The apartment building contained building defects. The applicant was the owner of a unit in that building (the Unit). As part of the process of identifying the defects, investigating the cause and engaging in a collaborative repair process with the original builder, the owners corporation had arranged for several inspections of both common and lot property. During this process no one notified the owners corporation, its building manager or experts that the unit suffered from water penetration. Sometime later the unit was inundated with water and the owners corporation was notified. An inspection was promptly arranged, however, the cause was believed to a failure to clear the drainage system of debris. Some months later, the unit again flooded as a result of which the tenant left. After testing, the cause was found to be defective building work (rather than poor maintenance).
The applicant then sued the owners corporation for loss of rent, compensation for damage to property and cleaning costs arising from the negligence of the owners corporation. The key question was whether the owners corporation had acted reasonably in the circumstances and was it therefore responsible for the unit owners loss?
ACAT found that the owners corporation had acted reasonably in undertaking building defect inspections and that this was an unfortunate situation where no one was to blame for the applicant’s losses. The applicant’s claim was dismissed.