Strata Lawyer & Strata By Laws Sydney        02 8324 7565

On 11 November 2020, the NSW Court of Appeal handed down its decision in Vickery v The Owners – Strata Plan No 80412 [2020] NSWCA 284.

The history of the matter involved a lot owner in a strata scheme who claimed that the owners corporation breached its obligation under section 106(1) of the SSMA to maintain the common property resulting in his lot leaking with water.  The lot owner claimed damages for lost rent as a result of the water leak.

At first instance, the NSW Civil and Administrative Tribunal (“NCAT”) held that NCAT had jurisdiction to award damages to a lot owner for breach of section 106(1) of the SSMA.  However, on appeal to the NCAT Appeal Panel, the NCAT Appeal Panel held NCAT does not have jurisdiction to award damages for breach of section 106(1) of the SSMA.

Section 106(5) of the SSMA states:

“(5)  An owner of a lot in a strata scheme may recover from the owners corporation, as damages for breach of statutory duty, any reasonably foreseeable loss suffered by the owner as a result of a contravention of this section by the owners corporation.”

The NSW Court of Appeal allowed an appeal from a decision of the NCAT Appeal Panel. ‘

The issue before the NSW Court of Appeal was whether section 232 of the SSMA which provides that NCAT may “make an order to settle a complaint or dispute” included an order for the payment of damages.

Justice Basten and Justice White allowed the appeal and held that:

  • section 232 of the SSMA conferred power upon NCAT to hear and determine a claim for damages;
  • the language of section 232 of the SSMA should not be read down to preclude such an order, noting the legislative history of the provision, and the absence of any express prohibition against the making of such an order; and
  • the right of recovery created by section 106(5) of the SSMA was a statutory right of recovery and doesn’t reflect a general law cause of action.

The effect of the above Court of Appeal decision is that a lot owner no longer has to bring separate proceedings in the Tribunal seeking a work order to rectify the defects in the common property and in a Court seeking damages.  A lot owner may now bring a claim in NCAT for a work order and an order for damages for breach of section 106 of the SSMA.

If you have any questions in relation to the above or require assistance, please contact us.

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.