In the recent case of The Owners – Strata Plan No 19410 v King atf the Cascade Trust  NSWCATAP 326, the Owners Corporation appealed a decision made by the Tribunal that it undertake specified repairs to prevent water ingress to the second bedroom in one of the lots in the scheme, and pay damages for loss of rent. Only one of the orders, the money order, was challenged on appeal.
There are three reports referred to in the decision – a report prepared for the Owners Corporation by Mr Daniel Green from Landlay Consulting Group (the “Green Report”), a subsequent joint report obtained by the parties prepared by Mr Daniel Green of Landlay Consulting Group and Mr David Hall of David Hall Building Appraisals (the “Joint Report”), and a report previously obtained by the Respondents from Ibrahim Ech (the “Ech report”).
There was no order made by the Tribunal for a conclave or preparation of a joint expert report. The Joint Report appears to have been agreed to be prepared between the parties. There was no letter of instructions to the experts for the preparation of the joint report submitted in evidence. The only evidence before the Tribunal as to instructions given to the experts for preparing the Joint Report is set out in the Joint Report itself.
Grounds of Appeal
The errors of law relied on by the Owners Corporation were:
- Ground 3 – that the Tribunal made an error of law by applying the wrong legal principle when finding that the respondent had suffered consequential loss (loss of rent) because of mould in the second bedroom.
- Ground 4 – that the Tribunal failed to accept the uncontested findings of the Joint Report in relation to the cause of the mould in circumstances where it was bound to do so.
The leave grounds relied on by the appellant were:
- Ground 1 – that the Tribunal’s finding that the Owners Corporation was responsible for mould in the second bedroom was against the weight of evidence.
- Ground 2 – that the Tribunal’s finding that mould in the second bedroom caused loss was against the weight of evidence.
- Ground 5 – the Tribunal made an error of fact when it found that Mr Green in the joint report had not withdrawn the opinion, given in his earlier expert report, with respect to the mould in the second bedroom arising from water penetration through the wall.
Decision of the Appeal Panel
The appeal was dismissed for the reasons summarised below.
In respect of ground 4, the Appeal Panel held that without any evidence of an agreement between the parties that the Joint Report would be binding on the parties, it did not accept that the Joint Report bound the parties on the issue of causation. The only evidence available, which was the description of the brief in the Joint Report, refers to discussing and agreeing on the rectification required for the mould, not as to its causes.
Even if orders were made in accordance NCAT Procedural Direction 3 – Expert Evidence (the “Procedural Direction”) that the experts confer and produce a joint report, the Procedural Direction does not state that the report is binding. Although the Tribunal usually gives important weight to joint expert reports, the reports must otherwise comply with the Procedural Direction and respond to the “matter in issue” referred to the expert.
As such, the Appeal Panel held that ground 4 must fail, as the report was not binding in relation to the cause of the mould which was not a matter referred to the experts. The Tribunal was not, as a matter of law, bound to have regard to only the Joint Report when considering the issue of causation.
In respect of ground 1, the Appeal Panel held that the Joint Report could be read together with the other reports, by considering what it says, rather than what it does not say. The conclusion that the mould in the second bedroom resulted from a failure by the Owners Corporation to properly repair and maintain the common property was open to the Tribunal on the evidence before it. The weight of the evidence was not against it. Accordingly, leave to appeal on ground 1 was refused.
In respect of ground 5, the Appeal Panel held that there was no cause for reaching the conclusion pressed by the Owners Corporation that Mr Green had withdrawn the opinion he gave for the cause of mould in the second bedroom in the Green Report, in favour of the overview in the Joint Report, in circumstances where all the reports could be read together. This is especially so where the issue of causation was not part of the experts’ brief, and when that part of the Joint Report which the Owners Corporation relies on in relation to causation addresses an agreed “overview of the causes of condensation mould within a building”, rather than the causes of the mould in issue. Further, the conclusion that Mr Green had not withdrawn the Green Report was not against the weight of evidence. As such, leave to appeal on ground 5 was refused.
In respect of ground 3, the Appeal Panel stated that it would be unjust and unfair to the respondents to allow the Owners Corporation to raise this issue of law on appeal when it had the opportunity to do so at first instance. As such, the Appeal Panel held that ground 3 must fail.
In respect of ground 2, the Appeal Panel noted that the Owners Corporation’s submissions with respect to grounds 1 and 2 were substantially the same, in that the Tribunal had misinterpreted the Green Report and the Ech Report and had failed to give sufficient weight to the Joint Report. For the reasons set out above and the further reasons set out in the decision, the Appeal Panel were not satisfied that the Tribunal’s conclusions based on the expert reports were against the weight of evidence. The Appeal Panel stated that notably, the Owners Corporation’s submissions did not address the evidence of one Ms Bettencourt, or that contained in the outgoing condition report, that the presence of mould in the outer wall of the second bedroom was a material factor in the lot being uninhabitable due to the presence of mould, which the Tribunal accepted as demonstrating that the mould in the second bedroom was a material factor in the lot being uninhabitable. As that evidence was unchallenged, the Appeal Panel could not see why that conclusion was against the weight of evidence. Leave to appeal on ground 2 was refused.
This is general information and should not be considered to be legal advice. You should obtain legal advice specific to your individual situation.
Authors: Jasmin H.Singh & Allison Benson