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Three Strikes and You’re Out

In our long articles among other things, we have discussed the importance of knowledge and research. We also discussed using the legal search engine AUSTLII.

AUSTLII divides various areas of legal interest into Commonwealth & States including legislation and case law.

We are not lawyers but as strata managers, a knowledge of law, is in our view, mandatory.

For this article, we cover an area of interest  – recent NSW NCAT cases because this is where you will find most strata cases.

We went to the NCAT cases 2020 in AUSTLII and found McGrath v The Owners – Strata Plan No 13631.

At first glance, it appears to be an Appeal Panel case on the question of costs but when we read further, we found all kinds of interesting stuff. Here are a few morsels.

We noted the Appellant McGrath a lot owner lost the appeal on all grounds.

Other than costs, the case delved into various other interesting issues including s 38(2) of the Civil and Administrative Tribunal Act 2013 which provides that the Tribunal was not bound by the rules of evidence. This case involved expert evidence and the Tribunal exercised its power under Procedural Direction 3 to ensure it was provided with a satisfactory basis for the findings to be sought at the hearing and that expert opinions were soundly based, complete and reliable.

The proceedings involved damage to Mr McGrath’s unit from water ingress. He alleged a failure by the Owners Corporation with its obligations under s 106 of the Strata Schemes Management Act 2015 (NSW) to properly maintain and keep in a state of good and serviceable repair the common property. He complained about the presence of mould in the ceiling space above his unit. In support of his claim, he produced two reports.

The Tribunal directed Mr McGrath to have his experts comply with the Tribunal’s Procedural Direction 3. He failed to do so. The Tribunal refused to admit into evidence part of one report and the entirety of the other because of Mr McGrath’s failure and rejected any claim for relief in relation to mould.

Why did the Tribunal reject the reports in part and in whole?

Mr McGrath sought to rely on two reports: the report of Mr Seymour dated 14 April 2020 and the report of Mr Lark dated 7 February 2020.

On 7 April 2020, the application was listed for hearing, an adjournment was granted due to the late service of the Seymour and Lark reports. The reports did not comply with Procedural Direction 3. The Tribunal made a procedural order 3:

‘The applicant is given leave to rely on the reports of David Lark and Rob Seymour each dated 7 February 2020 provided a statement or affidavit that contains the report and complies with Procedural Direction 3 is provided to the Tribunal and the respondent by 17 April 2020.’

Mr McGrath subsequently filed a report from Mr Seymour, dated 14 April 2020, which did not contain the requirements of Procedural Direction 3. There was no compliance with order 3 in relation to Mr Lark. Indeed, Mr Lark’s report contains, in paragraph 2.4, an acknowledgement that his report ‘may not be in a format acceptable for litigation purposes’. No adequate explanation was given for the failure to comply with order 3.

The Seymour report relied on the analysis performed by Mr Lark, and that rendered portions of that report inadmissible.

The Tribunal was not prepared to ignore order 3 which would not have been made had it not been considered necessary. Compliance with that order should not be treated as optional. It was noted  the applicant failed to respect order 3, in relation to Mr Lark’s report, at any time during the more than three months between the second time the matter was listed for hearing (7 April 2020) and the third time the matter was listed for hearing (27 July 2020).

To add insult to injury when directed to file closing submissions, Mr McGrath chose to add fresh evidence which the Tribunal has disregarded. Further, when requested to provide for a form of the orders Mr McGrath sought, despite a specific indication that what was sought was the form of the orders proposed and not further submissions, the applicant included submissions with his proposed orders which submissions the Tribunal has also disregarded.

One week before the third occasion the matter was listed for hearing, Mr McGrath lodged a document which included an additional report from Mr Drexler, based on an inspection he made of the unit on 2 July 2020, well after the 29 May 2020 notice that indicated this matter was set down for hearing and without any direction being sought or obtained for additional evidence.

That report was also rejected because Mr McGrath had ample time to provide the evidence upon which he wished to rely and the Tribunal formed the view this would have been procedurally unfair to expect the Owners Corporation to deal with that report, a copy of which was only provided one week prior to the third occasion this matter was listed for hearing.

The Moral of the Story

“While the Tribunal is not bound by the rules of evidence, that does not mean that a party can file and serve what they like, when they like and ignore orders made by the Tribunal.”

And the above is just part of the story. More next time.

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