Boutenko v The Owners - Strata Plan No 77480

Applicant

1. The documentary evidence of the applicant that had been filed and served and was admitted into evidence subject to weight and relevance was: 1. The documents attached to the application filed with the Tribunal comprising of 114 pages. 2. A bundle of documents comprising 34 pages filed on 13 May 2022.
2. The applicant's documents relevantly included: 1. The quotations previously referred to. 2. Photographs of the condition of the Lot and proximate common property. 3. A consent to being appointed as compulsory strata manager by O'Neill Stata Management Pty Ltd; a copy of the licence of O'Neill Strata Management Pty Ltd; and a copy of the terms and conditions of O'Neill Strata Management Pty Ltd. 4. Emails between the applicant and Ms Fahim. 5. Correspondence relating to an attempt by the owners corporation to issue a Bankruptcy Notice on the applicant due to unpaid levies. The owners corporation obtained a judgement against the applicant for $17,373.63 for unpaid levies in 2021. The owners corporation then caused for a Bankruptcy Notice to be issued. The Lot owner paid the outstanding monies and was not made bankrupt. 6. Memorandum of fees from the applicant's former Solicitors dated 12 September 2016 and 13 December 2016. The applicant asserted that he had spent significant monies on legal fees without achieving a positive outcome against the owners corporation. Until these proceedings, the applicant had not taken legal action against the owners corporation. 7. A letter dated 18 March 2022 from Lowensteins Arts Management Certified Practising Accountants. The letter was addressed "To Whom it may concern." The letter stated that the accountancy firm acted for the applicant, and "to the best of our knowledge, from 22 March 2019 to 18 March 2022 there are (sic) estimated rental loss of $168,634.29 due to water damage at (address of Lot)". 8. A letter dated 4 March 2022 from RomicMoore Property (real estate agents). The letter is addressed "To Whom it May Concern." The letter was a "sales market appraisal" for the Lot and stated that the Lot had been inspected for the purpose of an appraisal. The letter stated that in its current condition (including "black mould throughout the whole apartment; ceilings which have leaks and black mould on walls, membrane-waterproofing issues, storm damaged pergolas, water damaged timber flooring" the Lot had a sales price of $700,000 to $800,000. If the Lot was repaired and the sunroom constructed, the "current possible sale price" would be $1,300,000 to $1,400,000". 9. A letter dated 16 November 2020 from RomicMoore Property. Again, that letter was addressed "To Whom it May Concern." The letter stated that a "fair rent in the current market would be in the region of $1,000-$1,100 per week", but that prior to leasing the Lot, water leaks; water ingress issues; and damage would need to be repaired; together with "any other issues as specified in a building inspector's report".
3. One of the documents that had been forwarded to the Tribunal in about April 2022 was a fee proposal from Crownview Projects dated 13 April 2022. That document states the builder performed an inspection of the applicant's Lot on 12 April 2022. The document identifies the damage to the Lot and proximate common property as follows: 1. Bathroom-Failed waterproofing membrane to the bathroom floor. 2. Shower wall with evidence of water ingress causing damage to paintwork. 3. No waterstop observed to bathroom door. 4. Living Room-Ceiling damage and imminent risk of collapse due to above terrace pipe and waterproofing failure. 5. Living room bulkhead-Significant deformation and imminent risk of collapse. 6. Bedroom 1-Significant "popping" of flooring due to water ingress. 7. Living room terrace-Pergola structure suffered storm damage. 8. Rooftop terrace-Failed waterproofing an efflorescence found within rooftop terrace. Insufficient falls to drain and cracking to the parapets.
4. The fee proposal of Crownview Projects has a detailed scope of works in respect of rectification works to the bathroom; pergola (Living room balcony); living room terrace; and rooftop terrace. It also contains a scope of works for the "option" of creating a rooftop sunroom. Excluding the "sunroom" the total cost (excluding GST and "Design and Practitioners Act Design (sic) and declaration requirements") is identified as $298,500.
5. A difficulty with this fee proposal document of Crownview Projects is that the applicant did not refer to it in his evidence and submissions, and it was not a document that he clearly identified as having been served on the respondent in the proceedings.
6. The applicant's oral evidence was that after the applicant moved out of the Lot in 2017, he rented the Lot to tenants. The rent charged was $950 pw. The tenants moved out in 2018 due to water ingress into the Lot.
7. The applicant stated that in 2019 for a period of 3 weeks the property was rented out to two "backpackers" for minimal rent despite being in an extremely poor condition due to water ingress. According to the applicant, one of the "backpackers" rode a motorbike. After they moved out, the Lot has not been rented.
8. The Tribunal Member asked the applicant to clarify when he knew that the owners corporation had not kept the premises in a state of good repair; and when he knew about suffering a loss. The applicant stated that in about April 2017, the remedial builder appointed to perform works to the roof membrane damaged a stormwater drainpipe, which caused water ingress into the Lot. The applicant was aware of suffering financial loss due to loss of rent from when his tenants moved out in 2018. His evidence did not specify when, precisely, in 2018 they moved out.
9. The owners corporation responded to the applicant complaining about this issue by stating that the water ingress issue would be repaired and would form part of a building defects claim against he the builder. However, repairs had never been performed. In 2020, another builder appointed by the owners corporation told the applicant the Lot was uninhabitable.
10. The applicant stated he sought legal advice in 2017 and was told that he could commence legal action against the owners corporation. He did not do so for reasons that relevantly included repeated promises by the owners corporation that "insurance claims" were ongoing and repairs would be performed. The applicant stated he was not given specific legal advice that he could take proceedings in NCAT until early 2022.
11. The applicant stated that "the whole property started leaking everywhere" in 2018.
12. When specifically asked by the Tribunal to identify when he first became aware of loss as a result of the owners corporation failing to keep and maintain the common property in a state of good and serviceable repair, the applicant replied "2018". He did not identify the month in 2018 when the tenants moved out.
13. The applicant stated the condition of his Lot had deteriorated since heavy rain in early 2022. A ceiling had partially collapsed. There was significant black mould. The Lot was damp. The applicant does not currently live in Sydney. He stated he returns regularly to clean up the Lot. This involves running the air-conditioner to remove dampness and other measures. The applicant stated that other areas of the common property are in poor condition, including a ceiling of the main entrance foyer which collapsed.
14. The applicant stated that he had suffered significant financial hardship due to (a) not being able to rent the Lot or sell it due to the water ingress problems in the common property of the strata building and failure to conduct repairs; (b) legal fees; (c) and legal proceedings attempting to bankrupt him for unpaid levies, despite the strata manager telling him that he could delay paying levies. The applicant stated he had to sell other investment properties and was in a poor financial position.
15. In cross examination the Lot owner denied he had been renting out the property on a continuous basis since about 2017. The Lot owner was adamant that he had only rented the property for 3 weeks in 2019. The Lot owner also denied that he had provided misleading information in an insurance claim in 2020 due to storm damage to the pergola on the second terrace (i.e. the pergola that had not been destroyed, but the structure remained and sheets had been damaged).

