Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Bass-Skardon v The Owners-Strata Plan No 33038 [2024] NSWCATCD 30 Hearing dates: 04 July 2023; 11 September 2023 Date of orders: 01 March 2024 (Amended on 22 April 2024) Decision date: 01 March 2024 Jurisdiction: Consumer and Commercial Division Before: G Sarginson, Senior Member The Notice of Order issue on 01 March 2024 is amended under Section 63 of the Civil and Administrative Tribunal Act 2013, and should read as follows: Decision: (1) By 3 months from the date of this decision, The Owners-Strata Plan No 33038, using suitably licensed persons exercising due care and skill, is to cause the performance of the works set out in paragraph [117] of the decision. (2) The Applicants are to file with the Tribunal and serve on the Respondent, by person or by post and additionally by email, all costs submissions and documents by 14 days from the date of this decision. (3) The Respondent is to file with the Tribunal and serve on the Applicants, by person or by post and additionally by email, all costs submissions and documents by 28 days from the date of this decision. (4) The Applicants are to file with the Tribunal and serve on the Respondent, by person or by post and additionally by email, all costs submissions in reply by 35 days from the date of this decision. (5) The costs submissions of the parties are to include whether they consent to the issue of costs being determined without a further oral hearing and if not, why not. (6) If a party seeks an extension of time to comply with directions, an application should be made in writing to the Tribunal no later than the day prior to the date for submission of documents. (7) Other than in respect of order 1, the application for orders by the Applicants in the proceedings listed for hearing on 4 July 2023 and 11 September 2023 (including the application for interim orders not previously determined by the Tribunal) is dismissed. (8) The Applicants are to give the owners corporation and any builder, engineer, or tradesperson engaged on behalf of the owners corporation reasonable access to Lot 6 so that the works in order (1) can be performed. Catchwords: LAND LAW---Strata title---Duty to repair common property---Whether duty breached---Nature and extent of repairs---Determination of appropriate works to comply with duty Legislation Cited: Strata Schemes Development Act 2015 (NSW) Strata Schemes Management Act 2015 (NSW) Cases Cited: Glenquarry Park Investments Pty Ltd v Hegyesi [2019] NSWSC 425 Halil v NSW Land and Housing Corporation (No 2) [2023] NSWSC 1646 The Owners-Strata Plan No 21563 v Rutherford [2023] NSWCATAP 326 The Owners-Strata Plan No 33368 v Gittins [2022] NSWCATAP 130 Texts Cited: None cited Category: Principal judgment Parties: Moira Bass-Skardon and Anthony Abbess (Applicants) The Owners-Strata Plan No 33038 (Respondent) Representation: M. Bass-Skardon, self-represented (Applicants) S. Harder, strata committee member (Respondent) File Number(s): 2023/00411749, 2023/00401459, 2023/00403057 and 2023/00380726 (Previously SC 23/05181; SC 23/15691; SC 23/15695; and SC 23/37329) Publication restriction: Nil REASONS FOR DECISION 1. This is an application by Ms Bass-Skardon and Mr Abbess for repairs to be performed to common property of a strata scheme pursuant to the obligations of the owners corporation to keep and maintain common property in a reasonable state of repair under s 106(1) of the Strata Schemes Management Act 2015 (NSW) (SSM Act). Background 1. The area in which repairs are sought is, primarily, the underfloor area beneath the applicants' Lot. 2. In this decision, any referent to "the Lot owners" is a reference to the applicants; and any reference to "the owners corporation" is a reference to the respondent. 3. At all relevant times, Ms Bass-Skardon appeared before the Tribunal representing both Lot owners. The owners corporation was represented by a strata committee member, Ms Harder. 4. The Lot owners are the owners of Lot 6 of the strata scheme building. That Lot is located on the ground floor of the building, in close proximity to an area of the building that is referred to as the "southern balcony." 5. The strata scheme building is located in an inner southern suburb of Sydney. 6. The building is two stories in height and was constructed in the late 19th century. At a point in time it was converted to being a strata scheme, with 9 Lots. The Lots are used for residential purposes. Although there is no direct evidence on this issue, it appears the strata building was, in its original form, a mansion that was later converted into separate residences. 7. On the ground floor of the building there is a set of stairs that lead from ground level up to a balcony/landing that abuts Lot 6 and Lot 7. That balcony/landing leads to external staircases on each side of Lot 6 and Lot 7 that each lead to the first floor of the strata building. 8. There is a complex procedural history to the dispute. 9. On 17 June 2022, the Lot owners took proceedings in the Tribunal seeking interim order relief and substantive proceedings in respect of water ingress into the sub-floor area below the balcony, Lot 6, and Lot 7, which was allegedly causing black mould in Lot 6. 10. The Lot owners were not clear in respect of what orders were sought. However, one of the orders was that the owners corporation be restrained from performing "demolition and cosmetic work" before it installed sub-floor drainage and repairs. The "demolition and cosmetic work" the Lot owners complained of involved repair works to the balcony/terrace; the back courtyard and the side path that the owners corporation had resolved to perform. Decision of the Tribunal Dated 9 September 2022 1. On 9 September 2022, those proceedings were heard and determined in the Tribunal (Titterton SM). The Tribunal made orders that: 1. By 31 December 2022, the owners corporation is to undertake and complete repairs to the balcony, the side pathway downpipe and the pathway. 2. No Lot owner is to obstruct the respondent or its contractors in the performance of the works. 3. The application is otherwise dismissed. 1. That decision was not appealed by either party and it is unnecessary to explore whether the work order in the form expressed complies with the principles set out in Glenquarry Park Investments Pty Ltd v Hegyesi [2019] NSWSC 425 at [100]-[114]. 2. The decision of the Tribunal dated 9 September 2022 contains written reasons. Leaving aside the various claims of the Lot owners (identified at p 4 of the reasons) that were dismissed, the Tribunal referred to the expert investigations that the owners corporation had engaged in respect of repairs to the common property. 