The Owners - Strata Plan No. 2187 v Astoria Asset Management Ltd

Background 5The plaintiff is the Owners Corporation of a strata title building situated at 1-21 Darlinghurst Road, Kings Cross. 6The defendant is the owner of a property known as the Astoria Hotel situated at Lot 13/1-21 Darlinghurst Road, Kings Cross. The hotel is situated within the building and is lot number 13 in Strata Plan 2187. 7The matter arises out of three sets of proceedings that were commenced in the Local Court in 2009. The first proceedings (No. 69802/2009) involved the Owners of the Strata Plan claiming the sum of $46,702.90 for unpaid levies, particularised to include costs incurred in the recovery of strata levies in accordance with s.80 of the Strata Schemes Management Act ( the SSMA). A Defence and Cross-Claim were filed which inter alia challenged the right of the Owners to seek s.80 expenses on the basis that they had not been reasonably incurred and are not reasonable in amount. The defendant also claimed that the levies were not lawfully raised. 8The second proceedings (No. 69874/2009) involved the Owners similarly claiming $16,030.45 for unpaid levies, interest and recovery expenses in accordance with s.80. That claim was defended. The third proceedings (No. 70159/2009) involved the Owners similarly claim the sum of $12,786.50. The plaintiff sought orders in the Local Court that the three proceedings be consolidated and (because the jurisdictional threshold of the court would be exceeded as a result) that the matters be transferred to the District Court. 9Section 80 of the SSMA provides "80 How does an owners corporation recover unpaid contributions and interest? (1) An owners' corporation may recover as a debt a contribution not paid at the end of one month after it becomes due and payable, together with any interest payable and the expenses of the owners' corporation incurred in recovering those amounts. (2) Interest paid or recovered forms part of the fund to which the relevant contribution belongs." 10Although strenuously resisted by the defendant, the learned Senior Magistrate ordered that the proceedings be consolidated. As a result, the (then) jurisdictional threshold of the Local Court was exceeded and the consolidated proceeding was brought before this court. 11By Amended Statement of Claim filed (in this court) on 8 February 2010 the plaintiff sued the defendant for the sum of $121,883.76 comprising strata levies, interest and expenses pursuant to s.80 of the SSMA. 12By Defence filed on 8 April 2010 the defendant resisted the plaintiff's claim on a number of grounds which may be summarised as follows: - (a)The defendant asserts that the plaintiff lacked the capacity to bring these proceedings because the plaintiff did not comply with s.80D of the SSMA. (b)The defendant asserts that the levies claimed by the plaintiff are invalid and null and void because:- (i)The meetings at which the levies were purportedly raised are a nullity because no notice, or any proper notice, of the meetings were given, or the meetings were improperly convened; (ii)If the meetings were valid, the plaintiff did not comply with the mandatory requirements for raising a valid levy found in s.75, s.76 and s.78 of the SSMA; and (iii)The motions to raise the levies were not included in the agendas for some of the meetings by lawful means and hence any decisions based on those motions are invalid. (c)The defendant asserts that the expenses claimed by the plaintiff are not recoverable because the expenses have not been reasonably incurred, and are not reasonable in amount, and certain expenses were not incurred by the plaintiff in recovering levies or interests, and are therefore not recoverable under s.80. (d)The defendant asserts that it is entitled to set off against the sum claimed in the Amended Statement of Claim, by way of equitable set off, the damages suffered by the defendant and an amount claimed by way of restitution pleaded in a Cross-Claim filed in the proceedings. 13The defendant's Notice of Motion sought orders that certain questions should be determined separately from any other question, and before any trial in the proceedings. Those questions are:- (a)Did the plaintiff comply with s.80D of the SSMA in relation to the commencement of the proceedings? (b)If the answer to the question is 'no', did the plaintiff fall within the exemption to s.80D found in clause 15 of the Strata Schemes Management Regulation 2005 (now repealed) in relation to the commencement of the proceedings. 14Section 80D of the Act is in these terms:- 80D Legal Action to be Approved by General Meeting (1) An owners corporation or executive committee of an owners corporation must not seek legal advice or the provision of any other legal services, or initiate legal action, for which any payment may be required unless a resolution is passed at a general meeting of the owners corporation approving the seeking of the advice or services or the taking of that action. (2)The regulations may make provision for or with respect to exempting any type of legal service or legal action from the operation of this section. 