The Barr government absolved itself of responsibility for the Elara apartment's disaster, rejecting the owners' plea for $6 million in compensation to help pay for repairs to their defect-plagued complex.
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The Canberra Times can reveal Chief Minister Andrew Barr knocked back the owners' application for compensation in June, saying that while their situation was "unfortunate" it didn't warrant a taxpayer-funded payment.
After two failed court cases against the builders' insurance scheme and then Mr Barr's rejection, the owners have now taken out a $5 million loan to help fix an estimated $19 million worth of defects.
They have already spent more than $1.2 million on legal, consultant fees and other costs during a near decade-long saga.
Mr Barr decision came after the owners corporation argued their case in a 89-page submission, which included harrowing personal impact statements from people who had bought into the Bruce complex.
In one statement, 25-year-old Melanie Bicket described being filled with "hopelessness and fear" at the prospect of being stuck in her Elara apartment, which "should have been a stepping stone to a bright future ... but has instead become a burden".
In another, a couple said the burden of carrying a "dilapidated, decaying investment" had taken an emotional toll and caused a strain on their relationship.
"There seems no light at the end of this tunnel. There is no clear path to a solution. There is no indication from the ACT administration that it wants to write this wrong," the couple's statement read.
Elara executive committee chair Dave Allen said the owners were encouraged to apply for an Act of Grace payment during a meeting with Minister for Building Quality Improvement Gordon Ramsay and other officials on November 2 last year.
The ACT treasurer is authorised to make the special payment to a wronged person if all other options for redress have been exhausted. The treasurer must assess whether the ACT's direct role in their circumstances meant the territory had a "moral obligation" to provide compensation.
The ACT government last year offered a $3.8 million Act of Grace payment to David Eastman, in relation to his wrongful conviction for the 1989 murder of chief police officer Colin Winchester. Mr Eastman rejected the offer, and was later awarded more than $7 million in compensation.
In their application, which The Canberra Times has obtained, the Elara owners make the case that the ACT government's inaction contributed to their predicament.
They argued the ACT government failed to take action, including against the complex's builder B & T Constructions, after defects appeared at the Thynne Street complex. The construction company collapsed before the problems were fixed, forcing the owners to pursue the Master Builders Fidelity Fund for compensation.
The owners said the government had established the fund and was therefore responsible for its narrow scope, which they said made it almost impossible to access compensation.
"The impact of this governance failure is financially catastrophic for thousands of ACT apartment owners (not just those in Elara)," the application said.
The owners said the Barr government needed to recognise the harm its inaction had caused, not only financially and emotionally for the owners but also to the reputation of the ACT as a place to invest in.
The toll of the saga on the Elara owners, and their anger toward the failed builder and ACT government, is laid bare in 10 pages of personal impact statements included in the application.
In their statement, "Sophie and Wayne" said the deliberately negligent actions of the government and private companies involved in the saga had left Elara owners "financially and psychologically exhausted", and their 124-unit complex close to uninhabitable.
"Sophie experienced significant mental anguish, making ordinary everyday matters difficult to deal with, impacting her professional performance, straining the harmony of home life and constantly feeling physically ill at having to deal with the vast array of stresses instigated by the plight of Elara," their statement read.
The owners submitted the application in late January, but did not receive a response from Mr Barr until June 9. Without explicitly referencing the COVID-19 pandemic, the Chief Minister said external factors had resulted in a delayed response.
In his three-page response, Mr Barr said while the Elara owners' situation was "unfortunate", it did not warrant a taxpayer-funded compensation payment.
He disputed the owners' claim that the ACT government had failed to act, saying the regulator took several steps to address the problem after it became aware of defects in 2011.
This included; issuing the builder with an emergency rectification order, taking disciplinary action against the the project's engineer, builder and builder nominees and arranging mediation between owners and the construction company.
But while an order to fix the defects was issued, it wasn't enforced before the builder went into liquidation in July 20, 2017.
In his letter, Mr Barr said the regulator had "continued to build a case for enforcement of the rectification order" prior to the company's collapse, including sending a letter on May 22, 2017, signaling its intention to act.
It was not clear why it took the ACT government six years to take that step.
Mr Barr said that once the builder went under, there was no legal entity for the territory to pursue to fix the defects.
He argued that because the ACT had played an active role in regulating companies involved in the Elara complex, the owners did not have a case for special compensation. Mr Barr said the ACT government was committed to "strengthening the integrity" of Canberra's building industry.
"While I understand this is not the outcome the Owners Corporation is seeking, please be assured I have given this matter full consideration," he said.
Mr Barr's decision was made before the ACT government entered the pre-election caretaker mode.
Mr Allen told The Canberra Times that in rejecting the application, Mr Barr had "brushed aside" all of his government's failures.
"Given the significant and long-term systemic failures within ACT government and the building industry in the ACT in general it is again very disappointing that the ACT government has not taken any responsibility in this matter," he said.
Asked for her reaction to Mr Barr's decision, Ms Bicket, now 26, said she was "sad that nobody wanted to help the owners".
Dan Jervis-Bardy
Dan covers federal politics from Parliament House, with a special focus on climate policy and the NDIS. He has previously reported on ACT politics and urban affairs since joining the Canberra Times in 2018.
Dan covers federal politics from Parliament House, with a special focus on climate policy and the NDIS. He has previously reported on ACT politics and urban affairs since joining the Canberra Times in 2018.
