4nature Incorporated v Centennial Springvale Pty Ltd

Strata Schemes Development Act 2015

1. Relevant sections of the SSD Act provide: Part 1 Division 1 Introduction … 3 Main objects of Act The main objects of this Act are to provide for: (a) the subdivision of land, including buildings, into cubic spaces to create freehold strata schemes and leasehold strata schemes, and (b) the way in which lots and common property in strata schemes may be dealt with, and (c) the variation, termination and renewal of strata schemes. Division 2 Interpretation 4 Definitions (1) In this Act: … utility lot has the same meaning as it has in the Strata Schemes Management Act 2015. … Part 10 Strata renewal process for freehold strata schemes Division 1 Preliminary 153 Application and purpose of Part (1) This Part applies to freehold strata schemes other than the following schemes: (a) a scheme relating to a parcel that is the subject of a development contract, (b) a scheme in which one or more of the lots in the scheme are, or form part of, a retirement village within the meaning of the Retirement Villages Act 1999. (2) The purpose of this Part is to facilitate the collective sale or redevelopment of freehold strata schemes in accordance with the process set out in this Part. 154 Definitions In this Part: ancillary order - see section 186 (1). collective sale of a strata scheme means a sale of the whole strata scheme. compensation value, in relation to a lot, means: (a) the compensation to which the owner of the lot would be entitled as determined under section 55 of the Land Acquisition (Just Terms Compensation) Act 1991 (subject to any modifications prescribed by the regulations), or (b) if the regulations prescribe a different method of determining that value - the value of the lot determined in accordance with that method. court means the Land and Environment Court. developer means a person or group of persons proposing to carry out a redevelopment of a strata scheme in accordance with a strata renewal plan. dissenting owner, in relation to a strata renewal plan, means an owner of a lot in relation to which a support notice is not in effect under this Part for the plan. independent valuer means a qualified valuer who: (a) has appropriate experience or expertise to undertake valuations for the purpose of this Part, and (b) has no pecuniary or other interest that could reasonably be regarded as capable of affecting the qualified valuer's ability to give the valuations in good faith. market value, in relation to a building and its site, means the value of the building and its site determined in accordance with the regulations. objection means an objection filed in the court in accordance with section 180. operational period of a strata renewal committee means the period for which the committee may, under section 166, exercise its function. qualified request means a qualified request under section 19 of the Strata Schemes Management Act 2015. redevelopment of a strata scheme means a redevelopment of the whole strata scheme in a way that alters the scheme to the extent that its termination and replacement by a further strata plan is necessary. required level of support, in relation to a strata renewal plan for a strata scheme, means the support (given in support notices that are in effect under this Part) of the owner or owners of at least 75% of the lots, other than utility lots, in the scheme. returning officer for a strata renewal plan means a person who is appointed as the returning officer for the strata renewal plan in accordance with the regulations. strata renewal committee means a strata renewal committee established under section 160. strata renewal plan means a strata renewal plan prepared in accordance with this Part for a strata scheme. strata renewal proposal - see section 156 (1). support notice - see section 174 (1). 155 Application of Strata Schemes Management Act 2015 (1) If there is an inconsistency between the Strata Schemes Management Act 2015 and this Part or an order of the court made under this Part, this Part and the order prevail to the extent of the inconsistency. (2) To remove doubt, but subject to subsection (1): (a) Schedule 1 to the Strata Schemes Management Act 2015 applies in relation to a meeting of an owners corporation under this Part, and (b) Schedule 2 to the Strata Schemes Management Act 2015 applies in relation to a meeting of a strata committee under this Part. Division 2 Strata renewal proposals 156 Submission of strata renewal proposal (1) Any person (whether or not the person is the owner of a lot) may give a written proposal for the collective sale or redevelopment of a strata scheme (a strata renewal proposal) to the owners corporation of the scheme. (2) A strata renewal proposal must include the information or other matters prescribed by the regulations. 157 Strata committee to consider proposal (1) As soon as practicable (but no later than 30 days) after the owners corporation receives a strata renewal proposal, the strata committee of the owners corporation must consider it at a meeting of the committee. (2) The secretary of the owners corporation, or any other member of the strata committee, may convene the meeting. (3) The purpose of the meeting is to decide whether or not the strata committee considers the strata renewal proposal warrants further consideration by the owners corporation. (4) The minutes of the meeting must include: (a) a complete copy of the strata renewal proposal, and (b) detailed reasons for the decision. (5) The strata committee must give each owner of a lot in the strata scheme a copy of the minutes within 14 days after the meeting. 158 Convening general meeting to consider proposal (1) If the strata committee decides that the strata renewal proposal warrants further consideration by the owners corporation, it must, as soon as practicable (but no later than 30 days) after making the decision, convene a general meeting of the owners corporation to further consider the proposal. (2) Also, a general meeting of the owners corporation may be convened to consider the strata renewal proposal on a qualified request, whether or not the strata committee has considered the proposal or decided it warrants further consideration. (3) The purpose of the general meeting is to decide whether or not the owners corporation considers the strata renewal proposal warrants investigation by a strata renewal committee. (4) Notice of the general meeting must: (a) comply with clause 1 of Schedule 7, and (b) be given to each owner at least 14 days before the meeting. 159 Lapsing of proposal (1) This section applies if: (a) the strata committee decides a strata renewal proposal does not warrant further consideration by the owners corporation and a qualified request to consider the proposal at a general meeting of the owners corporation has not been made within 44 days after the day the strata committee made the decision, or (b) the owners corporation, under Division 3, decides a strata renewal proposal does not warrant investigation by a strata renewal committee. (2) The strata renewal proposal lapses for the purpose of this Part when the decision is made. Division 3 Establishment, membership, function, operation and dissolution of strata renewal committees 160 Establishment of committee (1) If the owners corporation passes a motion that the strata renewal proposal warrants investigation by a strata renewal committee, the owners corporation must, by resolution at a meeting: (a) establish a strata renewal committee to prepare a strata renewal plan for the strata scheme, and (b) elect its members. (2) A person who has a financial interest in more than 25% of the lots (other than utility lots) in the strata scheme must not vote in a resolution to establish a strata renewal committee or be elected as a member of the committee unless the person has disclosed that fact to the owners corporation. (3) The strata renewal committee must consist of a chairperson and the number of other members, not more than 8, determined by the owners corporation. (4) A strata renewal committee is taken to be established on the day its members are first elected under this Division. (5) A motion for the resolution to establish a strata renewal committee may include forms of motion for the matters the owners corporation considers appropriate, including the matters referred to in clause 2 of Schedule 7. 161 Election of members (1) The owners corporation may elect, as members of the strata renewal committee, persons who are eligible for appointment or election to the strata committee of the owners corporation. (2) Before election under subsection (1), a person must disclose to the owners corporation any pecuniary or other interest the person may have relating to the strata renewal proposal that could conflict with the proper performance of the strata renewal committee's function. (3) A person may be a member of both the strata committee and the strata renewal committee. (4) Nomination for election as a member of a strata renewal committee may be made before or at the meeting at which it is established. 162 Notice of decision to establish committee (1) If a strata renewal committee is established for a strata scheme, the secretary of the owners corporation must, within 14 days after it is established, give written notice of the decision to the owner of each lot in the scheme. (2) The notice must include the information prescribed by the regulations. 163 Vacation of office (1) A person vacates office as a member of the strata renewal committee if the person: (a) is no longer eligible for appointment or election to the strata committee of the owners corporation, or (b) was not an owner when elected as a member, or was a company nominee, and the individual who nominated the person for election, or the corporation for which the person is a company nominee, ceases to be an owner or notifies the owners corporation in writing that the person's office is vacated, or (c) resigns office by written notice given to the owners corporation, or (d) is removed from office by special resolution of the owners corporation. (2) The owners corporation may elect a person who is eligible to be a member of the strata renewal committee to fill a vacancy in the office of a member of the committee. 164 Function and operation of committee (1) The function of the strata renewal committee is to prepare a strata renewal plan, relating to the strata renewal proposal for the strata scheme, for consideration by the owners corporation and the owners in accordance with this Part. (2) In exercising its function, the strata renewal committee: (a) must not spend more than the amount that the committee has, by resolution of the owners corporation made from time to time, approval to spend in preparing the strata renewal plan, and (b) may engage persons to help it prepare the strata renewal plan (for example, a person who gave the strata renewal proposal to the owners corporation), if the owners corporation has delegated to the committee the authority to do so. (3) The strata renewal committee may at any time ask the secretary of the owners corporation to convene a general meeting to approve: (a) amounts that may be spent by the committee in preparing a strata renewal plan, or (b) any other matter relating to the operation of the committee or the exercise of its function. (4) If, when an act or proceeding of the strata renewal committee was done, taken or commenced, there was: (a) a vacancy in the office of a member of the committee, or (b) any defect in the election of a member, any act or proceeding of the committee done in good faith is as valid as if the vacancy or defect did not exist and the committee were fully and properly constituted. 165 Conflicts of interest (1) If: (a) a member of a strata renewal committee has a pecuniary or other interest in the proposed collective sale or redevelopment under a strata renewal proposal, and (b) the interest may raise a conflict with the proper performance of the committee's function, the member must, as soon as practicable after becoming aware of the potential conflict, disclose the nature of the interest to a meeting of the strata committee. (2) On being informed of a matter under subsection (1), the strata committee must refer the matter to a meeting of the owners corporation for a decision by the owners corporation (having regard to the nature of the interest): (a) to remove the member from office, or (b) to allow the member to remain in the office and to require the member to abstain from voting at, or participating in, a meeting of the strata renewal committee on a matter relating to the member's interest, or (c) to take no further action in relation to the matter and to allow the member to remain in the office. (3) A member of a strata renewal committee must comply with any requirement made under subsection (2) (b). 166 Period of operation of committee Unless the strata renewal committee is earlier dissolved, the committee may exercise its function: (a) for 1 year after the day it is established, or (b) if the owners corporation, by special resolution made before the end of the period referred to in paragraph (a), extends that period - for the extended period. 167 Dissolution of committee A strata renewal committee is dissolved on the earliest of the following days: (a) the day the owners corporation, by resolution, dissolves the committee, (b) the day the strata renewal plan prepared by the committee lapses under this Part, (c) the day the operational period of the committee ends, unless the required level of support for the strata renewal plan prepared by the committee has been obtained before that day, (d) the day the owners corporation decides to apply to the court for an order to give effect to the strata renewal plan prepared by the committee. Division 4 Procedures of strata renewal committees 168 Meetings and voting (1) A strata renewal committee may hold its meetings at the times and in the way it decides. (2) The quorum for a meeting of a strata renewal committee is a majority of its members. (3) A decision supported by a majority of votes cast at a meeting of a strata renewal committee at which a quorum is present is the decision of the committee. 169 Minutes and record of decisions (1) A strata renewal committee must keep minutes of its meetings and a record of its decisions. (2) Within 14 days after a meeting of the strata renewal committee, the chairperson of the committee must: (a) give a copy of the minutes of the meeting to the secretary of the owners corporation and to each member of the committee, and (b) if the owners corporation has a notice board, place a copy of the minutes of the meeting on that notice board. (3) If asked by an owner of a lot in the strata scheme, the secretary of the owners corporation must give the owner a copy of the minutes of a meeting within 14 days after the request is made. (4) Nothing in this section requires the chairperson to give a copy of the minutes to himself or herself. Division 5 Strata renewal plans 170 Content of strata renewal plan (1) A strata renewal plan for a strata scheme must include the following information: (a) a general overview of the strata renewal proposal to which it relates, (b) a full and frank statement by the proposed purchaser or developer of their intended use of the strata parcel, (c) if the plan is for a collective sale of the scheme: (i) the name of the purchaser, if known, or a proposal for marketing the parcel for sale by public auction or tender, and (ii) the sale price (if known), or a minimum reserve price for the sale or details of the way in which a minimum reserve price for the sale is to be set, and (iii) the proposed completion day for the sale, and (iv) the proposed day on which the owners of the lots are to provide vacant possession of their lots, and (v) the details, prescribed by the regulations, about costs and expenses to be deducted from the sale price, and (vi) any other terms and conditions of the proposed sale that the strata renewal committee considers are significant, … (e) any other information or document about the proposed collective sale or redevelopment prescribed by the regulations. (2) Subsection (1) does not limit the matters that may be included in a strata renewal plan. (3) If a strata renewal plan is for a collective sale of a strata scheme, the plan must provide for the purchase of each owner's lot at not less than the compensation value for the lot. (4) If a strata renewal plan is for a redevelopment of a strata scheme, the plan must provide for each dissenting owner's lot to be purchased at not less than the compensation value for the lot. 171 Requirements relating to sale of lots (1) If a strata renewal plan is for a collective sale of a strata scheme, the amount paid for the sale of the lots and common property in the scheme must be apportioned among the owners of the lots in the same proportions as the unit entitlements of the owners' lots. (2) If a strata renewal plan is for a redevelopment of a strata scheme, the amount to be paid for the sale of a dissenting owner's lot must not be less than the compensation value of the lot. 172 Consideration of plan by owners corporation (1) On preparing a strata renewal plan, the strata renewal committee must convene a general meeting of the owners corporation to consider the plan. (2) Notice of the general meeting must: (a) comply with clause 3 of Schedule 7, and (b) be given to each owner at least 14 days before the meeting. (3) The owners corporation may, by resolution, amend the strata renewal plan or decide to return the plan to the strata renewal committee for amendment. (4) If, under subsection (3), the strata renewal plan is returned to the strata renewal committee for amendment, subsections (1) and (2) apply in relation to the plan on completion of the amendments. (5) The owners corporation may, by special resolution, decide to give the strata renewal plan, whether or not amended in accordance with this section, to the owners for their consideration. (6) A motion under this section is not a motion for which a priority vote can be cast under clause 24 of Schedule 1 to the Strata Schemes Management Act 2015. (7) A strata renewal plan is not given any force or effect merely because of a decision made under subsection (5). 