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Australia City Properties Management Pty Limited v The Owners - Strata Plan... [2025] NSWSC 1208 | Case summary | Zoe

NSWNSWSC

Australia City Properties Management Pty Limited v The Owners - Strata Plan No. 65111

[2025] NSWSC 1208

Supreme Court of NSW|2025-10-16|Before: Pike J

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General information, not legal advice.

At a glance

Source facts

Court

Supreme Court of NSW

Decision date

2025-10-16

Before

Pike J

Catchwords

CONTRACTS – Construction – Interpretation – where parties
enter Binding Heads of Agreement – whether obligations
under the Binding
Heads of Agreement are at an end – no question of principle

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Catchwords

CONTRACTS – Construction – Interpretation – where partiesenter Binding Heads of Agreement – whether obligationsunder the BindingHeads of Agreement are at an end – no question of principle

Judgment

Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.

Medium Neutral Citation: Australia City Properties Management Pty Limited v The Owners - Strata Plan No. 65111 [2025] NSWSC 1208

Hearing dates: 25 September 2025

Date of orders: 16 October 2025

Decision date: 16 October 2025

Jurisdiction: Equity - Real Property List

Before: Pike J

Decision: (1) The proceedings be dismissed. (2) The defendant pay the plaintiff’s costs in the agreed sum of $20,000. (3) The defendant pay the plaintiff’s costs of the motions filed 17 July 2025 and 21 August 2025.

The relevant facts may be relatively briefly stated as follows.
“The Summit” apartment building is situated at 569-581 George Street, Sydney. Ownership of apartments is covered by a strata scheme – with lots being held in Strata Plan No 6511. There are some 351 lots in the scheme and the building occupies approximately 30 floors.
ACPM is the registered proprietor of Lot 179 in the apartment building. Lot 179 is 49 square metres in area and is comprised of an office/reception area (of 30 square metres) on the ground floor of The Summit, together with a car space and storage unit.
Ms Ou Bo Hu, the mother of ACPM’s director (Bo Yun Wang) owns Lot X.
The Owners Corporation, is, as the name suggests, the owners corporation in respect of the strata scheme at The Summit.
On 30 March 2001, the parties entered into a Caretaker Agreement pursuant to which the Owners Corporation appointed ACPM to perform caretaking services in The Summit apartment building. Some of the services provided by ACPM under the Caretaker Agreement were carried out from Lot 179 from which ACPM also conducted a real estate agency business.
On 17 August 2019, the Owners Corporation purported to terminate the Caretaker Agreement and took possession of Lot 179 from ACPM.
ACPM then commenced these proceedings alleging, among other things, that by its conduct the Owners Corporation had repudiated the Caretaker Agreement, sought loss of bargain damages and orders that it was entitled to possession of Lot 179.
The proceedings were determined by the primary judge – Darke J: see Australia City Properties Management Pty Ltd v Owners Strata Plan No. 65111 [2020] NSWSC 1505. There was then an appeal to the Court of Appeal: see Australia City Properties Management Pty Ltd v Owners Strata Plan No. 65111 [2021] NSWCA 162.
The Court of Appeal held that the Owners Corporation had breached the Caretaker Agreement and ordered the Owners Corporation to pay to ACPM $1,007,896.13.
One issue before the primary judge was whether under the terms of the Caretaker Agreement, ACPM was required to sell Lot 179 to the Owners Corporation following termination of the Caretaker Agreement. At [357] of the Court of Appeal judgment, Bathurst CJ (who delivered the principal judgment in the Court of Appeal) stated:

(a) in relation to clause 1, it was not in dispute that Lot 179 was not subdivided as at 30 June 2025; (b) in relation to clause 2 – it was not in dispute that prior to 30 June 2025 the Owners Corporation did not prepare or lodge the new strata subdivision; (c) in relation to clause 3 – the Owners Corporation paid into the trust account for the solicitor for ACPM on 30 June 2025, the sum of $900,000. ACPM made it clear that it did not accept payment in circumstances where the remaining conditions of the BHA had not been satisfied by 30 June 2025 and has offered to repay the monies to the Owners Corporation. Further, ACPM contends (and the Owners Corporation disputes) that GST should also have been paid on the $900,000, and it is agreed that this GST of $90,000 has not been paid; (d) in relation to clause 4 – it was not in dispute that no joint statement has yet been issued about the settlement. ACPM has sought for a joint statement to be prepared and sent out but has not received a response from the Owners Corporation; (e) in relation to clause 5 – a new by-law was drafted allowing ACPM exclusive use of the sign board to advertise real properties for rent or sale, and this by-law was passed at the EGM on 21 March 2025. The amended by-laws were registered on the title to SP/65111 on or about 25 June 2025; (f) in relation to clause 6 – an EGM was held on 21 March 2025 approving the settlement and the implementation of paragraphs 1, 3 and 5 of the BHA; (g) in relation to clause 7 – the Supreme Court proceedings were adjourned to 31 March 2025 and have since been further adjourned to enable this dispute to be determined; (h) in relation to clauses 8 and 9 – the parties are at odds as to which is the operative provision presently applying, ACPM says it is clause 9, whereas the Owners Corporation says that it is clause 8; (i) in relation to clause 10 – NCAT gave judgment on 22 November 2024, essentially in ACPM’s favour and the orders have not been complied with.

A deal of evidence was led, primarily by the Owners Corporation, in relation to the steps carried out in order to seek to comply with the BHA.
Both parties took me through the chronology of events although neither really placed much reliance on it.
I record the following brief chronology of events post the execution of the BHA on 30 October 2024.
30 October 2024 happened to be the date of the Annual General Meeting of the Owners Corporation.
On 8 November 2024, the Owners Corporation’s solicitor, Mr Philip Beazley (Mr Beazley), emailed the BHA to Westside Strata Managers (Westside) and spoke to a representative of Westside about steps to be undertaken to comply with the BHA.
On 18 November 2024, an Extraordinary General Meeting of the Owners Corporation was held dealing with unrelated matters. There was no evidence as to when this meeting was convened, only that 14 days’ notice was required to convene a meeting.
On 22 November 2024, NCAT delivered judgment on the application argued in early September 2024. The judgment was in favour of ACPM.
Nothing then appears to have happened until 20 January 2025 when Mr Beazley drafted certain resolutions to give effect to the BHA and circulated them to the committee of the Owners Corporation for approval. On 31 January 2025, a notice of EGM was given, to be held on 19 February 2025.
On 19 February 2025, the EGM was adjourned to 21 March 2025.
At the EGM on 21 March 2025, the requisite resolutions were passed to give effect to approving and implementing the settlement.
On 25 March 2025, Mr Beazley advised the Court by email that whilst the matter had settled, the settlement was still being implemented and finalised. The directions hearing for 28 March 2025 was then vacated and moved to 4 July 2025.
On 26 March 2025, Mr Wang (the director of ACPM) asked for a draft of the announcement of the settlement provided for in clause 4 of the BHA. The request was forwarded by Westside to Mr Beazley.
Nothing then appears to have occurred until 6 June 2025 when Mr Beazley telephoned Westside and was told that the person he had previously been dealing with was on maternity leave. He said he needed to urgently speak to whoever was looking after her matters and was told that person was on holidays.
An update was provided by Westside on 12 June 2025 to the committee of the Owners Corporation. It is apparent from the update that quotations and cost disclosures were still being sought for the work to be done.
On 10 June 2025, Mr Beazley forwarded some information to a surveyor, Mr Stewart Dixon (Mr Dixon). Mr Dixon did not respond until 16 July 2025, attaching a copy of the proposed strata subdivision of Lots X, 179 and common property.
Mr Wang of Westside asked Mr Beazley on 10 June 2025 whether development approval had been granted. He also stated that if it had not, it may be prudent to seek an extension “citing delays at council as the reason”. Mr Beazley responded that there was no DA. He did not respond on the extension issue.
On 16 June 2025, Mr Wang of Westside again emailed Mr Beazley asking whether he (Mr Beazley) was able to make contact with the lot owner re the extension.
On 16 and 17 June 2025, Mr Beazley emailed certain forms to ACPM’s solicitor (Mr Freidman) asking for them to be executed and returned. The documents included an uncompleted (blank) Owners Consent form in relation to the DA and also a consent from the owner of Lot X. Mr Wang obtained his mother’s signature (as the owner of Lot X) and provided the completed consent to Mr Freidman.
On 27 June 2025, Mr Beazley asked Mr Freidman for his firm’s trust account details. These were immediately provided by a solicitor working for Mr Freidman as Mr Freidman was interstate at the time. Mr Freidman then immediately responded questioning what money was to be paid, and a little later saying there was no point to paying the money because the subdivision could not be effected by 30 June 2025.
On 30 June 2025, $900,000 was deposited on behalf of the Owners Corporation into Mr Freidman’s trust account.
On 1 July 2025, Mr Freidman emailed Mr Beazley contending that the $900,000 was not paid in accordance with the BHA and needs to be returned. He asked for bank account details to be provided. No details have been provided and Mr Freidman still holds the money.
The parties then engaged in further correspondence in August 2025 in which ACPM sought a copy of any development application. No fully prepared application was ever provided.

