| ::
25/11/2010 -
Management rights - Caretaker liability clarrification |
The value of appropriate insurance can not be understated as the ramifications of a lack of insurance can be real issues.
In this case, it was found as the managers being held personally liable and a considerable monetary bill was awarded.
The below information is from Col Myers at Small Myers Hughes. Col is a very well informed industry expert involved in the Management Rights Industry.
The recent New South Wales District Court decision of Borg -v- The Owners – Strata Plan 64425 (2010) NSW DC 203 has ramifications for Resident Building Managers all around the country.
Facts
Ms Borg was a guest at The Quest Apartments at Cronulla. She had a night out celebrating her 30th birthday and when she returned to the complex, she fell at the top of a set of stairs leading from the footpath down to the reception area of The Quest Apartments. She claimed the fall was caused by a cracked tile at the top of the stairs (which was actually on the Council footpath as the building encroached slightly onto the Council land). The accident occurred between 12:30am and 1:00am but evidence was produced that Ms Borg was still breast-feeding her daughter at this time and only consumed two (2) alcoholic drinks during the evening. The area was very dark at the time and it had been raining. The evidence showed that the heel of her shoe caught in a hole in a cracked tile and this caused the fall.
The Decision
There were three Owners Corporations which formed part of the "Sur Mer" building in which The Quest Apartments were located. These Owners Corporations were bound by a Strata Management Statement and Ms Borg sued the three Owners Corporations, as well as the operator of The Quest Apartments and the associated Quest Management Company which held the Caretaking Rights for their complex. She also sued the Sutherland Shire Council but later dropped the Council from the Court proceedings.
It was held that even though the cracked tile was located on Council land, the Owners Corporations were in "occupation" of the relevant area because of the encroachment. Consequently they could be held liable as occupiers. The total damages awarded by the Court was $517,000.00 and this amount was apportioned between the relevant Defendants.
Liability of the Caretaker
There was a Caretaking Agreement in place between one of the Owners Corporations and The Quest company whereby the Caretaker was effectively delegated the Owners Corporation’s functions in respect to the repair, replacement and maintenance of the common property. This included the tiled area where the accident happened. The Court looked at the wording of the Caretaking Agreement, which had the standard clauses obliging the Caretaker to "care take" the common property, to conduct regular inspections and arrange for repairs of the common property and to immediately report to the Owners Corporation hazards or dangers in the common property that came to the Caretaker’s attention.
The Court concluded that the Owners Corporation had delegated to the Caretaker responsibility for minor handyman repairs which the Court considered would include temporary repairs to the hole in the cracked tile, as well to inspect and report on more serious defects and arrange for their repair (including replacement of the tile itself).
Ramifications for Caretakers
This case makes it clear that Resident Building Managers will be held accountable if they do not arrange for the repair and maintenance of common property. The case also brings home the necessity for Resident Building Managers to ensure that they have their own Public Liability and Professional Indemnity insurance cover. The resident Manager and the Owners Corporation are separate entities and each must carry their own insurance. The Manager gets no protection from the policy that covers the Owners Corporation.
The case also illustrates the benefit of the Resident Building manager using the same insurance company who holds the Owners Corporation insurance - so as to avoid a dispute with the insurer over the extent of the cover.
Col Myers - Partner of: Small Myers Hughes| LAWYERS
|
