For centuries solicitors have been placing “non liability” or “indemnity” clauses in agreements. Comparatively, strata managing agency agreements indemnify strata managers for a whole range of factors.
In the 2004 case of BCS Strata Management vs Robertson, the strata manager attempted to defend their actions by claiming protection under indemnity. The facts of the case are as follows:
• Mrs. Robertson had injured herself in a lift
• The floor of the lift did not settle level with the floor of the building. In fact, it dropped down some 18 cm
• When Mrs. Robertson stepped into the lift, she fell and injured her leg
• Mrs. Robertson sued the Owners Corporation and BCS Strata.
• Mrs. Robertson won her case in the lower court and it was appealed in the Supreme Court
• Mrs. Robertson claimed that the Owners Corporation and the Strata Manager had breached their duty under section 62 of the Strata Schemes Management Act 1996
• The Owners Corporation and BCS cross claimed against each other. One of the claims by BCS was that they were indemnified under their managing agent’s agreement
It should be noted that, the Court of Appeal found that there was no breach of statutory duty. The issue of statutory duty under Section 62 for a strata manager will be considered in a later article. At this time, we wish to focus on the indemnity.
The Court held that a strata manager could not claim protection under indemnity where the strata manager was sued in their own capacity for their own negligence.
Two important points to note are:
• No indemnity will protect a strata managing agent from their own negligence and
• The protection is only relevant where an Owners Corporation is sued by an injured party and the Owners Corporation makes a claim on the strata manager under a cross claim. In other words, Owners Corporations are prevented from blaming their strata manager where only the Owners Corporation is sued
Considering the fact that any good litigator would sue both the agent and the Owners Corporation, indemnities are almost of little relevance. This is not to say that they should not be put in your managing agency agreement, however it provides no protection to the strata manager if sued directly and the strata manager has done something wrong.
Cheers,
Bailey Compton and The team at ACP/Leverage!
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