The applicant was the owner and occupier of unit 3 in Units Plan 2292. In May 2013, the applicant notified the owners corporation of water ingress into the unit from the balcony, which was caused by inadequate waterproofing in the external wall (which formed common property). The water ingress also caused rot to the unit’s internal wall. In July 2013, the executive committee approved a quote by a contractor (RBS) to fix the balcony for about $8,250. The rectification work did not commence since the applicant demanded that the builder access the unit externally using scaffolding for an extra cost the executive committee did not approve. In addition, RBS refused to do the work as it was not comfortable in working in a “hostile environment”. In February 2014, another builder (BEC) provided a new quote to fix the balcony for about $6,875. This arrangement did not proceed either due to the access issue and the fact that the applicant raised some specific requirements about the replacement tiles to be placed on the balcony. In August 2014, the executive committee advised the applicant to seek her own quote for the work and to remain within the BEC quote of $6,875. In October 2014, the applicant obtained another quote which was more than the BEC quote. This arrangement did not proceed as the applicant and respondent could not reach agreement as to how much expense would be covered by the respondent. The applicant commenced proceedings in ACAT in 2017, demanding that the respondent fix the balcony and internal damage caused by the water ingress.

The Tribunal considered two main issues:

(a) whether the cost of the external work was to be apportioned between the parties, and if so, how?

The applicant and the respondent agreed to engage a new contractor (AES) to undertake the fixing works to the balcony, which cost $14,135 inclusive of GST. The respondent contended that this amount should be apportioned between the parties, since the increase in price was due to the applicant’s unreasonable obstruction (by insisting on external access) which delayed the work. The Tribunal, however, was of the view that the applicant was merely seeking options for access instead of insisting on external access. Even if this was the case, the respondent should have applied for an access order under s129 of the UTMA instead of letting the situation deteriorate. Moreover, the Tribunal was not satisfied that access was the main or only reason stopping the contractors from undertaking work. Therefore, the respondent’s argument failed and it was ordered to pay the full amount.

(b) Whether the applicant is entitled to orders in relation to the internal works?

The applicant also sought an order requiring the respondent to repair the unit’s internal architraves, plasterboard and carpet, arguing that the respondent had been negligent in failing to repair the balcony and this caused the internal damage. The respondent submitted that those items were not common property and not ‘defined parts’ therefore fell outside the owners corporations obligation to maintain.

The Tribunal affirmed its previous decision in Castro v Owners Unit Plan No 246 [2016] ACAT 111, and held that although the relevant terms of the UTMA do not expressly give rise to an owners corporation’s liability for negligence, lot owners can nevertheless sue the owners corporation for negligence and nuisance for breach of the section 24 duty. In the present case, the respondent was responsible for maintenance of the balcony and in failing to maintain the balcony, it was liable to the applicant for the internal damage that flowed. The area of the applicant’s unit which suffered damage was sufficiently proximate to the balcony that the damage caused should have been anticipated. There was a foreseeable risk that if the respondent failed to take reasonable care and exercised reasonable skill in carrying out its various functions, which included maintaining the applicant’s balcony, the applicant may suffer financial loss caused by damage to the inside of her unit, that the risk to the applicant was not insignificant and that a reasonable person in the position of the owners corporation would have taken appropriate precautions.

The Tribunal ordered the respondent be responsible for the internal repairs.