Smith v Owners Corporation Unit Plan 3115 (Unit Titles)
[2021] ACAT 28
•12 April 2021
ACT CIVIL & ADMINISTRATIVE TRIBUNAL
SMITH v OWNERS CORPORATION – UNIT PLAN 3115 (Unit Titles) [2021] ACAT 28
XD 606/2020
Catchwords: UNIT TITLES – use of common property – security and parking arrangements – control, management and administration of common property – standing of occupier to sue at common law – negligence – duty of care – owners corporation tortious liability – causation – where owners corporation failed to ensure access to secure storage cage – where occupier’s bicycle stolen from common property, which would have otherwise been in the storage cage if not for the negligence of the owners corporation – depreciated damages awarded
Legislation cited: Civil Law (Wrongs) Act 2002 ss 40, 41, 42, 43, 45, 46, 47
Unit Titles Act2001
Unit Titles (Management) Act 2011 ss 7, 16, 19, 107
Cases cited:Kirk v The Owners UT 2992 [2017] ACAT 102
McElwain v The Owners SP75975 [2017] NSWCA 239
List of
Texts/Papers cited: Harold Luntz et al, Torts: Cases and Commentary (LexisNexis, 8th ed, 2017)
Tribunal: Senior Member L Beacroft
Date of Orders: 12 April 2021
Date of Reasons for Decision: 12 April 2021
AUSTRALIAN CAPITAL TERRITORY )
CIVIL & ADMINISTRATIVE TRIBUNAL ) XD 606/2020
BETWEEN:
HUGH DAVID SMITH
Applicant
AND:
OWNERS CORPORATION – UNIT PLAN 3115
Respondent
TRIBUNAL: Senior Member L Beacroft
DATE:12 April 2021
ORDER
The Tribunal orders that:
1.The respondent is to pay the applicant the total sum of $561.94, comprised of:
(a)$467.31 compensation.
(b)$19.13 interest from 30 April 2020 (i.e. from the date that the application was filed to the date of the order).
(c)Filing fee of $75.50.
………………………………..
Senior Member L Beacroft
REASONS FOR DECISION
Background
1.The applicant, Mr Hugh Smith, was an occupier of a unit and claims that he had a bike stolen from the common property area of the unit complex (Unit Plan 3115) that was under the control and management of the complex’s body corporate, the respondent. The applicant claims the sum of $685.75, being the cost of a bike purchased in May 2018,[1] or if deprecation is applied in accordance with the ATO guidelines then he claims the sum of $467.31,[2] plus reimbursement of his filing fee of $75.50, and interest.[3] He claims that he was owed a duty of care by the respondent, that this duty was breached, and that the respondent is liable to pay compensation to him for loss of his stolen bike. The respondent denies the claim. The Tribunal finds the application proved, and awards compensation as set out in the order above, for the reasons set out below.
Applicant’s claims
[1] Applicant’s witness statement dated 26 October 2020 Annexure B
[2] Applicant’s final submissions filed 15 January 2021 at [17]-[21]
[3] Applicant’s civil dispute application dated 30 April 2020
2.In summary, at the time the bike was stolen the applicant occupied one of the units and had an arrangement with the owners to stay there with the owners’ daughter.[4] A push bike owned by him was allegedly stolen on or about 3-4 April 2020.[5] The applicant claims that he locked his bike on the bike stand located on the common property because he was unable to secure his bike in the locked cage attached to the unit, as he usually did.[6] There were obstructions that prevented him accessing it on the day. These obstructions were semi-permanent poles and barriers that the respondent had arranged to have erected to rectify issues with the building, as well as cars parked inappropriately due to the poles and barriers.[7] The applicant decided to lock his bike to the bike stand in the common property because it was the “next most secure location” to the locked cage and he could not think of anywhere else,[8] although he understood it was not secure in that persons could access it.[9]
[4] Applicant’s final submissions filed 15 January 2021 at [1]-[4]; Transcript of proceedings dated 7 December 2020 page 5
[5] Transcript of proceedings 7 December 2020 page 14
[6] Transcript of proceedings 7 December 2020 page 16
[7] Applicant’s civil dispute application dated 30 April 2020; applicant’s final submissions filed 15 January 2021; Transcript of proceedings 7 December 2020 pages 12-13
[8] Transcript of proceedings dated 7 December 2020 page 17
[9] Transcript of proceedings dated 7 December 2020 pages 17-18
3.The applicant submitted evidence that his partner, the co-resident of the unit, had first notified the strata manager by email on 7 January 2020 about the difficulties with accessing their locked cage during the rectification works, which was acknowledged in a reply email by the strata manager.[10] He stated that he had not seen the Rules cited by the respondent; however, he contends that if he is subject to them, the Rules cannot defeat his claim given the respondent has been negligent and denied him access to his locked cage.[11]
Respondent’s claims
[10] Transcript of proceedings dated 7 December 2020 page 21; witness statement David Smith dated 26 October 2020 Attachment D
[11] Transcript of proceedings dated 7 December 2020 page 20-21
4.The respondent denies any liability for the loss of the applicant’s bike. The respondent queried that it owes a duty of care to the applicant, given he was not an owner of the unit and not a legal tenant.
