NSW: Time Limitations in Damages Claims for Failure to Maintain and Repair the Common Property: an Update

This article clarifying time limitations in damages claims for failure to maintain and repair the common property has been supplied by Allison Benson, Kerin Benson Lawyers.

An Owners Corporation has a strict duty to maintain and repair its common property under section 106(1) of the Strata Schemes Management Act 2015. This is uncontroversial. What has been heavily argued since the 2015 legislative reforms commenced has been the limits of the new provisions in section 106(5) and (6) of the Strata Schemes Management Act 2015. These are the provisions providing a right for a lot owner to recover damages from their owners corporation where the owners corporation has breached its duty to maintain and repair its common property provided lot owners make a claim within two years of becoming aware of their loss.

As a quick recap there were a number of conflicting decisions in the NSW Civil & Administrative Tribunal (NCAT) and its Appeal Panel as to whether the NCAT had the power to award damages under these sections, whether the right to recover damages was retrospective and when the two year limitation period commenced.

The NSW Court of Appeal in Vickery v The Owners – Strata Plan No. 80412 [2020] NSWCA 284 in late 2020 confirmed that NCAT has the power to award damages to a lot owner under section 106(6). The Court of Appeal then remitted the remaining questions back to the NCAT Appeal Panel for determination.

On 21 April 2021 the Appeal Panel in The Owners – Strata Plan No 80412 v Vickery [2021] NSWCATAP 98 held that:

• The owners corporation’s failure to maintain and repair the common property was a breach of section 106(1) due to saving provisions in the 2015 Act. Therefore, on 30 November 2016 the owners corporation was in breach of section 106(1).
• The two year time period for the owners corporation’s breach of s106(1) started on 30 November 2016, the date the cause of action became available. As such, Mr Vickery first became aware of his loss on 30 November 2016 when section 106(5) commenced and the cause of action became available.
• The right to recover damages was not retrospective and therefore Mr Vickery could not claim for any damages incurred before 30 November 2016; and The Appeal Panel did not find it necessary to decide whether a lot owner has a separate cause of action for damages for each day section the owners corporation is in breach of 106(1). However, it indicated that this interpretation would permit a new claim to be brought by a lot owner for each day the owners corporation was in breach of its statutory duty. This interpretation would be inconsistent with the plain and ordinary meaning of section 106(6) in requiring the claim to be brought within two years of the lot owner becoming aware of their loss. The Appeal Panel considered that a lot owner is not entitled to bring proceedings each day the statutory duty is breached and they incur loss although this finding is not binding.

Allison Benson
Kerin Benson Lawyers
E: [email protected]
P: 02 4032 7990

Please note: This is not intended to be legal advice. You should seek legal advice specific to your situation.

This post appears in Strata News #472.

Have a question about time limitations in damages claims for failure to maintain and repair the common property or something to add to the article? Leave a comment below.

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This article has been republished with permission from the author and first appeared on the THOUGHTS FROM A STRATA LAWYER … website.

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