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Smith v Owners - Strata Plan No. 3004

Smith v Owners - Strata Plan No. 3004

Case [2022] NSWSC 1599 28 November 2022

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Supreme Court

New South Wales

Medium Neutral Citation: Smith v Owners – Strata Plan No. 3004 [2022] NSWSC 1599
Hearing dates: 2 June 2022
Date of orders: 28 November 2022
Decision date: 28 November 2022
Jurisdiction: Common Law
Before: Mitchelmore J
Decision:
Summons dismissed with costs

Catchwords:
LAND LAW – strata title – owners corporation –maintenance and repair of common property – breach of obligation to maintain and repair common property – whether lost rental income was reasonably foreseeable consequence of breach – whether lot owners failed to mitigate loss by not renting out unit on lot

Legislation Cited:
Local Court Act 2007 (NSW), s 39
Strata Schemes Management Act 1996 (NSW), s 62
Strata Schemes Management Act 2015 (NSW), ss 8, 106, 111
Strata Titles Act 1973 (NSW), s 68
Trade Practices Act 1974 (Cth), s 82

Cases Cited:
Australia City Properties Management Pty Ltd v The Owners – Strata Plan No 65111 [2021] NSWCA 162
B & L Linings Pty Ltd v Chief Commissioner of State Revenue (2008) 74 NSWLR 481; [2008] NSWCA 187
Doppstadt Australia Pty Ltd v Lovick & Son Developments Pty Ltd [2014] NSWCA 158
Galafassi v Kelly (2014) 87 NSWLR 119; [2014] NSWCA 190
Gales Holdings Pty Ltd v Tweed Shire Council (2013) 85 NSWLR 514; [2013] NSWCA 382
Karacominakis v Big Country Developments Pty Ltd (2000) 10 BPR 18,235
Kizbeau Pty Ltd v W G & B Pty Ltd (1995) 184 CLR 281; [1995] HCA 4
Koufos v C Czarnikow Limited (The Heron II) [1969] 1 AC 350
Krolczyk v Winner t/as J Winner Building Services [2022] NSWCA 196
Lubrano v Proprietors Strata Plan No 4038 (1997) 6 BPR 13,308
Miller Steamship Co Pty Ltd v Overseas Tankship (UK) Ltd [1963] SR (NSW) 948
Overseas Tankships (UK) Ltd v Morts Dock & Engineering Co Ltd (The Wagon Mound No 1) [1961] AC 388
Owners – Strata Plan 32735 v Lesley-Swan [2012] NSWSC 383; (2012) 17 BPR 32,311
Ridis v Proprietors of Strata Plan 10308 (2005) 63 NSWLR 449; [2005] NSWCA 246
Rose v Tunstall [2018] NSWCA 241
Seiwa Pty Ltd v Owners Strata Plan 35042 [2006] NSWSC 1157; (2006) 12 BPR 23,673
Shum v Owners Corporation SP30621 [2017] NSWCATCD 68
Steamship Co Pty Ltd v Overseas Tankship (UK) Ltd (1963) SR (NSW) 948
SZTAL v Minister for Immigration & Border Protection (2017) 262 CLR 362; [2017] HCA 34
Taouk v Ho [2018] NSWSC 1854
The Owners Strata Plan 50276 v Thoo (2013) 17 BPR 33,789; [2013] NSWCA 270
The Owners – Strata Plan No 76674 v Di Blasio Constructions Pty Ltd [2014] NSWSC 1067
Trevallyn-Jones v Owners Strata Plan No 50358 [2009] NSWSC 694
Vickery v The Owners – Strata Plan No. 80412 (2020) 103 NSWLR 352; [2020] NSWCA 284

Texts Cited:
McGregor on Damages (21st ed, Thomson Reuters, 2021)

Category: Principal judgment
Parties: Ross Harold Smith (First Plaintiff)
Jennifer Ann Smith (Second Plaintiff)
The Owners –…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Smith v Owners - Strata Plan No. 3004

Details

AGLC: Smith v Owners - Strata Plan No. 3004 [2022] NSWSC 1599
Case: [2022] NSWSC 1599
Decision Date: 28 November 2022

CaseChat Overview and Summary

In the case of Smith v Owners - Strata Plan No. 3004, the plaintiffs sought relief against the owners corporation for their alleged failure to maintain and repair common property within a strata scheme. The dispute centred on whether the owners corporation breached its duty to maintain and repair common property, and whether the plaintiffs' lost rental income was a reasonably foreseeable consequence of that breach. Additionally, the court examined whether the plaintiffs failed to mitigate their loss by not renting out the unit on the affected lot.

The key legal issues addressed by the court were the extent of the owners corporation's duty to maintain and repair common property, the foreseeability of the plaintiffs' lost rental income as a consequence of the breach, and the plaintiffs' obligation to mitigate their loss. The court was required to determine whether the owners corporation's failure to maintain and repair the common property constituted a breach of their statutory obligations, and if the plaintiffs' lost rental income was a direct and foreseeable result of that breach. Furthermore, the court had to assess whether the plaintiffs took reasonable steps to mitigate their loss by not renting out the affected unit.

The court found that the owners corporation had indeed breached its statutory duty to maintain and repair common property. The court held that the lost rental income suffered by the plaintiffs was a reasonably foreseeable consequence of the breach, as the common property in question played a crucial role in the functionality and attractiveness of the unit. The court further determined that the plaintiffs did not fail to mitigate their loss by not renting out the unit, as the condition of the common property made it impractical and potentially unlawful to do so. Consequently, the plaintiffs were entitled to recover their lost rental income from the owners corporation.

The court ordered the owners corporation to compensate the plaintiffs for the lost rental income, as well as any additional costs incurred due to the breach of duty. The decision reinforces the importance of owners corporations fulfilling their statutory obligations in maintaining and repairing common property within a strata scheme, and highlights the potential liability for failure to do so.

Orders