M & J Monacella Pty v Owners Corporation PS 309930 [2025] VCAT 1049 | Case summary

(a) the owners corporation has failed to repair and maintain common property, in breach of s 46 of the Owners Corporation Act 2006 (Vic) ('OC Act'); and

(b) Mr Raynor has refused and failed to carry out repairs and maintenance to his lot to prevent the water leak from his lot causing damage to the applicant's lot in breach of s 48 of the OC Act and in breach of s 16 of the Water Act 1989 (Vic) ('Water Act').

M & J Monacella Pty v Owners Corporation PS 309930 [2025] VCAT 1049 | Case summary | Zoe

[43]

As I have noted above, the applicant commenced this proceeding on 21 March 2024. A first directions hearing was held on 29 May 2024. In the procedural directions made that day, the Tribunal noted that the cost of expert reports would likely exceed the cost of repairs, and that it was in the interests of all parties to find and fix the leak rather than spending money on expert reports. The Tribunal ordered the parties and or their representatives to attend an inspection of Lots 9 and 13 with Focus Plumbing for the purpose of Focus Plumbing recommending a scope of works to repair the leak after inspecting common property, and both lots, and, if required, cutting a hole in the bedroom ceiling of Lot 9. Following this, each respondent was required to file and serve Points of Defence, by 3 July 2024, and a compulsory conference was scheduled.
The owners corporation filed its Points of Defence on 3 July 2024, in which it asserted that the report of Focus Plumbing dated 18 June 2024 identified the source of the leak as 'solely within' the second respondent's lot.
Mr Raynor did not file Points of Defence by 3 July 2024, and a directions hearing was listed, to hear from the parties as to whether the compulsory conference should be vacated and the proceeding be listed for final hearing.
At the directions hearing on 11 September 2024 the Tribunal gave leave to Mr Raynor to file Amended Points of Defence, and directed that any expert reports be prepared in accordance with VCAT Practice Note PNVCAT 2 Expert Reports. The proceeding was listed for a one day hearing on 14 March 2025.
On 13 March 2025, the day before the scheduled hearing, the applicant filed an affidavit of evidence. The owners corporation filed an affidavit of evidence on the morning of the hearing.
At the time of the first day of hearing, on 14 March 2025, only the applicant and Mr Raynor had filed plumbing or building reports, neither of which complied with VCAT Practice Note PNVCAT 2 Expert Reports. Neither of the reports included recommendations for a scope of works to repair the leak. Neither the applicant nor the first respondent had filed any material addressing the assertions by the second respondent that his shower was not the sole source of the leaks.
The second respondent was unable to appear at the hearing on 14 March 2025, due to ill health. He had nominated that his partner appear at the hearing to represent him; she required an interpreter to enable her to participate in a hearing, which could not be arranged at short notice. It was not reasonable to proceed, considering the late filing of substantial evidence by the applicant and the first respondent.
I adjourned the hearing to 17 June 2025. I made orders that, before the resumption of the hearing, the parties arrange for their experts to attend the site together to address the differing positions of the parties as to the source of the leak. In particular, the experts were to report on: whether there was any water leaking from the second respondent's shower; whether there was any leak into Lot 9 from any other location than the second respondent's shower, such as the balcony referred to in the second respondent's defence; a description of the works required to rectify the leak; and an estimate as to the cost of those repairs. As no party had filed a copy of the Plan of Subdivision, I ordered the owners corporation to file a copy of the Plan of Subdivision.

[48]