The dispute between the parties essentially boils down to what they should be taken to have intended in the chapeau to clause 9 of the BHA when they stated (my emphasis in bold) “If for any reason paragraphs 1, 2, 3, 5 and 6 cannot be implemented by 30 June 2025 then”. In essence, ACPM simply contends that if, as at 30 June 2025, each of clauses 1, 2, 3, 5 and 6 of the BHA have not been implemented (which is not in dispute), then what it terms the “Retention Outcome” in clause 9 applies and ACPM keeps its ownership of Lot 179 in its present form, the proceedings are dismissed with an order that the Owners Corporation pay ACPM’s costs of $20,000 up to 4 July 2025. That is the relief sought in ACPM’s motion.
The Owners Corporation urges a different construction. It contends that the words “if for any reason paragraphs 1, 2, 3, 5 and 6 cannot be implemented by 30 June 2025” in clause 9 do not raise a factual question as to whether, as at 30 June 2025, each of those steps have been implemented, but rather it is contended that clause 9 is only enlivened if implementation of all of the Condition Paragraphs (being 1, 2, 3, 5 and 6) has “proven impossible” by 30 June 2025. On the construction propounded by the Owners Corporation, if the steps in paragraphs 1, 2, 3, 5 and 6 are still in train as at 30 June 2025 (which would be the situation if none of the steps have proven impossible), then it has not be established that they “cannot be implemented” and therefore clause 9 has no application. In other words, the Owners Corporation’s construction is that clause 9 is only enlivened where, as at 30 June 2025, the property transaction contemplated by clauses 1-8 “cannot” be achieved because it has “proven impossible”. In all other cases, the duties imposed by the Condition Paragraphs remain on foot, and are to be fulfilled within a reasonable time. In these circumstances, what was termed the “Purchase Outcome” in clause 8 applies, whereby Lot 179 is purchased by the Owners Corporation, the proceedings are dismissed with no order as to costs and there are mutual releases. The motion filed by the Owners Corporation seeks orders in the nature of specific performance of what remains of the BHA.

