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Owners Corporation Law

15 Apr 2014

Two recent decisions in the Supreme Courts of Victoria and NSW should be mandatory reading for all executive committee members of owners corporations in exercising decisions relating to repair and maintenance of common property.

In the decision of Brown v OC201532U, the Victorian Supreme Court awarded damages of over $600,000, plus legal costs, to Mr Brown, who suffered an injury while attempting to scale a common property fence and gate that was in disrepair. 

The owners corporation knew the rear fence and gate was not functioning, however delayed carrying out repairs while it attended to other matters, although intended to repair the common property in the future and as funds became available. 

The court found the injury sustained by Mr Brown was reasonably foreseeable, and that the owners corporation owed Mr Brown a duty of care not to allow that injury to occur.

In the decision of Taylor v The Owners – Strata Plan 11564, Mr Taylor was tragically killed when an awning on a shop-front failed and fell on top of him as he was walking underneath. 

Similarly, the owners corporation knew of the potential danger but did not take active steps to repair the awnings. 

In the Supreme Court of Appeal in NSW, the estate of Mr Taylor continues to litigate regarding the exact quantum of damage which the owners corporation must pay. 

This is because, prior to his death, Mr Taylor ran his own business and was also engaged in property development. He had three children by a previous marriage, and three stepchildren via his second marriage. Several of the children are claiming compensation for injury, loss, harm and damages arising from recognised psychiatric and psychological injuries.

It should be noted that most insurance policies will provide indemnity for acts carried out by executive committee members. However, almost all of the insurance policies will contain a clause that indemnity will not be extended to those committees that make negligent or bad-faith decisions. 

The simple lesson to be heeded for owners corporations – take proactive steps to regularly inspect common property, and when it is discovered that an item of common property is in a state of disrepair, don’t delay carrying out the repairs. 

Tom Bacon is the principal lawyer of Strata Title Lawyers. tom@stratatitlelawyers.com.au

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