Hang v The Owners-Strata Plan No 77261; Tornados Smokehouse Concord Pty Ltd... [2026] NSWCATCD 104 | Case summary | Zoe

NSWNSWCATCD

Hang v The Owners-Strata Plan No 77261; Tornados Smokehouse Concord Pty Ltd v The Owners-Strata Plan No 77261; The Owners-Strata Plan No 77261 v Hang

[2026] NSWCATCD 104

NCAT Consumer and Commercial|2026-08-11|Before: G Sarginson, Deputy President

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At a glance

Source facts

Court

NCAT Consumer and Commercial

Decision date

2026-08-11

Before

G Sarginson, Deputy President

Catchwords

LAND LAW – strata title – duty of owners corporation to maintain and repair common property – lot owner suing for breach of duty - whether duty excluded by common property rights by-law – commercial lots – termination of lease during fixed term – damages – economic loss - whether reasonably foreseeable – whether caused by failure of lot owners to take reasonable measures to avoid loss– principles applicable to assessment of damages – uncertainty of future events - Strata Schemes Management Act 2015 (NSW) ss 106, 108, 142, 232 LAND LAW – strata title – Strata Schemes Management Act 2015 (NSW) – former tenant suing for damages in negligence – Tribunal proceedings commenced after end of tenancy - jurisdiction of Tribunal – meaning of “interested person” – whether proceedings should be transferred to a court - Strata Schemes Management Act 2015 (NSW) s 226 – Civil and Administrative Tribunal Act 2013 (NSW) cl 6 sch 4

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Catchwords

LAND LAW – strata title – duty of owners corporation to maintain and repair common property – lot owner suing for breach of duty - whether duty excluded by common property rights by-law – commercial lots – termination of lease during fixed term – damages – economic loss - whether reasonably foreseeable – whether caused by failure of lot owners to take reasonable measures to avoid loss– principles applicable to assessment of damages – uncertainty of future events - Strata Schemes Management Act 2015 (NSW) ss 106, 108, 142, 232 LAND LAW – strata title – Strata Schemes Management Act 2015 (NSW) – former tenant suing for damages in negligence – Tribunal proceedings commenced after end of tenancy - jurisdiction of Tribunal – meaning of “interested person” – whether proceedings should be transferred to a court - Strata Schemes Management Act 2015 (NSW) s 226 – Civil and Administrative Tribunal Act 2013 (NSW) cl 6 sch 4

Judgment

Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.

Medium Neutral Citation: Hang v The Owners-Strata Plan No 77261; Tornados Smokehouse Concord Pty Ltd v The Owners-Strata Plan No 77261; The Owners-Strata Plan No 77261 v Hang [2026] NSWCATCD 104

Cases Cited: AAI Ltd v Kalnin Corporation Pty Ltd [2017] NSWSC 548
Advance Fitness Corporation Pty Ltd v Bondi Diggers Memorial & Sporting Club Ltd [1999] NSWSC 264
Alamado Holdings Pty Ltd v Australian Window Furnishings (NSW) Pty Ltd [2006] NSWCA 224
Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27; [2009] HCA 41
Bartlett v The Owners-Strata Plan No 12375 [2025] NSWCATCD 92
BKB Constructions Pty Ltd v Sawan [2022] NSWCATAP 103
Cao v ISPT Pty Ltd [2024] NSWCA 188
Carbone v Fowler Homes Pty Ltd; Carbone v Fowler Homes Pty Ltd [2024] NSWCA 192
Coscuez International Pty Ltd v The Owners-Strata Plan No 46433 [2022] NSWCATAP 147
Fasako Pty Ltd v TianyD Beauty & Hairdressing Australia Pty Ltd [2022] NSWSC 49
Fasako Pty Ltd v TianyD Beauty & Hairdressing Australia Pty Ltd [2022] NSWCA 112
Frampton v The Owners-Strata Plan No 35012; The Owners-Strata Plan No 35012 v Frampton [2019] NSWCATCD 15
Gigi Entertainment Pty Ltd v Schmidt (2013) 17 BPR 32,611; [2013] NSWCA 287
Griffinchuk No 1 Pty Ltd ATF Griffinchuk Family Trust v The Owners-Strata Plan No 92745 [2025] NSWCATAP 273
Gumland Property Holdings v Duffy Bros Fruit Market (Campbelltown) Pty Ltd (2008) 234 CLR 237; [2008] HCA 10
Hampson v Clyne (1967) 86 WN (NSW) 321
Holus Bolus Pty Ltd v The Wicko Pty Ltd [2012] NSWSC 497
Horan v The Owners – Strata Plan No. 68307 [2024] NSWCATAP 118
Interslice Pty Ltd v CCA Investments-Bass Hill (No 2) [2024] NSWSC 481
ISPT Pty Ltd and AWFP Management No 2 Pty Ltd v Cao and Zhao [2023] NSWSC 1115
IW v City of Perth [1997] HCA 30; 191 CLR 1
Luxner Holdings Pty Ltd v Glentham Pty Ltd (2007) 35 WAR 254
Malec v. J.C. Hutton Pty. Ltd. (1990) 169 CLR 638; [1990] HCA 20
Mallonland Pty Ltd v Advanta Seeds Pty Ltd (2025) 418 ALR 639; [2025] HCA 25,
Metrolink Victoria Pty Ltd v Inglis (2009) 25 VR 633; [2009] VSCA 227
Nguyen v Cosmopolitan Homes [2008] NSWCA 246
Owners of “Shin Kobe Maru” v Empire Shipping Company Inc [1994] HCA 54; (1994) 181 CLR 404
Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28
Promina Design & Construction Pty Ltd v The Owners—Strata Plan No 97449 [2023] NSWCATAP 252
Sabouni v Revelop Building and Developments Pty Ltd [2021] NSWSC 31
Selkirk v The Owners – Strata Plan No 2661 [2024] NSWCATCD 71
Selkirk v The Owners-Strata Plan No 2661; The Owners-Strata Plan No 2661 v Selkirk [2026] NSWCATAP 211
Sellars v Adelaide Petroleum NL (1994) 179 CLR 332; [1994] HCA 4
Silberstein v Strata Choice Pty Ltd [2022] NSWCATAP 375
Smith v The Owners-Strata Plan No 3004 [2022] NSWSC 1599
Stevenson v Ashton [2019] NSWSC 1689
The Owners – Strata Plan No 2661 v Selkirk [2024] NSWSC 760
The Owners - Strata Plan No 33368 v Gittins [2022] NSWCATAP 130
The Owners - Strata Plan No 55468 v Silberstein [2025] NSWCATAP 102
The Owners – Strata Plan No 74232 v Tezel [2023] NSWCA 35
The Owners of Strata Plan No 3397 v Tate [2007] NSWCA 207
The Owners SP 35042 v Seiwa Australia Pty Ltd [2007] NSWCA 272; 13 BPR 24,789
The Owners-Strata Plan No 33368 v Gittins [2022] NSWCATAP 130
The Owners-Strata Plan No 36613 v Doherty [2021] NSWCATAP 285
The Owners-Strata Plan No 37762 v Pham [2006] NSWSC 1287
The Owners-Strata Plan No 68307 v Horan (No 4) [2026] NSWCATAP 223
Vickery v The Owners-Strata Plan 80412 (2020) 103 NSWLR 352; [2020] NSWCA 284
Vojkoic v Bicioc [2020] NSWCATAP 128
Walker Corporation Pty Ltd v The Owners-Strata Plan No 61618 [2022] NSWSC 1246
White House Developments Pty Ltd v The Owners - Strata Plan No 70276 [2025] NSWCATAP 68

There are 3 sets of proceedings. One is by the lot owners against the owners corporation seeking damages under ss 106(5) and 232 of the Strata Schemes Management Act 2015 (NSW) (SSM Act). The second is the former tenant (Tornados) seeking damages under s 232 of the SSM Act against the owners corporation for the tort of negligence. The third is the owners corporation against the lot owners. The owners corporation seeks damages for reimbursement of monies expended to conduct repairs pursuant to orders of the local Council.
A jurisdiction issue has been raised by the owners corporation in respect of the proceedings by the former tenant against the owners corporation. In closing oral submissions, the former tenant sought that, if the Tribunal found the proceedings were outside its jurisdiction because the former tenant was not an “interested person” under s 226 of the SSM Act who could take Tribunal proceedings, the former tenant’s proceedings should be transferred to a court of competent jurisdiction. That issue is one of the issues addressed in the decision.
The relevant property involves a kitchen ventilation system to commercial lots.
Both the lot owners and the former tenant are represented by the same Barrister, Ms Edwards of Council. She is instructed by a Solicitor in the lot owners proceedings against the owners corporation (Mr Buda), but acts on a direct access basis in respect of the tenant’s proceedings against the owners corporation.
The former tenant has not taken any proceedings against the lot owners for breach of the retail lease between the parties.
There are two registered strata schemes. They were registered on or about 11 December 2006.
Strata Plan No 77261 is the strata scheme for the commercial lots in the strata building. Strata Plan No 77260 is the strata scheme for the residential lots. Both are strata plans are registered separately in respect of lots 1 and 2 of deposited plan DP 1098478.
Strata Plan No 77260 has 35 lots. Strata Plan No 77261 has 7 lots. The residential strata scheme is also known as “TEMPO Residential.” The commercial strata scheme is also known as “TEMPO Commercial.”
In this decision, any reference to “the owners corporation” is a reference to the owners corporation for the commercial lots (i.e. The Owners Strata Plan No 77261) unless it is clear that reference is being made to the owners corporation for the residential lots (i.e. The Owners Strata Plan No 77260).
There is a Building Management Committee (BMC) that liaises between the two registered strata schemes.
The commercial strata scheme has registered by-laws. An important by-law is By-law 22, which the owners corporation submits places responsibility on the owners of lots 5 and 6 (i.e. Mr Hang and Ms Tran), rather than the owners corporation, for the maintenance and repair of the relevant parts of the kitchen exhaust system.
There are various registered easements applicable to the residential strata plan and the commercial strata plan. The are set out in the documents at pp 1588-1599 of the tender bundle lodged prior to the hearing on 19 February 2024. The relevant easement pertains to the dispersal of exhaust from the commercial lots in the building.
At all relevant times, the lot owners are and have been the owners of lots 5 and 6 in the commercial strata scheme (The Owners-Strata Plan No 77261). The lots are also known as shop 5 and shop 6. They are located on the grounds floor of the strata building. The lot owners purchased lots 5 and 6 on about 28 September 2015.
The relevant events prior to the local Council issuing orders in respect of works to the kitchen ventilation system in August 2022 will be set out in more detail later in the decision. However, at this juncture, it is appropriate to give a brief overview of the facts.
Between 2015 and 2020, lots 5 and 6 were leased from the lot owners by a business known as “Porticos Chicken”. There was very limited evidence as to what type of commercial cooking “Porticos Chicken” performed. However, it appears that business was primarily a take-away chicken store, with some seating.
In 2020, the lot owners entered into negation with another take-away chicken business, Frangos Chicken, to operate from lots 5 and 6. A lease was signed on about 7 December 2020. However, the owners corporation voted against a Motion to apply its seal to a Development Application in respect of proposed modification of the common property to facilitate the operation of Frangos Chicken. The lot owners did not make any application to the Tribunal for an order under s 232(6) of the SSM Act that the owners corporation consent to the Development Application. Rather, the lease with Frangos Chicken did not proceed, and Frangos Chicken found a different location to operate from in the same suburb.
On about 3 January 2022, the lot owners entered into a 5 year retail lease with Tornados to operate a “smokehouse” style restaurant and take-away. The affidavit of Mr Romanov, director of Tornados, dated 10 October 2023 included a menu of Tornados Smokehouse. According to Mr Romanov, the system of cooking of Tornados involved “cold smoking” meats.
Tornados commenced operating the restaurant (after fitting out the lot) on or about 4 April 2022.
A short period of time later, a resident and lot owner in the residential strata scheme complained to the owners corporation and the local Council about unpleasant and excessive odours and fumes allegedly emanating from the restaurant.
In June 2022, the owners corporation engaged Baratech Engineering Pty Ltd (Baratech) to conduct an investigation. Baratech issued a report dated 17 June 2022. Mr Lu was the author of the report.
On 27 June 2022, the local Council (City of Canada Bay Council) represented by Mr Oustambasidis, Co-ordinator, Building and Compliance, conducted an inspection of the strata building. The inspection revealed that smoke was detected in common, commercial and residential compartments of the building due to inadequate mechanical ventilation and associated inadequate fire separation/compartmentalisation measures.
On 17 August 2022, the local Council issued to the lot owners an Emergency Development Control Order under s 9.34(1)(b) of the Environmental Planning and Assessment Act 1979 (NSW) that Tornados cease operation until the mechanical ventilation system has been upgraded in accordance with an approved scope of works that is certified and approved by the local Council. The notice stated that significant financial penalties would be imposed if the order was not complied with.
On 25 August 2022, City of Canada Bay issued to the owners corporation a Development Control Order-Fire Safety Order under Item 1, Part 2 Schedule 5 of the Environmental Planning and Assessment Act 1979 (NSW). The Fire Safety Order directed that the kitchen mechanical ventilation system servicing the cooking operations of Tornados not be used until an approved scope of works that is certified and approved by the local Council. The notice contained a Fire Safety Schedule, and identified that the owners corporation was to:
Engage the services of an accredited practitioner (fire safety) and practicing mechanical ventilation engineer to perform and submit an audit of the mechanical ventilation system.
Engage the services of an appropriately qualified Accredited Certifier to audit the building and the findings of the mechanical ventilation audit to ensure compliance with the Building Code of Australia and recommendations regarding the mechanical ventilation system of the building, and if applicable, a new/updated Fire Safety Schedule.
Provide and obtain local Council approval prior to commencing work.
Obtain local Council certification for each stage as the works are progressing.
The notice contained the following:

The lot owners’ submitted that between 2015 (when the lot owners purchased lots 5 and 6 in the commercial strata scheme) and 2019 the lot was tenanted by Porticos Chicken, whose lease was terminated for non-payment of rent. In December 2020, the lot owners had signed a lease with Frangos Chicken, but the owners corporation had refused, at a general meeting of the owners corporation on 15 December 2020, to consent to the lodging of a Development Application with the local Council pertaining to the fit-out of Frangos Chicken.
The lot owners’ submit that, after the lease with Frangos Chicken did not proceed, they were “without a tenant for another year” and were “forced to offer 6 months’ rent free to attract another commercial tenant”.
In January 2020, the lot owners entered into a 5 year lease with Tornados. The rent was $10,000 plus GST per month, with a 3% annual increase “as of 2023”.
The lot owners submit that Tornados ceased to operate after the issue of the following orders from Canada Bay Council:
An Emergency Development Control Order under s 9.34(1)(b) of Schedule 5 of the Environmental Planning and Assessment Act 1979 (NSW) to cease cooking operations and the use of the mechanical ventilation system servicing the cooking activities on 17 August 2022.
A Fire Safety Order “in relation to the defective mechanical ventilation system servicing Tornados” which “also found that the damper and fire seals were not on the current fire safety schedule for the building and not maintained with the annual fire safety statement” on 25 August 2022.
A further Fire Safety Order on the owners corporation dated 11 October 2022. This was issued despite the owners corporation making representations to Canada Bay Council on 20 September 2022 that orders only be issued upon the lot owners. The Fire Safety Order of 11 October 2022 “contained the same reasons” as the Order of 25 August 2022.
As a result of the orders of the local Council, Tornados lease was terminated. The lot owners cannot obtain another tenant until the owners corporation complies with the necessary works under the local Council orders, and had lost the tenancy of Tornados and the ability to rent the premises to a different tenant. As of the date of submissions, the owners corporation had not completed the compliance or rectification work to common property.
The lot owners submit the owners corporation had breached its duty under s 106(1) of the SSM Act and it was entitled to damages for reasonably foreseeable loss under ss 106(5) and 232(1) of the SSM Act. In respect of breach, the lot owners submit that the owners corporation failed to:

No submissions are made in respect of whether the Tribunal has jurisdiction to hear the dispute. The submissions appear based on an assumption the Tribunal has jurisdiction.
Tornados submits that Mr Romanov, the sole director of Tornados, is a chef and “developed the concept for Tornados.”
In January 2022, Mr Romanov inspected the rangehood in the premises, and determined it required a deep clean. He engaged “G & J Filter to replace the filters in the rangehood every month thereafter from May -August 2022”.
Tornados fitted out the premises between January and April 2022. In April 2022, the restaurant had a “soft launch”. None of the fit out work involved any work on the rangehood; ducts; fans or mechanical duct serving the kitchen.
Shortly after cooking operations commenced, a resident in Unit 3 “reported ingress of smoke and fumes into his unit”.
On 27 June 2022, an officer of City of Canada Bay Council performed an inspection.
On 17 August 2022, the Council served Tornados with an Emergency Development Control order causing Tornados to cease operation as it could not use the kitchen mechanical ventilation system.
On 11 October 2022, City of Canada Bay Council issued a Development Control Order comprising a Fire Safety Order on the owners corporation. The effect of this order was that Tornados could not trade until the owners corporation performed the works pursuant to the orders.
Tornados identifies its causes of action against the owners corporation as breach of “its duty both at general law under s 106(1) of the SSM Act with respect to a claim in negligence against the respondent”.
Reference is made to the tort of negligence. No reference is made to the tort of nuisance.
Tornados submits that it was an “interested person” with standing to sue the owners corporation as it was “a legal occupier of the property as of 3 January 2022”.
The submissions refer to emails and reports of Baratech Engineering (Mr Luis Lu) in June 2022. According to Tornados, Mr Lu sent “an email and reports” to the strata manager Mr Castrogiovanni on 17 and 21 June 2022 advising that the cause of the kitchen ventilation system problem is “fire rating problems”. The report stated that “at the same time around April 2022 (as the restaurant opening) the building kitchen exhaust and car park exhaust shaft cover was changed”. Mr Lu had emailed the resident who complained (Mr Choi) on 21 June 2022 that “the fundamental problem seems fire rating failure of the shafts and other structures as I mentioned on my latest report”.
Tornados submits that from May 2022 there was an “internal dispute” between the commercial and residential owners corporation’s regarding the cost of repairs; Baratech Engineering was “replaced” and attempts were made to “shift liability” to the lot owners.
According to the submissions, there was “evidence that problems arose regarding the ventilation system as early as 2017 which required repairs”.
Tornados submits that special by-law 22 created an “additional duty” on the owners corporation “regarding the mechanical ventilation system” and that after the by-law was amended in 2020, the owners corporation had “additional duties with regard to the system when it was not in use”. There was no evidence that the owners corporation did any maintenance or repair works on the kitchen ventilation system in the period from 2019 to 2022.
Tornados seeks an award of damages under s 232 of the SSM Act. The amount of damages sought is not identified, other than Tornados relies on the evidence of Mr Nerjati, its accountant. Tornados submits that the damages were reasonably foreseeable, and that it had to close the business.
Tornados submits that its damages fall into “two general categories,” and damages are to be assessed to put Tornados “in the position they would have been had the negligence not occurred.” They are:

On 14 February 2024, the owners corporation lodged and served an outline of written submissions by the owners corporation’s then Counsel, Mr Noll AM.
The owners corporation submitted that the pleadings and evidence raised the following issues:
Who is obliged pursuant to SSMA 106 when read together with by-law 22 to maintain and repair the Kitchen Exhaust System (KES) as defined in by-law 31?
Who is obliged to perform the works ordered by City of Canada Bay (Council)?
If the answers to the firs two questions places the maintenance and repair obligation on the respondent owners corporation, then has the obligation been breached?
If, however, the answers to the first two questions places the maintenance and repair obligation on the respondent owners corporation, has that obligation been breached?
Who is liable to pay for the remediation works now underway to repair the Kitchen Exhaust System and some adjacent internal walls?
Is the respondent liable to pay monies to each of the applicants?
Are the applicants liable to pay monies to the respondents?
The owners corporation submitted that by-laws 22 and 31 allocated responsibility for the maintenance and repair of the KES on the lot owners and Tornados rather than the owners corporation. It was submitted that the Tornados, as a tenant, did not have standing to claim damages under ss 106(5) and 232 of the SSM Act, and the Tribunal “does not have jurisdiction to decide a standalone common law negligence claim”, notwithstanding the “suggestion otherwise” in Silberstein v Strata Choice Pty Ltd [2022] NSWCATAP 375 at [30].
No submission was made that Tornados was not an “interested person” with standing to bring proceedings against the owners corporation for the tort of negligence; as distinct from a submission that the Tribunal had no power “to decide a standalone common law negligence claim.”
The owners corporation opening submissions briefly set out some of the events between 7 April 2022, when the “residents of unit 3” complained to the strata manager Mr Castrogiovanni about smoke ingress and the termination of the lease by Tornados in April 2023. The submissions included reference to the local Council issuing a “further Development Control Order” pursuant to the En**vironmental Planning and Assessment Act 1979 (NSW) on 11 October 2022, which:

Baratech also inspected Unit 3. Refrigeration pipes penetrate the toilet wall into the ceiling of the other side towards the shaft direction. The penetration has leak from the other side into the toilet ceiling. Mr Choi mentioned that “there was a strong smell in the toilet and ceiling.” Due to the ceiling restriction, Baratech was not able to see further or to the other side of the wall.
The smoke smell in Unit 3 “happens at the same time when the smell occurs in the basement”. The basement has opening to the car park exhaust shaft at the bottom. The smell is stronger around the opening bottom area of the shaft.
Mr Lu of Baratech had asked Mr Choi to turn on the car park exhaust fan when the smell occurs. Mr Choi had done that for two evenings. The “result is that the car park exhaust fan can clear the smell in the car park and also the smell in Peter’s apartment though the apartment is above the car park.”
Baratech concluded as follows:
Since the car park exhaust fan can clear the smoke smell from the apartment above, that “implicates (sic) there is a leak between the car (sic) and Peter’s apartment.” The architectural design does not arrange any opening connection between the car park and Unit 3. Baratech could not see any leak at any visible areas through the slab. The owner and occupier of Unit 3 “confirmed the smoke smell was not from the windows or doors. It was possible the leak is “through the shaft which connects the car park and adjoining Peter’s apartment. It also “implicates that the shaft separation walls probably are not sealed as per the fire rating requirements.”
The smoke smell “possibly crosses from the kitchen riser to the car park riser via the leaked ducts and shaft walls, which further cools and sinks down to the car park and penetrate into Peter’s apartment as well. However, if it was “true” the issue did not exist before April 2022 “then this possibility exists, but not too high”.
If there was no leak between the two risers, then the other possibility is that discharged smoke from the kitchen exhaust could cool on the roof and enters the outlet of the car park exhaust riser and further drops down along the riser to the car park.
Baratech provided “recommendations” as follows:
The “short term” solution was to turn on the car park exhaust fan to keep the smoke smell away from Unit 3. However, that was not a feasible permanent solution as it “consumers too much energy and pushes up the electricity bills.
The long term solution is “to do an overhaul investigation after cutting some of the ceiling areas” of Unit 3. If leaks are found “just seal them.” However, “the leaks between the two risers within the shaft will be very challenging to fix unless we knock off some walls.”
In addition to the above, if possible, lift the shaft roof cowl within the tiled top cover to give more shaft release space on top. This will “help lessen the restriction of the leaked smoke release.”
The report concludes by stating that “the above three solutions will help, but cannot guarantee 100% fixing the issue as there are areas we cannot reach or currently see”.
Between 20 June 2022 and 28 June 2022, Baratech provided the owners corporation with a number of quotations. The proposed works involved (a) installing a timer to run the exhaust fan during the operating hours of the restaurant; (b) cutting ceilings and possibly part of walls for testing purposes; (c) cleaning the kitchen exhaust ducts, which “have not been cleaned for a very long time.” The quote did not include cleaning kitchen range hoods or filters; (d) lifting or replacing the cowl on the roof to give more release of the leaking smoke. The quote noted that there had been a recently installed new shaft cowl to prevent water leaking into the building. The total amount of the quotations (when added together) was $27,533.
On 27 June 2022, Mr Oustambasidis, of Canada Bay Council, conducted an inspection of the strata building pertaining to the mechanical ventilation system.
On a date subsequent to the inspection of Mr Oustambasidis, the owners corporation approved the quote for Baratech to perform the cleaning of the kitchen exhaust ducts in the amount of $4,235 and that work was performed.
On 19 July 2022, the strata manager wrote to the lot owners stating that, although By-law 22 made the kitchen exhaust the responsibility of the lot owners; due to the urgency of the work the owners corporation had engaged Baratech to clen the kitchen exhaust ducts. The letter states that during the work “it has been revealed that there are several penetrations to the building exhaust system caused by the connection of shop 5 & 6 that are not complaint (photos attached), and Baratech had provided a quotation to repair the penetrations in the amount of $4,349.40”.
The letter stated that the owners corporation would engage Baratech to repair the penetrations, and would seek to recover $8,584.40 from the lot owners. The letter also stated that the lot owners should ensure the exhaust system booster was left on whilst the tenancy was in operation. The letter concluded by stating that the owners corporation had been “approached by the City of Canada Bay” after a complaint by the “residential owner of unit 3” and the owners corporation would seek to recover any “any additional costs as incurred by the Owners Corporation as a result of fire orders etc” under special by-law 2 from the lot owners.
On 17 August 2022, City of Canada Bay Council issued an emergency control order on the lot owners that cooking operations and use of the kitchen mechanical ventilation system cease within 24 hours, and not recommence until appropriate repairs are performed. The order states under the heading “reason for issuing the Order”:

On 7 September 2022, the Building Management Committee met. The Minutes of that meeting relevantly stated that as “the current terms of the proposed order require that all fire safety measures across the building be audited,” it was resolved that “further consideration be given to the pending Eagle Fire quotations and a change in fire service contractors be deferred until Council’s response is received”. Further, the Minutes state that “in the absence of Council’s response by 30/9/2022, the Building Management will reconsider the quotations and authorise a contractor to proceed with the 2022 annual fire inspection”.
On 20 September 2022, after instructions from or on behalf of the owners corporation for the residential strata scheme, Monti Lawyers, wrote to City of Canada Bay Council in respect of the “intention to issue a fire order” that had been made by the Council against the owners corporation and the lot owners.
That letter made a number of representations, which are summarised as follows:
The owners corporation for the residential lots requested that no order be issued on that owners corporation, and the only order be made against the lot owners. The basis of this submission was that it was the lot owners who were using the mechanical ventilation system and the terms of the easement imposed repair and maintenance obligations on the lot owners. The owners corporation submitted that the mechanical ventilation system used by the lot owners was only “partly” on the land of strata plan No 77260, and was “otherwise on the land” of strata plan No 77261, so the “SP 77260 does not and cannot use the mechanical ventilation system under the terms of the Easement and because the key operation parts of the system are not on its land”.
In the alternative, the owners corporation for the residential lots submitted that any order be issued against the lot owners and The Owners Strata Plan No 77261 (i.e. the owners corporation for the commercial lots) as The Owners Strata Plan No 77260 is not responsible for the mechanical ventilation system; or if any order is made against The Owners Strata Plan No 77260 it is delayed until the expiration of the time period for compliance against the lot owners and The Owners Strata Plan No 77261.
In about September 2022, the owners corporation engaged Baratech and Brentnall Certification Pty Ltd (Brentnall BCA) to investigate and report in response to the Orders that were issued by City of Canada Bay Council.
On 10 October 2022, Brentnall BCA issued a report addressed to Baratech. The report stated that Brentnall BCA had been engaged to provide advice regarding the requirements of the Building Code of Australia as they relate to the kitchen exhaust system; and also a fire safety audit “to satisfy the requirements of the proposed fire order to be issued by Canada Bay Council.” The fire safety audit report was issued under separate cover.
The report is 4 pages in length. It states that an inspection of the building was undertaken on 27 September 2022. On page 2 of the report, there is a detailed description of the kitchen exhaust system and what was observed at the inspection on 27 September 2022. The kitchen exhaust system is described as follows:

On 20 October 2022, Baratech wrote to the strata manager stating that Baratech and Brentnall BCA had “worked together” to perform a BCA inspection. The letters states a copy of the “BCA report” was attached. However, it is not clear what report was attached to the letter of Baratech, as the Brentnall BCA assessment report in respect of the building contained in the Tender Bundle is dated 1 November 2022.
In any event, in the letter of 20 October 2022, Baratech makes recommendations that “focus” on the kitchen exhaust system, and “other fire safety inspection and rectification would be carried out separately upon instruction from Conti Strata”. The recommendations involved removing plasterboard lining of the walls adjoining the shaft; cutting holes into the ceilings of units 2 and 3 to inspect leaking points; removing ceiling tiles of the “Stellar office” (which appears to be a reference to the adjoining commercial tenant to lots 5 and 6) to inspect the kitchen exhaust ducts travelling to the kitchen exhaust shaft; and removing ducts within the carpark shaft and inspecting the leaks of the partition wall between the kitchen exhaust shaft and car park exhaust shaft.
On 11 October 2022, City of Canada Bay Council issued a Development Control Order (also known as Fire Safety Order) under the EPA Act to the owners corporation. The purpose of the order was identified as being to ensure fire safety.
The Development Control Order directed that the kitchen mechanical ventilation system serving lots 5 and 6 not be used until works were performed to the satisfaction of the Council. The Order directed that the owners corporation engage an Accredited Practitioner (Fire Safety) and practicing mechanical ventilation engineer to perform an audit of the premises in respect of compliance with standards and codes; and to engage “an appropriately qualified Certifier” to perform and submit an audit of whether “deemed to satisfy” fire safety provisions had been complied with. A strategy/recommendations was to be prepared and approved by Council. There would then be a “fire safety upgrade and mechanical ventilation works” performed. The Order set out the timeframe for compliance.
The Order sets out the “Reason for Issuing the Order” as follows:

Considering Mr Buda, Solicitor, has (on the basis of the documentary evidence) acted for Tung Quang Hang and Kien Xuan Tran for a number of years, dating back to at least the period in which the lot owners commenced negotiations with Tornados in late 2021 to enter into the lease, it is difficult to comprehend how two affidavits could be prepared, sworn and witnessed with the wrong name of the deponent. It is also difficult to comprehend how proceedings could be brought in the Tribunal in the name of “Tung (Kim) Quang Hang” as the sole applicant, but a Solicitor and, additionally, a Barrister acting for the lot owners in the proceedings would not have clearly identified and obtained clear instructions as to who were their clients.
Although some explanation is provided in an affidavit of Mr Buda Solicitor relied upon in the interlocutory application that was ultimately determined by way of written reasons of the Tribunal in August 2024, the explanation (confusion about who was the deponent and the lot owners having lived separately for a period of time), the reasons proffered were unconvincing when weighed against the responsibilities of legal representatives.
For the sake of simplicity, the Tribunal will refer to the female lot owner who gave evidence on the first day of the hearing as “Kim.”
The oral evidence of “Kim” was vague and non-responsive to many questions by the Counsel of the owners corporation who appeared at the first and second days of the hearing, Mr Knoll AM. It was during the course of cross examination that Ms Edwards of Counsel eventually raised, firstly the issue that she did not believe the witness was understanding questions likely due to medical reasons rather than any particular language difficulties, and secondly that although “Kim” was the person giving evidence in the affidavits, the name of the deponent of the affidavits was incorrect, and should have been Kien Xuan Tran.
That led to an application that “Kim” be excused from giving evidence.
The issue of “Kim” being excused was not pursued on the second day of the hearing (20 February 2024) because Ms Edwards of Counsel did not appear in person due to a COVID-19 infection. Mr Knoll AM of Counsel consented, on behalf of the owners corporation, to the second day of the hearing being adjourned.
Despite being sufficiently physically unwell to attend the hearing on 20 February 2024 in person, Ms Edwards of Counsel appeared by telephone to make submissions on appropriate procedural directions.
The issue of “Kim” being excused from further cross examination and her husband being joined as a part to the lot owners proceedings against the owners corporation was dealt with in reasons of the Tribunal (7 pages) dated 23 August 2024.
Those reasons arose from an interlocutory hearing on 16 August 2024. The procedural history of the interlocutory dispute (one of the many interlocutory disputes and applications during the course of the proceedings) is set out in the reasons, which include a dispute about setting aside a Summons to produce documents issued by the owners corporation on Mr Romanov. It is unnecessary to set out the outcome of the Summons dispute. However, in respect of the issue of the correct identity and parties to the proceedings, Ms Edwards had sought that (a) “Kim” be excused from giving further evidence in cross examination (based on medical reports) and (b) Kien Xuan Tran be joined as a party to the proceedings.
Relevantly to this decision, the Tribunal determined that (a) “Kim” not give further evidence; and (b) Kien Xuan Tran be joined a party to the proceedings. It is unnecessary to repeat the written reasons provided with the orders.
Considering that Tung Quang Hang (the male lot owner) and Kien Xuan Tran (the female lot owner) are the lot owners; and they are both parties to the proceedings taken by the owners corporation (Case Number 2024/00065826) the Tribunal determined it appropriate to join Kien Xuan Tran as a party to the proceedings under s 44 of the NCAT Act in Case Number 2023/00381512 and correctly identify “Tung Quang Hang” as the name of the first applicant, rather than “Tung (Kim) Quang Hang” in Case Number 2023/00381512”.
Tung Quang Hang (the male lot owner) swore an affidavit Case Number 2023/00381512 dated 29 August 2024. In that affidavit, he refers to “being one of the applicants in the proceedings herein and also a co-owner of the property…” If there was any confusion regarding the form of the orders of the Tribunal dated 23 August 2024, the affidavit of Tung Quang Hang acknowledges that he understood he is a party in Case Number 2023/00381512.
Tung Quang Hang was cross examined by the new Counsel for the owners corporation, Mr Purdy of Counsel, at the hearing on 4 September 2024. However, before returning to his evidence, it is appropriate to make further comment about Kien Xuan Tran.
Although the Tribunal does not accept that any significant weight can be given to the evidence of a person who cannot correctly identify their name as the deponent of an affidavit, and who is non-responsive to questions in cross examination, that does not mean that no weight can be given to the contemporaneous documentary evidence attached to the affidavits of “Tung (Kim) Quang Hang” dated 10 October 2023 and 31 January 2024. Most, if not all, of those documents are replicated in other affidavits or business documents of the owners corporation that deal with the issue of the state of repair of the kitchen exhaust system, or the terms of the lease with Tornados.
The affidavit of Tung Quang Hang dated 29 August 2024 states that he “did not take an active part” in the management of the commercial lot, and his wife was involved in decisions. The lot owners had engaged Raine & Horne Commercial Cabramatta (the agency of Mr Tripodina) to manage the commercial lot, and the “majority of everyday dealings” were left with the agent. Mr Tripodina also manages “other properties” of the lot owners.
Mr Hang states that after the “charcoal chicken shop” vacated the lease, his wife told him at some unspecified time that Frangos was interested in leasing the commercial lot. He was later told by his wife that Mr Tripodina had informed his wife that the owners corporation had “rejected” Frangos.
After the lease with Frangos Chicken did not proceed, Mr Hang and his wife “suffered extreme financial stress as a result of mortgage and fees.”
The lot owners offered a rent free period to attract a new tenant. In around “early 2022”, Ms Tran told Mr Hang a new tenant head been obtained.
According to Mr Hang, he was informed by his wife in about April 2022 that when the “new tenant started cooking” the premises was filled with smoke and the ventilation system was not working properly.
Mr Hang was unaware of any issue being raised about the ventilation system or smoke when the premises were rented to Portico Chicken.
Mr Hang asserts that he was informed by his wife in about August 2022 that the local Council had shut down the restaurant (i.e. Tornados) “due to smoke” and “strata management had refused to rectify…”
Mr Hang assert that he and his wife have suffered “mortgage and financial stress” to the premises not being let, as well as personal stress. At [21] there is a table of claimed losses.
It is asserted at [21] that the gross rental income involving Tornados (taking into account the six month period at the commencement of the lease when no rent was payable) was $366,978.74 in the period to 2 September 2024. That included interest “based at 8% outstanding monies” and the cost of agent letting fees to “Raine & Horne” ($23,570) and “Zorrick Metrowest Commercial ($19,800).
The table then refers to “addition (sic) and anticipated damages” as follows:
Anticipated 6 months for repairs to building: $71,500 inclusive of GST.
Anticipated rental incentive to any proposed tenant and time to find tenant (6 months based 2025 rental per month $11,168 plus GST): $73,711.31.
Sub-total $537,190.05.
Ongoing damages based on loss of monthly rent with interest at 8% per annum: $12,951.40 per month.
Bank Charges ($3,412; plus “new loan application” of $21,250, plus “La Trobe fees” of $3,062): $27,724.04.
Strata levies of $53,117.12.
“Total Damages” sought: $618,031.21
The affidavit contains some supporting documents. Relevantly, there is a copy of the lease with Tornados; some documents involving levies (including a notice of levies between July 2021 and January 2022); a “loan activity statement” of La Trobe Financial for the period 1 January 2024 to 30 June 2024; a tax invoice of $23,570.18 from Raine & Horne Cabramatta; a tax invoice of Metro Commercial Property Group dated 7 December 2021 in the amount of $19,800; a “duties statement” of NSW Office of State Revenue; and a settlement adjustment sheet in respect of purchase of the commercial lots by the lot owners in November 2015.

Mr Tripodina, the property manager who managed the commercial lots on behalf of the lot owners at the relevant times, swore an affidavit dated 29 August 2024. He gave evidence on 4 September 2024. His evidence (including cross examination) is at T:4/9/24:P28-54.
Mr Tripodina states in his affidavit that he had managed the commercial lots on behalf of the lot owners since 2015. Mr Tripodina does not seek new tenants on behalf of the lot owners, who engage other agents for that purpose. Most of the affidavit responds to assertions in the affidavit of Mr Castrgiovanni, the strata manager. Mr Tripodina denies that there were any delays caused by himself or the lot owners regarding repairs, and that repair of the kitchen exhaust system was the responsibility of the owners corporation.
Mr Tripodina asserts at [36]-[37] that he “feared” the lots would remain vacant until the owners corporation complied with the Council orders, and any new lease would have to have “incentives” that included a 36 months’ rent free period or discount in respect of the fit out costs of the tenant.
At [38]-[39] in response to Mr Castrgiovanni’s affidavit, Mr Tripodina states he does not understand why the owners corporation cleaned and sealed the kitchen exhaust in 2017, but now asserts it is not responsible for repairs. Mr Tripodina states he has no knowledge of what “modifications” to the kitchen exhaust system were completed before 2017.
At T:4/9/24:P30-33, Mr Tripodina was questioned about the fees charged by the agent. Different fees applied in respect of introducing a new tenant (Raine & Horne Cabramatta did not introduced Tornados). Gross fees for managing the property range between 7% and 10%. Some management fees were payable if there was no rent paid, but others were dependent upon there being actual rent paid by a tenant.
At T:4/9/24:P33-37, Mr Tripodina was questioned about inspections of the kitchen exhaust system and the complaints that commence in about April 2022. Mr Tripodina maintained that the “shaft is within common property” and the tenant’s responsibility was the “internal ducting unit and motor on the roof.” Mr Tripodina referred to an inspection by “HTL” and that the smoke issue was an “intermittent” issue which was a “structural issue.” Mr Tripodina stated at T:4/9/24:P37:549-550 that his “dealings pretty much ended around June when the matter was referred to the landlord’s legal representation”.
In respect of renting out the premises after the end of the lease with Tornados, Mr Tripodina stated at T:4/9/24:P:43: L645 that there had been “enquiries” with his agency about renting the commercial lost the subject of this dispute, but “we are unable to commit to a tenancy without having some form of sign off or confirmation that the lots are fit for purpose”.
At T:4/9/24:P44-50 Mr Tripodina was questioned about whether, in his opinion, the defects in the mechanical ventilation system were due to the “ductwork” or “structural”. Mr Tripodina asserted on a number of occasions that he believed that the defects were structural and the responsibility of the owners corporation to repair.
At T:4/9/24:P50-54, Mr Tripodina was re-examined. It is unnecessary to detail the re-examination as it did not clarify any of the evidence previously given.

The affidavit of 10 October 2023 contains relatively brief evidence (which, although it is not evidence, contains a further copy of Tornados Points of Claim dated 9 October 2023), but attaches a large number of documents. A number of those documents are duplicated in evidence of other witnesses.
Mr Romanov stated that Tornados was incorporated in 2021. He is a “trained chef” who has “worked in and operated restaurants for approximately 25 years”.
Mr Romanov states that Tornados was a “unique concept” that involved “cold smoking methods” which he had been “working on” for a long time, but crystallised during the COVID-19 lockdown.
Mr Romanov entered into the lease with the lot owners in January 2022 for a period of 5 years, and between January-April 2022 fitted out the premises. Tornados commenced trading on 4 April 2022. In about May 2022 a resident of the building complained to him about smoke odours from the restaurant. He immediately notified Mr Tripodina and the landlord. The affidavit then sets out briefly the events in between July 2022 and August 2022 involving local Council inspections and orders. In August 2022, George who was an owner of a different shop at the premises, told him there were complaints about smoke and fumes when Porticos Chicken was the tenant. From August 2022 the restaurant ceased to operate, causing stock to be lost and loss of profits.
Mr Romanov states that in April 2023, the lease between the lot owners and Tornados was terminated for frustration. The lease security deposit (bond) was repaid to Tornados.
Mr Romanov states he “tried to sell” equipment and stock, but received “much less than I (sic) paid for it.”
The affidavit contains a “spreadsheet” which purportedly summarised the loss of stock and equipment. That document asserts that the cost of stock and equipment was $125,190.95, with only $9,200 was sold, leaving a loss of $115,990.95.
The affidavit contains a different spreadsheet purportedly created by the accountant of Tornados which sets out a “monthly profit forecast” for the business over the course of the lease period.
The affidavit also contains a spreadsheet for the costs of fitting out and defitting the premises; and some tax invoices.