173 Copy of plan to be given to owners (1) If the owners corporation decides by special resolution under section 172 (5) to give the strata renewal plan to the owners for their consideration, the secretary of the owners corporation must within 14 days give a copy of the plan to each owner. (2) The copy of the plan must be accompanied by the information or documents prescribed by the regulations. 174 Notice of owner's decision to support plan (1) An owner may, at least 60 days after receiving a copy of the strata renewal plan but before the plan lapses, give the returning officer for the plan a notice in the approved form (a support notice) that: (a) states the owner supports the plan, and (b) is signed by the owner and each registered mortgagee or covenant chargee of the owner's lot. (2) If a lot is owned by more than one person, each of those persons must sign the support notice. (3) The signature of an owner, registered mortgagee or covenant chargee (the relevant person) must be witnessed by a person who: (a) is at least 18 years of age, and (b) is not a party to the proposed collective sale or redevelopment to which the support notice relates. (4) A notice referred to in subsection (1) has effect as a support notice under this Part in relation to the owner's lot on the day it is given to the returning officer. (5) In giving a support notice, an owner agrees to participate in the proposed collective sale or redevelopment under the strata renewal plan to which the notice relates. (6) In signing a support notice, a mortgagee or covenant chargee merely consents to the owner giving the notice in relation to the owner's lot and is not bound in any way by the strata renewal plan. (7) The returning officer must: (a) keep a record showing the number of lots for which a support notice has been given and is in effect, and (b) if asked by an owner, advise the owner of the number of lots for which a support notice has been given and is in effect. 175 Withdrawal of support notice (1) An owner who has given a support notice for a strata renewal plan may, by notice in the approved form given to the returning officer for the plan, withdraw the support notice. (2) However, an owner cannot withdraw a support notice after the day a notice has been given under section 176 (2). (3) If a support notice is withdrawn, it ceases to have effect as a support notice under this Part in relation to the owner's lot on the day the notice of the withdrawal is given to the owners corporation. 176 Notice if required level of support obtained (1) If the required level of support for a strata renewal plan is obtained before the plan lapses the returning officer for the plan must give written notice of that fact to the secretary of the owners corporation. (2) The secretary must, within 14 days after receiving the notice give written notice that the required level of support for the strata renewal plan has been obtained to: (a) each owner of a lot in the strata scheme, and (b) the Registrar-General. (3) On receiving the notice, the Registrar-General must make appropriate recordings in the folio for the common property in the strata scheme to show that the scheme is the subject of a strata renewal plan. (4) If requested by the Registrar-General, the owners corporation must give the Registrar-General the information about the strata renewal plan the Registrar-General requires to make the recordings referred to in subsection (3). (5) On and from the making of the recordings referred to in subsection (3), a support notice that is in effect for the strata renewal plan is taken to have been given under this Part by any subsequent owner, registered mortgagee or covenant chargee of the lot in relation to which the support notice was given. 177 Lapsing of plan (1) A strata renewal plan lapses if: (a) the owners corporation decides under this Division not to give the plan to the owners for their consideration, or (b) within 3 months after the day the owners corporation decided to give the plan to the owners for their consideration, the required level of support for the plan has not been obtained, or (c) the owners corporation decides not to apply to the court under Division 6 for an order to give effect to the plan, or (d) if an application is made under Division 6 to the court for an order to give effect to the plan - the court decides not to make the order. (2) If a strata renewal plan lapses under subsection (1), it ceases to have any force or effect for the purpose of this Part. (3) The owners corporation must, as soon as practicable after the strata renewal plan lapses, give written notice of that fact to the Registrar-General. (4) On receiving the notice, the Registrar-General must make appropriate recordings in the folio for the common property in the strata scheme to show that the scheme is no longer the subject of a strata renewal plan. Division 6 Applying for orders to give effect to strata renewal plans 178 Decision to apply for order (1) If the required level of support for a strata renewal plan for a strata scheme is obtained: (a) the secretary of the owners corporation, or a member of the strata renewal committee, must convene a general meeting of the owners corporation for the purpose of deciding whether to apply to the court for an order to give effect to the plan, and (b) the owners corporation may, by resolution, decide to apply to the court for the order. (2) To remove doubt, an application for an order may be made by the owners corporation even if an owner of a lot in the strata scheme at the time the application is made is not an owner who gave a support notice for the strata renewal plan. (3) However, the owners corporation must not apply for an order unless it is satisfied that the strata renewal plan complies with section 170. (4) The secretary of the owners corporation must, within 14 days after a decision is made to apply for an order, give written notice of the decision to each tenant of a lot in the strata scheme whose name has been notified to the owners corporation as a tenant of the lot in accordance with the Strata Schemes Management Act 2015. 179 Application for order (1) An application for an order to give effect to the strata renewal plan must be accompanied by the following: (a) a copy of the plan, (b) a copy of each support notice that is in effect under this Part for the plan, (c) the names of each dissenting owner and each registered mortgagee and covenant chargee of a dissenting owner's lot, (d) a declaration given by the owners corporation identifying the steps taken in preparing the plan and obtaining the required level of support in accordance with this Part, (e) if the plan is for a collective sale of a strata scheme: (i) a declaration given by the purchaser, if known, disclosing the nature of any relationship, whether personal or commercial, the purchaser may have with the owner of any lot in the scheme, and (ii) a report of an independent valuer that includes details of the market value of the whole building and its site (at its highest and best use) and details of the compensation value of each lot, … (g) any other information or document about the proposed collective sale or redevelopment prescribed by the regulations. (2) Notice of the application must be served, in accordance with rules of court, on: (a) each owner of a lot in the strata scheme, and (b) each registered mortgagee or covenant chargee of a dissenting owner's lot, and (c) if the strata renewal plan is for a collective sale of a strata scheme - the proposed purchaser (if known), and (d) if the strata renewal plan is for a redevelopment of a strata scheme - the local council and the proposed developer (if known), and (e) any other person directed by the court. 180 Objection to application (1) Any of the following persons may file an objection to the application for an order to give effect to the strata renewal plan: (a) a dissenting owner, (b) a person on whom notice of the application must be served under section 179 (2) (b)-(e). (2) The objection must be filed in the court within 21 days after notice of the application is served on the person filing the objection. (3) A person who files an objection need not be a party in proceedings before the court relating to the strata renewal plan. Division 7 Orders to give effect to strata renewal plans 181 Hearing of application (1) The court must hear and dispose of an application for an order in proceedings before the court. (2) If the court orders mediation or arranges a conciliation conference in relation to the application: (a) the court may terminate the mediation or conference at any time and hear, or continue to hear, the proceedings, or (b) any party to the mediation or conference may, at least 90 days after the day the first mediation or conference session starts, ask the court to terminate the mediation or conference and hear, or continue to hear, the proceedings, or (c) if the parties reach an agreement at mediation or the conciliation conference and the strata renewal plan is varied under the agreement - the court may hear, or continue to hear, the proceedings in relation to the varied plan. (3) The court must hear, or continue to hear, the proceedings whether or not the parties reach an agreement at mediation or a conciliation conference. (3A) Subsection (3) has effect despite section 34 (3) (a) of the Land and Environment Court Act 1979. (4) If a strata renewal plan is varied at mediation or a conciliation conference, the varied plan is taken to be the strata renewal plan under this Act. (5) However, the court must not make an order in relation to a strata renewal plan that is varied at mediation or a conciliation conference unless: (a) written agreement to the variation has been given by the owner of each lot in relation to which a support notice has been given for the plan, and (b) written notice of the variation has been served by the owners corporation on the following (unless otherwise directed by the court): (i) each dissenting owner, (ii) each person on whom notice of the application must be served under section 179 (2) (b)-(e). (6) Any of the following persons may be joined as a party to the proceedings: (a) a person who has filed an objection to the application and applies to be a party to the proceedings, (b) a person directed by the court to be joined. (7) In this section: conciliation conference means a conciliation conference under section 34 of the Land and Environment Court Act 1979. mediation means mediation in accordance with the Civil Procedure Act 2005. 182 Decision of court (1) The court must make an order giving effect to the strata renewal plan if satisfied of the following matters: (a) the relationship, if any, between the owners of lots and the purchaser or a developer has not prevented the plan being prepared in good faith, (b) the steps taken in preparing the plan and obtaining the required level of support were carried out in accordance with this Act, (c) all notices required to be served under sections 179 and 181 have been served, (d) if the plan is for a collective sale - the proposed distribution of the proceeds of sale apportioned to each lot is not less than the compensation value of the lot and the terms of the settlement under the plan are just and equitable in all the circumstances, … (g) any other matter prescribed by the regulations. (2) The court may, on its own initiative, vary the strata renewal plan and make an order giving effect to the varied plan if satisfied of the matters referred to in subsection (1). (3) However, the court cannot vary a strata renewal plan under subsection (2) unless: (a) the variation is of a minor nature that does not affect the plan in any substantial way, and (b) written agreement to the variation has been given by the owner of each lot in relation to which a support notice for the plan has been given. (4) The court must not make an order giving effect to the strata renewal plan if the court is not satisfied about the matters referred to in subsection (1). (5) The court must give written reasons for its decision to make, or not to make, an order. (6) This section applies subject to section 181 (5). 183 Court order and directions (1) If the court makes an order giving effect to a strata renewal plan for a strata scheme, the order may include directions about any of the following matters: (a) the termination of the scheme, including, for example, the day on which the scheme is to be terminated and the day on which vacant possession of lots and common property in the scheme is to be given, (b) the winding up of the owners corporation of the scheme, (c) the discharge of the liabilities of the owners corporation, (d) the persons liable to contribute amounts required for the discharge of the liabilities of the owners corporation and the proportionate liability of the persons, (e) the distribution of the assets of the owners corporation and the proportionate entitlement of each person under the distribution, (f) any other matter prescribed by the regulations. (2) The owners corporation must lodge the order for registration within 7 days after it is made. (3) The Registrar-General must record the order on the folio for the common property and for each lot in the strata scheme. (4) The order has effect under this Part when the Registrar-General makes the record under subsection (3). 184 Effect of order relating to collective sale (1) This section applies if the court makes an order giving effect to a strata renewal plan for a collective sale of a strata scheme. (2) The owner of each lot in the strata scheme must sell the owner's lot in accordance with the strata renewal plan and the order. (3) The strata scheme is terminated on: (a) the day on which all the dealings effecting the transfer of all lots and common property in the scheme are registered, or (b) if the order specifies a later day for that purpose - the later day. (4) On termination of the strata scheme: (a) the owners corporation is dissolved, and (b) the rights and liabilities of the owners corporation vest in the purchaser, unless the order otherwise provides, and (c) any legal proceedings begun by or against the owners corporation may be completed by or against the purchaser, and (d) the purchaser must give the Registrar-General notice of the termination in the approved form. (5) On receiving the notice, the Registrar-General must: (a) cancel the folios for the lots and common property in the strata scheme, and (b) create a folio for the land in the former parcel, and (c) record in the Register the matters the Registrar-General considers appropriate to give effect to the order. (6) A lease of a lot in the strata scheme is terminated on the day stated in the strata renewal plan for giving vacant possession of the lot to the purchaser or on such later day as may be specified in the order. (7) Subject to this Part, the termination of a lease under this section does not affect a right or remedy a person may have under the lease. Note. It is expected that leases would generally be terminated in accordance with the terms of the lease (or under legislation such as Division 2 of Part 5 of the Residential Tenancies Act 2010) and not under this section. … 186 Ancillary orders (1) The court may make an order to provide for any ancillary or consequential matter (an ancillary order) that it considers appropriate or necessary to ensure the effectiveness of the order giving effect to a strata renewal plan. (2) Without limiting subsection (1), an ancillary order may include directions about the following matters: (a) the appointment of a trustee for the sale of an owner's lot, (b) the vesting of an owner's lot in the trustee for the purpose of selling the lot and distributing the proceeds of sale to the owner, (c) the delivery of an owner's certificate of title for the owner's lot to the trustee, (d) the distribution of the assets of the owners corporation and the proportionate entitlement of each person under the distribution, (e) the reallocation of unit entitlements among the lots that are subject to the strata scheme for a reason set out in section 236 (1) of the Strata Schemes Management Act 2015, (f) the payment of compensation to a person because of the termination of a lease under section 184 (6) or 185 (7). (3) An ancillary order may be made when or at any time after the order giving effect to the strata renewal plan is made. (4) An ancillary order may be made on application by any person with the leave of the court. 187 Order attaches to land and is binding An order giving effect to a strata renewal plan and an ancillary order relating to that order: (a) attaches to the parcel for the strata scheme to which the plan relates, and (b) binds the owners corporation of the strata scheme and each person who for the time being is: (i) an owner or registered mortgagee or covenant chargee of a lot in the parcel, or (ii) the purchaser or a developer under the plan, and (c) binds any person claiming through or under or in trust for or in succession to an owner, or who is a subsequent owner or occupier to the owner, of a lot in the scheme. Division 8 Miscellaneous 188 Costs (1) Unless the court otherwise orders: (a) the reasonable costs of proceedings for an application for an order to give effect to a strata renewal plan that are incurred by a dissenting owner are payable by the owners corporation, and (b) the owners corporation cannot levy a contribution for any part of the costs on a dissenting owner. (2) The regulations may prescribe other matters for or with respect to the costs of proceedings for an application for an order to give effect to a strata renewal plan. 189 Relationship between orders and strata renewal plans If there is an inconsistency between a strata renewal plan and an order giving effect to the plan or an ancillary order, the order and ancillary order prevail to the extent of the inconsistency. 190 Limitation on submitting strata renewal proposal (1) If a strata renewal proposal or a strata renewal plan for a strata renewal proposal lapses under this Part, a person cannot give the proposal, or another strata renewal proposal that is substantially similar to that proposal, to an owners corporation within 12 months after the day the proposal or plan lapses. (2) An owners corporation is not required to deal with a strata renewal proposal under this Part if it is given in contravention of this section.

