There can be quite a difference between being responsible for the maintenance and repair of an item (like a burst water pipe) and being liable for any damage that it may have caused both from the issue itself and from the works needed in fixing the issue.
The strata manager seems to know the difference. Insurance companies know the difference. I think I now know the difference. My lot property (floors) have been damaged a few times in such circumstances so I’ve had to clarify it in some depth eg with insurance companies.
“Owning” and fixing the problem does not always mean owning and fixing the consequential damage that the problem caused. If the OC was legally liable for the consequential damage caused, of course it would have to fix it and its insurance would likely cover it – either in its building cover or its legal liability cover. But in many cases, particularly with water issues like burst pipes, the OC is not actually legally liable for any consequential damage as there usually is no negligence involved. So yes, in those cases the lot owner can have to pay for lot property damage caused by the problem and in the fixing of it. Or at least the lot owner’s contents insurance company can have to pay.
It’s another reason for lot owners to have contents insurance. In “no fault” situations like burst pipes, the OC repairs the common property while the lot owner repairs lot property. And each can claim on insurance for the consequential damage caused. The OC’s compulsory insurance will probably cover damage to lot fixtures and fittings but usually not to lot carpets if the OC is not liable. Hence the problem. The OC can’t even insure lot carpets even if it wanted to. It could however decide to pay anyway even if it was not liable.