Mr Romanov states that some cleaning of the rangehood and replacement of filters occurred. This was because the rangehood was greasy due to not having been properly cleaned by the former tenant, and the period during COVID 19 where the commercial lots were vacant.
Mr Romanov states that in January 2022, he arranged for G & J Filter cleaning to perform a deep cleaning of the rangehood. A copy of the relevant invoice is attached to the affidavit in the amount of $800. Mr Romanov states that he engaged G & J Filter to replace the filters in the rangehood every month. A copy a brief report by G & J Filters stating that they “cleaned the exhaust filer” every 4 weeks between May 2022 and August 2022, with the last service provided on 19 August 2022.
Mr Romanov states that neither he, nor anyone associated with Tornados inspected or performed any work on the ducts or other aspect of the mechanical ventilation system (other than cleaning and filter replacement of the rangehood) in the period from the fit out onwards, and as far as he was concerned there were “no issues with the building’s mechanical ventilation system…nor did I ever represent to anyone that I had.”
At [17]-[55] of the affidavit, Mr Romanov annexes and refers to various reports and correspondence involving the owners corporation; its contractors; the local Council and lawyers. Much of that correspondence, and the reports obtained by the owners corporation, has been set out earlier in this decision and does not bear repetition.
However, there is reference to events and reports prior to January 2022.
On 5 July 2021, the (then) strata managing agent for the commercial strata scheme (Whelan Property Group) wrote to commercial lot owners stating that “the kitchen exhaust in Shop 7 has recently been cleaned and seal (sic) as it was in require or repair and as per By-law 22”. The costs were charged back to the lot owners of Lots 1 to 7 on a pro-rata basis as they had “exclusive use of the kitchen exhaust system”.
On 16 September 2020, Beaver Willams (an air-conditioning and fire safety systems contractor) provide a quote addressed to “The Trustee for the Conti Property Group Trust” for repairs arising from the basement exhaust fan not working.
On 16 August 2018, Eagle Fire Protection Pty Ltd provided an “Annual Test Report” to the commercial owners corporation in respect of the fire safety of the building. That report referred to some repairs required. There is nothing in the report that explicitly refers to the mechanical ventilation system the subject of this dispute.
On 16 October 2020 Eagle Fire Protection Pty Ltd provided a tax invoice to the owners corporation for $385 for works due to “fire trip for A/C contractor”. There is reference in the invoice to “duct detector housing is incorrect/non-compliant.”
On 26 October 2020, Eagle Fire Protection Pty Ltd provided a quotation to the owners corporation for “duct detector issues and programming faults” which involved the “duct probe” affecting the smoke detector and alarm of shops 4 and 5.
On 16 October 2020, Beaver Williams provided a quotation to the owners corporation for “quarterly maintenance; 6 month call out service; and annual mechanical AFSS” that refers to the car park area.
In reports of 2 November 2020 and 12 November 2020, Altec Building Pty referred to be engaged by the owners corporation to inspect and provide a report in respect of a ceiling leak in Shop 7. The reports referred to a leak from a planter box, and also a potential leak from a “Colourbond carcass” of the “chicken shop ventilation system” which was directly above the ceiling where there was water ingress. In addition to re-waterproofing of the plantar box,
On 21 November 2020, Altec Building Pty Ltd provided a quotation to the owners corporation. In addition to repairs and re-waterproofing of the plantar box, the quote referred to “supply and install a new Colourbond carcass encasing the ventilation system.”

Mr Romanov was questioned about the various businesses he has operated, or been involved in. Romanov Catering Pty Ltd was a “catering business through RSL clubs” that was “modern Australian western style food.” It went into a creditor’s voluntary winding up-liquidation in 2017. Mr Romanov asserted the liquidated was due to his divorce. It was pointed out to Mr Romanov that unsecured debts at the time of liquation were $346,346.05. Mr Romanov asserted that “99%” of creditors were eventually paid. According to Mr Romanov part of the process of paying creditors involved selling his house, but some of that money was paid to creditors and other money went to “settlement of my divorce.” One of the creditors (Foodlink) placed a caveat on the house.
Mr Romanov was questioned about Fresh Cut Veg Pty Ltd. Mr Romanov stated it is a “fruit and veg supplier” to restaurants. Mr Romanov held 50% of shares. He ceased to be a director of that company in 2023. Mr Romanov had “sold his share back” to his business partner in 2022 to “concentrate” on Tornados. Fresh Cut Veg Pty Ltd had provided stock to Tornados. Mr Romanov asserted that his business partner has paid him $400,000 by way of instalments to “buy out” Mr Romanov’s share of the business.
Mr Romanov was questioned about the kitchen exhaust system, including the duct work, shaft and rangehood. Mr Romanov explained his understanding of the cleaning process based on his experience as a “restaurateur of 25 years”. Mr Romanov stated he had cleaning performed both prior to commencing trading and on a regular basis thereafter. He described the difference between cleaning and replacing the rangehood and its filter, and cleaning the canopy and shaft that is connected to the rangehood.
Mr Romanov was questioned on the special conditions of the lease between the lot owners and Tornados. He agreed that there were terms of the lease that Tornados agreed to ensure the exhaust fan and rangehood are cleaned, serviced, and maintained at regular intervals no greater than 6 months. He agreed that it was a term of the lease that the lessor (i.e. the lot owners) did not warrant the exhaust fan’s suitability and the lessee would make its own enquiries into this. Mr Romanov agreed that, at the time Tornados entered into the lease, the exhaust fan and rangehood were operating “satisfactorily and properly.”
Mr Romanov was questioned on the fit out. He agreed there had been “substantial modifications” to fit out the premises, involving gyprocking, electrical and plumbing. He stated the gyprocking work did not involve demolition, but “we just put gyprock on gyprock.” Mr Romanov agreed that the fit out expenses were necessary for the business to commence trading, but only agreed “to a certain point” the expenses were a “sunk cost” that was an unrecoverable expense irrespective if the business traded for 4 months or 10 years.
Mr Romanov was questioned on “a couple of the fit out expenses” Tornados had claimed as damages. Mr Romanov had included invoices from his other business “Fresh Cut Veggies.” He asserted that such invoices were in respect of stock to Tornados. Mr Romanov had included an invoice from his “business accountant” A1 Accounting Corporation”. One was dated 10 October 2023, which Mr Romanov asserted was for advice given previously about terminating the lease. He agreed that was not a fit out expense. Another was an invoice in Mr Romanov’s own name dated 1 July 2023 for $30,000. Mr Romanov asserted this was his personal fees for overseeing and co-ordinating the fit out. It was put to Mr Romanov this was not a genuine invoice for a genuine business expense rendered in the normal course of business. Mr Romanov disagreed, asserting that he was entitled to be paid for his time and if he did not co-ordinate the fit out Tornados would have to hire a project manager.
The last topic of cross examination of Mr Romanov was the businesses he had been involved in since Tornados had ceased trading. He asserted that he had worked as a part-time chef on weekends at Henry’s Bar and Restaurant Pty Ltd in “April or May 2023”. Mr Romanov confirmed that he is the director of Romanov Investments Pty Ltd which owns a 50% shareholding in Enigma Catering Pty Ltd. He asserted that Enigma Catering Pty Ltd commenced trading in November 2023. Mr Romanov claimed that Enigma Catering Pty Ltd is yet to make a profit, but a share of any profits are paid back to Romanov Investments Pty Ltd. Mr Romanov stated it was speculative as to whether Enigma Catering Pty Ltd would be successful, but he would “prefer” that Tornados was still trading.
Mr Romanov was re-examined at T:4/9/24:P85. There were only two questions relating to the difference between the activities of Tornados and Enigma Catering; and Mr Romanov’s work at “Henry’s Bar.” It is unnecessary to set out those answers.

Mr Castrogiovanni is the strata manager employed by Conti Strata with management of the strata scheme. He has been managing the strata scheme since about 22 April 2020. Prior to Conti Strata, Beaumont Strata Management Agency was the strata manager.
Mr Castrogiovanni affirmed affidavits dated 8 December 2023; 21 March 2024 and 2 September 2024.
The affidavit of 8 December 2023 attaches a large amount of documentation in respect of the complaints about smoke and odours from Tornados; the response of the owners corporation; and the intervention of the local Council. It is unnecessary to repeat the narrative and detail of contemporaneous documents previously set out in these reasons.
However, the following salient evidence was contained in the affidavit:
On 7 April 2022, the occupiers of unit 3 complained by telephone to Mr Castrogiovanni of smoke and odours.
Between 7 April 2022 and 7 June 2022 the strata manager made efforts to contact the lot owners and get the lot owners to engage a contractor to investigate and repair. As discussed previously, Mr Tripodina has a different version of events.
On 7 June 2022, the strata manager wrote to Mr Tripodina stating that because the lot owners had not engaged a contractor to investigate and repair, the owners corporation would do so. The owners corporation subsequently engaged Baratech.
Mr Castrogiovanni believes the kitchen exhaust system was “cleaned and sealed in 2017 based on the records of the previous strata manager. At Annexure D to the affidavit if a copy of the administrative fund accounts of the owners corporation from November 2017, which indicates that monies were paid to Stallion Air Conditioning Pty Ltd in June 2017 for “kitchen exhaust cleaning and sealing”.
The affidavit of 21 March 2024 simply attaches a series of tax invoices. Mr Castrogiovanni asserts that the owners corporation had incurred “costs” due to the some and fumes emanating from Tornados of $122,529.
It is unnecessary to refer to all of the accounts. Many of them are tax invoices from the strata manager, and appear to be normal expenses incurred by the owners corporation in respect of strata management services from the strata manager. No evidence is provided as to how such expenses are different to, and in addition to, normal expenses incurred pursuant to the strata managing agency agreement.
One invoice is from Grace Lawyers dated 30 November 2022 in the sum of $4,175.72. Those fees were for providing legal advice and attending the general meeting of the owners corporation on 9 November 2022.
The other invoices are from Baratech; EBS Consultants and Dual Tech Air Conditioning Pty Ltd.
Notably, the tax invoices demonstrate the following works:
Kitchen exhaust duct cleaning by Baratech (invoice dated 26 July 2022).
Repairs to penetrations in the kitchen exhaust system duct and fan repair by Baratech (invoice dated 1 August 2022).
Various invoices for inspection and reporting on the kitchen exhaust system by EBS Consultants Pty Ltd between March 2023 and November 2023.
Rewrap of “new Trafalgar fyrewrap to sheet metal ductwork run through the Stellar Land tenancy” by Dual Tech in February 2024 (tax invoice 16 February 2024).
The affidavit of 2 September 2024, and documents attached to that affidavit, focusses upon events from 25 August 2022.
The affidavit sets out various correspondence and reports from Baratech. Mr Castrogiovanni asserts that Baratech had been engaged without prejudice to the owners corporation’s rights of recover from the lot owners.
According to Mr Castrogiovanni, after Baratech was first engaged (providing a first report of 17 June 2022) it “advised there were several defects in the kitchen exhaust system”.
Mr Castrogiovanni attaches the meeting agenda and minutes of the EGM of the owners corporation on 9 November 2022. Those documents are referred to previously in this decision. Some works by Baratech were approved at that meeting.
Mr Castrogiovanni states that “shortly after” the meeting on 9 November 2022, he was instructed:

Mr Castrogiovanni was question about the circumstances in which the owners corporation refused to consent to the Development Application (DA) that would allow the lease with Frangos Chicken to proceed. It was put to Mr Castrogiovanni that the reason the owners corporation refused to consent to the DA being lodged was that the owners corporation knew the kitchen exhaust system was in a state of disrepair, and the owners corporation did not want to spend the necessary monies to repair it. This question was objected to. After legal argument, some questioning on this issue was allowed, to the extent to what Mr Castrogiovanni might have known based on what he was told or instructed by strata committee members.
Mr Castrogiovanni stated that he did not have direct knowledge and the meeting “wasn’t held with discussions” as to why consent to the lodging of the DA was refused. He stated he “can’t make that comment,” but then stated it was “potentially” a reason for the refusal to consent to the DA (T:4/9/2024/P105-106).
Mr Castrogiovanni was questioned about delay between the local Council ‘shut down and rectify’ orders in August 2022, and the performance of rectification works. Mr Castrogiovanni was asked “What took so long for the works to start” (T: 4/9/24:P111:L1828). Mr Castrogiovanni replied that the owners corporation had initially engaged Baratech to perform repairs, but that after Baratech “scheduled” the works “there were a number of variances that came about from their initial engagement,” so the owners corporation “elected to move on from Baratech and get independent advice from EBS Consultants.”
Mr Castrogiovanni was again questioned about the works performed to the kitchen exhaust system by Stallion Air Conditioning in 2017. He had no information as to what works had been performed, and no documents could be found identifying the work.
Mr Castrogiovanni was questioned about Eagle Fire, and an email of June 2022 where reference is made about items requiring rectification. Mr Castrogiovanni stated that Eagle Fire was the contractor who inspected the strata building for the purpose of completing the annual fire safety inspection report for submission to the local Council, but that Eagle Fire were “terminated” by the owners corporation because the owners corporation believed they made recommendations for expensive work that was not justified.
At T:5/9/24:P129-136, further questions were asked about the works performed by Altech Building in 2020 arising from the ceiling water leak. Mr Castrogiovanni accepted that it was “potentially” possible that there was a pre-existing defect prior to 2022 that had not adequately been repaired, but the manner in which the questions were put does not allow for a conclusion that there was any clear concession.
At T:5/9/2024:P137-138, Mr Castrogiovanni accepted that in March 2022 Eagle Fire had recommended “$35,000 worth of repairs for defects” and this occurred approximately 2 weeks before the smoke and odour complaint by the occupants of unit 3.
At T:5/9/2024:P141-157 there was extensive questioning of Mr Castrogiovanni about the various expert reports and quotations obtained by the owners corporation (in particular, Bartech and EBS) and the contemporaneous emails that have been referred to previously in these reasons. Much of that questioning involved it being put to Mr Castrogiovanni what was in the documents, but there were a number of occasions when Mr Castrogiovanni was asked about specific events, and he answered that he could not recall.
At T:5/9/24:P157-158 Mr Castrogiovanni was briefly questioned about the letter from Monti Solicitors on behalf of the residential owners corporation seeking that the residential owners corporation not be liable for the cost of repairs. No answers were given that affect the weight to be given to the evidence beyond what is set out in the letter.
At T:5/9/24:P159-163 Mr Castrogiovanni was questioned about the owners corporation’s engagement of Baratech, Brentnall; and how that interacted with the obligations of Eagle Fire. The following evidence was given at T:5/9/24:P159:L2561-2568:

The cross examination of Mr Screnci is at T:5/9//24:P166-201.
Mr Screnci stated that he did not know what modifications has been performed to the kitchen exhaust system in 2017.
Mr Screnci was questioned about ceiling water leak into lot 7 (Stellar Land) in 2020. Mr Screnci stated he did not have a specific recall, but that the issues with the damage caused by the water leak “went on for a while.”
In respect of decisions of the strata committee and the owners corporation, Mr Screnci stated that only two other lot owners had taken any interest in the management of the owners corporation.
Mr Screnci was not able to recall what, if any, repairs were conducted to the kitchen exhaust system in response to the Altec Building report.
Mr Screnci was questioned about the owners corporation’s refusal to agree to consenting to the owners corporation’s seal being applied to the Development Application for the Frangos Chicken store. Mr Screnci stated the 3 member strata committee had discussions and “concerns”. One was an increased fire risk. Mr Screnci stated at T:5/9/2024:P185-186 that he did not know whether Frangos Chicken was planning to install a new kitchen exhaust system.
Mr Screnci stated that the owners corporation had been “burnt” by the fire false alarms during the tenure of Porticos Chicken’s tenancy, and want to “have a dialogue” before the owners corporation faced “a whole new set of problems.” Mr Screnci stated that Porticos Chicken and the lot owners were “difficult to deal with” during the tenure of the tenancy because they did not respond to communications.
At T:5/9/2024:P187-189, questioning returned to the ‘rejection’ of Frangos Chicken and Mr Screnci’s “fire safety concerns”. At T:5/9/2024:P189:3089, Mr Screnci stated that there was a concern that if Frangos Chicken commenced operation there may have been “reason to suggest that the infrastructure wouldn’t cope with whatever they were doing”.
At T:5/9/2024:P189-192 Mr Screnci was questioned about Eagle Fire and their various quotations and recommendations for repairs to obtain the annual fire safety approval for the building. Mr Screnci stated that he was concerned that Eagle Fire had made “extravagant” recommendations and were difficult to work with because they would “come in without notice…and give these hefty bills that hold a gun to our heads…” On that basis, Mr Screnci instructed Mr Castrogiovanni to obtain alternative quotations. Mr Screnci denied that the owners corporation refused any “necessary” repairs to obtain annual fire safety certification.
At T:5.9/2024:P192-196, Mr Screnci was again questioned about reports and quotations from Eagle Fire, including one identifying approximately $41,000 proposed fire safety repairs a short period of time prior to the complaints of smoke and odour ingress from the owners of lot 3. Mr Screnci asserted that Eagle Fire “came up with those type of bills pretty regularly” and that the strata committee and owners corporation did not know and could not have reasonably known of any defects in the kitchen ventilation system prior to April 2022.
At T:5/9/2024:P196-197, Mr Screnci was questioned about (a) whether it was the owners corporation’s responsibility to perform repairs and maintenance to the kitchen exhaust system in the period when the lot was unoccupied; and (b) whether the works the Council had ordered the owners corporation perform had been completed. Mr Screnci accepted that it was the owners corporation’s responsibly to perform maintenance and repairs to the kitchen exhaust system while the relevant lots were unoccupied, but stated the strata committee and owners corporation did not know and could not reasonably have known that any repairs were needed.
On the issue of whether the works directed by the local Council had been completed by the owners corporation, Mr Screnci stated that the “current status” was that the works were “almost done” and it was his understanding that they would be completed “within the next month or two.”
At T:5/9.2024:P198-199, Mr Screnci was asked questions about the lots not having been rented out to another tenant subsequent to the end of the lease with Tornados. Mr Screnci asserted that, in his opinion, the lots could be rented out to a different tenant, such an office, irrespective of whether the local Council orders had been performed.
At T:5/9/2024:P200-201 the questioning returned to the recommendations of Eagle Fire and the local Council orders. Mr Screnci agreed that in the local Council orders of August 2022 there were items identified that needed to be performed in regards to fire safety and the issue of a “fire safety statement”.

Mr Beven’s report is dated 28 March 2024.
Mr Beven is critical of the methodology adopted by Mr Nejati and the lack of contemporaneous documents to support his assumptions. Mr Beven believes that Mr Nejati’s opinion is flawed because it assumes Tornados would have been a very successful business, which does not take into account the risks of restaurant/small business failing or otherwise being unsuccessful or moderately successful in generating a profit. Mr Beven adopts a discount rate for the risk of the business being unsuccessful.
At 4.1.1-4.1.13 of the report, Mr Beven asserts that “recovering three heads of losses would overcompensate Tornados”, because “recovering both the costs associated with setting up and closing down the restaurant and calculating forgone profits would result in double-counting losses”. According to Mr Beven, to adopt this approach would mean that Tornados would be treated as a profit generating enterprise without “the need to make any initial investment.”
Mr Beven states that any loss to Tornados should be assessed as either the costs of setting up and closing down the business; or the profits made during the course of the period in which the business would have operated.
On the issue of the setting up and closing down costs, Mr Beven stated at 4.2.4 after calculating the “verified expenses” and “partially verified expenses” and disregarding the expenses where no evidence or supporting documentation has been provided, the cost of setting up and closing down the business was $176,792.
At 4.3.1-4.4.10 Mr Beven addresses “forecast EBITDA”, which can also be expressed as loss of profits. Mr Beven takes a diametrically opposed view to Mr Nejati on the issue of the success of Tornados. Mr Beven does not believe the business would have been a success such that it generated any loss of profits. On the contrary, Mr Beven believes the business would have a “projected trading loss” such that it would have required “substantial and continuous working capital funding without any prospects of a return.” Accordingly, Mr Beven believes there is no loss of profit by reason of the business closing in August 2022.
On the issue of value of goodwill, Mr Beven believes there was no goodwill value attached to the business such that the business would have been able to be sold with a goodwill value component.

The closing submissions of the owners corporation are summarised as follows:
The definition of “kitchen exhaust system” in special by-law 22 “…include not only pipes and ducts from hoods etc which extract the smoke but also the vertical shaft over which the easement exists.”
Tornados was a “user” within the meaning of clause 2 of special by-law 22 at the time the local Council order was made on 17 August 2022, and “was therefore responsible for rectifying the operational defects in the KES (except to the extent that “structural” maintenance or repairs were required) and for the various other obligations set out in cl. 22.2”.
The fact that the local Council order caused Tornados to cease “operation” of the KES does not mean it was not a “user” of the KES within the meaning of special by-law 22. There is a distinction between “use” and “operation.”
When Tornadoes vacated, the lot owners became “users” of the KES because “they have been seeking alternative tenants while maintaining the existing fit out including the connection of the kitchen range hoods to the KES and holding the premises out as suitable for a restaurant.”
The works recommended by EBS Consultants on 31 May 2023 included sealing of the masonry vertical shaft. The meaning of “structural” in “normal parlance denotes a function of load bearing or resisting.” The submissions cite AAI Ltd v Kalnin Corporation Pty Ltd [2017] NSWSC 548 at [75]-[93] for that definition of “structural”. The masonry shaft “perhaps” had a structural function, but also a “fire separation function” that was not structural. The repairs to the masonry shaft “addressed the fire separation function not any structural function which the shaft may have fulfilled.”
Based on the expert valuation report of Mr Lawford and Mr Doncas (which was not challenged) the lots had a “realistic rental market potential return” of $130,000 per annum. There was no evidence that the lots could not be let for the purpose of a restaurant or for some other use, and the report of Mr Lawford and Mr Doncas was consistent with the ability to rent the lots, irrespective of the local Council orders. The lot owners had made no reasonable efforts to obtain a new tenant after the lease ended, and there was no reason that a new tenant (if the lots were rented as a restaurant) could not have made their own fit out such that the lots could be used for commercial purposes. The lot owns should only be awarded damages of “at most a few months loss of rental income.”
In respect of Tornados claim, the Tribunal does not have jurisdiction because Tornados was not an “interested person” within the meaning of s 226 of the SSM Act. The plain meaning of the words meant that “interested person” was not a formerly “interested person,” but an “interested person” as at the date that proceedings were commenced.
In oral submissions on 4 June 2026, the owners corporation opposed the proceedings being transferred to a Court, and submitted they should be dismissed in circumstances where Tornados and chosen to take proceedings in the Tribunal and it was the owners corporation who pointed out the jurisdiction issue. There was no limitation impediment for Tornados commencing a proceedings in a court for negligence. If the proceedings were transferred, Tornados should be ordered to pay the owners corporation’s costs thrown away by having to defend Tribunal proceedings that the Tribunal had no jurisdiction to hear.
If the Tribunal had jurisdiction because Tornados was an “interested person” under s 226 of the SSM Act, the owners corporation accepted that the Tribunal had the power under s 232 of the SSM Act to consider a claim in negligence. However, there were “formidable obstacles” in establishing the existence of a duty of care and breach of duty under the principles set out by the Hough Court in Mallonland Pty Ltd v Advata Seeds Pty Ltd [2024] HCA 25 at [29]-[41]. Tornados was not “vulnerable” in the relevant sense, because there were measures that Mr Romanov could have taken if he had turned his mind to the risk of a defective exhaust system. He “could have made enquiries of the lot owners, undertaken his own investigation of its efficacy and negotiated a lease casting responsibility upon the landlord lot owners.” No negligence giving rise to damages for pure economic loss is established.
If a claim for damages is upheld, the qualification of the loss should be on the basis of Mr Beven’s evidence, not Mr Nejati’s evidence.
The Tribunal should, in the owners corporation’s claim against the lot owners, award compensation for the cost of the owners corporation repairing the kitchen exhaust system in circumstances where it was the lot owners’ responsibility and the lot owners’ had failed to do so.

It is not disputed that the lot owners are “interested persons” under s 226(1)(d) of the SSM Act with standing to seek damages under ss 106(5) and 232(1) of the SSM Act. They were lot owners when the alleged breach of statutory duty occurred; were lot owners when the application was lodged with the Tribunal; and were lot owners as at the conclusion of the Tribunal hearing.
The lot owners proceedings were commenced within the applicable time period under s 106(6) of the SSM Act. At the time the proceedings were commenced, the applicable time period under s 106(6) of the SSM Act was 2 years from the date the lot owner first becomes aware of the type loss they are entitled to recover that is the subject of the claim (The Owners – Strata Plan No 74232 v Tezel [2023] NSWCA 35 at [12]; [29]; [41]-[42]). That limitation period has subsequently been extended to 6 years by way of statutory amendment. It is unnecessary to discuss the operation of the statutory amendment, because the lot owners proceedings in the Tribunal were commenced within 2 years of the date the lot owners first became aware that Tornados ceased paying rent by reason of the alleged breach of the owners corporation’s duty under ss 106(1)-(2) of the SSM Act.
As discussed previously, the lot owners’ claim against the owners corporation is based on damages under ss 106(5) and 232(1) of the SSM Act for reasonably foreseeable loss caused by the owners corporation’s breach of statutory duty to keep and maintain common property in a state of good repair. The cause of action is statutory rather than in tort or contract (The Owners – Strata Plan No 2661 v Selkirk [2024] NSWSC 760 (Selkirk-Supreme Court) at [138]; Vickery v The Owners – Strata Plan No 80412 [2020] NSWCA 284 at [19]; and [168]-[169]).
Section 232(1) of the SSM Act empowers the Tribunal, when it has jurisdiction, to make orders that “settle” complaints or disputes of a type set out in s 232(1)(a)-(f). Awarding damages by reason of the operation of s 106(5) of the SSM Act is within the remedial powers of the Tribunal, which has been settled law since the NSW Court of Appeal decision in Vickery.
Section 106 of the SSM Act stated at the date of commencement Tribunal proceeding as follows:

