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If the floor belongs to the owner then the owners corporation is responsible for any damage caused to the floor by the spalling repair regardless of whether it is a fixed or a floating floor and regardless of whether it was installed with or without permission, by virtue of s.65(6) of the Act, which states:
(6) An owners corporation is liable for any damage to a lot or any of its contents caused by or arising out of the carrying out of any work, or the exercise of a power of entry, referred to in this section unless the damage arose because the owners corporation was obstructed or hindered.
There is no penalty under the Act for failing to obtain permission to install a wooden floor and NCAT does not have the power per se to order its removal. If the floor is resulting in a nuisance or a breach of a noise by-law then NCAT can issue an order that the noise be prevented (eg. by putting carpet over the top) but it has no power to order the removal of the floor if it is wholly within the lot.
NCAT also has no power to override s.65(6) of the Act. If the lot or its contents are damaged the owners corporation is liable for the damage. If the owner had an illegal machine gun stored under the floor and it was damaged during the repairs the owners corporation would be liable for the damage as it is lot property. The fact that the goods may be illegal or may have been installed without permission is irrelevant for the purposes of s.65(6).
I was simply quoting what the Supreme Court has ruled. The moment something falls into disrepair the Act has been breached. It matters not how hard it may have been to detect.
Having said that, testing for concrete cancer is a trivial exercise that even a lay person can carry out. If it has grown to such an extent that it will take 12 weeks to fix then it would have been detectable for the past 5 years at least.
George indicated that the strata manager had told him he had to move out, not the other way around, so the analogy with a private repair in a standalone property is not relevant.
Shock and awe tactics are often necessary, especially when a strata manager has lied to the owner by claiming that the owners corporation is not liable for what s.65(6) of the Act says they are liable for and has implied that it has the power to force him to move out when it has no such power under the Act.
If it is a one-bedroom unit then it would indeed become uninhabitable if the bedroom floor has to be demolished. Even if it has more bedrooms concrete cancer repairs fill the lot with fine dust that is a health risk. Keeping the doors shut achieves nothing. The workers have to come in and out and the dust blows after them. Been there, done that.
An owner in our building reported concrete spalling in his lot in March 2015. He could not re-rent it with the repairs pending. Because he did not use shock and awe tactics the vindictive committee took 11 months to complete the repairs, depriving him of the use of his lot for that time and ultimately costing the building $94,000 for repairs and damages for a job that should have cost under $20,000.
Forget any debate about insurance companies avoiding liability due to airy-fairy concepts of negligence. The situation is black and white and it is set out in sections 21 and 28 of the Insurance Contracts Act 1984.
Under s.21 of said Act the insured must inform the insurer of any matter that is relevant to its decision to insure the insured and the premium that it charges for such insurance. Quote:
21(1) Subject to this Act, an insured has a duty to disclose to the insurer, before the relevant contract of insurance is entered into, every matter that is known to the insured, being a matter that:
(a) the insured knows to be a matter relevant to the decision of the insurer whether to accept the risk and, if so, on what terms; or
(b) a reasonable person in the circumstances could be expected to know to be a matter so relevant, having regard to factors including, but not limited to:
(i) the nature and extent of the insurance cover to be provided under the relevant contract of insurance; and
(ii) the class of persons who would ordinarily be expected to apply for insurance cover of that kind.
A new contract of insurance is entered into every time you renew your insurance. If the problem existed before you last renewed, and you failed to advise the insurer that you were ignoring an obvious public liability risk, then you are in breach if s.21 of the above Act.
Under s.28 of the Insurance Contracts Act if you fail to comply with s.21 the insurance company can avoid liability. Quote:
28(1) This section applies where the person who became the insured under a contract of general insurance upon the contract being entered into:
(a) failed to comply with the duty of disclosure; or
(b) made a misrepresentation to the insurer before the contract was entered into;
but does not apply where the insurer would have entered into the contract, for the same premium and on the same terms and conditions, even if the insured had not failed to comply with the duty of disclosure or had not made the misrepresentation before the contract was entered into.
(2) If the failure was fraudulent or the misrepresentation was made fraudulently, the insurer may avoid the contract.
(3) If the insurer is not entitled to avoid the contract or, being entitled to avoid the contract (whether under subsection (2) or otherwise) has not done so, the liability of the insurer in respect of a claim is reduced to the amount that would place the insurer in a position in which the insurer would have been if the failure had not occurred or the misrepresentation had not been made.
No insurance company would insure you if they knew you were ignoring a major safety risk. At the very least they would add a clause excluding any claims relating to the staircase. They would have no trouble convincing a judge of that. It is just like when you insure a car with hail damage. They will insure the rest of the car but not that part.
