Negligence Claim Against Owners Corporation For Failure to Maintain and Repair Common Property

Although the recent decision of the NSW Court of Appeal in Owners Strata Plan 50276 v Thoo [2013] NSWCA 270 decided that a breach of section 62 of the Strata Schemes Management Act 1996 does not give a lot owner a cause of action in damages against the owners corporation, the NSW Court of Appeal left open the question in relation to a lot owner’s claim against the owners corporation in respect of negligence.

It is interesting to note that since Thoo’s case there has been one recent reported decision by the NSW District Court in which the lot owners (a family owned news agency business conducted through a trust) brought a claim in negligence against the owners corporation for losses sustained due to water leaking into their lot and for a leaking pipe: Chong Yon Han and Jung Ok Min as trustee for H M Trust trading as Eastpoint Newsagency v Tanert Pty Limited [2014] NSWDC 99.

While the District Court’s decision mainly dealt with the owners corporation’s application for security of costs against the lot owners, the Court commented that the lot owners appeared to have brought a bona fide claim in negligence in respect of an undisputed loss against the owners corporation. Unfortunately, the Court was not in a position to make a judgment in respect of that issue as the lot owners had not filed and served their evidence and the owners corporation had not filed a defence.

The District Court’s decision serves as a timely reminder that owners corporations should consider conducting routine inspections and audits on the state of its common property to identify potential risks and hazards.

Owners corporations should also notify their public liability insurer of any risks and hazards on or affecting the common property as soon as it becomes aware of such matters.

If you require legal advice in relation to your rights, please feel free to contact us on (02) 8710 3430 to arrange an appointment.

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