The Owners - Strata Plan No. 20548 v Mount Street 4 Pty Ltd atf Mount Street 4 Unit Trust and Anor

Applicant's position

1. Noting that s 181(6)(b) of the Strata Act provides that a person may be directed by the Court to be joined as a party to proceedings, and that r 6.24(1) of the Uniform Civil Procedure Rules 2015 (NSW) provides that the Court may join a party where such joinder is "necessary to the determination of all matters in dispute", the applicant seeks the orders for joinder on the basis that the rights and/or liabilities of the 15 active dissenting owners will be affected (presumably by any resolution or otherwise at the conciliation conference).
2. The applicant submits that because a dissenting owner does not automatically become a party to the proceedings, dissenting owners may "not necessarily take any active role in the proceedings", and more relevantly, any conciliation conference. Therefore, in circumstances where only one dissenting owner (Mr Bond) has filed an objection and (on his own motion) been joined as a party, and as mentioned earlier, where a total of three objections have been filed; and, where no objections have been received from the remaining 12 active dissenting owners, the applicant does not understand (and has no knowledge of) the basis for those owners' opposition to the proposed collective sale. As such, the applicant maintains that the concerns of those owners cannot be considered during the conciliation conference if those owners are not joined. In these circumstances, the applicant submits that the joinder of these active dissenting owners is "necessary for the determination of all matters in dispute" primarily because any orders made in these proceedings will likely affect their rights and interests.
3. In summary, the applicant maintains that the absence of these owners at the conciliation conference means that the conciliation process is of "limited utility" as only one dissenting owner has been joined to the proceedings (being Mr Bond, the second respondent). The applicant emphasises that as it only seeks to have the named owners joined "for the purpose of the conciliation conference" and not the whole of the proceedings, and that the joinder provides the "just, quick and cheap" determination of the proceedings.

Consideration

1. Having closely considered the evidence and the applicant's detailed submissions, albeit with some caution, I am not inclined to make the orders sought in the motion. My reasons may be briefly stated.
2. First, I am satisfied that the scheme provided in the Strata Act dealing with strata renewal plans for the collective sale of a strata scheme leading to the Court making an order pursuant to s 182(1) of the Strata Act (giving effect to the strata renewal plan) is prescriptive, detailed and comprehensive. A number of the steps outlined above (in relation to the preparation of the strata renewal plan and obtaining the required level of support) involve notice being given at various stages of that process to ensure that affected owners will be adequately informed.
3. Specifically, the Strata Act (and the Strata Regulation) provides that notice shall be given to owners in relation to the initiation and progress of a strata renewal proposal. In circumstances where the required level of support for a strata renewal plan is obtained (in other words, 75% of owners have indicated their support), there must thereafter be a general meeting of the owners' corporation for the purpose of deciding to apply to the Court for an order to give effect to the plan and, again, written notice must be given of any such decision to each owner; and further, notice of the application to the Court for an order (in relation to a collective sale of a strata scheme) must be served in accordance with the rules of the Court on each owner, registered mortgagee or covenant chargee. Accordingly, it is clear that the Strata Act indicates that ongoing notice to owners affected by a proposed strata renewal plan is required. I am satisfied that adequate and ongoing notice has been given by the applicant in the current circumstances, including service of the required notices, during the process for a collective sale of a strata scheme.
4. Based upon representations and submissions made by the applicant, for the purpose of this motion, I have been informed (and do not need to determine) that the applicant has complied with all the relevant preparatory matters (and this will be a matter that may be further considered in any future hearing or conciliation). Matters such as whether the Strata Renewal Plan included the mandatory information required by s 170(1) of the Strata Act and "any other information" as required pursuant to the Strata Regulation, is not a matter that is presently relevant to this motion.
5. Secondly, I take into account the circumstances that any dissenting owner may file an objection to an application (as may any person upon whom notice of the application was served) and, in accordance with s 180(3) of the Strata Act, a person who files an objection does not need to be a party to the proceedings before the Court. As such, based on the provisions in the Strata Act, I am satisfied that any owner who objects to the Strata Renewal Plan may still be a "dissenting owner" without being a party to the proceedings or the conciliation conference.
6. Thirdly, I am concerned, irrespective of any power that may be available, that an order is sought for "limited" joinder (that is "for the purposes of conciliation conference only" - as noted in the notice of motion) is appropriate, particularly in circumstances where in my view, all owners have been informed of the proceedings and would be aware of the process leading up to the proceedings.
7. Fourthly, it is implicit in the scheme provided for in the Strata Act that in circumstances where the interests of "consenting" owners are otherwise represented by the owners' corporation, any dissenting owners are able to participate and become parties if they so desire. As such, in the present matter, as noted above, given that there are a number of clear objectors, I see no utility in making the orders sought.
8. Fifthly, in any event, I remain conscious of s 181(3) of the Strata Act mandating that the Court "must hear, or continue to hear, the proceedings whether or not the parties reach an agreement at mediation or a conciliation conference".
9. Sixthly, although I accept the applicant's (understandable) position that the attendance of all relevant lot owners (dissenting or otherwise) may be of assistance at the conciliation conference which has been directed by the Court, I see no need for an order for joinder to be made simply to facilitate and/or address that concern for certain parties whose precise concerns (if any) may well not be known to the applicant.
10. Seventhly, I do not, in the circumstances, consider that the making of the orders sought in the motion would contribute to the just, quick and cheap disposal of the proceedings.
11. Eighthly, I do not accept that even a more limited order (as suggested in the applicant's final oral submissions) limited to the four owners who have not indicated their position in response to the motion (as detailed in Ms Vatala's second affidavit sworn 30 January 2024 at par (19)) should be made for the reasons I have noted above.
12. In summary, given the statutory regime and the detailed and prescriptive procedures that are to be followed leading to the Court granting relief in the substantive proceedings, which includes the provision of appropriate notice of various aspects of the progression of this regime, I am not satisfied that there is sufficient utility in making the orders sought in the motion.
13. In the circumstances, I find that it is appropriate to dismiss the motion filed 21 December 2023.

