Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Dart v The Owners - Strata Plan No. 71849 [2024] NSWCATAP 145 Hearing dates: 4 June 2024; Further Written Submissions on 11 June 2024 and 18 June 2024 Date of orders: 26 July 2024 Decision date: 26 July 2024 Jurisdiction: Appeal Panel Before: D Charles, Senior Member M Deane, Senior Member Decision: (1) The proceedings are remitted to the Consumer and Commercial Division of the Tribunal for determination in accordance with the law, with leave given to the parties to adduce such further evidence as the Tribunal thinks fit. (2) No order as to the costs of the appeal (with the intent that the parties are to pay their own costs of the appeal proceedings). (3) If the appellant and/or the respondent contend for a different costs order, the following orders and directions will apply: (i) Any party contending for a different costs order in the appeal proceedings (costs applicant) is to file and serve a short written submission (no more than 5 A4 size pages), within 14 days of the date of these orders, (ii) In that event, Order 2 above will cease to have effect, (iii) The other party (the costs respondent) is to file and serve a short written submission (no more than 5 A4 size pages) in response to the costs applicant's submission, within 28 days of the date of these orders, (iv) The costs applicant may file and serve any written submissions strictly in reply to the costs respondent's submissions (no more than 2 A4 size pages) within 35 days of the date of these orders, (v) Subject to the parties' submissions on this point, the Appeal Panel proposes to determine any application for a different costs order in the appeal proceedings without a hearing, pursuant to s 50(2) of the Civil and Administrative Tribunal Act 2013 NSW, based on the written submissions provided in accordance with the directions as set out above. Catchwords: APPEAL – Errors on questions of law – no evidence to support finding - failure to consider a party's submissions – not applying legal principle. STRATA - Duty to maintain and repair common property – liability of owners corporation for damage for breach of duty. LIMITATION OF ACTION – whether s 106(6) Strata Schemes Management Act 2015 (NSW) applies where applicant seeks a work order. Legislation Cited: Civil and Administrative Tribunal Act 2013 (NSW) Strata Schemes Management Act 2015 (NSW) Cases Cited: Boutenko v The Owners – Strata Plan No 774 780 [2022} NSWCATCD 166 Corcoran v Far [2019] NSWSC 1284 Craig v South Australia (1995) 184 CLR 163 Day v SAS Trustee Corporation [2021] NSWCA 71 Dranichnikov v Minister for Immigration and Multicultural Affairs (2003) 77 ALJR 1088 Glenquarry Park Investments Pty Ltd v Hegyesi [2019] NSWSC 425 Hua Nan Trading Pty Limited v The Owners – Strata Plan No 23296 [2023] NSWCATAP 66 Plaintiff M1/2021 v Minister for Home Affairs (2022) 96 ALJR 497 Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 Selkirk v The Owners – Strata Plan No 2661 [2024] NSWCATAP 17 Smith v Owners – Strata Plan No 3004 [2022] NSWSC 1599 Tao v The Owners – Strata Plan No 16107 [2023] NSWCATAP 327 The Owners – Strata Plan No 74232 v Tezel [2023] NSWCA 35 Vickery v The Owners – Strata Plan No 80412 [2020] NSWCA 284 Texts Cited: None cited. Category: Principal judgment Parties: Helen Mary Dart (Appellant) The Owners - Strata Plan 71849 (Respondent) Representation: Counsel: J Mee (Appellant) DF Elliot (Respondent) Solicitors: Sachs Gerace Lawyers (Appellant) Grace Lawyers (Respondent) File Number(s): 2024/00100115 Publication restriction: nil Decision under appeal Court or tribunal: NSW Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Citation: N/A Date of Decision: 16 February 2024 Before: S A McDonald, Senior Member File Number(s): 2022/00434325 formerly CL 22/13883 REASONS FOR DECISION Background 1. This is an internal appeal under s 80(2) of the Civil and Administrative Tribunal Act 2013 (the NCAT Act) against a decision made in the Consumer and Commercial Division of the Civil and Administrative Tribunal (NCAT) on 16 February 2024 (the Decision). 2. The Appellant is the owner of lot 6 (also referred to as Unit 302) of Strata Plan No. 71849 which comprises a three bedroom unit on the top floor of a strata scheme in Kingscliff NSW consisting of six residential lots in a three storey Strata Scheme (the building). 3. The Respondent is the Owner's Corporation (OC) of the building. 4. It is common ground that the building has been affected by water ingress. This has caused damage to the common property and lot property inside the Appellant's lot. 5. The parties' dispute has arisen as regards the extent and nature of the repairs to the building, in the context of the OC's obligation to maintain and keep the common property of the strata scheme in a state of good and serviceable repair: see s 106(1) of the Strata Schemes Management Act 2015 NSW (the SSMA). 6. For the reasons set out below, we have determined that the Appellant has established errors in the Decision as to questions of law and consequently that she has the right (i.e., she does not require leave) to make this internal appeal. The errors on questions of law which we have identified are 1. the Tribunal's findings as to the number of common property items in the Appellant's unit which required repair, were based on no evidence, and 2. the Tribunal's failure in the Decision to consider the Appellant's submissions that the limitation period in s 106(6) of the SSMA did not apply to the Appellant's application for a work order, was sufficiently significant to constitute a failure to exercise the Tribunal's jurisdiction under the SSMA. 1. In our view, there is a further question of law regarding whether the determination of the Tribunal that the Appellant's application for a work order was barred by the limitation period in s 106(6) of the SSMA, involved the application of a wrong principle of law. In this regard, leave was granted to the parties to provide written submissions following the appeal hearing as to the Appeal Panel's decision in Tao v The Owners – Strata Plan No 16107 [2023] NSWCATAP 327 (Tao). Having considered those submissions, we have also found that the Tribunal erred on a question of law on that point. 2. The Appellant asked the Appeal Panel to consider a folio of new evidence and to determine the matter for itself without remitting the proceeding to the Tribunal. As we observed during the appeal hearing, such a course raised unacceptable issues of procedural fairness in that the OC would not have the opportunity to consider that new evidence or respond to it during the appeal hearing. 3. In our determination, the proceeding must be remitted to the Consumer and Commercial Division of the Tribunal for determination in accordance with the law, with leave given to the parties to adduce such further evidence as the Tribunal thinks fit. 4. Whilst acknowledging that there had been an error on a question of law in the Tribunal's decision in relation to its failure to consider whether s 106(6) applied to a work order, the OC's counsel submitted for the OC that it would be unnecessary to remit the matter to the Tribunal on that point and the Appeal Panel could consider the question for itself. However, in our view, consideration of the first question of law (i.e., the Tribunal's findings as to the number of common property items in the Appellant's unit which required repair) would necessitate the consideration of the circumstances as they stand at the present time and as set out above, we are not in a position to take into account new evidence at the appellate stage. 5. An application for costs "in the event that the appellant was successful in the appeal" was not pressed by the Appellant. In our view, rule 38A of the Civil and Administrative Tribunal Rules 2014 (the NCAT Rules) applies and each party should pay its own costs of the appeal, but we will grant liberty to apply for costs (with appropriate directions as to written submissions) in the event the parties submit that there are special circumstances which would warrant the making of a costs order in the appeal proceedings: see s 60(2) and s 60(3) of the NCAT Act. 6. The proceedings have so far been underway in the Tribunal for over two years. Given our decision to remit the matter for redetermination, the parties are strongly encouraged to negotiate a settled outcome without the need for further Tribunal hearings. The hearing before the Tribunal on 1 and 2 May 2023 1. The Tribunal's hearing took place over two days and was fraught with complications. These included the late service of a crucial expert report by the OC and the absence of an experts' conclave (i.e., to identify areas of disagreement and the reasons for disagreement) prior to the hearing. 