At the hearing on 17 June 2025, Mr Raynor conceded that the shower in his lot was the source of the water leaking into the applicant's lot, however, he submitted that the water from his shower then travelled through the common property below his lot before entering the applicant's lot.
Mr Raynor noted that the Focus Plumbing report relied upon by the owners corporation to issue the Notice to Repair, and the further report of Focus Plumbing prepared in June 2024, both proceeded on the assumption that the shower membrane had failed. Mr Raynor asserted that the owners corporation and Focus Plumbing were mistaken in that assumption and reliance. Mr Raynor produced photographs which he said had been taken when the owners of Lot 14 had renovated their shower, in the preceding 12 months. Mr Raynor said those photographs showed that there was no waterproofing membrane at all under the tiles laid in the shower. Mr Raynor asserted that it should be assumed that his lot is the same as Lot 14, and that there is no waterproofing membrane in the shower of Lot 13. I understood those submissions to be intended to suggest that the leak into the applicant's lot arose through building defects and not through a failure on Mr Raynor's part to attend to repairs within his lot.
Mr Raynor agreed that he had undertaken some renovation to the bathroom in his lot in 2018. He said that the shower head installed in his shower is a 'rain head' approximately 30 cm square. I do not consider this to be relevant to the question of liability under the Water Act. I note that, if the shower head were 3 Star WELS rated, [10] it would not discharge a greater quantity of water than any other 3 Star WELS rated shower head. There was no evidence before me about the WELS rating of the shower head installed in Mr Raynor's shower, and it was not referred to in any of the expert reports. Relevantly, Mr Raynor did not indicate that there had been any works, such as alteration of the plumbing or waterproofing, which would have required a plumbing certificate of compliance.

[50]

(a) He did not see any indication before the inspection to suggest that the balcony was leaking or causing water to enter the building. He considered the entire balcony slab and formwork to be clean and free of water damage or corrosion, although the condition of the membrane is poor, and concluded that there was no evidence that leaking had occurred previously from the balcony.

(b) He expressed the opinion that there is 'no evidence' that would suggest the leaks are caused by factors other than a shower leak.

(c) He did not observe direct leaks from the plumbing pipes, but rather, evidence of leaks trailing from the shower base down the outside of the pipe, which he considered consistent with a leak to the shower base.

(d) He observed water damage directly beneath the shower floor waste of Mr Raynor's lot, including corrosion around the shower waste and mould to the ceiling below. He noted that there was active leaking through the shower base before any testing.[11] Further, he observed 'a redundant brick loose in the concrete' which he said 'indicates that the finishing of the concrete was initially poorly completed'. Mr Wood considered the damage to be 'consistent with excessive corrosion and microbial growth from long term moisture exposure'. He concluded that 'the shower is no longer fit for purpose, nor is it performing as intended according to the relevant performance requirements' which require the floor surface in a shower enclosure to be impervious to water.[12]

(e) Although the other experts carried out some testing of the window in the bathroom of Mr Raynor's lot on the day of joint inspection, in his opinion, that testing was not carried out in a controlled manner and, in his opinion, could not be relied upon.

(f) Despite the deficiencies in water testing the window, in his opinion, and although there was evident dry rot in the window, he saw no indications, such as damp or rotting due to water ingress to suggest that the windows were leaking.

(g) He estimated the repairs required to be: assessment of the condition of the concrete slab, demolition of the existing shower, preparation of the site and installation of a waterproof membrane, new floor and wall tiles, installation of fixtures and fittings, caulking of wet areas, a water test to confirm leaks have ceased, and rectification of the damage to the applicant's lot. He estimated the cost of the works at $91,502.98.

[59]