Orders

1. The orders of the Court are: 1. The applicant is granted leave to amend the notice of motion filed 21 December 2023 by deleting subparagraph (k) of the first order sought. 2. The notice of motion filed 21 December 2023 is dismissed.

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: 04 April 2024

(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.

(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.

(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.

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.

1. The process for a collective sale of a strata scheme provided for in the legislation was helpfully summarised by Pain J in Application by the Owners - Strata Plan No 61299 [2019] NSWLEC 111 at [16], in terms which I generally adopt as follows:

(1) Step 1: a strata renewal proposal is prepared and submitted to the committee of an owners' corporation (Strata Act, s 156; Strata Schemes Development Regulation 2016 (NSW) ('Strata Regulation'), reg 30).

(2) Step 2: the strata committee must consider the proposal within 30 days (Strata 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 (Strata 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 (Strata Act, s 160). Written notice of this decision must be given to all lot owners within 14 days of the establishment of the SRC (Strata Act, s 162; Strata Regulation, reg 31).

(5) Step 5: the SRC prepares a strata renewal plan (Strata Act, s 164(1)). The requirements for the content of the strata renewal plan are prescriptive and involve the preparation of valuations on two bases - the individual lots within the strata scheme and the whole building and its site (Strata Act, ss 170-171; Strata Regulation, reg 33).

(6) Step 6: the strata renewal plan must be considered by a general meeting of the owners, notice of which must comply with the Strata Act, s 172(2) and Sch 7, cl 3. The owners' corporation 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 (Strata Act, s 154, definition of "required level of support"). Notice must be given to all non-utility lot owners and the Registrar-General of the owners' corporation secretary's receipt of the required level of support within 14 days of such receipt (s 176(2)).

(8) Step 8: if support notices (Strata Act, s 174(1)) are received from at least 75% of the owners of non-utility lots (s 154, definition of "required level of support"), the owners' corporation at a general meeting of the owners may resolve to apply to the Court to have the strata renewal plan made (s 178(1)). Section 179 (also Strata Regulation, reg 35) outlines the documents that the application to the Court for such an order must comprise. The Strata Act prescribes who must be served with a copy of the application to the Court, including all owners (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 (Strata Act, ss 182-183; Strata Regulation, regs 36-37). The orders bind the owners, any purchaser of the scheme, and the dissenting owners (s 187).