3. The Tribunal noted that in 2018 the owners corporation had engaged Total Building Engineering Solutions (TBES), a structural engineering expert, to inspect the condition of the subfloor under the strata building after "flooding". In 2019 the owners of Lots 5, 6 and 7 complained of mould and dampness in their Lots. In 2020 there were limited "damp-proof" repairs conducted by a builder, Zenith Remedial. In 2022 there was further disputation regarding the extent of repairs that needed to be conducted (including the underfloor area; and external drainage issues) that involved the Lot owners and the owners of Lot 7 with the owners corporation, including which builder should be conducted to perform repairs and the extent of repairs. 4. The Tribunal noted that TBES had prepared reports dated 5 June 2020 and 22 July 2022 in addition to its original report in September 2018. 5. In essence, TBES found that there was inadequate drainage in the rear courtyard that had affected the sub-floor area and that there was mould in Lot 6 which occurred as a result of "constant water ingress into the sub-floor due to poor site drainage"; there was evidence of timber rot, mould and deterioration in the sub-floor elements; and there was a "large crack in the balcony" which was a "significant safety concern" due to the potential for collapse. 6. TBES recommended that remedial works be performed involving the sub-floor area; balcony; and drainage in the courtyard. The owners corporation had resolved to conduct such works. The Lot owners sought additional works be performed; disputed the level of "priority" given to the works; and raised concerns about the presence of asbestos. 7. However, the Tribunal was not satisfied that a work order should be made other than repairs to the balcony; the side pathway downpipe; and the pathway. The Tribunal stated as follows: I am uninclined, given the preliminary nature of the reports, to order any specific work to be undertaken to the sub-floor. I am quite satisfied that the respondent is aware of its obligations to maintain the premises, and am confident that they will consider the advice contained in those reports, and in whatever other reports they may obtain and address any structural issues in the sub-floor. 1. The Tribunal also dismissed the Lot owners claim for damages under ss 106(5) and 232 of the SSM Act in respect of failure to repair common property. Events From December 2022 1. In about late 2022 it appears there were discussions between Lot owners about "selling" the strata scheme building rather than conducting repairs (i.e. resolving to sell or redevelop the strata scheme under Part 10 of the Strata Schemes Development Act 2015 (NSW)). There was limited evidence as to the detail of such discussions and the Tribunal cannot ascertained how serious or advanced they were. In any event, the discussions do not affect the duty of the owners corporation to keep and maintain common property in a state of good repair under s 106(1) of the SSM Act. 2. At an Extraordinary General Meeting of the owners corporation on 15 December 2022 it was resolved that, in respect of "balcony repairs": Resolved ove the quote from BIRS to carry out items 1,2 and 4 and defer item 3 (the courtyard) to a later date. 1. The Agenda for the meeting had a quotation from BIRS (a licensed builder) to perform works in the total amount of $149,980. The quotation contained a scope of works. The scope of works is summarised as follows: 1. Item 1-Structural engineering involvement to provide plans and specifications for the "front deck works" ($5,000). 2. Item 2-Works to the "front balcony/deck floor" and "replacement of 2 windows on eastern cavity masonry wall" ($77,500). 3. Item 3-Courtyard replacement with new floor drainage ($43,533). 4. Item 4-Works to the side footpath ($11,690). 1. On 2 February 2023, the Lot owners commenced proceedings in the Tribunal seeking a penalty under s 247A of the SSM Act by reason of the owners corporation not complying with the orders of the Tribunal dated 9 September 2022. 2. In about February 2023 the owners corporation, using TBES and BIRS, commenced works to the balcony. However, soon after commencing work TBES observed that, after inspecting the sub-floor in the proximity of the "eastern stairway structure" that the structural column was only partially supporting the staircase and that if that was not addressed the demolition of the concrete slab that constituted the balcony could cause the stairways to collapse as they would lack independent structural support. 3. TBES recommended demolishing the stairway structures located on both sides of the main entrance and that further controlled demolition of the slab be carried out upon the completion of the demolition of the stairway structure. Demolishing and reconstructing the stairs would also involve the creation of a design and structural engineering specifications for the reconstructed staircases. 4. Works were suspended in February 2023 for a period of time. 5. While works were suspended, the Lot owners proceedings in the Tribunal continued. For reasons that are unnecessary to detail, the penalty proceedings were amended to be a renewal application under cl. 8 of sch. 4 of the NCAT Act. There were also various directions hearings before Harrowell DP. 6. The Lot owners had raised that the works sought to be performed by the owners corporation caused a risk of asbestos contamination and that no suitable measures had been taken to ameliorate that risk. An attempt was made by Harrowell DP to have the parties agree on a scope of works, including any issue regarding asbestos contamination. Ultimately, no resolution was reached. 7. On 23 March 2023, the Lot owners filed a bundle of documents with the Tribunal. Those documents relevantly included: 1. A chronology of events. 2. Report and quotation of Mould Men dated 21 July 2022. That report referred to there being mould "deeply embedded" in the floorboards and sub-floor of (and proximate to) Lot 6. 3. TBES Report ("Brief Inspection Update") dated 22 July 2022. 4. Agenda for Extraordinary General Meeting of owners corporation held on 15 December 2022. 5. Minutes of Extraordinary General Meeting dated 15 December 2022. 6. Expert report of Mr Dan Drexler of NSW Master Building Inspectors dated 19 January 2023 and tax invoice for the cost of the report. 7. TBES Report dated 5 June 2020 8. BIV Reports Pty Ltd (Asbestos Register and Management Plan) dated 17 January 2023 and 6 February 2023. 