Respondent

1. The documents of the owners corporation relevantly included: 1. Property damage repair Scope of Works by Abril Building Solutions dated 29 May 2020 in the sum of $52,502.80. That quote referred to proposed works in Units 21, 5, 12, 16 and 3. 2. Quotation of Artistic Projects dated 8 September 2017 in respect of performing a flood test to determine how water ingress was occurring into a Lot, with the ceiling being water damaged and black mould present. 3. An unsigned "Tender Walk Through Scope" dated 4 December 2018 that referred to works to a number of Lots due to water ingress, including the applicant's Lot. 4. Minutes of the Annual General Meeting ('AGM') of the owners corporation dated 4 March 2020. The Resolutions passed at that AGM did not involve performing works to repair the common property. Rather, a Resolution was passed that the owners corporation "acknowledge updates of the strata committee" given to the meeting about various matters including "insurance repairs." 5. Quotation of Rescom Builders dated 25 January 2019. The quotation is based on a "scope of works received from CRD Building Consultants dated 25 October 2017 for items 9.5, 9.6,9.7, 9.8, 9.9, 12.14, 12.16, 12.17, 22.5, 5.0, 6.0 & 7.0". The total cost is $162,776.90". 6. A document entitled "Owners points of defence and supporting documentation," which sets out broadly what are the submissions of the owners corporation. 7. A statement of Ms Fahim. 8. Two letters of "commendation" of Ms Fahim's performance as a strata committee member by other members of the strata committee. 9. Minutes of a strata committee meeting on 27 November 2017.
2. The oral evidence of Ms Fahim was that repairs to common property would be conducted "soon." When questioned by the Tribunal as to what this meant, she replied that "in a couple of weeks" Rescom Builders would commence works; but then qualified that by stating that an updated scope of works may be required.
3. There was no evidence of any Resolution being passed by the owners corporation at a general meeting to enter into a contract with a remedial builder.
4. As discussed previously, Ms Fahim was at pains to blame "insurance companies" and "Solicitors" for the delay in having common property repaired, but her evidence did not clearly set out why the owners corporation could not conduct repairs (and raise special levies if necessary) and why the issue of repairs was simply in the hands of the insurer.
5. A written summary of what Ms Fahim asserts are the relevant factual events is set out in the "Owners points of defence" (sic) as follows: The Owners have been progressing the repair of damage complained of by Mr Boutenko (at various points) through two claims against home warranty insurance, one made in respect of the work of the original builder (a claim against HOWI issued by Lumley, assumed by IAL) and a second made in respect of the work of the rectifying builder appointed by Lumley, when it became insolvent prior to completing the rectification work. The Owners have also been pursuing repair of damage to an affected pergola of Mr Boutenko's Unit 12 through a claim against CHU insurance following a storm event. The original insurance claim is to be resolved by completion of a scope of incomplete work left by the appointed rectifying builder when it became insolvent and the Owners terminated its contract. The Owners have in 2018 entered into a deed with IAL for the completion of these works, by Rescom, but the progress of these works (which will involve rectification of the damage to Mr Boutenko's unit 12) have been delayed by: a dispute in relation to the scope of the second insurance claim (made against iCare); the interruption caused by C-19 to progress of any works and preparation of the Owners' insurance claim against iCare in respect of defects in the rectification works; the interruption caused by 2020 storm event and subsequent insurance claims and assessments against CGU; the time taken for iCare's decision on the insurance claim (the decision being made on 16 March 2022) the Owners subsequent application to appeal iCare's decision (now the subject of NCAT proceedings HB 22/19337) ; and the time and expense of these proceedings; and a recent change (1 April 2022) of strata manager to Strat United (sic); and a recent change of solicitors (in June 2022) from HWLE to Piper Alderman, with HWLE's files being provided only last week. The Owners anticipate that the Rescom works will be progressed in the near future, subject to procuring agreement of IAL in relation to the accommodation and removal costs of the affected owners. The collation of these costs is underway and it is anticipated that they will be provided to IAL's solicitor William Roberts (Brian Silva) within the next fortnight and arrangements for the re-pricing of the works can progress.
6. Ms Fahim's evidence was vague. It was replete with generalisations and self-serving statements. She repeatedly asserted that delays were out of her hands; and that she, as a Lot owner, had also suffered by living in a strata building that was in a state of poor repair. She gave no adequate explanation as to when common property would be repaired to eliminate water ingress. Ms Fahim repeatedly asserted she had done the "best that I can" and delays were not her fault; or the fault of the strata committee.
7. Ms Fahim also asserted that she had seen tenants in the applicant's Lot. She claimed the applicant had been renting out his Lot on a continual basis since 2018. Her evidence about this issue was vague as is given little weight. Mr Justo also gave evidence as to his belief that the applicant had been renting out his Lot on a continual basis. As with Ms Fahim, his evidence was vague and generalised on this issue, and the Tribunal gives it little weight.
8. Importantly, both Ms Fahim and Mr Justo accept that the strata building is in poor condition with major water ingress issues into common property and Lot property.

The Applicant's Claim That The Owners Corporation Consent to the Construction of the Enclosed Pergola Terrace Area ('Sunroom')

