On 8 January 2018, the NSW Civil and Administrative Tribunal’s Appeal Panel handed down the long awaited decision in The Owners Strata Plan No 30521 v Shum [2018] NSWCATAP 15. 

The Tribunal Proceedings before the Appeal 

By way of background, in the original Tribunal proceedings against the Owners Corporation, the Applicant, an owner of a lot in a strata scheme, sought substantive orders pursuant to sections 106, 126 and 232 of the Strata Schemes Management Act 2015 (“SSMA”) that:

  1. The Owners Corporation had failed to rectify defects in the common property roof in a timely manner in accordance with its statutory duty under the SSMA.
  2. The alleged delay constituted a statutory breach causing damage to the interior of the lot as a result of water penetration causing mould and bubbling paint.
  3. The alleged damage to the interior of the lot had caused the Applicant to suffer loss and damage in the form of lost rental income due to the Applicant’s lessee terminating the commercial lease over the lot.

The Applicant also claimed that the following loss flowed from the Respondent’s alleged statutory breach, described above:

  1. Lost rent in the sum of $46,893.85 (the rental).
  2. A percentage of water and council rates, as well as levies, in the sum of $6,553.79, ordinarily paid by the Lessee under the terms of the commercial lease (the contributions).
  3. Interest on the rental and contributions in the sum of $2,495.60.

The total of the Applicant’s claim was in the sum of $55,943.24.

The Tribunal ordered that the Owners Corporation was to pay the Applicant the sum of $55,943.24 within 7 days of the date of the orders in respect of the loss of rent, contributions and interest claimed.

NCAT Appeal Panel’s Decision 

The lot owner appealed the Tribunal’s decision to the NCAT Appeal Panel. The appeal raised the question of whether the Tribunal has jurisdiction to award damages to a lot owner for breach by an owners corporation of a statutory duty to maintain and repair property in accordance with section 106 of the SSMA.

The Appeal Panel decided as follows.

NCAT Appeal Panel’s Decision 

The appeal raised the question of whether the Tribunal has jurisdiction to award damages to the owner of a lot in a strata scheme for breach by an owners corporation of a statutory duty to maintain and repair property in accordance with section 106 of the SSMA.  Strata Schemes Management Act, 2015 (2015 Management Act).

The Appeal Panel decided that:

  1. An owners corporation has statutory duties to properly maintain and keep in a state of good and serviceable repair the common property and any personal property vested in the owners corporation and to renew or replace any fixtures or fittings comprised in the common property and any personal property vested in the owners corporation.
  2. In respect of the duty to maintain and keep in a state of good and serviceable repair, there is a continuing obligation imposed on the owners corporation, breach of which may give rise to multiple causes of action.
  3. Pursuant to s 106(5) of the SSMA a lot owner is entitled to recover reasonably foreseeable loss suffered in consequence of each breach.
  4. The Tribunal has jurisdiction under s 232 of the SSMA to make an order in favour of a lot owner against an owners corporation for the payment of money by way of damages for each such breach.
  5. There is no monetary limit to the jurisdiction of the Tribunal in respect of an order for compensation.
  6. The SSMA is not retrospective in its operation and there is no power to make an order:
    • in respect of a breach by an owners corporation of its obligation to comply with section 62 of the Strata Schemes Management Act 1996;
    • for damage suffered by a lot owner prior to the commencement of the SSMA on 30 November 2016.

For the above reasons, the NCAT Appeal Panel reduced the amount of the Applicant’s claim and made an order of $28,034.11 being rent of $23,327.36, outgoings of $3682.31 and interest of $1024.44.

It is important to seek legal advice specific to your circumstances before applying for an appeal to the NCAT Appeal Panel. At Pobi Lawyers, we can assist you and determine if you have suitable grounds to apply for an appeal. We can also guide you through the application and appeal process and if necessary can represent you at the Appeal.

If you wish to speak to our team of strata lawyers regarding your NCAT Appeal, please contact Michael Pobi or Iain Fairholm by telephone on (02) 8710 3430 or send an email to michael.pobi@pobilawyers.com. If you would like to meet with us, we can arrange by appointment to meet with you at our office.

Please note that the information contained in this article is not legal advice and should not be relied upon. You should obtain legal advice specific to your circumstances before you take any action or otherwise rely upon the contents of this article.

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