9. Quote of Harbourside Plumbing and Gasfitting Pty Ltd (HPG) dated 19 February 2023 for repair of the stormwater drainage system ($4,900 plus GST). 10. Asbestos Clearance Certificate and report of Clearsafe Environmental Solutions dated 23 February 2023. 11. Agenda for Extraordinary General Meeting of owners corporation dated 28 March 2023. 1. On 3 April 2023, the Lot owners filed further proceedings in the Tribunal, being an application for substantive orders and an application for interim orders. 2. The application for interim sought various orders which were not interim orders under s 231 of the SSM Act. Rather, the Lot owners asserted that the owners corporation "persists on remediating external areas linked to the sub-floor (i.e. balcony, a roofing downpipe Eastern side, and external stairs) instead of the rotting sub-floor ceiling (sic) joints, lintels and broken beams which support the main building." 3. The application for interim orders sought that the sub-floor under the strata building be repaired; that all "roofing downpipes" be "checked;" that there be regular "spot checks" for the presence of asbestos during the balcony works; that an order be made under s 188 of the SSM Act for "strata records and attachments"' and the owners corporation reimburse the Lot owners for the cost of two reports the Lot owners had obtained (one of which involved the issue of asbestos removal). 4. The application for substantive orders filed on 3 April 2023 sought the same orders as the substantive proceedings. 5. The application for interim orders was listed for hearing on 3 May 2023 and the substantive proceedings were listed for a directions hearing. 6. The Tribunal did not make any interim orders, and made procedural directions setting the substantive proceedings down for hearing with procedural directions for the filing and serving of documentary evidence. 7. The Lot owners filed and served documentary evidence on 17 May 2023. There was included in those documents a document described as "Points of Claim." The Points of Claim set out, in substance, that the what the Lot owners sought was repairs to the subfloor and the "checking" of stormwater downpipes. There was, reference to "communications" being provided under s 188 of the SSM Act and the appointment of a compulsory strata manager under s 237 of the SSM Act. However, ultimately, orders were not pressed in these proceedings under s 188 of the SSM Act or s 237 of the SSM Act. 8. The Lot owners documents repeated many of the documents that were contained in the bundle of documents filed on 23 March 2023 and relevantly included: 1. Report and quotation of Mould Men dated 21 July 2022. 2. Report of TBES dated 22 July 2022. 3. Expert report of Mr Dan Drexler, building consultant, of NSW Master Building Inspections dated 19 January 2023. 4. BIV Reports Pty Ltd (Asbestos Inspection) dated 17 January 2023 and 6 February 2023. 5. Clearsafe Environmental Solutions "Asbestos Clearance Certificate" dated 23 February 2023. 6. A document entitled Preliminary Scope of Works (Proposed by Applicant). 1. The "Preliminary Scope of Works" (Proposed by Applicant), was in substance, that before current remediation works to the balcony proceed, the owners corporation engage experts to perform further inspections, including to the entire sub-floor area and the drainage system of the building and then obtain quotations. It was also identified that the owners corporation should install temporary propping to the balcony whilst the sub-floor and drainage expert inspections occur, and that there be regular expert "spot checks" regarding the existence of asbestos. The Lot owners also sought that the wall sheeting outside of Lots 6 and 7 front patio entries be replaced. 2. The owners corporation had filed and served documentary evidence on 13 May 2023. 3. That documentary evidence included a document of 123 pages (including index) which was, in substance, a hybrid witness statement and submissions, where Ms Harder (strata committee member) and 2 other Lot owners set out what was asserted to be the relevant factual events (including chronology) and some email correspondence involving Ms Bass-Skardon. There was also a further copy of the TBES report dated 22 July 2022. 4. In substance, what the owners corporation asserted was that it was taking measures to comply with the orders of the Tribunal dated 9 September 2022 but had been delayed for reasons that included the issues with the staircases. The owners corporation did not accept that all of the sub-floor needed to be further investigated and repaired, nor the whole of the drainage system investigated and repaired. The owners corporation submitted that the Lot owners were unreasonably intruding into the repair process and it was the Lot owners who were causing delays because Ms Bass-Skardon was not satisfied with the extent of the repairs. 5. On 13 June 2023, the Lot owners filed and served a further bundle of documents. Those documents included various emails and two statutory declarations of persons who simply stated that they were prepared to be a witness "if required." 6. Importantly, in the documents on 13 June 2023 was a Scott Schedule. That document had not been attached to the report of Mr Drexler. The Scott Schedule contained a scope of works (and costings) to reconstruct the timber floors and sub-floor area of (and beneath) Lot 6, together with drainage works. The Scott Schedule also referred to the cost of the Lot owners vacating the property for 4 weeks and storage likely storage costs. 7. The total cost identified in the Scott Schedule was $117,767, which included $16,000 for storage and accommodation (for a period of 4 weeks while the sub-floor and flooring was being replaced). Hearing on 4 July 2023 1. On 4 July 2023, the Lot owners substantive proceedings were listed for hearing at the Tribunal. Ms Bass-Skardon appeared, and her expert Mr Drexler also attended. Ms Harder, strata committee member, appeared for the owners corporation. 2. At that hearing, Ms Bass-Skardon stated that the Lot owners were not seeking any orders under s 188 of the SSM Act for production of documents, as that application was being pursued in separate proceedings. It also became clear that the Lot owners were not pressing for any order to appoint a compulsory strata manager in the proceedings that were listed on 4 July 2023. 3. In any event, if compulsory appointment of a strata manager was sought that application would have been dismissed as the Lot owners had failed to file and serve any terms and conditions of a proposed compulsory strata manager; a copy of a proposed compulsory strata manager's licence; and a letter from a proposed compulsory strata manager agreeing to be appointed (ss 237(4) and (5) of the SSM Act). 