Maston v The Owners - Strata Plan No. 11784 - [2020] NSWCATCD 18 - NSWCATCD 2019 case summary — Zoe

NSWNSWCATCD

Maston v The Owners - Strata Plan No. 11784

[2020] NSWCATCD 18

NCAT Consumer and Commercial|2019-08-01

View original source

At a glance

Source facts

Court

NCAT Consumer and Commercial

Decision date

2019-08-01

Catchwords

STRATA AND COMMUNITY SCHEMES - Repair of common property Legislation Cited: Strata Schemes Management Act 2015 (NSW) Cases Cited: The Owners - Strata Plan No. 74835 v Pullicin

Source

Original judgment source is linked above.

Catchwords

STRATA AND COMMUNITY SCHEMES - Repair of common property Legislation Cited: Strata Schemes Management Act 2015 (NSW) Cases Cited: The Owners - Strata Plan No. 74835 v Pullicin

Judgment (13 paragraphs)

[1]

Background

This application was lodged on 03 April 2019 by James and Lunar Maston as the owners of Lot 4 in Strata Plan No. 11784 seeking the following orders under s. 232 of the Strata Schemes Management Act 2015 (SSM Act): "1. That the Owners Corporation repair in a proper and skilful manner the following defects in the common property and their respective causes: 1.1 Water ponding on the concrete path adjacent to the external southern wall of the Applicants' lot by implementation of the recommendations in the report of RHM Consultants Pty Ltd ("RHM report") dated 2 August the 2018; 1.2 Removal of the spitter trains on the northern and southern masonry walls on the stairwell adjacent to the Applicants' lot and application of grout to the voids in that area, as recommenced [sic] in the RHM report; and; 1.3 Repair the cavity flashing on the external wall of the Applicant's lot. 2. That the Owners Corporation reinstate and/or replace the gate and adjoining fences at the entrance to the Applicants' lot, by consultation and agreement with the Applicant's with the design to be in keeping with the external appearance of the strata scheme. 3. For the purposes of the proper completion and certification of the repairs, that the Owners Corporation retain a properly qualified and experienced consultant to specify, to supervise and to certify the satisfactory completion of the repairs in favour of the Owners Corporation. 4. That the repair on each of the defects be commenced within four weeks of the making of these orders (if they are not previously commenced) and be completed and certified within four weeks of commencement or such other period as the Tribunal may order."

By letter dated 07 May 2019, the respondent owners corporation's solicitors wrote to the registrar seeking leave to represent the respondent. In support of that application, Messrs Chambers Russell submitted that the proceedings give rise to questions of law and the interpretation of legislation. In expanding on that submission, Chambers Russell essentially provided a defence to the claim as follows: "2.2 Although prima facie the proceedings appeared to be a straightforward application for the owners corporation to repair and maintain the common property pursuant to its obligations under section 106 of the SSMA, the owners corporation will say in its evidence and submissions that: 1. the owners corporation entered into a contract with Qube Services Pty Ltd ("Qube") dated 15 September 2016 for remedial building works; 2. certain work under the contract (including variations) is incomplete or defective and has yet to be rectified; 3. the owners corporation obtained a preliminary building defects report from Remedial Building Solutions dated 22 October 2018 outlining defects caused by Qube under the contract ("RBS Report"); 4. the owners corporation obtained a litigation compliant report from Building and Waterproofing Reports Australia dated 23 April 2019 ("BWRA Report"), which includes the scope of works to rectify the defects identified in the RBS Report; 5. the RBS Report and the BWRA Report identifies the same defects outlined at section 4A of the application, save for the alleged removal of a gate and adjoining fences during the performance of the works; 6. the owners corporation has obtained legal advice regarding its rights to commence proceedings for breaches of statutory warranties under the Home Building Act 1989; and 7. the owners corporation has lodged a Home Building Complaint with the New South Wales Fair Trading ("Home Building Complaint") in relation to the defects outlined in the RBS Report and BWRA Report. 2.3 We note that section 106(4) of the SSMA states that: (4) If an owners corporation has taken action against an owner or other person in respect of damage to the common property, it may defer compliance with subsection (1) or (2) in relation to the damage to the property until the completion of the action if the failure to comply will not affect the safety of any building, structure or common property in the strata scheme. 2.4 The owners corporation says that the Home Building Complaint, which includes the defects outlined in the application, constitutes an "action" of the purpose of section 106(4) of the SSMA and therefore allows it to defer compliance with sections 106(1) and 106(2) of the SSMA in relation to the orders sought in the present proceedings. …