2. The Tribunal noted that the Appellant (who was the Applicant in the Tribunal proceedings) had relied on the following evidence in support of her application: 1. Affidavit of Helen Mary Dart sworn 7 July 2022, together with exhibit HMD-1, 2. Affidavit of Georgina Nicole Josephson sworn 7 July 2022, 3. Reports by Conscious Environments Pty Limited (Conscious Environments) dated 16 May 2021, 25 June 2022 and January 2023, 4. Reports by Jeffrey Hills & Associates (Blair Ripley) dated 30 November 2021 (JHA Report). 1. The OC had relied upon: 1. witness statement of Dominique Williams dated 10 November 2022 and 27 April 2023. Ms Williams was the strata manager of SP 71849, 2. witness statement of Carl Butterfield dated 10 November 2022. Mr Butterfield was the chair of the OC and the owner of lot 4 in SP 71849, 3. witness statement of Christine Gray-Buchanan dated 17 November 2022. Ms Gray-Buchanan was a member of the strata committee of SP 71849 and was the owner of lot 5 in SP 71849, 4. expert report of Blair Ripley dated 25 November 2022 (PDR Report) and 28 April 2023 (supplementary PDR Report) and the further supplementary report. 1. A joint tender bundle (JTB) of five volumes had been provided by the parties at the commencement of the first day of the hearing but there were various objections by counsel for both parties about documents in the JTB, which were noted in the Decision. 2. At the end of two days, the Tribunal was sufficiently frustrated with the deficiencies in the evidence to make further directions as an attempt to refine and define facts and issues between the parties which, at the conclusion of evidence, were still unclear or at least, not reconciled. 3. The Tribunal required the Appellant: 1. to advise the OC of the extent to which 68 items of common property building work referred to in a particular report (Annexure B to the expert report of PDR Freeman t/a Tim Freeman dated 27 April 2023 (sic 28 April 2023) (the Supplementary PDR Report) had been completed (order 5), 2. what items of physical building damage exist in lot 6 as a result of water ingress to be repaired on a room by room basis "including what items appear to be matters of common property for the OC and what are matters for the registered proprietor of Lot 6" (order 6), and 3. to provide a summary of the likely costs of repair of the physical damage of those items for which the registered proprietor of Lot 6 is responsible in order 6 (order 7). 1. When the Appellant served her written submissions in July 2023, she also served two reports from Greg Matthews of GM Building Consultants dated 5 June 2023 (Inspection Report) and 23 June 2023 (Costs Report) in response to the Tribunal's directions. The OC objected to the service of the new reports because the Appellant's case had closed at the conclusion of the hearing on 2 May 2023. The Decision 1. The Tribunal found that the submission of expert reports two months after the hearing constituted new evidence in chief rather than submissions in reply. The Tribunal's directions dated 2 May 2023 had not sought further expert evidence; rather they sought information or particulars. As a result, the Tribunal refused to allow the further reports to form part of the Tribunal's consideration of the matter because the OC had no opportunity to cross examine the new expert, or to respond to the evidence. 2. The Tribunal relevantly noted that the reports from Conscious Environments dated 16 May 2021 and 25 June 2022 apparently concluded that the damage sustained to unit 302 was a direct result of water entering the property from common property areas and not from any internal leak. The damage to unit 302 including ceiling water damage, front bedroom water damage and damage to the flooring were a result of common property defects which the OC had failed to properly maintain and or repair (at [35]). 3. The Appellant had outlined the history of water ingress and damage into unit 302 since about 2013. In early 2016 there was some water ingress issues into unit 302 and the adjacent lot 5 via the roof of the building and in April 2017 the Appellant's daughter noticed two leaks in the third bedroom of unit 302 either from the wall or the roof which continued to get progressively worse into the second half of 2018. Notifications were lodged with the OC and its insurer. The strata manager on behalf of the OC lodged an insurance claim for the water damage in unit 302. By June 2018, water was leaking down through the air conditioning vent and onto the island bench in the kitchen of lot 4 below unit 302 owned by Mr Butterfield. No source was identified. The floorboards of unit 302 started capping in the pantry area and around the kitchen island bench and towards the living room. Although the leak was detected by a plumber, the floorboards continued capping. As the floorboards were a floating floor, the strata manager refused to make a claim under the OC's insurance and insisted the claim should be made under the Appellant's insurance. Correspondence then ensued between the strata manager, the OC, the insurer, and the Appellant. 4. By July 2018, the Appellant said that "the damage in the living area became so bad that the dining table had to be raised off the flooring to ensure that it would not also be damaged by the water ingress". Floorwood commenced work on unit 302 on about 1 March 2019 to repair the mould and moisture damage caused by the external leaks. In October 2018 the Appellant was told by Floorwood that "there is mould growing on and under the boards and I can smell the mould". On 1 May 2020 the Appellant received an email from the owners of the adjacent lot 5 containing a timeline of roof problems for lot 5. Miss Buchanan stated her unit was unliveable (presumably as a result of moisture and mould) and issues of having the roof restored rather than replaced continued to raise problems (at [36]). 5. Floorwood, (who was a contractor approved by the OC for the replacement of the floorboards in unit 302 in 2019) did defective work and as the water ingress problem had not been resolved at that time, this work now needed to be redone. When Flooring Xtra came to do the new flooring in July 2020, the existing flooring was damp to touch, the insulation underneath was soaked, there were high moisture readings throughout the unit and it was dangerous to work in and they considered that all work should cease (at [41]). 6. The Tribunal further noted lay evidence provided for the OC by Christine Gray-Buchanan to the effect that her lot, lot 5 (directly opposite the Appellant's) unit had direct exposure to water ingress via roof leaks from 2012, with varying degrees of ingress but that they had funded their own repair work to the interior of their apartment as a result of a Lot Owners' Agreement (which does not have any bearing on the appeal). 7. An affidavit from Karl Butterfield, the owner of Lot 4 (being unit 202 and the unit beneath the Appellant's unit) gave a history of the water ingress in the complex. 8. A statement from Dominique Williams, the then strata managing agent for the complex noted that at the AGM on 12 July 2022 the OC struck a special levy to raise funds for meeting the cost of installation and repairs and maintenance to the common property. 9. The Tribunal found that, by agreement or omission, the only building defect reports by building experts before the Tribunal were: 1. a report dated 30 November 2021 of an inspection by Blair Ripley and J Hobbs of JHA Australia group on 11 November 2021 when they inspected unit 302 (JHA Report). The report contained 68 recommendations and the lot owner was recorded as relying on the JHA report as establishing common property defects and a basis for proposed orders 5(a)(iii) and 5(b), 2. A report dated 25 November 2022 of PDR Freeman (Blair Ripley, formerly of Jeffrey Hills & Associates and Patrick Freeman of PDR Freeman) inspecting the property on 7 and 19 October 2022 (Tim Freeman Report), and 3. Supplementary Report dated 27 April 2023 of Messrs Freeman and Ripley following inspection immediately prior to the Tribunal hearing (Supplementary Report). 1. The Tribunal had determined to exclude the reports prepared by Mr Greg Matthews of GM Building Consultants, and so, determined that "of the 68 items of defective common property, 66 have been successfully repaired or remediated and the two remaining items of common property are those with in unit 302 which, with appropriate access and in due course, the OC will remediate" (at [63]). 2. The Tribunal further said: 68. Pursuant to s.106(5) of the SSMA, a lot owner may recover from the OC any reasonably foreseeable loss suffered by the owner as a result of the OC's failure to repair and maintain common property. The Tribunal finds that the applicant's losses in respect of the water ingress to unit 302 from the common property were reasonably foreseeable. 