Hynes Legal: Damages in the Commissioner’s Office

By March 26, 2021Legal Issues

The Commissioner’s Office is a unique jurisdiction. A recent decision shows (yet again) the simplicity of the office’s approach in adjudicating strata disputes.

In this example, an occupier of a lot was awarded more than $4,000 to repair damage to his car.

It is safe to say that had this dispute been ventilated elsewhere, there would have been greater costs involved and the process would have taken far longer than just one appearance at QCAT. If you want to know what happened, read on.

The facts are concise (and undisputed):

  • The occupier had a car parked in the basement car park.
  • In February 2020 he noticed stains on the roof of his car.
  • There was a pipe in the roof of the garage above his car that was leaking.
  • He could not get the stains buffed out or addressed in any simple way, meaning there was a repair bill of more than $4,000 to fix the damage.

What happened next?

The Body Corporate made a claim on its insurance. The claim was rejected. The insurer decided that the Body Corporate was not negligent because the Body Corporate was not aware of the damaged pipe, and after it became aware, had addressed it.  Negligence requires a duty of care to be owned and breached to be made out.

So, there was no recourse under the Body Corporate’s insurance policy.

But there was under the BCCM Act.

Section 281 of the BCCM Act deals specifically with issues of this nature when it provides:

(1) If the adjudicator is satisfied that the applicant has suffered damage to property because of a contravention of this Act or the community management statement, the adjudicator may order the person who the adjudicator believes, on reasonable grounds, to be responsible for the contravention—

          (a) to carry out stated repairs, or have stated repairs carried out, to the damaged property; or

          (b) to pay the applicant an amount fixed by the adjudicator as reimbursement for repairs carried out to the property by the applicant.

(2) The order can not be made if—

          (a) for an order under subsection (1) (a) —the cost of carrying out the repairs is more than $75,000; or

          (b) for an order made under subsection (1) (b) —the amount fixed by the adjudicator would be more than $10,000.

Keen-eyed readers will note that this section does not require a finding of negligence by the adjudicator.  It requires the adjudicator to be satisfied that:

(a)          there was a contravention of the Act

(b)          because of that contravention loss or damage resulted.

Here, there seemed no argument that there was damage, but was it caused by a contravention of the Act?

Yes, it was.

And it didn’t matter that the first the Body Corporate heard of the issue was when the occupier complained about the damage.

This was because the statutory obligation to maintain and repair common property (which the pipe was) was not simply one that the body corporate had to react to when there was an issue.  The statutory obligation:

“…is not one to use reasonable care to maintain and keep in good repair the common property, nor one to use best endeavors to do so, nor one to take reasonable steps to do so, but a strict duty to maintain and keep in repair. The duty to maintain involves an obligation to keep the thing in proper order by acts of maintenance before it falls out of condition, in a state which enables it to serve the purpose for which it exists.

Thus the body corporate is obliged not only to attend to cases where there is a malfunction but also to take preventative measures to ensure that there not be a malfunction.

It follows that as soon as something in the common property is no longer operating effectively or at all, or has fallen into disrepair, there has been a breach …”

This is what is called strict liability.  It doesn’t matter whether the Body Corporate knew about the leak, as might need to be proven in a case with a claim based on negligence.

Here, the Body Corporate was obliged to make sure the pipe didn’t leak. Regardless of how that leak came about, the statutory obligation to maintain (and repair) common property was breached, leading to damage – and that’s the end of the story.

Lest anyone get excited and think that this means open slather on damages and compensation in the Commissioner’s Office, think again.  It is very much linked to repairs as noted above in Section 281 of the BCCM Act. It doesn’t cover things like loss of rent if an owner’s lot is uninhabitable because of damage due to lack of maintenance. Talking with Chris, I know that is a common misconception in the Commissioner’s Office.

What are the lessons?

  1. Sometimes insurance doesn’t cover the risk a body corporate faces
  2. Strict liability is strict!
  3. Bodies corporate should have a preventative maintenance program for their common property and utility infrastructure
  4. The Commissioner’s Office will help people find a way to solve their problem if they can (see paragraph 11 of the decision)

This is one of those matters where no one was seemingly overtly to blame, but the Body Corporate had to wear the responsibility regardless.

You can read the case here.

For more information on the roles, responsibilities and rights of bodies corporate, lot owners and occupiers, please visit the education section of the Hynes Legal website where Frank Higginson and Chris Irons, former Commissioner for Bodies Corporate and Community Management, host weekly webinars to explore common Body Corporate issues and hot topics.

Author: Chris Irons, Strata Adviser – Hynes Legal.

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