In the recent decision of The Owners – Strata Plan No 72381 v The Owners – Strata Plan No 71067  NSWSC 1857 the Supreme Court of NSW had to look into a confusing strata management statement to decide whether the installation of a glass doorway within the lobby area of the World Tower building without consent was considered a breach of the arrangements for the management and operation of World Square made under the Strata Schemes (Freehold Development) Act 1973 (NSW) (“the Old Act”).
The Background and The Dispute
The World Tower building is divided into three vertical portions, consisting of lots 801, 802 and 803, respectively being the high-rise, mid-rise and low-rise portions of the building. Lot 802, the mid-rise portion, is known as Strata Plan 72381(”Mid Rise Owners”) and Lot 803, the low-rise portion, is known as Strata Plan 71067 (“Low Rise Owners”). They are the parties in these proceedings.
Access from the entrance of the World Tower Building to the lifts for the mid-rise portion and the high-rise portion of the building is gained through a lobby area on level 10, where most of level 10 is part of Lot 803 and owned by the Low Rise Owners.
The Low Rise Owners constructed a glass/mirrored doorway in the wall within Level 10. The Mid Rise Owners instituted proceedings requesting the removal of the new doorway and that the doorway be reinstated to its prior condition. The Mid Rise Owners claimed that the lobby was part of the World Tower Shared Facilities, and by constructing the new doorway the Low Rise Owners altered the Shared Facilities without consent, contravening the arrangements for the management and operation of World Tower building made under the Old Act.
The Meaning of “Shared Facilities”
The World Square strata management statement (“World Square SMS”) provided for a committee to be established, made up of representatives from the high, mid and low-rise portions. The World Square SMS provided that no portion would be entitled to carry out works on the shared facilities without consent in writing from the committee. The low-rise portion did not receive consent from the committee to carry out the works.
Uncertainty arose from the ambiguous meaning of the term “World Tower Shared Facilities” as set out in the World Square SMS.
The dictionary in the SMS provided that the Shared Facilities are “the services, facilities, machinery, equipment and other things that two or more of the World Tower members use or have the benefit of”. Specifically, the definition provided that the Shared Facilities refer to World Tower Easements, and facilities used and owned by one portion but located in another portion’s stratum lot. Easement 21 provided for ‘access across and through the lobby area of the lot burdened’. In this case, the lot burdened was Lot 803, being the Low Rise portion.
Justice Emmett found that the new doorway in the wall was not part of the World Tower Shared Facilities. He found that the World Square SMS appeared to confuse the terms ‘common property’ and ‘lobby,’ by labelling the lobby area on level 10 ‘common property’ when it was in fact owned by the Low Rise Owners.
He stated that the intention of the SMS was to simply provide for access to the mid-rise and high-rise portions of the World Tower. The area shown as common property but in fact owned by the Low Rise Owners did not confer any rights in relation to any part of that lobby. Therefore the construction of the new doorway was not a contravention of the arrangements for the management and operation of World Tower building made under the Old Act. It followed that the Mid Rise Owners were not entitled to the relief sought, and the case was dismissed with costs.
Note: The Freehold Development Act has since been repealed by s 203 of the Strata Schemes Development Act 2015 (NSW) with effect from 30 November 2016. However, cl 9 of Schedule 8 of the Strata Schemes Development Act 2015 provides that any proceedings commenced but not determined or finalised under a provision of a former Act, including the Freehold Development Act, are to be dealt with and determined as if the former Acts had not been repealed.
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