1. The Tribunal then went on to consider the authority in the NSW Court of Appeal's decision in The Owners – Strata Plan No 74232 v Tezel [2023] NSWCA 35 (Tezel) at [39] – [40]. 2. The Tribunal found that the decision of the Court of Appeal in Tezel cast doubt on the conclusions reached in Hua Nan Trading Pty Limited v The Owners – Strata Plan No 23296 [2023] NSWCATAP 66 (Hua Nan) about the purported ability of the Tribunal to extend time to bring a claim in respect of loss in a lot property and that time is not 'reset' by any continuing breach by the OC of its obligation to comply with its duties under section 106 SSMA (at [71]). The Tribunal found that no such application to extend time had been made and no matters had been put before the Tribunal in support of such an application. 3. The strata schemes application was lodged on 28 March 2022. Regarding the two year limitation period in s 106(6) of the SSMA, crucially the Tribunal found: 75. The loss, as it can best be summarised, is damage caused by water ingress from the common property into unit 302. Such water ingress caused direct water damage, moisture damage and mould to floors, walls and ceilings of unit 302. … 79. At paragraph 28 of her first affidavit, the applicant states that timber flooring was replaced in unit 302 in 2019 due to water damage but needed further rectification works due to poor workmanship of the flooring installer recommended by a strata manager. Since then further water damage to the flooring has occurred because of the continued water ingress from the common property and damage caused by the flooring installer. … 86. Although the Tribunal is unable to find that all of the applicant's alleged loss occurred before 28 March 2020, the nature of water ingress and leaks from an aged roof is that they will continue and refresh. While some of the mould and water damage may well have arisen after 28 March 2020, the Tribunal has no way of determining on the evidence before it what percentage, if any, of the amount now claimed by the applicant did so. And Tezel states above that there time is not reset by any continuing breach by the OC of its duties. 1. The Tribunal referred to the decision in Boutenko v The Owners – Strata Plan No 774 780 [2022} NSWCATCD 166 (Boutenko) (at [118] – [126]) but went on to find: 88. The circumstances of the present case are somewhat different. The loss suffered here is not the rental loss on the property by it becoming uninhabitable. Rather it is the loss caused by the physical damage to the lot property. Based upon the above evidence, it is clear that the applicant first became aware of water ingress causing moisture damage and mould to her Lot property prior to 28 March 2020. 89. The Tribunal finds that the applicant first became aware of the loss at the time the water-damaged floorboards were to be replaced in March 2019 and on removal the mould and moisture could be readily observed, and after the time when the dining room table had to be raised to ensure that would not also be damaged by water ingress – see paragraphs 34(1) – (11) above. From this time forward, the Tribunal finds that the applicant knew that she had suffered loss from the physical damage to her lot property. 90. In these circumstances, the OC's defence pursuant to s. 106(5) of the SSMA is established and the applicant is not entitled to recover losses in respect of her lot property against the OC. 1. The Tribunal further refused the Appellant's application for the appointment of a strata managing agent under s 237 of the SSMA. Scope and nature of internal appeals 1. Internal appeals may be made as of right on a question of law, and otherwise with leave of the Appeal Panel: s 80(2), NCAT Act. 2. In Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 the Appeal Panel set out at [13] a non-exclusive list of questions of law, which includes: 1. Whether there was no evidence to support a finding of fact: Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 355-6; The Australian Gas Light Company v Valuer-General (1940) 40 SR (NSW) 126 at 138, 2. Whether there was a failure to afford procedural fairness: Italiano v Carbone [2005] NSWCA 177; Clements v Independent Indigenous Advisory Committee [2003] FCAFC 143 at [8]. Section 38 of the NCAT Act prescribes the procedure of the Tribunal generally. Relevantly, s 38(2) expressly requires the Tribunal's procedures to accord with natural justice. Sub-sections 5 and 6 also embody aspects of procedural fairness, 3. Whether a wrong principle of law had been applied: Chapman v Taylor [2004] NSWCA 456 at [33], per Hodgson JA (Beazley and Tobias JJA agreeing). 1. The requirement to afford procedural fairness can overlap with the requirement to exercise jurisdiction. A wrongful denial of, or failure to exercise, jurisdiction can be jurisdictional error, including by a court: Craig v South Australia (1995) 184 CLR 163; [1995] HCA 58 177. 2. Constructive failure to exercise jurisdiction arises where the decision-maker purports to have exercised the jurisdiction but in substance has not undertaken or completed the task of doing so because of failure to address some essential matter. That matter might, for instance, be a statutory precondition to the exercise of the power which it was necessary for the decision-maker to be satisfied of before the power is enlivened. Or it might be a critical argument raised by a party. 3. A further variant of constructive failure to exercise jurisdiction was discussed by members of the High Court in Dranichnikov v Minister for Immigration and Multicultural Affairs (2003) 77 ALJR 1088; [2003] HCA 26 (Dranichnikov). In that case Gummow and Callinan JJ (with whom Hayne J agreed) held that for an administrative decision-maker "[t]o fail to respond to a substantial, clearly articulated argument relying upon established facts" was both a constructive failure to exercise jurisdiction and a failure to accord natural justice: at [23]-[25]. Kirby J similarly found a constructive failure in that case where the decision-maker's mistake "amounts to a basic misunderstanding of the case brought by an applicant": at [88]. 4. It is not necessary for judicial decision-makers to address every argument or every piece of evidence in delivering reasons. As was noted in Corcoran v Far [2019] NSWSC 1284 at [64] by McCallum J (as her Honour then was): The decision in Dranichnikov is not authority for the proposition that a Tribunal will fall into legal error if it fails to refer to and engage with every argument put (whether clearly articulated or otherwise). Some discernment is required. The present case provides a good illustration as to why that must be so. Mr Corcoran's written submissions are littered with lengthy legal arguments that are simply irrelevant to the task for this Court. It is not necessary to engage with every point and indeed to do so would be inimical to the overriding purpose stated in s 56 of the Civil Procedure Act 2005 (NSW). 1. The failure to address an issue must be of sufficient significance as to warrant a conclusion that the decision-maker has failed to complete the exercise of its power by reason of having failed to engage with an issue of importance to the matter being resolved. As noted in Plaintiff M1/2021 v Minister for Home Affairs (2022) 96 ALJR 497; [2022] HCA 17 at [25] - [27] per Kiefel CJ, Keane, Gordon and Steward JJ (footnotes omitted): 25. It is also well-established that the requisite level of engagement by the decision-maker with the representations must occur within the bounds of rationality and reasonableness. What is necessary to comply with the statutory requirement for a valid exercise of power will necessarily depend on the nature, form and content of the representations. The requisite level of engagement – the degree of effort needed by the decision-maker – will vary, among other things, according to the length, clarity and degree of relevance of the representations. The decision-maker is not required to consider claims that are not clearly articulated or which do not clearly arise on the materials before them. 26. Labels like "active intellectual process" and "proper, genuine and realistic consideration" must be understood in their proper context. These formulas have the danger of creating "a kind of general warrant, invoking language of indefinite and subjective application, in which the procedural and substantive merits of any [decision‑maker's] decision can be scrutinised". That is not the correct approach. As Mason J stated in Minister for Aboriginal Affairs v Peko-Wallsend Ltd "[t]he limited role of a court reviewing the exercise of an administrative discretion must constantly be borne in mind". The court does not substitute its decision for that of an administrative decision-maker. 