Goubran v SP57150: appeal for rectification costs & interest
John Goubran & Associates Pty Ltd v The Owners – Strata Plan 57150 [2026] NSWCA 188
In short
The Court found that the trial judge erred by failing to determine claims for repair costs and pre-judgment interest.
The owner nevertheless failed to obtain leave to appeal.
A central issue was the owner's failure to apply under UCPR r 36.16 to have the judgment corrected by the trial judge.
The Court held that the small amount in dispute and difficulties with the repair costs claim weighed against granting leave.
Decision
See first instance case note for background facts.
This appeal arose from earlier District Court proceedings concerning water ingress into a lot in a Burwood strata scheme. Liability was no longer in issue. The only question before the Court was whether leave should be granted after the trial judge failed to determine a claim for repair costs and a claim for pre-judgment interest.
The Court accepted that the trial judge had erred by failing to determine both the repair costs claim and the claim for pre-judgment interest. The critical question, however, was whether those errors justified the grant of leave to appeal.
A central difficulty for the repair costs claim was the temporal connection between the negligence found at trial and the alleged loss. The only negligence established was the owners corporation's failure to act with reasonable promptness after it became aware of the water ingress issue in April 2022. The Court noted that the evidence showed damage, including the removal of carpets and the kitchen, had already occurred by March 2022. On the findings made at trial, damage sustained before the period of negligence could not have been caused by that negligence. The Court therefore considered that the repair costs claim faced a fundamental causation problem because much of the alleged damage appeared to pre-date the breach of duty which had been established.
The Court also examined the nature of the rectification works for which recovery was sought. The invoices relied upon included the installation of a laminate floating floor in place of carpet, acoustic underlay, floor levelling works and repainting of the entire unit. The Court observed that the invoices did not identify the cost of like-for-like replacement of the damaged items and raised a substantial question as to whether the works represented repairs, upgrades, renovations, or some combination of those categories. Even if some loss had been recoverable, the Court considered the evidence inadequate to quantify any recoverable amount by separating repair costs from betterment or renovation works undertaken by the lot owner.
In relation to interest, the Court found that the claim had not been abandoned and should have been determined. The claim was properly characterised as a claim for pre-judgment interest under s 100 of the Civil Procedure Act 2005 rather than as a separate head of damages. The Court noted that any award would attach to the damages actually awarded at trial, principally the loss-of-rent damages, and would require a calculation of interest across the relevant periods for those losses. While the Court accepted that the exercise was likely to be largely mechanical and capable of agreement between the parties, the applicant had not provided the Court with a final quantified interest calculation that would permit the issue to be conclusively determined on appeal.
The Court further emphasised that the applicant had not utilised the procedure available under UCPR r 36.16 to seek correction of the judgment by the trial judge. The applicant was aware of the omissions within the 14-day period allowed by the rule but offered no explanation for failing to pursue that course. The Court considered that an application under r 36.16 could have provided a simpler, cheaper and more proportionate mechanism for dealing with the overlooked claims than a Court of Appeal proceeding.
Finally, the Court noted, but did not determine, an unresolved legal issue raised by the owners corporation. The owners corporation argued that some of the works undertaken by the lot owner related to common property and had been carried out without authorisation. It submitted that those expenditures were not recoverable in negligence. The Court expressly declined to decide that question, observing that the authorities relied upon arose in a different statutory context. As a result, the decision leaves unanswered whether the cost of rectifying common property can constitute a recoverable head of damage in a negligence claim against an owners corporation.