The proper construction of clause 9 the BHA is clear from the words used by the parties, construed in context and in light of the background facts.
The only relevant background facts concern the nature of the extant dispute that the parties were seeking to resolve at the mediation on 30 October 2024. That dispute concerned the ownership of Lot 179 and, more particularly, whether ACPM is required to sell Lot 179 to the Owners Corporation. Absent agreement between the parties at the mediation, the dispute would have then have been heard and determined by the Court.
Against that background, the parties intentions are clear. Clauses 1 to 8 deal with what has been described as the Purchase Outcome, whereby the Owners Corporation buys Lot 179 as modified to exclude the car space and storage unit. Clause 9 deals with the Retention Outcome – whereby ACPM keeps Lot 179.
Clauses 1, 2, 3, 5 and 6 set out the substantial steps to implement the Purchase Outcome. I have adopted in these reasons the definition of Condition Paragraphs used by the Owners Corporation to refer to these clauses. Clauses 4 and 7 are irrelevant to the purchase. Once the Condition Paragraphs have been implemented, clause 8 sets out what the consequences are. In this sense – namely the first outcome sought to be achieved – it is appropriate to describe the Purchase Outcome as the primary mechanism.
Clause 9 then deals with the Retention Outcome, which obviously is the outcome if the Purchase Outcome is not implemented.
The natural and ordinary meaning of “If for any reason paragraphs 1, 2, 3, 5 and 6 cannot be implemented by 30 June 2025” in this context (after clauses 1 to 8) is if each of those steps is not implemented by 30 June 2023 the Retention Outcome applies. Put another way, “cannot be implemented” is synonymous with have not been able to be carried out or have not been implemented. The words thus operate to impose a date by which the Condition Paragraphs to give effect to the Purchase Outcome must be implemented otherwise the Retention Outcome will apply. The intention of the parties, objectively determined, was thus to give the Owners Corporation a period (to 30 June 2025) to seek to purchase Lot 179 (as modified), failing which ACPM would retain the Lot.
To construe the words in the manner contended for by the Owners Corporation as meaning, in effect, that all of the Condition Paragraphs “have proven impossible by 30 June 2025” is strained and unnatural.
The only example posited by the Owners Corporation in this regard – of proven impossibility – was if the Owners Corporation failed to give approval to the settlement, including the payment of the $900,000 purchase price by 30 June 2025.
The significance of referring to the Owners Corporation in general meeting refusing to give consent was said to be to demonstrate that the parties anticipated a scenario where the transaction contemplated by clauses 1 to 8 failed to get off the ground.
It was contended by the Owners Corporation that putting this point another way “the parties anticipated a scenario where none of the Condition Paragraphs could be fulfilled”. The Purchase Outcome would be impossible and this is the “eventuality that is accommodated by the disputed clause 9”.
I do not accept these contentions. If what was intended was that approval as required by clause 6 must be obtained by 30 June 2025, this could easily have been stated. Indeed, the point was somewhat undermined in argument by senior counsel for the Owners Corporation accepting that it would be open to the Owners Corporation, if approval was not obtained at an initial meeting to seek to hold subsequent meetings to obtain approval, provided that last meeting was called by 30 June. Provided a meeting was still extant as at 30 June 2025, satisfaction of that condition had not, proven impossible.
On the other hand, senior counsel for the Owners Corporation accepted that “proven impossible” means that the Owners Corporation must have tried and failed.
These matters highlight, in my view, a difficulty with the construction propounded by the Owners Corporation. On the one hand, “proven impossible” requires an attempt and failure and on the other simply means has not been achieved.
Further in such a situation, the 30 June 2025 deadline in paragraph 9 would, in my view, serve little practical utility in circumstances where paragraph 6 imposes an obligation on the parties to use their best endeavours as soon as possible to convene an EGM to approve the settlement. Had it been intended that the meeting should be held by 30 June 2005, this could have been provided for in clause 6 of the BHA.
The construction contended for by the Owners Corporation, in addition to being a strained and unnatural reading of the words used, would lead to the somewhat absurd outcome that provided none of the required steps had “proven impossible” by 30 June 2025, the Owners Corporation then had a seemingly open ended time period in which to complete the required steps, constrained only by what is “reasonable”. Viewed from this perspective, the 30 June 2025 date on the construction propounded by the Owners Corporation is almost meaningless. It also would likely lead to at least one absurd outcome which I deal with later in these reasons.
The Owners Corporation contended that there were at least 14 reasons why the Owners Corporation’s construction of clause 9 is correct and ACPM’s construction is wrong.
I deal with each in turn – appreciating that there appears to be a degree of overlap and elements in common between the 14 reasons.
