Cullinane v Owners Corporation 1 Plan No. PS434498R & Anor (Real Property) [2013] VCAT 608

Mr Settle of counsel, instructed by McMahon Fearnley Lawyers Pty Ltd

Mr N. Jones of counsel, instructed by LFS Legal Barristers and Solicitors

1. No. 1 Ayres Road, Healesville contains a subdivision with common property with a variety of residential units on their own ground in a semi-rural environment on the outskirts of the township of Healesville. The subdivision number PS434498R includes two Owners Corporations which are the respondents to this proceeding. In addition to the common property which is designated as Allotment 1, there are some 11 allotments. Lots 2 to 11 are members of Owners Corporation No. 1 with equal entitlements and liabilities as members of that corporation. Lots 4 to 10 are members of Owners Corporation No. 2, once again with entitlements and liabilities each of 100 points as members of that Owners Corporation. The present proceeding is brought by Ms Cullinane who is the owner and occupier of Lot 3 on the subdivision. The respondents are the two owners corporations. Common property, being Lot 1, is constituted by a common driveway which traverses the subdivision. At the Ayres Road frontage Lot 11 is to be found on the eastern side of the driveway and Ms Cullinane's unit, number three, is to the west of that driveway entrance. According to the notations on the title for common property Lot 1:

Only the members of Owners Corporation No. 2 are entitled to use Common Property No. 1. The members of Owners Corporation No. 1 are responsible for the maintenance and upkeep of the sewerage facilities within Lots 2, 3, 4, 5, 6, 7, 8, 9, 10, 11 and Common Property No. 1.

1. The residences occupied by the various unit holders are in the form of detached dwellings occupying separate allotments on the subdivision.
2. Ms Cullinane said that she signed a contract to purchase her allotment with its residence on 14 November 2002 and took possession of the property following a settlement on 6 December 2002. She told me that she dealt directly with the developer who built the residence and was given the opportunity of choosing the carpet laid inside from a variety of colour options.
3. The subdivision is located at the corner of Ayres Road and Smith Street. Ayres Road runs approximately east-west with Unit 11 to the west of Ms Cullinane's property, slightly uphill from Unit 3. In addition, the ground falls slightly from front to back, that is, from south to north.
4. The common driveway constructed on common property Lot 1 is generally dished so as to be lower in its centre than at the two edges. It has no kerbs on either side. At the inner or northern end there is a stormwater drainage pit which is apparently constructed to take stormwater from the driveway. The dishing or swale in the driveway is relatively marked at the lower or northern end near the drainage pit. It is minimal or non-existent at the southern end immediately adjacent to Ayres Road.
5. At the time of its initial construction the residence on Unit 11 had an orthodox lawn frontage between it and Ayres Road. In about 2010 the area immediately fronting the Unit 11 residence was landscaped so as to replace the lawn with an area of riverstone laid on a weed mat.
6. Ms Cullinane says that, shortly after these works were constructed, she noted that her residence began to have a musty smell. The plants in her garden began to die and a large amount of water was entering her property from the driveway through the retaining wall. She said the driveway started to crack. A joint on the retaining wall between her allotment and the driveway allotment 'started to open up' and mould and mildew were to be found in her drapes, carpets and the joint of the retaining wall.
7. Since the Ayres Road frontage of the subdivision runs up a hill from east to west from the corner of Smith Street, at the low point each residence is 'benched' into the slope with a site cut having been made to provide level sites for each of the residences. To accommodate the benching between common property Lot 1 - the driveway - and Unit 3, a treated pine retaining wall was constructed which follows the border between the driveway allotment and Unit 3. The ground level of the driveway approximates the top of the retaining wall. Immediately to the east of that retaining wall is a gravel pathway running from Ayres Road along the western wall of Ms Cullinane's residence. This gravel path is unsealed and has no discernable slope. At its rear is a gate with a wooden plinth at its base.
8. Ms Cullinane said that she investigated what the causes of the problems within her residence might be. She made a claim on her home and contents insurance. The carpet from her front bedroom, which was an area particularly affected by the mould and mildew, was removed by the insurer as was the carpet from the stairs to the first floor level of the residence. She said the insurer seemed initially to accept liability but has not made a payout because of some concerns as to what works will or will not be carried out to remedy what are said to be the drainage issues which have caused the problems of which she complains. Ms Cullinane made a number of enquiries seeking guidance from plumbers and from the local authority, the Yarra Ranges Shire Council. She sought assistance from the owner of Unit 11 whom she found initially co-operative. She said he agreed to construct a supplementary drain to alleviate the cause of the drainage problem. Ultimately, however, he took no action and, Ms Cullinane said, became hostile. On 12 October 2011 she instructed her now solicitors, McMahon Fearnley to write to the Owners Corporation, requesting them to investigate the matter and to take remedial action. Meanwhile, she had taken a number of photographs in various circumstances including rainy days and also made a video recording of the ingress of water through the treated pine retaining wall.
9. Not receiving satisfaction, her solicitor commenced the present proceeding against the Owners Corporations.