[3]

The Evidence

Both parties referred to the various reports obtained by the owners corporation, not specifically for these proceedings, but in relation to the alleged defects in the premises and the alleged incomplete or defective rectification works performed by Qube Services Pty Ltd. Those reports are as follows: 1. RHM Consultants Pty Ltd dated 02 August 2018; and 2. Remedial Building Solutions Pty Ltd (RBS) dated 22 October 2018. 3. Building and Waterproofing Reports Australia (BWRA) dated 23 April 2019 prepared by Mr Daryl Pickering.
The applicants obtained an expert report for the purpose of these proceedings from Mr Ross Thomas Brown of Abel & Brown Pty Ltd, an Hydraulic Engineer. Mr Brown is also a licensed plumbing and drainage contractor and in addition has legal qualifications but does not hold a practising certificate.
Mr Brown was instructed by Le Page Lawyers, he inspected the premises on 28 May 2019 and his report is dated 05 June 2019.
The respondent relies on the three reports listed in paragraph 5 above. I note that the RHM report and the RBS report were each obtained well before these proceedings commenced. However, it should also be noted that BWRA was initially briefed by Chambers Russell Lawyers on 09 January 2019.
The respondent also relies on a report from Neal Adams & Associates dated 03 July 2019.
The applicants also rely on a number of affidavits or statements made by Mr Maston while the respondent relies on affidavits from Mr Brad Louis who is the managing director and licensee-in-charge of Vital Strata Management Pty Ltd, the strata managing agent for the respondent and from Mr Luke Jeffrey, a solicitor employed by Chambers Russell Lawyers, who had day to day conduct of the matter under the supervision of Mr Russell.
The parties' affidavits and statements were being updated from time to time, even up to the days immediately prior to and on the hearing day. The parties sensibly took no issue in that regard as the circumstances continuously changed and developed up to the date of the hearing.

[5]

Legislation

As noted above, the application is brought pursuant to s. 232 of the SSM Act 2015. As I understand the parties' evidence and submissions, it is not disputed that it is appropriate that this claim be brought under that section and that the Tribunal has jurisdiction to hear and determine the matter.
The crucial section of the SSM Act 2015 in determining this application is s. 106(4). However, certain submissions made by the applicants also raise issues under s. 106(3). Section 106 is as follows: Part 6 Property management Division 1 Common property 106 Duty of owners corporation to maintain and repair property (1) An owners corporation for a strata scheme must properly maintain and keep in a state of good and serviceable repair the common property and any personal property vested in the owners corporation. (2) An owners corporation must renew or replace any fixtures or fittings comprised in the common property and any personal property vested in the owners corporation. (3) This section does not apply to a particular item of property if the owners corporation determines by special resolution that - 1. it is inappropriate to maintain, renew, replace or repair the property, and 2. its decision will not affect the safety of any building, structure or common property in the strata scheme or detract from the appearance of any property in the strata scheme. (4) If an owners corporation has taken action against an owner or other person in respect of damage to the common property, it may defer compliance with subsection (1) or (2) in relation to the damage to the property until the completion of the action if the failure to comply will not affect the safety of any building, structure or common property in the strata scheme. (5) An owner of a lot in a strata scheme may recover from the owners corporation, as damages for breach of statutory duty, any reasonably foreseeable loss suffered by the owner as a result of a contravention of this section by the owners corporation. (6) An owner may not bring an action under this section for breach of a statutory duty more than 2 years after the owner first becomes aware of the loss. (7) This section is subject to the provisions of any common property memorandum adopted by the by-laws for the strata scheme under this Division, any common property rights by-law or any by-law made under section 108. (8) This section does not affect any duty or right of the owners corporation under any other law.