15Clause 15 of the Regulation (which has now been repealed) was in the following terms at the time these proceedings were commenced:- 15 Exemptions From Need for Approval for Certain Legal Action (1) The seeking of legal advice, the provision of legal services, or the taking of legal action is exempt from the operation of s.80D of the Act if the reasonably estimated cost of seeking the legal advice, having the legal services provided or taking the legal action did not exceed:- (a) An amount equal to the sum of $750.00 for each lot in the strata scheme concerned (excluding parking and utility lots), or (b) $10,000.00; whichever is the lesser. (2) In a case where the cost, or estimated cost, of seeking legal advice, having legal services provided or taking legal action has been:- (a) Disclosed by the legal practitioner concerned in accordance with the Legal Profession Act 1987; or (b) Set out in a proposed costs agreement under that Act, the reasonably estimated cost of seeking the legal advice, having the legal services provided or taking the legal action is taken for the purpose of this clause, to be the cost or estimated cost so disclosed or set out. 16In support of its motion for the "Section 80D point" the defendants relied on Owners of Strata Plan 46528 & Hall [2009] NSWSC 278 in which the court held that: - (a)The requirements of s.80D of the SSMA are mandatory (rather than merely directory); (b)A failure on the part of an owners corporation to comply with s.80D or fall within the exemption contained in clause 15 of the Regulation, means that the owners corporation lacked capacity to bring legal proceedings which ought to have been approved under s.80D; and (c)in those circumstances, where a defendant takes the point, the proceedings brought by the owners' corporation ought to be dismissed. 17The defendant contended that the plaintiff did not comply with s.80D or fall within the exemption found in clause 15 of the Regulation, and accordingly the plaintiff's claim ought to be dismissed. 18The defendant contended that there were a number of reasons as to the reason that it was appropriate for the preliminary point to be determined as a separate question. 19Firstly, it was said that the point was a separate threshold issue that was unconnected to, and totally independent of the other issues in dispute between the parties. Thus the evidence and argument concerning the point would not overlap and could be dealt with separately from the evidence and argument concerning the other issues in the proceedings. 20This would have the result that there would be no duplication in time or cost if the determination of the preliminary point does not dispose of the plaintiff's claim. 21Secondly, the outcome of the preliminary point is critical to the outcome of the plaintiff's claim and if decided in the defendant's favour will dispose of the plaintiff's claim at a relatively early stage of the proceedings with a concomitant minimisation of cost. 22Thirdly, the court would be able to quickly determine the preliminary point, there being limited evidence and limited need for cross-examination. 23Fourthly, the preliminary point is at the core of the dispute between the parties and its determination will resolve a substantial part of the litigation. If the point is decided in the defendant's favour, the plaintiff's claim would be dismissed, thus disposing of a major part of the litigation. In the event that it is decided in favour of the plaintiff, there would be considerable narrowing of the issues between the parties. 24In turn, resolution of the preliminary point will enhance the prospects of the parties being able to resolve the dispute, since one major item of contention will have been removed. 25The plaintiff was content that there be a separate determination of the preliminary point but expressed the intention that, in the event the point was decided in the defendant's favour, that it have leave to file a notice of discontinuance with a view to commencing fresh proceedings.

Decision on whether it is appropriate to hear and determine a preliminary point 26The court's power to issue directions as to the conduct of hearing derives from s.62 of the Civil Procedure Act 2005 and as an incident of its inherent power to control its own procedure: Landsal Pty Ltd (in liq) v REI Building Society (now Co-Op Building Society of South Australia) (1993) 113 ALR 643. 27Part 28 Rule 2 UCPR provides that the court may make orders for the decision of any question separately from any other question, whether before, at or after any trial or further trial in the proceedings. In exercising power under this rule, the court must give effect to the overriding purpose to facilitate the just, quick and cheap resolution of the real issues in the proceedings: CPA s.56. The general practice is that all issues in the proceedings should be tried at the same time. There is good reason for the court to be cautious about making orders for separate determination that depart from the general practice: there is a real risk that the formulation of discrete issues for separate determination may fail to anticipate the full range of the potentially relevant evidence. 28However, the Rules give the court a general discretion to order a separate determination of any question in an appropriate case. Part 28 Rule 4 provides a guide to the circumstances in which it might be exercised: where the decision is likely to substantially dispose of the proceedings or of the whole or any part of any claim for relief in the proceedings or renders unnecessary any trial or further trial in the proceedings or on the whole or any part of any claim for relief in the proceedings. 29The applicant is charged with satisfying the court that such an order is appropriate in the particular circumstances. Some such circumstances include: (a)where resolution of the separate question may realistically promote early resolution of the proceedings or substantially narrow the disputed issues; (b)where there is a preliminary question of fact or law that is critical to the disposition of the proceedings: Carl Zeiss Stiftung v Herbert Smith and Co [1969] 1 CH 93; (c)where issues are clearly severable. 30In the present case, I am satisfied that the determination of the issue concerning the application of section 80D of the SSMA is one which is clearly severable, which is critical to the outcome of proceedings and which might either contribute towards the early resolution of the proceedings or at least substantially narrow the issues. 31Therefore I consider it appropriate and expedient to direct that the preliminary questions, as set out in the defendant's amended Notice of Motion, be determined in advance of the other issues in the proceedings. 32The parties agreed in advance that if the court decided in favour of the determination of a preliminary issue, then it was appropriate to proceed to hear and determine the point.