4. The hearing was not able to conclude on 4 July 2023. The reason for this was the Scott Schedule. It became apparent that the Scott Schedule was prepared by Mr Drexler and was attached to his report of 19 January 2023, but had not been served with that report. 5. The hearing was adjourned part-heard for the owners corporation to have the opportunity to obtain and serve any evidence in response to the opinions expressed in the Scott Schedule of Mr Drexler. 6. However, prior to the adjournment, the Tribunal head the lay evidence in the matter, with Ms Bass-Skardon and Ms Harder giving evidence and being given the opportunity to cross examine each other. The documentary evidence of each party that had been filed and served was identified and admitted into evidence subject to submissions on weight and relevance. New Application for Interim Orders Filed By Lot Owners 1. On 14 August 2023, Ms Bass-Skardon (on behalf of herself and Mr Abbess) filed a fresh application for interim orders. 2. The application sought an interim order under s 231 of the SSM Act to prevent the owners corporation from recommencing and completing the works to the balcony and staircases (and downpipe) that had been started in early 2023 until the conclusion of the proceeding that had been part-heard on 4 July 2023. 3. In the course of the application for interim orders (and in respect of the substantive proceedings) the owners corporation filed and served a further report of TBES dated 20 July 2023. That report arose from a further inspection on 10 July 2023. Report of TBES Dated 20 July 2023 1. The report of 20 July 2023 attached various photographs taken at the site inspection on 10 July 2023. The site inspection was conducted by Mr Obradovic (director of TBES) and Mr Sarveli (senior structural engineer/remedial engineer). The photographs were mainly of the sub-floor area underneath the balcony, but there was also photographs of the balcony and staircases, including photographs showing the works that had been done in February 2023 (which had involved limited demolition works of tiles of the balcony). 2. The report did not engage with or respond to the report of Mr Drexler dated 19 January 2023 or his Scott Schedule. 3. The report relevantly stated as follows: 1.3.3. Subfloor timber members under the external concrete deck had signs of previous water damage and were partially rotted. No timber rot in joists or bearers was observed under the internal unit areas. Most of the sub-floor timber members under the internal area that had some stains were probe tested for the presence of rot (Photos 23-25, 29). Hence we believe most of the sub-floor structural support beams were still in acceptable condition due to the absence of visually detectable damage. 1.3.4 We observed deficient support for timber bearer beams on most of the brick piers. Small packers were used under the timber bearers (Photos 12-17). We believe these packers may be compressible, and also, some of them had insufficient bearing areas. Hence our recommendation is to replace the unsuitable packer with the new compliant packers made of non-compressible materials. The contractor shall be able to do it by installing temporary props under bearer beams without the need for disturbing timber floorboards. 1.3.5 At some openings we observed steel lintel beams to be corroded or partially displaced (Photos 18, 25-28). We recommend remediating most of the lintel beams in the sub-floor area by the installation of temporary propping and supplying new galvanised steel beams. To size the new lintel beams, further structural design calculation will be required. 1.3.6. It is recommended that a detailed dilapidation survey of the whole building survey is undertaken prior to the commencement of any works to the concrete deck of the sub-floor. CONCLUSION 2.1. Remediation Recommendations 2.1.1. The southern concrete deck and adjacent stairs require full replacement as well as sub-floor supports under the external deck. 2.1.2. Lintel beams, and bearer support packers, will be required replacement in the sub-floor. These works can be undertaken from the sub-floor without the need for the replacement of timber floorboards. Additional Documentary Material in the Application for Interim Orders 1. In the application for interim orders, the owners corporation also relied on further documentary evidence, being an Airsafe Laboratories Pty Ltd report (by Mr Shaw) dated 11 July 2023 in respect of cement and mortar samples tested for asbestos. The report stated that no asbestos was detected. 2. The owners corporation also relied upon emails between Mr Obradovic and the strata manager Mr Manns between March and May 2023 which stated the balcony, in its current condition, was a safety risk due to the potential for collapse and that the staircases needed to be demolished and a design then performed to reconstruct the staircases. Mr Obradovic stated that it would be most cost efficient to demolish the staircases in the course of demolishing the balcony and then identify a design for reconstruction of the staircases. He also stated that as the work involved structural works an engineering design was required under the Design and Building Practitioners Act 2020 (NSW). Hearing for Interim Orders and Decision of the Tribunal to Refuse Interim Orders Restraining Owners Corporation from Conducting Works 1. The hearing for interim orders was listed for hearing before the Tribunal on 18 August 2023 before this Senior Member. 2. Ms Bass-Skardon appeared for the applicants and Ms Harder and Mr Manns (strata manager) appeared for the respondent owners corporation. 3. At the hearing for interim orders, the owners corporation submitted that the demolition works were about to recommence, with work (unless prevented to commence by orders of the Tribunal) stating within a few days and the demolition works likely to take 1-2 weeks. After the demolition works occurred, the owners corporation would then obtain a design for the staircases and instruct the builder (under the supervision of the engineer) to reconstruct the staircases and the balcony. 4. The Tribunal heard argument from both parties, and declined to make interim orders restraining the owners corporation from performing the works. 