Michael Kerr v Owners Corporation SP 17161 [2014] NSWCATCD 3

Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Michael Kerr v Owners Corporation SP 17161 [2014] NSWCATCD 3 Hearing dates: 16 December 2013 Decision date: 07 January 2014 Jurisdiction: Consumer and Commercial Division Before: M Eftimou, General Member Decision: 1 Pursuant to section 62 of the Act, the Owners Corporation shall, on or before 31 March 2014, engage an expert licensed builder to inspect and report on the external courtyard walls between lot 15 and lot 16 to determine whether the walls are compliant with the Building Code of Australia. 2 The Owners Corporation shall, on or before 30 June 2014, implement the recommendations of the expert engaged pursuant to order 1 by causing the qualified tradesmen to undertake, in a proper and workmanlike manner, the work recommended by the building expert. 3 The order of the Adjudicator made on 8 August 2013 in application SCS13/22428 is affirmed. Catchwords: failure to maintain and repair common property - section 62 of the Act Legislation Cited: Strata Schemes Management Act 1996 Category: Principal judgment Parties: Michael Kerr (Applicant) Owners Corporation SP 17161 (Respondent) File Number(s): SCS 13/46494

reasons for decision 1This is an appeal against Adjudicator's order made on 8 August 2013 in SCS 13/22428. In that matter, the appellant had sought an order under sections 62 and 65A of the Act that the brick wall between villa 15, villa 16 and the common property driveway/parking area is to be repaired to comply with the Building Code of Australia, and a second order that the wooden fence for the bin area is to remain. 2The Adjudicator considered that any orders under sections 62 and 65 were "inappropriate" and she determined to deal with the application under section 153(1) of the Act 3The Adjudicator made the following order: "1 Pursuant to section 153(1) of the Strata Titles [sic] Management Act 1996 Resolution 2 Boundary Fencing - Lots 15 and 16 recorded on the Minutes of the Extraordinary General Meeting of the Owners Corporation SP 17161 on 24 April 2013 is invalid." 4The appellant seeks an order that the Tribunal affirm, the order made by the Adjudicator on 8 August 2013, but that the decision to invalidate the minutes of the EGM held on 24 April 2013 also include the replacement of the timber fence surrounding the garbage area. In addition the appellant seeks an order under section 62 of the Act that the Owners Corporation maintain and repair the common property. 5The Adjudicator had before her evidence that the Owners Corporation was made aware of defects in the brick wall in question as long ago as 2007. An engineering report by Clark Engineering Consultants, dated 7 September 2007, declared that the courtyard wall to villa 15 did not meet the requirements of the Building Code of Australia. The appellant submitted in the adjudication request that despite repeated request to the strata manager to have the wall repaired, the wall remains damaged and unstable. Evidence was given of vehicle damage to the wall of villa 16 in December 2012 and that the emergency repairs undertaken by the Owners Corporation on the wall are defective and were not done in a proper and workmanlike manner. 6The Adjudicator stated that the Owners Corporation accept that work is required on the brick surrounds for lots 15 and 16 within the strata scheme. 7The Tribunal finds that the Adjudicator failed to adequately address the orders sought by the appellant. Consideration was given by the Adjudicator to the application made under section 65A of the Act and this was dealt with by the making of an order under section 152 of the Act. The Adjudicator found that she was not satisfied that the real dispute between the parties was due to the failure of the owners corporation to comply with its duty under section 62 of the Act to properly maintain and keep the wall in a state of good and serviceable repair. The Adjudicator found that the owners corporation had not refused to comply with their obligations under section 62 of the Act. No reasons were provided as to how this finding was reached on the written evidence presented. The Adjudicator went on to consider the application under section 65A and failed to make orders or dismiss the application that was made under section 62 of the Act. 8The appellant has submitted an opinion that the walls of the courtyard between lots 15 and 16 do not meet the BCA and he seeks to rely on the report of Clark Engineering, a number of photographs, and an extract from the Australian Building Codes Board (2007). The appellant has stated that some emergency repair work has been done but that the work is defective and has not been done in a proper and workmanlike manner. 9The respondent did not attend the hearing. The respondent sent a letter to the Tribunal, dated 25 November 2013, advising that it will not be attending. The letter indicated that the Owners Corporation has made every effort to ensure all matters requiring repair and or replacement have been carried out as promptly as possible by a competent licensed tradesperson. The Owners Corporation declared that, unfortunately, it is not always possible to have work done as soon as all would like it to be achieved. 