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The Owners Strata Plan No 2661 v Selkirk

The Owners Strata Plan No 2661 v Selkirk

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Case Copied 21 June 2024 76 min read

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Supreme Court

New South Wales

Medium Neutral Citation: The Owners – Strata Plan No 2661 v Selkirk [2024] NSWSC 760
Hearing dates: 12 June 2024
Decision date: 21 June 2024
Jurisdiction: Common Law
Before: Leeming JA
Decision:
1. Grant leave to appeal, confined to ground 3 of the summons filed on 5 March 2024, and otherwise refuse leave.
2. Appeal allowed.
3. Answer the question “Whether a mitigation defence is available in answer or partial answer to a claim for damages under s 106(5)”:
It is open to an owners corporation to seek to establish that all or part of a lot owner’s claimed damages are not damages for foreseeable losses as a result of the owners corporation’s breach of duty, including by establishing that the lot owner has behaved unreasonably in failing to mitigate his, her or its loss.
4. Note that the remittal pursuant to order 3 made by the Appeal Panel on 6 February 2024 will be conducted in accordance with these reasons.
5. The Registrar of this Court be directed to refer a copy of these reasons for judgment, and a copy of part of the reasons of Senior Member Tyson delivered on 15 August 2023 (insofar as those reasons have been provided to this Court) to the Office of the Legal Services Commissioner, with a view to considering whether any steps should be taken in relation to the Senior Member’s findings at [123].

Catchwords:
LAND LAW – strata title – duties of owners corporation – duty to maintain and repair common property – claims for rectification works and damages by lot owner under Strata Schemes Management Act 2015 (NSW), s 106(5) and 232(1) following breach of duty – whether entitlement of owners corporation to apply for orders to inspect and perform works on lot owner’s property an answer to resistance by lot owner to accessing her property – whether open to owners corporation to rely on unreasonable conduct by lot owner in failing to mitigate her loss in partial defence to claim for damages – consideration of nature of duty owed by owners corporation and statutory right to damages under s 106

Legislation Cited:
Australian Consumer Law, s 236
Civil and Administrative Tribunal Act 2013 (NSW), s 83, cl 6(2) of Sch 4
Civil Liability Act 2002 (NSW), Pt 1A, s 5D
Civil Procedure Act 2002 (NSW), s 56
Court Suppression and Non-publication Orders Act 2010 (NSW)
Home Building Act 1989 (NSW)
Legal Profession Uniform Law Australian Solicitors’ Conduct Rules 2015 (NSW), r 5
Residential Tenancies Act 2010 (NSW), s 52
Safety, Rehabilitation and Compensation Act 1988 (Cth)
Strata Schemes Management Act 1996 (NSW), s 62
Strata Schemes Management Act 2015 (NSW), ss 4, 106, 122, 123, 124, 232
Trade Practices Act 1974 (Cth), ss 82, 87

Cases Cited:
Adeels Palace Pty Ltd v Moubarak (2009) 239 CLR 420; [2009] HCA 48
AK v Western Australia (2008) 232 CLR 438; [2008] HCA 8
Alexandria Landfill Pty Ltd v Transport for NSW (2020) 103…

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.

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Details

Case: [2024] NSWSC 760
Decision Date: 21 June 2024

CaseChat Overview and Summary

The Owners Strata Plan No 2661 initiated proceedings against Selkirk, a lot owner within the strata scheme, seeking to enforce the owners corporation's rights to inspect and repair common property and to recover damages for losses incurred due to Selkirk's failure to cooperate with the owners corporation. The dispute came before the Supreme Court of New South Wales, where the primary issue was whether the owners corporation could compel Selkirk to allow access to her property to carry out necessary repairs and whether the corporation could successfully argue that Selkirk's unreasonable conduct contributed to the extent of the damages claimed.

The court examined the nature of the duty imposed on the owners corporation under the Strata Schemes Management Act 2015 (NSW) to maintain and repair common property. It was necessary to determine whether the corporation's entitlement to apply for orders to inspect and perform works on Selkirk's property was negated by her refusal to cooperate. Furthermore, the court had to consider whether the corporation could partially defend against the claim for damages by arguing that Selkirk's unreasonable conduct in not mitigating her loss should be taken into account. The statutory right to damages provided under section 106 was also scrutinized to assess its applicability in this context.

In its reasoning, the court found that the owners corporation had a legitimate interest in ensuring the maintenance and repair of common property, and the right to seek court orders to access Selkirk's property was not precluded by her refusal to cooperate. The court held that the unreasonable conduct of Selkirk in obstructing the inspection and repair process could be considered in determining the extent of damages. The owners corporation was entitled to claim damages, but the amount could be reduced to reflect Selkirk's contributory negligence. The court granted the owners corporation the authority to inspect and repair Selkirk's property and ordered her to pay the corporation for the costs incurred due to her obstruction, subject to a reduction based on her unreasonable conduct.

Orders