In brief - Nature and scope of duty owed by landlords and owners corporations

A number of High Court and NSW Court of Appeal cases illustrate the nature and scope of the duty owed by an absent landlord vis-a-vis a tenant occupier and an owners corporation in injury cases arising from accidents as well as criminal acts. Casualty claims handlers should be aware of these.

Landlord's duty of care dependent on amount of control over premises

Since Jones v Bartlett [2000] HCA 56; 205 CLR 166, there has been no doubt that a landlord owes a general duty to take care. What steps are required to discharge that duty depends on the amount of control the landlord has over the premises.

Liability split 50/50 between landlord and tenant

In Loose Fit Pty Limited V Marshbaum & Ors [2011] NSWCA 372, both the owner of commercial premises and the tenant occupier were found to owe a duty to take reasonable care to avoid a foreseeable risk of injury. In this case, the owner created the risk by renovating the premises and not installing a handrail in a staircase. Those renovations, which in the end did not comply with the applicable safety standards, later created the hazard which caused the plaintiff's injuries. The Court of Appeal considered that in the circumstances, a reasonable person in the position of the owner would have installed a handrail before entering into the 2006 lease with the occupier. By failing to do so, they had breached their duty of care to the plaintiff.

However, the occupier was not vindicated. The hazard in the Loose Fit v Marshbaum case was obvious and it was open to the landlord to take steps to avert the risk. The court went so far as to say that, even if the lease required the landlord to construct a handrail or to ensure that the premises complied with applicable safety standards, the occupier would not be relieved from taking reasonable precautions to ensure the safety of entrants.

Liability was apportioned 50/50 between the landlord and the occupying tenant.

Owners corporations not required to discover unknown and unsuspected defects

Pursuant to section 62 of the Strata Schemes Management Act 1996, the owners corporation is obliged to keep common property in a state of "good and serviceable repair."

In Ridis v Strata Plan 10308 [2005] NSWCA 246, the High Court found that to discharge its obligations under section 62, an owners corporation should have in place a system for monitoring the maintenance and state of repair of the common property. This does not extend to requiring the owners corporation to inspect premises for the purpose of discovering unknown and unsuspected defects. The owners corporation in the Ridis v Strata Plan case were found not liable for failing to identify a safety risk posed by ordinary glass installed circa 1939 despite the contemporary safety standards requiring the installation of safety glass in structures of that nature.

Is there a duty to guard against criminal acts?

In Modbury Triangle Shopping Centre Pty Ltd v Anzil [2000] HCA 61, which involved an employee who was assaulted in the car park of a shopping centre where he worked, the High Court held that an owner/occupier of commercial premises owes a duty of care to tenants, their employees, customers and anyone lawfully in common areas. To discharge its duty, the owner/occupier must take reasonable steps to protect people against defects or danger in the property's condition.

In this case, the plaintiff was injured as a result of a criminal act and the High Court found the owner/occupier not liable and said that there would only be limited circumstances in which an owner/occupier could be held liable for injury suffered by an entrant as a result of the criminal acts of a third party.

Similarly, in Proprietors of Strata Plan 17226 v Drakulic [2002] NSWCA 381 it was held that there was no special relationship between the strata plan proprietors and the plaintiff sufficient to trigger a duty of care that extended to safety measures to protect the latter from the risks of injury at the hand of outside assailants. Thus, the strata plan proprietors were not held liable for injuries caused to the plaintiff as the result of an assault that occurred in the common property of a secure block of units, despite the fact that access to the building was obtained because of the defective state of the entrance door lock. The court rejected that the harm was foreseeable and held that it was neither reasonable nor just to place such a duty of care on the strata plan proprietors.

Landlords and owners corporations should heed their duty of care

A landlord will not escape liability just because it is not in occupation of premises. The nature and scope of the duty owed will depend upon the role of the landlord in creating the risk or failing to remove or reduce it.

Similarly, an owners corporation owes a duty to occupiers and visitors on its common property. This can be discharged by implementing a reasonable system of inspection and does not require identifying hidden defects or dangers.

No obligation to guard against criminal acts

In contrast, the law remains that an owners corporation or an owner/occupier of commercial premises is not obliged to guard against the acts of criminals, even in circumstances where its failure to undertake repairs allowed the criminal access.