Walker Corporation Pty Ltd v The Owners - Strata Plan No 61618 [2022] NSWSC 1246

Walker Corporation Pty Ltd v The Owners - Strata Plan No 61618 [2022] NSWSC 1246

The challenged SMS article and by-laws requiring OCs to appoint and retain as their strata managing agent the agent chosen by the BMC are void for uncertainty, as they do not specify essential terms necessary for a valid appointment and delegation under the Acts. Additionally, such clauses are inconsistent with, and go beyond, the statutory powers conferred on OCs and BMCs by the Management Act and the Development Act, offend the legislative scheme allocating democratic rights to lot owners, and are thus invalid.

Parties
Plaintiff: Walker Corporation Pty Limited; First Defendant: The Owners - Strata Plan No 61618; Second Defendant and First Cross Claimant: Robert Edmund Quickenden; Third Defendant: Jeffrey Kent Smoot; Fourth Defendant: Alexander Peter Kathestides; Fifth Defendant: Cynthia Jean Jackson-Nagy; Sixth Defendant: Fotoulla Lazaridis; Seventh Defendant: Paul Margolin; Eighth Defendant: Vivian Paraskevi Mavrocordatos; Ninth Defendant/second Cross Claimant: The Owners - Strata Plan No 61770; Tenth Defendant: Annabelle Romaine Warren; Eleventh Defendant: Laslo Abonyi Nagy; Twelfth Defendant: Lilting House Pty Limited; Thirteenth Defendant/third Cross Claimant: The Owners - Strata Plan No 61619; Fourteenth Defendant: Douglas Thomas Dean; Fifteenth Defendant: Schielang Pty Limited; Sixteenth Defendant: Anthony Mervyn MacDonald Miller; Seventeenth Defendant: Hall Plain Superannuation Fund Pty Limited; Eighteenth Defendant: Christopher William Townsend; Nineteenth Defendant: McCormacks NSW Pty Limited; Twentieth Defendant: Strata Choice Pty Limited; First Cross Defendant: Walker Corporation Pty Limited; Second Cross Defendant: The Owners - Strata Plan 61771; Third Cross Defendant: The Owners - Strata Plan 61620; Fourth Cross Defendant: The Owners - Strata Plan 71494; Fifth Cross Defendant: The Owners - Strata Plan 73154; Sixth Cross Defendant: Ovolo Woolloomooloo Pty Limited; Seventh Cross Defendant: Transport for NSW
Jurisdiction
Australia
Judgment Date
16 September 2022
Procedural Posture
Declaratory Relief, Cross Claims (equity) / Final Hearing (issue of Statutory Validity of SMS Article and by Laws)
Outcome
The plaintiff’s claim fails to the extent of upholding the challenged provisions; the cross-claims succeed; the challenged SMS article and by-laws are declared invalid. Final orders to be made after parties confer.
Legal Topics
By Laws Validity, Strata Management Statement, Ultra Vires, Delegated Legislation, Uncertainty, Inconsistency With Statute
Land Law Strata Title Law Equity Administrative Law By Laws Validity Strata Management Statement Ultra Vires Delegated Legislation +2 more

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Parties

Walker Corporation Pty Limited

Plaintiff

The Owners - Strata Plan No 61618

First Defendant

Robert Edmund Quickenden

Second Defendant and First Cross Claimant

Jeffrey Kent Smoot

Third Defendant

Alexander Peter Kathestides

Fourth Defendant

Cynthia Jean Jackson-Nagy

Fifth Defendant

Fotoulla Lazaridis

Sixth Defendant

Paul Margolin

Seventh Defendant

Vivian Paraskevi Mavrocordatos

Eighth Defendant

The Owners - Strata Plan No 61770

Ninth Defendant/second Cross Claimant

Annabelle Romaine Warren

Tenth Defendant

Laslo Abonyi Nagy

Eleventh Defendant

Lilting House Pty Limited

Twelfth Defendant

The Owners - Strata Plan No 61619

Thirteenth Defendant/third Cross Claimant

Douglas Thomas Dean

Fourteenth Defendant

Schielang Pty Limited

Fifteenth Defendant

Anthony Mervyn MacDonald Miller

Sixteenth Defendant

Hall Plain Superannuation Fund Pty Limited

Seventeenth Defendant

Christopher William Townsend

Eighteenth Defendant

McCormacks NSW Pty Limited

Nineteenth Defendant

Strata Choice Pty Limited

Twentieth Defendant

Walker Corporation Pty Limited

First Cross Defendant

The Owners - Strata Plan 61771

Second Cross Defendant

The Owners - Strata Plan 61620

Third Cross Defendant

The Owners - Strata Plan 71494

Fourth Cross Defendant

The Owners - Strata Plan 73154

Fifth Cross Defendant

Ovolo Woolloomooloo Pty Limited

Sixth Cross Defendant

Transport for NSW

Seventh Cross Defendant

Procedural Posture

Declaratory Relief, Cross Claims (equity) / Final Hearing (issue of Statutory Validity of SMS Article and by Laws)

Legal Issues

  1. 1 Whether the challenged by-laws and the SMS article requiring constituent Owners Corporations to appoint the BMC's managing agent as strata managing agent are valid.
  2. 2 Whether such by-laws and SMS article are void for uncertainty, ultra vires, or inconsistency with the Strata Schemes Management Act 2015 and Strata Schemes Development Act 2015.

Ratio Decidendi

The challenged SMS article and by-laws requiring OCs to appoint and retain as their strata managing agent the agent chosen by the BMC are void for uncertainty, as they do not specify essential terms necessary for a valid appointment and delegation under the Acts. Additionally, such clauses are inconsistent with, and go beyond, the statutory powers conferred on OCs and BMCs by the Management Act and the Development Act, offend the legislative scheme allocating democratic rights to lot owners, and are thus invalid.

Court Disposition

The plaintiff’s claim fails to the extent of upholding the challenged provisions; the cross-claims succeed; the challenged SMS article and by-laws are declared invalid. Final orders to be made after parties confer.

Orders

  • Adjourn the proceedings to 9:30 am on 30 September 2022 or as arranged.
  • Direct the parties to confer on the form of orders to give effect to the judgment and to deal with costs, and submit proposed orders before the adjourned hearing.