1. It is common ground that the building had significant building defects. In 2012 the applicant and the owners corporation were only at the beginning of understanding the extent of these defects. The actual damage to Lot 3 is the result of broader building and design issues that became the subject of a claim made by the owners corporation against the builder, engineer, building surveyor and architect in a separate proceeding in the Building and Property List.[1]
2. The applicant has relied on the expert structural and building report of Tom Casamento dated 16 September 2013, obtained by the owners corporation. She also relies on a subsequent report from Tom Casamento dated 14 January 2014. The reports confirm water damage was rife throughout the building, and this damage was caused by a combination of building design and construction defects. It is common ground the owners corporation did not cause the building defects that caused the flow of water into the applicant's lot.

What obligations is the owners corporation under to take steps to remedy the defects?

1. For the purpose of section 16(1) of the Water Act, a person can be regarded as having caused something by non-feasance, but only if they were under a duty to take steps which were, in fact, omitted.
2. There is a duty on the owners corporation to repair and maintain the common property. Section 46 of the Owners Corporations Act 2006 (OC Act) provides:

(b) the chattels, fixtures, fittings and services related to the common property or its enjoyment.

Claim under section 16 Water Act

1. Section 16(1) provides as follows:

(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. Section 16(5) further provides:

(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. The duty on the owners corporation to repair and maintain the common property places a responsibility on the owners corporation in regard to the flow of water into the applicant's property.

What steps did the owners corporation take to remedy the flow?

1. Relevant to these proceedings is the meaning of "steps reasonably available" and this includes a requirement that the current occupier has a sufficient and reasonable time to carry out those steps after being given notice of the unreasonable flow.
2. In Connors v Boden International Pty Ltd,[2] at Paragraph 51 Senior Member Young stated:

... I consider that the words "steps reasonably available" includes a requirement that the current occupier has a sufficient and reasonable time in which to carry out those steps after being given notice or constructive notice of the unreasonable flow is imputed. Further, that their liability in the event of them not taking reasonable steps to cease the flow after such notice is limited to the time from which such steps should reasonably have been taken.

Therefore, I find that "reasonable steps" in the Act infers that the current occupier takes the necessary steps within a reasonable time.

1. I am satisfied, on balance, that the duty to repair and maintain the common property in the context of the flow of water into the applicant's property was taken seriously by the owners corporation manager from when she was first informed in February 2012 about the flow.
2. Despite the duty to repair and maintain the common property, an owners corporation is not an entity like a lot owner, individual or corporation, who can act and make decision in its own capacity more readily than an owners corporation.
3. The owners corporation could not have simply carried out works without being able to pay for them. Each step of the process would require the owners corporation to issue levies and have the money be paid before works could be carried out.
4. After the expert reports were prepared and their financial implications understood by all lot owners and the owners corporation, it became apparent that the cost of rectifying the entire building's damage was in excess of $500,000 and would require a special levy from each owner for $50,000. The works to rectify the entire building were of such magnitude they constituted an upgrade within the meaning of section 53 of the OC Act and this in itself required a special resolution to carry out the works. Borrowing money to pay for the works would also require a special levy (section 25 OC Act).
5. I find that the owners corporation was responsive to the flow when notified by the applicant in February 2012. It sent a plumber in response to the complaint by the applicant (Warranwood Plumbing 13 February 2012).
6. Resolutions were passed at the annual general meeting held on 15 August 2012, the effect of which were to engage lawyers to address the defects suffered by the building.
7. This led to the report from Tom Casamento dated 16 September 2013, and his further report from 14 January 2014, to deal with the specific water flow issues in the applicant's lot.
8. The owners corporation subsequently arranged a CCTV inspection by Scotia and works to rectify the flow. It then arranged a quotation from Bay Building and raised a special levy to carry out works on common property in the roof terrace above the applicant's lot, and organised and paid for the works to rectify the causation of the flow.
9. The applicant claims that the time taken to gain entry to lot 7 was unreasonable and further slowed down the process. The owner of lot 7 was not present at the hearing to respond to this claim, but on balance, I am satisfied that the owners corporation acted from the time it was put on notice in February 2012, and from there took reasonable steps in reasonable time for an owners corporation in its capacity to cease the flow. The flow to the applicant's lot was a part of much broader defects affecting the whole building.
10. I further accept that rectification of the flow to the applicant's lot was certainly not assisted by the tardiness of Mr Casamento in providing his report. It took him some nine months from his appointment to provide his report and then a further four months to reinspect the applicant's lot and provide a further report in January 2014.
11. Proceedings were initiated in this Tribunal in the Building and Property List against the builder, engineer and architect and on 24 February 2015, Deputy President Aird in Order 3(i) joined the applicant as an interested party to the building defects claim.[3] It is in those proceedings where the applicant had the opportunity, as early as 2014, to raise the issue of her economic loss.

1. I am satisfied that the owners corporation acted in accordance with its duty to repair and maintain the common property and once such duty is negatived, the contention that the owners corporation has caused flows of water from the common property must be rejected.
2. The proceeding is dismissed.
3. There is no order as to costs.

[1] VCAT Building and Property List proceeding D373/2014.

[2] [2008] VCAT 454.

[3] VCAT Building and Property List proceeding D373/2014.