1. In her Points of Claim dated 27 July 2012, Ms Cullinane alleged that there had been an unreasonable flow of water from the body corporate's driveway onto her land. It was contended the unreasonableness of this flow was demonstrated by the fact that the slope and construction of the body corporate's driveway led water to flow from it onto her land and further, these flows of water were promoted 'by reason of the gaps and cracks in the Driveway'.
2. The Points of Claim alleged damage to her property. She noted that Section 46 of the Owners Corporation Act obliged the corporation to repair and maintain the common property of which the driveway was part. Therefore, it was contended that, by virtue of Section 16(1) of the Water Act 1989, the Owners Corporation was liable to pay damages.
3. She sought orders for the modification of the driveway, compensation for the damage suffered to her house, an order for costs in her favour and further or other relief.

1. The cause of action relied on by Ms Cullinane in this proceeding is established by Section 16(1) of the Water Act 1989 which provides as follows:
   1. Liability arising out of flow of water etc.

(a) there is a flow of water from the land of a person onto any other land; and

(ii) damage to the property (whether real or personal) of any other person; or

the person who caused the flow is liable to pay damages to that other person in respect of that injury, damage or loss.

1. It is also appropriate to note sub-section (5) of the same section which is in the following terms:

(5) If the causing of, or the interference with, the flow (as the case requires) was given rise to by works constructed or any other act done or omitted to be done on any land at a time before the current occupier became the occupier of the land, the current occupier is liable to pay damages in respect of the injury, damage or loss if the current occupier has failed to take any steps reasonably available to prevent the causing of, or the interference with, the flow (as the case requires) being so given rise to.

1. It will be seen that one of the elements of the cause of action is establishment that the relevant flow of water is 'unreasonable'. Section 20 requires all relevant circumstances to be considered in determining whether a flow is reasonable or unreasonable and mentions certain specific matters. Sub-section (2) provides a weighting for those matters. The section provides, inter alia:
   1. Matters to be taken into account in determining whether flow is reasonable or not reasonable

(1) In determining whether a flow of water is reasonable or not reasonable, account must be taken of all the circumstances including the following matters -

(a) whether or not the flow, or the act or works that caused the flow, was or were authorised;

(b) the extent to which any conditions or requirements imposed under this Act in relation to an authorisation were complied with;

(c) whether or not the flow conforms with any guidelines or principles published by the Minister with respect to the drainage of the area;

(d) whether or not account was taken at the relevant time of the likely impact of the flow on drainage in the area having regard to the information then reasonably available about the cumulative effects on drainage of works and activities in the area;

(e) the uses to which the lands concerned and any other lands in the vicinity are put;

(ii) collected, stored or concentrated on that land; or

and if so, for what purpose and with what degree of care this was done;

(h) whether or not the flow was affected by any works restricting the flow of water along a waterway;

(i) whether or not the flow is likely to damage any waterway, wetland or aquifer.

(2) In taking account of the matters specified in subsection (1), greater weight must be attached to the matters specified in paragraphs (a), (b), (c) and (d) than to the other specified matters.

1. In her witness statement Ms Cullinane said that in about 2010 she observed landscaping works being carried out at Unit 11 which included placement of riverstones in the front yard of the unit. These stones were installed so as to replace an area previously occupied by a grassed area with a few bushes. Beneath the riverstones was a reed mat, presumably to prevent weeds growing up through the stones. Following these works she said she began to notice a musty smell in her house. Plants in her garden began to die 'large amounts of water [was] entering [her property] from the driveway'. She said the driveway started to crack and the joint in the retaining wall between her property and the driveway started to open up. She said mould and mildew appeared in her drapes, carpets, windows and in the joint of the retaining wall.
2. Mr Settle, counsel for Ms Cullinane, submitted that before the introduction of the riverstones and the weed mat at the front of Unit 11, 'there was, no doubt, a flow of water from the respondent's land onto the applicant's land, but at that stage the flow was not unreasonable'. He said the cumulative effect of the rain which fell on the driveway and ran off and the flow from Unit 11 created an unreasonable flow, `it is as a result of the unreasonable flow that damage has resulted'.
3. Mr Settle said that there was no explanation why Ms Cullinane's property was suffering damage other than the combined flow of water from the driveway and the flow of water from Unit 11. He referred to a video shot by Ms Cullinane which shows water spurting from between the timber members which constitute a retaining wall between the driveway allotment and Ms Cullinane's property on the uphill side.
4. He said that the total flow is caused, in addition to surface flows, by seepage and percolation. He said the Owners Corporation:

caused the flow by omission in failing to [kerb] the driveway and install proper or adequate drainage on its property. Both were 'a' cause of the damage to the Applicant's property.

1. He contended that a consideration of the contours of the land as mandated by Section 20(1)(f) of the Water Act showed that the driveway had not been properly constructed. The lower portion in the middle described as a swale purporting to direct water flows into the property and into a drainage pit was 'ineffective because it is too shallow'. He continued:

...the eastern side of the driveway, being the side closest to Unit 3, is generally lower than the western side of the driveway/swale. In one position this is about 140mm lower.

1. Mr Settle submitted there was no obligation on his client:

to collect the unreasonable flow of water from the [Owners Corporations] land, and land further uphill, and dispose of that water.

He said she was obliged to carry out drainage only coping with the water falling onto her own unit.