[6]

Consideration and Determination

For further clarity in relation to s. 232 of the SSM Act 2015, I note that the Appeal Panel in the recent decision in The Owners - Strata Plan No. 74835 v Pullicin; The Owners - Strata Plan No. 80412 v Vickery [2020] NSWCATAP 5 noted that their conclusion was based on, among others, the following proposition: [8]. … (4) Section 232(1)(e) of the 2015 Management Act confers jurisdiction on the Tribunal to entertain complaints or disputes between a lot owner and an owners corporation about the operation of a strata scheme for the failure to comply with the duty in S. 106(1) to maintain and repair common property.
I have included as Annexure "A" to these reasons a chronology prepared by the solicitors for the respondent. This chronology seems to me to be expressed in factual terms only without the insertion of any opinions, submissions or conclusions. I do not understand the applicants to dispute the contents but they may well not be able to confirm or deny some of the items.
In my opinion the use of the chronology makes it much easier to understand the issues, at least the relevant issues, in this application and I will refer to it at a number of points.
It is clear and is not a matter for dispute that at some stage prior to September 2016 there were certain building defects in the scheme. As a result, the owners corporation engaged a builder called Qube Services Pty Ltd to undertake certain rectification works.
At some stage, probably about the middle of 2017, it became apparent that there were defects either not completed or else in the works performed by Qube. This resulted in a site meeting being arranged between the owners corporation's representatives and Qube in about December 2017.
It is important to note, as will be discussed further below, that the applicants submit that from about the same time, in fact 06 September 2017, the respondent was engaged in negotiations with Qube in relation to the defective works, without any resolution and without undertaking any actual "action" against Qube until 6 May 2019. It was on that latter date that the respondent instructed its solicitors to lodge a complaint in relation to the defective building works with the Office of Fair Trading.
I have set out the particulars of the applicants' claim as lodged in paragraph 1 above. By the time of the hearing, the applicants' claim had been refined to a certain extent to include the following complaints in relation to defective works: 1. water pooling on the common property rear courtyard of Lot 4; 2. incorrect installation of the flashing of Lot 4; and 3. unauthorised removal of fixtures attached to Lot 4 property being a gate and fencing.
It needs to be remembered that the claimed defective works in the strata scheme extend far beyond Lot 4. Close to Lot 4 the expert reports make it clear that there are other issues in the concrete courtyards including cracking and the harmful effect on the appearance of the building, as well as water ingress and dangerous nosings on stairs.
Where any of those defects relate to common property, it is agreed that the owners corporation has the mandatory duty under s. 106(1) to maintain and keep in good repair that common property and the respondent does not seek to suggest it can avoid that duty.
However, it is also agreed between the parties that in an appropriate case or in relation to particular items of common property an owners corporation may take two kinds of action to avoid having to comply with that strict duty.
The first action is that an owners corporation may pass a special resolution under s. 106(3) to the effect that it is inappropriate to maintain, renew, replace or repair the property and that decision will not affect the safety of any building, structure or common property in the strata scheme or detract from the appearance of any property in the strata scheme.
The second action that an owners corporation may take is to consider taking action against an owner or another person in respect of the damage to common property. If it does take such action (whatever that may mean) it may defer compliance with s. 106(1) (or subsection (2) in relation to renewal or replacement of any fixtures or fittings comprised in common property or any personal property vested in the owners corporation) until the completion of the action against the owner or other party. However, that compliance may only be deferred if the failure to comply will not affect the safety of any building, structure or common property in the strata scheme.
The crux of this application and the respondent's defence to it is whether in these particular circumstances deferral of the duty to comply affects the safety of any building, structure or common property in the strata scheme.
In grappling with that central issue it will be necessary to consider those issues set out in the applicants' statement of issues in paragraph 4 above.

