In The Owners – Strata Plan No 100777 v Ausbao (286 Sussex St) Pty Ltd [2026] NSWCA 61, the Court (Bell CJ, Adamson and Ball JA agreeing) dismissed the Owners' appeal of the primary judge's decision not to stay proceedings despite a dispute resolution clause in the strata management statement in circumstances where no issue of principle arose, there was no clear injustice, and a stay would not be ordered even by the Court re-exercising the discretion.
Case background
The Owners and Ausbao each hold a stratum los in a mixed use building which was subdivided by the creation of two "Stratum Lots" under the Conveyancing Act. One Lot was further subdivided to create a "strata scheme" which was brought into effect by registering a strata scheme and a strata management statement. The Owners and Ausbao comprised the Building Management Comittee under the SMS and together entered into an agency agreement with Bright & Duggan appointing it as strata manager.
The Dispute
A dispute arose relating to the validity of an AGM called by Bright & Duggan and the resolutions passed, the Owners issued a dispute notice, Ausbao commenced proceedings, and Bright & Duggan were joined as the second defendant. An application for a stay was made on the basis of a dispute resolution clause in the SMS. The central question was whether the underlying dispute was properly characterised as being "about" the SMS such that the dispute resolution clause in the SMS was engaged. The primary judge characterised the dispute as being "about " the agency agreement with Bright & Duggan, and not about the SMS. The Owners appealed.
Outcome
First, the application did not raise an issue of principle or public importance. There was no suggestion that the primary judge erred in identifying the relevant principles associated with stay applications based upon dispute resolution clauses in commercial contracts.
Second, the primary judgement did not give rise to a "reasonably clear injustice going beyond something that is merely arguable" noting the high bar that the established criteria imposed. Even if the broader construction argued by the Owners was right, the primary judge's characterisation of what the dispute was about was still correct. Further, joinder of Bright & Duggan meant that resolution of the matter in the Court will be determinative in a way that an expert determination between the Owners and Ausbao would not be.
Third, even if leave was granted and the Owners arguments were accepted, on the re-exercise of discretion, the Court would have declined to stay the proceedings to avoid bifurcation of proceedings, given that relief sought in the ASOC might not be covered by the stay, and because Bight & Duggan would not be bound by it.