In 2002, a woman purchased a ground floor unit in a small five-unit brick and concrete building in Abbotsford, registered as a strata plan. Within a year, heavy rain sent water pouring through her carpets. Over the next seven years, despite expert reports, complaints, and pleas for action, the owners corporation failed to fix the common property drainage. Her unit became uninhabitable. Her tenant left. She couldn't sell, couldn't rent, and couldn't live there.
In February 2010, the NSW Supreme Court awarded her $255,491.76 in damages and interest, plus a mandatory injunction forcing the owners corporation to complete repairs. Justice Bryson was blunt: the owners corporation had known about the problem for years and done nothing meaningful to fix it.
This is the story of how years of inaction turned a fixable waterproofing problem into a quarter-million-dollar liability — shared among just four other lot owners.
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7 yrs
Of water ingress
$255K
Damages + interest
5 lots
In the building
$810K
Value if repaired
The building: a small block in Abbotsford
The building is a four-level brick and concrete home unit block in Abbotsford with car parking underneath, sitting on a sloping site with the street frontage at the lowest point. It contains just five lots. The owner had Lot 1 — a slightly elevated ground floor two-bedroom unit, the most exposed to water coming down through the building's common property.
The strata plan was registered in February 2001. The owner purchased in May 2002 and moved in as an owner-occupier. Things were fine — until the first heavy rain.
Timeline: seven years of water, inaction, and deterioration
First water penetration. Heavy rain sends water into both bedrooms. Carpets become sodden. The owner notifies the owners corporation.
Owners corporation contracts Seana Group to rectify defective building works. Work completed in second half of 2003 — but later events show the scope was inadequate and the work was not done to a proper standard.
The owner replaces the ruined carpets at her own expense: $2,366.
The owner moves out and leases the unit to a tenant at $490/week.
Dampness returns. Tenant complains of damp smell in kitchen. Water coming in through the kitchen power point. Further problems throughout 2005 — dampness, water leaks, mould.
Tenant demands rent reduction to stay. New 6-month lease at $450/week (down from $490). Water damages kitchen cupboards.
Tenant leaves. Refuses to pay rent. The unit is no longer habitable. It will remain vacant for the rest of the case — over three years.
Major flooding. Heavy rain sends water pouring in from balconies, external doors, sills, and wall cavities. Water found lying in bedrooms and bathrooms. Kitchen flooded on all sides. Carpets saturated, floorboards buckled. The owners corporation sends tradesmen to pump out water, but no repairs or rectification follow.
The owners corporation obtains a detailed report from a building consultant clearly setting out the rectification works required. The owner tries to persuade a General Meeting to act on the report. She is outvoted.
The owner seeks mediation through the Office of Fair Trading. The owners corporation refuses to participate. She files in the Supreme Court.
Supreme Court judgment. Justice Bryson awards $255,491.76 in damages and interest, plus a mandatory injunction requiring the owners corporation to complete all remedial works by September 2010.
What the court found
The owners corporation didn't even dispute liability. None of the owner's evidence was challenged by cross-examination, and the owners corporation led no evidence of its own. Justice Bryson's findings were damning:
Key findings
- The owners corporation breached s 62 of the Strata Schemes Management Act 1996 — the statutory duty to properly maintain and keep in a state of good and serviceable repair the common property.
- The initial repair work was inadequate. The Seana Group contract from 2003 had insufficient scope and the work wasn't done to a proper standard. The owners corporation didn't follow up.
- The owners corporation relied on insurers instead of acting. Justice Bryson noted this "explained but did not excuse" their failure to fix the problem.
- The owners corporation refused mediation when the owner tried to resolve the dispute through the Office of Fair Trading.
- The unit's value dropped from $810,000 to $130,000 — a valuer assessed it was worth $810K in good condition, but only $130K in its damaged, uninhabitable state.
- The owner was "remarkably patient" — the court praised her "remarkably elaborate and, from a retrospective view, patient course of attempts to obtain compliance."
The court granted a mandatory injunction — not just damages — because money alone couldn't fix the situation. As Justice Bryson put it: an award of damages would only compensate for the diminished value, but would "do nothing to bring about rectification of the common property, leaving the unit in its deteriorated state." Only compelling actual compliance could produce a just outcome.