1. He submitted that the applicant's witnesses, namely Mr Casamento and Mr Martin, should be preferred to the evidence of the respondents' witnesses, Mr Merlo and Mr Pemberton.
2. To the extent that Mr Merlo, on behalf of the respondent, had submitted that the present floor levels in Ms Cullinane's house were as they had been at the point of construction, that evidence was rejected. He said:

The evidence of Mr Casamento was that that was not feasible as, in effect, this would result in everything being out of square.

1. Rectification of his client's house would require jacking and remaking of the whole floor despite the contrary opinion of Mr Merlo. Mr Settle continued:

If only part of the floor is jacked, to what height should it be jacked? Will the consequential damage be limited to the extent proposed by Mr Merlo?

1. Loss adjuster, Mr R. Pemberton, furnished a report dated 15 November 2011 to the Owners Corporations' solicitors. It was annexed to the applicant's application commencing this proceeding but Mr Pemberton was called as a witness for the respondent. Mr Pemberton said:

Unit 3 appears to be affected in general by elevated moist/damp conditions as evidenced by moss/mildew in areas completely unrelated with the flow of surface water run-off from Unit 11 and across the common driveway.

He produced photographs said to illustrate this point in a number of places in the roof and in the wall below the bay window at the front of the house. Mr Pemberton said:

Mrs Cullinane advised the western and southern walls of the main bedroom were affected [by mould and mildew] however inspection failed to identify evidence of said infiltration; Mrs Cullinane alleges to have cleaned the affected areas. Mrs Cullinane informed the floor coverings and window furnishings were removed by the Contents Insurers.

1. Mr Pemberton noted movement cracks in the internal wall in the ensuite area to the affected front bedroom. He also noted 'fissures in 3 areas of the ceramic floor tiling servicing the said ensuite facility'.
2. He also noted 'elevated levels of ground saturation in the rear yard, unrelated to the area of complaint'. The conclusions reached by Mr Pemberton were as follows:
   1. Rainwater run-off appears to be shedding from Unit 11, across the common driveway and by virtue of the topography disperses onto the lower lying allotment upon which Unit 3 is constructed.
   2. There appears to be an absence of reasonable surface water drainage to the front/side landscaped area of Unit 11 which has been redesigned in a fashion that prevents natural seepage and encourages water to accumulate and run-off to lower lying areas.
   3. There appears to be an absence of sufficient drainage at the perimeter of Unit 3 to capture/redirect natural surface water run-off.
   4. Unit 3 dwelling is sited on a sloping block whereby the front-cum-side elevations of the Unit 3 allotment slope toward the structure thus, by virtue of design the storm water run-off and seepage directs toward the dwelling.
   5. Healesville is located in a region which provides a vital catchment for Melbourne's water supply; the Maroondah Dam/Reservoir.
   6. The locality, originally a farming district, is known for its higher than average wet weather conditions, high humidity levels and lower temperatures.
   7. High levels of saturation associated with natural ground water seepage were evident throughout the various areas of the allotment.
   8. Mildew/moss was observed to be affecting elevations of the allotment unrelated to the matter of alleged storm-water run-off from the common driveway.
   9. Surface water has been shown to be dispersing from Unit 11 and across the common area driveway as opposed to allegations of the surface water run-off emanating directly from the driveway.
   10. As discussed, the property slopes south west to north east, that is, toward the rear of the allotment. The south west side elevation ('blind side') depicts an absence of drainage provision; the retaining garden wall of a timber 'sleeper' construction, the brick wall of the unit and the timber 'sleeper' forming the base/threshold of the side/rear gate effectively creates an enclosure capturing the rainfall and surface water accumulating on the gravel path during wet weather conditions. By virtue of the rainfall being obstructed from effective discharge by three solid sides, the accumulating rainwater and any surface water run-off subsequently pools in the enclosed area, ultimately dissipating by seepage into the surrounding surfaces including foundation soils.
   11. Internal cracks were observed to be affecting plaster, differential movement of door architraves and 'hairline' cracks to tiled surfaces.
   12. Considering the end of approximately 15 years of drought conditions and increased frequency of wet weather and heavy rainfall conditions, escalated episodes of water run-off and significant saturation of the lower lying allotments could be reasonably anticipated.
   13. It would appear the dwellings on the subdivision were constructed circa 2000, during the drought conditions. It is reasonable for attention to be heightened to possible emerging defects associated with surface water run-off as a result of the seasonal changes experienced.
   14. Engineers or like suitably qualified parties may identify possible design and/or drainage defects and practical methods to implement in endeavours to alleviate the flow of surface water and mitigate loss.
3. Mr Pemberton was critical of the arrangements made on the western boundary of Ms Cullinane's unit. The western wall was abutted by a gravel path approximately 1.2m wide without paving or grading. At the rear, there was a plinth constituted by a sleeper. He said:

The south-west side elevation ('blind side') depicts an absence of drainage provision; the retaining garden wall of a timber 'sleeper' construction, the brick wall of the unit and the timber 'sleeper' forming the base/threshold of the side/rear gate effectively creates an enclosure capturing the rainfall and surface water accumulating on the gravel path during wet weather conditions.