Did the plaintiff comply with s.80D of the SSMA in relation to the commencement of the proceedings? 33The evidence disclosed that there has been a dispute between the plaintiff and defendant since about April 2006 in relation to levy arrears and other issues, including the cost of complying with the local Council's Fire Orders and the severance of Lot 13 from the balance of the Strata Plan. The history of the dispute was outlined in the affidavit of Mr Colin Tseris of 24 February 2011. Proceedings had previously been commenced against the defendant in 2006 and had been strenuously defended. The proceedings were discontinued but throughout 2006 and 2007 there was exchanged between the Owners' Corporation and solicitors acting for the defendant a series of letters regarding the basis upon which the defendant asserted that it was not liable. 34Indeed in September 2008, the executive committee, members of the Owners' Corporation and the strata manager knew there was at least the prospect of a dispute between the plaintiff and defendant over recovery of arrears for fire protection works, the costs of which exceeded $39,000.00. Following a costs disclosure for proposed proceedings from Bannermans Lawyers dated 2 February 2008, the executive committee resolved to put the commencement of recovery proceedings on the agenda for a general meeting. The general meeting resolved not to commence recovery proceedings. 35The plaintiff is a statutory corporation within the terms of the SSMA. It has a statutory obligation pursuant to s.62 of that Act to maintain the property. To the extent it does not do so, it is in breach of the Act and liable to suffer judgment: Seiwa Pty Ltd v Owners Strata Plan 35042 [2006] NSWSC 1157. In order to meet its statutory obligations, it must raise levies and when these are not paid, it has the power to bring proceedings to recover them: s.80 SSMA. 36There is a statutory bar to bringing proceedings pursuant to section 80D unless certain requirements have been met. However, s. 80D has no application if the anticipated cost of the proceedings would be less than $10,000.00: Regulation 15. (Regulation 15 has since been amended so that there is no limitation in relation to proceedings for recovery of strata levies). 37The plaintiff's strata manager, Stuart Debenham, in his affidavit sworn on 25 October 2010, set out the circumstances in which the three sets of proceedings were commenced and his belief at the time of commencement of the probable cost pertaining to them. The authority of Mr Debenham, as strata manager, to issue proceedings in appropriate circumstances, was not in issue. Nevertheless, his affidavit (paragraphs 8 and 9) set out the details of his delegated authority.. In paragraphs 59 and following, he set out the basis upon which he believed that the costs would not exceed the statutory threshold. He annexed the relevant costs invoices and disclosure statements. 38In a later affidavit of 15 March 2011, Mr Debenham said that in his experience as a strata manager he had given instructions to commence legal proceedings for the recovery of strata levies approximately 10 times per annum and in all, on about 30 occasions. The amounts for which those proceedings had been commenced (apart from the present) ranged from about $2,000.00 to $8,000.00. He said that he was "not aware" of any matter where the legal costs of the Owners' Corporation for the recovery of levies exceeded $10,000.00. 39The conditions for the operation of s.80D were not met. There was no resolution passed at a general meeting or meetings of the Owners' Corporation that approved the initiation of actions. If there was authority to commence the action, it had to derive from the operation of Regulation 15. 40The terms of s.80D and the (then) Regulation were considered in detail by Kirby J in Owners of Strata Plan 46528 v Hall [2009] NSWSC 278. That case involved an appeal from a Magistrate's decision in a dispute between an Owners' Corporation and one of the unit holders. The facts were not dissimilar to those of the present case. There was a history of disputation between the unit holder and the Owners' Corporation in respect of payment of levies; the owners issued proceedings in the Local Court. After a number of interlocutory skirmishes, the proceedings were consolidated and dealt with in the General Division of that court. The learned Magistrate identified a number of issues, one of which related to the proper construction of s.80D and in particular, whether its provisions were mandatory or merely directory. Another issue concerned the application of the relevant Regulation which exempted compliance with s.80D. The Local Court found in favour of the lot holder. 41On appeal, Kirby J held that the learned Magistrate was not in error in finding that there had to be evidence that the executive committee had made an estimate, specific to the case under contemplation, upon material which furnished some reasonable basis for concluding that the costs would be less than $10,000.00. One way in which the committee might demonstrate that it had made the estimate was by the production of a solicitor's cost estimate. 42In the present case, as I have noted, the strata manager held a specific delegation to commence proceedings for recovery of levies and thus he stood, for that purpose, in the shoes of the executive committee. 