The $255,491 breakdown
The court awarded damages across several categories, based on unchallenged expert evidence:
Loss of rental income: $128,984
From late 2005 to the projected completion of repairs in September 2010 — nearly five years. The court calculated lost rent based on a valuer's assessment of market rental value for each year, minus the reduced rent actually received during the tenant's final months. A 6% property management fee was deducted.
Reinstatement of the unit: $97,830
An independent building consultant assessed the total cost to repair the water-damaged interior — carpets, floorboards, kitchen, bathrooms, mould remediation, repainting. This figure was unchallenged.
Carpet replacement (2003): $2,366
The owner's out-of-pocket cost to replace the carpets ruined in the first flooding event — years before the situation escalated.
Legal and mediation costs: $5,026
Pre-litigation solicitor costs ($4,866) and a mediation application fee ($160). The court awarded these as damages, finding that the owner's attempts to resolve the dispute before suing were "altogether reasonable conduct caused by the breach of duty."
Interest: $21,285
Calculated on each component from its respective mid-point date. This brought the total judgment to $255,491.76.
On top of the $255K judgment, the owners corporation was ordered to pay the owner's legal costs for the Supreme Court proceedings — and to complete all remedial works by September 2010.
The devastating detail: who actually pays
Justice Bryson made one final order that drove the point home. Under s 229 of the Strata Schemes Management Act, he ordered that the damages, interest, costs, and the owners corporation's own legal costs must be paid from contributions levied only on lots other than Lot 1.
That means the entire $255K judgment plus both sides' legal costs plus the cost of repairs was split among just four lot owners. In a five-unit building, years of inaction by the majority who voted against repairs created a catastrophic financial liability for each of them individually.
Why this case matters
1. The duty to maintain common property is absolute
The court confirmed that s 62 creates a compulsory, absolute duty — not just a duty to use "best efforts" or "take reasonable steps." If common property is defective and causing damage to a lot, the owners corporation must fix it. Full stop.
2. Relying on insurers is not an excuse
The owners corporation's main explanation for inaction was that they were waiting for their insurer to handle it. The court said this "explained but did not excuse" the failure. Owners corporations can't outsource their statutory duty to an insurance company.
3. Courts can force repairs, not just award money
This case is a key authority for mandatory injunctions in strata disputes. The court found that damages alone were inadequate — they would compensate the $680,000 drop in value but wouldn't actually fix the building. By ordering the owners corporation to do the work, the court ensured the problem got solved.
4. Small buildings, massive risk
In a 200-lot building, a $255K judgment is $1,275 per lot. In a five-lot building with Lot 1 excluded, it's over $63,000 per lot — before legal costs and the actual repairs. Small strata schemes have less capacity to absorb these liabilities, making prompt maintenance even more critical.
Red flags for apartment buyers
If you're buying into a strata scheme — especially a ground floor or basement unit — this case is a cautionary tale. Here's what to look for:
Check AGM minutes for unresolved maintenance complaints
The owner raised the water issue at general meetings and was outvoted. If AGM minutes show the same problem raised year after year with no resolution — especially if motions to fix it are being defeated — that's a serious warning sign.
Look for expert reports that haven't been acted on
The owners corporation had a detailed expert report in 2008 clearly setting out what needed to be done. They didn't act on it. If strata records show reports have been commissioned but recommendations not implemented, that's a red flag.
Be cautious with very small strata schemes
In a five-lot building, one dysfunctional majority can block necessary repairs for years. And when the bill finally comes due, there are very few lots to split it across. Smaller schemes need more diligent governance, not less.
Ask about insurance claims and reliance on insurers
In this case, the owners corporation's main excuse was that they were waiting for their insurer. If a building is relying on an insurance claim to fund essential repairs rather than levying owners directly, that's a sign the scheme may be underresourced or poorly managed.
Inspect ground floor units carefully
Ground floor and below-grade units on sloping sites are the most vulnerable to water ingress from common property defects. Inspect after heavy rain. Look for damp smells, staining near power points, buckled floorboards, or mould in kitchens and bathrooms.
Sources & methodology
This article is based on a published NSW Supreme Court decision [2010] NSWSC 68, heard 9 February 2010 and decided 16 February 2010. Some identifying details have been omitted for privacy, though the full decision is a matter of public record. All claims, figures, and findings are drawn directly from the court's published reasons for decision.
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