1. The proposed works to enclose the pergola clearly involve significant alteration of common property.
2. The works are beyond cosmetic work under s 109 of the SSM Act; and minor renovations under s 110 of the SSM Act.
3. Section 108 of the SSM Act relevantly states: 108 Changes to common property (1) Procedure for authorising changes to common property An owners corporation or an owner of a lot in a strata scheme may add to the common property, alter the common property or erect a new structure on common property for the purpose of improving or enhancing the common property. (2) Any such action may be taken by the owners corporation or owner only if a special resolution has first been passed by the owners corporation that specifically authorises the taking of the particular action proposed. Note - If the special resolution is a sustainability infrastructure resolution fewer votes may be needed to pass it. See section 5(1)(b). …
4. Section 126 of the SSM Act states: 126 Orders relating to alterations and repairs to common property and other property (1) Order requiring owners corporation to carry out work on common property The Tribunal may, on application by a lessor of a leasehold strata scheme or an owner of a lot in a strata scheme, order the owners corporation to consent to work proposed to be carried out by an owner of a lot if the Tribunal considers that the owners corporation has unreasonably refused its consent and the work relates to any of the following - (a) minor renovations or other alterations to common property directly affecting the owner's lot, (b) carrying out repairs to common property or any other property of the owners corporation directly affecting the owner's lot. (2) Order consenting to owner's work on owners corporation property The Tribunal may, on application by a lessor of a leasehold strata scheme or an owner of a lot in a strata scheme, make an order (a work approval order) approving of minor renovations or alterations or repairs already made by an owner to common property or any other property of the owners corporation directly affecting the owner's lot if the Tribunal considers that the owners corporation unreasonably refused its consent to the minor renovations or alterations or repairs. (3) A work approval order is taken to be the consent of the owners corporation to the renovations, alterations or repairs and may provide that it has effect from a day specified in the order that occurred before the order was made. (4) In deciding whether to grant a work approval order or to provide for the order to have effect from a day that occurred before the date of the order, the Tribunal may take into account the conduct of the parties in the proceedings, for example, if an owner did not first seek the consent of the owners corporation before carrying out the renovations, alterations or repairs. (5) Responsibility for ongoing repair and maintenance of affected property The Tribunal may specify in an order under this section whether the owners corporation or the owner of the lot has the ongoing responsibility for the repair and maintenance of any additional property arising out of a minor renovation or alteration or repair to common property approved under the order. (6) If an order provides for the owner of a lot to have the ongoing responsibility for the repair and maintenance of any such additional property, the order also has effect in relation to any subsequent owner of the lot.
5. Although the applicant gave oral evidence that the proposed sunroom was necessary to repair common property because he was informed by a builder after the pergola was destroyed by winds that replacing it was "a safety issue," it is not a repair of existing common property. Rather, it is an alternation of common property that has the effect of improving or enhancing the common property, because it creates an enclosed area which the applicant proposes to use.
6. The provisions of s 126 of the SSM Act do not override the provisions of s 108 of the SSM Act. Although the proposed sunroom is an "alteration of common property directly affecting the owners Lot" under s 126 of the SSM Act (Endre v The Owners-Strata Plan No 17771 [2019] NSWCATAP 93; Gisks v The Owners-Strata Plan No 6743 [2021] NSWCATCD 14; Thomson v The Owners-Strata Plan No 87812 [2020] NSWCATAP 132) the Tribunal cannot make an order under s 126 of the SSM Act for the following reasons: 1. The applicant has never put forward a common property rights by-law for consideration and determination by the owners corporation at a general meeting in respect of the proposed works; and 2. The applicant is not seeking to arrange himself to perform and pay for the work. Rather, he seeks that the Tribunal order the owners corporation perform such work. Any such orders can only be made in respect of the owners corporation's duty to perform repairs of common property by reason of its duty under s 106 (1) of the SSM Act. The evidence does not satisfy the Tribunal that enclosing the pergola area and turning it into a sunroom is work necessary to comply with its duty under s 106 (1) of the SSM Act.

Repair of Common Property-Damage Caused By Water Ingress

1. Section 106 of the SSM Act states: 106 Duty of owners corporation to maintain and repair property (1) 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. (2) An owners corporation must renew or replace any fixtures or fittings comprised in the common property and any personal property vested in the owners corporation. (3) This section does not apply to a particular item of property if the owners corporation determines by special resolution that - (a) it is inappropriate to maintain, renew, replace or repair the property, and (b) its decision will not affect the safety of any building, structure or common property in the strata scheme or detract from the appearance of any property in the strata scheme. (4) If an owners corporation has taken action against an owner or other person in respect of damage to the common property, it may defer compliance with subsection (1) or (2) in relation to the damage to the property until the completion of the action if the failure to comply will not affect the safety of any building, structure or common property in the strata scheme. (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. (6) An owner may not bring an action under this section for breach of a statutory duty more than 2 years after the owner first becomes aware of the loss. (7) This section is subject to the provisions of any common property memorandum adopted by the by-laws for the strata scheme under this Division, any common property rights by-law or any by-law made under section 108. (8) This section does not affect any duty or right of the owners corporation under any other law.
2. In The Owners-Strata Plan No 33368 v Gittins [2022] NSWCATAP 130 the Appeal Panel summarised the relevant principles pertaining to the duty to repair as follows at [57]-[59]: The scope of the duty of an owners corporation to maintain and keep in a state of good repair common property has been the subject of extensive judicial consideration (e.g. Seiwa Australian Pty Ltd v Owners Strata Plan 25042 [2006] NSWSC 1157; Ridis v Strata Plan 10308 [2005] NSWCA 246; Stolfa v Owners Strata Plan 4366 & Ors [2009] NSWSC 589; Stolfa v Hempton [2010] NSWCA 218; The Owners Strata Plan No 50276 v Thoo [2013] NSWCA 270; and Glenquarry Park Investments Pty Ltd v Hegyesi [2019] NSWSC 425 ('Hegyesi')). In The Owners-Strata Plan SP 20211 v Rosenthal; Rosenthal v The Owners-Strata Plan No 20211 [2018] NSWCATAP 243 ("Rosenthal") and Loneragan v The Owners-Strata Plan No 16519 [2020] NSWCATAP 177 ("Loneragan"), the Appeal Panel summarised the principles applicable to the duty of an owners corporation under s 106 (1) and (2) of the SSM Act as follows (Rosenthal at [35]-[36]; Loneragan at [29]-[41]). The pertinent principles (excluding authority references) are: (1) The owners corporation has a strict duty under s 106 (1) of the SSM Act to maintain and keep in a state of good and serviceable repair the common property. That duty is not merely to take reasonable steps or use best endeavours. (2) The duty under s 106 (1) of the SSM Act includes keeping common property in order by acts of maintenance before it falls out of condition. The duty includes taking preventative measures to ensure there is not a malfunction. The duty also includes remediation of defects in the original construction of the common property. (3) As soon as something in the common property is no longer operating effectively or at all, or has fallen into disrepair, there has been a breach of the s 106 (1) duty. (4) Breach of the duty under s 106 (1) of the SSM Act gives each Lot owner a statutory cause of action. (5) Repairs to common property (including renewal or replacement of common property) that does not involve alteration or addition for the purpose of improving or enhancing the common property does not require a special resolution of the owners corporation under s 108 of the SSM Act. (6) Renewal or replacement of common property under s 106 (2) of the SSM Act is only engaged when the item of common property is no longer operating effectively, or at all, or has fallen into a state of disrepair. (7) Renewal or replacement of common property under s 106 (2) of the SSM Act is limited by a concept of reasonable necessity. Further, in Hegyesi, Parker J referred to the scope of the remedial powers of the Tribunal under s 232 of the SSM Act. In the context of remedial work orders for breach of s 106 of the SSM Act, Parker J held: (1) Orders must be focussed upon the minimum necessary for the owners corporation to comply with its duty to maintain and keep in a state of good repair the common property (paras [111]-[112]). (2) Orders for repairs must be sufficiently specific so that the owners corporation understands what needs to be done to comply with the orders, and not vague or indeterminate (paras [104]; [113]-[114]).
3. The evidence in this matter clearly shows that there is significant unrepaired damage to common property (and the applicant's Lot property) due to water ingress and the two storm damage events.
4. The Tribunal is satisfied the respondent is in breach of its duty under s 106 (1) of the SSM Act.

