The owners corporation is liable for the consequences of its actions – whether it is failure to repair or the installation of a watering system without the necessary protection.
You are affected by the consequences of the OC’s actions and the OC must rectify the cause and if necessary compensate you.
The SM is splitting hairs in saying the issue is damp rather than mould, but if there is mould, then there is almost certainly damp there to feed it.
You can demonstrate damp by taking readings with a damp meter – not expensive and obtainable from Bunnings.