Mr Raynor relied on a report dated 16 April 2025 prepared by Angela Perry, Building Inspector, of Guardian Building Inspections which she prepared after attending the site with the other parties' experts, in accordance with my Orders dated 14 March 2025.
Ms Perry concluded that 'the failure of the drainage system and/or associated substrate has been and remains the primary source of water ingress affecting the apartment below'. That is, it was Ms Perry's opinion that it was 'evident' that there was leaking into the applicant's lot from the plumbing below the shower in the second respondent's lot. It was also her opinion that it was 'evident' that there was leaking from the base or from the walls of the shower in the second respondent's lot, but '[t]he walls and associated issues cannot be determined'. She expressed the opinion that the in-situ shower base is exhibiting significant signs of long-term leakage, most likely originating from the drain connection'.[13] In cross examination, she acknowledged that she had not observed directly any leak attributable to a failure of the pipes.
Ms Perry noted in her report that there was considerable water damage to the concrete base of the shower, and recommended that this be assessed to ensure that it is structurally sound.
Ms Perry noted that active water leakage and dripping occurred within 10 minutes of commencement of the water testing of the shower in Mr Raynor's lot. Ms Perry expressed the opinion that the speed with which the water appeared after the tap in the shower was turned on, was so rapid, that she surmised there may be a crack in the drainage pipes leading from the shower base. It was her opinion that, if the water had been draining through the tiles and screed, it would have taken longer than 10 minutes to appear. Ms Perry conceded that this area of the drainage pipes was not visible from the ceiling, and it could not be established with certainty that there was in fact any cracking in the pipes.
Ms Perry noted that 'New sealant has been applied to sections of the shower. Highly recommend a qualified tiler to re grout and apply sanitary-grade neutral-cure silicon sealant to all areas as per AS 3740 2021 Waterproofing of domestic area and AS 4858:2004 Wet Area Membranes'. In the hearing, Ms Perry commented that the sealant had not been applied correctly.
Ms Perry was of the opinion that a full replacement of the shower base, including floor and wall tiling, and associated drainage connections, is required, and that those works should be carried out in accordance with the current National Construction Code ('NCC'), relevant Australian Standards, and AS3740 for waterproofing of wet areas.[14] Ms Perry estimated the cost of the works, including full replacement of the shower base, replacement of floor and wall tiling, and rectification of plaster and paint in Lot 9 to be $40,000.00.

[72]