Strata Schemes Development Regulation 2016

1. Relevant clauses of the Strata Schemes Development Regulation 2016 (SSD Regulation) provide: Part 6 Strata renewal 26 Definition In this Part: highest and best use in respect of land means the lawful, physically possible and financially feasible use that maximises the value of the land. 27 Compensation value For the purposes of paragraph (a) of the definition of compensation value in section 154 of the Act, the determination of compensation under section 55 of the Land Acquisition (Just Terms Compensation) Act 1991 is modified as follows: (a) sections 56 (1) (b) and (2) and 62-65 of that Act are taken not to apply in respect of that section, (b) any references in that Act to "acquisition", "compulsory acquisition" or "the public purpose for which the land was acquired" are taken, for the purposes of that section, to be references to the strata renewal proposal, (c) the buyer and seller referred to in section 56 of that Act are to be assumed to take into account the highest and best use of the land, (d) the matters set out in section 55 of that Act are to be valued at the following times: (i) for the purposes of inclusion in a strata renewal plan - on a day that is not more than 45 days before the day on which the general meeting of the owners corporation is held under section 172 of the Strata Schemes Development Act 2015 to consider the plan, (ii) for the purposes of an application made under section 179 of the Strata Schemes Development Act 2015 for an order to give effect to a strata renewal plan - on a day that is not more than 45 days before the day on which the application is made. 28 Market value (1) For the purposes of the definition of market value in section 154 of the Act, the market value of a building and its site: (a) is to be determined by estimating the amount for which the building and site would be sold by a willing but not anxious seller to a willing but not anxious buyer, and (b) is to be determined at the following times: (i) for the purposes of inclusion in a strata renewal plan - on a day that is not more than 45 days before the day on which the general meeting of the owners corporation is held under section 172 of the Act to consider the plan, (ii) for the purposes of an application made under section 179 of the Act for an order to give effect to a strata renewal plan - on a day that is not more than 45 days before the day on which the application is made. (2) For the avoidance of doubt, the buyer and seller referred to in subclause (1) (a) are to be assumed to take into account the highest and best use of the building and its site. 29 Returning officer (1) For the purposes of the definition of returning officer in section 154 of the Act, the returning officer for a strata renewal plan is to be appointed by a resolution of the owners corporation and is to be a person who is independent of the owners corporation and who is not any of the following: (a) a lot owner in the strata scheme or a relative or associate of a lot owner, (b) a member of the strata committee, (c) a strata managing agent for the strata scheme or any employee of the strata managing agent, (d) a person who has a pecuniary interest in the outcome of the collective sale or redevelopment proposed by the strata renewal plan or a relative or associate of such a person (but not if the pecuniary interest is only the reasonable fee for performing the functions of the returning officer and the payment of that fee has been approved by the strata committee). (2) In this clause, a reference to an associate of a person is a reference to: (a) a partner, employee or agent of the person, or (b) a person who is related to the person or to a person referred to in paragraph (a): (i) as a spouse or de facto partner, or (ii) as a child, grandchild, sibling, parent or grandparent, whether derived through subparagraph (i) or otherwise, or (c) a body corporate, or a member of a body corporate, partnership, trust, syndicate or joint venture, in which the person or a person referred to in paragraph (a) or (b) has a beneficial interest, or (d) if the person is a body corporate: (i) a related body corporate within the meaning of the Corporations Act 2001 of the Commonwealth, or (ii) an officer (within the meaning of that Act) of the body corporate or a related body corporate. 30 Strata renewal proposal (1) For the purposes of section 156 (2) of the Act, a strata renewal proposal must include the following: (a) the warning notice set out in subclause (2), (b) the name and address of the person giving the proposal (the proponent), (c) details of the financial interests (if any) that the proponent has in any of the lots in the strata scheme, (d) a general description of the proposal and the purpose of the proposal, (e) how the proposal will be funded, (f) an estimate of the total cost (including application fees and legal fees) of obtaining an order from the court to give effect to the strata renewal plan, (g) whether the proponent will provide any monetary contributions (whether initial or continuing) towards the reasonable costs and expenses incurred by the strata renewal committee or owners corporation in relation to the following: (i) preparing a strata renewal plan, (ii) obtaining specialist consultant reports, (iii) obtaining an order from the court to give effect to the plan, (h) if the proponent is to provide any monetary contributions, what (if any) security (such as cash, bond, bank guarantee) will be provided, (i) the potential (if any) for owners to buy back into the development following the collective sale or redevelopment, (j) if the proposal is for a collective sale of the strata scheme: (i) an indicative sale price and an explanation of how that price was determined and the distribution of that sale price on current unit entitlements, and (ii) the proposed timetable for the collective sale, including a proposed completion date and the proposed date by which owners will be required to vacate premises forming part of the scheme, … (2) The warning notice required by subclause (1) (a) is to be to the effect of the following, being a notice on the front of the proposal that is legibly printed, in bold type, with the words shown in capital letters in the heading being at least 14 point, and the rest of the notice printed in letters at least 10 point: IMPORTANT NOTICE TO OWNERS IN STRATA PLAN [insert plan number] This renewal proposal may have significant legal, financial and taxation consequences for you. It may also impact on the rights of your tenants, mortgagees, covenant chargees or caveators which may in turn have impacts on you. You should ensure that you understand your rights and obligations and how this proposal will affect you. 31 Notice of decision to establish strata renewal committee A written notice of the decision to establish a strata renewal committee that is required by section 162 of the Act to be given to the owner of each lot in the strata scheme must contain the information and be in the form set out in Schedule 6 and may contain any other relevant information as the secretary of the strata committee sees fit. 32 Costs and expenses deducted from sale price For the purposes of section 170 (1) (c) (v) of the Act, the exact amount of all costs and expenses to be deducted from the sale price must be included in a strata renewal plan for the collective sale of a strata scheme, or if the exact amount of a cost or expense is not known, an estimate of the amount and a detailed explanation as to how that estimate has been determined. 33 Content of strata renewal plan For the purposes of section 170 (1) (e) of the Act, the following information must be included in a strata renewal plan: (a) particulars of any estates or interests (whether registered or unregistered), or any caveats or priority notices, that affect a lot or common property in the scheme to which the plan relates, (b) details of all current unit entitlements, (c) a report of an independent valuer that includes details of the market value of the whole building and its site (at its highest and best use) and details of the compensation value of each lot, … 34 Copy of strata renewal plan given to owners (1) For the purposes of section 173 (2) of the Act, the following information and documents must accompany the copy of a strata renewal plan given to owners: (a) a strata renewal information sheet in the approved form, (b) the approved form of a support notice, (c) details of the returning officer's address for service of a support notice. (2) In this clause, support notice has the same meaning as in section 174 of the Act. 35 Application for an order For the purposes of section 179 (1) (g) of the Act, an application for an order to give effect to a strata renewal plan must include particulars of any estates or interests (whether registered or unregistered), or any caveats or priority notices, that affect a lot or common property in the scheme to which the plan relates. 36 Decision of court For the purposes of section 182 (1) (g) of the Act, a court must be satisfied that the effects of the strata renewal plan are just and equitable in all the circumstances despite any difference between a valuation contained in the plan and any valuation that accompanied the application for an order to give effect to the plan. 37 Court order and directions For the purposes of section 183 (1) (f) of the Act, a court order giving effect to a strata renewal plan for a strata scheme may include directions about the time by which any part of the plan must be initiated or completed. … Schedule 6 Form of notice (Clause 31) Notice to owners about decision to establish strata renewal committee Strata Schemes Development Act 2015; section 162 Establishment of strata renewal committee At a meeting of Owners - Strata Plan No [insert strata scheme number] held on [insert date of meeting] a strata renewal committee was established. Function of strata renewal committee The function of the strata renewal committee is to prepare a strata renewal plan for further consideration by the owners corporation and the owners. The strata renewal plan will be based on a strata renewal proposal made by [insert name of person who gave the strata renewal proposal to the owners corporation]. Summary of strata renewal proposal The strata renewal proposal was for the [insert either "collective sale" or "redevelopment" depending on the nature of the proposal] of strata scheme SP [insert strata scheme number]. The strata renewal proposal [insert a short summary of the proposal]. Membership of strata renewal committee The strata renewal committee has [insert number of members, including the chairperson] members. The members are: Chairperson [insert name of chairperson and then insert the names of all the other members of the strata renewal committee]. Budget of strata renewal committee [Insert details of the budget for, or any limitation on the amount that can be spent, preparing the strata renewal plan and details of how reports on expenses incurred will be circulated on a quarterly or more frequent basis]. Engaging specialists The strata renewal committee has authority to engage specialists to provide advice on the preparation of the strata renewal plan. OR The strata renewal committee must seek the approval of the owners corporation before it can engage any specialist to provide advice on the preparation of the strata renewal plan. [Delete whichever is not applicable]. Period of operation of strata renewal committee The strata renewal committee can exercise its functions for 1 year from the date on which it was established, unless the owners corporation resolves to dissolve the committee earlier. The owners corporation may extend the 1 year period of operation by passing a special resolution. Minutes of meetings of strata renewal committee The strata renewal committee must keep minutes of its meetings. A copy of the minutes can be obtained from the secretary of the owners corporation [insert "and will be placed on the owners corporation notice board" if there is an owners corporation notice board]. Further information For further information please contact [insert the name and contact information for a person (such as the chairperson) who can provide information about the strata renewal committee and the preparation of the strata renewal plan].
2. Owners corporation operation, meeting procedures and requirements for service of documents are set out in the SSM Act and Strata Schemes Management Regulation 2016 (SSM Regulation).