43He gave evidence as to the usual practice for recovery of unpaid levies. He said that a commercial debt recovery firm was engaged and that it prepared all the documentation for filing and then arranged for its review by a solicitor. He said: "It was my understanding that Grace Lawyers would not issue a costs agreement or costs disclosure until it was estimated that their costs would exceed $750.00 which would usually occur once a request for particulars was made by a defendant or a Defence and any other type of application/motion was filed to the Local Court proceedings." 44Did this "understanding" amount to an estimate, specific to the case under contemplation, upon material which furnished some reasonable basis for the conclusion that the costs would be less than $10,000.00? 45It seems to me that there was little or no consideration of the specific case under contemplation. Rather, it seems that the practice was to issue proceedings for recovery of levies and wait for a response from the defendant before obtaining an estimate of costs. This is underscored by a comparison with the actions of the executive committee in 2008 in which it is apparent that the committee, the strata manager and the owners in general were plainly made aware of the attitude of the defendant to payment of levies and of the need for consideration of the legal costs of proposed proceedings by the general meeting. 46An approach of this kind might arguably be adequate for some proceedings to recover levies, but consideration of the specific case would or should have alerted the strata manager to the fact that this particular owner was likely to engage in a lively dispute as to liability. 47Even if that were not the case, it seems to me that the practice of commencing proceedings and then obtaining an estimate if and when they were defended is a prime example of the practice which the section was enacted to overcome, and that is, to embroil the owners in litigation without any real or reasonable apprehension of the probable costs of doing so. 48An examination of the three sets of proceedings does not assist the plaintiff. The first Statement of Claim was filed on 16 January 2009. It was not until 11 February that a request for further and better particulars was made. In the meantime, on 3 February the second Statement of Claim had been filed. Thus at the commencement of the second proceedings, there had been no response at all to the first Statement of Claim. The plaintiff might have argued that it was justified in commencing the second proceedings on the basis that the first were not defended but for the fact that it failed to wait for 28 days to expire before filing the second Statement of Claim. 49In any event, in accordance with the practice, the request for particulars and the defence generated a costs estimate from Grace Lawyers. It was dated 18 February 2009 but did not specify to which proceedings it related. As of 18 February the plaintiff had received only the request for particulars in respect of the first proceedings, therefore it seems reasonable to conclude that the estimate pertained only to those proceedings. It estimated an amount of $3,525.00 inclusive of GST. 50It did not provide any detail as to how that sum was calculated except that it allowed for one day's hearing in court. On one hand, this estimate is fairly meaningless since it affords no analysis of the complexities of the likely issues. On that basis, it is difficult to see how it could provide the strata manager (or executive committee) with a reasonable basis for concluding that the costs would be less than $10,000.00. On the other hand, it is a difficult matter to estimate the likely costs of litigation when the only information available is the Statement of Claim and a request for particulars. 51In my view, based on Kirby J's dicta at paragraph [37] of Hall, s.80D requires the plaintiff's committee or strata manager to consider the circumstances of the particular case. In relation to recovery of strata levies, that would include consideration of whether the party in default is likely to defend the proceedings (as in Hall) or raise a Cross-Claim. Absent such a consideration I do not see how the committee or manager could be satisfied that the matter is likely to be a straightforward debt recovery. 52In any event, as I have noted, the first two proceedings were commenced without any apparent consideration of the likely costs. Even if the costs estimate forwarded by Grace Lawyers could, in the circumstances, provide the strata manager with reasonable grounds for concluding that the likely cost would be less than $10,000.00, it would only relate to the third proceedings. 