Section 106 (4) of the SSM Act

1. The only matter raised as a justification for the owners corporation not complying with its duty under s 106 of the SSM Act is that it has made insurance claims; repairs are in the hands of the insurer; and there are recent NCAT proceedings arising from an appeal against a decision of the home warranty insurer of Mint Projects not to indemnify (or fully indemnify) in regard to repairs.
2. The position of the owners corporation raises the potential operation of s 106 (4) of the SSM Act, although the owners corporation did not refer to this provision in its written materials or oral submissions. How s 106 (4) of the SSM Act is to be interpreted was briefly referred to by the Appeal Panel in Shih v The Owners Strata Plan No 87879 [2019] NSWCATAP 263 at [95] without any conclude view being expressed.
3. There are a number of pertinent matters in regard to s 106 (4). The deferral of compliance with the duty under s 106 (1) and (2) only occurs during the period the owners corporation "takes action…against an…other person in relation to damage to the property…until the completion of the action…"
4. Section 106 (4) does not use the phrase "legal action". However, it cannot mean any act against another person in relation to damage to the property. If that were the case, an owners corporation would have an essentially unfettered discretion to defer complying with its duty under s 106 (1) and (2) of the SSM Act provided it was doing some act against some person in relation to the damage to the property.
5. Considering the fundamental importance of the duty of the owners corporation under s 106 (1) of the SSM Act, such an interpretation of s 106 (4) of the SSM Act would be illogical and irrational. It would lead to a situation where an owners corporation could endlessly defer complying with its duty provided it was doing something other than what it is obliged to do under s 106 (1) of the SSM Act, which is to ensure that the common property is kept in a state of good repair.
6. Further, the reference to "the damage" limits the scope of s 106 (4) of the SSM Act. It is not a reference to "any damage." Consequently, if damage is continuing to occur by way of the owners corporation not complying with its duty, it cannot invoke s 106 (4) of the SSM Act to justify deferral of performing repairs because it has taken action against another person in respect of earlier, or different, damage to common property.
7. The Tribunal is satisfied that the taking of "action" under s 106 (4) of the SSM Act against another person in relation to the damage means the taking of legal action. That is also consistent with the word "action" in s 86 (4) of the SSM Act, which limits the ability of an owners corporation to take action to recover unpaid levies. Section 86 (4) of the SSM Act also does not use the phrase "legal action", but there is no logical efficacy to s 86 (4) of the SSM Act unless "action" means "legal action".
8. Section 106 (4) of the SSM Act must be interpreted in a manner that promotes the purpose of object of the Act rather than in a manner that does not promote the purpose or object of the Act (s 33 Interpretation Act 1987 (NSW)). In my view, it is not consistent with the underlying purpose or object of the SSM Act to interpret s 106 (4) of the SSM Act as "taking action" to mean anything less than taking "legal action".
9. It is arguable that making an insurance claim is sufficient to "take action against…(an) other person in respect of the damage to the property…" However, the Tribunal does not regard such an interpretation as promoting the underlying purpose or object of the Act.
10. Making an insurance claim is a fundamentally different and a less serious step than taking legal action. Any insured can make a claim on their insurance. The Tribunal also has the power under s 174 of the SSM Act to make an order that an owners corporation or Lot owner make or pursue an insurance claim "in relation to the damage to the building or any property to which the insurance relates".
11. However, that is not taking "action against" the insurer, it is simply invoking an insured's rights under the policy of insurance. The discretion to not to comply with the duty under s 106 (1) of the SSM Act cannot be enlivened merely because an owners corporation has made a claim on its insurer; and is waiting for its insurer to determine the claim or engage the performance of repairs.
12. Further, any discretion not to comply with the duty under s 106 (1) of the SSM Act under s 106 (4) of the SSM Act only exists until the "completion of the action". Making an insurance claim and the finalisation of that claim are two different things. It is clear when a legal action is "completed." That occurs when a Court or Tribunal makes orders; or legal proceedings are withdrawn or dismissed. It is entirely unclear when an insurance claim is "completed." An interpretation of s 106 (4) of the SSM Act that interprets the taking of "action" as the making of an insurance claim; and the "completion" of the action as either the refusal of the claim or the eventual performance of repairs engaged by the insurer would impose a unduly broad and ambiguous interpretation of "action" and "completion" compared to an interpretation that limits "action" to the taking of "legal action".
13. In this matter, the only evidence of legal action taken by the owners corporation is recent NCAT proceedings to appeal a decision of a home warranty insurer of a builder under the provisions of s 48A (2) (a) and s 48K of the Home Building Act 1989 (NSW). The only evidence regarding such proceedings was the oral evidence of Ms Fahim of a Tribunal Matter Number for proceedings, without clear details of the proceedings.
14. Such legal action was only taken in 2022. Section 106 (4) of the SSM Act cannot apply retrospectively. Section 106 (4) of the SSM Act cannot be invoked to justify the owners corporation failing to comply with its duty under s 106 (1) of the SSM Act regarding the manifest and severe water ingress issues into common property and Lot property in the period from 2018 (being the period the applicant complains of).
15. Section 106 (4) of the SSM Act only applies if the "failure to comply will not affect the safety of any building, structure or common property in the strata scheme". The Tribunal is satisfied on the evidence of the applicant (which is not seriously disputed by the owners corporation) that water ingress is affecting the safety of the building, structure, or common property. The applicant's evidence is that there is black mould in the Lot; ceilings have partially collapsed; and water ingress affects the electrical system. This level of damage makes the applicant's Lot uninhabitable.
16. Although the applicant could have obtained more comprehensive expert evidence, the photographs of the damage and his oral evidence are compelling. The Tribunal is satisfied that the failure of the owners corporation to comply with its duty under s 106 (1) of the SSM Act affects the safety of the building, structure, or common property. Accordingly, the owners corporation cannot rely on s 106 (4) of the SSM Act in any event.
17. Further, s 106 (4) of the SSM Act only provides that the owners corporation "may" defer its duty to repair. That confers a discretion (s 9 Interpretation Act 1987 (NSW)). Any discretion must be exercised reasonably, taking into account all the relevant facts and circumstances. Considering the length of time there has been a failure to keep common property in a state of good repair and the extent of the damage, it is unreasonable for the owners corporation to defer compliance with its duty under s 106 (1) of the SSM Act.
18. Section 106 (4) of the SSM Act does not apply in the circumstances of this matter.