Strata Schemes Management Act 2015

1. Relevant provisions of the SSM Act provide: Part 1 Preliminary … 4 Definitions (1) In this Act: … utility lot means a lot designed to be used primarily for storage or accommodation of boats, motor vehicles or goods and not for human occupation as a residence, office, shop or the like. … 5 Resolutions of owners corporations (1) In this Act, a resolution of an owners corporation is a special resolution if: (a) it is passed at a properly convened general meeting, and (b) not more than 25% of the value of votes cast are against the resolution. (2) For the purposes of determining a special resolution, the value of a vote in respect of a lot is equal to the unit entitlement of the lot. However, if the total unit entitlement of lots of the original owner is not less than half of the aggregate unit entitlement, the value of the vote in respect of those lots is taken to be reduced by two-thirds (ignoring any fraction). (3) In this Act, a resolution of an owners corporation is a unanimous resolution if it is passed at a properly convened general meeting and no vote is cast against the resolution. Note. A motion or election that is not required to be approved by a special resolution or unanimous resolution is passed by a simple majority of votes (see clause 14 of Schedule 1). 6 Meaning of "large strata scheme" (1) In this Act, large strata scheme means a strata scheme comprising more than 100 lots or another number of lots prescribed by the regulations for the purposes of this section. (2) When calculating the number of lots in a strata scheme for the purposes of this section, utility lots and lots used for the purposes of parking are not to be included in the calculation. … Part 2 Managing body for strata schemes - owners corporation … Division 3 Meetings of owners corporation … 19 Other general meetings (1) The secretary or a strata committee of an owners corporation may convene a general meeting (that is not an annual general meeting) of the owners corporation at any time. (2) The secretary of the owners corporation, or another officer if the secretary is absent, must convene a general meeting (that is not an annual general meeting) of the owners corporation as soon as practicable, and not later than 14 days after, receiving a qualified request. (3) A meeting may be convened on a qualified request even if the first annual general meeting has not been held. (4) A request is a qualified request for the purposes of this section if it is made by one or more owners of a lot or lots in the strata scheme having a total unit entitlement of at least one-quarter of the aggregate unit entitlements. … 23 Meeting procedures and voting Other procedures for general meetings of the owners corporation and voting at those meetings are set out in Schedule 1. Part 3 Strata committee of owners corporation Division 1 Constitution of strata committee … 31 Persons who are eligible to be appointed or elected to strata committee (1) The following persons are eligible for appointment or election to the strata committee of an owners corporation: (a) an individual who is a sole owner of a lot in the strata scheme, (b) a company nominee of a corporation that is a sole owner of a lot in the strata scheme, (c) an individual who is a co-owner of a lot or a company nominee of a corporation that is a co-owner of a lot in the strata scheme, if the person is nominated for election by an owner who is not a co-owner of the lot or by a co-owner of the lot who is not a candidate for election as a member, (d) an individual who is not an owner of a lot in the strata scheme, if the person is nominated for election by an owner of a lot who is not a member, or is not seeking election as a member, of the strata committee. (2) To avoid doubt, an individual who is a sole owner of a lot may nominate himself or herself, and an owner that is a corporation may nominate the corporation's company nominee, for election as a member of the strata committee. (3) A sole owner of a lot in a strata scheme may not nominate more than one person for election as a member of the strata committee, except as provided by subsection (5). (4) Only one co-owner (including a company nominee of a co-owner) of the same lot may be a member of a strata committee at the same time, except as provided by subsection (5). (5) A person who is an owner of more than one lot in the strata scheme may nominate one person for election as a member of the strata committee for each lot for which the person is an owner. … Part 4 Strata managing agents and building managers … Division 2 Functions of strata managing agent … 54 Functions of officers and strata committee may be given to strata managing agent (1) The instrument of appointment of a strata managing agent may provide that the strata managing agent has and may exercise all the functions of the chairperson, secretary, treasurer or strata committee of an owners corporation or the functions of those officers or the strata committee specified in the instrument. (2) However, the chairperson, secretary, treasurer and strata committee of an owners corporation may continue to exercise all or any of the functions that the strata managing agent is authorised to exercise. (3) Any act or thing done or suffered by a strata managing agent in the exercise of any function of the chairperson, secretary, treasurer or strata committee conferred on the strata managing agent in accordance with this section: (a) has the same effect as if it had been done or suffered by the chairperson, secretary, treasurer or strata committee, and (b) is taken to have been done or suffered by the chairperson, secretary, treasurer or strata committee. (4) This section is subject to section 56. … Part 12 Disputes and Tribunal powers … Division 4 Orders that may be made by Tribunal … 236 Order for reallocation of unit entitlements (1) Tribunal may make order allocating unit entitlements The Tribunal may, on application, make an order allocating unit entitlements among the lots that are subject to a strata scheme in the manner specified in the order if the Tribunal considers that the allocation of unit entitlements among the lots: (a) was unreasonable when the strata plan was registered or when a strata plan of subdivision was registered, or (b) was unreasonable when a revised schedule of unit entitlement was lodged at the conclusion of a development scheme, or (c) became unreasonable because of a change in the permitted land use, being a change (for example, because of a rezoning) in the ways in which the whole or any part of the parcel could lawfully be used, whether with or without planning approval. (2) Matters to be taken into consideration In making a determination under this section, the Tribunal is to have regard to the respective values of the lots and to such other matters as the Tribunal considers relevant. … Part 14 Miscellaneous … 263 Service of documents by owners corporation and others (1) Application of section This section applies to a notice or other document required or authorised under this Act or the by-laws to be given by the Secretary, the Tribunal, an owners corporation, the lessor of a leasehold strata scheme, the original owner, a strata committee, the secretary of an owners corporation or a strata managing agent and is subject to the other provisions of this Act. (2) Service on occupier of lot A notice or other document may be given to the occupier of a lot: (a) by post at the address of the lot, or (b) by leaving it at the address of the lot with a person apparently of or above the age of 16 years. (3) Service where address is included in strata roll If an address for the service of notices on a person is recorded in the strata roll or has been notified in a tenancy notice, a document may be given to the person: (a) in the case of a postal address, by post at that address, or (b) by leaving it at that address with a person apparently of or above the age of 16 years, or (c) in the case of an email address, by email to an email address specified for the service of documents. (4) Service on owner of lot A document may be given to the owner of a lot in accordance with subsection (3) or if no address for service is recorded on the strata roll: (a) personally, or (b) by post at the address of the lot, or (c) by leaving it on a part of the lot that is the owner's place of residence or business (otherwise than on a part of the lot provided for the accommodation of a vehicle or as a storeroom), or (d) by leaving it in a place provided on the parcel for receiving mail posted to the lot, or (e) in any other manner authorised by the by-laws for the service of notices on owners. (5) Service of notice to produce certain records and property Notice under section 182 may be given to a person: (a) personally or by post, or (b) by leaving it with a person apparently of or above the age of 16 years at the place of residence or place of business of the person who is to be given the notice. (6) Service on person where building included in part strata parcel A document may be given to a person in whom is vested an estate in fee simple, or, in the case of a leasehold strata scheme, a leasehold estate registered under the Real Property Act 1900, in part of a building or its site, another part of which is included in a part strata parcel, in any manner provided by section 170 of the Conveyancing Act 1919. … Schedule 1 Meeting procedures of owners corporation … Part 3 General meeting procedure … 17 Quorum (1) Quorum required for motion or election A motion submitted at a meeting must not be considered, and an election must not be held at a meeting, unless there is a quorum present to consider and vote on the motion or on the election. (2) When quorum exists A quorum is present at a meeting only in the following circumstances: (a) if not less than one-quarter of the persons entitled to vote on the motion or election are present either personally or by duly appointed proxy, … Schedule 2 Meeting procedures of strata committees (Section 40) Part 1 Preliminary 1 Meetings to which Schedule applies This Schedule applies to meetings of the strata committee of an owners corporation. 2 Application to large strata schemes The provisions of this Schedule are subject to the regulations, but only to the extent that the regulations relate to large strata schemes. 3 Definitions In this Schedule: owner means an owner of a lot in the strata scheme for which a meeting is held or proposed to be held. tenant member means a tenant representative nominated for a strata committee under section 33. Part 2 Notices of meetings 4 Notice of meetings for large strata schemes (1) The secretary of the owners corporation of a large strata scheme must give notice of a meeting to each other member of the strata committee (including any tenant member) at least 3 days before the meeting and to each owner. (2) Notice is to be given in accordance with section 263 and by displaying the notice on the notice board (if any) maintained by the owners corporation. … Part 3 Meeting procedure … 12 Quorum (1) Quorum required for motion A motion submitted at a meeting of a strata committee must not be considered unless there is a quorum present to consider and vote on the motion. (2) When quorum exists A quorum is present at a meeting only in the following circumstances: (a) in the case of a strata committee which has only one member, if the member is present, (b) in any other case, if not less than one-half of the persons entitled to vote on the motion are present. (3) A person who has voted, or intends to vote, on a motion or at an election at a meeting by a permitted means other than a vote in person is taken to be present for the purposes of determining whether there is a quorum. (4) The quorum for meetings of a strata committee is to be calculated on the basis of the number of members last determined by the owners corporation for the committee. … 17 Minutes and other records (1) Records to be kept A strata committee must cause to be kept a record of its decisions, any notices given under this Schedule and full and accurate minutes of its meetings. (2) The minutes must include minutes of all resolutions passed in accordance with this Schedule. …

Strata Schemes Management Regulation 2016

1. Relevant provisions of the SSM Regulation provide: Part 2 Owners corporations and strata committees … 14 Other means of voting - owners corporation and strata committee (1) An owners corporation or strata committee may, by resolution, adopt any of the following means of voting on a matter to be determined by the corporation or committee: … (b) voting by means of email or other electronic means before the meeting at which the matter (not being an election) is to be determined by the corporation or committee (pre-meeting electronic voting).
2. SP No 61299 is a large strata scheme as defined in s 6 of the SSM Act. Not counting the utility lots it has 123 lots in terms of s 6(2).

Land Acquisition (Just Terms Compensation) Act 1991

1. The Land Acquisition (Just Terms Compensation) Act 1991 (Just Terms Act) is referred to in cl 27 compensation value of the SSD Regulation. Relevant sections are: 55 Relevant matters to be considered in determining amount of compensation In determining the amount of compensation to which a person is entitled, regard must be had to the following matters only (as assessed in accordance with this Division): (a) the market value of the land on the date of its acquisition, (b) any special value of the land to the person on the date of its acquisition, (c) any loss attributable to severance, (d) any loss attributable to disturbance, (e) the disadvantage resulting from relocation, (f) any increase or decrease in the value of any other land of the person at the date of acquisition which adjoins or is severed from the acquired land by reason of the carrying out of, or the proposal to carry out, the public purpose for which the land was acquired. 56 Market value (1) In this Act: market value of land at any time means the amount that would have been paid for the land if it had been sold at that time by a willing but not anxious seller to a willing but not anxious buyer, disregarding (for the purpose of determining the amount that would have been paid): (a) any increase or decrease in the value of the land caused by the carrying out of, or the proposal to carry out, the public purpose for which the land was acquired, and … (c) any increase in the value of the land caused by its use in a manner or for a purpose contrary to law.

Summary of process for collective sale of a strata scheme

1. The process for a collective sale of a strata scheme was helpfully summarised by the Applicant, to which some amendment has been made, as follows: 1. Step 1: a strata renewal proposal is prepared and submitted to the committee of an OC (SSD Act, s 156; SSD Regulation cl 30). 2. Step 2: within 30 days, the strata committee must consider the proposal (SSD Act, s 157). 3. Step 3: if the strata committee is supportive of the proposal, the strata committee must convene a general meeting of the owners within 30 days (SSD Act, s 158) complying with subs (4) (14 days' notice of the meeting) and send minutes to lot owners within 14 days after the meeting (s 157(5)) which must include a complete copy of the strata renewal proposal and detailed reasons for the decision (s 157(4)). 4. Step 4: if the general meeting of the owners is supportive of the proposal, a strata renewal committee (SRC) must be formed (SSD Act, s 160). Written notice of this decision must be given to all lot owners within 14 days of the establishment of the SRC (SSD Act, s 162; SSD Regulation, reg 31). 5. Step 5: the SRC prepares a strata renewal plan (s 164(1)). The requirements for the content of the strata renewal plan are very prescriptive and involve the preparation of valuations on two bases - the individual lots within the strata scheme and the whole building and its site (SSD Act, ss 170-71; SSD Regulation, reg 33). The strata committee lasts for one year and the term can be extended by special resolution of the OC (s 166). 6. Step 6: the strata renewal plan must be considered by an OC general meeting, notice of which must comply with the SSD Act, s 172(2) and Sch 7 cl 3. The OC can by special resolution decide to give the strata renewal plan to the owners for their consideration (s 172(5)). This must be done within 14 days of the decision being made (s 173). 7. Step 7: at least 75% of non-utility lot owners must support the strata renewal plan (s 154, definition of "required level of support"). Notice must be given to all non-utility lot owners and the Registrar-General of the OC secretary's receipt of the required level of support within 14 days of such receipt (s 176(2)). 8. Step 8: if support notices (SSD Act, s 174(1)) are received from at least 75% of the owners of non-utility lots (SSD Act, s 154, definition of "required level of support"), the OC at a general meeting may resolve to apply to the Land and Environment Court (Court) to have the strata renewal plan made (s 178(1)). Section 179 (see also SSD Regulation, reg 35) outlines the documents that the application to the Court for such an order must comprise. The SSD Act prescribes who must be served with a copy of the application to the Court, including all owners (SSD Act, ss 178(4), 179(2)). 9. Step 9: the Court considers the strata renewal plan and may make orders giving effect to the strata renewal plan if satisfied of certain matters which ultimately leads to the termination of the strata scheme (SSD Act, ss 182-183; SSD Regulation, regs 36-37). The orders bind the owners, any purchaser of the scheme and the dissenting owners (SSD Act, s 187).
2. Additional steps not arising in this case given the absence of respondents include: 1. Any dissenting owners and those on whom notice of the application must be served under s 179(2)(b)-(e) may object to the Court to the making of the strata renewal plan (SSD Act, s 180). 2. The SSD Act provides for a conciliation process between an OC and dissenting owners which is a variation on the process under s 34 of the Land and Environment Court Act 1979 (SSD Act, s 181, see also the Court's Practice Note - Strata Schemes Development Proceedings).

