Question: Can the chair be negligent and held civilly liable by not taking any action to repair a leak?
In our small strata, most owners are absentee. The committee chair is one of the few residents. The committee’s other members are all absentees but readily contactable.
The chair discovered a major “concealed” water leakage and called in a plumber.
The plumber quoted on repairs but was not instructed to take further action, so the water continued leaking for a considerable time.
The chair did not inform the committee members about the leak or the plumber’s visit.
The other committee members became aware of the problem after the affected lot’s owner received their water bill.
One of the committee members immediately intervened and called the plumber to repair the leak.
By not taking any action, was the chair negligent? Can they be held civilly liable under Section 101a?
Answer: Negligence is a complicated and misunderstood area of law.
Negligence is a complicated and misunderstood area of law. To prove negligence, the following elements need to be made out:
- There was a duty of care;
- The duty of care was breached;
- The breach caused the loss; and
- Actual damages were suffered
Without a complete review of all the relevant circumstances, it is not possible to make a conclusion as to whether the chairperson was negligent in not fixing the water leak.
However, some considerations on the issue would be that:
- The chairperson does not (nor does any other committee member) have the power to authorise a plumber to carry out works. Such a decision can only be made by the committee, a general meeting or an adjudicator in an emergency;
- There are various code of conduct obligations with respect to how committee members ought to act in certain circumstances. Consequences of such breach do not necessarily mean personal liability will accrue; and
- Section 101A of the BCCMA is not just about negligence. There is an element of good faith that cannot be ignored.
This post appears in the June 2025 edition of The QLD Strata Magazine.
Todd Garsden
Mahoneys
E: tgarsden@mahoneys.com.au
P: 07 3007 3753
Hi
Committee members have repeatedly made personal malicious and defamatory statements to an owner and others.. The owner is now threatening legal action and they are unrepentant stating that the owner had better have plenty of money as their (committee members) defence will be covered by the BC and its insurance.
Is this the case – would the insurance cover their legal fees for the defence of personal attacks?
Hi John
The following response has been provided by Frank Higginson, Hynes Legal:
It all depends on the policy. My experience has been that defamation is sometimes excluded form being an insured event, but it will all depend on what the policy conditions are.
Hi Michael
1. Looking at one insurers policy wording that has this exclusion the wording of the exclusion is “We will not pay claims directly or indirectly arising from or in connection with pollution or contamination”. It does not elaborate on the type of pollution, however if a claim was specifically brought against an office bearer related to pollution from toxic fumes arising from cladding products the insurer may be at liberty to apply the exclusion;
2.This is a good question and I think it deserves it’s own article with input from a solicitor. Some of my comments are: – Every claim presents a new set of circumstances and it is always difficult to advise on hypothetical matters as there are always other considerations.
– The word “intentional” is an important consideration – it would imply that you were aware the property was not properly insured in accordance with the Act and the office bearer intentionally decided to insure the building otherwise.
– There is no obligation under the act to insure loss of rent
– While a solicitor would be best placed to give advice on “possible defences” some things we would recommend clients discuss with their solicitor are – firstly, owners vote to endorse insurance at their general meeting. Secondly, did the committee receive other professional advice with regard to the placement of insurance (such as from your strata manager or broker).
Trust this answers your queries but you are welcome to call me if you want to discuss further.
Tyrone Shandiman
0419 012 262
tshandiman@iaa.net.au
http://www.stratainsurancesolutions.com.au
This information is of a general nature only and neither represents nor is intended to be personal advice on any particular matter. Shandit Pty Ltd T/as Strata Insurance Solutions strongly suggests that no person should act specifically on the basis of the information in this document, but should obtain appropriate professional advice based on their own personal circumstances. This information is designed as a basic guide with relation to cover and you should refer to your Policy Schedule and Product Disclosure Statement for all terms and conditions related to cover under any insurance policy. Shandit Pty Ltd T/As Strata Insurance Solutions is a Corporate Authorised Representative (No. 404246) of Insurance Advisernet Australia AFSL No 240549, ABN 15 003 886 687.
Hi Tyrone
I have a couple of queries regarding common exclusions:
1. asbestos and pollution – what type of pollution is this – could it also include toxic fumes arising from cladding products;
2. Intentional decision not to effect or maintain insurance in accordance with applicable strata legislation – I have a case where our insurance was placed at the same amount as last year. I now see, after 6 months into the currency period, that rentals have increased substantially, by as much as $100 per week. This makes me wonder that we could now be under insured. As Strata committee treasurer, what defense would I have if losses were incurred due this supposed under insurance? One must bear in mind that the SSMA act 20-15 NSW states that the BSI has to be for at least the minimum amount for replacement. This amount, in the event of a declared catastrophe, will not be sufficient to replace the building and the strata committee could therefore have a claim against them by their OC. Where do I stand in such a case? The operable wording would be maintain insurance, possibly.