That means your insurance company can avoid liability in relation to the staircase under s.28(3). They do not have to prove negligence.
Firstly the NCAT Tribunal can “award damages”. They cannot do it directly but they can do it indirectly. Let me explain.
Repair of concrete cancer in your lot comes under s.65 of the Act. Section 65(6) reads as follows:
(6) An owners corporation is liable for any damage to a lot or any of its contents caused by or arising out of the carrying out of any work, or the exercise of a power of entry, referred to in this section unless the damage arose because the owners corporation was obstructed or hindered.
Section 138(3)(d) of the Act prevents NCAT from awarding damages. NCAT can however issue an order that the owners corporation comply with section 65(6) of the Act. That has the same effect.
There is no power under the Act for the owners corporation to evict you. Not even NCAT can make such an order. The owners corporation cannot enter your lot to carry out repairs without your permission. If you refuse access and it is not an emergency they have to seek an order from NCAT requiring you to give them access.
The owners corporation also cannot commence NCAT action until the matter has gone to mediation.
The Supreme Court has ruled that an owners corporation has a duty to be proactive in relation to maintenance of common property and to inspect the common property regularly. The Supreme Court has also ruled that the moment something falls into disrepair the owners corporation is in breach of the law.
If the owners corporation had inspected all lots regularly looking for concrete cancer the repairs in your lot would have been detected early and would have taken a day or two to fix. Claiming that it is going to take 12 weeks is ridiculous. If the repair company knows its job then it should only take one week at the most even for a large repair. If it will take 12 weeks then the repair must be huge and the owners corporation is in clear breach of its duty.
Under the new Act, which comes into effect later this year, you have the legislated right to sue the owners corporation for any loss you suffer as a result of their failure to promptly maintain common property (new s.106(5)), and it is RETROSPECTIVE. The restriction on NCAT not awarding damages also gets removed.
So here is what you should do. Write to the strata manager and state the following:
1. You claimed that the owners corporation is not liable for damage to my property when repairing the concrete cancer. That is not correct. Under s.65(6) of the Act you are liable for any damage caused to my property as a result of carrying out work on common property.
2. The Supreme Court has ruled that the owners corporation has a duty to be proactive in relation to maintenance of common property and to inspect the common property regularly for faults. It has also ruled that the moment something falls into disrepair the owners corporation is in breach of s.62 of the Act.
3. The owners corporation is therefore in breach of s.62 of the Act at present for failing to check for and detect the concrete cancer in my lot the moment it first began. If it had done so the repair would have taken a few days only, not 12 weeks.
4. Under s.106(5) of the new Strata Act, which is retrospective, I have the right to seek damages for any loss I suffer as a result of any breach of s.106 the Act by the Owners Corporation. Unlike under the old Act NCAT will have the power to award damages.
5. The cost of alternative accommodation is a loss I will suffer due to the breach of the Act by the owners corporation. If the owners corporation does not compensate me for that loss voluntarily I will seek an order against it under s.106(5) of the new Act as soon as it comes into effect.
5. There is no power under the Act for you to evict me and NCAT does not have the power to do so either. If you expect me to move out then you will need to obtain a court order. That will almost certainly delay the matter until after the new Act comes in.
6. I want the repairs carried out as soon as possible but as it is a repair to common property I will not accept and cannot afford to bear a greater share of the cost than other owners.
7. To avoid the cost of legal action and the unnecessary delay to the repairs please confirm in writing that you will comply with s.65(6) of the Act by compensating me for any damage to my personal property. Please also confirm in writing that the owners corporation will meet all incidental costs associated with the repair to common property, which includes the reasonable cost of alternative accommodation for me while the repairs are carried out. As soon as that is confirmed in writing I will be happy for the repairs to begin.
If the owners corporation refuses the above, let them ask for mediation. Attend mediation and present the above to the mediator. If mediation fails it will then go to a strata adjudicator. They make a decision on the paperwork. There is no hearing. So you will have ample time to prepare your case in writing. I am happy to assist you in that regard. They can order that you give access to your lot but they do not have the power to order you to vacate, especially if you tell them you cannot afford to pay for rent elsewhere.
You may think it is harmless but cockatoos are extremely destructive. You may not have any timber on your block of units, but what about the numerous other buildings in the area? If they end up with tens of thousands of dollars of damage, as is often the case, are you going to offer to foot the bill?
Secondly as for which by-law you breach, you breach By-Law 1. No good saying they fly past screeching anyway. You are encouraging them to the area. Once again if it is no you that they are bothering then it will be hundreds of other home owners in your area.
