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If the bathroom has been designated common property in the plan, the owner may have a claim. However. under the “Who’s responsible … ” memorandum, even then it would only be for the immediate damage or defects only.
More likely, however, you would say that since the bathroom walls are internal and so is the damage, there is no responsibility to the Owners Corp. The Memorandum seems to say that the Owners Corp is not responsible for damage caused by a failure of Common Property – not logical and probably not legal but there it is in black and white and would certinly be used as a guide by an adjudicator at the CTTT.
Add to the fact that the owner has gone ahead and fixed it, so there’s no way of telling who was responsible in the first place (they could have damaged the tiles and seal doing other work).
It really is up to the Owners Corp how far they want to go with this and that comes down to community relations. There are plenty of grounds for limiting or even refusing the payment but if you want to keep everyone sweet, compromise is the key.
