Victorian County Court Awards $176,298 After Water Damage Claim Dispute

The homeowner, Mark Fall‑Armytage, bought a 2014 Caulfield South dwelling in May 2018 and noticed severe water stains, mould and leaks after a heavy summer downpour in June 2018. He filed a domestic building insurance claim in August 2023, but the insurer rejected it, citing the policy’s coverage period had lapsed for non‑structural defects.

The County Court, after reviewing the policy’s clauses 34 and 35, found that the insurer’s wording applied to losses occurring within the coverage period, not merely to the underlying defect’s inception. The judge ruled that “occurring during the period” referred to the loss itself, creating a long‑tail liability that the insurer could not deny.

Fall‑Armytage invoked Section 9 of the Domestic Building Contracts Act, arguing that statutory warranties run with the building and should protect him as a successor owner. The Court of Appeal rejected that claim, holding that while Sections 8 and 9 create warranties, they do not grant a new owner the right to recover losses suffered by a prior owner.

The Court of Appeal dismissed the claim except for the 11th defect, remitting that issue to the County Court for a final hearing. The appeal was granted because the judge felt the matter required a fresh factual determination.

During the legal wrangling, Fall‑Armytage had to pay for temporary accommodation and storage of belongings, a burden that has strained his finances. He hopes the County Court will resolve the remaining defect swiftly, allowing him to finally repair his home without further litigation.