In Marks v Owners SP 30190 [2023] NSWCATAP 21, the Appeal Panel made a number of findings about the requirement of an owners corporation to repair, maintain, renew and replace the common property when resolving a dispute about resolutions for works and a special levy to pay for the work.
Factual background
The dispute concerned proposed works to a common property laundry, including the installation of a fourth washing machine and replacement of existing finishes and heritage-significant elements such as the door and window joinery. The owners corporation estimated the works at approximately $17,000, while the appellant argued that the necessary repairs could be completed for between $4,000 and $6,000.
Consideration
A key issue was whether the proposed works constituted repair and maintenance, or an alteration to common property. The appellant argued that, if the latter, a special resolution was required. The owners corporation maintained that the works fell within its statutory obligation under s 106 of the Strata Schemes Management Act 2015 (NSW), and relied on a heritage exemption confirming that the proposed works were permissible.
The owners corporation relied on Stolfa v Hempton [2010] NSWCA 218 and Owners of SP 50276 v Thoo [2013] NSWCA 270 in support of its position that necessary repair and maintenance can include replacement or renewal, even where this results in some improvement or alteration to the common property.
Westgarth DP explained the circumstances in Stolfa v Hempton in the following way:
Even though the replacement concrete floor at issue in Stolfa was different from and superior in construction to the wooden floor that it replaced, the purpose and effect of the work was to avoid or remediate defects in or damage to the building from the effects of age, use and time, not to introduce an enhancement or difference even if that was a consequence.
Further, the Court of Appeal in Owners of SP 50276 v Thoo provided that:
Replacement is a large concept. If a modest single-bulb light fitting is removed and a grand crystal chandelier is installed in its place, the former has obviously been replaced by the latter. There is also replacement if a substantial brick wall is erected on a site previously occupied by a flimsy brushwood fence. Replacement connotes no more than the installation of one thing in the place of another to achieve functional equivalence.
The Appeal Panel accepted that these authorities had been properly applied. It found that the proposed works were directed to addressing deterioration and defects arising from the age and use of the laundry, rather than introducing an independent enhancement. Any changes to the laundry were considered incidental to carrying out the necessary repair works. The heritage exemption further supported that conclusion.
Conclusion
The decision demonstrates that works do not necessarily become an “alteration” merely because they result in some change or improvement to common property. The purpose and nature of the works remain critical in determining whether they fall within an owners corporation’s statutory obligation to repair and maintain.