1. He said the water so gathered ultimately dissipates 'by seepage into the surrounding surfaces including foundation soils'.
2. Mr Ray Martin, a building consultant of the consultancy company Build Assess Pty Ltd, carried out an inspection of Ms Cullinane's property on 5 May 2012 and furnished a report dated 6 June 2012 at the request of Ms Cullinane's solicitors. Mr Martin said that the lower central section of the driveway referred to by a number of experts and by council as a 'swale' which was 'intended to act as an open drain or culvert which should collect and distribute all surface water to the pit further down the driveway' was 'too shallow'. He said control joints in the driveway were providing 'an outfall for water in these locations to run towards Unit 3 and percolate into the soil'. These he said were 'a minor contributor'. The excessive flow of water onto Unit 3, he said, was causing the deterioration of timber used to landscape her property's surrounds and was affecting some of the plants. He said there was damage occurring to the footings on the west wall 'as evidenced by the cracking of plaster and tiles, uneven gaps to the head of doors at this end of the house and minor cracking to the brickwork'. He said excessive water in the sub-floor was elevating the moisture content in the timber flooring 'causing it to become cupped and stained'. He said that there was no effective sub-surface or agricultural drain to collect surface water and ground water that has percolated into the clayey silt and silty clay. Mr Martin noted that the permit for the development of the unit complex at which Ms Cullinane's was a part, 'PE-2000/53' issued 7 December 2001, required the driveway 'to be sealed and drained' (Condition 8). He continued:

Drainage is the collection and removal of excess surface water and groundwater from land using surface or subsurface drains. The surface drainage is ineffective due to the lack of a positive culvert at the centre of the driveway at a depth that can cope with the volume of water during heavy rainfall. During the recent drought the ineffective surface drainage may not have been obvious however the increase in rainfall over recent times has resulted in an excessive flow of surface and ground water from the land above the common property driveway and the common property driveway itself towards unit 3.

1. He referred to provisions of the Building Code of Australia requiring effective surface and subsoil drainage on sloping sites, observing that independently of the Code it was good building practice in any event. Mr Martin said that the nature of the water flowing from a common property driveway was 'a combination of surface water and ground water'. Absent an effective 'scallop' on the driveway, he said 'it would have been good practice to provide an effective agricultural drainage system to collect and divert the ground water into the stormwater drain via a pit'.
2. Mr Martin advocated the construction of an agricultural cut-off drain on the east side of the driveway together with a concrete kerb on the east side of the driveway which would 'need to be mechanically fixed to the existing concrete driveway and sealed so that water is not able to transfer between the base of the kerb and the top edge of the drive'. He said also that the control joints in the driveway should be sealed with 'an elastomeric sealant in accordance with the manufacturer's recommendations'.
3. Mr Martin costed the work to make good the damage to Ms Cullinane's house at $27,715. He gave a further report dated 31 October 2012 following the inspection on 24 October 2012.
4. In this report he responded to a number of points made in a report by Mr Merlo who gave evidence on behalf of the respondent. First, he denied the view that the problems of dampness in Unit 3 were caused by a lack of adequate sub-floor ventilation. He said that the version of the Building Code of Australia that applied when the building was constructed had been adequately met. He noted that there was:

excellent sub-floor clearance which averages 400mm from the ground to the underside of the bearers and 600mm from the ground to the underside of the particle board flooring in the area beneath bedroom 1 and the ensuite.

1. He said he saw no evidence of moisture affecting the sub-floor timbers and flooring.
2. Mr Martin agreed that the high side of Unit 3 (viz, the west side) 'would benefit from grading and draining but this alone will not address the excessive flow of water coming from the common property above'. He disagreed with Mr Merlo's view that rainwater run-off from the common driveway was not a significant issue. He also disagreed with the views expressed by Mr Merlo that the problems with the levels in the floor of Unit 3 in the vicinity of the ensuite to bedroom 1 were caused by the bowing of a bearer in the sub-floor which had warped due to lengthy exposure during the building process. He said this bowing 'would have occurred during and just after construction and is not the cause of the recent movement in the building'.
3. Mr Martin also disagreed with the opinion of Mr Merlo that, since the underside of the bedroom floor did not disclose any moisture reading, the problem in the vicinity of the ensuite were not the result of excessive moisture.
4. Mr Martin agreed with the suggestion that a kerb should be installed on the low side (viz, the east). He said in his view, however, the cut-off drain was also required.
5. He disagreed that it was incumbent on Ms Cullinane to provide drainage protection for her property because it had been 'benched into a hillside'. Mr Martin noted that units further to the north had the benefit of a deeper dishing in the central driveway which carried water into the drainage pit and away from them. Mr Martin also disagreed with the suggestion by Mr Merlo that the council drainage in Ayres Road was inadequate.
6. Mr Martin said that the gravel path on Ms Cullinane's property should be graded to fall away from the house and an agricultural drain should be provided 'adjacent to the existing retaining wall to collect the surface water once the path is re-graded'. I understand this suggestion to be for an agricultural drain to be constructed on Ms Cullinane's side.
7. In a further report dated 5 December 2012 following an inspection on 28 November 2012, Mr Martin increased his costings for the reinstatement works to $49,238 inclusive of Goods and Services Tax. Amongst the items which explained the increase in cost was an extension of the proposal to replace carpet and underlay so as to extend not merely to the areas which had been removed but to the upstairs areas as well, leading to a total costing incurred of $14,850. There was also an amount of $13,536 allowing for 'make provision for a contribution to the accelerated deterioration in landscaping timber and loss of plants'. The amount allowed for this item in Mr Martin's original estimate was $2,490. The allowance for carpet in the original costing was $2,993.
8. As to the rectification costings made by Mr Martin, Mr Pemberton said that they were excessive in a number of respects. First, he noted that the carpet was costed by Mr Martin at $355 supplied and laid per broadloom metre. This would be the cost for the highest quality woollen carpet. Mr Pemberton said a more reasonable allowance would be $70 per broadloom metre. He said the photographs taken and put into evidence showed that the carpet upstairs had stretched as a result of the moist atmosphere. In his experience carpet of the quality costed by Mr Martin would not have stretched in this way.
9. Again, he said that the timber landscaping features for which rectification costs were sought were, on his observation, untreated hardwood. To the extent that they had now rotted out, this was just ordinary wear and tear. The wooden members of the retaining wall at the epicentre of the dispute, namely along the western boundary of Ms Cullinane's unit, are still in good condition because on his observation it was of treated pine. Photographs show it to have a greenish tinge, whereas the other wooden members showed as grey, indicating that they had not been treated.
10. Mr Tom Casamento was a consulting structural engineer who furnished a report dated 20 March 2013. He said:

The building distress experienced at this site is the result of differential movement of the stumps caused by heave and settlement as a result of moisture variation in the soil.

1. He said he believed the property was still moving and needed 'rectification' to minimise further movement. Mr Casamento said that he took internal levels of the floor which showed that it was:

out of level by up to 49mm, which is considered quite substantial. I concluded that there was enough evidence to suggest that differential movement (heave and settlement) of the stumps is still occurring.

1. He said that when water ingressed following heavy rainfall, the stiff clay swells and heaves and when it dries out, it subsides. According to Mr Casamento, the result was to leave a gap between the top of the stumps and the sub-floor structure in effected areas.
2. Mr Casamento denied the views expressed by Mr Merlo on behalf of the respondent, that a lack of subfloor ventilation explained the problem. He said that he had entered the subfloor area and satisfied himself that there was an adequate opportunity for circulation even although a number of the empty purpen had joists in their immediate vicinity.
3. Mr Casamento attributed the problem suffered by Ms Cullinane's house to the inadequacy of drainage on the common driveway. Again, he took levels on the driveway. He said:

The crossfall opposite the west wall is relatively steep (up to 141mm), with a shallow swale roughly centralised and varying in depth. The crossfall is considerably steeper at the driveway entrance to the garage at the rear of Unit 11. Water runs down a slope with a level drop of 1189mm to the surface swale. There is absolutely no chance that the shallow swale would capture this rainfall run-off [from the driveway], and consequently would flow directly into Unit 3.

1. He also observed the riverstones on Unit 11. He said:

Water captured on the membrane [viz, the reed mat] would also flow across the driveway and into the subject property. The surface area [viz, covered by riverstones] is quite substantial. The owner [Ms Cullinane] has photographic evidence of this sheet flow from this area during heavy rainfall.

1. Mr Casamento agreed that the unpaved gravel area to the east of the retaining wall was also a source of water infiltration. He noted a CSIRO publication 'Foundation Maintenance and Footing Performance: A Home Owner's Guide' stating that it was:

highly recommended that an apron of concrete paving be installed along this path with a fall away from the building. The water should be captured by a spoon drain and discharged into a stormwater drain.

1. Mr Casamento advocated a kerb along the eastern edge of the driveway and an agricultural drain along the edge of the driveway, that is, on the Owners Corporation land. This could be installed, he said, with a ditch-witch.
2. He agreed with Mr Martin that the subfloor vents provided adequate subfloor ventilation to conform with the Building Code.
3. He said that, in his opinion the low floor levels in the area of the ensuite to bedroom 1 could not have originated at the time of construction since this would have put the structure out of square. It would have been very difficult to complete. These movements out of level were, in his view, of recent origin.
4. Mr Merlo gave evidence for the respondents. He furnished three reports, the first dated 25 January 2012, the second dated 3 December 2012 and the final report dated 25 March 2013. In his first report Mr Merlo said:

There are acute surface and sub-surface drainage issues in particular along the south side [of Ms Cullinane's unit] as well as the front/east side of the unit. Noting that the original unit site was benched into a hillside, this should have dictated carefully thought out drainage provision to protect the foundations and prevent sub-floor dampness. Unfortunately, such drainage initiatives were never carried out.

1. According to Mr Merlo's report there were 'two key issues' which he said 'jointly contributed' to the problems in Ms Cullinane's unit. Those issues were he said:

the absence of any surface and sub-surface drainage along the south side of the unit combined with the very limited subfloor ventilation

In Mr Merlo's view, run-off from the Owners Corporation's driveway was not a significant issue. In his view, the 'dished profile of the driveway was adequate to contain run-off'. He conceded that on occasions of 'very heavy rain' there could possibly be some overflow run-off in the northern edge of the driveway, that is the street end.

