Alexandra Villas [2000] QBCCMCmr 85 (18 February 2000)

P G DanielsREFERENCE: 0080-2000

ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	20451
Name of Scheme:	Alexandra Villas
Address of Scheme:	47 Windemere Road ALEXANDRA HILLS QLD 4161

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

William Daniel Wynne a co-owner of lot 4



P G DanielsI hereby order that the owners of lot 10, William Smith and Esther Bernadette Smith, must pay to the Body Corporate for Alexandra Villas the sum of $910 within 28 days of the date of this order.

I further order that the owners of lot 11, Norris George Thomas Shellard and Margaret Agnes Shellard, must pay to the Body Corporate for Alexandra Villas the sum of $400 within 28 days of the date of this order.

I further order that the application for an order that the owners of lot 9 repay to the Body Corporate for Alexandra Villas money spent on maintaining a retaining wall on the boundary of lot 9 and other land is dismissed.

I further order that the application for an order that stops the Body Corporate for Alexandra Villas from maintaining or expending money from the Sinking Fund to repair retaining walls on the boundary of a lot and land not part of scheme land is dismissed.1n
STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0080-2000

“Alexandra Villas” CTS 20451

The applicant, William Daniel Wynne, a co-owner of lot 4, has sought orders of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act) that:

Stops the Body Corporate from maintaining or expending money from the Sinking Fund to repair retaining walls which are on the boundary of a lot and land not part of scheme land.

Money which has been paid for repairs to retaining walls be repaid to the Sinking Fund by owners of the Lots involved.

Section 223(1) 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)).

The Body Corporate has arranged for maintenance work to be performed on a retaining wall servicing lots 9, 10 and 11. The retaining wall is on the boundary of lots 9, 10 and 11 and land owned by the Council. On top of the retaining wall is a fence.

The matter was initially considered at an extraordinary general meeting on 28 April 1999. The minutes of the meeting record the following in respect of motions 9-11:

“ORDINARY RESOLUTION: RESOLVED:

9.	TO ACCEPT THE QUOTE OF $1620.00 BY JACK’S FENCING & STRUCTURAL LANDSCAPING TO REPAIR FENCE VILLAS 9, 10 & 11 BE ACCEPTED. QUOTES & EXPLANATORY NOTE INCLUDED. FUNDING FROM SINKING FUND.

10 YES / 1 NO / 1 ABSTAIN

OR

PROPOSED BY COMMITTEE AS TWO QUOTES NECESSARY UNDER THE ACT BUT NOT RECOMMENDED:

10.	TO ACCEPT THE QUOTE OF $4580.00 BY GARRY HOOKEM FENCING TO REPAIR FENCE VILLAS 9, 10 & 11 BE ACCEPTED.

FUNDING FROM SINKING FUND.

0 YES / 11 NO / 1 ABSTAIN

ORDINARY RESOLUTION: RESOLVED:

11.	THAT THE COMMITTEE BE EMPOWERED TO SPEND UP TO $500.00 MORE THAT THE ACCEPTED QUOTE IN EITHER ORDINARY RESOLUTION 9 OR 10 HEREWITH, SHOULD THE NEED ARISE FOR WORK NECESSARY TO COMPLETE THE FENCE BUT NOT UNABLE TO BE DETECTED AT FIRST SIGHT BY THE CONTRACTORS. PAYMENT FROM SINKING FUND

9 YES / 2 NO / 1 ABSTAIN

It will be observed that the Body Corporate resolved to accept a quote from Jack’s Fencing & Structural Landscaping in the sum of $1620. The person who performed the work is named Jack Indan. I will refer to him as the contractor. The Committee was empowered to expend up to a further $500.

The contractor came on site and initially commenced work on the retaining wall servicing lot 9.

The applicant alleges that due to a letter from Brian Shepherdson and Associates, Solicitors dated 23 June 1999, the Committee forced the contractor to work when it was inappropriate to do so. The applicant states that when repair work was started subsidence occurred which resulted in the work costing more than the quote.

In my view the contractor had grossly underestimated the cost of performing the work. He stopped work when the cost had reached $2,273. At that stage he had only repaired half of the retaining wall of lot 9 and had not performed any work on the retaining walls of lots 10 and 11. The contractor required payment of $2,273 prior to performing any further work.

That amount was in excess of what the Body Corporate had previously approved at the 28 April 1999 EGM. Consequently, a further EGM was called. It was held on 28 September 1999. The minutes of that meeting record the following:

“DISCUSSION OCCURRED ON THE EVENTS OF THE WORK COMPLETED TO DATE & WORK TO BE COMPLETED IN THE FUTURE.

ORDINARY RESOLUTION: RESOLVED:

6. THAT THE BODY CORPORATE AGREES TO PAY JACK’S FENCING $2273.00 FOR PART WORK COMPLETED AS PER INVOICE ATTACHED RATHER THAN AS PER THE PREVIOUS QUOTATION APPROVED IN GENERAL MEETING FOR FULL QUOTE $1620.00 - PAYABLE FROM SINKING FUND.

