OWNERS CORPORATION UNABLE TO CONVINCE SUPREME COURT OF NSW FOR BUILDING MANAGER TO HAND OVER CONTACT DETAILS OF OWNERS RECORDED ON STRATA ROLL

Background

The case of The Owners – Strata Plan No. 54026 v Phillipa Ternes [2019] NSWSC 1579 involved a mixed use building in Broadway, Sydney comprising some 586 units, primarily residential, some shops and 27 commercial units.

The majority of the units are managed on behalf of the investor owners by UniLodge. The holding company is UniLodge Australia Pty Ltd. The units in the strata scheme are managed for the investor owners pursuant to lease arrangements between the owners and Sydney Campus Apartments Pty Ltd, a wholly owned subsidiary of UniLodge Australia.

Under the lease arrangements the owners grant residential leases of their properties to Sydney Campus.  UniLodge then arranges to licence the units for occupation by students.  Under the terms of the leases, the owners appoint Sydney Campus as their representative for the purpose of exercising their rights of ownership vis the owners corporation. The voting rights in the scheme are exercised by Sydney Campus, not the individual investor owners.  UniLodge Australia owns a unit in the strata scheme. Sydney Campus is the building manager.

In March 2015, Philippa Ternes, the general manager for UniLodge in Sydney, sent an e-mail to the then strata managing agent asking for the managing agent to enter a post office box of UniLodge as the mailing address for all of the units under UniLodge’s management. It appears that the then strata managing agent, Prudential Investment Company of Australia Pty Ltd (“PICA”) acted on the instruction. Since that time, all of the units managed by UniLodge have had the UniLodge post office box entered as their contact address in the strata roll. This position continued for over four and a half years.

In June 2019, PICA ceased to act as strata manager, and it appears to be common ground that its appointment was terminated. A new strata managing agent, Whelan Property Group Pty Ltd was subsequently appointed.

On 30 October 2019, the Owners Corporation commenced proceedings in the Supreme Court of NSW against Ms Ternes, UniLodge Australia and Sydney Campus seeking orders that Ms Ternes, UniLodge Australia and Sydney Campus produce a verified list of names and addresses, together with other contact details, for the persons recorded as owners of the units. On 5 November the defendants filed a notice of motion that the proceedings should have been commenced in the Tribunal.

As a side note, Unilodge Australia and Sydney Campus had also commenced proceedings in NCAT in June 2019 against the owners corporation seeking an order under section 237 of the Strata Schemes Management Act 2015 (“SSMA”) to appoint a compulsory strata manager and other relevant orders.

The Basis for the Claim

The Owners Corporation’s claim rested on service of a letter dated December 2018 under section 181 of SSMA which permits the strata committee of an owners corporation to give a notice to a person who has possession or control of property (including records) of the owners corporation requiring the person to deliver the property to the Strata Committee not later than 14 days after the notice is given.

Jurisdiction of the Tribunal

Section 187 of the SSMA gives the Tribunal power, on application by an owners corporation, owner or other person having or acquiring an estate or interest in a lot in the scheme, to order an owners corporation to enter information contained in a strata interest notice in the strata roll if a person fails to provide the required written confirmation of the notice. The Court then went on to say that section 187 of the SSMA was not applicable because the owners corporation was seeking information rather than refusing to record information which has been supplied. The Court said that no application was made to have information recorded in any strata interest notice recorded in the roll.

The Court noted that section 188 of the SSMA does allow the Tribunal to make an order for information to be supplied either by or to an owners corporation, but where the information is to be supplied to an owners corporation the section is limited to a strata managing agent, officer or former strata managing agent of the owners corporation. The Court held section 188(1) does not deal with requiring information from building managers.

The Court found that neither of the above provisions in Division 3 of the SSMA were applicable.

However, the defendants relied upon section 232 of the SSMA which entitles NCAT to make an order to settle a dispute or complaint about, relevantly, the operation, administration or management of a strata scheme. The defendants submitted that entitlement to the information involved a “complaint or dispute” about the “operation, administration or management” of the strata scheme.

The Decision

The Court considered that the Tribunal has jurisdiction to make an order under section 181 of the SSMA if the conditions set out in that section were satisfied.

The Court also considered that the orders sought by the owners corporation concern the maintenance of the strata roll, which is clearly part of the “administration” of the strata scheme under section 232(1)(a) of the SSMA.

In the circumstances, the Court also held that although the Tribunal has jurisdiction, it was not an exclusive jurisdiction as contended by the defendants.

Although the defendants sought the proceedings to be summarily dismissed or stayed, the Court relied upon its power to make an order transferring the proceedings to NCAT.

The Court also remarked that:

“50.     In general, the appropriate forum for disputes under the SSMA should in my view be the Tribunal. Applications under that Act form an important part of the Tribunal’s jurisdiction, and the Tribunal has ample powers and resources to deal with this particular dispute. There is no doubt that this Court would have the ability to deal with the Strata Corporation’s claim if the circumstances were sufficiently urgent, but I do not consider that they are.

51. Obviously, it is desirable that the Tribunal should, if possible, deal with the dispute at the same time as the application scheduled for hearing, but that is a matter for the Tribunal. In my view, even if there were no proceedings pending in the Tribunal, this application should be transferred to it, as there is nothing about these proceedings which requires that there should be a departure from the ordinary run of cases under the SSMA. For these reasons, I will order that the proceedings be transferred to the Tribunal.”

Conclusion

The outcome of the Ternes case was that the Court transferred the proceedings to NCAT and continue before NCAT as if the proceedings had been instituted before NCAT to permit the Owners Corporation to pursue its claim against the defendants in that jurisdiction.

The Ternes case highlights the importance of making sure legal proceedings are commenced in the appropriate jurisdiction. If not, the applicant/plaintiff can risk their proceedings being dismissed, stayed or transferred to the appropriate jurisdiction with a costs order made against them.

Michael Pobi

Principal

Disclaimer: Please note that the information contained in this article is not legal advice and should not be relied upon. You should obtain legal advice specific to your circumstances before you take any action or otherwise rely upon the contents of this article.

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