Evidence

1. The Applicant read the following affidavits: Christina Alice Renner 18 April 2019 Ping Yan So 2 July 2019 Ping Yan So 4 July 2019 Ping Yan So 8 July 2019 Vanessa Walsh 23 May 2019 Vanessa Walsh 2 July 2019 Vanessa Walsh 9 July 2019 Gus Moors 28 June 2019

1. Mr So chairman of the OC strata committee affirmed an affidavit dated 2 July 2019. He outlined the procedural steps that were taken in relation to the proposal for the collective sale of the strata scheme under the SSD Act (including the various meetings that were held, the distribution of meeting minutes, and the collection of support notices). Mr So affirmed a second affidavit dated 4 July 2019 which provides additional information relating to the procedural steps undertaken for the collective sale of the strata scheme. In a third affidavit affirmed 8 July 2019 Mr So detailed the provision of notice of the OC's decision to Seasons (the only tenant required to be notified) to apply to the Court to give effect to the strata renewal plan.
2. Ms Renner solicitor for the Applicant swore an affidavit dated 18 April 2019 confirming that all persons required to be served with notice of the application by s 179(2) of the SSD Act had been served, except the owners of lot 4, despite numerous attempts. She described how those persons were served.
3. Ms Walsh solicitor for the Applicant affirmed an affidavit dated 23 May 2019. She outlined the successful service of notice of the Class 3 application on the owners of lot 4. Ms Walsh affirmed a second affidavit dated 2 July 2019. She requested that the Council of the City of Sydney (the Council) provide a list of all development consents or complying development certificates held by the Council which evidence a change of permitted land use for any of the lots within SP No 61299. The list sent to Ms Walsh identified that no development consents had been issued or complying development certificates lodged with the Council for any change of use within the meaning of the Environmental Planning and Assessment Act 1979 of any of the lots within SP No 61299 since its registration. She described the current and historical zoning of the site. Ms Walsh affirmed a third affidavit dated 9 July 2019 annexing a table listing the registered proprietors of each of the lots, where the owners' and mortgagees' valid support notices are located in the evidence and each lot owner who is a dissenting lot owner. Another table provided identifies the service of the notice of the Class 3 application on each of the lot owners, the purchaser and the mortgagees of dissenting lots as required by s 179 of the SSD Act.
4. Mr Moors real estate agent employed by Colliers International (Colliers) appointed by the SRC as the sales agent for the collective sale of the site swore an affidavit dated 28 June 2019. He described the marketing campaign he used and the number of formal bids received to purchase the building. Colliers undertook four rounds of expressions of interest (EOI) offers to arrive at the final bidder. The final sale price of $81.8 million was a record sale price. Since the preferred purchaser was chosen in November 2017, there has been a change in property market conditions to the effect that the sale price of $81.8 million would not be achieved if the EOI campaign was conducted in June 2019.
5. The very detailed evidence is otherwise referred to in the judgment as relevant findings of fact are made.
6. The Class 3 application filed 7 February 2019 contains: 1. a statutory declaration made by Mr So dated 28 November 2018 (tab 1); 2. a title search for SP No 61299 dated 7 November 2018 (tab 1); 3. a letter to each lot owner enclosing all required documents under s 173 of the SSD Act (tab 1); 4. a letter issued by the returning officer on 25 October 2018 reporting that it received 106 support notices in relation to the strata renewal plan (of which 94 were compliant with s 174 of the SSD Act and 12 were non-compliant due to the non-execution of the registered mortgagee of the applicable lot) (tab 1); 5. the strata renewal plan (tab 2); 6. the support notices received in relation to the strata renewal plan (tab 3); 7. a list of dissenting owners and associated mortgagees (tab 4); 8. a statutory declaration made by Mr Yeh sole director and secretary of City Hotel Enterprise Pty Ltd (City Hotel) stating that City Hotel entered into a deed with the SRC to sell SP No 61299 to City Hotel and that City Hotel does not have any relationship with any lot owners in SP No 61299 (tab 5); 9. a valuation report for the site by Savills Valuations Pty Ltd (Savills) dated 29 January 2019 (tab 6); and 10. a list of any estates, interests, caveats or priority notices in relation to the common property or any lots within SP No 61299 (tab 7).
7. The strata renewal plan addresses the matters outlined in [54] below.

Exhibits

1. The Applicant tendered the following exhibits: Exhibit A Class 3 application Exhibit B Bundle of documents Exhibit C Exhibits CAR-1 and CAR-2 to affidavit of Ms Renner dated 18 April 2019 containing evidence relating to the method and timing of service on each relevant person. Exhibit D Exhibit PYS-1 to affidavit of Mr So dated 2 July 2019 contains evidence relating to the preparation of the strata renewal proposal for SP No 61299; the distribution to all lot owners of the minutes of the 27 April 2017 strata committee meeting in which the strata committee decided to pursue the collective sale proposal; the distribution to lot owners of the minutes of the 25 May 2017 annual general meeting (AGM) in which the strata renewal proposal was further considered; the minutes of the extraordinary general meeting (EGM) held on 6 September 2017 in which the OC approved the appointment of Dentons as legal advisor; minutes of meetings in which the OC has extended the SRC's tenure; minutes of the EGM held on 25 July 2018 in which a special resolution was passed unanimously to give the strata renewal plan to the owners for their consideration; evidence relating to the distribution of the strata renewal plan information package; written notice dated 5 November 2018 to lot owners that the required level of support of the strata renewal plan had been received; and minutes of the 21 November 2018 EGM to decide whether to apply to the Court for an order to give effect to the strata renewal plan. Exhibit E Exhibit PYS-2 to affidavit of Mr So dated 4 July 2019 contains the notice of the 25 May 2017 AGM that was sent to owners on 8 May 2017; the emails sent to the OC secretary and each member of the SRC enclosing minutes of the SRC meetings held on 15 June and 15 November 2017; and an email sent to all owners dated 27 November 2018 enclosing the minutes of the 21 November 2017 EGM. Exhibit F Attachment 1 Applicant's email supplementary submission dated 12 July 2019 - the notice of the AGM on 9 March 2016 being the AGM that occurred prior to the strata committee meeting on 27 April 2017 where the collective sale was first contemplated. Exhibit G Attachment 2 Applicant's email supplementary submission dated 12 July 2019 - the minutes of the AGM on 9 March 2016. Exhibit H Attachment 3 Applicant's email supplementary submission dated 12 July 2019 - the notice of the strata committee meeting held on 27 April 2017.

Satisfaction of matters in s 182 of the SSD Act

1. The matters the Court must be satisfied about in determining whether to give effect to the strata renewal plan are specified in s 182(1)(a)-(d), (g) of the SSD Act (subcll (e) and (f) are not applicable in this case) and cl 36 of the SSD Regulation. I will consider these in turn in light of the evidence adduced.

Section 182(1)(a): the relationship between the lot owners and the purchaser

1. The Class 3 application contains a declaration on behalf of the purchaser confirming that it does not have any relationship with the owner of any lot in the strata scheme. This declaration acknowledges that the purchaser entered into a deed with the SRC on 8 March 2018 (annexure B to the strata renewal plan, Class 3 application; affidavit of Mr Moors dated 28 June 2019 at annexure A). This deed followed an EOI campaign of four rounds (strata renewal plan, pp 23-24, annexure B, Class 3 application, affidavit of Mr Moors dated June 2018 at par 7, annexure A) and was entered into once the purchaser's bid was agreed by the SRC to be successful, subject to the Class 3 application being made. The EOI campaign resulted in bids from 16 bidders that ranged from $50 million through to the price on which the strata renewal plan is based, being $81.18 million (strata renewal plan, pp 23-24, Class 3 application; affidavit of Mr Moors dated 28 June 2019 at par 6, pars 8-9).
2. Given the EOI campaign administered by Colliers in respect of the building, the Court is satisfied that there was no pre-existing relationship between the lot owners and the purchaser. The arms-length competitive EOI process has not affected the strata renewal plan being prepared in good faith. The EOI process has facilitated the preparation of the plan in good faith as required by s 182(1)(a) of the SSD Act.
3. I am satisfied that for the purposes of s 182(1)(a) any relationship between the owners of the lots and the purchaser has not prevented the plan being prepared in good faith.

Section 182(1)(b): procedural steps taken to prepare the strata renewal plan and obtain support

1. The steps required to prepare the strata renewal plan and obtain the required level of support are set out in ss 156-176 of the SSD Act and cll 26-34 of the SSD Regulation.

Step 1

1. Under s 156(1) of the SSD Act, any person may give a written proposal for the collective sale of a strata scheme to the OC of the scheme. On 5 April 2017, Mr So submitted the "Proposal for the Collective (En-bloc) Sale of 252 Sussex Street, Sydney" (the proposal) (exhibit PYS-1 to the affidavit of Mr So dated 2 July 2019) to the OC. To comply with s 156(2) of the SSD Act and cl 30 of the SSD Regulation, the proposal must include: 1. the prescribed warning notice on the front page (see SSD Regulation, reg 30(1)(a) and (2); p 1 tab 1, exhibit PYS-1 to the affidavit of Mr So dated 2 July 2019); 2. the name and address of the proponent (see SSD Regulation, reg 30(1)(b); p 2 tab 1, exhibit PYS-1 to the affidavit of Mr So dated 2 July 2019); 3. details of the financial interests the proponent has in any of the lots in the scheme (see SSD Regulation, reg 30(1)(b); p 2 tab 1, exhibit PYS-1 to the affidavit of Mr So dated 2 July 2019); 4. a general description of the proposal and its purpose (see SSD Regulation, reg 30(1)(d); p 2 tab 1, exhibit PYS-1 to the affidavit of Mr So dated 2 July 2019); 5. details of how the proposal will be funded (see SSD Regulation, reg 30(1)(d); pp 15-16 tab 1, exhibit PYS-1 to the affidavit of Mr So dated 2 July 2019); 6. an estimate of total costs of obtaining an order from the Court to give effect to the strata renewal plan (see SSD Regulation, reg 30(1)(f); pp 17-22 tab 1, exhibit PYS-1 to the affidavit of Mr So dated 2 July 2019); 7. whether the proponent will provide any monetary contribution towards the costs (see SSD Regulation, reg 30(1)(g); pp 15-16 tab 1, exhibit PYS-1 to the affidavit of Mr So dated 2 July 2019); 8. if the proponent will provide a contribution, whether that contribution will be secured (see SSD Regulation, reg 30(1)(h) - not applicable in this case); 9. details of the potential for owners to buy back into the development following the sale (see SSD Regulation, reg 30(1)(i) - not applicable in this case); 10. an indicative sale price and an explanation of how that price was determined and the distribution of that sale price on current unit entitlements (see SSD Regulation, reg 30(1)(j)(i); p 13 tab 1, exhibit PYS-1 to the affidavit of Mr So dated 2 July 2019), and the proposed timetable for the collective sale (see SSD Regulation, reg 30(1)(j)(ii); pp 4, 17-22 tab 1, exhibit PYS-1 to the affidavit of Mr So dated 2 July 2019).
2. The proposal submitted by Mr So addresses each of these matters as applicable and complies with s 156 of the SSD Act.

Step 2

1. Section 157 of the SSD Act required the proposal to be considered by the strata committee called by the secretary within 30 days of the proposal being received. The purpose of the meeting is to consider whether the proposal warrants further consideration by the OC. To this end, a meeting of the strata committee was called by the secretary and convened on 27 April 2017 (affidavit of Mr So dated 2 July 2019 at pars 14-16). Notice of a strata committee meeting in a large strata scheme is required to be given with three days' notice (SSM Act, Sch 2 cl 4) and in accordance with s 263 of the SSM Act. A copy of the 27 April 2017 strata committee meeting notice and the distribution list to whom the notice was sent is exhibit H.
2. There are five members of the strata committee. A quorum is formed if "not less than one-half of the persons entitled to vote on the motion are present" (SSM Act, Sch 2 cl 12(2)(b)). At the 27 April 2017 strata committee meeting there were four members of the strata committee present.
3. It was determined by the strata committee that the proposal warranted further consideration. The minutes record the strata committee resolutions as required by Sch 2 cl 17(2) of the SSM Act, including in respect of item 3 which related to the collective sale of the building and item 4 which related to owners voting electronically for the purpose of general meetings pursuant to cl 14(1)(b) of the SSM Regulation (tab 2, exhibit PYS-1 to the affidavit of Mr So dated 2 July 2019).
4. The minutes of the strata committee meeting including detailed reasons for the decision were sent by the secretary to the owners in the strata scheme on 10 May 2017 (SSD Act, s 157(4), (5); affidavit of Mr So dated 2 July 2019 at pars 16-18; tab 2, exhibit PYS-1 to the affidavit of Mr So dated 2 July 2019). A full copy of the proposal had already been sent to the owners with the notice for the AGM which was sent on 8 May 2017 (affidavit of Mr So dated 2 July 2019 at pars 17-18).
5. The process for the appointment of the strata committee prior to the strata committee meeting on 27 April 2017 was also identified in supplementary submissions which included exhibits F and G. Strata committee meetings are regulated by Pt 3 and Sch 2 of the SSM Act.
6. The notice of the AGM prior to 27 April 2017 namely 9 March 2016 is exhibit F.
7. The minutes of the AGM on 9 March 2016 establishing the strata committee in place as at 27 April 2017 is exhibit G.
8. The strata committee members are as follows: 1. Ping Yan So - owner lots 71 and 138; 2. Richard Ling Cheng Fah - nominee for lot 55; 3. Jackie Kwan - part owner lot 66; 4. Marcus Tow - director of Seasons (tenant representative under s 33 of the SSM Act); 5. Frank Shien - company nominee of owner of lots 122, 124 and 125 (CN Investments Pty Ltd).
9. Section 31 of the SSM Act contains requirements for eligibility, which includes sole ownership of a lot, a nominee of a company owned lot, a partial owner of a lot and a non-owner nominee of an owner. As set out above, the members of the strata committee meet a criterion in s 31 of the SSM Act.
10. Notice of a strata committee meeting in a large strata scheme is required to be given with three days' notice (SSM Act, Sch 2 cl 4) and in accordance with s 263 of the SSM Act. A copy of the 27 April 2017 strata committee meeting notice and the distribution list to whom the notice was sent is exhibit H.
11. There are five members of the strata committee. A quorum is formed if "not less than one-half of the persons entitled to vote on the motion are present" (SSM Act, Sch 2 cl 12(2)(b)).