5.The respondent denies that it breached any duty of care owed to the applicant. The respondent explained in its evidence that it is the body corporate of a complex that was subject to an emergency rectification order[12] and therefore required urgent works, as the building would be uninsured if not undertaken.[13] In late 2019, the respondent’s strata manager advised owners and occupiers of the units that the rectification works required installation of poles such that some parking spaces would be inaccessible, including sending a letter by a letterbox drop on 4 December 2019.[14] The poles were in place from 9 December 2019 to 19 June 2020.[15]
[12] Rectification order dated 20 September 2012 submitted 9 March 2021
[13] Respondent’s final submission filed 15 January 2021 including attachments of correspondence from CHU Strata Insurance
[14] Letter dated 4 December 2019 submitted 9 March 2021
[15] Respondent’s final submission filed 15 January 2021
6.In its defence, the respondent claims that there is insufficient proof of the theft of the bike.[16] Also, the respondent provided various undated photos showing that the storage cage could be accessed during the rectification works.[17] The respondent agrees that cars prevented from parking in their usual spaces due to the rectification works parked in a manner that caused difficulties for other residents.[18] However, the respondent denies that the applicant could not access his unit’s security cage due to the rectification works, or that the owners corporation was made aware of this.[19] The respondent also contends that if there was an obstruction the applicant could have lifted his bike or taken some other action to access it.[20]
[16] Respondent’s final submission filed 15 January 2021
[17] Respondent’s final submission filed 15 January 2021
[18] Respondent’s final submission filed 15 January 2021
[19] Respondent’s response received 30 July 2020 and 15 January 2021
[20] Respondent’s final submission filed 15 January 2021
7.A further defence to the applicant’s claims raised by the respondent is that the area where the bike was stolen from is not claimed to be secure,[21] as made clear in the complex’s ‘House Rules’ as follows:
[21] Transcript of proceedings dated 7 December 2020 page 30
Vehicles and Parking
…
8 Whilst the basement is a restricted area access area [sic], it is not a secure basement and residents need to be aware of any suspicious activities.
General
1 The Owners Corporation does not accept responsibility for any personal property removed, damaged or stolen from the common property areas, the underground carpark or from individual units or storage cage.[22]
Law
[22] Respondent’s response received 30 July 2020 Attachment of extract of House Rules
8.A legal issue in this case was whether the common law negligence principles apply such that an occupier can sue a body corporate for loss due to the body corporate’s negligence. The case law on this question overwhelmingly indicates that an occupier can make such a claim. In short, there is nothing in the Unit Titles Act2001 or the Unit Titles (Management) Act2011 that precludes common law negligence actions from being made by an occupier or a unit owner against the body corporate. In Kirk v The Owners UT 2992,[23] the tribunal considered this issue and referred to the leading case law, including McElwain v The Owners SP75975[24] (McElwain). In McElwain, the court considered the NSW equivalent law to the unit title laws in the ACT and stated that a lot owner or occupier can enforce an owners corporation statutory duty in respect of the common property, and also they have a right to sue at common law. On this basis, the Tribunal finds that a body corporate can be sued for negligence under the common law in regard to the functions and responsibilities it performs, being the “control, management and administration of the common property” which it holds as agent for the unit owners.[25]
[23] [2017] ACAT 102
[24] [2017] NSWCA 239
[25] Unit Titles (Management) Act 2011 Act sections 7, 16, 19
9.Determining whether there has been common law negligence requires considering the application in this case of ordinary common law negligence principles and also legislative requirements as set out in the Civil Law (Wrongs) Act2002 (the Act). The applicant bears the burden of proof, and must establish on the balance of probabilities that he is owed a duty of care by the respondent, that the respondent breached it, and that damages resulted.
