THE MOROCCAN DECISION – RAMIFICATIONS OF THE FAILURE TO MAINTAIN COMMON PROPERTY

On 5 March 2010 the District Court held that not only does a body corporate have a statutory duty to maintain common property, but it is also liable for any foreseeable losses that arise due to a breach of this statutory duty. Such loss is not limited to damage to property, but also pure economic loss.
In Magog (No 15) Pty Ltd v The Body Corporate for the Moroccan [2010] QDC 70, the Body Corporate was ordered to pay both damages for repairs to the lot with interest amounting to some $20,000.00 and rental abatement losses with interest amounting to $335,000.00.

This should ring alarm bells for all bodies corporate in Queensland considering the age of many schemes and recent weather conditions.

The facts

The Body Corporate for the Moroccan CTS 17574 is a scheme on the Gold Coast comprising 59 lots, 7 of which are commercial. Magog (No 15) Pty Ltd (Magog) is the owner of lot 1, a commercial lot in the scheme. Magog leased the lot to Prada. Lot 1 suffered damage as a result of a failing waterproofing membrane which permitted water to penetrate into its lot.

The first water leak occurred in June 1999 causing damage to Prada’s fixtures, fittings and stock. Magog notified the Body Corporate of the water leak and requested the Body Corporate fix the problem. Further water leaks occurred in 2002, 2005 and 2006.

The continual water inundation into lot 1 also caused a loss of rental income to Magog as Prada negotiated special conditions into their lease at renewal concerning rent abatement in the event of further water leaks. The Body Corporate was put on notice regarding this condition in the lease.

In 2003 the Body Corporate obtained a water penetration report stating that further damage would be sustained if the waterproofing membrane was not satisfactorily repaired. The Body Corporate made some attempts to fix the problem, but they were all ineffective. Magog installed drip trays in the ceiling  in 2003, however this was only a temporary solution to the problem and the issue was not finally resolved until the waterproofing membrane was completely replaced, which did not occur until 2007.

The decision
The Court found that the relevant time for the statutory duty to arise is from the time the first water leak occurred, which in this instance was 6 June 1999. The Judge stated – “In my view it is clear from the words of section 152 of the Act and section 109 of the Standard Module that there is an intention disclosed by the legislation for a duty of care to arise. A duty of care is owed by the Body Corporate for the benefit of lot owners and other users of the common property. The defendant had a duty to maintain common property in good condition, including, to the extent that common property is structural in nature, in a structurally sound condition. The duty to maintain common property in good condition required the defendant to maintain and manage and control the common property so that water did not leak from the common property into lot 1.”

The Court further determined that the Body Corporate had breached its duty of strict liability from at least 2003 when Magog installed the drip trays in its lot.

It was also found that the Body Corporate owed a common law duty to Magog to take reasonable care to avoid causing harm. Given that the Body Corporate had been put on notice, it was reasonably foreseeable from 2003 when the Body Corporate received the findings of the water penetration report that economic losses would be sustained by Magog. Accordingly, Magog was awarded damages for economic loss.

Conclusion
In conclusion, bodies corporate must take their statutory obligations to repair and maintain the common property in good condition, including, to the extent that common property is structural in nature, in a structurally sound condition seriously. Not only will a body corporate be liable for any property damage caused as a result of its failure to do so, but it will also be liable for pure economic loss if that loss is reasonably foreseeable.
In relation to their statutory duties, bodies corporate must ensure they take appropriate action in a timely manner.

Source:  Success Law

Concrete spalling also known as “Concrete Cancer”  is the result of the lack of effective waterproofing being employed to protect the concrete and the re-enforcement steel within the concrete. This is particularly difficult issue on the Gold Coast with many buildings built in the 1970′s through Early 1980′s without appropriate care to materials, design and specification necessary to guard against the effects of salt air and water.

 

Of particular concern in coastal areas is external cantilever balconies. It is possible for the balcony to deform from weight over a period of time and open up cracks usually near the join of the balcony and the main structure, allowing rain and salt spray to be washed into the concrete re enforcement creating corrosion and spalling. This has the potential to be a major issue and all such balconies should be regularly inspected and issues dealt with quickly.

 

 

Concrete spalling is not just an issue in coastal areas or the outside of building and can occur in any area where concrete is subjected to water. Typically we see this in basements or under podiums that are subject to water penetration and is simply the result of oxidation or rusting of the re-enforcing steel inside the concrete. Whilst salts do speed up the process any water making its way to the re-enforcement will Carry oxygen to the steel, additionally acid rains and various pollutions from motor vehicles and industry when carried by water can increase the deterioration of the re-enforcement. By the time you see crumbling or cracking of concrete from the swelling of the steel underneath the process is well underway and usually will require quite a deal of tracing back to remove effected concrete and steel locate the source of the water and deal with the ingress and then the effected concrete replaced and sealed again.

 

Another possible cause can be leaking pipes buried within the concrete. Often the water from the leak will track along the outside of the leaking pipe and slowly eat into the surrounding concrete. Usually this is easily corrected with the pipes exposed and removed to give access to the affected area remedial work on the concrete can be undertaken and then the pipes replaced. 

 

 

 

In this case a damp patch was evident and small leak in a pipe was suspected. Once uncovered a leaking pipe was evident, however it was found that water had followed the pipework and created further damage to the concrete.

 

 

The repair job whilst still a relatively small job it now involved tracing back the pipework to the extent of the water damage and effecting repairs along the pipework in the area.

 

 

The finished job is now ready for painting.

 

Waterproofing is not a job you can take shortcuts with and just stopping water entering an area is often not enough as it will find a new path unless dealt with effectively the first time.

 

In all cases of water penetration acting early can save major damage and cost in the future and by using only qualified waterproofing specialists like Xycrete you can ensure your job is completed to highest standards 

 

  

 

Once out of the main Clem 7  Tunnel and into the smoke or exhaust stacks there is no permanent lighting or power, so work was undertaken with miners lamps and limited portable lighting. We supplied generators and portable compressors suitable for confined spaces and our staff worked 60 metres below the Brisbane river 12 hour shifts days and nights to complete what is a difficult job in an extreme location. 

 

Injection jobs can be difficult as we often don’t know the history of what is behind the wall or has been used as a base for a podium garden making waterproofing even more challenging. Because of this and the range of specialist equipments and chemicals available it is important to use only qualified professional water proofers to undertake these jobs.

We are extremly proud of the team at Xycrete and the additional hours and effort they put into finishing the tunnel work.