10Submission was also received from another interested person. Mrs Nelson states in her submission that the executive committee and the strata manager have proceeded to obtain assessments and quotes to repair/replace existing structures to bring all within current Building Code Standards. Mrs Nelson complains about the appellant's unreasonable and objectionable behaviour in relation to this dispute. 11This is an appeal under section 177 of the Act. Section 181 of the Act provides that in the determination of appeal from an order of an Adjudicator, the Tribunal may admit new evidence, may determine an appeal by affirming, amending or revoking the order appealed against, or substituting its own order for the one appealed from. 12The grounds of appeal submitted by the appellant are that the Adjudicator has failed to consider the application on the grounds on which it was filed. 13The condition of the brick fence appears to be an issue that has concerned the Owners Corporation for some time and has concerned the appellant since a vehicle reversed into the wall late in 2012. 14There is some evidentiary material before the Tribunal, including photographs and a 2007 building report. However, there is insufficient evidence to determine what the required repair might be. The 2007 building report states that the wall does not meet the Building Code of Australia. The appellant argues that it is evident from the photos that there are insufficient supports and inadequate masonry. This evidence does not allow the Tribunal to be satisfied as to the totality of the repairs which are needed to ensure that the walls meet the BCA standards or that the emergency repairs have been done in a proper and workmanlike manner. 15The Owners Corporation has clearly considered the need to maintain and repair the fences, as it was resolved at the AGM in 2013 to replace the fence with a Colorbond R fence. This was the motion determined to be invalid by the Adjudicator in SCS 13/224288. 16In summary, the evidence before the Tribunal does not assist to determine exactly what maintenance work is required to be done, nor how soon. 17The respondent has submitted that every effort has been made to ensure all matters requiring repair and or replacement have been carried out as promptly as possible. The Owners Corporation conceded that no consideration was given to the 2007 building report of Mr Clarke until 2012. No evidence has been provided about the steps the Owners Corporation is currently taking to ensure compliance with the obligations of section 62 of the Act. No evidence has been provided about any action taken by the Owners Corporation since the Adjudicator's decision made on 8 August 2013 to address this issue. 18The Tribunal is not able to conclude on the evidence before it that the owners Corporation is proposing to obtain a building report and to consider it at the next AGM or whether it is intended to rely on the 2007 report of Mr Clarke. 19In the practical workings of a strata scheme there are always constraints and priorities in discharging duties under section 62. The duty to maintain which was considered by the New South Wales Supreme Court in Seiwa Pty Ltd v The Owners of Strata Plan 35042 [2006] NSWSC 1157 makes clear that the duty to keep common property in good condition and repair be attended to before these assets fail to serve their purpose. 20The only expert evidence before the Tribunal is the 2007 report of Mr Clark. Mr Clark stated that the wall to the courtyard of unit 15 has been built to a standard which is not acceptable to the BCA. The existing wall is not capable of withstanding the specified horizontal load. The noncompliance of the wall with BCA requirements can be dealt with by making suitable modifications to the footings and adding engaged piers at suitable intervals as required by AS 3700. 21The Tribunal concludes that the Owners Corporation has failed to comply with section 62 of the Act. 22The Tribunal orders that, in accordance with its obligations under section 62 of the Act, the Owners Corporation shall engage an expert builder to report on the courtyard walls. The Tribunal finds that a new report should be obtained, as the report from Mr Clark is now more than six years old. The condition of the walls has changed since that time, in particular since one of the walls was hit by a vehicle, and also because the Building Code of Australia has been amended since 2007. The report should also consider whether the emergency repair work to the wall has been done in a proper and workmanlike manner and is not defective. 23The Tribunal has also considered the orders made by the Adjudicator and accepts the submissions made by the appellant that the resolution adopted at the EGM held on 24 April 2013 included the replacement of the garbage area surrounds from timber to Colorbond®. For clarity the Tribunal notes that the motion that was passed at the EGM held on 24 April 2013 included both the replacement of the fence and the garbage area surround from timber to Colorbond. The Adjudicator in the decision made on 8 August 2013 found that this motion is invalid. This decision has not been challenged by the Owners Corporation.