10.The Tribunal notes the case law that has identified a body corporate to be the occupier of the common property, that has identified occupier’s liability as one dimension of common law negligence, and that a body corporate therefore has a duty to invitees to take reasonable care under common law negligence.[26] The Act confirms that occupiers have a “duty to take all care that is reasonable in the circumstances” to ensure that “anyone” on the premises does not suffer “damage” due to “the state of the premises” or “things done or omitted to be done about the state of the premises”. The Act also sets out specific considerations about whether the duty is discharged.[27] The Act has other provisions about occupier’s liability that are relevant to consideration of whether there was a breach and damages payable.[28] Also, other provisions in the Act are relevant to proving causation and determining the quantum of damages payable for negligence claims.
[26] See, eg, cases referenced in Harold Luntz et al, Torts: Cases and Commentary (LexisNexis, 8th ed, 2017) [7.5.1]-[7.5.7]
[27] Civil Law (Wrongs) Act 2002 section 168
[28] Civil Law (Wrongs) Act 2002 sections 40-47
11.The Act defines ‘causation’ in a negligence matter including an occupier’s liability claim as follows: “the negligence was a necessary condition of the happening of the harm” and “it is appropriate for the scope of the negligent person’s liability to extend to the harm so caused”.[29] The latter section reflects the ‘but for’ test of causation under the common law, and also recognises the principle in common law that there must be a limit to a negligent person’s liability for consequences that flow from a negligent act, or put another way, that the damage cannot be too remote from the negligent act.[30]
Findings
[29] Civil Law (Wrongs) Act 2002 section 45
[30] See, eg, cases referenced in Harold Luntz et al, Torts: Cases and Commentary (LexisNexis, 8th ed, 2017) [4.3.1]-[4.3.2], [4.3.26]-[4.3.31]
12.The Tribunal finds that in this case as a matter of law, the respondent is the occupier of the common property and the respondent owed the applicant a duty of care. The law that supports this finding is set out above.
13.The Tribunal finds that the bike was stolen, despite the respondent disputing this late in the proceedings. The evidence from the applicant leaves the Tribunal in no doubt of this. The Tribunal finds the applicant to be a truthful person, and he provided corroborating and contemporaneous evidence to support the theft of his bike.[31]
[31] Applicant’s witness statement dated 26 October 2020 Attachment G
14.The key issues in this case are as follows:
(a)Has the respondent breached its duty?
(b)Is the damage caused by the respondent, or too remote to be payable by the respondent?
(c)If damages are payable, what is the appropriate sum of damages payable in this case, in particular does deprecation apply?
15.The Tribunal has considered the above issues and makes the following findings.
Has the respondent breached its duty?
16.The Tribunal finds that the respondent has breached its duty to the applicant for the following reasons.
17.The Tribunal finds that the applicant is a legal occupier of a unit in the complex. While not a unit owner or a tenant subject to a residential tenancy agreement, it is clear from the evidence that the applicant is a legal occupant. In any case, the Act specifies that “anyone on the premises” is owed a duty for the respondent to take reasonable care.[32] As a legal occupant, the applicant had an entitlement to access the locked cage of his unit.
[32] Civil Law (Wrongs) Act 2002 section 168
18.The respondent is the body corporate and has management and control of the common property for parking, the common property that allows access to the applicant’s locked cage, and also the common property where the bike was stolen. While the rectification order and insurer put the respondent under some pressure to do the rectification works, the rectification order did state that the body corporate must ensure that “all work [is] carried out in a way that prevents injury to people and unintended damage to property”.[33] The letter sent to owners and occupiers dated 4 December 2019 made it clear that the disruption to parking alone was going to be significant, with at least 12 units, some or all with tandem parking, being denied their parking spaces while the rectification works were underway[34]. Despite the latter mentioned requirements in the rectification order and by the insurer, and the significant impact on parking at the complex of the rectification works, the letter did not offer a plan for safely managing parking during the rectification works.[35] The evidence shows that there was an ad hoc response by the body corporate and its strata manager as issues arose. The parking issues that arose due to the rectification works, which led to the applicant not accessing his locked cage on the day the bike was stolen, were foreseeable, and there should have been a plan to safely manage them, but there was not.
[33] Rectification order dated 20 September 2020 submitted 9 March 2021 page 2
[34] Letter to owners and occupiers dated 4 December 2019 submitted 9 March 2021
[35] Letter to owners and occupiers dated 4 December 2019 submitted 9 March 2021
19.The Tribunal finds that the respondent had, or should have had, knowledge of the applicant storing property, such as a bike, in his locked cage. The Tribunal finds that the respondent had actual knowledge that, at times, the applicant’s access to the locked cage was not possible due to obstructions, in that the respondent’s agent, the strata manager, received an email dated 7 January 2020 advising of this. Upon being advised of the issue, the respondent should have known that the applicant might be required to use alternative storage to store his property, such as a bike, which might be less secure.
