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The general order making power under section 232 of the Strata Schemes Management Act 2015 does not empower the NSW Civil and Administrative Tribunal to make an order for an owners corporation to recover a debt. 

Background

A tenant operated a coffee shop/sandwich bar from a lot in a mixed, residential and commercial scheme. Directly below the coffee shop was an orthodontic surgery.

Since 2015, the occupiers of the orthodontic surgery had complained to the owners corporation that water was dripping into the surgery from the coffee shop.

The owner of the lot made numerous demands for the tenant to fix the problem but the owner refused to rectify the problem himself.

The owners corporation obtained access to the tenant’s coffee shop in late 2017 and had repairs carried out which remedied the problem at a cost of $76,108.25.

The owners corporation sought to recover the $76,108.25 from the owner and tenant, arguing that the failure to address the water penetration issue amounted to a breach of the owner/tenant’s duty not to create a nuisance or hazard under section 153 of the Strata Schemes Management Act 2015 (“SSMA”). The owners corporation was entitled to carry out the work itself and sought to “recover the cost of the work” from the tenant/owner as a “debt” under sections 120(3) and (5) of the SSMA.

The owners corporation sought an order from the Tribunal that the tenant/owner reimburse the owners corporation for the cost of the rectification work. The owners corporation believed that the Tribunal had jurisdiction to make such an order under its general order-making power found at section 232(1)(a) and (e) of the SSMA. 

Decision

The Tribunal held that the general order making power under section 232 of the SSMA does not empower the Tribunal to make an order for an owners corporation to recover a debt. The proceedings were transferred to the Local Court of NSW. 

The Tribunal also held:

“41. When s 232(1) is read in its entirety, it appears to be directed towards orders that require some outcome that will ensure that those within the strata scheme act, or refrain from acting, in some way that will achieve the workable operation, management and administration of that scheme.

42. What is conspicuously absent from s232 is the use of any words that even vaguely allude to an order for debt recovery. This is because such remedies fall outside and are at odds with the objectives s 232 SSMA seeks to implement. This conclusion is reinforced by the fact that other sections of the Act (eg s 132) make specific reference to the Tribunal’s power to order payment of money to an owners corporation. 

43. Thus, I am inclined to the view that the general order making provisions in s232 SSMA do not empower the Tribunal to make a monetary order for “debt recovery” “for the cost of carrying out the work” to remedy a breach of Part 8 of the SSMA, as provided for under s 120 SSMA.

47. What we see in s132 therefore, is a specific provision that addresses a specific scenario, namely, where an owner or occupier has carried out work that damaged common property or another lot. In such a situation the legislature has enacted a provision, that specifically refers to and empowers the Tribunal to award an owners corporation the cost of repair flowing from that damage. This is to be contrasted with s 120 of the SSMA, which makes no reference to the Tribunal.

50. If, as the OC argues, the situation addressed under s 120 SSMA triggers the operation of the Tribunal’s general order-making power under s 232 so as to allow the Tribunal to make an order, it must follow that s 132 SSMA should also trigger the operation of s 232 and empower the Tribunal to make a money order without the need for s132(1) to specifically empower the Tribunal to do so. In which case, the words in s 132(1) referring to the Tribunal’s power, would be superfluous and of no utility.”

Disclaimer: 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.