Walker Corporation Pty Ltd v The Owners – Strata Plan No 61618 [2023] NSWCA 125
Introduction
The recent NSW Court of Appeal decision involving the Finger Wharf development in Woolloomooloo, Sydney, has significant implications for strata management in New South Wales. This article provides an in-depth review of the case, highlighting the background facts, the legal issues in dispute, the Court of Appeal’s decision, and the key takeaway for owners corporations.
Background Facts
The Finger Wharf development, a prominent Sydney landmark, is divided into eight three-dimensional lots. Seven of these lots are further subdivided, constituting independent strata title schemes. Walker Corporation Pty Ltd, the applicant in this case, owns lots in two of these strata schemes. A key aspect of the development’s management is the Building Management Committee (BMC), which is responsible for appointing a Strata Manager.
Issues in Dispute
The dispute arose when three owners corporations decided to replace McCormacks NSW Pty Ltd with Strata Choice Pty Ltd as their strata managing agent. Walker Corporation argued that this action breached clause 8.11 of the Strata Management Statement (SMS), which stipulates that each owners corporation should appoint and retain the same strata managing agent as the one appointed by the BMC.
The Law
The case was adjudicated under the Strata Schemes Management Act 2015 (NSW) (SSMA) and the Strata Schemes Development Act 2015 (NSW) (SSDA). The crux of the legal question was whether clause 8.11 of the SMS was inconsistent with these Acts.
The Court of Appeal’s Decision
The Court of Appeal upheld the validity of the resolutions passed by the three owners corporations. It found that clause 8.11 of the SMS was inconsistent with the SSMA and consequently contrary to s 105(5) of the SSDA. The court maintained that the SSMA envisages that decisions about the appointment of a strata managing agent and the powers or duties to be delegated to it are to be made by the lot owners acting through an owners corporation.
Conclusion
The Court of Appeal concluded that clause 8.11 was not authorised by SSDA The statutory concept of an SMS as a “management” statement “for the building and its site”, and the functions of the BMC as “managing the building and its site” do not extend to a complete takeover of management of all the functions which may be delegated by an owners corporation to a strata managing agent.
Key Takeaway for Owners Corporations
This case underscores the importance of ensuring that strata management statements are in line with the SSMA and the SSDA. Owners corporations have the primary responsibility for managing the strata scheme, and their powers of delegation are to be exercised for the benefit of lot owners. Any provision in a SMS that extinguishes the right of the owners corporation to appoint a strata managing agent of its choosing, and to terminate that agent’s services if necessary, is likely to be inconsistent with these Acts.
If you have any queries or need assistance reviewing and/or drafting your Strata Management Statements, we can help.
Disclaimer: This is commentary published by Pobi Lawyers for general information purposes only and should not be relied upon as specific legal advice. You should obtain your own legal advice specific to your circumstances before you take any action or otherwise rely on the contents of this article. The content of this article is subject to change. The law is also subject to change.
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