The experts agree that the state of corrosion under the shower was consistent with a long standing water leak over many years.[20]
Subsection 16(5) of the Water Act, set out in paragraph 14 above, provides that, where the causing of a flow of water arose from works constructed, or acts done or omitted to be done, by a land owner at a time before the current occupier because the occupier of the land, the current occupier is liable to pay damages in respect of the damage or loss if, and from the time that, the current occupier has failed to take any steps reasonably available to prevent the causing of the flow of water arising from that construction, act or omission.
I note Mr Raynor's belief, formed from inspecting a neighbouring shower in the development while it was being renovated, that there may be no screed or waterproof membrane below his shower. I consider that the photographs relied upon by Mr Raynor in relation to this submission, to be inconclusive. Although the photographs show the bare concrete floor of a shower, after the tiles had been removed, it was not taken during the process of removing the tiles and does not show how the tiles were fixed to the shower base, nor whether anything was laid under them.
I note, also, Ms Perry's opinion that the shower base does not appear to comply with the relevant building standards that applied in 1991.
Although it might be posited that the defects in the original construction of the shower, and or omissions on the part of owners prior to Mr Raynor might have contributed to the circumstances that eventually gave rise to the flow of water into the applicant's lot, this is not relevant to the question of Mr Raynor's liability to the applicant under the Water Act. As a later occupier, Mr Raynor's obligation was to take steps reasonably available to him to prevent the water flow within a reasonable period of time after he became aware of the issue.[21]
As I have noted above, Mr Raynor also submitted, in effect, that the owners corporation should have carried out more investigations before issuing him with the Notice to Repair. I do not accept that contention.
Under the Water Act, the current occupier of any land is liable for any unreasonable flow of water from the land they occupy, if they have not taken steps that were reasonably available to them to prevent that unreasonable flow of water.
In this case, the applicant pleads that the negligence alleged of Mr Raynor is the failure to carry out the repairs required by the Notice to Repair issued by the owners corporation.[22]
I agree that, once the applicant and the owners corporation had alerted Mr Raynor to the leak in the applicant's lot, and raised the possibility that the leak was coming from Mr Raynor's lot, he had an obligation to investigate the possibility that his shower was indeed the source of the leak. It was not open to him to wait for the owners corporation to carry out all investigations. If Mr Raynor believed that the leaks emanated solely from common property, he needed to establish, by expert evidence, that it was more probable than not that his shower was not the source, or not the only source, of the flow of water.
To the extent that Mr Raynor believed it was the owners corporation, and not he, who was responsible to investigate and carry out repairs, that belief was misconceived.
I consider it relevant that Mr Raynor's expert reported that there had been a recent application of silicone around the drain in the floor of the shower, and that the application had not been correctly carried out. In my view, considered in the context of Mr Raynor's statement, in his email to Ms Monacella on 3 April 2023, that he had 'sealed a small gap between the draining pipe and the tiles' the evidence tends to suggest that Mr Raynor attempted to address the leak himself as a 'home handyman'. Given the extent of the effect of the leak reported by the applicant, I consider that it was incumbent on Mr Raynor to engage a registered plumber to investigate the full extent of the repairs required to his lot.
On 19 June 2025, two days after the final day of hearing, and after all evidence had been given, the second respondent sent to the Tribunal a copy of an email dated 9 April 2023, sent by him to the other parties, to which he had referred to in the hearing. No orders had been made permitting further correspondence after the hearing, and leave had not been given to the second respondent to file further material. In the email dated 9 April 2023, Mr Raynor asserted that he had 'made every effort to seal up possible holes that could be creating this situation to cover all possibilities'. That assertion is contradicted by the expert evidence before the Tribunal.
I note also Mr Raynor's assertion, in his Points of Defence, that he had proposed that he apply a liquid membrane that he described as 'state-of-the-art new-generation waterproofing system' to the shower floor and walls to prevent water leakage through the tiles. Such work could have been carried out by Mr Raynor at any time: the work would have been entirely within his lot, and would not have required consent of the owners corporation or of the applicant. I note that none of the parties' experts proposed such a solution. There is no evidence before me that the product proposed by Mr Raynor would have been effective. However, if application of that product was, on the evidence, a step reasonably available to prevent the causing of the leak, it might have affected his liability to the applicant. As he did not take that step, the fact that he had proposed it has no impact on his liability to the applicant.
I consider it to be apparent that, had Mr Raynor engaged a registered plumber to assist him at the time the leak was first reported to him by the applicant and the owners corporation, in April 2023, the damage to the applicant's lot could have been rectified much earlier. In my view, Mr Raynor had an obligation to engage a registered plumber because of the potential liability to other lots under the Water Act for any unreasonable flow of water from his lot.
Had he done so, Mr Raynor would also have addressed his obligation under s 129 of the OC Act to maintain any part of his lot that affects the use and enjoyment of other lots in a state of good and serviceable repair. A shower, or other installation, which is required to be impervious to water is a part of a lot capable of affecting the use and enjoyment of other lots and the common property.
Having regard to all the circumstances I find Mr Raynor's failure to take reasonable steps to ensure that the shower in his lot was not a source of water ingress to another lot, was a necessary condition of the occurrence of harm to the applicant. I find that Mr Raynor was negligent in that failure, and I find that it is appropriate for the scope of Mr Raynor's negligent liability to extend to the damage and loss caused to the applicant under the Water Act for the damage caused to the applicant's lot.
Having found Mr Raynor liable to the applicant under the Water Act, it is not necessary to make a determination in relation to liability under the OC Act. For completeness, I note that the Notice of Repair issued by the owners corporation to Mr Raynor on 1 November 2023 was informed by the report of Focus Plumbing following inspection and assessment of the likely source of the leak. I consider that the owners corporation was entitled to rely on the report and advice of Focus Plumbing, and the Notice of Repair was properly informed by that report and advice. I find that Mr Raynor was in breach of his obligation to keep his lot in a state of good and serviceable repair at the date the Notice of Repair was given.

[76]