53Returning to Hall, the next question is whether or not s.80D is in mandatory terms or is merely directory. Kirby J at [62-63] said: "Section 80D is concerned with the retention of lawyers to perform work, which may be costly. The section is not confined to taking legal action. There must be a resolution of the general meeting when seeking legal advice, the provision of legal services or the initiation of legal action. In the context of a strata scheme, it would be unusual for legal advice to exceed $10,000.00 so that generally such matters would come within the exemption provided by [Regulation 15]. The same is probably true of most legal services (such as drawing a deed). So usually a resolution would only be required under s. 80D when the Owners' Corporation initiated legal action. That being the context, what inconvenience, if any, attends an interpretation of s.80D as a mandatory requirement, where the consequences of failure to seek authorisation (when the point is taken) is that the action must be dismissed. The inconvenience is that of having to seek the unit holders' authorisation in general meeting and start again...." 54After considering the consequences of the action being dismissed, His Honour said at [66]: "Accordingly, the inconvenience in giving the provision a mandatory interpretation, which the terms of the section suggest, is not substantial." 55The plaintiff argued that the evidentiary onus was on the defendant to demonstrate that the reasonably estimated cost of proceedings would have exceeded $10,000.00. It said that the plaintiff had adduced evidence as to the solicitor's costs disclosure and the practice of the strata manager and that the defendant had led no evidence as to cost or likely cost. Therefore, it said, the defendant had failed to discharge the onus of proof. 56It does not seem to me that the defendant bears the onus of proof in those circumstances. If the plaintiff does not comply with s.80D in circumstances where it ought to have done so, the evidentiary onus must be on it to demonstrate that the exemption afforded by the Regulation applies, if the point is taken by the defendant. 57Even if I am incorrect about this, in my view the plaintiff would still fail because the conclusion I have reached is that the strata manager did not turn his mind to the question of reasonable estimate of costs or did not adequately turn his mind to that issue. 58I find therefore that the terms of s.80D are mandatory and that failure to comply with them will result in the action or actions being dismissed. I find that the strata manager did not address or adequately address the question of the estimated cost of the particular proceedings against the defendant. Had he done so, he could not have failed to conclude that the defendant was likely to defend the proceedings and defend them strenuously. Whether or not to proceed in those circumstances was a matter which in my view should have been determined by the general meeting. Accordingly, in my view, the answer to the first and second questions in the defendant's notice of motion is 'no'.

The question of ratification 59However, that does not conclude the matter. The plaintiff argued that even if it had not complied with s.80D, it subsequently ratified the initiation of the legal proceedings in two general meetings. Hall did not consider the question of ratification at a subsequent meeting. 60On 8 July 2009, after the defendant's defences had been served, Grace Lawyers issued a revised costs agreement and disclosure which estimated the total costs of the proceedings was $43,040.00. The plaintiff called an Extraordinary General Meeting to ratify the commencement of the legal proceedings. 61The first purported ratification was pursuant to an EGM held on 11 November 2009 and the second was pursuant to an EGM held on 13 October 2010 (affidavit of Stuart Debenham at paragraphs 23 and 58, and Annexures A and M). 62Gibb DCJ was required to decide whether or not an alleged lack of authority to institute proceedings could be cured by later ratification by an owners corporation in The Owners Strata Plan No. 57725 v 95 York Street Pty Limited and Tandew Pty Limited and Strata Partners Pty Limited (8 December 2006) NSWDC ["The York Decision"]. 63In the York decision, the defendant contended that there could be no retrospective ratification of the commencement of the proceedings so as to cure an alleged lack of authority by the Owners' Corporation. Having satisfied herself that as a matter of general principle ratification could operate both prospectively and retrospectively, Her Honour turned to the circumstances in which valid ratification of an act can occur, namely: (a)that the agent whose act is sought to be ratified must have purported to act for the principal, (b)at the time when the act was done, the agent must have had a competent principal, and (c)at the time of the ratification the principal must be legally capable of doing the act himself: Firth v Staines [1897] 2 QB 70. 64Her Honour then said (at page 20): "To the extent that the Strata Schemes Management Act 1996 imposes formal requirements upon the decision-making and resolution by the owners' corporation in general meeting, the policy of the Act is clear; to provide protection to the members of the owners' corporation at large from the incurring of liabilities unknown to them or contrary to their wishes. That policy was met and discharged by repeated decisions of the executive committee and general meeting which authorized proceedings, monitored, accounted and budgeted for expenses and observed and approved the presence of legal advisors, whose retainer was apparent in papers and budgets and by their very presence at the general meetings of the owner corporation." 