Step 3

1. As the strata committee considered that the proposal warranted further consideration, s 158(1) of the SSD Act mandated that a general meeting of the OC be convened within 30 days. General meetings of the OC are regulated by Pt 2 ss 19, 23 and Sch 1 of the SSM Act. This was done since an AGM was held on 25 May 2017. The proposal was included in the notice calling the AGM (tab 1, exhibit PYS-2 to the affidavit of Mr So dated 4 July 2019 (motion 18)). The notice of the general meeting indicated that a purpose of the meeting was to consider the proposal (SSD Act, Sch 7 cl 1(a)), and included a brief summary of the proposal (SSD Act, Sch 7 cl 1(d); summary in annexure G, tab 1, exhibit PYS-2 to the affidavit of Mr So dated 4 July 2019), a form of motion to decide whether the proposal warranted further investigation (SSD Act, Sch 7 cl 1(e); motion 18.1, tab 1, exhibit PYS-2 to the affidavit of Mr So dated 4 July 2019) and a copy of the proposal (SSD Act, Sch 7 cl 1(f); annexure G, tab 1, exhibit PYS-2 to the affidavit of Mr So dated 4 July 2019). The notice of the AGM was given 17 days before the meeting on 8 May 2017 (tab 1, exhibit PYS-2 to the affidavit of Mr So dated 4 July 2019). Section 158(4) of the SSD Act requires 14 days' notice.

Strata renewal committee (step 4)

1. At the AGM on 25 May 2017, motion 18.1 regarding whether the proposal warranted further investigation was carried by the OC (SSD Act, s 160(1); affidavit of Mr So dated 2 July 2019 at par 22; tab 3, exhibit PYS-1 to the affidavit of Mr So dated 2 July 2019). A quorum of a general meeting is formed if at least 25% of persons entitled to vote (159 lots) are present (SSM Act, Sch 1 cl 17(2)(a)). Persons attending by a "permitted means" (which includes means established under cl 14(1)(b) of the SSM Regulation (as discussed in [36] above)) is taken to be present for determining quorum. The AGM was attended by owners of 51 lots either in person, by proxy or by ballot (tab 3, exhibit PYS-1 to the affidavit of Mr So dated 2 July 2019). The OC also resolved to form the SRC to prepare a strata renewal plan and elected seven members of the SRC (SSD Act, ss 160(1), (3), (5), 161, Sch 7(2); affidavit of Mr So dated 2 July 2019 at pars 22-25; tab 3, exhibit PYS-1 to the affidavit of Mr So dated 2 July 2019), none of whom have a financial interest of more than 25% of the lots in the strata scheme (SSD Act, s 160(2); affidavit of Mr So dated 2 July 2019 at par 24).
2. Within 14 days of the establishment of the SRC (on 6 June 2017), the secretary gave notice of its establishment in accordance with cl 31 and Sch 6 of the SSD Regulation (SSD Act, s 162(1) and (2); affidavit of Mr So dated 2 July 2019 at par 26; annexure A, tab 3, exhibit PYS-1 to the affidavit of Mr So dated 2 July 2019).
3. During the life of the SRC (on 20 November 2017), a member resigned (Ms Diana Tong - company nominee for lot 69) (SSD Act, s 163; affidavit of Mr So dated 2 July 2019 at par 29). She was not replaced. This does not affect any step taken thereafter by the SRC in good faith: see s 164(4) of the SSD Act.
4. SRC meetings are regulated by Pt 10, Div 4 of the SSD Act. A quorum is formed by a majority of members, s 168(2). The SRC discussions were largely by email, however, it held meetings on 15 June 2017 and 15 November 2017 (SSD Act, s 168; affidavit of Mr So dated 2 July 2019 at pars 32-33; tabs 7 and 8, exhibit PYS-1 to the affidavit of Mr So dated 2 July 2019) attended by six of eight members. The minutes to these meetings of the SRC were distributed to the owners within the required 14 days (SSD Act, s 169; affidavit of Mr So dated 4 July 2019 at par 6).
5. SRCs, by default, only operate for one year unless their operation is extended by special resolution of a general meeting. A special resolution requires a 75% majority to pass (SSD Act, s 5).
6. The SRC's operation was unanimously extended by the AGM on 25 May 2018, which was attended in person or by proxy by owners or company representatives of 45 lots (item 15, tab 5, exhibit PYS-1 to the affidavit of Mr So dated 2 July 2019).
7. Since its inception on 25 May 2017, the SRC's tenure has been extended by unanimous decision at an AGM (SSD Act, s 166; affidavit of Mr So dated 2 July 2019 at par 31; tabs 5 and 6, exhibit PYS-1 to affidavit of Mr So dated 2 July 2019). The effect of s 167(d) of the SSD Act is that the SRC was dissolved the day the OC decided to apply to the Court for an order to give effect to the strata renewal plan, that is, on 21 November 2018 (tab 14, exhibit PYS-1 to the affidavit of Mr So affidavit dated 2 July 2019).
8. The SRC was responsible for engaging Colliers as the sales agent for the building and Savills as the independent valuer required for the strata renewal plan and for the preparation of the strata renewal plan generally.

Preparation of strata renewal plan (step 5)

1. Section 170 of the SSD Act sets out what must be included in a strata renewal plan. It must include: 1. a general overview of the proposal (SSD Act, s 170(1)(a); pp 16-20, annexure B to Class 3 application); 2. a full and frank statement by the purchaser regarding their intended use of the building (SSD Act, s 170(1)(b); annexures B and D to Class 3 application); 3. the name of the purchaser (SSD Act, s 170(1)(c)(i); p 26, annexure B to Class 3 application); 4. the sale price (SSD Act, s 170(1)(c)(ii); p 26, annexure B to Class 3 application); 5. the proposed completion day for the sale (SSD Act, s 170(1)(c)(iii); pp 28-29, annexure B to Class 3 application); 6. the proposed day on which the lot owners are to provide vacant possession of their lots (SSD Act, s 170(1)(c)(iv); p 38, annexure B to Class 3 application, being sold as going concern subject to leases); 7. details about costs as prescribed by the SSD Regulation (SSD Act, s 170(1)(c)(v); SSD Regulation, reg 32; pp 26, 38, 42-45, annexure B to Class 3 application); 8. any other terms and conditions of sale considered by the SRC as significant (SSD Act, s 170(1)(c)(vi); pp 26-29, annexure B to Class 3 application at annexure A); 9. particulars of any estates or interest (whether registered or unregistered), or any caveats or priority notices, that affect a lot or common property in the scheme (SSD Act, s 170(1)(e); SSD Regulation, reg 33(a); annexure B to Class 3 application at annexure C); 10. details of all current unit entitlements (SSD Act, s 170(1)(e); SSD Regulation, reg 33(b); p 15, annexure B to Class 3 application); 11. a report of an independent valuer (SSD Act, s 170(1)(e); SSD Regulation, regs 33(c), 27, 28; annexure B to Class 3 application at annexure A (first valuation)) detailing the market value of the whole building and its site (at its highest and best use) (SSD Regulation, reg 28; first valuation pp 110-111) and details of the compensation value of each lot (SSD Regulation, reg 27; first valuation pp 125-128) valued as at not more than 45 days before the OC meeting to consider the strata renewal plan (date of first valuation 18 June 2018; EGM to consider the plan 25 July 2018); 12. provision for the purchase of each owner's lot at not less than the compensation value for the lot (SSD Act, s 170(3); annexure B, tab 2, Class 3 application pp 38-41 and table 5 (pp 42-45)).
2. The strata renewal plan attached to the Class 3 application addresses each of these matters.
3. The strata renewal plan complies with the requirement in s 170(3) of the SSD Act as all lots are proposed to be purchased for at least a lot's compensation value.
4. Section 171(1) of the SSD Act provides that "the amount paid for the sale of the lots and common property in the scheme must be apportioned among the owners of the lots in the scheme in the same proportions as the unit entitlements of the owners' lots". The strata renewal plan proposed does not comply with s 171(1) of the SSD Act and the Applicant seeks an ancillary order under s 186(1) of the SSD Act to vary the unit entitlements to ensure that all lots are paid at least the compensation value as determined by the Savills valuation (tab 2 (annexure B) to Class 3 application pp 38-45). This is to account for the fact that the building is a mixed-use building and that the market values of lot 120 (the cafe), lot 121 (storage), lot 122 (reception), lot 124 (office) and lot 125 (gymnasium) are greater than the unit entitlements allocated to those lots. Resolution of this conflict in the legislation in these circumstances is discussed below at [100]-[112].
5. The strata renewal plan does not propose vacant possession. This is also discussed further below at [115]-[119].

Consideration of strata renewal plan (step 6)

1. On 25 July 2018, an EGM was convened to consider the strata renewal plan (SSD Act, s 172(1)). General meetings are regulated by Pt 2 and Sch 1 of the SSM Act. More than 14 days' notice of the meeting was given on 3 July 2018 and the notice complied with cl 3 of Sch 7 of the SSD Act (SSD Act, s 172(2); affidavit of Mr So dated 2 July 2019 at par 36; tab 9, exhibit PYS-1 to the affidavit of Mr So dated 2 July 2019). A quorum of a general meeting is formed if at least 25% of persons entitled to vote (159 lots) are present (SSM Act, Sch 1 cl 17(2)(a)). Persons attending by a "permitted means" (which includes means established under cl 14(1)(b) of the SSM Regulation (as discussed in [36] above)) is taken to be present for determining quorum (SSD Act, Sch 1 cl 17(3)). The EGM was attended by owners of 82 lots either in person, by proxy or by ballot (tab 10, exhibit PYS-1 to the affidavit of Mr So dated 2 July 2019).
2. At the EGM, it was resolved by special resolution as required by s 172(5) that the strata renewal plan should be given to the owners for their consideration (SSD Act, s 172(5); affidavit of Mr So dated 2 July 2019 at pars 34-41; tab 10, exhibit PYS-1 to So affidavit dated 2 July 2019) and a returning officer was appointed. The returning officer was a solicitor from Aequitas Lawyers who was not otherwise involved in the preparation of the strata renewal plan - Dentons had been engaged for that purpose (annexure B to Class 3 application, p 22; SSD Regulation, reg 29; tab 10, exhibit PYS-1 to the affidavit of Mr So dated 2 July 2019).
3. As the OC decided to give the strata renewal plan to the owners for their consideration, the OC secretary caused a copy of the strata renewal plan to be provided along with the documents prescribed by the SSD Regulation (SSD Act, s 173(2); SSD Regulation, reg 34; affidavit of Mr So affidavit dated 2 July 2019 at pars 42-44; tab 1 (annexure 1) to the Class 3 application) on 2 August 2018 (that is, within the 14 days required by the SSD Act, s 173(1)). This included the pro-forma support notice for completion by the owners and details on the timing of when those notices were required to be returned as prescribed by s 174(1)-(3) of the SSD Act.

Support notices (step 7)

1. Pursuant to s 174(7), the returning officer is required to keep a record of the support notices received. A copy of the returning officer's notice regarding the required level of support is at tab 1 (annexure D) to the Class 3 application (confirmation of support notice) (SSD Act, s 176(1); affidavit of Mr So dated 2 July 2019 at par 47). Copies of the actual support notices received by the returning officer are at tab 3 of the Class 3 application. None of the support notices were withdrawn in accordance with s 175 of the SSD Act (SSD Act, s 175; affidavit of Mr So dated 2 July 2019 at par 46).
2. The number of support notices received satisfies the "required level of support" as defined in s 154 of the SSD Act being at least 75% of the lots, other than utility lots.
3. Following receipt of the confirmation of support notice on 5 November 2018, the OC secretary sent written notice to the owners that the required level of support of the strata renewal plan had been reached (SSD Act, s 176(2)(a); affidavit of Mr So dated 2 July 2019 at par 48; tab 11, exhibit PYS-1 to the affidavit of Mr So dated 2 July 2019). On 7 November 2018, the OC's solicitors, Dentons, gave written notice that the required level of support of the strata renewal plan had been reached to the Registrar-General (SSD Act, s 176(2)(b); affidavit of Mr So dated July 2019 at par 49; tab 12, exhibit PYS-1 to the affidavit of Mr So dated 2 July 2019). The Registrar-General recorded that the required level of support of the strata renewal plan had been reached on the titles of the lots in the scheme (SSD Act, s 176(3); tab 1 (annexure A) to the Class 3 application is a copy of the search for SP No 61299).

