APX Projects Pty Limited v The Owners – Strata Plan No. 64025 [2015] NSWSC 1250

APX Projects Pty Limited v The Owners – Strata Plan No. 64025 [2015] NSWSC 1250

APX failed to establish standing to bring the derivative action. The settlement communications did not clearly or impliedly appropriate the August 2012 settlement amount to sinking fund levies, so the Owners Corporation was free to appropriate the monies to administrative fund expenses such as legal fees. The payment of legal fees from the sinking fund was not shown to be ultra vires because s 71(2) permitted such a disbursement subject to later recoupment and lateness in making a levy did not retrospectively invalidate it. The interests of justice exception was not satisfied because APX had not attempted normal owners corporation procedures, cheaper and more appropriate statutory...

Jurisdiction
Australia
Judgment Date
01 September 2015
Procedural Posture
Application by Lot Owner to Bring Derivative Action at General Law on Behalf of Owners Corporation / Final Hearing of Summons
Outcome
Summons dismissed; plaintiff ordered to pay the second defendant's costs; liberty to apply granted within 14 days.
Legal Topics
['derivative Action' 'rule in Foss V Harbottle' 'owners Corporation Sinking Fund' 'administrative Fund and Sinking Fund Levies' 'appropriation of Debts' 'ultra Vires Exception' 'interests of Justice Exception']
['strata Title' 'equity' 'corporations and Associations' 'civil Procedure'] ['derivative Action' 'rule in Foss V Harbottle' 'owners Corporation Sinking Fund' 'administrative Fund and Sinking Fund Levies' 'appropriation of Debts' 'ultra Vires Exception' 'interests of Justice Exception']

Case Brief

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Procedural Posture

Application by Lot Owner to Bring Derivative Action at General Law on Behalf of Owners Corporation / Final Hearing of Summons

Legal Issues

  1. 1 ['Whether APX had standing to bring proceedings on behalf of the Owners Corporation against its treasurer under exceptions to the rule in Foss v Harbottle.' 'Whether the August 2012 settlement monies, or part of them, were appropriated to sinking fund levies and therefore required to be paid into the sinking fund.' 'Whether payment of legal fees from the sinking fund was ultra vires under the Strata Schemes Management Act 1996.' 'Whether it was in the interests of justice to allow APX to bring a derivative action on behalf of the Owners Corporation.']

Ratio Decidendi

APX failed to establish standing to bring the derivative action. The settlement communications did not clearly or impliedly appropriate the August 2012 settlement amount to sinking fund levies, so the Owners Corporation was free to appropriate the monies to administrative fund expenses such as legal fees. The payment of legal fees from the sinking fund was not shown to be ultra vires because s 71(2) permitted such a disbursement subject to later recoupment and lateness in making a levy did not retrospectively invalidate it. The interests of justice exception was not satisfied because APX had not attempted normal owners corporation procedures, cheaper and more appropriate statutory...

Court Disposition

Summons dismissed; plaintiff ordered to pay the second defendant's costs; liberty to apply granted within 14 days.

Orders

  • ['Summons dismissed.' "Order the plaintiff to pay the second defendant's costs." 'Grant liberty to apply within 14 days in relation to the implementation of these orders or in relation to any special costs order that may be sought.']