Australia: Compensation claims on commercial and residential premises

Last Updated: 20 April 2016
Article by Adrian O'Dea

If an accident occurs in commercial or residential premises, the injured person may often look to make a compensation claim against the owner or occupier of the premises.

The claim may allege that there has been a failure by the owner or occupier to take reasonable care to avoid a risk of injury which was foreseeable and which may have been prevented.

It is often the case that an owner of commercial premises has appointed a managing agent to be responsible for the state of the premises. An owner of residential premises leased to a tenant may have appointed a real estate agent to assist in the management of aspects of the premises and the lease.

Depending on the facts of the case, the owner of premises may have a claim against the managing agent or real estate agent. Much will turn on the terms of the agency agreement between the owner and the managing agent and whether the managing agent has failed to comply with obligations under that agreement.

It may be that the managing agent or real estate agent owes a duty of care to the injured person, and that the injured person may be able make a claim directly against the managing agent or real estate agent for breach of that duty of care.

Terms of the agency agreement between the owner and agent

Each case turns on its own facts and it is important to ascertain exactly what obligations the managing agent owes under the agency agreement with the owner.

There are cases where the Court has held that an owner has effectively delegated its responsibility for the state of the premises to the managing agent under the terms of the agency agreement.

In the case of Laresu Pty Ltd v Clark [2010] NSWCA 180, Mr Clark was injured when he fell down stairs in a small retail and commercial building in Bankstown, Sydney. Mr Clark was visiting a friend who rented a shop on the ground floor of the building. When Mr Clark went to use the toilet located on the common property of the premises, he slipped and fell on a flight of stairs in an unlit area leading to the toilets. The light in the area was operated by an automatic light switch and it had automatically turned off some hours earlier. It was not possible for Mr Clark to manually turn on the light for the stairs. Mr Clark sued the owner of the premises and also the managing agent. The NSW Court of Appeal held that under the terms of the agency agreement between the owner of the premises and the managing agent, the owner had effectively delegated its responsibility for the state of the premises to the managing agent. However, this was subject to an express instruction the owner had given to the managing agent some years earlier in relation to the setting of the automatic light switch. The owner had given instructions to the managing agent for the automatic light switch to be set so as to cause the lights in the area to be on only between 8.00am and 6.30pm. Notwithstanding that in a general sense the owner had delegated management of the premises to the managing agent, the state of the lighting was, because of this instruction, something for which the owner had some responsibility. The Court also found that the managing agent should have recommended to the owner that the light be kept on until much later in the evening or be kept on for 24 hours of the day. In all the circumstances, the Court considered that the owner was 40% responsible and the managing agent was 60% responsible for the liability to Mr Clark.

In the case of Peter A Simon Real Estate Pty. Ltd v Ghabash & Ors; Chung & Anor v Ghabash [2004] NSWCA 467, Mr Ghabash operated a restaurant business in commercial premises he rented from the owner, Mr Chung. Mr Chung had retained Peter A Simon Real Estate as the managing agent of the premises. There was a fire in the premises caused by an electrical fault, which in turn was caused by water leaking into the ceiling space. Mr Ghabash had previously made complaints to both Mr Chung and Peter A Simon Real Estate about the problem of water leaking into the ceiling space, however the problem was not attended to. Mr Ghabash made a claim against both Mr Chung and Peter A Simon Real Estate and the primary judge found that Mr Chung and Peter A Simon Real Estate were equally responsible for the damage suffered by Mr Ghabash.

Mr Chung and Peter A Simon Real Estate appealed to the NSW Court of Appeal, who found that Mr Chung was liable but that Peter A Simon Real Estate was not liable. The Court of Appeal was not satisfied that Peter A Simon Real Estate was responsible, under the terms of its arrangement with Mr Chung, to undertake the necessary repairs on its own initiative. Mr Chung did have responsibility to undertake such repairs and ensure the premises were safe. Even if it was true that Peter A Simon Real Estate had not passed on Mr Ghabash's complaints about the water leaking to Mr Chung, because of the fact that Mr Chung already knew about the problem, any failure on the part of Peter A Simon Real Estate to pass on the complaint did not cause any loss.

Key questions to consider

If there is an accident at commercial or residential premises, and the owner has appointed a managing agent or real estate agent to manage the premises, some key questions to consider are:

  1. What are the exact terms of the contract between the owner and managing agent?
  2. Is the managing agent responsible for ensuring the premises are safe?
  3. Is the managing agent responsible for effecting repairs on their own initiative (at least up to a certain monetary limit) without having to obtain approval from the owner?
  4. Should the managing agent have been aware of the danger or made recommendation to the owner concerning prevention of a possible danger?
  5. Is the managing agent responsible for ensuring that details of the danger are notified to the owner?
  6. Was the owner already aware of the danger in any case?
  7. Was the risk something which required urgent attention and should the managing agent have ensured that the owner knew about the seriousness of the danger immediately?
  8. Do the owner/occupier and managing agent have insurance in place to cover any potential claim made against them and, if so, has the insurer been notified?

When an accident occurs in commercial or residential premises, the potential liability of the owner / occupier and any managing agent is not always clear. Much will depend on the particular facts and circumstances of the case and the terms of any contract between the owner and managing agent.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.