27. None of the preceding analysis detracts from, or is inconsistent with, established principle that, for example, if review of a decision‑maker's reasons discloses that the decision‑maker ignored, overlooked or misunderstood relevant facts or materials or a substantial and clearly articulated argument; misunderstood the applicable law; or misunderstood the case being made by the former visa holder, that may give rise to jurisdictional error. 1. Thus, in Day v SAS Trustee Corporation [2021] NSWCA 71 at [37] Meagher JA stated (with the agreement of Payne and White JJA): "a constructive failure to exercise jurisdiction (or a purported exercise, in the sense that there is an appearance of an exercise of jurisdiction) as alleged by the appellant is not a mere failure to consider evidence or to address an argument or submission, which may be contingent or otherwise insignificant, but a failure to understand and determine a case or claim. The ultimate question is whether a failure to consider and address certain issues or arguments involved a failure to address central or critical elements of the case or claim: compare, in relation to failures to consider evidence, Minister for Immigration and Citizenship v SZRKT (2013) 212 FCR 99; [2013] FCA 317 at [69], [111]. It will be insufficient for the appellant to show that his 'three key issues' were not stated and determined discretely. What he must show is that they raised 'substantial' (in the sense of clearly material) arguments or questions which the primary judge in substance failed to address in determining the appellant's claim ... Grounds of appeal 1. The Appellant outlined 10 grounds of appeal with the notice of appeal. 2. In oral submissions, counsel for the Appellant narrowed the appeal grounds as regards her client's application for a work order, into these categories or topics: 1. Common property issues: 1. that the Tribunal's Decision manifested a misunderstanding as regards the nature and extent of the common property works required in the circumstances (appeal grounds 1, 3, 4, and 5), 2. that the Tribunal denied procedural fairness to the Appellant by allowing the Appellant to be ambushed with evidence immediately prior to the hearing and then did not accept evidence provided in response pursuant to the directions made on 2 May 2023 (appeal grounds 2, and 7). 1. Lot property and SSMA s 106(6) issues 1. that the Tribunal incorrectly found that subsection 106(5) of the SSMA applied to a work order, and that in the circumstances, the limitation period in subsection106(6) must apply to bar the Appellant's claim (appeal ground 6), 2. that the Tribunal erred in declining to extend time in respect of any limitation period which was found to apply (appeal ground 8). 1. By Appeal Ground 9, the Appellant contended that the Tribunal had erred in declining to compulsorily appoint a managing agent for the strata scheme pursuant to s 237 of the SSMA. 2. Appeal Ground 10 related to the Tribunal's order that each party bear their own costs of the proceeding , but it was not pressed at the appeal hearing. The OC's case. 1. The OC by its counsel submitted that the orders sought by the Appellant were of insufficient specificity and could not be made by the Tribunal: see Glenquarry Park Investments Pty Ltd v Hegyesi [2019] NSWSC 425 (Glenquarry). 2. The OC's counsel further submitted that the Appellant had failed to put forward her own evidence and had sought to rely on the evidence of the OC, at the hearing before the Tribunal on 1 and 2 May 2023, and that the Tribunal was justified in rejecting the Appellant's reports which were submitted after the hearing. This was because, so the OC's counsel argued, the Tribunal's orders had sought a list, not evidence, and the Appellant had not sought leave to reopen the proceedings to enable the Appellant's reports to be admitted into evidence. The OC's ultimate submission was that the Appellant should be held to the forensic decisions that were made during and after the Tribunal's hearing in the presentation of her case. Appeal Panel findings and Reasons (referring to the categories or topics put by the Appellant's counsel as abbreviated grounds of appeal) 1. Given our findings regarding the categories or topics, 1(a) and 2(a), to the Appellant's grounds of appeal, we have not been required to consider the Appellant's arguments for the categories or topics as stated for 1(b) and 2(b) above. The nature and extent of the works required to the common property – the Tribunal's findings based on no evidence. 1. After setting out the building defect reports which were before the Tribunal, to be the JHA Report (dated 30 November 2021), the Tim Freeman Report (dated 25 November 2022), and the Supplementary report dated 27 April 2023, the Tribunal noted in the Decision: 58 The Tribunal pays attention to the Supplementary Report as being a statement of evidence almost at the date of the hearing as to what remedial works had been undertaken in respect of the common property. 59. The Supplementary Report identifies 6 leak locations in Unit 302, five of which are roof leaks and one of which is rising damp (1864). The leak locations 1 and 2 are caused by leaking flashings in the vicinity of a vent pipe exposed Deck Tite Flashing over the hallway. Leak locations 3 and 4 are caused by water entering the roof space sideways through the external Blueboard cladding/fascia line between the top of the louvre screens and bottom edge of the roof apron flashings. Leak 5 is caused by water entering the roof space sideways through the External Blueboard cladding at junction to roof apron flashings and top section of external louvre frame. Leak 6 is not a roof leak and is from rising damp from a moisture saturation of balcony tile bed joints of the balcony and not a failure of the waterproof membranes to the balcony slab. … [The Tribunal determined to exclude the reports submitted after the hearing] 62. As a result, the only contemporaneous expert evidence that exists is the Supplementary Report which the Tribunal therefore must accept in respect of its consideration of which items of defective common property have [been] remedied and resolved. 63. In so doing, the Tribunal accepts that of the 68 items of defective common property, 66 have been successfully repaired or remediated and the two remaining items of common property are those within Unit 302 which, with appropriate access and in due course, the OC will remediate. 1. The Appellant contended that these findings considered only the common property issues contained in the JHA Report and that they did not consider the other reports which were before the Tribunal. The JHA report was limited to common property matters external to the units only. JHA did not inspect the inside of the Appellant's unit, so the report did not comment on the common property repairs required to the inside of Unit 302. 2. The Appellant noted that section 3 of the Tim Freeman report specifically addressed the issues requiring attention inside the Appellant's unit, including ceiling damage, balcony waterproofing and tiling, corrosion of window frames, damage to window frame ceiling, rust damage failure on down pipe brackets, damaged timber within the access duct riser, severe black mould on air-conditioning system, corrosion and rusting on external door frames and handles, issues with external metal louvre screens and concrete spalling on columns adjacent to the balcony door frames. 3. As indicated, the OC contended that the Appellant (as applicant at first instance) had made a forensic decision during the hearing to rely on the reports which had been provided by the OC and should be held to those forensic decisions. In the events which occurred, the Appellant decided for the hearing that she would not put forward her own evidence. However, it is tolerably clear that the Senior Member of the Tribunal, who was presiding, wanted clarity as to the real issues in dispute between the parties and that he was frustrated with the (limited) evidence made available for the hearing. Indeed, at the conclusion of the hearing, the Tribunal had asked for a table or a list of the items of common property that the Appellant contended required repair, consistent with the OC's obligation in s 106(1) of the SSMA. 4. The OC contended that there was no misunderstanding on the part of the Tribunal as to the items of common property. The bulk of the common property repairs were set out in the JHA report, and these had been completed, apart from tiling and a spiral staircase. Regarding the common property items within the Appellant's lot, there was no clarity as to the items within the lot space requiring repair. 5. Weighing the parties' arguments, the JHA Report noted at p 82: JHA has been commissioned to undertake a site inspection to identify and report on visual defects of the common property within the complex. This excludes internals or externals of the units. 