Bondlake Pty Ltd v The Owners - Strata Plan No 60285

[2005] NSWCA 35

NSW Court of Appeal

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Interrogate

Catchwords

1. Contract
2. › Illegality
3. › Statutory prohibition
4. › Whether contract impliedly prohibited by statute is void or valid and enforceable
5. › Construction of statute to determine legislative intention
6. › Strata Schemes Management Act 1996 (NSW), s 113(1)(b)
1. Strata Title
2. › Owners corporation
3. › Restrictions during initial period
4. › Prohibition on incurring debts exceeding available funds
5. › Whether contravening contract void for illegality
6. › Claim over against original owner presupposing liability
7. › Qualified sanction for contravention
8. › Strata Schemes Management Act 1996 (NSW), s 113
1. Statutory Interpretation
2. › Implied prohibition
3. › Whether statute rendering contract prohibited also renders it void
4. › Factors relevant to construction
5. › Qualified sanctions
6. › Effect on innocent third parties
7. › Scheme of recovery from original owner

Quick Take

A contract entered into by an owners corporation during the initial period in contravention of s 113(1)(b) of the Strata Schemes Management Act 1996 (NSW) is not void for illegality. The statutory scheme of recovery from the original owner under s 113(2) is the intended sanction, not invalidity of the contract. Persons dealing with owners corporations during the initial period are not at risk of their contracts being struck down as void.