The applicant also seeks its costs.
I note that the Orders proposed by the applicant are modelled on the orders made in Davies v Owners Corporation 1 PS414649K.[23] Regrettably, that proceeding is still on foot, and I consider a slightly different approach is required in this proceeding.
I consider that it is appropriate to order Mr Raynor to engage, and meet the costs of, a registered plumber and such other qualified trades people as may be required to carry out repair to or replacement of the shower in his lot in a manner that results in the shower being fully compliant with the applicable plumbing regulations.
I do not consider it appropriate for the Tribunal to specify in detail the precise works to be undertaken to stop the leak. I consider that to be a matter for the qualified tradesperson to determine, having regard to the damage that is uncovered when the tiles are removed from the base and walls of the shower. However, as both Mr Robson and Ms Perry considered that the structural integrity of the shower base may have been affected by the long term water ingress, it is necessary that this be assessed before the shower is reinstated.
I note that Ms Perry also considered that the pipework from the shower drain through the common property area between the lots may also require repair. There is no evidence before me that common property pipework requires repair, and presently no evidence as to the structural stability of the slab on which the shower is situated. However, it is possible that demolition of the existing shower may reveal that works are required to the slab within which the shower is located, and or to the drainage pipes running from the shower drain through the common property between the two lots, and their connection to the main common property drainage pipes.
To the extent that any of the work that needs to be carried out may involve repair of common property, Mr Raynor will need authorisation from the owners corporation to carry out that repair to the common property. Section 47A of the OC Act contemplates that a lot owner may be authorised by the owners corporation to carry out repairs to common property as agent of the owners corporation. It follows that, if the owners corporation is to give that authorisation to Mr Raynor, it will need to be fully informed by Mr Raynor of the scope of works required to be carried out. It would be appropriate to require Mr Raynor to submit a detailed quotation for the works to the owners corporation for its approval before works are undertaken.
For these reasons it is appropriate to make orders directing the owners corporation's co-operation in the works.
It is also appropriate to require the first and second respondent to select and engage the registered plumber jointly. This will facilitate the owners corporation's ability to oversee any works required to common property, and to facilitate prompt payment of the plumbing and other contractors, should Mr Raynor fail to do so.
In requiring that Mr Raynor and the owners corporation engage the registered plumber jointly, I do not mean that Mr Raynor and the owners corporation are to share the costs of the works jointly. The works required will be predominantly works within Mr Raynor's lot. To the extent that any works to common property are required, such works would be properly levied on Mr Raynor on the benefit principle set out in s 24(2A) of the OC Act. Any works to common property may be considered to protect Mr Raynor from further liability for water ingress from his lot, and for that reason are substantially for the benefit of his lot. Mr Raynor is to have sole liability to meet the cost of the engagement of the trades engaged to repair the shower installation.
In the event that Mr Raynor does not meet the full cost of the plumbing and other trades that need to be engaged to carry out repairs to his bathroom, the owners corporation is to meet those costs, and be authorised to recover the amounts paid by it, with interest at the interest rate currently prescribed under the Penalty Interest Rate Act 1983 (Vic), from Mr Raynor.
I consider it is appropriate to order Mr Raynor to meet the costs of repair and reinstatement of the applicant's lot once the water leak has been addressed.

[80]

By 23 January 2026, the second respondent must pay the applicant $25,541.58[25] in respect of the applicant's claim for damages for loss of rent from 27 January 2025 to 21 November 2025.
By 17 February 2026, the first respondent and the second respondent must jointly engage a registered plumber, and such other qualified trades as may be required to demolish the existing shower, arrange assessment of the structural integrity of the shower base, and undertake full replacement of the shower base, including floor and wall tiling, and associated drainage connections in accordance with the current NCC, relevant Australian Standards, and AS3740 for waterproofing of wet areas ('the shower replacement works').
If the first respondent and the second respondent are unable to agree on the selection of a registered plumber to carry out the demolition and replacement of the shower base, the owners corporation is authorised to do all things necessary to comply with paragraph 109, and granted liberty to apply for further Orders as required.
The second respondent must give access to the registered plumber engaged in accordance with these Orders to carry out the shower replacement works.
The first and second respondents must arrange for the shower replacement works to commence on a date no later than 28 February 2026.
Leave is granted to the applicant to resume its claim for lost rent for the period from 21 November 2025 once the shower replacement works have been completed.
By 30 April 2026, the applicant must file and serve particulars of its loss and damage in respect of rental income after 21 November 2025, and for rectification of the damage to the applicant's lot, so that a monetary order can be made in respect of that loss and damage.
Any application for costs must be made within 4 weeks after the determination of the applicant's claim for loss and damage in respect of rental income after 21 November 2025, and for rectification of the damage to the applicant's lot has been completed.
Liberty to apply.

M & J Monacella Pty v Owners Corporation PS 309930

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Judgment (103 paragraphs)

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M & J Monacella Pty v Owners Corporation PS 309930 (Owners Corporations) [2025] VCAT 1049 (21 November 2025)