Following the recent decision of the NSW Court of Appeal in Libra Collaroy Pty Ltd v Bhide [2017] NSWCA 196, property owners need to be aware that appointing an agent to manage a property may not be a complete defence to a claim for damages for personal injury.

In this important case, the NSWCA examined the apportionment of liability between property owners, a tenant and property agent in circumstances where visitors to a rental property suffered injuries following a balcony collapse.

Background

The property owners entered into a management agreement with Elders Real Estate (Libra Collaroy Pty Ltd) in 2005.  There was a history of complaints about the poor state of the balcony by the tenant, to both the property owners and the property agent.

Subsequently, visitors to the property were injured when the balcony collapsed in 2012.  The collapse had occurred due to weathered deterioration of the metal fixings and structural beams.

The decision

At first instance, the Trial Judge held that liability for the plaintiffs’ injuries rested solely with the property agent as the owners had successfully discharged their duty of care to the plaintiffs by delegating authority for property management to the agent.

The property agent appealed the decision to the NSW Court of Appeal, as a result of which liability was apportioned between the agent, owner and tenant on a 50:30:20 basis.

The NSW Court of Appeal found that:

  • The owners had breached their duty of care to the plaintiffs
  • Based on the management agreement, the property agent was liable to indemnify the owners with respect to the plaintiffs’ claims
  • The owners were liable to contribute 30% to the property agent’s liability on account of failing to obtain an expert’s report on the condition of the balcony when it was evident that the property agent was not competently resolving the issue with the balcony
  • The tenant was liable to contribute 20% to the property agent’s liability as she ought to have prevented access by visitors to the balcony when she knew it was defective

Conclusion

Whether or not a Management Agreement will 100% indemnify an owner in relation to an occupiers’ liability claim will depend on the facts in each case.  In this case, the property owners were well aware of the poor state of the balcony and it was evident that the agent was not proactive in resolving the issue.  Property owners should keep themselves informed and take reasonable steps to ensure any repair and maintenance issues are resolved in a reasonable time frame by the agent.

Authored by Danielle Watt – Associate at MBA Lawyers