The strata renewal process described in Part 10 of the Strata Schemes Development Act 2015 (NSW) commences when a person gives, to the owners corporation of a strata scheme, a strata renewal proposal that is either:
- for the collective sale of all lots in the strata scheme to a proposed purchaser; or
- for the redevelopment of a strata scheme by a proposed developer.
Although the Development Act casts the owners corporation as the active party in the renewal process (with obligations to hold various meetings, prepare a strata renewal plan, and make an application to the NSW Land and Environment Court for an order giving effect to the plan), a proposed purchaser or developer will also have an interest in the renewal process undertaken by the owners corporation and its eventual outcome.
What, then, is the position of a proposed purchaser in an application by an owners corporation under section 179 of the Development Act to the Court for an order giving effect to a strata renewal plan for the collective sale of all lots in their strata scheme? This question was considered by the Court in the cases of The Owners – Strata Plan No. 6666 v Kahu Holdings Pty Ltd  NSWLEC 15 and The Owners – Strata Plan No. 6877 v 2-4 Lachlan Avenue Pty Ltd  NSWLEC 13.
In these applications, the proposed purchaser (who is the same under the strata renewal plan for both strata schemes, and is to be the eventual developer of the sites should the Court make the order requested by each owners corporation) filed a notice of motion applying to be joined to both proceedings as a Second Applicant (the owners corporations for both schemes being the Applicant in their respective matters). An accompanying affidavit indicating the proposed purchaser’s material interests in the outcome of the proceedings and financial consequences should the Court make the order giving effect to the strata renewal plan was also filed.
The Court held that it was inappropriate that the proposed purchaser be joined as an Applicant to the two proceedings as the Development Act “clearly only envisage[ed] an owners corporation bringing an application under s 179” and that “it is more appropriate to consider [the proposed purchaser’s] application [as] being to join as a respondent, albeit as a supporting respondent”.
The court found the power in section 181(6) of the Development Act to join the proposed purchaser as a Respondent in both matters. Section 181(6) allows the Court the discretion to join the following persons as a party to proceedings:
“(a) a person who has filed an objection to the application and applies to be a party to the proceedings, [and]
(b) a person directed by the court to be joined.”
Section 181(6)(a) covers an application by an owner in a strata scheme who opposes the section 179 application by an owners corporation (and has filed an objection with the Court) to be joined as a Respondent.
In section 181(6)(b), the Court found the power to join the proposed purchaser as respondent, and held that “in the absence of guidance in the Development Act as to what a supporting respondent might submit as being a basis for the Court to agree to join them as a respondent” the proposed purchaser’s approach in indicating its material interests in the outcome of the proceedings and financial consequences should the Court make the order giving effect to the strata renewal plan was “both sensible and adequate”.
The final issue for the Court was how to delineate between the two respondents in these cases: one a lot owner opposing the application, and the other a proposed purchaser (and eventual developer) supporting the application – in this instance the Court held that the former would be given the descriptor “Respondent (Dissenting Owner)” and the latter “Respondent (Supporting Purchaser)”.