Veteran Sydney to Hobart sailor and property developer Syd Ficher has lost another court battle with his neighbours in the Gazebo building in Sydney’s Kings Cross.
The NSW Appeal Court has refused to strike out a Supreme Court decision that the building’s owners corporation could retrospectively ratify a decision to pursue a defects claim against Fischer’s development company 2EBR, which converted the building from a hotel to apartments.
Just two weeks ago, the Supreme Court ruled that Mr Fischer, who lives on the whole floor penthouse of the iconic building in Elizabeth Bay Rd, opposite the El Alamein Fountain, could not demand exclusive use of one of the building’s three lifts, leaving the other two lifts to the remaining 90-plus residents.
In November 2012, strata lawyer Beverley Hoskinson-Green advised the Gazebo’s executive committee that they were running out of time to begin legal action over alleged defects under the Home Building Act, as the window for claims was about to expire.
However, major legal actions by strata schemes can only be approved by a general meeting of the owners corporation and, due to the Christmas and New Year holidays, this could not be organised at the Gazebo before the time limit expired.
Hoskinson-Green advised the Gazebo owners corp that a retrospective decision would still be allowed, provided a claim was registered in time and a general meeting of the owners corp duly agreed to take legal action.
However, this was challenged in the Supreme Court by Fischer’s company 2EBR, represented by lawyers from Clayton Utz, who argued that the decision to take legal action had to be made by a general meeting before action commenced. As a result, the claim had missed the deadline.
When Justice Hammerschlag ruled that the owners’ corp claim was valid, Fischer’s company then took the matter to the Court of Appeal which, today (Friday December 5) unanimously confirmed the Supreme Court decision.
“This Court of Appeal decision is a very important one for the strata industry because it now sets out clearly that an owners corporation can act quickly to commence proceedings and then have the decision ratified by a general meeting of owners,” Hoskinson-Green told Fairfax Media.
“This is particularly important in circumstances where the owners corporation’s rights are shortly to expire or in other emergencies such as the threat of imminent damage being inflicted by, say, an adjoining owner driving rock anchors under the owners corporation’s building, removing physical support to the building.
However, Hoskinson-Green, a partner at Makinson d’Apice, warned that the subsequent ratification needed to take place promptly and failure to get general meeting approval could prove expensive.
“If the proceedings are ratified, all well and good,” says Hoskinson-Green. “If not, then the proceedings will have to be withdrawn and the owners’ corporation may have to pay any costs incurred up to that point by the defendant.”
She added that now that the Appeal Court had handed down its decision, the defects claim against 2EBR could proceed as usual.