By reason of the operation of s 106(7) of the SSM Act, the obligation of the owners corporation to keep and maintain common property (which includes common infrastructure) in a reasonable state of repair under ss 106(1)-(2) of the SSM Act is qualified to the extent that a common property rights by-law imposes liability for repairs and maintenance on a lot owner or occupier. In other words, if by-law 22 does not impose liability on the lot owner or occupier for repairs and maintenance, it is the owners corporation who has the legal responsibility. No issue has been raised by either party that ss 106(3) or (4) of the SSM Act is relevant to the dispute.
Under By-law 22.2(a), a lot owner or occupier who “uses” the Kitchen Exhaust System must properly maintain the system, but “not carry out any structural maintenance, repairs or replacements.”
The logical objective interpretation of By-law 22.2(a) is that responsibility for structural maintenance, repairs or replacements of the Kitchen Exhaust System (which includes, but is not limited to mechanical equipment for the operation of the kitchen exhaust system; and pipes, ducts vents and other services associated with the use, operation, maintenance and repair of the kitchen exhaust system by reason of the definition under by-law 31.1) is the responsibility of the owners corporation.
Accordingly, the starting point is to determine what is meant by “structural maintenance, repairs or replacements” of the Kitchen Exhaust System, and what are the particular defects or failures of common property.
Regrettably, the lot owners and Tornados referred to no legal authorities on the interpretation of “structural maintenance, repairs and maintenance” to support the submission that the defects in the building and kitchen exhaust system were “structural.” The only authority that the owners corporation referred to in written submissions was AAI Ltd v Kalnin Corporation Pty Ltd [2017] NSWSC 548 (Kal**nin). However, Kalnin involved the statutory warranty provisions of the Home Building Act 1989 (NSW) (HB Act) and the (then applicable) statutory definition of “structural defect” and “structural element of a building”.
No party referred to any authorities dealing with similar by-laws; or authorities referring to the contractual definition of “structural repairs” in commercial or retail leases.
There is reference to the concept of “structural changes” in the SSM Act. Under s 110 of the SSM Act, a lot owner can perform “minor renovations” to common property authorised by a resolution passed at a general meeting of the owners corporation. However, this does not apply to work involving “structural changes” under s 110(7)(b) of the SSM Act. Neither party referred to any authorities dealing with the meaning of “structural changes” under s 110(7)(b) of the SSM Act, or how (if at all) any analogy could be drawn to assist interpretation of by-law 22.
Authorities dealing with the responsibility for “structural repairs” in the context of commercial and retail lease clauses (i.e. whether the landlord or the tenant was responsible for structural repairs) were discussed by Harrison AsJ in Fasako Pty Ltd v TianyD Beauty & Hairdressing Australia Pty Ltd [2022] NSWSC 49 (Fasako-Supreme Court).
Fasako involved a dispute between a lessor (landlord) and lessee (tenant) about modification of the building fire safety system. The tenant sought to fit out the premises to include a number of partitioned beauty rooms. That could not occur in a manner compliant with building safety standards unless the fire sprinkler system was upgraded. Under cl. 9.3 of the lease (entitled “structural repair”), the lessor was responsible for keeping the building in “sound structural condition.” The words “structural” was not defined in the lease. The tenant asserted the landlord was responsible for the works and the landlord asserted the tenant was responsible. The tenant sought to terminate the lease for the landlord’s breach of cl. 9.3. The tenant argued it could not complete its fit out until the landlord repaired the fire safety system. Both parties took proceedings in NCAT.
At first instance in NCAT found the works fell outside cl. 9.3; the termination notice was invalid; and the lease remained on foot. The tenant appealed to the Appeal Panel of NCAT. That appeal succeeded and the matter was remitted to the Tribunal. The landlord appealed the Appeal Panel decision under s 83(1) NCAT Act to the Supreme Court. The Supreme Court (Harrison AsJ) dismissed the appeal. The landlord appealed to the NSW Court of Appeal. The NSW Court of Appeal refused leave to appeal (Fasako Pty Ltd v TianyD Beauty & Hairdressing Australia Pty Ltd [2022] NSWCA 112).
At [179]-[182] Harrison AsJ cited with approval the Appeal Panel’s reasoning that relied upon the principles in Holus Bo**lus Pty Ltd v The Wicko Pty Ltd [2012] NSWSC 497 (Holus Bolus); Advance Fitness Corporation Pty Ltd v Bondi Diggers Memorial & Sporting Club Ltd [1999] NSWSC 264; Hampson v Clyne (1967) 86 WN (NSW) 321; and Alamado Holdings Pty Ltd v Australian Window Furnishings (NSW) Pty Ltd [2006] NSWCA 224. At [180]-[181], Harrison AsJ stated:

It is incontrovertible that the kitchen exhaust system failed in the sense that it did not prevent smoke and odours escaping into lot 3 and the car park of the building. That led to the local Council orders of August-October 2022.
Whether there were other repairs to common property required that fall outside the definition of the kitchen exhaust system.
In the absence of either party assisting their own case, and the Tribunal, by obtaining independent expert evidence that clearly addresses the nature of the defects and whether they involve “structural repairs or maintenance,” the Tribunal is left with the task of sifting through the contemporaneous expert reports (and the local Council orders) to determine whether the lot owners have proved breach of duty under s 106(1)-(2) of the SSM Act. In that regard, for a tribunal of fact to be satisfied, on the balance of probabilities, of the existence of a fact, it must feel an actual persuasion of the existence of that fact and consider whether circumstantial evidence is sufficient to draw a reasonable and definitive inference beyond mere conjecture (Nguyen v Cosmopolitan Homes [2008] NSWCA 246 at [44]-[54]).
At the hearing, a number of lay witnesses were questioned about whether the repairs and maintenance was “structural,” or not. However, the opinions of a strata manager, a real estate agent, a strata committee member, or a lot owner on a technical issue is of limited relevance, and those opinions are not given any significant weight.
Critical evidence of the condition of the kitchen exhaust system and building are contained in the following (although these are not the only relevant documents, with the documents about building repairs and proposed building repairs by Altec Building and Eagle Fire prior to April 2022 also being relevant):
The Baratech report dated 17 June 2022.
The local Council orders of 17 August 2022.
The Brentnall BCA report of 10 October 2022.
The local Council orders of 11 October 2022.
The email of Mr Lu of Baratech to Mr Castrogiovanni dated 27 October 2022.
The Brentnall BCA report of 1 November 2022.
The EBS Consultants report of 21 April 2023.
The Baratech report of 17 June 2022 relevantly refers to the possibility of the leak is “through the shaft which connects the apartment and adjoining Peter’s apartment” which “implicates that the shaft separation walls probably are not sealed as per the fire rating requirements”.
The local Council order of 17 August 2022 referred to dampers and fire safety seals being “not on the current annual fire safety schedule for the building and subsequently not maintained as required with the annual fire safety statement (AFSS)”. As well, the mechanical ventilation system was “defective;” there was “inadequate” separation; and a “lack of maintenance and certification” of the mechanical ventilation system that “constitutes a significant fire hazard.”
The Brentall BCA report of 10 October 2022 identified a “very high probability” that the kitchen exhaust duct; and the shaft containing the kitchen exhaust duct “contains gaps”. Further, there were additional “defects” that gave “cause for concern” in respect of: the “masonry construction generally is likely to be substandard” such that it allows the escape of smoke from the kitchen and carpark exhaust shafts” and “the construction of mechanical ductwork is likely to be substandard” (emphasis added).
The local Council orders of 11 October 2022 contain, in substance, the same basis as the orders of 17 August 2022, but further note the “investigation reports and recommendations of the mechanical ventilation system” provided by Baratech “revealed defective/unsafe conditions” and the provision fire safety measures in the building is “inadequate”.
The email of Mr Lu of Baratech to Mr Castrogiovanni dated 27 October 2022 states that it “seems a lot of ducts and shaft walls have problems. It is not only one or two ducts” (emphasis added). That indicates that the defects go beyond merely the exhaust fan unit (by-law 22.2(b)(i)) or ducts (by-law 22.2(b)(ii)), which are matters that the lot owner or occupier who “uses” the kitchen exhaust system” are obliged to maintain and repair.
The report of Brentnall BCA dated 1 November 2022 states that “the construction of masonry fire rated walls” (emphasis added) was “not acceptable”. That is elaborated in the report as involving “the construction of the kitchen exhaust shaft” (emphasis added); the masonry walls in the electrical enclosure of the lobby of Level 3 were “constructed with visible gaps between the bricks, which would not achieve the necessary fire resistance levels” (emphasis added); that there may be other masonry walls in the building that were inadequate; and that further inspection is required.
However, the Brentall BCA report does not state that further inspections are required to determine whether there are defects. Rather, further inspection is to determine the extent of the defects, and what scope of works is necessary to repair them.
The report of EBS Consultants dated 21 April 2023 is comprehensive. Separately to defects identified in the exhaust duct (“multiple service penetrations…in the various locations throughout the tenancy that were poorly fire stopped or not fire stopped), Mr Harriman of EBS Consultant identified defects. He stated that “where the mechanical ventilation system penetrated through the blockwork shafts, I identified numerous non-compliances regarding blockwork construction of the shafts with unsealed perpends and construction joints between the concrete elements” (emphasis added).
Mr Harriman of EBS Consultants concludes that the smoke ingress was caused “as a result of lack of maintenance, unsealed sheet metal joints, a potential hole in the sheet, and unsealed brickwork shaft joints and perpends.” He further asserts that “non-compliance” (presumably meaning non-compliance with fire safety standards) is caused by a combination (emphasis added) of:
Lack of periodic maintenance, and poor workmanship during the installation of the mechanical ductwork at the installation stage;
The “unsealed shafts” to Unit 2 and 3 are attributable to “a lack of poor workmanship at construction stage when the shaft was constructed”.
The water leak in the ceiling proximate to the Stellar Land occupied lot leading to the contractor damaging the Trafalgar Fyrewrap insulation.
Further, Mr Harriman identified “various other service penetrations through the building substrates and shafts with no fire stopping system” (emphasis added); “a number of PVC pipes” without fire collars; and “a number of unsealed electrical cable service penetrations through the fire rated elements” (emphasis added). Mr Harriman concludes that the smoke has emanated “through small leaks in the duct work and brickwork shaft” (emphasis added) as well as there being “penetrations” through the “fire rated elements of the building” (emphasis added).

The Tribunal is satisfied that the defects which caused and contributed to the smoke egress into the strata building whilst the kitchen exhaust system was used by Tornados went beyond non-structural maintenance, repair and replacement of the components of the kitchen exhaust system.
When the evidence is considered in its totality, the defects involve structural maintenance, repair or replacement that fall outside the scope of by-law 22.2. The defects involve the structural integrity of the building, particularly as it pertains to fire safety. Further, there are defects in the building identified in the contemporaneous evidence that are not the kitchen exhaust system, including walls and penetrations. To the extent those defects involve the kitchen exhaust system, the owners corporation is obliged to maintain and repair under by-law 22.3(a).
The Tribunal does not accept the submission of the owners corporation that the defects and repairs required to the strata building are not structural, because they involve a “fire separation function” rather than load bearing or resisting. That submission is predicated on the Tribunal limiting the concept of “structural maintenance and structural repairs” in by-law 22.2 and 22.3 to only those elements of the building that are load bearing. That distinction incorporates principles from now repealed home building legislation. As discussed previously, the Tribunal does not apply that definition to by-law 22.2 and 22.3.
The definition of structural maintenance and structural repairs for the purpose of by-laws 22.2 and 22.3(a) is whether the maintenance and repairs affects the structural integrity of the strata building to a sufficient degree that it is regarded as structural rather than non-structural. The nature and extent of the defects identified in the contemporaneous expert reports and local Council orders, which clearly involve the fire safety of the building and the structure of the building, are of a sufficient degree that they are structural for the purpose of by-law 22.2(a) and by-law 22.3(b). There are also defects to parts of the building that are not part of the kitchen exhaust system, and cannot fall within by-law 22.2. Those defects are, irrespective of by-law 22.2, the responsibility of the owners corporation.
According, it is the obligation of the owners corporation to conduct repairs under by-law 22.3(a) and s 106(1)-(2) of the SSM Act, not the obligation of the lot owners or Tornados under by-law 22.
It is noted that some of the defects involve the ductwork of the kitchen exhaust system, which arguably falls within by-law 22.2(b)(ii). However, the defects go well beyond the pipes, wires, cables and ducts installed, or the exhaust fan unit. The defects involve a constellation and combination of different elements of the building. When considered in totality, they are structural. There is no evidentiary or legal basis for attempting to separate out, for example, repairs to the ductwork from the other defect items. Even if that artificial exercise was attempted, the other items are structural. However, the better approach is to consider the defects in their totality.
The lot owners and Tornados submit that by reason of by-law 22.3(b) the owners corporation was obliged to maintain and repair the kitchen exhaust system when the lots were unoccupied in the period between the tenancies of Portico Chicken and Tornados. The owners corporation opposes that on the basis of its definition of the word “Users” in the by-law. It is unnecessary for the Tribunal to determine that aspect of the dispute by reason of its previous findings regarding the nature and extent of the defects in the building and the operation of by-law 22.3(a).

In this matter, the tenancy ended prematurely in April 2023. However, there was a 5 year tenancy that commenced in January 2022. Damages in this matter are not assessed merely on the loss of opportunity to obtain a new tenant after April 2023, as there was an existing tenant under a fixed term lease. However, as will be discussed further, the vicissitudes and uncertainties of having a commercial tenant who pays rent throughout the duration of the tenancy are matters to be appropriately considered when assessing damages under Malec principles.
The principles for assessing damages to a landlord when a commercial tenant repudiates a lease causing termination were discussed by Nixon J in ISPT Pty Ltd and AWFP Management No 2 Pty Ltd v Cao and Zhao [2023] NSWSC 1115 (Zhao) at [180]-[184] and Richmond J in Interslice Pty Ltd v CCA Investments-Bass Hill (No 2) [2024] NSWSC 481 at [130]-[132]. Zhao was appealed to the NSW Court of Appeal (Cao v IS**PT Pty Ltd [2024] NSWCA 188, but on different grounds, and it is unnecessary to refer to that decision).
When assessing damages to a landlord for a tenant repudiating during the period of the fixed term, the landlord’s measure of damages is assessed by reference to the difference between future rental payments and the benefits the landlord will received from re-letting the premises-see also: Gumland Property Holdings v Duffy Bros Fruit Market (Campbelltown) Pty Ltd (2008) 234 CLR 237; [2008] HCA 10 (Gumland Property Holdings); Luxner Holdings Pty Ltd v Glentham Pty Ltd (2007) 35 WAR 254; Gigi Entertainment Pty Ltd v Schmidt (2013) 17 BPR 32,611; [2013] NSWCA 287 (Schmidt).
However, in such circumstances, the landlord still bears the onus of proving loss, and whether the landlord has taken reasonable steps to ‘mitigate’ loss by obtaining (or attempting to obtain) a new tenant is relevant.
As Leeming JA stated in Selkirk-Supreme Court at [127]-[130] the issue of ‘mitigation’ is misdescribed, and there is no “duty to mitigate”. Rather, what measures the lot owner has taken to avoid loss is relevant to whether, at a point in time, the actions of the owners corporation are no longer an operative cause of the loss (or no loss is established) because a lot owner is regarded as having, by its actions or inaction, caused its own loss, or the type of loss is no longer reasonably foreseeable.
In Smith, Mitchelmore J took a similar approach and stated at [39]-[40] and [45]-[46]:

In closing submissions, the lot owners provide a schedule of damages that exceeded $670,000. In the affidavit of Mr Hang, a similar schedule exceeded $618,000.
The kinds of damages claimed not only included loss of rent; but “agents letting fees;” “interest;” “bank charges” and “strata levies.”
Leaving aside whether there was sufficient documentary evidence to establish loss beyond the mere assertion of the lot owner regarding a number of these purported kinds of damages, other than loss of rental income, they are not reasonably foreseeable.
“Bank charges” are not a reasonably foreseeable loss. There is no evidence the owners corporation knew, or should reasonably have known, there was a mortgage on the lots 5 and 6. That issue was not put to Mr Screnci in cross examination, nor Mr Castrogiovanni. In any event, there is no clear evidence of any loss by reason of the lot owners having to pay an increased amount on their mortgage by reason of the owners corporation’s breach of ss 106(1)-(2) of the SSM Act. The limited documentation regarding mortgage payments is insufficient evidence of actual loss, even if it were a type of loss that is reasonably foreseeable (which, in the circumstances of this matter, it is not).
“Strata levies” are not a loss for which damages can be awarded, because strata levies are paid by all lot owners under the SSM Act to the administration and capital works funds of the owners corporation in accordance with unit entitlements. That is not a “loss” incurred by the lot owners as a result of the owners corporation’s breach of ss 106(1)-(2) of the SSM Act.
There is no provision in the SSM Act or the NCAT Act to award interest, nor would the Tribunal incorporate it into an award of damages for the same reasons as expressed by Robertson PM in Selkirk v The Owners – Strata Plan No 2661 [2024] NSWCATCD 71 at [234]-[240].
“Letting fees” are also not a reasonably foreseeable type of loss. In any event, as was put in cross examination to Mr Hang by the owners corporation’s Counsel, that is an expense that would have been incurred in any event at the end of the lease with Tornados; or if Tornados vacated the property for other reasons during the lease and a new commercial tenant was obtained. No loss is established.
The Tribunal is satisfied that the only type of reasonably foreseeable loss in the circumstances of this matter is loss of rental income. There is no evidence of any loss of outgoings. However, calculating the loss of rent amount has to take into account the expenses that would have been incurred by the lot owners in any event by reason of the management fees they would have to have paid their agent to manage the tenancy.
As discussed previously, it also needs to take into account the issue of what measures the lot owners took (and could reasonably have taken) to obtain a new tenant after April 2023; and the uncertainties and vicissitudes of obtaining a new tenant.

The evidence of Mr Romanov was that Tornados had paid a rent instalment of $22,000 for the rental period of July and August 2022. No rent was paid after that date.
The period from 3 September 2022 to 4 April 2023 (the date of termination of the lease) is 7 months.
The unpaid rental amount (exclusive of GST, which the tenant was liable to pay) was $30,000 (i.e. $10,000 x 3 months) to January 2023; and $41,667 from January 2023 to April 2023 (i.e. $10,416.67 x 4 months).
From that amount, there needs to be deducted the amount of management fees the lot owners were liable to pay their agent for managing the tenancy. Raine & Horne Cabramatta (Mr Tripodina) was the managing agent who managed the commercial lease on behalf of the landlord. Other expenses paid to a different agent to find Tornados as a tenant are not taken into account.
The evidence as to what fees the lot owners were liable to pay Raine and Horne Cabramatta is less than satisfactory. No managing agency agreement setting out fees has been referred to in submissions. There is an affidavit of the female lot owner that contains a tax invoice of Raine & Horne Cabramatta dated 10 May 2023 for $23,570.18, but this amount includes “re-leasing fees”; “unpaid management fees on rent; and providing advice.
Mr Tripodina was cross examined on what fees his agency charges to manage the lease on behalf of the landlord (T:4/9/24:P31-33). He gave evidence that the agency charges between 7-10% of the gross rent as a management fee.
For the purpose of calculating damages, the Tribunal adopts the figure of 8.5% of rent as the management fee figure.
Accordingly, the loss of rental income for the period between September 2022 and April 2023 is $71,667 less the amount payable to the agent as a management fee ($6,091.70).
The amount of loss of rent for the period September 2022 to April 2023 is $65,575.30.
The Tribunal is not satisfied that there was any unreasonable conduct of the lot owners to terminate the lease earlier than 4 April 2023. The are entitled to loss of rental income (less agency management expenses) for that period.

This is the more challenging aspect of calculation of damages, by reason of uncertainty, vicissitudes and the lack of action of the lot owners in attempting to find a tenant who, while not operating a restaurant of the type that Tornados was operating, could still fit out the commercial lots and operate a business that was not in breach of the local Council orders.
By the time of close of evidence in this matter (5 September 2024) the owners corporation had not completed repairs, although there was evidence from the owners corporation the repairs would be completed within a few months of 5 September 2024.
There was no evidence that the local Council had taken any action against the owners corporation after the issue of the Notices in August-October 2022; nor that the building had not been certified by the local Council as failing to comply with fire safety measures such that no annual Certificate was issued. There is also no evidence that other commercial tenants in the building were unable to trade.
The Tribunal is satisfied that there is significant uncertainties and vicissitudes as to the length of time Tornados would have remained a tenant, as well as the uncertainties of when a new tenant would have been obtained after the termination of the lease with Tornados.
In respect of the uncertainties of Tornados remaining as a tenant, the evidence of Mr Beven identifies that Tornados would not have been profitable. Had it not been profitable, it would likely have defaulted on its lease, and the lot owners would have to have obtained a new tenant. Although Mr Nejati takes a different view regarding the profitability of the Tornados, for the purpose of assessing damages to the lot owners the Tribunal accepts there is a probability that Tornados would not have been profitable at a relatively early point in time during the lease period. Mr Beven provided a clear and detailed methodology and relied upon less speculation as to the abilities of Mr Romanov than Mr Nejati.
The Tribunal makes clear that this finding is only in respect of the issue of calculation of damages to the lot owners, and what methodology to apply. Calculation of damages to Tornados for negligence (if any) is not what is being considered at this juncture. The substantial divergence between Mr Beven and Mr Nejati demonstrates just how speculative and uncertain the success of a commercial tenant operating a restaurant is. That uncertainty is magnified by the fact that Mr Romanov had operated a previous business that had went into liquidation. Although Mr Romanov asserted its failure was due to his divorce, that again is demonstrative of uncertainty as to future success.
The evidence of the expert valuers, Mr Lawford and Mr Doncas, was not challenged in cross examination. Their report supports a finding that the lot owners could have obtained a tenant (or tenants, if the lots were let out separately) for different types of uses and obtained rent of an equivalent amount. Again, this is subject to the uncertainties and vicissitudes of commercial leasing.
The evidence of the lot owners and Mr Tripodina as to what measures the lot owners had taken to advertise the premises and obtain a new tenant was unsatisfactory. As discussed previously, the female lot owner’s evidence in cross examination was vague and unresponsive to questions. The male lot owner’s evidence was that, primarily, it was his wife who made critical decisions regarding leasing the lots. Both he, and Mr Tripodina, appeared to adopt the position that the lots could not be rented out until the owners corporation had completed repairs.
However, this view is predicated upon the only use for the commercial space being a restaurant of the type that Tornados was operating. Porticos Chicken had been able to operate its business without difficulty, and notwithstanding the responsibility of the owners corporation to conduct repairs to common property, it appears that little or no marketing of the commercial lots with a view to ascertaining if a tenant operating a different type of business has occurred.
The uncertainties and vicissitudes of leasing the premises is also demonstrated by the period of time it was unoccupied between the tenancy of Porticos Chicken and Tornados. Much was made in submissions and cross examination regarding the aborted lease with Frangos Chicken. However, irrespective of who (if anyone) was at fault as to why Frangos Chicken did not become a tenant and perform its own fit out of the premises, the fact that the commercial lots were vacant for a considerable period of time before Tornados entered into a lease shows that obtaining a commercial tenant is not a straightforward task. However, that task is dependent on the premises being advertised, and a landlord being proactive and flexible in obtaining a new tenant.
When all of the above uncertainties are taken into account, the Tribunal assesses loss of rental income after April 2023 based upon the following different scenarios.
The first is that the ability of the lot owners to rent out the lots to a commercial tenant was affected by the owners corporation’s failure to repair the premises in accordance with the local Council orders.
If that approach is taken, then considering the evidence of Mr Screnci and Mr Castrogiovanni regarding the status of the repairs as of September 2024, the repairs were likely to be completed by December 2024. Although the matter was listed for oral closing submissions in June 2025, the evidence closed at the conclusion of the hearing on 5 September 2024, other than in respect of the further supplementary joint expert report by the accounting experts, which is separate to the issue of the date on which the repairs were complete.
The monthly rent was, from the period 4 April 2023 to 2 January 2024, $10,416.67 (exclusive of GST, which the tenant was liable to pay). The monthly rent from 2 January 2024 to the end of December 2024 was $10,833.33.
The period from April 2023 to January 2024 is 8 months (total: $83,333.36).
The period from January 2024 to December 2024 is 12 months (total: $130,000).
The periods added together total: $213,333.36.
From that amount, there needs to be a deduction for managing agency fees (8.5%). When that amount is deducted, the amount is $192,200.02.
From the amount of $192,200.02, there needs to be a percentage deduction for the uncertainty of Tornados remaining a tenant during that period, and the time it would take (if the premises were adequately advertised and marketed) to obtain a new tenant within that period. After repairs had been completed, there is no appropriate reason why the lot owners could not have obtained a commercial tenant within a short period of time, and taking into account that to attract a new tenant a rent free period is likely to have been a term of the lease.
In all the circumstances, it is appropriate to adopt a discount of 50%. The discounted amount is $96,100.
If that methodology is applied, the amount of economic loss is as follows:
Period to April 2023: $65,575.30.
Period April 2023 to December 2024: $96,100.
Total: $161,675.30.
The alternative approach is to consider whether, even in circumstances where the common property was not completely repaired to satisfy the local Council orders, the lot owners could have rented the commercial lots for purposes other than operating a restaurant of a type that involved using the kitchen exhaust system in the manner that Tornados did.
That approach is supported by (a) the evidence contained in the valuation report of Mr Lawford and Mr Doncas; and (b) the evidence of Mr Hang and Mr Tripodina (and the absence of any cogent evidence from Ms Tran) as to the lack of measures the lot owners had taken to advertise and market the commercial lots to obtain a new tenant after April 2023. That approach would not involve applying a discount for uncertainties and vicissitude, but determining at what point the owners corporation was not liable for any loss incurred by the lot owners because the lot owners had, as a matter of legal principle, caused their own loss.
If that approach was taken, the Tribunal remains satisfied that the lot owners should be awarded damages of $65,575.30 for the period to April 2023, because the lot owners could not rent the premises to an alternative tenant when the lease with Tornados was still on foot, and there is no basis for finding that the lease should have been terminated earlier than April 2023.
The issue then becomes what is the appropriate amount of loss of rent in the period after April 2023 considering the (a) the lack of concerted effort to market the commercial lots to other tenants; and (b) the difficulty in attracting a new commercial tenant for a different use of the premises when the premises had been operating previously with a rangehood/ventilation system; and the premises would need to be fitted out differently for a different tenant. There is also possibility that premises which were the subject of a local Council order would not be attractive to a new commercial tenant until the new tenant was satisfied the orders had been complied with.
If the alternative approach was taken, the lot owners would still be entitled to an award for loss of rental income for some amount after April 2023. The Tribunal does not accept that, in all the circumstances of the mater, had the lot owners taken proactive measures to market the commercial lots for a different type of tenant they would likely have obtained such a tenant within a short period of time after April 2023.
If the alternative approach was taken, it would not make any difference to the amount awarded to the lot owners. The amount of $96,100 is equivalent to approximately 10 months loss of rent for the period after April 2023 (the rent amount, after deduction for the management fee, being $9,531.26). That period of time is an appropriate period of time for the lot owners to obtain a new, different type of tenant to Tornados such that any loss after that period of time is caused by the actions of the lot owners. It is unnecessary to make a finding as to whether the owners corporation has proved ‘failure to mitigate’ at any earlier period of time.