65At page 21, Her Honour said: "In any event whether there be a statutory requirement for observation of certain formalities or not, that which is done (or not done) absent such formality is not a nullity. The formalities are not a sine qua non for the existence of the relevant capacity, and non-compliance with such formality does not deprive the body (here the owners' corporation) of relevant capacity. At its highest the requirement for compliance with certain formalities may serve as a bar to the institution of proceedings, but that bar itself dissolves upon completion of the formalities." 66Her Honour cited several authorities in support of the finding that later acts of authorisation could ratify decisions which had been otherwise made without authority: Danish Mercantile Co v Beaumont [1950] D 659, Omega Estates Pty Ltd v Ganke [1964] WN 80 and Re Nick Manias: Ex parte Edsill Pty Ltd (1986) 15 FCA 86. However, each of those cases concerned proceedings which had been commenced by an agent who lacked the requisite authority: they did not concern a statutory prohibition on the commencement of proceedings. 67The object of s.80D SSMA is to ensure that all owners are able to be consulted about legal proceedings and able to have the opportunity to vote in favour or against obtaining legal advice and engaging in legal action. When the Bill which became the 2004 amended Act was debated in parliament, the Minister explained the object of s.80D in these terms: " Another new initiative will be in relation to the commencement of any form of legal action by executive committees. Concern has been expressed that prior to commencing action individual owners should be made aware of the cost of legal action and the likelihood of success...the commencement of legal action on matters concerning the scheme is one area where it is certain that a divergence of views will exist. The Government proposed to minimise the level of internal dispute arising in this area by taking some simple but effective measures. Firstly, if legal action of any type is being contemplated, the estimated cost of the action is to be provided in writing to all owners in accordance with the Legal Profession Act. A meeting of the Owners' Corporation must be called before the action can actually commence, to ensure that everyone can have a say if they wish." Hansard 4.12.2003 [emphasis added]. 68The wording of s.80D is quite deliberate. It does not refer to the maintenance or carrying on of legal proceedings - it refers to the 'initiation' of legal proceedings. The plain and ordinary meaning of those words is that approval of the general meeting is required before action is commenced, or, put another way, action cannot be initiated without that approval. This interpretation sits conformably with the Minister's second reading speech cited above. 69Secondly, one of the plain objectives of the section is for the owners to have a chance to voice their opinions about both the prospects and cost of legal action. If ratification could cure a failure to comply with s.80D, this purpose would be frustrated, since legal costs would already have been incurred. 70Thirdly, although Hall did not deal with ratification, Kirby J spoke very plainly when he said that where the consequence of failing to obtain the appropriate authorisation to initiate legal action is that the action must be dismissed, the inconvenience to the owners is "that of having to seek the unit holders' authorisation in general meeting and start again." 71The York decision can be distinguished on the basis that the proceedings in that case were commenced before the amendment to the Act which created s.80D. There was no direct issue of compliance with s.80D because the proceedings had already been commenced and had already been the subject of summary judgment. The case centres largely on the ability under the common law for a principal to ratify the unauthorised act of its agent to initiate legal action on its behalf. The court does nothing more than restate the well established principles under the common law that a principal is capable of ratifying legal proceedings commenced in their name by an agent without authority and where that occurs the ratification relates back to the institution of proceedings. 72In my view, the meaning of s.80D is clear: without the relevant authority, the action cannot be initiated. Thus the third limb of Firth v Staines - that at the time of ratification the principal must be legally capable of doing the act himself - is absent.

Decision 73I find that the plaintiff did not comply with the terms of s.80D SSMA in that it commenced three sets of proceedings (now consolidated) without the approval of the general meeting. 74I find that the plaintiff's representative, the strata manager, did not address or adequately address the question of the estimate of the reasonable costs of the proceedings prior to commencing the proceedings and therefore the plaintiff is not entitled to the benefit of Regulation 15 to the SSMA. 75I find that the general meeting lacked the power to ratify the decisions of the strata manager to commence proceedings. 76It follows that the defendant must succeed on ground (1) of its Amended Notice of Motion filed on 16 June 2011. 77I will hear the parties on the form of orders to be made and on costs. 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: 06 December 2013