[7]

Shih and Pullicin

Before embarking on my consideration and determination of the issues in these proceedings, I need to clarify whether some of the decisions to which I was taken have been overtaken by later internal Appeal Panel decisions.
I was taken to my decision in Pullicin v The Owners - Strata Plan No. 74835 [2019] NSWCATCD 17 July 2019. I note in passing that in that matter Le Page Lawyers appeared for the applicants and Chambers Russell Lawyers appeared for the respondent.
In Pullicin, and specifically in relation to the meaning of "action" for the purpose of s. 106(4), I refer to the decision of Senior Member Boyce in Shih & Oars v The Owners - Strata Plan No. 87879 [2018] NSWCATCD 74.
In those respective matters, both Senior Member Boyce and I ordered the respondent owners corporation to pay damages to the applicant owners pursuant to s. 106(5) of the SSM Act 2015.
In order to come to our respective decisions, Senior Member Boyce and I each had to make findings and a determination in relation to s. 106 (4) and each of us did so.
In a rather complicated set of circumstances which I do not intend to describe in detail, I simply state that my determination followed the Appeal Panel decision in The Owners - Strata Plan No. 30621 v Shum [2018] NSWCATAP 15, published on 08 January 2018. That decision found that the Tribunal could make an award of damages under s. 106(5) of the SSM Act 2015. In Shih, Senior Member Boyce also relied on s. 106(5) of the SSM Act 2015.
On 31 October 2019, an internal Appeal Panel decided in Shih v The Owners - Strata Plan No. 87879 [2019] NSWCATAP 263 that the Tribunal did not have jurisdiction to award damages under s. 106(5) of the SSM Act 2015.
That situation was resolved as recently as 15 January 2020 in the Appeal Panel decision in The Owners - Strata Plan No. 74835 v Pullicin; The Owners - Strata Plan No. 80412 v Vickery referred to in paragraph 18 above. In that matter, at paragraph 10 (11), the Appeal Panel said: "(11) The 2015 Management Act does not, expressly or impliedly, impose or confer power on the Tribunal to make orders by way of compensation for failure to comply with the duty in s. 106(1)."
The purpose of this lengthy detour is to make clear that none of the internal Appeal Panel decisions just referred to took issue with the findings in Pullicin and Shih in relation to s. 106(4) at first instance.

[9]

"One Action or More Than One Action"

The applicants submitted that the temporary protection provided by s. 106(4) applied to only one action, not successive actions.
I note in the applicants' Statement of Issues set out in paragraph 4 above states, "5. Whether any "action" taken by the Respondent extends to more than one "action" against more than one complainant."
It seems to me clear that the applicants intend that that issue refers to whether there can be more than one "action" against more than one third-party. The applicants submit that there cannot.
The respondent submits that there is nothing in s. 106(4) to support that submission and that there is no reason why another "action" can also obtain the benefit of s. 106(4).
In my opinion, there is only one "action" at any time in these proceedings and that the successive "action" of the insurance claim follows on from the circumstances of Qube being subject to external administration. That is, at any one time, there is only ever one "action". In any event, I agree with the respondent's submission and I find that there is no reason why the respondent owners corporation cannot seek to defer compliance with its duty under s. 106(1) and (2).
Still in relation to "taking action", the applicants submit, and I agree, that no relevant action was undertaken for a lengthy period from the end of 2017 until May 2019. In Pullicin, and I think in Shih also, the time period was relevant because the respective applicants were seeking compensation or damages during periods when relevant action was not being "taken". For example, in Pullicin, the applicants were seeking compensation for lost rent during periods when the owners corporation was relevantly not taking action.
I agree with the respondent's submission that this is not relevant in the current proceedings. The applicants are not seeking monetary compensation for having to put up with, for example, not having the use of the gate or fence for an extended period. What they are seeking is action in the form of rectification. In that regard I need to consider the current circumstances at the time of this decision or at the time of the hearing, not what may have been occurring, or not occurring, in 2017 or 2018.