Claiming that you are not making the noise (the cockatoos are) is like having your radio turned up full and claiming it is the radio making the noise, not you. Claiming they make a noise anyway is like saying people drive past with their radios blaring. Bottom line is your actions are adding to the problem.
The other problem is their droppings. I presume you do not volunteer to clean up any that fall onto common property or other people’s balconies.
If you want the freedom to feed wild birds (in breach of the recommendations of all wildlife experts), go out in the bush and live on a farm.
Not putting the issue below to bed but adding an aside. In the submission I am currently preparing for the review into the strata legislation I have suggested that it is time that any owner with internet access be REQUIRED to provide an email address for the service of documents.
People whinge and complain about environmental issues, like the destruction of forests, yet take no action to initiate change.
If a user thinks that giving out their email address will result in spam, all they have to do is create a Gmail or Hotmail account just for the service of notices.
The other, perhaps more democratic alternative, is to charge a substantial “processing fee” for manual service of documents, the same way many businesses do these days. (eg. 50c per page). Watch people come running with their email addresses then. An exemption would be made for people such as the elderly who genuinely do not have ready access to the internet. No excuse though for those who have half a dozen iPhones and several PC’s at their disposal.
I am a chairman/secretary of a strata complex and I researched this issue in detail a couple of months ago. With potential fines of over $3M and up to 5 years jail for committee members the issue is more important than any other single issue canvassed in the current review of strata legislation, yet there is no mention of it whatsoever in the Government review paper, which is at:
Our strata manager did not know whether we come under the WH&S Act or not. Various solicitors have expressed conflicting views on the matter. Even customer support staff within WorkCover could not give a clear answer.
At present the question seems akin to John Hewson’s 1993 “GST on birthday cake” question, only we are potentially talking about millions of dollars in fines, not a few cents worth of GST.
A solicitor on the web page below suggests that residential schemes do come under the WH&S Act:
A solicitor on this web site also says they do:
http://www.flatchat.com.au/wp-content/uploads/2012/02/WHS-FAQ-Sheet-Jan-2012.pdf
The solicitors on this web page suggest that in some cases they do but in others they do not:
WorkCover staff could not answer the question and gave me a complex questionnaire to fill out to determine whether we did or did not come under the Act. It was the same form used to determine whether an employer needed to provide an employee with workers’ compensation insurance.
The WHS Act and Regulations seem to indicate that a residential building falls under the Act if it has a lift:
– Schedule 1 of the Act states that the Act applies to high risk plant and the premises in which it is situated, even if it is not a workplace.
– Regulation 10 states that a lift is high risk plant.
To quote from the Act and Regulations:
WH&S ACT SCHEDULE 1 – Application of Act to dangerous goods and high risk plant
3 This Act applies to the operation or use of high risk plant, affecting public safety, even if the plant is not situated, operated or used at a workplace or for use in carrying out work.
4 For the purposes of clause 3:
(b) a reference in this Act to a workplace includes a reference to any high risk plant affecting public safety and the premises at or in which the plant is situated or used, …
WH&S REGULATION 2011 – REG 10
10 Application of the Act to dangerous goods and high risk plant
(1B) The following plant is prescribed as high risk plant for the purposes of Schedule 1 to the Act:
(c) lifts, including escalators and moving walkways,
Contradicting all of the above I received a personal letter from WorkCover’s Principal Policy Officer, Michael Costello, stating that residential strata buildings do not come under the WH&S Act even if they employ a contractor or have a lift.
Other WorkCover staff stated that Mr Costello was the final arbiter on matters relating to the WH&S Act.
To quote from his letter:
As the scheme is a residential scheme and no worker is engaged as an employee t hen the exemption applies. You are engaged on an ad hoc basis and paid for the services you supply you are contactor not an employee. The same applies to the other contractors engaged by you
I am aware of the various interpretations that have circulated amongst the strata industry. WorkCover has given presentations at a number of industry seminars and there is now a general understanding of the application of the exemption as described in the attached Q&As. It needs to be emphasised that although residential strata schemes are exempt from the provisions of the WHS Act they still have a duty under Sec 62 of the Strata Schemes Management Act to keep the common area in a state of good and serviceable repair.
Lifts are high risk plant and are subject to the provisions of the WHS Act even though they may not be in a workplace. The main provisions affecting residential strata schemes it that the lift needs to be registered with WorkCover in accordance with Division 4 of the WHS Regulation 2011 and the registration needs to be renewed on a yearly basis. The presence of a lift in a residential scheme does not affect its exemption status.
If you have any further enquiries you can call me on 02 43215152
Michael Costello
Principal Policy Officer
WorkCover NSW
Not correct sorry. If a water leak from OC pipe for example causes damage to your carpet then you have to claim on your insurance. OC does not pay and does not claim on their insurance. See