NCAT Slices Up the Rent Loss Salami in this Strata Damages Claim
Wang v The Owners – Strata Plan No. 88789 [2022] NSWCATCD 157
GoStrata’s CaseWatch is a short, sharp and easy-to-understand review of important and interesting Court and Tribunal decisions affecting Australian strata title stakeholders.
Quick Read
This 2022 decision by the NSW NCAT Appeal Panel decision is about a dispute in a large Greenwich strata title building about a strata owner’s rent loss claim for water entry whilst the strata building was pursuing a building defects claim for related faults. The simple story is that there were original building defects some of which caused water entry into the strata owner’s rented lot, they led to rent reductions for a while, a later flood into the apartment, some internal damage, and the loss of the tenant. In the meantime, the strata building had started legal action against the builder, Icon, for the defects and also decided to defer its common property repair obligations for those defects under s 106(4). But Icon went into liquidation before the legal action was resolved. The issues in the case were whether the damages claim was made within 2 years of the strata owner’s awareness of the rent and other losses and whether deferring repair obligations limited the strata building’s liability for strata damages. After considering what happened [and when] and the decision in Tezel’s Case, the NCAT Appeal Panel decided that the strata owner’s damages claim could be split into different types and over different periods to deny some rent losses [as they were made more than 2 years after awareness], deny some rent losses [as they arose when the strata building was not liable because of its action on building defects and the deferral decision], and allowed other rent losses others which happened after the flood and when the building defects action had ended. This decision is an important example of how strata buildings can, at least temporarily, reduce their exposure to strata damages claims when there are building defects actions and s 106(4) decisions. It also, interestingly, opens the possibility of multiple s 106(5) strata damages claims by owners for differing events and causes.
Implications
The key implications of this strata case are as follows.
Strata owners have the onus [legal burden] of establishing all the requirements for s 106(5) strata damages claims.
The 2 year time limit for s 106(5) strata damages claims starts with the strata owner’s awareness as outlined in Tezel’s Case.
The 2 year time limit in s 106(5) will be strictly applied.
A strata owner’s s 106(5) strata damages claim can be split if the damages have separate causes and/or have different awareness dates, even if they are of a similar type [like rent losses].
In this case, the flooding of a strata lot, created a new and distinct loss under s 106(5).
A strata building can decide to defer its repair obligations for damaged common property under s 106(4) whilst taking action against for that damage.