5. The Tribunal gave written reasons for its decision. It is unnecessary to repeat those reasons. In essence, the Tribunal was not satisfied that the balance of convenience was in favour of restraining the owners corporation, as (a) the area was in an unsafe condition; (b) the owners corporation owned the common property and had a duty to keep and maintain the common property in a state of good repair; (c) the owners corporation had resolved to conduct repairs and had previously been ordered by the Tribunal to conduct repairs to the balcony; and (d) potential further repairs to the sub-floor underneath the applicants' Lot and the floorboards was not a sufficient basis to delay repairs to the staircases and balcony. 6. The matter was then again listed for hearing before the Tribunal on 11 September 2023 to conclude the evidence at the hearing. 7. The owners corporation tendered the report of TBES dated 20 July 2023. No other expert evidence had been obtained by the owners corporation since the previous hearing, nor a report that directly responded to the report of Mr Drexler dated 19 January 2023 (or the Scott Schedule prepared by Mr Drexler). 8. Mr Drexler was present at the hearing on 11 September 2023. He was cross examined by Ms Harder. 9. The parties then made oral submissions (including reply submissions) as to why the Tribunal should, or should not, make the orders sought. 10. During submissions, it was submitted by the respondent that "removal of mould" was the subject of other current NCAT proceedings by the applicants. The owners corporation's comments to the Scott Schedule prepared by Mr Drexler stated on the issue of mould: Not admit-Mound removal has already been completed 21/7/22-This has already been tried via NCAT case SC 22/27794 and SC 22/27262-The owners corporation was not responsible for removing the Mould. No other further communication has been received by the Owners Corporation on this matter. CONSIDERATION 1. A difficulty in this matter is the multiplicity of proceedings lodged by the applicants, and the confusing between what orders are being sought in the matters when orders sought overlap. Neither party provided clarity to the Tribunal regarding the orders sought, nor whether other proceedings had been listed for hearing (and, if so, when that hearing was to occur). Both parties (the Lot owners in particular) had a tendency to confabulate between the various proceedings (including the proceedings that were before Titterton SM). 2. Both parties also filed and served their documentary evidence in a disorganised manner rather than each filing a single bundle. 3. Ultimately, the role of the Tribunal as decision maker is "to fairly and justly identify the nub of what was sought to be argued" in the proceedings that were listed for hearing on 4 July 2023 and 11 September 2023, while ensuring that both parties are accorded procedural fairness, and without undertaking "a partisan analysis of lengthy, unstructured assertions and misconceptions" (Halil v NSW Land and Housing Corporation (No 2) [2023] NSWSC 1646 at [63]). 4. Common property is any part or parcel of the strata scheme that is not comprise of a Lot. The boundaries of a Lot are (unless otherwise identified in the registered strata plan) the inner surface of walls; the upper surface of floors; and the under surface of the ceiling. Common infrastructure is also common property (ss 4 and 6 of the Strata Schemes Development Act 2015 (NSW)). 5. In this matter, the Tribunal is satisfied that all of the areas in dispute involve common property. 6. Section 106 of the SSM Act states as follows: 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. (2) An owners corporation must renew or replace any fixtures or fittings comprised in the common property and any personal property vested in the owners corporation. (3) This section does not apply to a particular item of property if the owners corporation determines by special resolution that— (a) it is inappropriate to maintain, renew, replace or repair the property, and (b) its decision will not affect the safety of any building, structure or common property in the strata scheme or detract from the appearance of any property in the strata scheme. (4) If an owners corporation has taken action against an owner or other person in respect of damage to the common property, it may defer compliance with subsection (1) or (2) in relation to the damage to the property until the completion of the action if the failure to comply will not affect the safety of any building, structure or common property in the strata scheme. (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. (7) This section is subject to the provisions of any common property memorandum adopted by the by-laws for the strata scheme under this Division, any common property rights by-law or any by-law made under section 108. (8) This section does not affect any duty or right of the owners corporation under any other law. 1. Under ss 232 and 241 of the SSM Act, the Tribunal has the power to make remedial orders to settle complaints or disputes about the exercise or failure to exercise a function conferred on the owners corporation imposed by the SSM Act, including an order that the owners corporation take specified action. 2. The applicable legal principles pertaining to the owners corporation's duty under s 106(1) of the SSM Act was summarised in the Appeal Panel decision of The Owners-Strata Plan No 33368 v Gittins [2022] NSWCATAP 130 at [57]-[59] as follows: The scope of the duty of an owners corporation to maintain and keep in a state of good repair common property has been the subject of extensive judicial consideration (e.g. Seiwa Australian Pty Ltd v Owners Strata Plan 25042 [2006] NSWSC 1157; Ridis v Strata Plan 10308 [2005] NSWCA 246; Stolfa v Owners Strata Plan 4366 & Ors [2009] NSWSC 589; Stolfa v Hempton [2010] NSWCA 218; The Owners Strata Plan No 50276 v Thoo [2013] NSWCA 270; and Glenquarry Park Investments Pty Ltd v Hegyesi [2019] NSWSC 425 ('Hegyesi')). In The Owners-Strata Plan SP 20211 v Rosenthal; Rosenthal v The Owners-Strata Plan No 20211 [2018] NSWCATAP 243 ("Rosenthal") and Loneragan v The Owners-Strata Plan No 16519 [2020] NSWCATAP 177 ("Loneragan"), the Appeal Panel summarised the principles applicable to the duty of an owners corporation under s 106 (1) and (2) of the SSM Act as follows (Rosenthal at [35]-[36]; Loneragan at [29]-[41]). The pertinent principles (excluding authority references) are: (1) The owners corporation has a strict duty under s 106 (1) of the SSM Act to maintain and keep in a state of good and serviceable repair the common property. That duty is not merely to take reasonable steps or use best endeavours. (2) The duty under s 106 (1) of the SSM Act includes keeping common property in order by acts of maintenance before it falls out of