1. This supports the Appellant's contention that the JHA report did not deal with issues inside the Appellant's unit. 2. Section 3 of the Tim Freeman report, which was also in evidence before the Tribunal is headed "Unit 302 Inspection Findings" and details six locations where water stains and damage to plasterboard ceilings exist, with evidence of varying degrees of mould contamination from minor to extreme. 3. The OC contended that the Tribunal had accepted the evidence of the only expert who gave evidence in the proceedings that the majority of the defects raised in the JHA Report, and the Tim Freeman Report, had been remedied and so a "no evidence" error could not arise. 4. However, the OC's concessions at the hearing at first instance provide a further basis for finding both that the issues within the Appellant's unit had not been remedied and that it was unnecessary for the Appellant to have led further evidence by way of expert reports as to the requirement for repairs within the Appellant's unit. The following exchange at pages 61- 62 of the transcript between the OC's counsel and the Tribunal (emphasis added) is pertinent: ELLIOT: what I might say is, my understanding of what we should be doing, whether that's going to assist or what we acknowledge should be done. SENIOR MEMBER: no, go ahead. ELLIOT: Those two common property items which I've identified that are outside of the lot, the stairs and the tiles and then within the lot there is a hallway ceiling - SENIOR MEMBER: you're in attachment B now, aren't you? ELLIOT: what I'll say is, to the extent that there's - SENIOR MEMBER: you've got 21 items? ELLIOT: yes any common property within the lot we acknowledge that we need to repair and maintain. So for example, there's a ceiling and a hallway that a photo shows is rather gross. We acknowledge that needs to be repaired and maintained. For example in an outdoor balcony there's a roof which the applicant says needs to be repaired and maintained. We say it's made of cement board and doesn't suffer the effects of mould and therefore does not need to be ripped out but may need to be painted, for example. I can put together a full list of the items which we acknowledge but - SENIOR MEMBER: just give me a rough percentage, not by number necessarily, by value, by time, whatever, of the items that need to be repaired then in the unit are the common property as opposed to the lot owner's? ELLIOT: I believe it is just the ceiling - SENIOR MEMBER: it's the walls unless they're internal walls, isn't it? ELLIOT: Quite, yes. SENIOR MEMBER: and it's the floor, although you would say not floor coverings. ELLIOT: Yes, there's an issue about whether the floor's common or lot. But there's also an issue as to the - it depends on also what is pressed in relation to the floor. For example, if the applicant says that you have to rip up the entire floor in the entire apartment, we are likely to press our position about it being lot property, but if it just requires a couple of boards to be fixed, then we may not press that position. What we don't know exactly, this comes back to my starting point, we don't clearly understand or have a list of things which is said that we need to do, apart from what I've prepared myself. SENIOR MEMBER: You may not have a list in the sense that you may not have a shopping list, but you have a duty. ELLIOT: We do have a duty of course. SENIOR MEMBER: And you understand how it applies to this particular building. ELLIOT: In respect of common property, yes. Lot property is a separate issue. SENIOR MEMBER: Lot property is a separate issue, but - ELLIOT: if there's any common property - SENIOR MEMBER: it's yours to care and maintain. ELLIOT: Yes and we acknowledge that we will do that. SENIOR MEMBER: And there's no doubt about that and there's no dispute, there's no time limit, there's no nothing, just do it. 1. A distinction was drawn between lot property and common property. At the Appeal Panel hearing, counsel for the OC clarified that this distinction was for the purposes of determining repairs which fell within the limitation period (discussed below). In the absence of any limitation period, that distinction fell away. This position is consistent with the Appeal Panel's decision in Tao. We brought Tao to the parties' attention, and allowed time for the parties to make written submissions following the appeal hearing as regards Tao's application in the present appeal. 2. The Appeal Panel in Tao held, relevantly: 36. Whether the internal wall is lot property or common property is irrelevant. If it is common property, the Respondent must undertake the necessary repair work based upon its obligations under s 106. If, on the other hand, the damage is to lot property, the Respondent's obligation arises in the circumstances of this case because the damage was the consequence of the work previously undertaken by the Respondent in fixing common property between Lot 8 and Lot 6. 37. Accordingly, it is not necessary for us to determine whether the Respondent is correct in stating that the internal wall is lot property. Whether it is lot property or common property, the consequence remains the same and that is that the Respondent has an obligation to repair the internal wall and do such other work that reasonably addresses the issues identified in the Adelson's report. 1. As we have already noted, the OC's counsel for the appeal hearing took the position that the Appellant had not provided a list of the alleged defective items of common property within the Appellant's lot by reference to the evidence that was before the Tribunal, and that the orders sought by the Appellant lacked specificity, and so must be contrary to Glenquarry. Without needing to go into the detail of those orders, this contention is sufficiently addressed by the Appeal Panel in Selkirk v The Owners – Strata Plan No 2661 [2024] NSWCATAP 17 (Selkirk) as follows: 25. The existence of the OC's strict duty under SSMA s 106(1) was not in dispute. Once the OC conceded its breach of that duty from 5 December 2020, it was part of the scope of fulfilling that duty and rectifying that admitted breach for the OC, not the appellant, to establish the source of water entry and the extent of damage and the scope of works required to remediate it, particularly when an expert quotation said that "membrane failure" about which the appellant complained was one source. The same conclusion would apply if the admission was not made (as it properly was here) but, rather, it was established by the lot owner that there was a breach of duty by, for example, water entry. 26. To the extent that expert evidence was required for such purpose, it was within the OC's scope of duty and obligation to remediate to provide it. … … 37. We do not accept, as the OC submitted, that the strict duty as established by authority is qualified to operate differentially depending on whether the common property in question is purely related to the Appellant's lot or the Appellant is the only person affected by the breach (at least since the water overflow to the lot below from the breach was stopped). To so differentiate would be to read into the application of SSMA s 106 a differentiation that is not there on the plain words and is inconsistent with the thrust of the authority just cited. It is not there for good reason. Such a differentiation would potentially be very difficult to administer and would potentially increase disputation. An owners corporation's judgment call on who was affected by fulfilment of its duty in respect of specific common property would have that consequence. No authority was cited in support of the submission. 38. The foregoing principles are not qualified by the decision in Glenquarry Park Investments PL v Hegyesi [2019] NSWSC 425 at [57]-[74] et seq, [100]-[114]. In Glenquarry Park there were jurisdictional deficiencies in formulation of the orders for remediation, because the formulation potentially imposed on the owners corporation in that case, without basis in the findings, a scope of works which went beyond the owners corporation's strict duty. It was not a dispensation from the strict duty. There was recognised a degree of flexibility in the form of compliance by the owners corporation with the strict duty, which, on the authorities canvassed extensively by Parker J (Ridis v Owners SP 10308 (2005) 63 NSWLR 449, [2005] NSWCA 246, Owners SP 50276 v Thoo [2013] NSWCA 270 and Stolfa) includes replacement if that is reasonably necessary because the item has come to the end of its serviceable operating life and can no longer be kept in a state of good and serviceable repair. The same must be true if the state of the item is so damaged or deteriorated that it cannot be repaired but must be replaced. … 40. An expert report may be integral to formulation of the precise scope of work required to assist the owners corporation to fulfil its strict duty or as an incident of the relief granted to require the owners corporation to fulfil its strict duty: Carli at [53]; cp in a home building context Marr v JCK Building Solutions PL [2018] NCATCD, unreported, 4 December 2018, HB 16/43946 at [46]-[54], where an element of the manner of remediation in certain circumstances may inherently require inspection, properly defined so as to be sufficiently specific, to establish the need for and required scope of remediation. 