Some Recent NSW Supreme Court Strata Cases

January, 2014

The NSW Supreme Court has handed down two cases recently of relevance to Owners Corporations.

The Owners – Strata Plan No. 62022 v Sahade:

An Owners Corporation’s general meeting was held to be invalid because insufficient notice was given to the Plaintiff under clause 32 of Schedule 2 of the Strata Schemes Management Act 1996 (SSMA), which requires strict compliance.

During the matter evidence was tendered which established when the notice letter was posted, and under Section 76 of the Interpretations Act 1987 the letter was deemed to have been received 4 working days later. But under Section 36 of that Act the day the notice was received is excluded from calculation, such that the meeting was found to be held one day too early (or the notice received one day too late to have a meeting on that date).

This case is a good reminder of the strict compliance requirements for notice of general meetings, and that when in doubt executive committees and strata managers should provide more notice to be safe.

Gannon v The Owners – Strata Plan 14403:

An Owners Corporation resolved to raise additional contributions to the administrative fund to comply with a Council Fire Order under section 76(4) of the SSMA. The Local Court held the Appellant (being Gannon in the Supreme Court) did not pay the levy when required, and awarded the expenses incurred by the Owners Corporation to recover these levies under section 80 of the SSMA.

The Appellant submitted that, before a special levy could be raised under section 76(4), the Owners Corporation must be faced with other expenses it cannot at once meet from either the administrative or sinking funds, and this prerequisite was not met. The Supreme Court held that it is sufficient for the purposes of sections 75, 75A & 76 that the Owners Corporation has an estimate of expenses it will incur, and a precise amount is not necessary.

The Supreme Court also held the Owners Corporation was entitled to recover legal expenses under section 80, but there was insufficient evidence to establish the quantum of costs incurred and it was found appropriate to refer the legal costs to assessment.

This case provides some solace to Owners Corporations that estimates of expenses will be sufficient when looking at passing special levies, and provide more flexibility in dealing with these issues than if exact amounts were required first.

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paul-jurdeczka

Paul Jurdeczka | Partner|
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E: pjurdeczka@millsoakley.com.au

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