We understand that generally, a lot owner is responsible for carpet replacement and we are in the process of replacing carpet at our expense.
I think there is a long line of liability before you get to paying for anything yourself, including your carpet. If you don’t have home and contents insurance, the upstairs neighbour’s insurance and perhaps even the strata insurance might be liable. I would be passing the bill to the upstairs neighbour and calling my own insurer before I did anything else.