[11]

The Safety of Any Building, Structure or Common Property in the Strata Scheme

I repeat my findings at paragraphs [37] to [40] in Pullicin that if the defects in the common property cause or may cause hurt or injury to the occupants or causes risk of hurt or injury to the occupants then the duty to comply with the mandatory duty in s. 106(1) and (2) may not be deferred pursuant to s. 106(4).
Therefore, in considering whether the respondent may defer compliance with s. 106(1) and (2) I have to determine first whether the respondent is "taking action" and I have found above that it is doing so relevantly for the purpose of s. 106(4).
I now have to consider whether the deferral of compliance will affect the safety of any building, structure or common property in the strata scheme.
In relation to the stairs from the courtyard outside Lot 4 down to the entrance area, I find on the basis of the reports of Mr Pickering, Mr Brown and Mr Adams that these stairs were a slip and fall risk as a result of the uneven and slippery "nosings" to the steps.
I find on the basis of the supplementary affidavit dated 12 July 2019 of Mr Luke Jeffrey and its attachments that that safety issue has now been rectified by the replacement of the defective nosings.
To the extent that the Lot 4 flashing was alleged to be defective by the applicants, I accept the opinion of Mr Pickering that there may be a cosmetic issue but that the flashing has been correctly installed and is performing as required. I find there is no risk to the safety of any building, structure or common property in the strata scheme caused by that flashing.
In relation to the water ponding on the common property outside Lot 4, the applicants rely on the report of Mr Brown to the effect that the ponding of water "represents a real and foreseeable risk of a 'slip and fall' type accident to Lot 4 building occupants, as well as visitors, guests and other users of the property in or about this area" at paragraph 43 of his report.
The applicants also rely on some observations and opinions of Mr Pickering to the effect that certain water penetration has resulted in unhealthy or dangerous conditions including into an electrical junction box. The applicants do not state how this relates to the current proceedings on behalf of Mr Maston and his mother. I cannot see on the basis of the evidence before me either that this water penetration is resulting from the subject water ponding or has anything to do with the defects the subject of this application.
In relation to the "slip and fall" risk, I find on the detailed and comprehensive evidence of Mr Adams that there is no such risk in the subject areas whether wet or dry. Mr Adams's investigation involved rigorous testing and the application of accepted standards and puts beyond doubt that there is any relevant risk to safety by a "slip and fall" type of accident.
The applicant also refers to Mr Adams's opinion at paragraph 4.2.2 of his report to the effect that if the surface remains wet or damp for extended periods of time it is likely to encourage the growth of biological matter which in sufficient quantities has the potential to cause almost any surface to be slippery when wet. There is no evidence that the common property outside Lot 4 remains wet for extended periods of time. There is not the slightest hint that any "biological matter" has appeared or is likely to appear within any relevant time frame.
In relation to the damaged or removed fence and gate, the applicants submit that whether those items are common property or lot property is not the issue. However they are to be characterised, the owners corporation's contractor removed them and the owners corporation must have a duty to replace those items. It cannot be the case that an owners corporation can simply remove common or lot property, affecting the applicants' lot, and not be required to replace them.
Mr Russell submits there are three possibilities: 1. the gate and fence are common property, in which case the owners corporation has a duty to "repair" them by replacement; or 2. the gate and fence are lot property but the owners corporation is not repair/replace them but rather it may have a liability to compensate the owners under s 122(6) of the SSM Act 2015; or 3. the gate and fence are in a legal purgatory in the sense that an approval to install the gate and fence cannot be found and it may be an illegal and unauthorised alteration to common property.
I find that on the evidence available the applicants have not proved their case in relation to the gate and fence. I cannot determine whether the items are lot or common property. I do not agree that they in a legal purgatory, even if they are an unauthorised alteration to common property: see Davenport v The Owners - Strata Plan 536; The Owners - Strata Plan 536 v Davenport [2018] NSWCATAP 301.
For the reasons above, I find that to the extent that the items complained of in this application require maintaining or repair or replacement under s. 106(1) or (2) of the SSM Act 2015 do not affect the safety of any building structure or common property in Strata Scheme 11784 and the respondent may defer compliance with its duty under s. 106(1) or (2) of the SSM Act 2015 until the outcome of the claim against the owners corporation's insurer is determined.
For those reasons, the application is dismissed.