First, reliance is placed on what the Owners Corporation contends is the plain and ordinary meaning of the clause, and in particular the use of the conjunction “and” in the chapeau. I do not regard the natural and ordinary meaning of the words as supporting the Owners Corporation’s construction. To the contrary, the use of the conjunction “and” supports ACPM’s construction, making it clear that all of clauses 1, 2, 3, 5 and 6 must be implemented. This is clear when the words are contrasted with the opening words of clause 8.
Secondly, the Owners Corporation submits that ACPM apparently contends for “and” to mean “or” in the chapeau to clause 9 but to mean “and” in sub-clause 9(a). As set out above, I do not regard ACPM’s construction of the chapeau to read “and” to mean “or”.
Thirdly, and related to the first two points, reliance is placed on the fact that the Condition Paragraphs are part of a single transaction which should not be broken down into discrete parts which it is contended is the effect of reading “and” as “or” in the chapeau. I do not accept the premise for the reasons set out above – “and” means “and” on ACPM’s construction. Another way of stating the meaning of the chapeau in clause 9 is if the Purchase Outcome has not been implemented (in all of its parts) by 30 June 2025 then the sub-clauses operate. Such a reading does not involve reading “and” as “or”.
Relatedly, the Owners Corporation asserts that a problem with ACPM’s construction of clause 9 is that it stops “the process” – of the purchase of Lot 179 – in its tracks “even when it is underway and perhaps close to fruition”. There is said to be no reason to impute to the parties an intention that the transaction be so easily thwarted. I do not agree. There is every reason to impute such an intention to the parties when it is the natural and ordinary meaning of the words they have used. The obvious intent is to provide a deadline or time period for the Purchase Outcome to be implemented. There is nothing absurd or harsh in providing for this.
Fourthly, the Owners Corporation identifies a mismatch between what it says is the operation of the chapeau to clause 9 and sub-clause 9(a) – failure to complete a single Condition Paragraph by 30 June 2025 results in all of these paragraphs (even if already completed) being at an end. This is said to be a “bizarre” outcome. I do not agree. The words of sub-clause 9(a) simply indicate that the Purchase Outcome is at an end – no part of it is to have any effect - and then, as provided for in sub-clause 9(c), ACPM retains ownership of Lot 179. The meaning of sub-clause 9(a) is quite clear on its own but even clearer when regard is had to the other sub-clauses of clause 9.
One example given by the Owners Corporation in this regard concerns the joint statement (clause 4) being at an end. I do not regard this as overly significant. The statement is not a substantive step in connection with the Purchase Outcome. The clear intent of sub-clause 9(a) is that the Purchase Outcome is at an end. Clause 4 simply provides for a joint statement in relation to the settlement and does not prescribe its content. The statement would likely include all of the elements of the settlement including the Retention Outcome.
Further, I do not see the position as being any different on the construction of clause 9 propounded by the Owners Corporation. The proven impossibility in relation to one of the conditions could emerge after another of the conditions has been completed. Yet, in this situation, all of the conditions would be at an end even on the case propounded by the Owners Corporation.
The fifth reason advanced is related to the last point and the identified apparent “mismatch”. It is said that the parties cannot objectively have intended that the Owners Corporation go to the trouble and expense of taking steps that facilitate a transfer of ownership in relation to Lot 179, only for ACPM to retain ownership in the event that completion of a single Condition Paragraph does not occur by 30 June 2025. Although not expressly stated, the submission appears to be that such an outcome would be absurd. I do not agree. It is simply the consequence of a hard date deadline for implementation. Again, the position does not appear to me to be significantly different on the construction propounded by the Owners Corporation. The Purchase Outcome could fall over because of the failure to satisfy only one of the Condition Paragraphs.
Sixthly, it is contended that the Owners Corporation’s construction avoids the absurdities identified. The submission is really no more than the outcome on the construction propounded by the Owners Corporation is different to the outcome on ACPM’s construction and more favourable to the Owners Corporation. I do not regard the outcomes on ACPM’s construction as absurd. There is nothing therefore to avoid. The use of emotive language such as the Owners Corporation having “the rug pulled out from under” it, does not assist.
Seventhly, the Owners Corporation focuses on what it says is the meaning of “cannot” – namely “proves impossible”. This simply drives the reasonable person back to the natural and ordinary meaning of words used in the chapeau in context. I have set out above my view as to the meaning. I reject the contention that “cannot” means “proves impossible”. Insofar as reliance is placed on commercial purpose, the reliance is misplaced in my view. The stated “commercial purpose” is no more than what the Owners Corporation says is its construction. It is also clear that caution must be exercised in attributing commercial intent or purpose: see The J&P Marlow (No 2) Pty Ltd v Hayes and McCabe (2023) 112 NSWLR 29; [2023] NSWCA 117 at [76] per Bell CJ.
