(ii) Principles
156The question as to whether a breach by an owners corporation of its duty under the Act gives rise to a private cause of action by a lot owner who suffers damage has been the subject of consideration in a number of cases: Lubrano (supra) per Young J, as His Honour then was; Seiwa (supra), Nicita v Owners of Strata Plan No 64837 [2010] NSWSC 68 per Bryson AJ and Stolfa v Owners Strata Plan 4366 and Ors [2010] NSWSC 1507, per Brereton J.
157The issues concerning a breach of statutory duty under s 62 were also considered in Ridis v Proprietors of Strata Plan 10308 [2005] NSWCA 246, (2005) 63 NSWLR 449 and Trevallyn-Jones (supra).
158In Lubrano, supra, the Court determined the preliminary question in that case (extracted below) in the affirmative. That question related to the statutory duty under s 68 of the Strata Titles Act 1973, the predecessor to Section 62 of the Act and which was expressed in similar terms. The preliminary question was in the following terms:
"Does the failure by a body corporate to comply with (a) Obligations under s 68 of the Strata Titles Act 1973... give rise to separate causes of action in a lot owner who suffers damage as the result of that failure?"
159Young J in Lubrano referred to the principle stated by Vaughan Williams LJJ in Groves v Lord Wimborne [1898] 2 QB 402, 415-6, as follows:
"...it cannot be doubted that, where a statute provides for the performance by certain persons of a particular duty, and someone belonging to a class of persons for whose benefit and protection the statute imposes the duty is injured by failure to perform it, prima facie, and, if there be nothing to the contrary, an action by the person so injured will lie against the person who has so failed to perform the duty."
160Young J also referred to a passage in Whittaker v Rozelle Wood Products Ltd (1936) 36 SR (NSW) 204, 207 per Jordan CJ:
"If a statute creates a new duty, the question whether a person who suffers damage by reason of a breach of the duty may maintain an action in the ordinary Courts in respect of the breach depends upon the intention of the legislature, which is to be gathered upon a consideration of the particular statute read as a whole..."
161It has been accepted as now established law that the duty of an owners corporation under s 62 is a statutory duty owed to each lot owner, and its breach gives rise to a private cause of action under which damages may be awarded to a lot owner for of the duty: see Seiwa (supra) and Trevallyn-Jones (supra) at [132]. However, it is necessary to examine the circumstances of each case for there are, as discussed below, limitations upon what may be considered to be recoverable loss or damage, and in particular, losses that may be considered as having a causal nexus with a breach of duty.
162The facts in Seiwa, as earlier noted, involved circumstances in which there had been water penetration to a unit due to the failure of a water proofing membrane on the common property that sealed the floor of its external patio so as to prevent water from the surface of the patio entering into the unit.
163Brereton J in Seiwa observed:
"3 There is no suggestion in this case that subsection (3) is applicable. It is subsection (1) that is relevant. Section 62(1) imposes on an owners corporation a duty to maintain, and keep in a state of good and serviceable repair, the common property. That duty is not one to use reasonable care to maintain and keep in good repair the common property, nor one to use best endeavours to do so, nor one to take reasonable steps to do so, but a strict duty to maintain and keep in repair.
4 The duty to maintain involves an obligation to keep the thing in proper order by acts of maintenance before it falls out of condition, in a state which enables it to serve the purpose for which it exists [Hamilton v National Coal Board [1960] AC 633, 647 (Lord Keith of Avonholm); Haydon v Kent County Council [1978] QB 433, 464 (Shaw LJ); Ridis v Strata Plan 10308 [2005] NSWCA 246, [161]]. Thus the body corporate is obliged not only to attend to cases where there is a malfunction, but also to take preventative measures to ensure that there not be a malfunction [Greetings Oxford Koala Hotel Pty Ltd v Oxford Square Investments Pty Limited (1989) 18 NSWLR 33 (Young J); Ridis, [162]-[163]]. The duty extends to require remediation of defects in the original construction of the common property [Proprietors Strata Plan No. 6522 v Furney [1976] 1 NSWLR 412, 416 (Needham J); Ridis [164]-[165]]. And it extends to oblige the owners corporation to do things which could not be for the benefit of the proprietors as a whole or even a majority of them [Proprietors Strata Plan 159 v Blake (1986) CCH Strata Titles Cases 30-068 (Yeldham J); Ridis, [166]].
