Don Battams (Partner) and Angie Coleman (Senior
Most fashion conscious people will cringe at the thought of a
whole store of Prada bags and shoes being water damaged by a leaky
roof. In the recent case of MAGOG (No. 15) Pty Ltd v The Body
Corporate for the Moroccan, the Southport District Court held
that the body corporate owed a duty to lot owners to promptly
maintain common property of a community titles scheme in good
condition, and to take reasonable care to avoid harm to lot owners.
Following eight years of water damage to a lot in a community
titles scheme tenanted by Prada, the court issued an order to pay
damages to the tune of approximately $346,000 plus legal costs,
which included damages resulting from pure economic loss as well as
damages relating to the costs of repair.
The facts of this case
Water leaked onto the relevant lot on eight separate occasions
between 1999 and 2007, the result of a faulty water membrane
located on the roof. The body corporate was made aware of the leaks
on a number of occasions, and obtained a water penetration report
in 2003, which confirmed that previous attempts to fix the problem
were ineffective. The report also recommended certain works be
carried out to resolve the problem, but these were not actioned
When Prada agreed to renew their lease in 2003, the body
corporate was 'put on notice' that the lease had been
amended and now included a provision that would result in
substantial rental discounts should further water damage occur.
Although the body corporate was initially made aware of the
water problems in 1999, and then received the expert report in
2003, it was not until 2007 that the membrane was finally restored
and the water leaking stopped.
The court concluded that the body corporate owed two duties to
the owner of the relevant commercial lot:
A statutory duty to maintain the common property in good
condition, including, to the extent that the common property is
structural in nature, in a structurally sound condition; and
A common law duty to take reasonable care to avoid causing
The judge indicated that the statutory duty to rectify any water
leaks arose in 1999 when the first water leak arose. The obligation
to repair the roof membrane arose in 2003 when the body corporate
received the report concluding that the membrane needed to be
The judge referred to the NSW case of Seiwa Pty Ltd v The
Owner's Strata Plan 35042, in which it was held that the
duty to keep the common property in a 'state of good and
serviceable repair' did not impose a duty on the body corporate
to use 'reasonable care', to use 'best endeavours'
or to 'take reasonable steps', but instead imposed a strict
duty to maintain and keep the common property in repair.
Despite the fact that the body corporate made some attempts to
rectify the water leakages, the judge found that the repairs and
actions taken by the body corporate 'were not diligently
pursued or likely to resolve the problem' in light of the
repeated ongoing problems of water leakage and the lengthy period
of time when little action was taken.
A timely reminder
Body corporates are required to not only comply with their
statutory duty to maintain common property in a good condition, but
also to take reasonable care to avoid causing harm, as required by
common law. Failing to comply with these duties may result in body
corporates being liable to lot owners for the cost of actual damage
suffered (eg repairs) and for foreseeable economic losses suffered
by lot owners (eg loss of income).
Given the age of some of the body corporate buildings in
Queensland, this case is a timely reminder of the body
corporate's duty to maintain common property areas in a timely
and responsible manner.
For more information on this case or body corporate obligations,
please contact HopgoodGanim's Commercial Property team.
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