20.Case law suggests that upon being advised of the issue, a reasonable response by the respondent and its agent would be to inspect the relevant area of the common property to review the situation and consider solutions,[36] but this was not done by the respondent.
[36] See, eg, cases referenced in Harold Luntz et al, Torts: Cases and Commentary (LexisNexis, 8th ed, 2017) [7.5.10]
21.The Tribunal finds that the burden on the respondent to remove the access issues experienced by the applicant was not excessive, given the risks to property being damaged, or stolen, and even the personal safety of occupants. In the Tribunal’s view, meeting its obligations would have involved the respondent better managing the common property, particularly parking on the common property while rectification works were undertaken. In the Tribunal’s view, meeting its obligations also would have involved responding actively to any issues that arose, for example, by promptly inspecting the area to assess and solve issues as they arose. But this was not done.
Is the damage too remote to be payable by the respondent or put another way did the respondent cause the damage?
22.The Tribunal finds that the damage is not too remote to be payable by the respondent, and that the respondent caused the damage. In this case, it is clear from the evidence that, in the Tribunal’s view, the applicant’s bike would not have been in the bike stand and would have been in the applicant’s locked storage cage and not stolen, but for the negligence of the respondent. The issue is whether the second part of the causation test is met, i.e. is the damage too remote, is it appropriate for the scope of the respondent’s liability to extend to the harm so caused?
23.The respondent refers to the Rules of the complex and contends they defeat the applicant’s claim. In this case the Tribunal finds that the applicant, as a legal occupant of the unit, is bound by the Rules, even if he was not personally aware of them (see section 107(2) Unit Titles (Management) Act 2011). The issue here is whether the Rules provide a defence in this case to liability for negligence by the respondent for the theft of the bike from a common property area. The Rules in effect provide a notice to occupiers that the respondent will not accept liability for loss when they choose to park their bike in the stands in the common property area. Such a notice is commonly equated to a claim that the applicant has voluntarily assumed the risk of loss.[37] However, in this case the Tribunal finds that the applicant did not choose to park his bike there but parked it there because he had no other options available to him given access to his locked cage was prevented due to obstacles.
[37] See, eg, cases referenced in Harold Luntz et al, Torts: Cases and Commentary (LexisNexis, 8th ed, 2017) [6.3.26]
24.The respondent claims that the applicant could have prevented the theft by parking his bike elsewhere. However, the Tribunal finds that it is not reasonable to expect, as the respondent suggests, that the applicant lift his bike over a number of cars,[38] or lift it up stairs to gain access to his unit.
[38] Transcript of proceedings 7 December 2020 page 5
25.In this case the loss of the bike was a result of criminal conduct. However, the respondent remains liable because it actually knew that the applicant could not access his locked cage at times and it also knew that the alternative area where a bike might be secured is less secure than the locked storage cage.
26.In this case, the applicant’s lack of access to his locked cage was, in part, a result of inappropriate parking by third parties. However, the respondent remains liable because it actually knew that the applicant could not access his locked cage at times due to such parking, and it alone could have managed the common property to prevent inappropriate parking, e.g. by developing a plan and placing signage and barriers to implement the plan, which it failed to do. The respondent confirmed that it alone managed the parking area, and that it was aware of the significant parking issues that arose while the rectification works were underway. However, it did not erect any signs even in the areas that were critical to be kept free in order for persons to access their storage cages.[39]
If damages are payable what is the appropriate sum of damages payable in this case?
[39] Transcript of proceedings 7 December 2020 pages 25-27
27.The general principle of compensatory damages is to place the person harmed, insofar as money can achieve this, in a position they would have been in had the negligence not occurred. In this case the applicant owned a bike that was not new but had a value of $467.31 at the date of the theft, applying the ATO deprecation guidelines. The applicant seeks the value of his bike at purchase, claiming that exemplary or aggravated damages should be awarded in this case. Such damages are exceptional and usually involve circumstances where the negligent party showed a level of intention or the negligence was so outrageous that such damages should be paid. However, the Tribunal finds that this is not the case here.
Conclusion
28.The respondent is to pay the applicant the total sum of $561.94, being $467.31 compensation, $19.13 interest from 30 April 2020 (i.e. from the date that the application was filed to the date of the order), and the filing fee of $75.50.
………………………………..
Senior Member L Beacroft
Date(s) of hearing 7 December 2020 Applicant: In person Respondent: Mr D Bruno, authorised representative
Ms N Robb
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