The decision to apply to the Court (step 8)

1. On 21 November 2018, an EGM was convened and the OC resolved to apply to the Court for an order that the strata renewal plan be given effect (SSD Act, s 178(1); affidavit of Mr So dated 2 July 2019 at pars 51-54; tabs 13 and 14, exhibit PYS-1 to the affidavit of Mr So dated 2 July 2019). The notice calling the EGM on 21 November 2018 occurred on 5 November 2018, giving the required 14 days' notice (SSD Act, s 172(2); tab 11, exhibit PYS-1 to the affidavit of Mr So dated 2 July 2019). A quorum of a general meeting is formed if at least 25% of persons entitled to vote (159 lots) are present (SSM Act, Sch 1 cl 17(2)(a)). Persons attending by a "permitted means" (which includes means established under cl 14(1)(b) of the SSM Regulation (as discussed in [36] above) is taken to be present for determining quorum. The EGM was attended by owners of 77 lots either in person, by proxy or by ballot (tab 14, exhibit PYS-1 to the affidavit of Mr So dated 2 July 2019)).
2. The EGM resolved to make an application under s 179 of the SSD Act to the Court (see item 2, tab 11, exhibit PYS-1 to the affidavit of Mr So dated 2 July 2019).
3. The minutes of the EGM of 21 November 2018 were distributed to owners on 27 November 2018 (tab 3, exhibit PYS-1 to the affidavit of Mr So dated 2 July 2019).
4. For the purpose of s 178(3) of the SSD Act, the Applicant submitted that it may be inferred that the OC formed the view that the strata renewal plan complied with the requirements of s 170 of the SSD Act given the terms of strata renewal plan, the general level of support for the strata renewal plan, the steps taken in respect of the strata renewal plan and the application to the Court. The Applicant acknowledged that the minutes in respect of the 21 November 2018 EGM are otherwise silent on whether the OC expressly formed the state of satisfaction required by s 178(3).
5. Administrative law principles regarding decision-makers reaching requisite states of satisfaction are apt to be applied in considering whether s 178(3) of the SSD Act has been satisfied in this case. As observed by Pepper J in 4nature Incorporated v Centennial Springvale Pty Ltd (2016) 218 LGERA 289; [2016] NSWLEC 121 (4nature (LEC)) at [149], not all failures to advert to a particular matter for consideration in a statement of reasons will immediately result in a conclusion that it has not been taken into account or that a necessary mental state has not been reached. Whether the inference can be drawn, and if so, its strength, will depend on the surrounding facts and circumstances, including the material before the decision-maker informing and evidencing the decision-making process, and the statutory context within which the decision was made: see, eg, Minister for Immigration and Citizenship v SZGUR (2011) 241 CLR 594; [2011] HCA 1 at [67] and [70] (Gummow J), cited in 4nature (LEC) at [149]. An appeal from 4nature (LEC) was allowed in 4nature Incorporated v Centennial Springvale Pty Ltd (2017) 95 NSWLR 361; [2017] NSWCA 191 but it does not detract from the force of the general principle referred to.
6. The Applicant also submitted that a failure to have reached the required state of satisfaction (if that were the case) would not lead to the application to the Court being invalidated in any event. To this end, the considerations in Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28 are apposite. In circumstances where there has been compliance with s 170 of the SSD Act (see above at [54]-[56]), it would not be consistent with the purpose of the SSD Act, which is to provide for strata renewal (SSD Act, s 3(c)) and to facilitate the collective sale of strata schemes (SSD Act, s 153(2)), to invalidate an application to the Court because there was a failure to record the OC's state of satisfaction as to the compliance of the strata renewal plan with s 170 of the SSD Act before making an application to the Court for the strata renewal plan to be given effect. I accept the Applicant's submission that the clear inference arises from the evidence that the OC was satisfied as required by s 178(3) that the strata renewal plan complied with s 170.
7. Section 178(4) of the SSD Act requires notice of the decision to make an application to the Court to be given to any tenants who have been notified to the OC in accordance with the SSM Act. Such notice was given to Seasons on 27 November 2018 (affidavit of Mr So dated 8 July 2019 at pars 5, 7, annexure A). No such notice was given to Brew Bros Drinxology Pty Ltd (Brew Bros) (café operator) as it is not a tenant that has been notified to the OC as required by the SSM Act (affidavit of Mr So dated 8 July 2019 at par 6, annexure C).
8. As the strata renewal plan was given to the owners following a special resolution at a general meeting (SSD Act, s 172(5); affidavit of Mr So dated 2 July 2019 at pars 34-41; tab 10, exhibit PYS-1 to affidavit of Mr So dated 2 July 2019), the required level of support for the strata renewal plan was reached (SSD Act, s 176(1); affidavit of Mr So dated 2 July 2019 at par 47; tab 1 (annexure A) to the Class 3 application), and the OC agreed to apply for an order from the Court to give effect to the strata renewal plan. The strata renewal plan has not lapsed for the purpose of s 177 of the SSD Act.
9. I am satisfied for the purposes of s 182(1)(b) that the steps taken to prepare the strata renewal plan and obtain the required support were carried out in accordance with the SSD Act.

Section 182(1)(c): service of notices

1. The notices required to be served for the purpose of s 182(1)(c) are the notices required under ss 179 (application for court orders) and 181 of the SSD Act.
2. Section 179(2) requires service of the Class 3 application on each owner, each mortgagee and the proposed purchaser. Each lot owner and mortgagee as well as the purchaser has been served with the Class 3 application. The evidence of Ms Walsh confirms that service as required by the SSD Act has occurred.
3. No objections to the application pursuant to s 180 of the SSD Act have been lodged with the Court. As the Class 3 application is unopposed, there has been no cause to engage in a mediation or conciliation process under s 181 of the SSD Act. Accordingly, there has not been any amendment to the strata renewal plan that would require notification under s 181(5) of the SSD Act.
4. I am satisfied for the purpose of s 182(1)(c) that the required service of notices under ss 179 and 181 has occurred.

Section 182(1)(d) and (g): just and equitable terms of sale and distribution of proceeds

1. Section 182(1)(d) of the SSD Act provides: if the plan is for a collective sale - the proposed distribution of the proceeds of sale apportioned to each lot is not less than the compensation value of the lot and the terms of the settlement under the plan are just and equitable in all the circumstances, …
2. Section 182(1)(g) requires the Court to consider "any other matter prescribed by the regulations". Clause 36 of the SSD Regulation prescribes that for the purpose of s 182(1)(g), "a court must be satisfied that the effects of the strata renewal plan are just and equitable in all the circumstances despite any difference between a valuation contained in the plan and any valuation that accompanied the application for an order to give effect to the plan".
3. The first half of s 182(1)(d) is in the same terms as s 170(3) concerning the requirement of the strata renewal plan to provide for the purchase of each owner's lot at not less than the compensation value for the lot.
4. As the Applicant submitted, consideration of the Savills valuations (the first one contained in strata renewal plan dated 18 June 2018 (the first valuation) (tab 2 (annexure A) to the Class 3 application), the second contained in the Class 3 application dated 29 January 2019 (the second valuation) (tab 6 to the Class 3 application), the terms of the sale, the distribution of the proceeds and whether a variation of unit entitlements via an ancillary order under s 186 of the SSD Act is required because of the terms of s 171(1) of the SSD Act.

Valuation determination

1. The requirement for two valuations is specified in the SSD Act and the SSD Regulation. Section 170(1)(e) and cl 33(c) of the SSD Regulation and s 179(1)(e)(ii) of the SSD Act require the preparation of two independent valuations firstly to support a strata renewal plan and secondly an application to the Court for the strata renewal plan to be made. Each valuation is required to determine the market value of the whole of the building and its site per cl 28 of the SSD Regulation (the market value assessment) and to determine the values of the individual lots within the strata scheme by reference to the Land Acquisition (Just Terms Compensation) Act 1991 (Just Terms Act) per cl 27 of the SSD Regulation (the compensation value assessment).
2. The required timing of the two valuations is also specified in the SSD Act and the SSD Regulation. For the purpose of the valuation to be included in the strata renewal plan, the market value assessment and the compensation value assessment in the strata renewal plan are required be valued on a day that is not more than 45 days before the day on which the OC general meeting is held under s 172 of the SSD Act to consider the plan (SSD Regulation, regs 27(d)(i), 28(1)(b)(i)). The first valuation is dated 37 days prior to the EGM held under s 172 on 25 July 2018.
3. For the purpose of the valuation to be included in the Class 3 application, the market value assessment and the compensation value assessment are required to be valued on "a day that is not more than 45 days before the day on which the application is made" (SSD Regulation, regs 27(d)(ii), 28(1)(b)(ii). The second valuation is dated nine days prior to the filing of the Class 3 application.

The first valuation methodology

1. In the first valuation, Savills undertook both a market value assessment and a compensation value assessment as required by the SSD Act. Section 154 together with cl 28(1)(a) of the SSD Regulation state that the market value of a building and its site is to be determined by estimating the amount for which the building and site would be sold by a willing but not anxious seller to a willing but not anxious buyer.
2. Under subcl (2) the buyer and seller are assumed to take into account the highest and best use of the building and its site. The market value assessment proceeded on the basis that the highest and best use of the building was to be sold in one line to a hotel organisation that could refurbish it and reposition its offering.
3. In completing the market value assessment, Savills adopted three methods of valuation: 1. discounted cashflow (on a 10 year and five year basis) (tab 2 (annexure A) to the Class 3 application pp 105-107); 2. capitalisation of income (tab 2 (annexure A) to the Class 3 application pp 108-109); and 3. direct comparison (tab 2 (annexure A) to the Class 3 application p 109).
4. The three valuations were as follows (tab 2 (annexure A) to the Class 3 application p 110): Method Valuation Discounted cashflow (10 year) $70,000,000 Discounted cashflow (5 year) $69,600,000 Capitalisation of income $72,700,000 Direct Comparison (price per room) $70,883,208

1. Notwithstanding these valuation calculations, ultimately Savills concluded that the appropriate market value assessment was $81,180,000 being the price offered by the purchaser through the EOI process. As observed by Mr Moors, the selling agent at Colliers, "the final sale price of $81.18 million was a record sale price" (affidavit of Mr Moors dated 28 June 2019 at par 9).
2. Savills also undertook a compensation value assessment for each lot in the first valuation. This required consideration of the provisions of s 55 of the Just Terms Act as qualified by cl 27 of the SSD Regulation which excludes s 56(1)(b) and (2) inter alia. Savills considered each of the circumstances of the lot owners to determine what compensation beyond market value for their lot that they may be entitled to by way of disturbance inter alia.
3. The first valuation completed the market value component of the compensation valuation assessment (that is, the assessment under s 55(a) of the Just Terms Act) on two bases: 1. capitalisation of income (tab 2 (annexure A) to the Class 3 application pp 113-117); and 2. direct comparison (tab 2 (annexure A) to the Class 3 application pp 117-120).
4. Savills then reconciled these valuations to select a value per lot (tab 2 (annexure A) to the Class 3 application pp 121-124).
5. In considering the capitalisation of income approach, Savills selected a variety of capitalisation rates to reflect the various uses in the building. The range applied to the serviced apartments is in the order of 4.75-5%. A capitalisation rate of 5.75% is applied to the cafe in lot 120. The reception (lot 122), gymnasium (lot 125), office (lot 124) and parking spaces (lots 126-159) have a capitalisation rate of 6% applied. The signage lot (lot 123) has a rate of 9% applied.
6. Relying on comparable sales for each of the uses in the building (tab 2 (annexure A) to the Class 3 application pp 98-103) to determine the net market income, and applying the capitalisation rates above, Savills determined the market value of each lot on a capitalisation basis as set out on pp 114-117 of the first valuation. The total market value when determined on a per lot basis adopting the capitalisation method was $61,645,000.
7. Relying on comparable sales for each of the uses in the building and applying a direct comparison method, Savills determined the market value of each lot as set out on pp 119-120 of the first valuation. The total market value when determined on a per lot basis adopting the direct comparison method was $61,122,000.
8. Savills then completed a reconciliation of the two methods as set out on pp 121-124 resulting in a total market value when determined on a per lot basis of $61,510,000.
9. To these adopted rates per lot, Savills made an assessment of the other heads of compensation that would be payable to the owners under the Just Terms Act (tab 2 (annexure A) to the Class 3 application pp 125). As the owners are investors rather than owner occupiers, the scope to claim disturbance costs inter alia is limited. Savills has allowed an amount for legal fees ($2,000), miscellaneous costs ($1,000) and stamp duty (tab 2 (annexure A) to the Class 3 application pp 125-128). Stamp duty is not payable under the Just Terms Act for investors: Roads and Maritime Services v United Petroleum Pty Ltd [2019] NSWCA 41 at [13]. I accept the Applicant's submission that Savills has been generous in allowing a sum for stamp duty based on the assessed market value of each lot. The total compensation value for the building when determined on a per lot basis is $64,157,139 (tab 2 (annexure A) to the Class 3 application, pp 131).

The second valuation

1. As required by s 179(1)(e) an updated valuation by Savills dated 29 January 2019 was included in the Class 3 application (tab 6 to the Class 3 application). The second valuation generally accords with the conclusions reached in the first valuation albeit that the total compensation value in the second valuation ($64,203,751) is slightly higher (by $46,612) than the first valuation (tab 6 to Class 3 application p 128). This is the result of a slight variation in the capitalisation of income and direct comparison methods that arose because of more recent sales evidence and the application of slightly reduced capitalisation rates.
2. The Applicant submitted that, in the circumstances, the Court would conclude that despite the slight differences between the first valuation and the second valuation the making of the strata renewal plan, based on the first valuation, would be nonetheless just and equitable (see SSD Regulation, reg 36). I agree.