condition. The duty includes taking preventative measures to ensure there is not a malfunction. The duty also includes remediation of defects in the original construction of the common property. (3) 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 of the s 106 (1) duty. (4) Breach of the duty under s 106 (1) of the SSM Act gives each Lot owner a statutory cause of action. (5) Repairs to common property (including renewal or replacement of common property) that does not involve alteration or addition for the purpose of improving or enhancing the common property does not require a special resolution of the owners corporation under s 108 of the SSM Act. (6) Renewal or replacement of common property under s 106 (2) of the SSM Act is only engaged when the item of common property is no longer operating effectively, or at all, or has fallen into a state of disrepair. (7) Renewal or replacement of common property under s 106 (2) of the SSM Act is limited by a concept of reasonable necessity. Further, in Hegyesi, Parker J referred to the scope of the remedial powers of the Tribunal under s 232 of the SSM Act. In the context of remedial work orders for breach of s 106 of the SSM Act, Parker J held: (1) Orders must be focussed upon the minimum necessary for the owners corporation to comply with its duty to maintain and keep in a state of good repair the common property (paras [111]-[112]). (2) Orders for repairs must be sufficiently specific so that the owners corporation understands what needs to be done to comply with the orders, and not vague or indeterminate (paras [104]; [113]-[114]). Evidence of Mr Drexler 1. Mr Drexler's report states that he had read and complies with the NCAT Expert Code of Conduct for Expert Witnesses (Procedural Direction 3) and states that his report includes a copy of his curriculum vitae. 2. Mr Drexler inspected the sub-floor below the applicant's Lot on 19 January 2023. His report contains a number of photographs he took of the sub-floor area. 3. Mr Drexler did not perform an internal inspection of the applicants' Lot. At paragraphs [13]-[15] he states that Ms Bass-Skardon "instructed" him that there was extensive mould growth in the Lot due to damp entry through the kitchen floor. However, Mr Drexler performed no internal inspection of the Lot to verify his instructions from Ms Bass-Skardon. 4. Mr Drexler states that: 1. The main timber floor beams below Lot 6 are severely rotted due to damp. 2. Extensive rotted timber that had been part of the "main timber floor structure" had dislodged and fallen to the ground. 3. There was extensive rubble, comprising of rotted timber, bricks, rocks and cement on the ground below Lot 6. 4. Brick piers below Lot 6 had subsided and small blocks of timber had been inserted between the tops of the piers and underside of the timber beams to prevent piers from collapsing. 5. Severe borer damage was present along the main timber beams below Lot 6 at random locations. 6. The base brick foundation walls below Lot 6 were extensively water stained due to damp penetration. 7. The timber floor below Lot 6 was in danger of collapse. 8. The slope of the land at the strata building is towards the ground below Lot 6, which is the lowest point of the property. 9. Some of the downpipes that collect rainwater from the gutters of the building are not connected to the stormwater system, but discharge their contents into the surface of the ground. 10. The failure to connect downpipes into the stormwater system and inadequate drainage has led to water being directed towards the building, which is in breach of Sections 3.1.2.2 and 3.1.2.3 of the Building Code of Australia. 1. Mr Drexler concludes his report as follows: In summary, strata is required to remove the rubble in the subfloor below the building including the hessian that is suspected of containing asbestos, reconstruct the floor below Lot 6, install additional vents in the base walls of the building to reduce the amount of damp in the subfloor below the building, connect the downpipes into the stormwater to prevent excessive water from entering into the subfloor beneath the building and install drains to divert rainwater that flows down the slope of the land from entering into the subfloor below the building. Scope of Works By Mr Drexler to Rectify 1. The Scott Schedule of Mr Drexler contains a scope of works. Leaving aside comments by Mr Drexler about the cost of accommodation and storage while work is performed (which are outside of the scope of Mr Drexler's expertise as a building consultant to opine upon, in addition to lacking supportive source documentation), Mr Drexler's scope of works involves: 1. Demolition and reconstruction of brick piers underneath Lot 6. 2. Removal of hessian on the sub-floor ground that may contain asbestos. 3. Reconstruct the timber floor in Lot 6. 4. Polish floorboards 5. Install additional sub-floor vents. 6. Connect downpipes into stormwater drains and install drains to divert water away from sub-floor. 7. Treat walls with mould remover in walls of Lot 6 and repaint walls with mould resistant paint. Cross Examination of Mr Drexler 1. Most of the cross examination of Mr Drexler was focused upon Mr Drexler not having inspected the sub-floor area underneath Lot 6 and that is inspection was in the sub-floor area beneath the balcony (which is the subject of the reconstruction works approved by the owners corporation). 2. Mr Drexler was resolute in his answers in cross examination that he inspected the sub-floor beneath Lot 6, and that the area had significant deterioration due to water ingress over a long period of time. 3. Mr Drexler was also questioned about whether brick piers needed to be demolished and replaced rather than supportive material to existing piers. 4. Mr Drexler clearly explained his opinion as to why piers should be demolished and reconstructed. 5. Mr Drexler was questioned about his qualifications and expertise. He gave a clear explanation as to why he was suitably experienced and qualified to express opinions on building defects. 6. Overall, the Tribunal is satisfied that Mr Drexler gave evidence that was creditable and explained the basis for the opinions expressed in his report and Scott Schedule. Other Documentary Evidence of Regarding Sub-Floor and Drainage 1. The owners corporation did not obtain any expert report that directly responded to the report of Mr Drexler or his Scott Schedule. 2. Rather, the submissions of the owners corporation focused upon the reports of TBES; and the findings that had been made in the decision of Titterton SM on 9 September 2022. 