The Owners – Strata Plan No 100777 v Ausbao (286 Sussex St) Pty Ltd

1. [1]

   BELL CJ: These reasons relate to an application for leave to appeal from an interlocutory decision made on 18 December 2025 of Pike J (the primary judge) declining to stay proceedings pending in the Equity Division: Ausbao (286 Sussex St) Pty Ltd v The Owners – Strata Plan No. 100777 [2025] NSWSC 1565 (PJ or primary judgment).

2. [2]

   The Applicant, the Owners – Strata Plan No 100777 (the Owners), and the Respondent, Ausbao (286 Sussex St) Pty Ltd (Ausbao), each holds a stratum lot in a mixed-use building (the Building) which was subdivided by the creation of two “Stratum Lots” pursuant to the provisions of Division 3B of Part 23 of the Conveyancing Act 1919 (NSW). As the primary judge explained, subdivision of this land can include one of the stratum lots being further subdivided to create a strata scheme under the Strata Schemes Development Act 2015 (NSW). This is brought into effect by registration of a “strata plan”: s 9(1). If this occurs, a strata management statement must also be registered at the same time as a strata plan.

3. [3]

   The application for a stay was made on the basis of a dispute resolution clause in the Strata Management Statement (the SMS) to which the Owners and Ausbao were each a party. The key aspect of the clause in question was the requirement that the parties “must deal with disputes about this management statement [the SMS] according to this clause”: cl 5.3. The process as set out in cl 5 of the SMS required the giving of a “dispute notice”, subsequent negotiation, and ultimately, following the issue of a “determination notice” in the event that the dispute was not able to be resolved consensually, the referral of the dispute to an independent expert for determination.

4. [4]

   The central question before the primary judge was whether the underlying dispute which had caused the Owners to issue a Dispute Notice by letter dated 19 September 2025 (the Dispute Notice) and led to Ausbao seeking relief in the Supreme Court proceedings was properly characterised as being “about” the SMS such that the dispute resolution/expert determination clause in the SMS was engaged. If it was not, the basis for any stay of proceedings fell away because it was only if cl 5 was engaged that there could be any contractual basis for a stay of the Supreme Court proceedings. Even then, the decision whether to grant a stay was discretionary, given that dispute resolution clauses may not oust the jurisdiction of the court: Compagnie des Messageries Maritimes v Wilson (1954) 94 CLR 577; [1954] HCA 62.

5. [5]

   The primary judge, in a carefully reasoned judgment, characterised the dispute between the parties as in fact being “about” an Agency Agreement in relation to the management of the Building and not “about” the SMS. In that context, the Owners and Ausbao comprised the Building Management Committee (the BMC) under the SMS and had together entered into an Agency Agreement with Bright & Duggan Pty Ltd (Bright & Duggan), appointing it as strata manager on 23 October 2023 (the Agency Agreement). Under the SMS, Mr Spicer, as representative of the Owners, acted as Secretary of the BMC. At [61]-[64] of his reasons, the primary judge said the following:

6. [6]

   This assessment was based upon his Honour’s close review of extensive correspondence between Mr Spicer or lawyers acting on his and the Owners’ behalf, and Bright & Duggan. Some of this correspondence was set out and or referred to at [31]-[38] of his Honour’s reasons. The Court was also taken to much of this correspondence in argument. It is not necessary to reproduce that material. It suffices to say that, for very many months prior to, and then subsequent to, the convening of an AGM by Bright & Duggan for 11 September 2025 (the AGM), strong assertions had been made by or on behalf of Mr Spicer directed to Bright & Duggan to the effect that it, as Strata Agent, was subject to his direction as Secretary of the BMC including in relation to the convening of meetings. Mr Spicer asserted that, in relation to the convening of the AGM, Bright & Duggan had acted in breach of the Agency Agreement, usurped the role of the Secretary of the BMC and had acted beyond power, as a consequence of which it was asserted that the AGM would be invalid. This represented a continuation of a course of criticism that had existed as early as February 2025. On 25 February 2025, Mr Spicer had written to Ms Goodwin of Bright & Duggan in the following terms:

7. [7]

   The representatives of the Owners did not attend the AGM on 11 September 2025, and so, having not reached a quorum, it was adjourned until 25 September 2025 (which the Owners did attend and participate in, albeit under protest and with rights reserved). The basis for the asserted invalidity of each meeting and the resolutions passed in them related in substance to the actions of Bright & Duggan in convening and proceeding with them, and the question of validity will ultimately turn on the extent of Bright & Duggan’s authority under the Agency Agreement. On the evidence before the Court, Ausbao had not participated in the debate between Mr Spicer and Bright & Duggan as to the extent of or limits to Bright & Duggan’s authority prior to the issuing of the Dispute Notice. At most, it had been copied into correspondence between Mr Spicer and Bright & Duggan.