5 It follows that as soon as something in the common property is no longer operating effectively or at all, or has fallen into disrepair, there has been a breach of the s 62 duty [cf Ridis [177]]. Insofar as Ridis held that s 62 did not oblige an owners corporation to conduct or procure the conduct of an expert assessment of every possible source of danger in the common property, personal property vested in it, and fixtures and fittings comprised in the common property, that was in the context of a submission that by imposing the statutory duty to maintain and repair, s 62 had the ancillary effect of extending the common law duty of care of an owners corporation as an occupier of the common property to include rigorous duties of inspection. The Court of Appeal rejected the submission that s 62 expressly or implicitly resulted in the imposition of such a common law duty. But that is beside the point; in this case, unlike in Ridis, the plaintiff relies on a statutory cause of action said to arise on s 62, rather than a duty of care said to arise consequentially from s 62 [cf Ridis, [87]-[88]]."
164The appellant's claim for relief in that case was of two kinds. Firstly, the cost of rectification works. Secondly, relief by way of a prohibitory injunction to restrain any interference with the carrying out of rectification works. Alternatively a claim was made for a mandatory injunction to require performance of rectification works to the membrane, and further alternative relief, namely damages in lieu of such an injunction, in respect of the impact on the value of the unit of the continuing defect was also claimed. A claim was also made for damages for the loss of use of the unit.
165In relation to these claims, Brereton J observed:
"27 The breach of duty and its consequences in this case are closely analogous to the tort of nuisance, from which guidance can be derived for the measure of damages. Ordinarily, the proper basis for assessing damages for nuisance is the diminution in value of the plaintiff's land occasioned by the breach [Moss v Christchurch RDC [1925] 2 KB 750; Owen v John L Norris Holdings Pty Ltd [1964] NSWR 1337]. Reasonably foreseeable consequential losses are also recoverable, including for example loss of custom in the case of interruption to a business conducted from the premises [Fritz v Hobson (1880) 14 ChD 542], or costs of relocation [Grosvenor Hotel Co v Hamilton [1894] 2 QB 836, 840; Evans v Finn (1904) 4 SR(NSW) 297]. Although the cost of restoring the plaintiff's property to its previous condition may be recoverable [Minter v Eacott (1952) 69 WN(NSW) 93 (FC); Taylor v Auto Trade Supply Ltd [1972] NZLR 102; Evans v Balog [1976] 1 NSWLR 35 - unless there is no prospect of the plaintiff performing the works [Hosie v De Ferro (1984) 3 BPR 9418], or such costs are entirely disproportionate to the diminution in value [Public Trustee v Hermann [1968] 3 NSWR 94; Jones v Shire of Perth [1971] WAR 56; Taylor (CR) (Wholesale) Ltd v Hepworths Ltd [1977] 2 All ER 784] - that does not extend to performance of works on the land from which the nuisance emanates. To remove the cause of a nuisance from another party's land is an act of abatement, to remedy the nuisance. While a person affected by a nuisance is entitled to abate it, including by entering onto the land from which the nuisance arises and removing its cause [Traian v Ware [1957] VR 200], the costs of abatement are not recoverable [Young v Wheeler (1987) Aust Tort Rep 80-126; Barbagallo v J & F Catelan Pty Ltd [1986] 1 QdR 245 (FC); Richmond City Council v Scantelbury [1991] 2 VR 38, 47-48], unless as reasonable costs of mitigation, and even then probably not if they involve going onto the land of the other party [Proprietors SP14198 v Cowell (1989) 24 NSWLR 478, 486-7].
28 Essentially, Seiwa's primary position involves a claim for the cost of undertaking works, not to repair damage to its own property, but to rectify a defect in the common property: it seeks to be permitted to perform the requisite repairs to the common property which the owners corporation ought to have done, and to recover damages for to the cost to it of doing so. This is in the nature of a claim for the costs of abatement. By analogy with the position relating to abatement of a nuisance, in my opinion such damages are not recoverable. In my view, therefore, the damages to which Seiwa is entitled comprise the diminution in the value of its unit occasioned by the continuing defect, and the consequential loss of the use of the unit since August 1994."
166The circumstances in Seiwa differed from the facts of the present case in two main respects. Firstly, the appellant in that case had not entered onto common property and did not carry out repairs on common property. As noted above, there was a claim for an alternative form of relief, a mandatory injunction for carrying out rectification works. Secondly, the defect in Seiwa had led or resulted in water penetrating the membrane and entering into the appellant's unit. In the present case (a) the 'defect' was restricted to the tiles and associated materials on the balcony and (b) the respondent, by her contractor, in fact performed work on common property.