3. The owners corporation's submissions referred to paragraphs 1.3.3; 1.3.4; and 2.1.2 of the TBES report dated 20 July 2023, which have been set out previously. The owners corporation submitted that TBES had asserted that sub-floor elements under Lot 6 (and the floorboards of Lot 6) did not require replacement, and the brick piers only required packing, rather than reconstruction. 4. However, that report also needs to be considered in the context of earlier reports of TBES. 5. In its report of 5 June 2020, TBES identified timber rot, moulding and deterioration to "sub-floor elements" of the building. When that report is read in its full context, the deterioration of the sub-floor is not clearly expressed to be only in the area beneath the balcony, although that is the area where deterioration is at its most significant. The report also states that there was clear evidence of water ingress in the sub-floor area and "a major suspected point of water entry is due to the fall levels from the rear of the courtyard." TBES recommended, among other recommendations, that "an agricultural drain be installed to prevent water from entering and flooding the subfloor." 6. In the TBES report of 22 July 2022, it is stated there is: 1. Water penetration and severe deterioration of the sub-floor timber framing. 2. Severe corrosion observed to the lintel arches. 3. Severe mould growth to the bedroom walls of Lot 6, due to "constant water ingress into the subfloor due to poor site drainage". 1. The owners corporation submits that this report was engaged directly by Ms Bass-Skardon. However, who engaged the report is irrelevant. TBES is the engineers who have been involved in inspecting the strata premises and making recommendations over a number of years. 2. In respect of any conflict of opinion between TBES and Mr Drexler as to whether the sub-floor elements and brick piers underneath Lot 6 require replacement, the Tribunal accepts the evidence of Mr Drexler for the following reasons: 1. Mr Drexler attended the Tribunal and gave evidence. He was cross examined. He gave a clear and cogent explanation for his opinion that the sub-floor area underneath Lot 6 was sufficiently deteriorated due to age and water damage that replacement was appropriate; and that merely repacking the piers was insufficient to adequately repair the area. 2. No report of TBES (or any other expert) was obtained by the owners corporation that directly engaged with, and responded to, the report of Mr Drexler. 3. The report of TBES dated 20 July 2023 in respect of the assertion that "no timber rot in joists or bears was observed under the internal unit areas…we believe most of the sub-floor structural timber support beams were still in acceptable condition due to the absence of visually detectable damage" is inconsistent with the earlier reports of TBES on 5 June 2020 and 22 July 2022. 1. In its submissions, the owners corporation focussed heavily on the argument that many of the issues raised by the applicants were dealt with in the decision of the Tribunal dated 9 September 2022 and the applicants were unsuccessful. 2. However, there are flaws in that argument. 3. Firstly, when the reasons are read in their full context, most of the matters in which the applicants were unsuccessful in those proceedings were not matters that are the subject of these proceedings (invalidating Motion 13 of the annual general meeting of the owners corporation dated 2 June 2023; order seeking a "project management meeting"; order that owners corporation obtain gas certification in respect of Lot 7; order for an asbestos investigation be undertaken; order for damages under s 106(5) of the SSM Act). 4. In respect of repair to common property, the Tribunal either made a work order (repairs to the balcony; side pathway downpipe and side pathway) or said that the evidence regarding the need for repairs was "preliminary" and the owners corporation should "consider the advice" contained in the expert reports it had obtained and "whatever other reports they may obtain." The Tribunal did not find there were no drainage problems or sub-floor deterioration, but merely that it was not satisfied on the evidence it should make specific orders beyond the orders that it made. The reasons clearly indicate it expected the owners corporation to take necessary measures to ensure common property was in a reasonable state of repair irrespective of whether the Tribunal was prepared to make a specific repair order. 5. Secondly, the duty of the owners corporation under s 106(1) of the SSM Act is an ongoing duty. The failure of the applicants to obtain orders regarding the sub-floor under Lot 6 and all of the drainage works sought in 2022 does not mean the owners corporation is relieved of compliance with its duty. 6. Thirdly, the evidence of Mr Drexler and TBES (in respect of its report of 20 July 2023) occur after the decision of the Tribunal on 9 September 2022. 7. Fourthly, the owners corporation has undertaken some repairs, both by reason of the orders of the Tribunal on 9 September 2022; the resolution passed at the Extraordinary General Meeting (EGM) on 15 December 2022; and the further recommendations of TBES regarding the staircases. The owners corporation could have chosen to repair the sub-floor; piers and floorboards of and underneath Lot 6 at the time it was performing the works to the balcony, but took the position it was no liable to do so. Even if repairs will now become more costly because they will have to be performed separately, that is not a basis for the owners corporation not complying with its duty under s 106(1) of the SSM Act. 8. From the above findings, it follows that the Tribunal is satisfied that the applicants have proved the owners corporation is in breach of its duty to keep and maintain common property in a state of good repair under s 106(1) of the SSM Act. 9. In respect of appropriate orders for repair, the Tribunal is satisfied that the owners corporation should remove and replace the sub-floor piers under Lot 6; replace the sub-floor elements; and replace the floorboards. It may be possible to use the same floorboards, but if that is not appropriate the floorboards will need to be replaced and polished (if they were previously polished). 10. The Tribunal is also satisfied that a repair order should be made in respect of drainage. The owners corporation has a scope of works in the quotation of BIRS that was approved in at the EGM on 15 December 2022. Those works were "deferred." However, considering the inadequate drainage causing water ingress identified in the TBES report in 2020 and the report of Mr Drexler, there is no basis to further defer drainage works. 