8. [8]

   At [65] of his reasons, the primary judge observed:

9. [9]

   Bright & Duggan was not originally a party to the Supreme Court proceedings but, subsequent to the primary judge’s decision, it was joined as a Second Defendant with leave of the Court. By way of an Amended Statement of Claim filed on 13 February 2026, the proceedings were amended to seek the following relief (with prayers 3A and 3B added to the relief originally sought):

10. [10]

    As explained below, the amendment of the proceedings to include Bright & Duggan as a Second Defendant has some significance to the question of the grant of leave and, if leave were granted, to any re-exercise of the discretion. In this context, it is relevant to note that although, because of his Honour’s conclusion, it was not necessary for the primary judge to deal with any discretionary arguments against a stay of proceedings, the primary judge did observe at [74] that:

11. [11]

    By its draft Notice of Appeal, the Owners challenge the primary judge’s characterisation as to what the dispute was “about” and included in this argument was a challenge to his Honour’s construction of cl 5.3 of the SMS. Before the primary judge, the Owners had sought to argue that the reference in cl 5.3 to “disputes about this management statement” should be construed as meaning “disputes about matters arising from this management statement” in light of the language of cl 5.2 which provided:

12. [12]

    At [49]-[54] of his reasons, the primary judge rejected this argument on the following basis:

13. [13]

    His Honour then, in a reference to part of the Dispute Notice, the validity of which was challenged by prayer 1 of the Amended Statement of Claim (see [9] above), observed at [66]-[67] that:

Leave to appeal

1. [14]

   Leave to appeal is required because a judgment or order dismissing an application for (or indeed granting) a permanent stay of proceedings is “interlocutory” for the purposes of s 101(2)(e) of the Supreme Court Act 1970 (NSW) (Supreme Court Act) (Lipman Pty Ltd v Empire Facades Pty Ltd (formerly known as Empire Glass and Aluminium Pty Ltd) [2017] NSWCA 217 at [3]) and also because the proposed appeal is from a final judgment or order in proceedings of the Court that involves a matter at issue which has not been shown to amount to, or be of value exceeding $100,000 (Supreme Court Act s 101(2)(r)(i)). That is so in a case such as this which does not have a “readily ascertainable monetary value”: Marroun v State Transit Authority (2017) 96 NSWLR 295; [2017] NSWCA 273 at [12].

2. [15]

   Leave applications in this Court attract a general obligation on the applicant for leave to establish that there is an issue of principle, a question of public importance, or a reasonably clear injustice going beyond something that is merely arguable: Jaycar Pty Ltd v Lombardo [2011] NSWCA 284 at [46]; Be Financial Pty Ltd as Trustee for Be Financial Operations Trust v Das [2012] NSWCA 164 at [32]-[39]; The Age Company Ltd & Ors v Liu (2013) 82 NSWLR 268; [2013] NSWCA 26 at [13]; Secretary, Department of Family and Community Services v Smith (2017) 95 NSWLR 597; [2017] NSWCA 206 at [28]; PPK Willoughby Pty Ltd v Baird [2019] NSWCA 48 at [6] (PPK Willoughby).

3. [16]

   The current application does not involve an issue of principle. It was not suggested that the primary judge erred in his Honour’s identification of the relevant principles associated with stay applications based upon dispute resolution clauses in commercial contracts. His Honour identified the relevant principles including by reference to the decision of this Court in Lepcanfin Pty Ltd v Lepfin Pty Ltd (2020) 102 NSWLR 627; [2020] NSWCA 155 and the decision of Hammerschlag J in The Illawarra Community Housing Trust Limited v MP Park Lane Pty Ltd [2020] NSWSC 751 at [41] to [46] which itself collected many of the leading authorities.

4. [17]

   Nor was it suggested (nor could it have been) that the matter raised a question of public importance.

5. [18]

   As to the third established criterion for the grant of leave, namely whether the decision in respect of which leave is sought gave rise to “a reasonably clear injustice going beyond something that is merely arguable”, this formulation sets a reasonably high bar for good reason, as Simpson AJA and I pointed out in PPK Willoughby by reference to the sage observations of Sir Frederick Jordan in In the matter of the Will of F B Gilbert (dec) [1946] NSWStRp 24; (1946) 46 SR (NSW) 318 at 323 (Gilbert). Sir Frederick Jordan had expressed the opinion in Gilbert that:

6. [19]

   I have previously observed that “it may be that the decision to grant a permanent stay of proceedings does not sit comfortably within the dichotomy Sir Frederick Jordan drew in In Re Will of F B Gilbert (dec) …, namely between ‘an exercise of discretion on a point of practice or procedure’, on the one hand, and ‘an exercise of discretion which determines substantive rights’, on the other hand”: Wigmans v AMP Ltd (2019) 103 NSWLR 543; [2019] NSWCA 243 at [34]; see also CBRE (V) Pty Ltd v Trilogy Funds Management Ltd (2021) 107 NSWLR 202; [2021] NSWCA 316 at [4]-[10]. A dispute resolution provision may be seen as a source of contractual rights albeit of somewhat attenuated kind insofar as a court retains a discretion not to grant a stay (or an anti-suit injunction) even if the commencement of local (or foreign) proceedings amounts to a breach of such a provision: see CSR Ltd v Cigna Insurance Australia Ltd (1997) 189 CLR 345 at 391-394; [1997] HCA 33. Further, as already noted, such a clause may not oust the jurisdiction of the court: see [4] above.