167In Seiwa, as noted in the extracts above, the claim was for damages and was pursued on the basis of the appellant being permitted to perform repairs on the common property and then recover the cost to it of doing so. That claim failed.
168In the present case, there being no infiltration or entry of water inside the respondent's unit emanating from defects in the tiles, it is not factually analogous to a case of nuisance as in Seiwa (supra).
169It is necessary to identify and examine the underlying basis for the legal proposition referred to in Seiwa that a person who enters upon the land of another to abate a nuisance may be precluded from recovering the costs of the remedial works he or she undertakes on that land. The purpose in doing so is to determine whether there is a legal basis for the Magistrate's finding in this case that the respondent had an 'entitlement' to carry out work on common property and claim the expenses she incurred in replacing the tiles on that property.
170The relevant principle which denies an entitlement to recover damages for abatement of a nuisance is a long-established one. In Lagan Navigation Co v Lambeg Bleaching, Dyeing and Finishing Co Ltd [1927] AC 226, Lord Atkinson stated:
"It has been well said that the abatement of a nuisance is a remedy which the law does not favour and is not usually advisable, and that its exercise destroys any right of action in respect of the nuisance. In Earl of Lonsdale v Nelson (1823) 2 B & C 302, 311 Best J said:
"The security of lives and property may sometimes require so speedy a remedy as not to allow time to call on the person in whose property the mischief has arisen, to remedy it. In such cases an individual would be justified in abating a nuisance from omission without notice. In all other cases of such nuisances, persons should not take the law into their own hands, but follow the advice of Lord Hale, and appeal to a court of justice." (emphasis added)
171Lord Atkinson also referred to dicta of Collins LJ in Campbell Davys v Lloyd [1901] 2 Ch 518 at 524 as follows:
"The right of abatement by individuals is not regarded with favour by the law. In the words of Lord Hale: " because this many times occasions tumults and disorders, the best way to reform public nuisances is by the ordinary courts of justice."
172In Halsbury's Laws of Australia, 4th ed, vol 34, p 126, para 349 it was observed:
"Abatement means the summary removal or remedy of nuisance by the party injured without having recourse to legal proceedings. Its exercise destroys any cause of action in respect of the nuisance except for damage in respect of harm sustained before the abatement."
173Wood J in Young v Wheeler (1987) Aust Torts Reports 80-126 applied the principle that a person who has taken steps on the land of another to abate a nuisance is unable to recover the cost of the abatement as damages.
174In the present proceedings although the respondent was not abating a nuisance she nonetheless, without the consent of the respondent, proceeded to engage and instruct her contractor in April 2008 to enter upon the balcony and remove the existing tiles. Later, in September 2008 she again engaged her contractor to enter the common property and lay the tiles she had chosen.
175Taking into account the provisions of the Act that establish the strata scheme as discussed earlier in this judgment, a central question arises as to the basis, if any, upon which a lot owner without the consent or the approval of the owners corporation, or an order from a CTTT adjudicator under s 140(1) of the Act, may, in the event of a s 62 breach, proceed to undertake work on common property and subsequently claim reimbursement from an owners corporation of the expenses incurred.
176The Act, as earlier noted, does not authorise a lot owner to undertake repair or rectification work on common property. The Act, however, provides lot owners with a statutory process by which an order under s 140 may be sought under which an owners corporation may be required to give consent to work of the kinds specific in s 140(1) (a) or (b). Additionally, as noted above, the provisions of the Act preserve the right of a lot owner to apply for a mandatory injunctive relief under the general law.
177The respondent in the present case did not seek to engage either the statutory remedy under s 140 or any equitable relief. By her own decision a contractor was engaged, not for the purpose of undertaking work on her property, but to perform it on common property.
178The issue of a claimed right to undertake work on another's property and claim the cost of doing so from the owner of that property in this case is to be considered in the context of the statutory scheme. It is useful to examine the relevant principles by considering the position under the general law where damage arises from a nuisance occurring on a neighbouring property.
179The common law principles which limit the circumstances in which damages may be claimed for abating a nuisance have been set out above. Just as, in accordance with those principles, the unlawful performance of work on another's property does not find favour with the law for the reasons discussed in the case law above, provisions of the statutory scheme established under the Act operate so as to prevent lot owners or others from performing work on common property in the 'Key Management areas' specified in the Act. In that way the scheme, by conferring exclusive power, control and responsibility for common property in an owners corporation, ensures a controlled consistency of approach and the avoidance of disputes, or, in the language of the authorities on abatement of nuisance, "disorder".
