Zheng v The Owners – Strata Plan No 83678

Medium Neutral Citation: Zheng v The Owners – Strata Plan No 83678 [2025] NSWSC 1038

Hearing dates: 8 September 2025

Date of orders: 8 September 2025

Decision date: 08 September 2025

Jurisdiction: Equity - Duty List

Before: Hammerschlag CJ in Eq

Decision: Grant plaintiff leave, on behalf of Owners – Strata Plan No 83678, to conduct NCAT appeal in proceeding 2025/251776.

Catchwords: LAND LAW – Strata title – Owners corporation –Where NCAT authorises a by-law regularising the construction of an awning carried out without a resolution of the Owners Corporation by approving a by-law – Where Owners Corporation appeals to the Appeal Panel of NCAT and appeal has been set down for hearing – Where four lot owners, including the constructor of the contentious awning, requisition an extraordinary general meeting of the Owners Corporation to pass a resolution to discontinue the appeal – Where the resolution is passed by a bare majority of one, including the vote of the said owner – Application of the rule in Foss v Harbottle and an exception to it – HELD – Plaintiff granted leave to conduct NCAT appeal on behalf of Owners Corporation

Cases Cited: Carre v Owners Corporation – Strata Plan 53020 (2003) 58 NSWLR 302; [2003] NSWSC 397
Foss v Harbottle (1843) 67 ER 189; 2 Hare 461
Khatib v The Owners Strata Plan 83678 (Civil and Administrative Tribunal (NSW), P T Newton SC, Senior Member, 18 June 2025, unrep)
Tan v The Owners Strata Plan 22014 (No 2) [2015] NSWSC 1920

Category: Principal judgment

Parties: Paul Zheng (Plaintiff)
The Owners – Strata Plan No 83678 (Defendant)

Representation: Plaintiff (self-represented)
N Johnson (Strata Managing Agent) (Defendant)

File Number(s): 2025/00307376

Publication restriction: Nil

Ex Tempore JUDGMENT (Revised)

1. By Summons filed on 12 August 2025 the plaintiff (Mr Zheng), the owner of a lot in Strata Plan No 83678 seeks leave to conduct on behalf of the Owners (the Corporation) an appeal from a decision of a Senior Member of the New South Wales Civil and Administrative Tribunal (the Tribunal) handed down on 19 June 2025: Khatib v The Owners Strata Plan 83678 (Civil and Administrative Tribunal (NSW), P T Newton SC, Senior Member, 18 June 2025, unrep). Mr Zheng is secretary and chairperson of the Corporation.

2. By the decision, the Senior Member approved alterations to the common property by prescribing a change to the by-laws in the form of a common property rights by-law. The by-law retrospectively regularised the construction of an awning which a lot owner, Mr Khatib, had carried out without first obtaining a special resolution of the Corporation authorising it.

3. On 2 July 2025, the Corporation appealed the decision to the Appeal Panel of the Tribunal. On 16 July 2025, the Appeal Panel listed the appeal to be heard on 13 October 2025. On 17 July 2025, at an Extraordinary General Meeting of the Corporation, requisitioned by four lot owners including Mr Khatib, a resolution was passed by eight votes to seven that the Corporation withdraw the appeal. Mr Khatib voted in favour.

4. The following day, Mr Khatib brought before the Appeal Panel an application for summary dismissal of the appeal, which was heard and dismissed on 30 July 2025, on the basis that the validity of the resolution was challenged by Mr Zheng.

5. In Carr**e v Owners Corporation – S**trata Plan 53020 (2003) 58 NSWLR 302; [2003] NSWSC 397, Barrett J (as his Honour then was) determined that the rule in Foss v Harbottle (1843) 67 ER 189; 2 Hare 461 that a company is the proper plaintiff to bring an action in respect of a wrong done to it and that consequently an individual member has no standing to bring proceedings in respect of a wrong to a company, applies to strata title owners corporations. But his Honour also held, that the so-called residual fifth exception to it being “in any other case where justice requires it, exists” also applies: see Tan v The Owners Strata Plan 22014 (No 2) [2015] NSWSC 1920 at [91] and following.

6. Justice dictates that that exception to the operation of the rule should apply here. Without Mr Khatib’s vote, the resolution, if otherwise valid, would have been defeated. To give the resolution effect would have the result that Mr Khatib’s own vote would bring the proceedings, concerning his contentious awning, to an end where a significant proportion of the owners voted to continue the appeal. The Appeal Tribunal, itself, refused to dismiss the appeal. At this time, the appeal is still on foot, notwithstanding the passing of the purported resolution. In the circumstances, Mr Zheng is appropriately to be given carriage of the appeal on behalf of the Corporation.

7. I record that at the hearing of the Summons, the Corporation’s Strata Manager, Mr Johnson appeared for the Corporation. He informed me that the lot owners had notice of the application. He volunteered that the Corporation is dysfunctional.

8. The Summons seeks an order that the Corporation indemnify Mr Zheng for all legal costs and disbursements reasonably incurred in the conduct of the appeal, including the costs of the Summons and associated filing fee. I decline to make such an order at this stage. Instead, I make the order as to costs which appears below.

9. I make the following orders:

10. Grant the plaintiff, Paul Zheng, leave on behalf of Owners-Strata Plan No 83678 (the Owners) to conduct to its conclusion or settlement the appeal (the appeal) before the NSW Civil and Administrative Tribunal (NCAT) proceeding no. 2025/251776.

11. Reserve the question of whether the Owners should indemnify Mr Zheng for the legal costs and disbursements in the conduct of the appeal and these proceedings (including the costs of the Summons and associated filing costs) to await the outcome of the appeal.

12. Liberty to apply on three days’ notice.

13. These orders are to be entered forthwith.

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