What, If Any, Repair Orders Are Appropriate?

1. In circumstances where breach of s 106 (1) of the SSM Act is established, the Tribunal has a discretionary remedial power to order an owners corporation to perform works to repair and replace both common property and Lot property that has been damaged as a consequence of the breach (The Owners-Strata Plan No 77559 v Touma; Touma v The Owners-Strata Plan No 77559 [2022] NSWCATAP 186 at [83].
2. The difficulty in this matter is the paucity of evidence the applicant has provided to identify a scope of works for repair orders.
3. The majority of the quotations provided by the applicant are in respect of the proposed Sunroom. However, as discussed previously, that is not a matter that falls within the responsibility of the owners corporation under ss 106 (1) of the SSM Act and, in any event, involves work that requires a common property rights by-law.
4. The quotation of Hyspec Construction and Roofing dated 21 January 2022 (Quote QU-0446 at p 93 of the applicant's documents filed with the application). That is to replace the pergola that still exists but has been damaged due to a storm. The quote is brief and does not have a detailed scope of works.
5. The "fee proposal" of Crownview Projects dated 13 April 2022 does contain a sufficiently detailed scope of works for repairs of common property and consequentially damaged Lot property of and proximate to the applicant's Lot. If the Tribunal was satisfied that the document had been filed and served in accordance with Tribunal directions or that it had been clearly raised at the hearing and the Tribunal had given the applicant leave to rely on it, the Tribunal would have made a work order under s 232 of the SSM Act that the owners corporation perform works (other than the proposed "sunroom" which requires a common property rights By-law) in accordance with the scope of works in the Crownview Projects fee proposal.
6. However, not being satisfied that the respondent has been served with the document or that leave was granted for it to be admitted into evidence, it is not appropriate the Tribunal make a work order that reflects the scope of works in this document.
7. The various haphazard documents of the owners corporation also do not contain sufficient information for the Tribunal to formulate a work order.
8. As the Supreme Court held in Glenquarry Park Investments Pty Ltd v Hegyesi [2019] NSWSC 425 it is not appropriate for the Tribunal simply to make an order that an owners corporation obtain expert evidence on defects, and then repair the defects in accordance with any scope of works in such a report.
9. In the absence of a sufficient scope of works, the Tribunal can order an owners corporation to engage an expert to prepare a report for consideration by the owners corporation. However, in the circumstances of this matter, it is not satisfied that it is appropriate to do so.
10. The documents and evidence of the owners corporation indicate (albeit in a vague and unclear manner) that there have been investigations into the common property and a scope of works has been obtained through the auspices of a builder engaged by an insurer, although Ms Fahim referred in her evidence to the possibility that an "updated" scope of works is being obtained.
11. As, for reasons that will be discussed further, the Tribunal is satisfied that a compulsory strata manager should be appointed, it is appropriate for the compulsory strata manager to take immediate and urgent action to ensure that repairs to common property are performed; and that levies are raised or strata loans taken out to ensure such work is performed, irrespective of the any delays of any insurer or NCAT proceedings.
12. It will be a matter for the compulsory strata manager as to whether works are performed in accordance with the fee proposal of Crownview Projects; or other expert reports with scope of works available to the compulsory strata manger. However, considering the condition of the strata building (and, in particular, the applicant's Lot) the work is a matter of urgency.
13. In the circumstances, no work orders are made.

