The Owners Corporation can be seen as the owner of the common property of a strata scheme as whole, and the Owners Corporation has a duty under section 106(1) of the Strata Schemes Management Act 2015 (NSW) (the Act) to properly maintain and keep the common property in a state of good and serviceable repair.
Pursuant to section 106(5) of the Act, the owner may recover the damages and any reasonably foreseeable loss suffered by the owner resulting from the Owner Corporation’s breach of its statutory duty. However, the owners are not always entitled to damages whilst the Owners Corporation has breached its statutory duties under the Act, if the owner cannot substantiate the quantum of the losses and damages.
Salib v The Owners – Strata Plan No 20851 [2023] NSWCATCD 48
Strict Liability Under Section 106(1)
In the Salib Case, the Tribunal followed the decision of Siewa Pty Ltd v The Owners Strata Plan 35042 [2006] NSWSC 1157, and held that Owners Corporation’s liability under section 106(1) of the Act is “not one to use reasonable care to maintain and keep in good repair the common property, nor one to use best endeavours to do so, nor one to take reasonable steps to do so, but a strict duty to maintain and keep in repair.” This means that section 106(1) is a strict liability and Owners Corporation cannot use “reasonable steps have been taken” as a defence.
Owner’s Entitlement to Damages
An owner can seek money orders for damages under section 106(5) and/or section 232 of the Act. NCAT has power to make orders under these sections, as confirmed by Vickery v The Owners — Strata Plan No 80412 [2020] NSWCA 284.
For the owners to recover damages from the Owners Corporation, the onus of proof is on the owner to demonstrate the following:
- the Owners Corporation has failed to properly maintain and keep in a state of good and serviceable repair the common property;
- the owner has suffered reasonably foreseeable loss as a result of the breach by the Owners Corporation; and
- the quantum of any loss and it is also necessary to consider whether there was a failure by the owner to mitigate his loss.
Work Orders
Sometimes, the owner may also seek work orders under section 232 and/or section 241 of the Act for the Owners Corporation to rectify the defects. The Salib Case followed the decision of Glenquarry Park Investments v Hegyesi [2019] NSWSC 425 that “it is unacceptable that the recipient of the order should be in any doubt as to what is required”. The work orders must not be general in nature and need to be specific as to what the Owners Corporation is actually required to do.
Take Away
In its simplest form, the statutory duties of the Owners Corporation to repair and maintain the common property is a strict liability under section 106(1) of the Act. However, an owner must provide a reasonable quantum calculation as to how financial losses are incurred and to ascertain how the Owners Corporation’s breach of duties caused those financial losses. Likewise, the owner must present a specific scope of rectification works to confine the proposed work orders.
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