It should be noted that the relevant legislation in place at the time of this judgement is identical to the current sections 136 – 140 of the UTMA except that ACAT has replaced the ACT Magistrates Court as the relevant governing body.
Italian & Continental Bakery Pty Ltd and Ehrensperger Nominees Pty Ltd were the only owners in Units Plan No. 1609, a units plan registered under the UTA.
Henry Kazar of Sims Partners, an accounting firm, was appointed as administrator of the owners corporation on 9 March 2004. The order appointing Mr Kazar as administrator was for a period of six months and required that the members of the owners corporation ‘must indemnify the administrator for all of the costs and remuneration properly incurred by the administrator during the course of his administration …’. On 27 September 2004, Mr Kazar was reappointed with effect from 9 September 2004 (the expiry of the earlier term). An order was made that the members of the owners corporation ‘continue to indemnify the administrator for all of the costs and remuneration properly incurred by the administrator during the course of his administration …’.
On 14 March 2005, the Chief Justice of the ACT Supreme Court determined that, as from that date, the appointment of the administrator should be terminated.
Almost a year after the above termination, a notice of motion under appeal was filed. His Honour Justice Gray held that a number of procedural irregularities resulted in the application being so misconceived as to merit dismissal. However, in deference to the submissions put, His Honour addressed the matters raised in those submissions.
Section 140 of the then UTA (now s 136 of the UTMA) required that the application for an administration order be made by an interested party. Mr Kazar (the appellant) claimed to be an interested party by reason of being a creditor of the owners corporation (relying upon s 140(b) of the then UTA, now s 136(b) of the UTMA).
The Court then reviewed the meaning of interested party in that section and ultimately found that Mr Kazar had never been a creditor of the owners corporation because the indemnity was ordered in respect of the unit owners, not the owners corporation itself (at paragraph 32).