Distribution of proceeds

1. As a result of the first valuation, the value of the cafe (lot 120), the storage lot (lot 121), the reception (lot 122), the office (lot 124) and the gymnasium (lot 125), "the five utility lots") were significantly higher than the rates to be applied to serviced apartments. For example, on a direct comparison basis, the serviced apartments had a value of between $6,746/m2 and $15,333/m2 (tab 2 (annexure A) to the Class 3 application p 118). The cafe lot had a value of between $12,292/m2 and $38,804/m2 (the rate adopted by Savills for application to the cafe in this case was $32,500/m2) (tab 2 (annexure A) to the Class 3 application p 118).
2. Because of the disparity in values across the lots, the use of unit entitlements to distribute the amount paid for the lots as required by s 171(1) of the SSD Act will lead to the five utility lots being paid under their compensation value as determined by Savills. The original unit entitlement allocation did not reflect the difference in value between the various lots with different uses. The consequence is that either: 1. the highest value lot in a strata scheme needs to set the value for all other lots, so that the distribution by way of unit entitlement will always exceed the compensation value on a per lot basis; or 2. the requirement of s 171(1) is subordinate to the achievement of an apportionment of the proceeds of sale to each lot that is not less than the compensation value required by s 182(1)(d) when there is a practical conflict between those two sections. Accordingly the unit entitlements (and the consequent share of the proceeds of sale) need to be more equitably distributed in proportion to the value of the lots and the Court will notionally (or actually) re-allocate unit entitlements in the strata scheme to give effect to an otherwise acceptable strata renewal plan.
3. The first of these options is commercially unviable as the Applicant submitted. It is axiomatic that no purchaser will set a price for each lot by reference to the most expensive lot in a building. Such a position lacks commercial reality and would not be in keeping with the SSD Act's intent to facilitate strata renewal.
4. The second option requires an analysis of ss 171(1) and 182(1)(d). The Applicant noted that only the latter is listed as a mandatory matter about which the Court must be satisfied before making an order to give a strata renewal plan effect.
5. Section 171(1) provides: If a strata renewal plan is for a collective sale of a strata scheme, the amount paid for the sale of the lots and common property in the scheme must be apportioned among the owners of the lots in the same proportions as the unit entitlements of the owners' lots. Section 182(1)(d) provides: if the plan is for a collective sale - the proposed distribution of the proceeds of sale apportioned to each lot is not less than the compensation value of the lot and the terms of the settlement under the plan are just and equitable in all the circumstances.
6. The Applicant submitted that, unhelpfully, the two sections use different language in respect of the financial factor that they each seem to be directed at: "the amount paid for the sale of the lots and common property" compared with "distribution of the proceeds of sale". Notwithstanding this, they presumably mean the same thing, that is, how much money each lot owner will be paid.
7. The Applicant submitted that as a practical matter it does not appear to be contemplated by the legislation that there could be different uses within a building that will translate to individual lots having substantially different values. Where this is so, assuming that the unit entitlements do not reflect the difference in the values, these sections will always come into conflict such that they cannot both be achieved. When this occurs the SSD Act does not clearly specify which section is to be given priority, save to say that it would be expected that s 182(1)(d) would be given its place in the Court's consideration. However, consistent with the general proposition of statutory construction that legislation should be read harmoniously and as a whole, the mechanism by which the legislature has given scope for the practical conflict between s 171(1) and s 182(1)(d) to be resolved are the broad and facultative powers to make ancillary orders pursuant to s 186.
8. Section 186 provides: (1) The court may make an order to provide for any ancillary or consequential matter (an ancillary order) that it considers appropriate or necessary to ensure the effectiveness of the order giving effect to a strata renewal plan. (2) Without limiting subsection (1), an ancillary order may include directions about the following matters: (a) the appointment of a trustee for the sale of an owner's lot, (b) the vesting of an owner's lot in the trustee for the purpose of selling the lot and distributing the proceeds of sale to the owner, (c) the delivery of an owner's certificate of title for the owner's lot to the trustee, (d) the distribution of the assets of the owners corporation and the proportionate entitlement of each person under the distribution, (e) the reallocation of unit entitlements among the lots that are subject to the strata scheme for a reason set out in section 236 (1) of the Strata Schemes Management Act 2015, (f) the payment of compensation to a person because of the termination of a lease under section 184 (6) or 185 (7). (3) An ancillary order may be made when or at any time after the order giving effect to the strata renewal plan is made. (4) An ancillary order may be made on application by any person with the leave of the court.
9. Section 236(1) of the SSM Act (as referred to in s 186(2)(e)) provides that unit entitlements may be re-allocated among the lots that are subject to a strata scheme in the manner specified in an order if the Civil and Administrative Tribunal considers that the allocation of unit entitlements among the lots: (a) was unreasonable when the strata plan was registered or when a strata plan of subdivision was registered, or (b) was unreasonable when a revised schedule of unit entitlement was lodged at the conclusion of a development scheme, or (c) became unreasonable because of a change in the permitted land use, being a change (for example, because of a rezoning) in the ways in which the whole or any part of the parcel could lawfully be used, whether with or without planning approval.
10. In this case, it is unknown whether the allocation of unit entitlements to the five lots has always failed to reflect the difference in values between the uses across the building so as to fall within s 236(1)(a) of the SSM Act. As a revised schedule of unit entitlements was not lodged at the conclusion of the building's development, s 236(1)(b) does not arise. As set out in the affidavit of Ms Walsh dated 2 July 2019 there have been no planning changes to the lots that would activate s 236(1)(c).
11. While s 186(2)(e) expressly contemplates the reallocation of unit entitlements for a reason set out in s 236(1) of the SSM Act, the introductory phrase of subsection (1) provides that the general power of the Court to make "any ancillary or consequential order … that it considers appropriate or necessary to ensure the effectiveness of the order giving effect to a strata renewal plan" remains unfettered. The Applicant submitted that the Court may re-allocate the unit entitlements of a strata scheme without reference to the limitations in s 236(1) of the SSM Act in order to facilitate the making of a strata plan if it considers it "appropriate or necessary" in the circumstances. Such an order should be made in this case if the strata renewal plan would otherwise fail for non-compliance with s 171(1) of the SSD Act. I accept these submissions of the Applicant.
12. As the Applicant submitted, the re-allocation of unit entitlements proposed in this case is modest. They are set out in table 5 of the strata renewal plan (tab 2, Class 3 application, pp 42-45). Essentially, a small proportion of the unit entitlements of each serviced apartment and car parking lot would be re-allocated to the five lots. The consequence of this modest re-allocation is that both ss 171(1) and 182(1)(d) would be satisfied with respect to how much money each lot owner will receive.
13. In the absence of active objectors in these proceedings, the Court does take comfort that this re-allocation does not disadvantage any lot owner in any real way. Further, such re-allocation will largely be notional given that the consequence of an order giving effect to the strata renewal plan is the termination of the strata scheme in the short term (SSD Act, s 184(3)). I accept the Applicant's submissions in relation to the exercise of the Court's power available under s 186 for the reasons given by it. Accordingly I will make an ancillary order as enabled by s 186(1).
14. I am satisfied that for the purposes of s 182(1)(d) and (g) the proposed distribution of the proceeds of sale apportioned to each lot is not less than the compensation value of the lot and the terms of the settlement under the strata renewal plan are just and equitable in the circumstances.
15. As I am satisfied of all the necessary matters specified in s 182(1) it is appropriate to give effect to the strata renewal plan at tab 2 of the Class 3 application.

Current leases

1. The Applicant submitted and the Court notes that the common areas of the building are subject to a management services agreement and the individual units are each subject to a lease agreement with Seasons (tab 7, bundle of documents). The leases to Seasons commenced on 3 November 2016 for a term of five years with an option of five years. Rent increases are fixed at 2.5% in November 2019 and November 2020. There is no provision for a "review to market". Seasons is responsible for all outgoings except capital works fund levies, however, during the initial term Seasons is to make a $50,000 contribution per annum to that fund. The lease contains an early termination clause.
2. The retail/cafe lot, lot 120, is leased to Brew Bros (tab 6, bundle of documents). The lease expires on 14 February 2021 with a further five year option. There are no early termination rights in the Brew Bros lease.
3. Lot 69 (and its associated car space, lot 137) are leased as a residence, notwithstanding there does not appear to be development consent for that purpose (affidavit of Ms Walsh dated 2 July 2019, annexure A).
4. In relation to the sale of the lots subject to the existing tenancies, the Applicant identified that the SSD Act does not operate like the Just Terms Act under which all interests in land are acquired by a purchaser (see s 20 of the Just Terms Act). Part 10 of the SSD Act is directed only to the freehold interest in land. This is demonstrated by the following textual indicators: 1. the ability for the Court to order vacant possession of a lot is optional under s 183(1)(a) (note the use of the word "may" in the chapeau of s 183(1)); 2. the lease of a lot in a strata scheme is only terminated if a strata renewal plan provides for a date for vacant possession (s 184(6)). Such a date is not mandated, it is simply if there is such a date it needs to be specified (s 170(1)(c)(iv)); 3. under s 184(7), a termination of a lease under s 184(6) does not affect a right or remedy a person may have under a lease. The note that accompanies the section envisages that the leases will be terminated in accordance with their terms rather than by order.
5. The SSD Act does not require that a collective sale cannot occur subject to a lease. It provides some mechanisms for the termination of leases if vacant possession is required under a strata renewal plan. If vacant possession is not required, as in this case, then those clauses will have no work to do. I agree with these submissions. Consequently the orders I make will not have the effect of terminating any leases.

Terms of settlement

1. It is proposed by the strata renewal plan that the terms of the contracts of sale that ultimately transfer the building to the purchaser will be by way of the standard Law Society of NSW and Real Estate Institute of NSW "Contract for the sale and purchase of land, 2017 edition" (tab 2, Class 3 application at p 26), subject to special conditions set out in the deed between the purchaser and the SRC (tab 2, Class 3 application, annexure B to the deed). Most of the special conditions are common kinds of conditions dealing with logistics for settlement inter alia. Of note, according to the Applicant, are the following proposed conditions: 1. condition 40 which makes clear that that the purchaser will not have any right in the administrative or capital works funds; 2. condition 33.5 which disavows a requirement for the lot owners to remove chattels from the lot; 3. condition 43 which makes clear that the lots are sold subject to existing tenancies; 4. condition 44 which relates to the purchaser's guarantor.
2. The strata renewal plan proposes that contracts for sale be exchanged within five business days of orders being made by the Court (tab 2, Class 3 application at p 28). Completion will then occur within 90 days of the first exchange (tab 2, Class 3 application at p 28).
3. Under s 187 of the Strata Schemes Development Act 2015 this order of the Court is binding on the OC SP No 61299, all of the owners of lots within SP No 61299, the registered mortgagees of lots within SP No 61299 and the purchaser under the SRP, being City Hotel.

Orders

1. The Court orders: 1. The strata renewal plan for the collective sale of SP No 61299 dated 26 June 2018 at tab 2 of the Class 3 application is given effect. 2. Under s 187 of the Strata Schemes Development Act 2015, this order of the Court is binding on the Owners Corporation SP No 61299, all of the owners of lots within SP No 61299, the registered mortgagees of lots within SP No 61299 and the purchaser under the Strata Renewal Plan, being City Hotel Enterprises Pty Ltd. 3. The owners of lots in SP No 61299 are required to sell their lots in accordance with: 1. the Deed of Agreement entered into between City Hotel Enterprises Pty Ltd and the Strata Renewal Committee which is annexed to the Strata Renewal Plan; and 2. the Special Contract Conditions annexed to the Deed of Agreement. 1. Each owner of a lot in SP No 61299, and City Hotel Enterprises Pty Ltd, must, within five business days of being served with a sealed copy of these Court orders, exchange a contract for the sale of the relevant lot(s) as provided for in Annexure B of the Strata Renewal Plan. The Court notes that key terms of the contract are that it: 1. provides a 90 day settlement period from the date that the first contract is exchanged; 2. requires clear title to be provided on settlement, meaning that any caveat, or registered mortgage or charge, must be removed from title on or before settlement; and 3. does not require vacant possession as the lots are sold subject to any existing lease. 1. In accordance with s 186(1) of the Strata Schemes Development Act 2015, the unit entitlements for SP No 61299 are reallocated in accordance with the table at Annexure A. 2. In accordance with s 183(1) of the Strata Schemes Development Act 2015 upon termination of the strata scheme the assets of the former owners corporation vest in the former lot owners (and not the purchaser) as tenants in common in shares proportional to the unit entitlements of their former lots as of 7 February 2019, and the balance of the administrative fund must be distributed to the lot owners in accordance with their respective proportional ownership of the assets, within 14 days of termination of the strata scheme. 3. The Applicant has a general liberty to apply on three business days' notice. 4. The exhibits are returned.

19-42056 8-8-19 Annexure A (144 KB, pdf) DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 09 August 2019