7. [20]

   While a decision to grant or refuse a stay of proceedings will involve questions of contractual rights where a dispute resolution clause is involved, no determination of substantive rights in the sense referred to in Gilbert is involved. The decision made by the primary judge, while perhaps not aptly characterised as one falling into Sir Frederick Jordan’s first category in Gilbert, is closer to it on the spectrum than the second category and Chief Justice Jordan’s observations as to the need for “a tight rein” to be kept on interference with orders of the kind made by the primary judge are apposite in the present case. Indeed, it may well be that the entirety of the substantive dispute between the parties could have been resolved even in the very short period between the primary judge’s decision and the hearing and determination of this application.

8. [21]

   To return to the question of whether the decision in respect of which leave is sought gave rise to a “reasonably clear injustice going beyond something that is merely arguable”, in my view it did not for at least the following reasons:

   1. (1)

      While the competing construction of cl 5.3 of the SMS for which the Owners contended (as noted in short form at [11] above) had, with respect to the primary judge, considerable force, even if it were to be accepted, the primary judge’s characterisation as to what the dispute was “about”, even in the extended sense of cl 5.3 contended for by the Owners, would still, in my opinion, have been correct. The expression “arising from” looks to the source of the dispute. Here, that was the dispute between Mr Spicer and Bright & Duggan as to the extent of the latter’s delegated powers under the Agency Agreement.

   2. (2)

      There is no reasonably clear injustice or indeed any injustice at all generated as a result of the challenged decision: the parties will not only no doubt have the questions raised by the Amended Statement of Claim resolved expeditiously by Pike J but, in light of the joinder of Bright & Duggan, they will be resolved in a manner that binds Bright & Duggan and thus will be determinative in a way that an expert determination between the Owners and Ausbao alone would not necessarily be. In this context, it is relevant to note that, in correspondence with Bright & Duggan, the Owners had reserved their rights to sue Bright & Duggan for breach of the Agency Agreement.

   3. (3)

      Because of the structure of voting under the SMS and the absence of a deadlock provision, the only resolutions passed at the impugned AGM held on 25 September 2025 were those supported both by Ausbao and the Owners. In other words, no resolution contrary to the wishes of the Owners was passed at the meeting the validity of which they seek to impugn.

   4. (4)

      Fourthly, resolution of the dispute in this Court will obviate the time and related expense involved in a debate as to the efficacy of the Dispute and Determination Notices that were issued by the Owners (see prayers 1 and 2 of the Amended Statement of Claim) and which raised the issues referred to by Pike J at [66]-[67] of his reasons which have been extracted at [13] above. Mr Beaumont SC, who appeared for the Owners, accepted with commendable candour that the inclusion of questions relating to the reappointment of Bright & Duggan in the Dispute Notice that was issued was somewhat tendentious, given that it had not been the subject of an earlier dispute or good faith negotiations between the parties as required by cl 5.2 of the SMS. Parenthetically, the inclusion of that issue in the Dispute Notice issued by the Owners was confirmatory of the primary judge’s characterisation of the essence of the dispute.

9. [22]

   Also affecting my decision to refuse leave to appeal is the fact that, even if leave were granted and the Owners’ arguments as to the construction of cl 5.3 and the characterisation of the dispute were accepted, on the re-exercise of discretion (which may have regard to matters arising subsequent to the original decision: see Allesch v Maunz (2000) 203 CLR 172; [2000] HCA 40 at [24], [30]-[32]), I would have declined to stay the proceedings for two related reasons.

10. [23]

    First, the question of the validity of the Dispute and Determination Notices raised by prayers 1 and 2 of the Amended Statement of Claim would still, prima facie at least, have had to be resolved by the Court and so there would be a bifurcation of proceedings if the stay were only granted in relation to prayer 4 of the Amended Statement of Claim.

11. [24]

    Secondly, there would have been no proper basis to stay the proceedings against Bright & Duggan in respect of whom the relief sought in prayers 3A and 3B of the Amended Statement of Claim was particularly germane. A decision to stay Ausbao’s proceedings only as against the Owners would thus have bifurcated the proceedings in an additional way and would have been in tension with the requirements of s 56 of the Civil Procedure Act 2006 (NSW). In the face of a multiplicity of proceedings, there are strong reasons for resolving all aspects of a dispute in one forum even if that policy consideration is at the expense of a party’s contractual, dispute resolution rights: Australian Health & Nutrition Association Ltd v Hive Marketing Group Pty Ltd (2019) 99 NSWLR 419; [2019] NSWCA 61 at [81]-[85]; Incitec Ltd v Alkimos Shipping Corporation (2004) 138 FCR 496; [2004] FCA 698.

12. [25]

    For the foregoing reasons, the application for leave to appeal should be dismissed with costs.

13. [26]

    ADAMSON JA: I agree with the Chief Justice.

14. [27]

    BALL JA: I agree with the Chief Justice.