In closing submissions, Tornados submitted that (a) the Tribunal had jurisdiction, because the relevant time when the Tribunal had jurisdiction was when the cause of action arose; and (b) the Tribunal should award substantial damages to Tornados. However, if the Tribunal was to find there was no jurisdiction, Tornados sought the matter be transferred to a court of competent jurisdiction.
The owners corporation submitted the Tribunal has no jurisdiction, because who is an “interested person” under s 226 of the SSM Act was limited to an “interested person” as at the date the proceedings were commenced in the Tribunal, and at that point in time Tornados was not an interested person. If the Tribunal found that there was no jurisdiction, the owners corporation sought that the proceedings be dismissed rather than transferred, because Tornados had chosen to litigate in the Tribunal notwithstanding the Tribunal has no jurisdiction.
In respect of “interested person” under s 226 of the SSM Act, the only potential categories Tornados falls into is “a person having an estate or interest in a lot or an occupier of a lot” under s 226(1)(d). A lessee has, during the term of the lease, a legal interest in the lot (by reason of its legal rights as a lessee to occupy the lot) and, further, is an “occupier.”
There is no doubt that during the period of time the lease was on foot between January 2022 and April 2023, Tornados was an “interested person” under s 226, such that the Tribunal had the power to “make an order to settle a complaint or dispute”.
Once a person or entity has standing to bring proceedings in the Tribunal because they are “an interested person, original owner or building manager” under s 232(1), the Tribunal may, or may not, have the power to consider the cause of action. That issue has been considered in Coscuez International Pty Ltd v The Owners-Strata Plan No 46433 [2022] NSWCATAP 147 (Coscuez International) at [133]-[134]; White House Developments Pty Ltd v The Owners - Strata Plan No 70276 [2025] NSWCATAP 68 (although in the context of the causes of action and remedies of a lot owner against an owners corporation for breach of the duty in s 106(1)-(2), rather than an occupier); and The Owners - Strata Plan No 55468 v Silberstein [2025] NSWCATAP 102 at [111]-[117].
In this matter, a party who was an occupier, or had a legal interest in a lot, as at the date of the cause of action (negligence) has commenced Tribunal proceedings against an owners corporation in the Tribunal on a date after their occupation and legal interest in the lot (as compared to legal interests generally) has ceased.
The critical first issue for determination is whether ss 226(1)(d) and 232(1) of the SSM Act gives the Tribunal jurisdiction to consider proceedings brought by a former commercial tenant in the tort of negligence. In respect of that issue, if “interested person” is defined as an “interested person” as at the date of the cause of action, then Tornados has standing in the Tribunal. If “interested person” is defined as “interested person” as at the date proceedings are commenced in the Tribunal, it does not. As at the date proceedings were commenced in the Tribunal on 10 August 2023, Tornados was not “an occupier” of the lot. It also did not, on the evidence before the Tribunal have an estate or interest “in the lot.” There may be situations were a commercial tenant has an estate or interest in the lot at the date of commencement of proceedings even though the lease has ended or they are not in occupation. For example, the commercial tenant may have loaned monies to the landlord with the lot as security for the loan. That may be an “estate or interest” in the lot that continues after occupation has ceased, but it is unnecessary to further explore that issue. In this matter, the only evidence of Tornados having an interest “in the lot*”* (emphasis added) was the rights it had under the terms of the lease to occupy the lot which may have been able to be protected, for example, by relief against forfeiture if the lot owners sought improperly to take possession of the lot while the lease was on foot.
However, “an estate or interest in the lot” (emphasis added) cannot be interpreted so broadly that it includes any cause of action that a commercial tenant may have against an owners corporation (or a lot owner/landlord) that has arisen at any time during the course of the commercial tenancy. That is not an “estate or interest in the lot” but rather a potential right the party may have against owners corporation (or lot owner, for example, to sue for damages under the terms of the lease).
The issue of whether a person who is no longer a lot owner or occupant at the time Tribunal proceedings have been commenced has been given some Tribunal and Appeal Panel consideration.
In Vojkoic v Bicioc [2020] NSWCATAP 128 (Vojk**oic) a person who was never a lot owner and was no longer an occupant of the lot at the date Tribunal proceedings were commenced sought orders that relevantly included an order removing persons as strata committee members (s 238 of the SSM Act). The application was dismissed at the former occupant appealed to the Appeal Panel. The Appeal Panel raised, but did not determine (at [26]) whether the former occupant had standing to bring the Tribunal proceedings in the first place.
Rather, the Appeal Panel took into account that the former occupants “belief in the mismanagement of the scheme nor his alleged financial interest are sufficient for him to have an ongoing interest as an interested person” as a basis for refusing leave to extend time to bring the appeal (at [27]-[28]). The appeal was dismissed.
In Bartlett v The Owners-Strata Plan No 123**75 [2025] NSWCATCD 92 (Bartlett), the Tribunal (Burton SM) considered an application by a former lot owner involving retrospective variation of levies paid by the former lot owner in circumstances where the former lot owner argued the levies should not have been imposed because they were in respect of costs of the owners corporation in former Tribunal proceedings against the former lot owner were the former lot owner was the successful party, having achieved consent orders in its favour.
At the time Tribunal proceedings were commenced, Mr Bartlett was the owner of the lot. However, during the course of the proceedings, he sold the lot. Burton SM held (at [16]-[28]) that because Mr Bartlett was an “interested person” at the date Tribunal proceedings were commenced, the Tribunal did not lose jurisdiction because the lot owner had subsequently sold the lot. However, Burton SM was not, as in this matter, dealing with a situation where the party bringing Tribunal proceedings was not a lot owner, occupant or had an interest or an estate in the lot as at the date proceedings were commenced.
In Griffinchuk No 1 Pty Ltd ATF Griffinchuk Family Trust v The Owners-Strata Plan No 92**745 [2025] NSWCATAP 273 (Griffinchuk) the Appeal Panel considered an appeal from a decision of the Tribunal where the Tribunal had dismissed a claim for compensation or damages brought by a lot owner under ss 106(5) and 232(1) of the SSM Act because the Tribunal proceedings had been commenced after the lot owner had sold the lot. The Tribunal determined the former lot owner was not an “interested person” under s 226 of the SSM Act because they were not a lot owner or occupier at the date proceedings were commenced in the Tribunal. Accordingly, they had no standing to bring proceedings in the Tribunal. The Tribunal decision at first instance referred to the decision of Wilson SM in Frampton v The Owners-Strata Plan No 35012; The Owners-Strata Plan No 35012 v Frampton [2019] NSWCATCD 15 (Frampton) as supporting the finding of absence of jurisdiction.
The Appeal Panel held at [49]-[57] that there was no error of law in the Tribunal’s finding that the former lot owner was not an “interested person” under s 226 of the SSM Act, because as at the date Tribunal proceedings were commenced they were no longer a lot owner.
The Tribunal, in this matter, acknowledges that the decisions of Bartlett and Griffinchuk were delivered after 4 June 2025. However, the decisions of Frampton and Vojkoic pre-dated the last date of submissions. Both parties have had the opportunity to make submissions on the issue of jurisdiction. It is the task of all courts and Tribunals to determine whether they have jurisdiction in the matter. Calling on further submissions on the parties by reason of the decisions in Bartlett and Griffinchuk has no utility, in circumstances where both parties have addressed the issue of jurisdiction and the Tribunal has to determine the issue of jurisdiction.
Tornados submits that the powers of the Tribunal under the SSM Act are broad and should not be interpreted in an unduly restrictive way on the issue of jurisdiction. It’s position, in substance, is that it is sufficient that Tornados was an occupier of a lot and had an interest in the lot as at the date its cause of action in negligence arose.
The Tribunal does not agree with that interpretation.
Principles of statutory interpretation are well established. The Tribunal must interpret all the words of a statute to give them meaning, in the context of the purpose of the statute and the provisions of the statute as a whole (Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28 at [69]-[78]). In respect of a grant of power, it is inappropriate to read words conferring jurisdiction or making powers to a Court (or Tribunal) by making implications or imposing limitations that are not found in the express words (Owners of “Shin Kobe Maru” v Empire Shipping Company Inc [1994] HCA 54; (1994) 181 CLR 404 at 421).
Further, the High Court (Hayne, Heydon, Crennan and Kiefel JJ ) stated in Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27; [2009] HCA 41 at [47]:

The Tribunal does not regard the language of ss 226 and 232(1) as to being so broad that, when considered in a manner that is consistent with the purpose and policy of the SSM Act, it allows a person who was only an “interested person” at the date the cause of action arose, but is not an “interested person” at the date proceedings are commenced, to fall within the statutory definition. As Rothman J stated in The Owners-Strata Plan No 37762 v Pham [2006] NSWSC 1287 at [63], the Tribunal does not have the power to make orders to “settle” any type of dispute involving a strata scheme, and the Tribunal must have jurisdiction to determine the dispute.
A claim by a commercial tenant who is not a commercial tenant of the strata scheme (and thus, not an occupant or a person with an estate or interest in a lot) can take proceedings in a court to sue for the tort of negligence. This is not a cause of action where the legislature has clearly identified a statutory right to bring proceedings in the Tribunal, such as s 106(5) of the SSM Act. Nor has the legislature identified a statutory right to which the Tribunal has exclusive jurisdiction. In the absence of clear words that identify an “interested person” to include a “formerly interested person” there is no appropriate basis to interpret s 226 and 232(1) as giving standing to sue in the Tribunal to a person who, at a date prior to commencement of proceedings, is no longer an “interested person”.
Accordingly, had Tornados commenced proceedings in the Tribunal on or before date the lease ended, it would be an “interested person” and the Tribunal would have the power to consider (a) whether or not the tort of negligence against the owners corporation falls within s 232(1)(a)-(f) of the SSM Act; (b) if so, whether negligence is established; and (c) if so, whether loss or damage is established. However, as Tornados was not an “interested person” at the relevant time to bring proceedings in the Tribunal, it is inappropriate to consider those issues.
It is also unnecessary to consider whether, if Tornados was an “interested person” at the relevant time, time would be extended under s 41 of the NCAT Act to bring the proceedings in the Tribunal (Coscuez International at [108]-[111]).

The principles regarding transfer of proceedings by the Tribunal to a court where considered by the Appeal Panel in decision including BKB Constructions Pty Ltd v Sawan [2022] NSWCATAP 103 and Promina Design & Construction Pty Ltd v The Owners—Strata Plan No 97449 [2023] NSWCATAP 252. The Tribunal needs to be satisfied that there is a “sufficient cause;” “sound ground;” or “good reason” for the transfer to be made. A basis for transferring proceedings is that the Tribunal does not have jurisdiction in the matter. However, that does not mean that in every matter the Tribunal does not have jurisdiction it is appropriate to transfer proceedings to a court, simply because an applicant makes that application.
In this matter, the owners corporation did not raise that Tornados was not an “interested person” until the hearing on 4 September 2024. That is certainly not a criticism of Mr Purdy of Counsel, who quite appropriately raised the issue. The Tribunal accepts that the issue of jurisdiction is, ultimately, a matter for an applicant to establish and there is no doubt that when the issue of jurisdiction was raised, the primary position of Tornados was that the Tribunal had jurisdiction. It was the alternative position of Tornados that the proceedings be transferred.
Considering the period of time Tornados proceedings were in the Tribunal without the issue of jurisdiction being raised; and that Tornados had an arguable case on the Tribunal having jurisdiction, the Tribunal is satisfied that, in the particular circumstances of this matter, it is appropriate to transfer Tornados proceedings to a court of competent jurisdiction.
Considering the legal issues involved in Tornados negligence claim; the nature of the evidence; and the amount claimed, the Tribunal is satisfied that the proceedings should be transferred to the Supreme Court rather than the District Court (although acknowledging that the quantum of Tornados claim is less than $1,250,000).
In transferring the proceedings, by reason of cl 6(1)(b) of sch 4 the proceedings, once transferred, are to “continue before that court as if proceeding had been instituted there”. In those circumstances, the Tribunal has avoided making factual and legal findings in Tornados proceedings. The findings that were made in respect of the accountancy expert evidence were in respect of damages awarded to the lot owner under ss 106(5) and 232(1) of the SSM Act. However, it is sufficient to observe that (a) the legal principles discussed by the High Court in Mallonland Pty Ltd v Advanta Seeds Pty Ltd (2025) 418 ALR 639; [2025] HCA 25, (b) what the owners corporation knew, or reasonably should have known, about the state of repair of the kitchen exhaust system prior to April 2022 will be relevant; and (c) the legal test for negligence is far different to the test for breach of duty under ss 106(1)-(2) of the SSM Act.

Hang v The Owners-Strata Plan No 77261; Tornados Smokehouse Concord Pty Ltd v The Owners-Strata Plan No 77261; The Owners-Strata Plan No 77261 v Hang

At a glance

Court

Decision date

Before

Catchwords

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Catchwords

Judgment

Source

REASONS FOR DECISION

Introduction

Background

Procedural History

Lot Owners Outline of Opening Submissions

Tornados Outline of Opening Submissions

Owners Corporation’s Outline of Opening Submissions

The Claims and Defences of the Parties

Lot Owners-Points of Claim

Owners Corporation-Points of Defence to Lot Owners Claim

Tornados-Points of Claim

Owners Corporation-Points of Defence to Tornados Claim

Owners Corporation Claim Against the Lot Owners and Tornados

Documentary Evidence of the Parties

Lot Owners

Tornados

Owners Corporation

The By-laws of the Strata Scheme

Relevant Events-Documentary Materials

Tornados-Entry Into The Lease; Fit-Out; and Works

Complaints About Smoke and Odours in About April 2023 and the Response of the Owners Corporation

Evidence of Lay Witnesses And Evidence During Cross Examination

Lot Owners

Cross Examination of Mr Hang

Mr Tripodina

Mr Romanov

Affidavit of 10 October 2023

Affidavit of 30 January 2024

Affidavit of 9 August 2024

Cross Examination of Mr Romanov

Mr Castrogiovanni

Cross Examination of Mr Castrogiovanni

Mr Screnci

Cross Examination of Mr Screnci

Re-Examination

Expert Accountancy Evidence-Losses of Tornados

Mr Nejati’s Expert Report in Chief

Mr Beven’s Expert Report in Chief

Accounting Joint Expert Report

Cross Examination of the Experts

Supplementary Accounting Joint Expert Report

Rental Valuation Report

Closing Submissions of the Parties

Closing Submissions of the Lot Owners and Tornados

Lot Owners

Tornados

Owners Corporation

THE LOT OWNERS’ CLAIM AGAINST THE OWNERS CORPORATION

Jurisdiction of the Tribunal and Applicable Legal Principles Under ss 106 and 232(1) of the SSM Act

Interpretation of By-Law 22

What Were Causes of the Smoke, Fume and Odour Egress and How Should By-Law 22 Be Interpreted?

Why Did the Kitchen Exhaust System Fail When Tornados Was Using It?

Conclusion

Has the Owners Corporation Breached Its Duty Under ss 106(1)-(2) of the SSM Act?

What Damages to the Lot Owners Are Reasonably Foreseeable As A Result of the Breach?

Damages-Applicable Principles

What Type of Loss is Reasonably Foreseeable?

Assessment of Loss

The Period from 17 August 2022 to 4 April 2023

The Period After 4 April 2023

Conclusion

The Owners Corporation’s Proceeding Against the Lot Owners Seeking Damages and Compensation for the Cost of Repairing the Kitchen Exhaust System and Other Expenses

The Issue of Costs of the Lot Owners Proceedings Against the Owners Corporation and the Owners Corporation’s Proceedings Against the Lot Owners

Should A Quarantining Order Be Made In Respect of the Lot Owners Contributing By Way of Levies to Damages and Costs Awarded in Their Favour?

Tornados Proceedings Seeking Damages Against the Owners Corporation

Should the Proceedings Be Dismissed or Transferred?

The Issue of Costs of the Transfer

ORDERS

Case Number 2023/00381512

Case Number 2024/00065826