1. Relevantly, s 180 of the Strata Act also provides that any dissenting owners, and those on whom notice of the application must be served under s 179(2)(b)-(e), may file an objection to the Court making the strata renewal plan; and further, s 181 of the Strata Act provides for a conciliation process between an owners' corporation and any dissenting owners which is a slight (but important) variation on the process under s 34 the Land and Environment Court Act 1979 (NSW).
2. In the current proceedings, three objections have been filed pursuant to s 180 of the Strata Act. The first objection was filed 25 October 2023 on behalf of Julie Opie (the owner of Lots 27, 45 and 71) and Athol and Joy Ritchie (the owners of Lots 13 and 163); the second objection was filed 27 October 2023 on behalf of Keith Anthony Bond, the second respondent, who also filed a statement of facts and contentions on 28 November 2023; and, the third objection was filed on 2 November 2023 on behalf of Timothy Lynch and Janet Koussa (the owners of Lots 69, 90, 129 and 142).
3. There was evidence before the Court that the following five active dissenting owners have indicated their positions on the motion for joinder, as follows:

(a) Athol Christopher Ritchie and Joy Ritchie, owners of Lots 13 and 163 (represented by Sparke Helmore Lawyers), neither consent to nor oppose the motion;

(b) Julia Opie, owner of Lots 27, 45 and 71, (represented by Sparke Helmore Lawyers) neither consents to nor opposes the motion;

(c) Eldajo Pty Ltd, owner of Lot 92, consents to the motion;

(d) Taunton 10 Pty Ltd, owner of Lots 102 and 124 (represented by Baron & Associates solicitors), consents to the motion; and

(e) Bani William McSpedden, owner of Lot 158, does not wish to be joined on his own to the proceedings and would prefer to be joined with other owners for the purpose of the conciliation conference.

1. The following active dissenting owners, have either not advised of their position on the motion for joinder or have indicated that they do not wish to be joined, but have nevertheless, indicated they are available and willing to attend the conciliation conference on 11 March 2024:

(a) Timothy James Patrick Lynch and Janet Koussa, owners of Lots 69, 90, 129 and 142;

(b) Jaspon Pty Ltd, owner of Lot 39;

(c) Sugiharto Ta and Marlina Margaretha Lim, owners of Lot 89;

(d) Richard Brian Maclaren Wall and Olivia Alexandra Perks, owners of Lot 138;

(e) Judi Kelly, director of Accretio Pty Ltd, owner of Lot 132; and

(f) Alex Gotshall Communicators Pty Ltd, owner of Lot 167.

1. The applicants are unaware of the position of the remaining four active dissenting owners.

1. Noting that s 181(6)(b) of the Strata Act provides that a person may be directed by the Court to be joined as a party to proceedings, and that r 6.24(1) of the Uniform Civil Procedure Rules 2015 (NSW) provides that the Court may join a party where such joinder is "necessary to the determination of all matters in dispute", the applicant seeks the orders for joinder on the basis that the rights and/or liabilities of the 15 active dissenting owners will be affected (presumably by any resolution or otherwise at the conciliation conference).
2. The applicant submits that because a dissenting owner does not automatically become a party to the proceedings, dissenting owners may "not necessarily take any active role in the proceedings", and more relevantly, any conciliation conference. Therefore, in circumstances where only one dissenting owner (Mr Bond) has filed an objection and (on his own motion) been joined as a party, and as mentioned earlier, where a total of three objections have been filed; and, where no objections have been received from the remaining 12 active dissenting owners, the applicant does not understand (and has no knowledge of) the basis for those owners' opposition to the proposed collective sale. As such, the applicant maintains that the concerns of those owners cannot be considered during the conciliation conference if those owners are not joined. In these circumstances, the applicant submits that the joinder of these active dissenting owners is "necessary for the determination of all matters in dispute" primarily because any orders made in these proceedings will likely affect their rights and interests.
3. In summary, the applicant maintains that the absence of these owners at the conciliation conference means that the conciliation process is of "limited utility" as only one dissenting owner has been joined to the proceedings (being Mr Bond, the second respondent). The applicant emphasises that as it only seeks to have the named owners joined "for the purpose of the conciliation conference" and not the whole of the proceedings, and that the joinder provides the "just, quick and cheap" determination of the proceedings.

