Taylor Court [2000] QBCCMCmr 361 (21 July 2000)

CG YoungREFERENCE: 0239-2000

ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	13437
Name of Scheme:	Taylor Court
Address of Scheme:	9 Taylor Street ANNERLEY QLD 4103

TAKE NOTICE that pursuant to an application made under the abovementioned Act by

Judith Ann MURTAGH, a co-owner of Lot 4,



CG YoungI hereby order that the body corporate for Taylor Court community titles scheme 13437 is liable to pay the owners of lot 4 the amount of $1050, being compensation for the costs incurred by the owners in repairing damage to lot 42n.
STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0239-2000

“Taylor Court” CTS 13437

The applicant, Judith Murtagh of Lot 4, has sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (“the Act”), quote -

Payment of an amount of $1215.00 to the owners of Unit 4, this being the amount ($1050) paid by them to repair storm damage more than 3 years ago, plus compound interest calculated at 5% over three years and equal to $165.

Section 223(1) of the Act provides that an adjudicator may make an order that is just and equitable in the circumstances (including a declaratory order) to resolve a dispute, in the context of a community titles scheme, about –

(a)	a claimed or anticipated contravention of the Act or the community management statement; or
(b)	the exercise of rights or powers, or the performance of duties, under this Act or the community management statement; or
(c)	a claimed or anticipated contravention of the terms, or the termination of, or the exercise of rights or powers under the terms of, or the performance of duties under the terms of an engagement contract or an authorisation contract.

An order may require a person to act, or prohibit a person from acting, in a way stated in the order (section 223(2)). An adjudicator’s order may contain ancillary or consequential provisions the adjudicator considers necessary or appropriate (section 230(1)).

In the supporting grounds, the applicant states that in May 1996 a storm caused damage to at least seven lots in the complex, including Lot 4. Mrs Murtagh has provided a chronological account of the attempts made to have the body corporate repair and subsequently pay for the repairs to the lot.

The applicant has attached a report from LAC Loss Adjusters dated 28 August 1996 which details the storm and rainwater damage at “Taylor Court”. In respect to Lot 4, the report states in part:

“Unit 4

Unit Number 4 is a double storey unit at the front of the western block...Damage to this unit consists of water staining to ceiling and walls in the hallway and toilet and both bedrooms...we believe the water has entered purely through and as a result of worn lead flashings...As there was no storm damage to the roof itself then the internal damage would not be a claim under the policy.”

In a letter dated 12 September 1996 the body corporate manager, Matthews Body Corporate Management, provided an overview to all owners of the arrangements which have taken place as a consequence of “the heavy rains and stormy weather experienced in April/May”. In the letter a request is made to owners to “forward any further invoices/quotes in relation to the water damage”. The letter also states that “due to the fact that insurance claims are being rejected as a result of lack of maintenance, quotes are to be obtained for the much needed extensive repairs to the roof and for the rectification of the water seepage through the walls”.

The owners of Lot 4 responded to the request for further quotes in relation to the water damage by providing to the body corporate a quotation from D.J.A Builders dated 2 December 1996. A copy of this quotation was included in the application. The quotation states in part, “Quote to strip 90mm plaster cornice damaged by water penetrating lead flashing between roof and dividing brick wall of units and over back of gutter into bedroom.” The quote is for work to the toilet, bedroom and passage of lot 4.

The owners of Lot 4 then had repairs carried out early in 1997 after complaints from the occupier of the unit. Motions were then submitted to successive annual general meetings of the body corporate held in 1997, 1998 and 1999. The applicant states that during that period the body corporate has not responded to repeated requests for reasons as to why their claim has not been paid.

A copy of the application was forwarded to the body corporate secretary for distribution to all owners (excluding the applicant) and to the committee.2n There has not been a response to the application from the committee or any of the owners.

It is clear from the LAC Loss Adjusters report and from the quotation provided by D.J.A Builders that Lot 4 has been damaged during storms and rain periods in 1996. The cause of the damage is water penetration through defective lead flashing situated between the roof and a dividing brick wall. The lead flashing is on common property and is a body corporate responsibility to maintain in good condition in accordance with section 109(1) of the Body Corporate and Community Management (Standard Module) Regulation 1997 ("the Standard Module"). The letter from Matthews Body Corporate Management dated 12 September 1996 states repairs are necessary due to a lack of maintenance. Therefore, Lot 4 has suffered damage as a consequence of the body corporate not fulfilling its statutory duty to maintain the common property.

Under section 227 of the Act, an order can be made for a party to repair damage or pay compensation. Section 227 provides:

“(1) If the adjudicator is satisfied that the applicant for the order has suffered damage to property because of a contravention of this Act or the community management statement, the adjudicator may order the person who the adjudicator believes, on reasonable grounds, to be responsible for

the contravention—

(a) to carry out stated repairs, or have stated repairs carried out, to the damaged property; or

(b) to pay compensation of an amount fixed by the adjudicator.

Example—

A waterproofing membrane in the roof of a building in the scheme leaks and there is damage to wallpaper and carpets in a lot included in the scheme. The membrane is part of the common property and the leak results from a failure on the part of the body corporate to maintain it in good order and condition, the adjudicator could, on application of the lot’s owner, order the body corporate to have the damage repaired or to pay appropriate compensation.

(2) The order cannot be made if—

(a) for an order under subsection (1)(a)—the cost of carrying out the repairs is more than $75 000; or

(b) for an order made under subsection (1)(b)—the amount of the compensation is more than $10 000.”
I am satisfied that Lot 4 has been damaged as a consequence of the body corporate failing to maintain common property in good condition. I am also satisfied that it was reasonable for the owners of Lot 4 to engage a contractor to carry out the necessary work to rectify the damage to the lot. The work performed in the lot by D.J.A Builders is consistent with the damage reported by LAC Loss Adjusters. Therefore, I consider that it is reasonable for the body corporate to be liable for the costs of repairs.

The Body Corporate Manager has provided information to this office concerning recent developments regarding this matter. A copy of the minutes of the annual general meeting dated 26 June 2000 indicate that the body corporate resolved to pay all outstanding claims for repairs associated with the storm damage during May 1996. Trevor Matthews from Matthews Body Corporate Management has by facsimile dated 19 July 2000, stated that on 30 June 2000 a payment of $1050 was forwarded to the owner of Lot 4. This payment would satisfy the requirements of the order I have made.

The applicant has also sought an interest payment of $165. To determine this amount the applicant has applied an arbitrary interest rate of 5%. The applicant has not provided any basis for using this rate of interest, nor has the applicant provided any grounds to support such a claim. I would consider that a more appropriate rate of compensation is the prevailing consumer price index indicator. Over the last three years, this rate has been much less than the 5% rate sought by the applicant. In the circumstances I decline to order any interest payment against the body corporate.