1. Mr Merlo said he noted that the flooring of Unit 3 was serviceable and

there has been no moisture related damage to the underside and consequently any discolouration to the flooring in the front bedroom ... must have been due to other causes.

He suggested condensation as a possible cause 'particularly if the underlay was rubber'. Mr Merlo also said that, in his view, the Council drainage in Ayers Road was inadequate. He observed 'generally, the open earth drains are too shallow and in particular on the eastern side is overgrown'.

1. As to the misalignment of the floor level which he conceded existed, this in his view had been caused by `bowing/deformation of the original bearers'. Mr Merlo said that on his observation the bearers were 'substantially weathered', which weathering caused the bowing. He said the issue with the floor level could be dealt with 'by merely jacking the floor joists and packing between the underside of floor joists and top of bearers'. This, he said, would lead to the re-alignment of the door frames and the re-levelling of the tiled floor. He produced photographs depicting what he described as excessive sagging in the bearers on the south side of the unit. His photographs also depicted significant rising damp in the sub-floor area.
2. In his second report Mr Merlo had generally joined issue with Mr Martin on issues of causation and rectification. He agreed with Mr Martin that an agricultural drain should be constructed, but not at the boundary line between the Owners Corporation allotment and Ms Cullinane's unit, but rather, under the gravel path on Ms Cullinane's property. He said otherwise the drain 'could not be installed in the required impervious clay soil'. As to the problem with the floor levels, he observed:

The soil in this area is considered to be Class M - Moderately Reactive, and therefore not prone to substantial movement - swelling and shrinkage due to varying moisture content.

He stood by his opinion that heave was not an issue or a significant one. The rectification of the drainage would rectify any heave.

1. In his final report Mr Merlo was responding to the opinions of Mr Casamento. Once again, he 'stuck to his guns'. He said that he did not believe:

that the landscaping of Unit 11 has been a significant issue (if any at all) with respect to moisture accumulating on the gravel path along the western side of Unit 3. This water from the landscaping would merely be picked up by what is considered to be rather effective profiling of the large driveway and adequate fall to strategically located drains.

1. As to the suggestion by Mr Casamento that there should be a drain on the

Owners Corporation's allotment at the eastern boundary, he disagreed. First, he said, it would require the destruction of an existing hedge. Secondly:

It would not be possible to achieve the required smooth firm clay floor of the trench using a ditch witch nor would it be possible to achieve a proper grade to achieve fall - essential for the drain to function. The proposed drain, therefore, in the writer's opinion, would be non-functional would arguably actually collect water and generate increased seepage through the walls into the subject Unit 3.

1. He said that agricultural drains were prone to blockage and the proposed drain could not accommodate 'risers' as flushing points. He concluded:

A ditch witch would normally have a maximum width of 150mm. Not only would it be very difficult to lay a pipe at a depth of approximately 1.5m but the installation of a membrane in the trench would be virtually impossible.

1. In his viva voce evidence, Mr Merlo withdrew the concession that it would be desirable for the Owners Corporation to install a kerb along the eastern side of the driveway. At a view conducted on the first day of the hearing, a test was carried out of the drainage of the driveway using a garden hose. Based on the results of that test, Mr Merlo said that he was quite confident of the effectiveness of the swale on the driveway and no kerb was needed, despite his earlier opinion.
2. Mr Casamento, in his viva voce evidence, said that in his opinion it would be possible to construct the agricultural drain which he advocated on the Owners Corporation side of the boundary using a ditchwitch. He denied that the installation of an effective membrane to prevent seepage would be impossible. He said it would be possible to install 'risers' to allow for the clearage of the drain so long as the rises were offset slightly from the vertical.
3. Mr Casamento said that locating an agricultural drain beneath the gravel path not only would not solve the present problem, but have the potential to make it worse. He said that a drain in this location could operate as a 'sump' by which I took him to mean it could operate so as to concentrate sub-surface water in situ rather than remove it. This view as to the functionality of agricultural drains in the vicinity of foundation footings, was, he said, supported by a number of papers which had been presented at an expert group of which he was a member. Challenged to produce such papers, he referred to a short paper prepared by a Mr Brown. This paper relied principally on Australian Standard 2870 published in 1996 and a statement therein 'wherever practical, sub-surface drains should be avoided near footings'. This passage however appeared in a paragraph dealing with 'allotments containing a reactive site classified as H or E', that is, having highly or extremely reactive clay sub-soils. As Mr Merlo had observed, the sub-soil of this site is classified as M, viz, moderately reactive. This is not in dispute and is to be found in a geotechnical investigation carried out prior to the construction of buildings as part of the entire subdivision.

