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Water Leaks – Who is Liable, the OC or Lot Owner?


Water Leaks – Who is Liable, the OC or Lot Owner?

A recent decision in VCAT has dealt with an issue commonly faced by Owners Corporations throughout Victoria and their members – interpreting a plan of subdivision in the context of unreasonable flows of water into an apartment, and whether an Owners Corporation took reasonable steps to prevent a flow of water.

Specifically, the case dealt with interpreting the plan in question and determining the boundaries between common property and lots, so as to determine whether an Owners Corporation or an individual lot owner was liable for water damage pursuant to the Water Act 1989 (Vic).


In Davies v Owners Corporation 1 PS414649K [2019] VCAT 1159 (Davies) the applicants were the owners of two apartments in an apartment building on St Kilda Road, Melbourne. Their apartments had been severely damaged by water flowing from above into their ceiling cavities and then into their living spaces.

Destructive testing carried out during the course of this proceeding revealed that the problem of water leaks has existed for a considerable period of time, and must have been known about by the Owners Corporation and/or its managers. For example, at some point in the past, unbeknownst to the applicants, drip trays had been installed in their ceilings to collect the leaks from above.

The applicants commenced the proceeding against the Owners Corporation and owners of the apartments above, seeking damages and injunctive and other relief under sections 16 and 19 of the Water Act 1989 and under the Owners Corporation Act 2006 (Vic) in order to have the flow of water stopped and to be able to rectify the damage to their apartments.

It was not disputed by any party that the flows of water are not reasonable within the meaning of section 16 of the Water Act 1989.

The relevant question for determination was whether the glazed units and the balconies were common property or were within the property owned by the applicants.

The decision

Senior Member Kirton provided an analysis of a plan of subdivision which stipulated that boundaries shown by thick continuous lines are defined by buildings, the location of boundaries defined by buildings is the interior face and all structural columns, walls, slabs and beams are common property. This is a common approach used to define boundaries on a plan of subdivision.

Senior Member Kirton rejected an argument that the relevant building structures are limited to those walls which are load-bearing. Whilst non-load-bearing, the member held that that aluminium framed glazed panels which formed a wall and roof over part of the lot with sliding doors opening on to a balcony, are structural elements of the building, and therefore constituted common property.

As to the location of the boundary between a lot and common property on a balcony, Senior Member Kirton determined that the space between the ceiling of the lot below moving upwards to the balcony surface comprised of a void containing cables, pipes, drip trays and the like. Kirton SM held that the membrane, screed, tiles and decking all formed part of the lot, however the cement sheeting and joists formed part of the structure of the building and are therefore common property.

As a result of these findings, Senior Member Kirton was satisfied that the Owners Corporation was liable to the applicants under s. 16 of the Water Act 1989. The applicants were entitled to relief in the form of a declaration, an injunction, as well as damages.

Key take away points

1. The case provides some clarity as to how a plan of subdivision is to be interpreted in the context of a water leak and serves as a reminder of the difficulties faced by Owners Corporations where water leaks from either a lot, or common property, are causing damage to another lot.

2. Where there is disagreement as to the source of damage and ownership, this may cause further delays and damage to the lot owner’s property, which may expose an Owners Corporation to even further losses.

Some practical tips for reading a plan

Whilst boundary definitions for lots and common property will vary from plan to plan depending on the developer’s instructions and some are more detailed than others, typical definitions may include:

1. When a plan contains building boundaries, the plan must define the location of those boundaries by stating whether those boundaries lie along the ‘Interior face‘, ‘Exterior face’ or the ‘Median’ (marked ‘M’) of the relevant building structure.

2. Median means the boundary is shared between adjoining lots and that the two owners would share any repair costs of the dividing wall.

3. Exterior face means that the owner is responsible for all works from the plaster through to the paintwork on the exterior of the wall, and the façade is included in the lot owner’s property.

4. Interior Face means that the boundary starts from the internal face of the structure (so everything from the exterior paintwork through to the plaster is the Owners Corporation’s responsibility).

5. A common example contained in many Victorian plans is something along the lines of: “The lower boundary of units 1 to 12 (both inclusive) lies one metre below that part of the site which is contained within the vertical or near vertical boundaries of the relevant unit”. In this example, the owner is responsible for their roof and the foundations under the floor and the common property is all of the land in the parcel except for the land contained in units 1 to 12.

6. In other plans, areas above and below the units are common property and accordingly the Owners Corporation is responsible for the repair or replacement of the roof or foundations of the unit. Additionally, the owner could not build a second storey without unanimous approval from the Owner’s Corporation or build something below the surface such as a wine cellar.

Due to the complexity of some developments, interpretation of a plan may require professional advice.

If you have any questions about this decision or what it means for you, please contact Annabel Clarke on (03) 9604 9400.

Disclaimer: This article is general commentary on a topical issue and does not constitute legal advice. If you are concerned about any topics covered in this article, we recommend that you seek legal advice.