[12]

    ANNEXURE "A"
    CHRONOLOGY
    JAMES MASTON & LUNAR MASTON v THE OWNERS - STRATA PLAN NO 11784
    NSW Civil and Administrative Tribunal Consumer and Commercial Division:
    SC 19/16129

Date Event 15 September 2016 Remedial building contract is entered into Mid-2017 Defects become apparent On or about December 2017 Site meeting is arranged, but Qube do not attend 31 January 2018 Site meeting is held with Qube 21 May 2018 Fee proposal request is sent to RHM Consultants Ply Ltd ("RHM"), but does not include an investigation of the defects arising out of the works carried out by Qube under the contract 22 May 2018 RHM issue its fee proposal 28 June 2018 RHM is engaged in accordance with its fee proposal, and also to clarify the issues in unit 1 and 4 24 July 2018 Chambers Russell Lawyers ("Chambers Russell") is instructed to issue a notice of dispute on Qube without the report that RHM had been instructed to prepare 2 August 2018 Chambers Russell send the notice of dispute to Qube 10 August 2018 Qube advise that it is happy to meet at the strata scheme to discuss the outstanding works 27 August 2018 RHM advise that it cannot investigate the defects arising from the work carried out by Qube under the contract 3 September 2018 The owners corporation obtains a fee proposal from Remedial Building Solutions ("RBS") 3 October 2018 Site meeting is held with Ms Julie Edwards of the strata committee, RBS and Qube 22 October 2018 RBS issue its report 28 November 2018 Mediation application is lodged by the Applicants 4 December 2018 The strata committee resolve a motion for Brad Louis to attend mediation on the owners corporation's behalf 11 December 2018 Fee proposal request is sent to RBS to prepare a scope of works to rectify the defects 13 December 2018 RBS advise that it is unable to prepare a scope of works 29 January 2019 Chambers Russell is instructed to engage Building and Waterproofing Reports Australia ("BWRA") to prepare a scope of works 7 February 2019 Chambers Russell engage BWRA to prepare a scope of works 28 February 2019 Brad Louis informs Mr Maston that Chambers Russell have been engaged to address the defects arising from the work carried out by Qube under the contract 3 April 2019 The Applicants commence proceedings 23 April 2019 BWRA issue its report 6 May 2019 Chambers Russell are instructed to lodge a Home Building Complaint with New South Wales Fair Trading ("NSW Fair Trading") 14 May 2019 The owners corporation resolve to serve the reports prepared by RBS and BWRA on Qube 23 May 2019 NSW Fair Trading advise Chambers Russell to serve the reports directly on Qube 29 May 2019 Chambers Russell serve the reports prepared by RBS and BWRA on Qube 30 May 2019 Qube advises Chambers Russell that it requires a further 14 days to consider the reports 3 June 2019 Chambers Russell consent to the extension and request that Qube provide a response by 26 June 2019 18 June 2019 Qube are place under external administration 19 June 2019 Chambers Russell lodge a claim with Gallagher Basset Services Pty Ltd, the relevant Home Building Compensation Fund claims manager ("Gallagher Bassett") following instructions received from the owners corporation ("HBCF Claim") 28 June 2019 Gallagher Bassett confirm that a valid trigger event has occurred and the HBCF Claim is under investigation 4 July 2019 Gallagher Bassett confirm that an insurable event under the policy has occurred and an inspection will be arranged shortly

Maston v The Owners - Strata Plan No. 11784

At a glance

Court

Decision date

Catchwords

Source

Catchwords

Judgment (13 paragraphs)

Parties

Legislation Cited (1)

Cases Cited (6)