1. Mr Jones, counsel for the respondents, urged me to accept the views of Mr Merlo and Mr Pemberton as to the causation of the moisture problem suffered by Ms Cullinane's unit. He said that all experts agreed that her gravel path along the western boundary was a source of the sub-floor water. He said Mr Martin had conceded that this arrangement was not in compliance with the Building Code of Australia. What was required was a graded impervious surface taking the water away from the footings of the unit. All experts advocated the establishment of an agricultural drain. They were divided on the question of which side of the title boundary it should be placed in.
2. Mr Jones said that Mr Casamento referred in his report to overflows of water onto Ms Cullinane's property only in heavy rain; but in his viva voce evidence he said that such overflows could occur in moderate rain events. Mr Jones said there was no photographic evidence to support this view. There were no photos that showed water 'shooting across' the driveway. Mr Jones said that the test carried out during the view showed the water overwhelmingly running down the driveway and into the drainage pit. The only cross-flow was at the very front. This was inconsistent with the scenarios described by Mr Casamento he said. He referred to evidence from Mr Ellis, one of the other unit holders who made a witness statement on behalf of the Owners Corporations. Mr Ellis said that he saw Ms Cullinane taking photographs in heavy rain. This showed that not even heavy rain produced the 'sheeting' phenomenon which was the premise of the occupant's case.
3. He submitted that a lack of ventilation in the sub-floor area was a significant cause. Insofar as any water was travelling from Unit 11 onto Unit 3, Mr Jones submitted this should create no liability for his clients. If there were such flows which could be characterised as 'unreasonable' they were not caused by the owners corporations and therefore could not be the subject of any relief against them under Section 16(1) of the Water Act.
4. He noted that, before the installation of the riverstones, on the evidence of the applicant herself and the instructions given to Messrs Martin and Casamento, there were no unreasonable flows before the landscaping work introducing the riverstone. Any flows emanating from there were not caused by the Owners Corporation.
5. Mr Jones invited me to reject Mr Casamento's opinion that an agricultural drain ought not be placed under the gravel path. The paper produced by Mr Casamento dealt with a situation of highly and extremely reactive soils whereas the soil on this site was only moderately reactive.
6. Mr Jones invited me to accept Mr Pemberton's criticisms of the costing carried out by Mr Martin. He said only $3,500 at maximum should be allowed for carpet replacement. He invited me to reject the claim for cost of landscaping as 'ridiculous'; nor, he said, should I allow 16 hours work for the replacement of plants. He said there was no evidence proving a connection between the alleged 'die off' of plants and any acts or defaults of the Owners Corporation.
7. Mr Jones said that any flows of water from the respondents' property should be regarded as 'authorised' because they occurred in the context of plans for drainage which had been accepted by the responsible authority for the purposes of the issue of a planning permit. By virtue of Section 20(2) of the Water Act he said special weight should be given to this consideration in determining whether any flow was reasonable or unreasonable. Much of the water which had found its way into the sub-floor area of Ms Cullinane's unit would, he said, simply have fallen as rain on the gravel path adjacent to the west wall of the building.

1. It will be seen that the case as presented at trial on behalf of Ms Cullinane either did not precisely track the case postulated in the Points of Claim or perhaps should be regarded as somewhat narrower.
2. It was Ms Cullinane's evidence that there were no problems of the type now complained of before the landscaping work was carried out on Unit 11. On her behalf, Mr Settle submitted that before these events there were no unreasonable flows of water onto Unit 3. In those circumstances and accepting for the purposes of the argument that there has been a flow from the Owners Corporation's driveway onto Unit 3 which is not reasonable, can it be said that the owners corporation 'caused' the flow? The Owners Corporation took no positive step. It did not, according to any evidence before me, promote the landscaping on Unit 11. All that can be said against it is that it has failed to take action to intercept any flow caused by the landscaping which flowed across its allotment. The allegation against it is one of non-feasance. Causation is not the subject of any definition or explanation in the Water Act, hence the ordinary legal concepts of causation must apply. In this context, some years ago, in Turner v Bayside City Council [2000] VCAT 399; (1999) 16 VAR 130 I considered the concept and operation in the context of Section 16 of the Water Act of causation by non-feasance. I take the liberty of quoting what I there said.

[19] It is important at this stage to keep steadily in mind precisely the question that is being addressed. The applicant relies upon a statutory cause of action in the Water Act. Where the necessary facts are made out, the cause of action under Section 16(1) appears to be one of strict liability, that is, it is not necessary to demonstrate any want of reasonable care. The mere proof of causation seems to be enough. Nor are we seeking to answer the question whether the respondents owed a duty of care in accordance with the Common Law tort of negligence to Mr Turner. The issue of "duty" arises only in so far as the establishment of its existence and breach is the only means whereby it can be said that the respondents "caused" the flow of water.

[20] Mr Attiwill referred me to an unreported decision of the Court of Appeal in the matter of Lilley v Alpine Resorts Commission (3 April 1998). In Lilley's case the plaintiff was skiing on the "summit run" at Mt Buller Ski Resort when she collided with a snowboarder, suffering physical and psychological injury. She sued the Alpine Resorts Commission and Buller Ski Lifts Limited (the ski tow operator on the summit run) but not the snowboarder. After a lengthy trial the Judge gave a verdict for the defendant. The Judge found that the defendants had breached their duty to the plaintiff in failing to inspect the run and failing to erect a sign or signs. The trial judge concluded that no causal link had been demonstrated. His conclusion was upheld by the Court of Appeal, specifically by reference to a passage from the judgment of Mason J. (as he then was) in Sutherland Shire Council v Hayman [1985] HCA 41; (1985) 157 CLR 424, 467, where His Honour said:

"When there is a duty to take a precaution against damage occurring to others through the default of third parties or through accident, a breach of the duty may be regarded as materially causal or materially contributing to that damage, should it occur, subject of course to the question whether performance of the duty would have averted the harm."

