Hi,
This is an area that my company has some expertise in, unfortunately the information you have shown is not enough to form a firm view on, however if I read it correctly, are you saying the Strata Manager acted as the Construction Expert? If so then yes the SM and their firm could well be responsible for damages, it is not compulsory for Strata Firms to hold PI however if the Management Firm is a member of Strata Community Association then they will more then likely have PI coverage.
If the SM took the correct action and had a consultant carry out an inspection and write a scope of work and tender same, the consultant may also be in breach of their duty of care, in not advising that a Development and/or Construction Consent was required.
Bottom line is that this issue needs to be immediately referred to a Strata Lawyer, it is not something that either the EC or if their is a new Compulsory Manager the new manger to deal with. The issues are serious and the fines can be very high. The OC needs to get the right advice so as to deal with the compliance issue but also see that the repairs are those needed to protect all owners investment. It seems to me that you have unfortunantly received some very poor advice.
If you don’t know any Strata Lawyers send me an email and I can send you a list of those that we deal with in our construction expert litigation work.
Hope this helps.
Chris Mo’ane AIAMA , MASBC -CPC
GMD Integrated Consultancy Group