Application to Appoint a Compulsory Strata Manager

1. Section 237 of the SSM Act states as follows: 237 Orders for appointment of strata managing agent (1) Order appointing or requiring the appointment of strata managing agent to exercise functions of owners corporation The Tribunal may, on its own motion or on application, make an order appointing a person as a strata managing agent or requiring an owners corporation to appoint a person as a strata managing agent - (a) to exercise all the functions of an owners corporation, or (b) to exercise specified functions of an owners corporation, or (c) to exercise all the functions other than specified functions of an owners corporation. (2) Order may confer other functions on strata managing agent The Tribunal may also, when making an order under this section, order that the strata managing agent is to have and may exercise - (a) all the functions of the chairperson, secretary, treasurer or strata committee of the owners corporation, or (b) specified functions of the chairperson, secretary, treasurer or strata committee of the owners corporation, or (c) all the functions of the chairperson, secretary, treasurer or strata committee of the owners corporation other than specified functions. (3) Circumstances in which order may be made The Tribunal may make an order only if satisfied that - (a) the management of a strata scheme the subject of an application for an order under this Act or an appeal to the Tribunal is not functioning or is not functioning satisfactorily, or (b) an owners corporation has failed to comply with a requirement imposed on the owners corporation by an order made under this Act, or (c) an owners corporation has failed to perform one or more of its duties, or (d) an owners corporation owes a judgment debt. (4) Qualifications of person appointed A person appointed as a strata managing agent as a consequence of an order made by the Tribunal must - (a) hold a strata managing agent's licence issued under the Property and Stock Agents Act 2002, and (b) have consented in writing to the appointment, which consent, in the case of a strata managing agent that is a corporation, may be given by the Secretary or other officer of the corporation or another person authorised by the corporation to do so. (5) Terms and conditions of appointment A strata managing agent may be appointed as a consequence of an order under this section on the terms and conditions (including terms and conditions relating to remuneration by the owners corporation and the duration of appointment) specified in the order making or directing the appointment. (6) Return of documents and other records A strata managing agent appointed as a consequence of an order under this section must cause a general meeting of the owners corporation to be held not later than 14 days before the end of the agent's appointment and must on or before that meeting make arrangements to return to the owners corporation all documents and other records of the owners corporation held by the agent. (7) Revocation of certain appointments An order may be revoked or varied on application and, unless sooner revoked, ceases to have effect at the expiration of the period after its making (not exceeding 2 years) that is specified in the order. (8) Persons who may make an application The following persons may make an application under this section - (a) a person who obtained an order under this Act that imposed a duty on the owners corporation or on the strata committee or an officer of the owners corporation and that has not been complied with, (b) a person having an estate or interest in a lot in the strata scheme concerned or, in the case of a leasehold strata scheme, in a lease of a lot in the scheme, (c) the authority having the benefit of a positive covenant that imposes a duty on the owners corporation, (d) a judgment creditor to whom the owners corporation owes a judgment debt
2. The principles regarding whether or not a compulsory strata manager should be appointed are well established. In Hoare and Ors v The Owners-Strata Plan No 73905 [2018] NSWCATCD 45 the Tribunal stated at [199]-[200]: Appointment of a compulsory strata manager is a serious measure not to be taken lightly, because it removes the democratic process that has been established under the SSMA 2015 for the owners corporation to govern itself. In essence, it places the owners corporation into the hands of an administrator for a period of time. In respect of s 237 (3) (a) of the SSMA 2015, the Appeal Panel of the Tribunal stated in Bischoff v Sahade [2015] NSWCATAP 135 ('Bischoff') at [22]: "Circumstances in which the management structure may not be functioning or functioning satisfactorily include where the relevant level of management: (1) does not perform a required function, for example to properly maintain the common property; (2) exercises a power or makes a decision for an improper purpose, for example conferring a benefit upon a particular Lot owner or group of Lot owners in a manner not authorised by the SSMA; (3) fails to exercise a power or make a decision to prevent a contravention by Lot owners and occupiers of their obligations under the SSMA, including the Lot owners and occupiers obligation to comply with the by-laws; and (4) raises levies and takes or defends legal action on behalf of the owners corporation in circumstances where such action is unnecessary or not in the interests of the owners Corporation or the Lot owners as a whole"
3. Mere disagreement or personality conflicts between Lot owners is insufficient, of itself, to justify the appointment of a compulsory strata manager as is a mere subjective belief that the strata scheme is not being managed appropriately (Hoare and Ors v The Owners-Strata Plan No 73905 [2018] NSWCATCD 45 at [202]; Maple v The Owners-Strata Plan No 8950 [2021] NSWCATCD 108 at [19]-[22]).
4. In this matter, the Tribunal is satisfied that the owners corporation has, for a number of years, failed to comply with its duty to keep common property in a state of good repair under s 106 (1) of the SSM Act. That has led not only to serious damage of common property due to water ingress; but damage to Lot property. As discussed previously, none of the witnesses for the owners corporation disputed that the common property was in poor condition due to longstanding water ingress. That is abundantly clear from the evidence, as is the fact that the applicant's Lot has been severely damaged by water ingress.
5. The excuses and justifications provided by Ms Fahim on behalf of the owners corporation for failing to comply with its duty to keep and maintain common property in a state of good repair are inadequate. Further, considering the vague evidence given by Ms Fahim about repairs being conducted "soon," the Tribunal has no confidence the owners corporation will comply with its duty under s 106 (1) of the SSM Act in the future.
6. Additionally, the applicant referred in his oral evidence to Ms Fahim drawing monies as a "project manager" for the repair works. Ms Fahim did not give evidence about this issue, nor was she questioned about it by the applicant. At least one email of Ms Fahim in the documents of the applicant (an email dated 1 April 2017 at p 71 of the documents attached to the application file with the Tribunal) contain the footer "Secretary and Co-Project Manager of EC for SP 77480".
7. The Tribunal makes no findings about this issue. However, if a strata committee member was being paid undisclosed monies to "co-ordinate" repair works (either from the owners corporation's administrative fund or by a third party) that would be inconsistent with the duties of due care, diligence and acting in the best interests of the strata scheme owed by a strata committee member; unless payment was disclosed by Resolution at a general meeting of the owners corporation.
8. In the case of any monies paid by the owners corporation to a strata committee member, a resolution must be passed at a general meeting of the owners corporation in accordance with s 46 of the SSM Act.
9. In any event, irrespective of whether Ms Fahim has been receiving monies, the manifest and long standing failure of the owners corporation to comply with its duties under s 106 (1) and (2) of the SSM Act is sufficient for the Tribunal to be satisfied a compulsory strata manager should be appointed.
10. The documents provided by the applicant in respect of appointing O'Neill Strata Management Pty Ltd as compulsory strata manager comply with ss 237 (4) and (5) of the SSM Act. Considering the serious and consistent failure of the owners corporation to comply with its duty to keep and maintain common property in a state of good repair; the likely extent of the repair work; and the likely need for the owners corporation to raise special levies; the Tribunal appoints O'Neill Strata Management Pty Ltd as compulsory strata manager for a period of two (2) years from the date of this decision.