11. In respect of the appropriate scope of works for drainage, Mr Drexler only refers generally to connecting downpipes into the stormwater system and installing "drains." The applicants have obtained a quotation Harbourside Pluming and Gasfitting Pty Ltd with a detailed scope of works, that involves measures including installation of new strip drains and installation of additional drainage pipes (for a total cost of $4,900 plus GST). 12. The scope of works of BIRS only includes, as part of the "courtyard replacement with new floor drainage" installation of one strip drain adjacent to the driveway; as well as (in the context of the works to the "front balcony/deck floor" works) including "allow for drainage points to be connected to the closest stormwater points." 13. Considering the extensive drainage issues that have been identified as far back as the TBES report in 2020 (and are referred to by Mr Drexler) the Tribunal is satisfied that an appropriate scope of works to rectify the inadequate drainage system of the strata building that is causing water to be diverted into the sub-floor area is the work identified in the quotation of Harbourside Plumbing and Gasfitting Pty Ltd dated 19 February 2023. 14. In respect of the quotation of Harbourside Plumbing and Gasfitting Pty Ltd, there is a notation that "ground floor balcony to be removed and concrete footpath excavated before any plumbing can commence." However, that is a mere notation, and not part of a report or contained the scope of works. Mr Drexler does not refer to the issue of removal of the balcony and excavation of concrete footpath before drainage works can take place, and the Tribunal does not regard this notation as part of the scope of works in the quote. 15. The Tribunal is not satisfied that any orders should be made regarding removal of mould; or the repainting of Lot 6. Mr Drexler did not perform an internal inspection, and there is no contemporaneous photographic or other evidence provided by the applicants in these proceedings to establish the existence of mould on the walls or that the walls need to be repainted. 16. As discussed previously, although Mr Drexler referred to the cost of the applicants moving out moving out of Lot 6 whilst repairs are being performed and storing their property, no order for damages is made under s 106(5) of the SSM Act. Firstly, that was not clearly one of the orders sought in these proceedings. Secondly, it is premature to make the order in any event when the works have not yet been performed. Any future dispute about this issue may be the subject of future Tribunal proceedings, but the parties are strongly encouraged to co-operate and act reasonably to avoid future litigation. 17. Considering the nature and extent of the repair work, an appropriate timeframe to complete the work is 3 months from the date of this decision. 18. The applicants have, in the past, complained about potential asbestos issues. However, it is a matter for the owners corporation's contractors to take all measures they are required to take to ensure that and repair works are performed safely and in accordance with statutory obligations, including the removal and disposal of any asbestos. 19. Finally, the applicants' also seek the costs of obtaining the report of Mr Drexler and him attending the Tribunal to give evidence. That is a matter for a costs application rather than an award of damages under s 106(5) of the SSM Act (The Owners-Strata Plan No 21563 v Rutherford [2023] NSWCATAP 326) and the order of the Tribunal make directions to deal with any costs application. The parties are, however, encouraged to resolve any costs dispute. Repair Orders of the Tribunal 1. The owners corporation, using suitably licensed persons exercising due care and skill, is to cause the performance of the following works by 3 months from the date of this decision: Sub-Floor 1. Demolish and reconstruct brick piers beneath, and in close proximity to, Lot 6 such that removal and replacement of sub-floor joists, bearers, and all other elements of the sub-floor structure beneath Lot 6 can occur and the repaired sub-floor structure is adequately supported. 2. Demolish and reconstruct sub-floor beneath Lot 6. 3. Demolish and reconstruct floorboards of Lot 6, including, if existing floorboards cannot be re-used, installation of new floorboards that are to be polished if the previous floorboards were polished. 4. Removal of all debris in the sub-floor area beneath Lot 6 and the area in close proximity to Lot 6. 5. Install any necessary additional vents to assist ventilation in sub-floor area. Drainage System 1. Perform the works set out in the scope of works contained in the quotation of Harbourside Plumbing & Gasfitting dated 19 February 2023. ORDERS 1. The Tribunal makes the following orders: 1. By 3 months from the date of this decision, The Owners-Strata Plan No 33038, using suitably licensed persons exercising due care and skill, is to cause the performance of the works set out in paragraph [117] of the decision. 2. The applicants are to file with the Tribunal and serve on the respondent, by person or by post and additionally by email, all costs submissions and documents by 14 days from the date of this decision. 3. The respondent is to file with the Tribunal and serve on the applicants, by person or by post and additionally by email, all costs submissions and documents by 28 days from the date of this decision. 4. The applicants are to file with the Tribunal and serve on the respondent, by person or by post and additionally by email, all costs submissions in reply by 35 days from the date of this decision. 5. The costs submissions of the parties are to include whether they consent to the issue of costs being determined without a further oral hearing and if not, why not. 6. If a party seeks an extension of time to comply with directions, an application should be made in writing to the Tribunal no later than the day prior to the date for submission of documents. 7. Other than in respect of order 1, the application for orders by the applicants in the proceedings listed for hearing on 4 July 2023 and 11 September 2023 (including the application for interim orders not previously determined by the Tribunal) is dismissed. 8. The applicants are to give the owners corporation and any builder, engineer, or tradesperson engaged on behalf of the owners corporation reasonable access to Lot 6 so that the works in order (1) can be performed. ********** 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: 04 November 2024