Developer Strata Owner can’t sue Committee Members

Eastmark Holdings Pty Ltd v Kabraji [2013] NSWSC 1763

GoStrata’s CaseWatch is a short, sharp and easy-to-understand review of important and interesting Court and Tribunal decisions affecting Australian strata title stakeholders.

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Quick Read

This NSW Supreme Court decision about suing a strata committee member who was getting paid for consulting services in the Beau Monde building in North Sydney for duty breaches is rare, since that almost never happens.  The primary issue was whether a strata lot owner, rather than the strata building, could sue and the secondary issue was about the extent of a strata committee member’s duties. After considering how similar issues are dealt with in company law, the NSW Supreme Court decided that the strata lot owner could not sue because of an old company law case and since they could not show good faith, attempts to get the strata building to sue, and strata owner support. So, it demonstrates how hard it is to sue strata committee members.

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Implications

The key implications of this strata case are as follows.

• Company law principles, like the rule in the 1843 Foss v Harbottle case, can apply to strata title building litigation.

• Legal actions to enforce strata building rights must be taken by the strata building itself.