The Owners Corporation also referred to a number of cases which it contended drew a grammatical distinction between something that “cannot” be done and something that “has not been done”. I do not regard these cases as of much assistance in the present case. Context is all important. The cases referred to are in different contexts.
Eighthly, reliance is placed on the alleged factual matrix in which the parties were operating, being that the actions required by some of the Condition Paragraphs entailed a significant number of time consuming intermediate steps and the parties cannot have intended to impose an artificial deadline. The submission fails for want of evidence. There was no clear evidence (let alone a common substratum of fact), at the time the BHA was entered into of the time that it would take to complete each of the Condition Paragraphs. It is clear that the parties, who were legally represented and may be taken to be familiar with what was required to give effect to the Purchase Outcome, chose a period of eight months. Mr Beazley said, for what it is worth, that he thought the eight month period would be sufficient.
Further, the evidence put forward by the Owners Corporation shows that there were very substantial gaps in the work carried out to fulfil the conditions. The evidence, including of what was in fact done, falls well short of establishing it was objectively known by both parties, at the time of contracting, that there was a real chance that the conditions could not likely be satisfied in the eight month period selected.
Ninthly, it is said that on ACPM’s construction, the parties placed the survival of their deal at the mercy of a third party – the Council – thus said to be the roulette wheel of bureaucratic decision making. The submission really launches – or fails to launch – from the same evidentiary launchpad as the previous ground. I am not satisfied that it has been established there was any real roulette wheel at play here. Third parties were also involved in the satisfaction of other Condition Paragraphs, including the raising of funds. No complaint is made by the Owners Corporation in this regard.
Tenthly, it is said that 30 June 2025 had no particular significance for either party. I do not agree. The obvious significance was to impose a time limit for the Owners Corporation to implement the Purchase Outcome otherwise the Retention Outcome would be given effect to. There had to be an end date. The alternative, on the Owners Corporation’s construction, is really that there is no particular deadline, provided the steps are still in train, ie, have not proven to be impossible to implement by 30 June 2025, with the Owners Corporation having a reasonable time to complete the required steps. Such a position would likely lead to further disputation and litigation between the parties as to what was a reasonable time. I would not lightly ascribe such an intention to the parties in the present case, particularly having regard to their history of disputation.
In agreeing to the settlement ACPM was trading away its alternative to press on with the court proceedings.
Eleventhly, attention is drawn to the absence of “by 30 June 2025” in clause 8. I do not regard the contrast as significant. It is the inclusion of the words in clause 9 that is significant, following on from clause 8.
Twelfthly, reference is made to the date of 31 March 2025 in clause 7. I do not regard clause 7 as having any meaningful bearing on the construction of clause 9.
Thirteenthly, reference is made to the fact that there is no mechanism for extending the 30 June 2025 deadline in clause 9. I do not regard this absence as significant, particularly in the absence of any common background fact that the eight month period was thought to be potentially inadequate. There is no reason to believe anything other than that the eight month period was thought, as Mr Beazley apparently did, to be sufficient.
Finally, reference is made to the fact that the BHA was negotiated by experienced solicitors. So much may be accepted. Contrary to what is said by the Owners Corporation to follow from this, I do not accept that those experienced solicitors believed it would be hard pressed to complete the tasks in eight months. Mr Beazley did not think so – contrary to (a). As for (b) and (c), I do not accept the grammatical contentions advanced by the Owners Corporation in this regard. The position is certainly not so clear cut so as to suggest the words used lead to only one outcome. As for (d), the fact that an experienced solicitor is aware of the ability to include an extension mechanism and the default imputation of a reasonable time, does not assist.
For these reasons I do not accept the contentions advanced by the Owners Corporation.
For completeness, I also record that I do not regard it as necessary to determine whether the purchase price which the Owners Corporation was required to tender was $900,000 or $990,000. This turns on whether GST was payable. I am in no position on the evidence to determine this issue. More importantly, it is not necessary for me to do so where it is accepted that there were other Condition Paragraphs that were not satisfied by 30 June 2025.