Strata Title Disputes 1960’s Style
Re Steel & Ors and the Conveyancing (Strata TItles) Act 1961 (1968) 88 WN (Pt 1) (NSW) 467
Quick Read
This NSW Supreme Court decision from the earliest days of strata title about the operation of a small Bellevue Hill strata building that had been converted from company title to take advantage of the new strata title laws. A dispute soon developed between the strata owners about how the strata building was being operated including complaints about non-disclosure of strata records. Since the majority strata owner was also the developer, there were also issues about its equitable duties. Working from first principles, the NSW Supreme Court decided to appoint an independent administrator to run the strata corporation because it considered that the majority owners and committee members had failed to manage things for the benefit of all strata owners. And it’s a reminder that 55 years later, things aren’t too different in strata title.
Implications
Strata committee members were in a similar position to company directors.
If strata committee members are the developer [or promoters] their duties may be even higher with a fiduciary element.
Strata committee members must manage things for the benefit of all strata owners and avoid conflicts of interest.
This court decision was made by a single judge in the NSW Supreme Court in 1968.
The majority shareholder in an 8 apartment company title building in Bellevue Hill converted it to strata title under the new [1961] laws and set up management structures where its nominees were the sole strata committee members and itself as the strata manager [there were no real estate licensing requirements at the time].
The dispute arose when new owners in the strata building began complaining about the lack of information being provided to them including claims that there had been inappropriate expenses incurred and paid and many other smaller and less significant issues.
The non-developer owners asked that the NSW Supreme Court remove control of the strata corporation from the strata committee and appoint an administrator under s 23 of the Conveyancing (Strata Titles) Act 1961.
There were 3 key legal issues.
Firstly, whether the Court had the power to appoint an administrator and whether it should.
Secondly, what were the obligations of strata committee members.
Thirdly, whether the developer had stricter duties when it [or its nominees] were strata committee members.
Full Report & Case Details
Keywords
#NSW #NSWSupreme #comittee #fiduciary #adminstrator #1968 #STA1961 #s23