The Applicant's Damages Claim Under s 106 (5) and 232 of the SSM Act

1. The first issue for consideration is the limitation period in s 106 (6) of the SSM Act that a Lot owner cannot bring an action for damages by reason of breach of s 106 (1) of the SSM Act "more than two years after the owner first becomes aware of the loss". The loss must also be "reasonably foreseeable" (s 106 (5) of the SSM Act).
2. The Tribunal is satisfied that financial loss by reason of the applicant not being able to rent the Lot in circumstances where the respondent knew, or should reasonably have been aware, that the Lot was being rented out by its owner is a reasonably foreseeable loss from the failure to keep and maintain common property in a state of good and serviceable repair.
3. The applicant's evidence was that he became aware of financial loss by reason of the owners corporation's failure to repair common property causing water ingress in 2018. However, emails in the applicant's documents point to an earlier date. Emails in April 2017 refer to there being water damage to the ceiling of the Lot after Mint Projects performed tiling and waterproofing on the roof of the building. An email from the strata manager Mr Poulos dated 13 July 2018 states that the applicant had informed him there were "major water leaks still" in the applicant's Lot; he "cannot lease his Unit"; and "it has been that way for 1 year". The email also refers to the applicant informing the strata manger that "he will commence legal action if it is not repaired soon."
4. The applicant filed proceedings in NCAT on about 21 March 2022, but because the applicant did not provide sufficient evidence to the Tribunal that mediation with NSW Fair Trading had been attempted in respect of aspects of the claim, the application was not filed with the Tribunal until 13 April 2022.
5. Consequently, by reason of s 106 (6) of the SSM Act, the applicant must not have first become aware of the loss caused by the owners corporation's breach of its duty to keep and maintain common property in a state of good and serviceable repair earlier than 13 April 2020 to be awarded damages under s 106 (5) of the SSM Act.
6. The time limitation period in s 106 (6) of the SSM Act is a jurisdictional time limit, equivalent to the time limits to take proceedings in the Tribunal for breach of statutory warranties under ss 3B; 18B; 18E and 48K of the Home Building Act 1989 (NSW). For the same reasons as were expressed in S & G Homes Pty Ltd t/as Pavilion Homes v Owen [2015] NSWCATAP 190 at [50]-[53], the Tribunal cannot invoke s 41 of the NCAT Act to extend time under s 106 (6) of the SSM Act, as it is not a limitation defence but rather a jurisdictional fact that ether exists or doesn't exist.
7. There is controversy amount various decisions of the Appeal Panel as to what "first becomes aware of the loss" means. In The Owners-Strata Plan No 30621 v Shum [2018] NSWCATAP 15 ('Shum'), the Appeal Panel held that because the duty of an owners corporation to keep and maintain common property in a state of good and serviceable repair is an ongoing duty, that duty would be breached every day the owners corporation failed to conduct repairs. In the context of a cause of action only arising when all of the elements of the cause of action exist, a Lot owner would have a separate cause of action under s 106 (5) of the SSM Act every day that the owners corporation failed to repair the common property and the Lot owner suffered damage and reasonably foreseeable loss as a result of the breach of statutory duty.
8. In The Owners-Strata Plan No 80412 v Vickery [2021] NSWCATAP 98, the Appeal Panel made a "non-binding observation" that the interpretation of limitation principles applying to s 106 (6) of the SSM Act in Shum was incorrect and a Lot owner is not entitled to bring proceedings for damages under s 106 (5) of the SSM Act on each day the statutory duty is breached and the owner incurs loss (Vickery at [63]).
9. The Appeal Panel in Vickery emphasised that "a continuing wrong is not the same idea of successive occurrences of damage" (at [58]); and "it is a question of fact and degree as to whether damage is sufficiently distinct to result in separate causes of action" (at [61]). The Appeal Panel also cited Clutha v Millar [2002] NSWSC 362 at [20] that "a fresh cause of action will only arise if a fresh breach causes loss going beyond the loss resulting from the barred cause of action".
10. In Tezel v The Owners-Strata Plan No 74232 [2022] NSWCATAP 149 ('Tezel') the Appeal Panel applied the reasoning in State of Western Australia v Wardley Australia Ltd [1991] FCAFC 314; (1991) 30 FCR 245 that the statutory cause of action to be awarded damages for misleading and deceptive conduct under the Trade Practices Act 1974 (C'th) accrued "upon the occurrence of the misleading or deceptive conduct and by the suffering by the injured party of loss or damage "by" that conduct".
11. The Appeal Panel stated in Tezel at [35]-[37]: The elements constituting (and required to be satisfied in respect of) the statutory right to compensation from breach of duty are, as the Full Court in Wardley found, distinct from the time limitation in s 106(6). The time limitation in s 106(6) must operate on a cause of action which has crystallised in its elements under s 106(5). That crystallised cause of action may not be bought more than two years after the owner "first becomes aware of the loss." To be "aware" of something means no more than the person has knowledge: the Macquarie Dictionary defines "knowledge" as including "the state of being cognizant or aware, as of a fact or circumstance." The awareness is of "the loss" that is one element of the crystallised cause of action. "The loss" may be economic loss, rather than loss to a specific physical asset. Where a loss is economic loss, it has been held that the loss is not sustained until it is detected: see Pirelli General Cable Works Ltd v Oscar Faber & Partners (a firm) [1983] 2 AC 1; Hawkins v Clayton (1988) 164 CLR 539 at 599-601 per Gaudon J. In this respect the statutory time limit in SSMA s106(6) is consistent with general principle.
12. In Tezel, the Appeal Panel emphasised that knowledge of the "the loss" depends upon what type of damage is suffered in the sense that different types of damage may give rise to different losses; and lead to different limitation periods. The Appeal Panel stated at [45]-[49]: The foregoing interpretation of SSMA s 106(6) recognises, contrary to the observation of the Tribunal in the primary reasons set out earlier with which we respectfully disagree, that s 106(6) has important and distinctive work to do. It prevents (like all time limit provisions) a claimant sitting on its rights beyond a limited period. The consequence of sitting on rights is that a claim based on earlier breach of the strict obligation causing loss is out of time, a consequence which has limited this appellant's rights of claim. It is also important to recognise that the principle applied in Wardley that we seek to apply here will have different outcomes depending on the nature of the obligation the subject of breach and the prescribed right of relief. In Wardley, the obligation giving rise to a claim for economic loss was, as the Full Court found, crystallised when demand was made under the indemnity because of the nature of the obligation of indemnity. That obligation was to pay whatever the loss already accrued and continuing to accrue was found to be. In contrast, here the obligation is to compensate for the actual economic loss as a result of the particular breach of statutory obligation. The foregoing analysis appears to us to be congruent with the remedial purpose of introducing s 106(5) into the current SSMA in contrast to the preceding law, while still sanctioning an owner who sits on pursing earlier breaches. The provision, as we have said, focuses on reasonably foreseeable loss actually suffered from the relevant breach of duty, not a projection of future loss from that relevant breach. If the breach of duty under SSMA s 106(1) and/or (2) continues, there will be a further right to claim for reasonably foreseeable loss as a result of that relevant breach, which may or may not be of the same character. We note the concession during the hearing of this appeal that the defects still exist although they are being addressed. In contrast, the interpretation in the primary decision appears to require a "once for all" claim which could disadvantage a lot owner where the owners corporation continues in breach. Future loss cannot be quantified from historical breach because the length and consequences of the further breaches may differ. The problem cannot be fixed by calling in aid a right of renewal of proceedings under Sch 4 rule 8 to the NCAT Act because there would not be a non-compliance with the existing order (assuming the compensation ordered for the historical breach was satisfied but no more was offered). An alternative interpretation of s 106(5) to forestall the difficulty just described would give a more generous remedy. It would characterise "the loss" giving rise to the claim being the loss resulting from the complete ongoing contravention of s 106(1) and/or (2) as "a contravention of this section". The time limit in s 106(6) would not then start to run until the breach of strict obligation had been finally remedied. That has not arisen on the parties' conduct of the present proceedings.
13. The Tribunal understands that Tezel is subject to an appeal to the Supreme Court. However, it is not appropriate to delay the decision in this matter until the appeal in Tezel is determined, and in any event neither party made any application in this regard. To delay determination of a matter until an appeal of another matter is determined (the outcome of which is speculative) is not consistent with the principles of the Tribunal under s 36 (1) of the Civil and Administrative Tribunal Act 2013 (NSW) ('the NCAT Act').
14. Although the principles in Tezel could have been expressed in a more concise manner, in the view of the Tribunal the critical enquiry (by reason of the principles expressed in Vickery and Tezel, which the Tribunal adopts) is the relationship between "the damage" caused by the breach of duty by the owners corporation; "the loss" that is sustained by the damage; and the knowledge by the Lot owner of "the loss" that is sustained by the damage.
15. The "damage" is relevantly the physical damage to common property and Lot property caused by the owners corporation failing to keep and maintain common property in a state of good and serviceable repair. That "damage" may occur due to various events (such as, for example, rain events causing water ingress). It may cause different physical damage at different times due to either the rain event (in respect of which the state of common property allowed water ingress); or due to the ongoing failure of the owners corporation to repair (for example, a water ingress incident may lead at a later period to mould growing on ceilings and walls). The "damage" may occur separately. In such circumstances, the first "damage" is the water ingress causing the Lot to become moist. The second "damage" is mould growing on ceilings and walls.
16. However, critically, the damage must cause loss; and the Lot owner must be aware of "the loss" caused by "the damage." "Loss" is financial loss. The type of loss depends on the facts of the case. In this matter, the applicant is not claiming damages for financial loss due to the cost of repairing Lot property; or personal goods that have been damaged by water ingress; or accommodation costs for moving out of the Lot whilst repairs are performed. Rather, he is claiming damages for the "loss" caused by not being able rent out his Lot due to the damage caused by water ingress.
17. Although the events of water ingress may have occurred separately; and the physical damage to the Lot may have occurred on different occasions, his clear evidence is that due to water ingress causing damage to the Lot his tenants moved out in 2018. It is that event that was the key "loss" that was caused by the "damage" to common property and Lot property by reason of the owners corporation's breach of its duty under s 106 (1) of the SSM Act.
18. There is no evidence that the applicant suffered a different type of loss, or different amounts of loss; after 2018 as a result of damage caused by water ingress into the Lot. The evidence of the applicant was that his tenants moved out in 2018 because the Lot was uninhabitable; and it remained uninhabitable from that time, other than a brief 3 week period in 2019.
19. Accordingly, the loss that was caused by the damage commenced in 2018; and no different or separate loss has been identified as a result of damage to the Lot caused by failure of the owners corporation to keep and maintain common property in a state of good repair.
20. The applicant clearly knew of that loss in 2018. He knew the tenants had moved out and was unable to find a new tenant because of the water ingress damage to the Lot. He knew he was suffering from financial loss.
21. The Tribunal is satisfied that the applicant is outside the time period to be awarded damages for breach by the owners corporation of its duty to keep and maintain common property in a state of good and serviceable repair.
22. Even if the Tribunal construes the applicant renting the Lot out to "backpackers" for 3 weeks in 2019 and moving out as creating a situation where there was fresh damage caused by the breach of the owners corporation and fresh loss, then the applicant was aware of that loss in 2019. The applicant remains out of time under s 106 (6) of the SSM Act.
23. Accordingly, the applicant's claim for damages is dismissed as the applicant is outside the limitation period in s 106 (6) of the SSM Act.
24. It is unnecessary to consider two further issues that would have arisen had the applicant's claim been within time.
25. The first issue is whether the brief documentary evidence of the applicant from his real estate agent and accountant is sufficient to prove loss, in circumstances where there is no opposing evidence from the owners corporation regarding the condition of the applicant's Lot and the rent amount that could be charged. Applicable principles for whether there is sufficient evidence of loss are discussed in Sabouni v Revelop Building and Development Pty Ltd [2021] NSWSC 31 at [41]-[42].
26. The second issue is whether, if the applicant was in time and had provided sufficient evidence to assess damages, the damages should be reduced due to any failure of the applicant to take reasonable measures to avoid loss. The duty to mitigate applies to breach of statutory causes of action, just as it applies to breach of contract and tort (Murphy v Overton Investments Pty Ltd [2004] HCA 3; (2004) CLR 388 at [70]).
27. In the context of this type of dispute, the issue would be whether the applicant's failure to take earlier proceedings in NCAT to obtain orders for repairs and/or the appointment of a compulsory strata manager constituted a failure to mitigate in circumstances where there have been water ingress issues in the strata building since 2017 and a longstanding failure to repair.
28. However, it should be pointed out that the owners corporation would bear the onus of proving a failure to mitigate; and the duty only extends to reasonable measures which if taken would have reduced or eliminated the loss caused by the breach (Karacominakis v Big Country Developments Pty Ltd [2000] NSWCA 313 at [187]; Arsalan v Rixon [2021] HCA 40; (2021) 395 ALR 390 at [32]).
29. Whilst the Tribunal has sympathy for the applicant due to the failure of the owners corporation to take effective action to comply with its duty to keep and maintain common property in a state of good and serviceable repair over a long period of time and the repeated excuses given to the applicant by Ms Fahim; the fact remains that from 2018 the applicant knew he was suffering significant financial loss due to the Lot being wholly or partially unhabitable due to water ingress and failed to commence proceedings in the Tribunal until April 2022.
30. In regard, it is clear from the tax invoice of AndLegal dated 13 December 2016 that was contained in the applicant's documentary evidence that he obtained legal advice in the period September-December 2016 about the issue of taking proceedings in NCAT involving the construction of the 'sunroom'. Despite this, he did not take legal action regarding the failure to repair until April 2022.
31. Irrespective of the empty promises of Ms Fahim; insurance claim delays; and the content of legal advice given to the applicant, it is difficult to comprehend why the applicant did not take earlier proceedings in the Tribunal. Whether that is a failure to mitigate is not a matter to be determined by reason of the finding of the Tribunal that the claim for damages is out of time.
32. Finally, the Tribunal notes that in the application filed with the Tribunal the applicant sought a number of other orders, including production of documents under s 188 of the SSM Act; and an order that the owners corporation lodge an insurance claim. None of those orders were the subject of any evidence or submissions by the applicant at the hearing.

