The Owners-Strata Plan 64282 v Patelis [2011] NSWSC 222

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In Owners of Strata Plan 64282 v Patelis, the Supreme Court of New South Wales granted an Owners Corporation an urgent injunction preventing the registration of the transfer from the sale of a unit which had been renovated in breach of the strata by-laws affecting the unit, despite the sale of the unit being otherwise completed.

Facts

The unit owner had renovated his unit without formal consent from the Owners Corporation or the Council. The renovations involved converting a three bedroom, two bathroom unit into a five bedroom, four bathroom unit. The owner had also carried out works on common property, including the cavity space below the floor of his unit and in the ceiling, installing new plumbing and wiring.

The owner then marketed the unit for sale. The Executive Committee issued a notice to comply to the owner, advising that the renovations were in breach of by-laws. The owner appeared to withdraw the advertisement for sale; however later the unit was again re- listed for sale.

On the same day that the Owners Corporation sought an injunction to prevent a sale of the unit, the owner exchanged contracts to sell the unit. The Owners Corporation sought an injunction to prevent the sale from being completed.

The owner of the unit argued that the court should not exercise its discretion in making the order on a number of grounds, including

1. As the contract for sale had been completed, an injunction against the owner would be inappropriate, as he was no longer the owner of the unit;

2. The more suitable remedy available to the court ought to be damages; and The Owners Corporation has been guilty of delay and/or acquiescence in not expressly forbidding the sale and not demanding the reversal of the renovations.

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Decision

The court held that the Owners Corporation had not been guilty of delay and/or acquiescence and had served a notice of breach of by-laws as soon as it had come to the Executive Committee’s attention that the unit was listed for sale. In granting the urgent injunction preventing the registration of the transfer after the sale had been completed the court found “that this is a case in which … a mandatory injunction requiring removal of the works…is appropriate rather than … an award of damages”.

The court also held that there is a “distinct possibility that the purchaser may not [have wished] to proceed with the purchase [had they been] informed about these matters… and that the purchaser should be joined in these proceedings or at least given notice of the proceedings”.

Implications

This case is an important reminder to Executive Committee members of the importance of enforcing by-laws quickly. If an Owners Corporation becomes aware of a breach of a by-law, the Owners Corporation should swiftly seek advice to ensure that the highly technical requirements of the issue of a Notice to Comply is strictly followed to protect any subsequent enforcement mechanisms.

The unit relating to these proceedings has become subject of media reports, including an article in the Daily Telegraph and a segment on A Current Affair.

Turnbull Bowles Lawyers appeared for the Owners Corporation inThe Owners – Strata Plan 64282 v Patelis [2011] NSWSC 222

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