41. It is consistent with the strict nature of the OC's duty that, once a breach is admitted or established of that duty, it is incumbent on the owners corporation, to fulfil the duty, to establish the source or reason for the breach and the scope of the breach. If the owners corporation fails in fulfilling those aspects of its duty then part of the remedial order is necessarily to compel the required investigations (often expert) to establish those matters so that they can be undertaken as part of the order. 1. We agree with the Appeal Panel's analysis in Selkirk. Adopting that analysis, the solution to the quandary posed by the OC in this appeal – how could the OC know what work was required when it was not set out in the proposed orders? – is remedied by an order for the OC to undertake such investigations as are required to establish the necessary repairs occasioned by the OC's breach of s 106(1). Clearly, this responsibility is not incumbent on the Lot owner. 2. The OC conceded at the Tribunal's hearing that more than two items of common property remained to be repaired. We find that the Tribunal's acceptance (Decision, at [63]) that, "of the 68 items of defective common property, 66 had been successfully repaired or remediated and the two remaining items of common property are those with in unit 302 which, with appropriate access and in due course, the OC will remediate" is in fact, not a position reflected in any of the reports or evidence to which our attention was directed. There was simply no evidence to support an acceptance of the OC's position. This amounted to an error on a question of law. On that basis the Appellant's submission put as 1(a) in her counsel's categories or topics for the appeal grounds, succeeds. Failure to consider Appellant's submission that s 106(6) of the SSMA does not apply to a work order – sufficiently significant to constitute a constructive failure to exercise the Tribunal's jurisdiction 1. Under s 106(1), (5) and (6) to the SSMA: 106 Duty of owners corporation to maintain and repair property (1) An owners corporation for a strata scheme must properly maintain and keep in a state of good and serviceable repair the common property and any personal property vested in the owners corporation. … (5) An owner of a lot in a strata scheme may recover from the owners corporation, as damages for breach of statutory duty, any reasonably foreseeable loss suffered by the owner as a result of a contravention of this section by the owners corporation. (6) An owner may not bring an action under this section for breach of a statutory duty more than 2 years after the owner first becomes aware of the loss. 1. The Appellant submitted that the Tribunal erred in failing to consider the application, or otherwise, of the principles in The Owners – Strata Plan No 74232 v Tezel [2023] NSWCA 35 (Tezel) to the circumstances of her case to the Tribunal, i.e., a claim for work orders, rather than monetary compensation. 2. This argument was clearly raised in the proceedings at first instance. At [86] of the Appellant's written submissions for the Tribunal hearing (dated 3 July 2023), the Appellant (as applicant at first instance) said this: Claim for damages vs work order: It has not been established, in Tezel or in any other case, that the limitation period referred to in section 106(6) applies where the relief sought by the plaintiff is in the nature of a work order relating to lot property (as is the case here) rather than damages (which is not the case here). 1. This submission was then reiterated in the applicant's written submissions in reply (dated 12 October 2023): Limitation period defence Common property and lot property 44. Relevance of distinction: … it is only on the OC's case (specifically because of the limitation period issue raised by the OC) that the distinction between common property and lot property becomes relevant. On Ms Dart's case, the OC is responsible for rectifying the damage in Ms Dart's unit, whether that be damage to common property or lot property, and no limitation period bars her claims. 1. The Appellant submitted that s 106(5) of the SSMA allowed a Lot owner to recover "damages"; that subsection 106(6) of the SSMA refers to "the loss" and this applies only in respect to a claim for damages; and that in consequence, subsection 106(6) is not relevant where the relief claimed for breach of s 106(1) of the SSMA, is a work order. In our view, the Tribunal should have considered this issue. That it did not do so, is in our determination an error on a question of law. 2. The OC's counsel contended that it was not open to the Appellant to "sidestep" subsection106(6) by applying for a work order. (However, if the subsection did not apply to a work order, there is no "sidestepping"; whether a limitation period is engaged does not apply.) The OC's counsel (quite properly, in our view) acknowledged during the appeal hearing that the Tribunal had not considered the applicant's point and that this was an error on a question of law; but contended that it did not require the Appeal Panel to remit the matter, rather that the Appeal Panel could hear and determine the point, pursuant to its authority to do so under s 81(2) of the NCAT Act. 3. The OC's counsel contended that damage is a form of loss. However, there are decisions in the Tribunal which have drawn a distinction between compensation for (financial) loss, (such as loss of rent; Tezel, Boutenko) and on the other hand, applications for repairs in the form of work orders more generally (which do not qualify as compensation for "loss" under s 106(5) so much as "repairs" (Tao [39])). 4. The Tribunal found (Decision at [75]): 75. The loss, as it can best be summarised, is damage caused by water ingress from the common property into Unit 302. Such water ingress caused direct water damage, moisture damage and mould to floors, walls and ceilings of Unit 302. 1. The Appellant was not seeking compensation for financial loss. The Appellant sought work orders to repair damage to common property and lot property which was caused by the OC's acknowledged failure to acquit its obligation to, as s 106(1) of the SSMA states, "properly maintain and keep in a state of good and serviceable repair the common property and any personal property vested in the owners corporation". The Tribunal did not deal with this distinction, which was succinctly framed in the Appellant's submissions to the Tribunal, and so failed to consider a pivotal point in determining whether, in fact, the time limitation in subsection 106(6) applied. 2. The Tribunal (Decision at [87]) quoted at length from Boutenko , including the following paragraphs of that decision which differentiate between damage (remedied by a work order) and loss (remedied by financial compensation) and in our view, tend away from a finding that s 106(6) applies to a work order: 117. Although the principles in Tezel could have been expressed in a more concise manner, in the view of the Tribunal the critical enquiry (by reason of the principles expressed in Vickery and Tezel, which the Tribunal adopts) is the relationship between "the damage" caused by the breach of duty by the owners corporation; "the loss" that is sustained by the damage; and the knowledge by the Lot owner of "the loss" that is sustained by the damage. 118. The "damage" is relevantly the physical damage to common property and Lot property caused by the owners corporation failing to keep and maintain common property in a state of good and serviceable repair. That "damage" may occur due to various events (such as, for example, rain events causing water ingress). It may cause different physical damage at different times due to either the rain event (in respect of which the state of common property allowed water ingress); or due to the ongoing failure of the owners corporation to repair (for example, a water ingress incident may lead at a later period to mould growing on ceilings and walls). The "damage" may occur separately. In such circumstances, the first "damage" is the water ingress causing the Lot to become moist. The second "damage" is mould growing on ceilings and walls. 