Conclusion

1. The Tribunal appoints a compulsory strata manager for a period of two years from the date of these orders, but otherwise dismisses the proceedings.
2. However, as discussed previously, it is of vital importance that the compulsory strata manager taken action immediately to ensure the water ingress issues in the strata building (and in particular, the areas affecting the applicant's Lot) are repaired as soon as possible, considering the longstanding default of the owners corporation. It is a matter for the compulsory strata manager as to whether works are undertaken in accordance with the scope of works in the fee proposal of Crownview Projects Pty Ltd dated 13 April 2022.
3. If the compulsory strata manager does not take such measures, the applicant will have the right to commence further proceedings in the Tribunal to seek an order for repairs, due to the ongoing duty of the owners corporation under s 106 (1) of the SSM Act.

ORDERS 1. Pursuant to s 237 (1) (a) of the Strata Schemes Management Act 2015 (NSW) O'Neill Strata Management Pty Ltd is appointed compulsory strata managing agent of The Owners-Strata Plan No 77480 to exercise all functions of the owners corporation including the functions in s 237 (2) (a) of the Strata Schemes Management Act 2015 (NSW) for a period of two (2) years from the date of the making of this order. 2. The application is otherwise dismissed.

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar

Amendments 19 September 2023 - Formatting amendments. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 19 September 2023