Introduction
In The Owners – Strata Plan No 74232 v Tezel [2023] NSWCA 35 (6 March 2023) the NSW Court of Appeal finally determined when the two year limitation period under section 106(6) of the Strata Schemes Management Act 2015 (“SSMA”) commences.
Background summary
In this case, the dispute centred on whether a claim for loss of rent by an owner in a strata scheme was out of time according to section 106(6) of the SSMA.
The owner noticed water leaking into her unit in 2013 and eventually moved out permanently in that year. The owner attempted to rent out the unit in 2016 but was unsuccessful.
On 6 November 2020, the owner filed a claim for loss of rent starting from 6 November 2018, which was dismissed by the New South Wales Civil and Administrative Tribunal (“NCAT”) as being out of time under section 106(6) of the SSMA. NCAT concluded that the two year limitation period commenced to run when the owner first became aware of the rental loss in 2016.
The owner appealed against NCAT’s decision, and the Appeal Panel upheld her appeal.
The owner subsequently appealed to the NSW Court of Appeal (“Court”), arguing that the Appeal Panel erred in its interpretation of section 106(6) of the SSMA and that the owner’s claim was not out of time. The owner also sought leave to cross-appeal on two grounds related to damages and costs.
NSW Court of Appeal Decision
According to the Court, the owner’s claim was out of time since the two year limitation period began to run in 2016 when the owner first became aware of the loss of rent.
The Court also clarified that the phrase “first becomes aware of the loss” in section 106(6) of the SSMA refers to the time at which the lot owner was first aware of the kind or type of loss they are entitled to recover. The phrase does not require that the loss be reasonably foreseeable, nor does it refer to the particular loss that the lot owner is seeking to recover under section 106(5).
The Court also held that the loss did not occur on a rolling basis until the breach of section 106 was remedied.
Key Takeaway
Overall, this decision highlights the importance for lot owners to act promptly when dealing with losses and damages affecting their lot and seek legal advice if there is uncertainty about the timing of a loss of rent claim.
Disclaimer: This is commentary published by Pobi Lawyers for general information purposes only and should not be relied upon as specific legal advice. You should obtain your own legal advice specific to your circumstances before you take any action or otherwise rely on the contents of this article. The content of this article is subject to change. The law is also subject to change.
Recent Comments