It's relatively common to have defects in a commercial or residential building that are not immediately apparent, and in these cases a court or tribunal such as VCAT often awards compensation. Questions often arise for builders generally as to their potential exposure to pay damages in such a case and to whom.

A fairly recent case explored that issue, and very specifically the potential liability of a builder to a strata owners corporation (a ‘strata’ body corporate in the old terminology) in respect of latent defects in the common property in the building. Some of the units in the relevant development were…