Before the introduction of the new Strata Schemes Management Act 2015 (NSW) on 30 November 2016, the right of a lot owner to recover damages for breach of the owners corporation’s duty to maintain common property was uncertain.
Under section 106 of the Act, an owners corporation for a strata scheme must:
- “properly maintain and keep in a state of good and serviceable repair the common property and any personal property vested in the owners corporation” – section 106(1); and
- “renew or replace any fixtures or fittings comprised in the common property any personal property vested in the owners corporation”- section 106(2).
The opportunity to recover damages is addressed in section 106(5), which says “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 an owners corporation’s breach of its obligations in section 106.
[N.B. The time in which to bring the action is limited to two years after the owner first becomes aware of the loss – section 106(6).]
The NSW Civil & Administrative Tribunal Appeal Panel, in its decision of The Owners – Strata Plan No. 30621 v Shum [2018] NSWCATAP 15 (dated 8 January 2018), considered whether the Tribunal had jurisdiction to award damages to a lot owner for breach by an owners corporation of its statutory duty in section 106.
The Appeal Panel concluded the following:
- the Tribunal has jurisdiction under section 232(1)(a) and (e) of the Act 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 breach of its statutory duty in section 106, as it is an order settling a complaint or dispute about:
- the operation, administration or management of a strata scheme; and
- an exercise of, or failure to exercise, a function conferred or imposed by or under the Act;
2. there is no monetary limit to the jurisdiction of the Tribunal in respect of an order for compensation; and
3. the Act does not operate retrospectively, so the Tribunal cannot make an order:
- in respect of a breach under section 62 of the Strata Schemes Management Act 1996 (NSW); or
- for damage suffered by a lot owner prior to the commencement of the new Strata Schemes Management Act 2015 (NSW) on 30 November 2016.