180The rationale or purpose for ensuring that all work referred to in ss 62 and 140 remains under the control of an owners corporation accordingly may readily be identified. If an individual lot owner was free to have his or her contractor enter upon common property where an owners corporation has failed to rectify a defect and perform work on it, the integrity of a particular strata scheme could be readily undermined. Repairs or rectifications undertaken by an individual lot owner could result in strata safety issues, or impact on the convenience of other owners or result in visual or structural features or other matters that are out of keeping with the style and integrity of the unit building itself.
181The statutory obligations of an owners corporation to repair common property or to replace fixtures etc may be discharged by the corporation engaging contractors pursuant to s 13 of the Act. Where that occurs enforceable contractual rights against contractors operate in an owners corporation's favour should a contractor fail to meet relevant standards. In that event the owners corporation, may have the basis for seeking a remedy against a contractor. However, where work is performed by a contractor on behalf of an individual lot owner on common property, an owners corporation is obviously without such contractual remedies and rights.
182The statutory scheme under the Act, in other words, centralises the control of common property in an owners corporation in 'Key Management areas' and confers both powers and functions on it to be exercised in accordance with the Act.
183The approach adopted by the respondent in this case, if permissible, could result in the owners corporation incurring financial responsibility twice over. Thus in the respondent's letter of 6 September 2008 written to the Chairperson and the Committee Members of the Executive Committee, the basis upon which the respondent proceeded was stated as follows:
"We have taken the decision to complete the tiling on our front balcony. As advised, these tiles should be considered temporary. When the Owners Corporation is ready and able to re tile all balconies at... Challis Avenue, then Lot ...'s should be considered along with all others."
184The "temporary" installation of tiles as fixtures to a balcony floor of a type, and/or of a colour etc, chosen by an individual lot owner may not be compatible with existing or other common property balconies. It may not represent the proper or the correct way of "repairing" defects. The respondent's statement: "these tiles should be considered temporary", in itself suggests or implies that the owners corporation may be liable for the expense of "temporary" re-tiling, notwithstanding that such expense would be wasted in the event that it was later determined that the temporary tiles were inappropriate or inadequate and required replacement by a permanent solution pursuant to decision of the owners corporation to re-tile a number or all of the balconies in the building in uniform fashion.
185Additionally, expenditure on a "temporary" solution by way of a complete replacement of balcony tiling would represent an expenditure incurred for the benefit of one lot owner only, namely, the owner who had the benefit of the use of the common property (the balcony).
186In order for the respondent to establish that the relevant breach of duty by the appellant under s 62 gave rise to a claim for damages in respect of the re-tiling work it was, in my opinion, necessary for the Magistrate to consider the following matters:
(i) The fact that the breach was in the nature of an omission or a failure by the appellant to repair or rectify damaged tiles.
(i) Whether in relation to such a breach there was a causal relationship between it and the alleged damage suffered by the respondent.
(ii) Whether the failure by the appellant to replace the tiles that had "popped," "lifted" or delaminated gave rise to an entitlement in the respondent in relation to:
a. The removal of all existing tiles and replace them with tiles of her choice, and
b. To recover the cost of that work from the appellant.
187In essence the respondent's case was that the breach of the duty to repair under s 62 by the appellant caused the matters in (iii) (a) and (b) above. The error in the reasoning of the Magistrate is that there was a sufficient causal connection between the breach of duty and the expenditure assumes by the respondent to provide her with a right to recover from the appellant the expense of rectification as damages.
188In Travel Compensation Fund v Tambree [2005] HCA 69 at [45] Gummow and Hayne JJ stated:
"...there are cases in which the answer to a question of causation will require examination of the purpose of a particular cause of action, or the nature and scope of the respondent's obligation in the particular circumstances."
189In that case, based, in part upon conduct said to have been misleading and deceptive in contravention of s 42 of the Fair Trading Act 1987 it was observed that [49]:
"In the present case, where one of the claims made... was a statutory claim, "notions of 'cause' as involved in [that] statutory regime are to be understood by reference to the statutory subject, scope and purpose:" citing dicta in Allianz Australia Insurance Ltd v GSF Australia Pty Ltd [2005] HCA 26; (2005) 79 ALJR 1079 at 407.
190Those observations, in my opinion, are relevant in assessing the issue of causation in respect of a cause of action based upon a breach of statutory duty. The central question in the present case, is whether the statutory scheme established by the Act, its statutory subject, its scope and purpose, a breach of duty under s 62 gives rise to a claim where one lot owner decides to undertake rectification work on common property and then claims the cost.