The trial judge concluded and the Court of Appeal agreed that it was not demonstrated that any of the measures suggested would have protected the plaintiff from her injury.

[21] To ascertain whether in terms of this formulation any causal link can be made between the omissions of the respondents and the flow of water, one must ask what duties if any did the respondents come under in the circumstance.

1. For the purpose of Section 16(1) a person can be regarded as having caused something by non-feasance but only if the person was under a duty to take the steps which were, in fact, omitted. What is the source of the alleged duty to act to upgrade the drainage on the Owners Corporation's driveway to meet the increased demands allegedly caused by the landscaping at Unit 11?
2. The only suggested source of this duty is what is said to be Condition 8 of the permit issued for the subdivision originally. That permit has not been put into evidence before me. What I do have is a drainage plan indicating that the responsible authority adopted and authorised a planning scheme at the time of initial development. This strongly suggests that the condition in the planning permit relative to drainage was of the type contemplated by Section 62(2)(a) of the Planning and Environment Act 1987, namely:

(2) The responsible authority may include any other condition that it thinks fit including -

(a) a condition that specified things are to be done to the satisfaction of the responsible authority a Minister, public authority, municipal council or referral authority; and

1. There was a widely held view that the effect of conditions in a development permit were spent once the development was completed. If that were the case, then there could be no on-going duty on anyone's part to comply with a condition 10 years after completion of the relevant development. That view of things, however, has not survived the decision of Osborn J (as he then was) in Benedetti v Moonee Valley City Council (2005) 22 VPR 221.
2. Accepting that the relevant condition, whatever its terms, would continue to have effect, if a condition of the type which I have supposed were included in the relevant permit, it would be fully performed once initially implemented. It would continue to have effect in the sense that were someone bound by the condition, for instance, to fill in part of the drainage for some practical or aesthetic reason, enforcement processes could be undertaken to require that what has been approved as satisfactory by the Responsible Authority would have to be reinstated in accordance with the plan so endorsed. The applicant's case here supposes that the permit condition imposes an obligation for periodic upgrades to the drainage system beyond what was originally endorsed by the Responsible Authority to keep pace with changing circumstances such as the landscaping work on Unit 11. My experience in the Planning and Environment List of the Tribunal tells me that a typical drainage condition would simply require compliance with a regime accepted as satisfactory at the time of development by the Responsible Authority. It follows, therefore, that if this initial drainage regime is shown to be inadequate, because of subsequent events the question as to who has to take what action must be dealt with under the Water Act. The permit would impose no obligation to carry out 'upgrades'.
3. The permit is not in evidence. I cannot exclude the possibility that the permit condition for drainage would be of some unusual kind which might have the effect of requiring a person bound by a condition to carry out upgrades but this would be an unusual condition. In my view, the burden of proof on a matter such as this lies on the applicant and, in the absence of any evidence of some unusual permit condition along those lines, I will proceed on the basis that none exists.
4. This means that the Owners Corporation has not been shown to be under any duty to carry out an upgrade of the drainage system in these changing circumstances. Once any such duty is negatived, the contention that the Owners Corporation has caused flows of water emanating from the landscaped area on Unit 11 must be rejected.
5. I should observe that, even had I reached a different conclusion other difficult questions would have arisen. I was not taken for instance, to the provisions of the Planning and Environment Act which render permit conditions binding on successors in title. Nor was there any exploration of the issue as to their differential operation as between a diversity of owners following a subdivision. Presumably, the permit for this subdivisional development was given to a single proponent. According to what principles could it be said that a generalised obligation to see to the proper drainage of the subdivision as a whole meant that the responsibility for draining water generated from Unit 11 for the benefit of Unit 3 was to be regarded as imposed upon the owners corporation No. 1 as the owner and occupier of the common property? As it is, there is no need to attempt, in the absence of any submissions on these matters, to explore them further.
6. These conclusions are sufficient to lead to the rejection of the applicant's claim.
7. For completeness I should observe that the evidence of Ms Cullinane that prior to the landscaping works on Unit 11, her unit was not subjected to any flows of water upon it which were not reasonable must negate any contention that the Owners Corporation has, by the inherent nature of the driveway, caused an unreasonable flow of water onto Ms Cullinane's allotment.
8. Whilst it is not strictly necessary to deal with these matters, I should observe that I generally accept the criticisms made by Mr Pemberton of Mr Martin's costings for rectification. The photographs and my own observations on the view support the opinion that the various landscaping timbers on Ms Cullinane's allotment are untreated hardwood in contrast to the retaining wall which has apparently been resistant to the deterioration that has affected the others. Their rotting out therefore would, even if the applicant's claim had been successful would properly be ascribed to fair wear and tear. Again, I have seen nothing to indicate that the carpet in Ms Cullinane's unit is or was of the high quality that would command the cost of $355 supplied and laid per broadloom metre as assessed by Mr Martin.

1. I have heard no submissions on the question of costs and so I will reserve them.