119. However, critically, the damage must cause loss; and the Lot owner must be aware of "the loss" caused by "the damage." "Loss" is financial loss. The type of loss depends on the facts of the case. In this matter, the applicant is not claiming damages for financial loss due to the cost of repairing Lot property; or personal goods that have been damaged by water ingress; or accommodation costs for moving out of the Lot whilst repairs are performed. Rather, he is claiming damages for the "loss" caused by not being able rent out his Lot due to the damage caused by water ingress. 1. After quoting paragraphs [118] – [126] from Boutenko, the Tribunal noted that the circumstances of the present case were somewhat different in that (Decision at [88]) "The loss suffered here is not the rental loss on the property by it becoming uninhabitable. Rather it is the loss caused by the physical damage to the Lot property." 2. As indicated above the Tribunal then went on to find (Decision at [89] – [90]) that the Appellant had first become aware of the loss more than two years before the application was lodged and the OC's defence under s 106(6) was established in that the Appellant was not entitled to recover losses in respect of her Lot property against the OC. 3. The Tribunal was not bound by the decision in Boutenko, being of another Senior Member of the Consumer and Commercial Division; however having quoted those paragraphs in the decision regarding the distinction between damage and loss in the context of s 106, and being on notice of the Appellant's submissions that s 106(6) did not apply to work orders, the point was crucial in determining whether or not the time limit in s 106(6) should apply. 4. Noting that it is not necessary for judicial decision-makers to address every argument or every piece of evidence in delivering reasons; in this case we are persuaded that the failure to address the distinction between an application for compensation for financial loss and an application for a work order (in determining whether the OC's defence under s 106(6) was established) was of sufficient significance to warrant a conclusion that the Tribunal failed to complete the exercise of its power by reason of having failed to engage with an issue of importance to the matter being resolved. As a result, the Tribunal failed to exercise jurisdiction which demonstrated an error on a question of law. 5. As regards the OC's submission that we should determine the point under s 81(2) of the NCAT Act, we disagree. It was a significant point on which the matter was determined against the Appellant at first instance. If the limitation period did not apply, the matter could have been determined differently. In any event, we consider that the two errors on questions of law as set out above (i.e., 1(a) and 2(a)) are of themselves sufficient for the proceeding as a whole including the application of Tao to be remitted for reconsideration by the Tribunal. 6. The OC sought leave to make written submissions on the Appeal Panel's decision in Tao. Those written submissions having been made, and to assist in any further proceedings, we have considered them briefly below. Our views are obiter dicta only and are given in deference to the parties' written submissions received on 11 and 18 June 2024. The relevance of s 106(6) to an application for a work order – the Appeal Panel's decision in Tao 1. The decision in Tao was delivered between the Tribunal's Decision. Tao provides further analysis on the relevance of s 106(6) to an application for a work order: 39. In coming to the view expressed in the above paragraphs we have considered whether we are precluded from making the proposed work order on the basis that the Appellant's application is barred from being prosecuted by reason of s106(6), that is because the two-year time limit has expired. We are satisfied that the order can be made. There are two reasons for this view. First, it is our view that the time limit only concerns claims for compensation for loss. That is apparent from the reference to "loss" in s106(6). The action referred to in s106(6) is the action referred to in s106(5) for recovery as damages for reasonably foreseeable loss. Secondly, regard must be had to s122.That section provides that an owners corporation has power to undertake works of various kinds. Section 122(6) provides that an owners corporation is liable for any damage to any lot caused by or arising out of any authorised work, without imposing a time limit. 1. In its supplementary written submissions, the OC first contended that Tao was distinguishable on its facts and did not stand for the proposition that the Tribunal could make a work order to rectify lot property damage caused by a breach of s 106(1) – (2) if a claim for loss were barred by s 106(6) SSMA. The Appellant was of the view that Tao did stand for that proposition. 2. The OC sought to distinguish Tao on the basis that the subject of the dispute (a water stain on an internal wall) had been caused by works undertaken by the Owners Corporation in that case and so the obligation to repair arose in the circumstances because the damage was the consequence of the work previously undertaken by the respondent in fixing common property (referring to paragraph [37] in Tao). Subsection 122(6) of the SSMA provides that an owners corporation is liable for any damage to any lot caused by or arising out of any work, or the power of entry, as referred to in the other subsections of s 122, but without imposing a time limit. The OC submitted that in Tao, the enquiry under s 106(5) of the SSMA was not engaged because the lot property damage was not caused by a breach of s 106(1)-(2) of the SSMA, and the Appeal Panel did not undertake the inquiry as to whether the loss was reasonably foreseeable because of the breach. The OC argued that any judicial statements to the effect that "the time limit only concerns claims for compensation for loss" should be construed in the context of the facts of each case and not as a broad statement that work orders are not 'caught' because they concern "damage" and that statutory limitation only applies to claims for "loss". 3. It is clear on the face of the decision in Tao that the order in dispute was Order 2 made by the Tribunal, which was an order dismissing the Appellant's application for an order that the Respondent repair a watermark in the Appellant's lot and pay compensation for the loss of the room with the watermark in the lot. At [13] the Appeal Panel in Tao set out (emphasis added): 13. At [14] the Tribunal gave reasons for dismissing the Appellant's claim for compensation. The Tribunal held that by reason of s 106(6) of the Strata Act the claim for compensation was out of time. We note that the Appellant's application was lodged in 2023 and that the Appellant became aware of the water stain in 2020 (see [9] of the Decision). Since s106 (6) requires an action under s106(5) for damages for reasonably foreseeable loss arising from breach of a statutory duty in s 106(1) or (2) to be brought within two years after the owner first becomes aware of the loss, the dismissal of the claim for compensation is in our view correct. We further discuss these provisions in respect of a work order below. 1. Even though s122 SSMA was also in the frame, the relevance of the time limit in s 106(6) SSMA as it applied to compensation for financial loss compared to an application for a work order was front and centre in Tao. Accordingly, we are satisfied that both reasons for not applying the time limitation are directly relevant to the Appeal Panel's deliberations. 2. The second reason (i.e, that there is no time limit in relation to s 122(6)) is also relevant to the first. If there is no time limit on an owners corporation's obligation to repair damage arising out of work it has arranged to be undertaken in order to acquit its obligations under s 106(1), it does not make sense to impose a time limit on claims for repairs caused by a failure to abide by those obligations in the first place. 3. In our view, the Appellant's counsel makes this point persuasively by observing that the distinction which the OC's counsel now seeks to make, draws an untenable distinction between commissions and omissions (see at [8] of the Appellant's submissions in reply received on 18 June 2024): There is no logical distinction between damage as a consequence of an owners corporation failing to carry out any works at all or as a consequence of an owners corporation carrying out inadequate works, or as a consequence of an owners corporation carrying out faulty works. All of these cases involve a breach of section 106, and if by reason of any of those omissions or commissions, lot property is damaged, the owners corporation is liable to repair it. 1. In the alternative, the OC contended that we should not follow Tao because the Appeal Panel's findings in relation to the application of the time limit in s 106(6) are obiter dicta or because they are wrong. 