The Owners SP 35042 v Seiwa Australia Pty Ltd

The Owners SP 35042 (the Owners) appealed to the New South Wales Court of Appeal against a decision concerning the ownership of a waterproof membrane and the upper boundary of a lot within a strata scheme. The dispute arose between the Owners, representing the body corporate, and Seiwa Australia Pty Ltd (Seiwa), the owner of a lot. The core of the disagreement centred on whether a waterproof membrane installed beneath tiles on an uncovered terrace formed part of the common property or the property of the lot owner, and consequently, where the lower boundary of the lot was defined.

The Court of Appeal was required to determine two primary legal issues. Firstly, it had to ascertain whether the waterproof membrane, situated beneath the tiles on an uncovered terrace, constituted common property or the property of the lot owner. Secondly, the Court needed to determine the precise location of the lower boundary of the lot, specifically whether it was the upper surface of the concrete slab or the upper surface of the tiles laid on top of the slab, given that the registered strata plan did not explicitly specify this lower boundary. The Court also considered whether Seiwa had breached a statutory duty, leading to a claim for loss of rent.

In its reasoning, the Court of Appeal applied the principles of the *Strata Schemes (Freehold Development) Act 1973* (NSW). It held that where the registered strata plan did not specify the lower boundary of a lot, and tiles had been laid prior to the registration of the plan, the upper surface of the concrete slab was to be considered the lower boundary of the lot. Consequently, the waterproof membrane and the tiles laid on top of it were deemed to be part of the lot owner's property, not common property. The Court also addressed the damages claim, affirming that a wrongdoer must accept their victim as they find them when assessing loss.

The appeal was ultimately dismissed, and the Owners were ordered to pay Seiwa's costs.