1. Having closely considered the evidence and the applicant's detailed submissions, albeit with some caution, I am not inclined to make the orders sought in the motion. My reasons may be briefly stated.
2. First, I am satisfied that the scheme provided in the Strata Act dealing with strata renewal plans for the collective sale of a strata scheme leading to the Court making an order pursuant to s 182(1) of the Strata Act (giving effect to the strata renewal plan) is prescriptive, detailed and comprehensive. A number of the steps outlined above (in relation to the preparation of the strata renewal plan and obtaining the required level of support) involve notice being given at various stages of that process to ensure that affected owners will be adequately informed.
3. Specifically, the Strata Act (and the Strata Regulation) provides that notice shall be given to owners in relation to the initiation and progress of a strata renewal proposal. In circumstances where the required level of support for a strata renewal plan is obtained (in other words, 75% of owners have indicated their support), there must thereafter be a general meeting of the owners' corporation for the purpose of deciding to apply to the Court for an order to give effect to the plan and, again, written notice must be given of any such decision to each owner; and further, notice of the application to the Court for an order (in relation to a collective sale of a strata scheme) must be served in accordance with the rules of the Court on each owner, registered mortgagee or covenant chargee. Accordingly, it is clear that the Strata Act indicates that ongoing notice to owners affected by a proposed strata renewal plan is required. I am satisfied that adequate and ongoing notice has been given by the applicant in the current circumstances, including service of the required notices, during the process for a collective sale of a strata scheme.
4. Based upon representations and submissions made by the applicant, for the purpose of this motion, I have been informed (and do not need to determine) that the applicant has complied with all the relevant preparatory matters (and this will be a matter that may be further considered in any future hearing or conciliation). Matters such as whether the Strata Renewal Plan included the mandatory information required by s 170(1) of the Strata Act and "any other information" as required pursuant to the Strata Regulation, is not a matter that is presently relevant to this motion.
5. Secondly, I take into account the circumstances that any dissenting owner may file an objection to an application (as may any person upon whom notice of the application was served) and, in accordance with s 180(3) of the Strata Act, a person who files an objection does not need to be a party to the proceedings before the Court. As such, based on the provisions in the Strata Act, I am satisfied that any owner who objects to the Strata Renewal Plan may still be a "dissenting owner" without being a party to the proceedings or the conciliation conference.
6. Thirdly, I am concerned, irrespective of any power that may be available, that an order is sought for "limited" joinder (that is "for the purposes of conciliation conference only" - as noted in the notice of motion) is appropriate, particularly in circumstances where in my view, all owners have been informed of the proceedings and would be aware of the process leading up to the proceedings.
7. Fourthly, it is implicit in the scheme provided for in the Strata Act that in circumstances where the interests of "consenting" owners are otherwise represented by the owners' corporation, any dissenting owners are able to participate and become parties if they so desire. As such, in the present matter, as noted above, given that there are a number of clear objectors, I see no utility in making the orders sought.
8. Fifthly, in any event, I remain conscious of s 181(3) of the Strata Act mandating that the Court "must hear, or continue to hear, the proceedings whether or not the parties reach an agreement at mediation or a conciliation conference".
9. Sixthly, although I accept the applicant's (understandable) position that the attendance of all relevant lot owners (dissenting or otherwise) may be of assistance at the conciliation conference which has been directed by the Court, I see no need for an order for joinder to be made simply to facilitate and/or address that concern for certain parties whose precise concerns (if any) may well not be known to the applicant.
10. Seventhly, I do not, in the circumstances, consider that the making of the orders sought in the motion would contribute to the just, quick and cheap disposal of the proceedings.
11. Eighthly, I do not accept that even a more limited order (as suggested in the applicant's final oral submissions) limited to the four owners who have not indicated their position in response to the motion (as detailed in Ms Vatala's second affidavit sworn 30 January 2024 at par (19)) should be made for the reasons I have noted above.
12. In summary, given the statutory regime and the detailed and prescriptive procedures that are to be followed leading to the Court granting relief in the substantive proceedings, which includes the provision of appropriate notice of various aspects of the progression of this regime, I am not satisfied that there is sufficient utility in making the orders sought in the motion.
13. In the circumstances, I find that it is appropriate to dismiss the motion filed 21 December 2023.

(1) The applicant is granted leave to amend the notice of motion filed 21 December 2023 by deleting subparagraph (k) of the first order sought.

(2) The notice of motion filed 21 December 2023 is dismissed.