2. For the reasons set out above, we consider that the Appeal Panel's comments in relation to s 106(6) were directly relevant to its deliberations and so were not obiter dicta. Further we agree with the Appeal Panel's reasoning because we consider that it is consistent with relevant case law and is correct. The OC noted that the Appeal Panel was not assisted by legal representatives, both parties being self-represented. This is hardly unusual in the Tribunal and does not generally affect the calibre of the decision making. 3. The OC referred to the decision in Smith v Owners – Strata Plan No 3004 [2022] NSWSC 1599 and contended that physical damage to lot property and loss or rental income are heads of damage that are reasonably foreseeable as being suffered by a Lot owner by reason of water ingress caused by a breach of s 106(1)-(2). As such, a claim for financial compensation for either of those events would be barred under s 106(6), and this is consistent with the Appeal Panel's determination that the time limit concerns compensation for loss. It does not however support the OC's contention that the time limit applies to an application for a work order. 4. The OC also referred to the decision in Tezel, and particularly the observation (at [40]) that the two year period was directed at ensuring that a Lot owner could not delay taking proceedings in circumstances where the people having to make good the loss are also lot owners and the passage of time may affect their ability, through the owners corporation, to recover that loss from another person. The OC contended that if the time limitation in s 106(6) did not apply to an application for a work order, a Lot owner could delay seeking relief indefinitely for damage to lot property and other lot owners would not be able to order their affairs. However, such a delay would not be in an owner's interests and further, as noted by the Appellant, other limitation periods may potentially apply, while excessive delay causes difficulties in proving causation. 5. The OC contends that Tezel (at [41] – [47]) rejects any distinction between "loss" and "damage" and that such a distinction would lead to the "absurd result" that lot owners would be unable to seek compensation for physical damage to their property under s 106(5) as the loss did not include physical damage. This submission misconstrues the distinction that is drawn in Tao and in Boutenko; the distinction is in fact between the two year time limit concerning only claims for compensation for loss (see Tao at [39]) and not claims for repairs (in the form of a work order). Were the claim made for financial compensation for physical damage, that too would be subject to the two year time limit. However, an owners corporation's obligation to properly maintain the common property and keep it in a state of good and serviceable repair is ongoing, as is its obligation to repair damage caused by its failure to acquit that obligation. As noted by the Appellant in reply the relevant distinction is between the remedy of a work order, and the remedy of monetary compensation (or damages). 6. Leave was granted for the OC to make submissions on Tao; arguably the OC's submissions went further than that in contending that there is no express power in the SSMA for the Tribunal to make a work order in respect of damage to lot property caused by a breach of s 106(1)-(2). However, as White JA made clear in Vickery v The Owners – Strata Plan No 80412 [2020] NSWCA 284 at [173] – [180] (in forming the majority with Basten JA) the Tribunal is empowered to make a work order under s 232(1)(e). The OC pursued its argument that an owner could not use a work order to get relief "through the back door that he or she cannot get through the front." However, as noted above these are not the same types of relief; the time limit in s 106(6) applies to monetary compensation, which the Appellant does not seek in this case. 7. The OC contended that it was unnecessary to remit the whole matter to the Tribunal. We disagree for the reasons given earlier. Order for appointment of Strata Managing Agent under s 237 (appeal ground 9) 1. On its own, the s 237 point would not have been grounds for remitting the proceeding to the Tribunal for redetermination. Contrary to the Appellant's contentions, the Tribunal correctly stated the circumstances in which it could make an order appointing a compulsory strata manager in the disjunctive and did not conflate the elements of s 237(3). The Tribunal's reference to Bischoff & Ors v Sahade & Ors [2015] NSWCATAP 135 in finding that the compulsory appointment of a strata manager was a significant step not to be taken lightly, was also uncontroversial. The Tribunal was simply not satisfied (Decision at [93]) that any alleged deficiencies of the OC in regard to the repair or maintenance of common property which had arisen in evidence in the proceedings, justified the appointment of a strata manager and that none of the other circumstances in s 237(3) applied (Decision at [94]). 2. However, because it would be open to the Appellant to make a new application under s 237 under the circumstances which have occurred since the first hearing in any event, there appears to be little utility in excising the application under s 237 from the matters to be considered on remittal of the proceedings. Costs (appeal ground 10) 1. Ground 10 stated "The Tribunal made an order that each party bear their own costs, However, the OC has sought to be heard on costs." The Appellant sought to stay the process until the determination of this appeal. 2. The Tribunal dismissed the application and found that "it was not immediately apparent" that NCAT Rule 38 applied because the Appellant had sought a work order not a money order and the appropriate order should be that each party should pay its own costs. However, if there were Calderbank offers or other special circumstances of which the Tribunal was unaware, the Tribunal granted leave for either party to approach the Tribunal to seek a timetable for written submissions on costs, to be dealt with on the papers. The OC did make that application. The Appellant sought a stay for that timetable. It did not proceed, and no new costs order has been made in the interim. 3. At the Appeal Panel hearing, counsel for the Appellant stated that the tenth ground of appeal, fell away "apart from the costs of the appeal". The Appellant stated that they were not appealing the order that each party pay its own costs "but in the event that they were successful they did". We were of the view that it was not open to the Appellant to have a bet each way. The Appellant then stated that it was not pressed. 4. Under s 60(2) NCAT Act, the Tribunal may award costs in relation to proceedings before it only if it is satisfied that there are special circumstances warranting an award of costs. Our preliminary view is that neither party has proposed, much less established, special circumstances for the award of costs; nor are there any special circumstances otherwise apparent. 5. Accordingly, we make no order as to the costs of the appeal (with the intent that the parties are to pay their own costs of the appeal proceedings). The parties will have liberty to apply if either party contends for a different costs order. Orders 1. For the reasons given, we make the following orders: 1. The proceedings are remitted to the Consumer and Commercial Division of the Tribunal for determination in accordance with the law, with leave given to the parties to adduce such further evidence as the Tribunal thinks fit. 2. No order as to the costs of the appeal (with the intent that the parties are to pay their own costs of the appeal proceedings). 3. If the appellant and/or the respondent contend for a different costs order, the following orders and directions will apply: 1. Any party contending for a different costs order in the appeal proceedings (costs applicant) is to file and serve a short written submission (no more than 5 A4 size pages), within 14 days of the date of these orders, 2. In that event, Order 2 above will cease to have effect, 3. The other party (the costs respondent) is to file and serve a short written submission (no more than 5 A4 size pages) in response to the costs applicant's submission, within 28 days of the date of these orders, 4. The costs applicant may file and serve any written submissions strictly in reply to the costs respondent's submissions (no more than 2 A4 size pages) within 35 days of the date of these orders, 5. Subject to the parties' submissions on this point, the Appeal Panel proposes to determine any application for a different costs order in the appeal proceedings without a hearing, pursuant to s 50(2) of the Civil and Administrative Tribunal Act 2013 NSW, based on the written submissions provided in accordance with the directions as set out above. ********** I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 26 July 2024