The facts and issues

The applicants owned two apartments on level 8 of an apartment building in St Kilda Road. Their apartments had been severely damaged by water flowing from above into their ceiling cavities and then into their living spaces.

The applicants commenced the proceeding against the relevant Owners Corporation and the owners of the apartments above them, seeking damages and injunctive and other relief under sections 16 and 19 of the Water Act 1989 and the Owners Corporation Act 2006 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 were unreasonable within the meaning of section 16 of the Water Act or that the flows of water into the level 8 apartments were coming from above, and were being caused by a combination of defects in the glazed units on level 9 and defects in the balconies on level 9 and more particularly, a combination of the following:

• leaks through the sloping glazed roofing of apartments 92, 93 and 94, and other leaks through the glazed panels and aluminium frames, probably caused by the lack of movement joints between the panels
• leaking at the toe of the balcony (the northernmost edge) due to inadequate membrane/flashing detail
• the membrane not extending under the window/door sills of the glazed units on level 9
• inadequately sealed subsills
• a breakdown of the membrane on the level 9 balcony
• the cement sheet substrate forming the floor of each balcony being cracked, likely due to the fact that the substrate used was 12mm thick, whereas it should have been 19mm.

The question for determination was whether the glazed units and the balconies were common property or within the property owned by the owners of the level 9 apartments.

The plan of subdivision

As Senior Member Kirton noted and is often the case, the plan of subdivision was lacking in precision or detail. Page 1 of the plan defined the common property and the private lots as follows:

"The Common Property No.1 is all the land in the plan except Lots... 81 to 89, 91 to 94...

Boundaries are shown by thick continuous lines are defined by buildings [sic]

Location of boundaries defined by buildings:

Interior face: all boundaries

All structural columns, walls, slabs and beams and ducts whether or not shown on this plan are contained in Common Property No 1."

This is typical of many plans of subdivision.

The applicants’ contention was that by reason of the definitions “The Common Property No.1 is all the land in the plan except Lots... 81 to 89, 91 to 94...” and the location of each boundary as the “interior face”, everything shown on the plan of subdivision was common property unless it was extracted from the definition by its inclusion in one of the listed lots. If it was not referred to in another lot, it remained common property. Further, by reason of the phrase “All structural columns, walls, slabs and beams and ducts whether or not shown on this plan are contained in Common Property No 1”, any structural element of the building must be common property.

The OC contended that the glazed units and the cement sheet floor of the balcony were not structural and therefore were not common property.

Was the level 9 glazing part of the common property?

Both parties relied on various definitions contained in the Glossary of Building Terms, a publication produced by Standards Australia and the National Committee on Rationalised Building. Applying those definitions, the tribunal held that:

• the word “structural” in the description of the common property is used in the sense of a “structural element”, being a “physically distinguishable part of a structure, for example, wall, column, beam, connection”. Senior Member Kirton stated: “The glazed units are clearly a physically distinguishable part of the building.
• They fall within the definition of Wall, being a “vertical construction that bounds ... a space and usually fulfils a load-bearing or retaining function... Walls may be ... made of ... glass..., framed (made of ...steel, other metals...) ... The main types of wall are a) external walls to enclose the sides of a building or structure...”.
• If the load-bearing test in the definition of “Structural” in the Glossary of Building Terms is applicable, then the glazed units are structural. Senior Member Kirton noted: “The definition of Structure (building) is the “load-bearing part of a building, comprising the primary elements”. Primary Building Element means a “member of a building designed ... to take ... loads and includes roof ... and wall framing members including bracing members designed for the specific purpose of acting as a brace to those members”.

Were the level 9 balconies common property?

The experts agreed that the balcony was constructed by use of the following materials from the top-down:

• tiles or cosmetic covering, which are on top of
• a screed, which is on top of
• a painted on membrane, which is on top of
• 12 mm structural substrate compressed cement sheeting, which covers
• joists to which the cement sheeting is attached.

The applicants submitted that the membrane, screed and tiles (or decking) on each section of the balcony were owned by the owners of the level 9 apartments, but the structure which formed the boundary between the apartment above and the apartment below was common property. That is, the cement sheet and the joists on which they sit and the ceiling space and the top side of the plasterboard which forms the ceiling below were all common property. However, the owners corporation contended that the cement sheet was also part of the internal face. It said it was only the joists below the cement sheet which were common property.

The Senior Member held that both the joists and the cement sheet were part of the structure of the balcony. Together they make the horizontal plane which forms the boundary between one lot and the other. She also held that the upper boundary of the lot was the underside of the ceiling and so the affected plasterboard on the ceiling was common property. Accordingly, it was held that the void between the floors, the joists and cement sheet form the structure of the balcony, and were common property, while the membrane, screed and tiles or decking are privately owned. The owners corporation was accordingly held liable for the rectification of the water leaks and the resultant damage.

Conclusion

This decision provides guidance about the types of building elements which might be held to form part of the common property and also the obligations on owners corporations to rectify leaks that are causing damage to lot property. Of course, the question will always turn on the wording of the relevant plan of subdivision, so the analysis in this case will not be universally applicable.

Further information / assistance regarding the issues raised in this article is available from Fabienne Loncar, Partner, Christopher Philactides, Senior Associate, or your usual contact at Moray & Agnew.