9 YES / 1 NO / O ABSTAIN

ORDINARY RESOLUTION: RESOLVED:

7. THAT THE QUOTATION NO 52 FOR $400.00 FOR NEW POSTS BEHIND UNIT 9 BE APPROVED – PAYABLE FROM SINKING FUND.

6 YES / 3 NO / 1 ABSTAIN

ORDINARY RESOLUTION: RESOLVED:

8. THAT THE QUOTATION NO 51 FOR $850 FOR POSTS ETC BEHIND UNIT 10 & 11 BE APPROVED – PAYABLE FROM SINKING FUND.

8 YES / 1 NO 1 ABSTAIN

NOTE: RIDER: WORK ONLY FOR RESOLUTIONS 7 & 8 TO BE COMPLETED IF NO RAIN FOR 2 WEEK PERIOD PRIOR TO THE CONSTRUCTION BY REQUEST OF THE CONTRACTOR.

RIDER BY THE MEETING:

THAT A VOTING PAPER ON A WRITTEN QUOTATION PROVIDED BY THE CONTRACTOR BE CIRCULARISED TO ALL ON SITE OWNERS FOR APPROVAL, IF NECESSARY, TO A LIMIT OF FULL COMMITTEE EXPENDITURE OF UP TO $1400.00, OVER AND ABOVE ORDINARY RESOLUTION 7 AND 8.

7 YES / O NO / O ABSTAIN

It will be noted that the Body Corporate agreed to pay the contractor’s bill of $2273.00 and a further $400 to finish the work to the retaining wall servicing lot 9. Additionally, it was resolved to accept a further quote of $850 from the contractor to repair the retaining wall servicing lots 10 and 11.

Subsequent to the EGM, the contractor came on site to recommence work. Mr John Rogers, a co-owner of lot 9, informed me that he told the contractor not to finish repair work on the retaining wall servicing lot 9. Mr Rogers was not satisfied that the work would be adequate in the longer term. Mr Rogers informed me that he wanted the situation properly rectified without the potential for the problem to occur again. This was a matter of particular concern to Mr Rogers as he is ill and he was anxious that his wife should not have to deal with the problem in the future should he die.

Mr Rogers then decided to engage his own contractor to replace the retaining wall servicing his lot with a new wall constructed with bricks, rather than the existing wooden wall. Mr and Mrs Rogers paid for the new wall. It cost approximately $10,000. Mr Rogers informed me that after the initial work to his retaining wall was done but prior to the EGM on 28 September 1999, he reinstated the garden of his lot at a cost of $583. This was necessary as the land at the back of his lot had moved due to the defective retaining wall. He reinstated the garden as he believed the contractor would come back on site relatively quickly and complete the work. As it turned out, the contractor did not come back on site quickly due to the second EGM being held on 28 September 1999. When Mr and Mrs Rogers decided to construct a new brick wall, the cost of reinstating their garden at $583 was wasted as the construction of the new brick wall involved subsidence of land at the back of their lot.

The contractor then worked on the retaining wall servicing lots 10 and 11. He did the following work: lot 10 – replaced foundation posts and a small number of wales; lot 11 - replaced 4 foundation posts.

The contractor has subsequently been paid for the work performed on the retaining wall for lot 9 ie $2273. He has also been paid for the work performed on lots 10 and 11. It cost $1310.

The applicant seeks an order that the owners of lots 9, 10 and 11 pay to the Body Corporate the cost of the work involved. It is necessary to consider whether the work was a Body Corporate responsibility or a responsibility of the respective lot owners.

A lot owner has a responsibility to maintain their lot in good condition. However, an exception is a fence. The Body Corporate is responsible for fences on the boundary of scheme land and other land. If the retaining wall is a fence, it is a Body Corporate responsibility to maintain. If it is not a fence, then it is the responsibility of the respective lot owners. I will examine the relevant legislation.

Section 120(2) of the Body Corporate and Community Management (Standard Module) Regulation 1997 (the Regulation) provides for the obligation of an owner to maintain a lot in good condition as follows:

(2) The owner of a lot included in the scheme must maintain the lot in

good condition.

Section 258 of the Act makes the Body Corporate liable for maintaining a perimeter fence. It does this by stating that a Body Corporate is taken (deemed) to be the owner of scheme land for the purposes of the Dividing Fences Act 1953. The Dividing Fences Act 1953 then provides that the owners of adjoining land are jointly liable to maintain a fence. Section 258 provides as follows:

Body corporate to be taken to be owner of parcel for certain Acts etc.

258.(1) The body corporate for a community titles scheme is taken to be

the owner of the scheme land for the following Acts—

 Dividing Fences Act 1953

 Land Act 1994.

The Dividing Fences Act 1953 only applies to structures that come within the definition of “fence” provided in section 6 of the Act. Fence is defined as follows:

“fence” means a structure of posts and boards, palings, rails, galvanised

iron, metal, or wire, or a wall, ditch, or embankment, or a combination

of any of these, enclosing or bounding land, and includes any

foundation, foundation wall, or support reasonably necessary for the

support and maintenance of the fence, but does not include a wall

which is part of a house or other building;

It will be noted that there are two elements to the definition. Firstly, what may be considered to be the fence proper. This includes a wall. The fence must enclose or bound land. Secondly, the support for a fence. This includes a foundation wall. The support must be “reasonably necessary for the support and maintenance of the fence”.

The question that needs to be addressed is whether the retaining wall comes within the definition of fence. Is it a “wall... enclosing or bounding land” (first limb) or is it a “foundation, foundation wall, or support reasonably necessary for the support and maintenance of the fence” (second limb).

In my view the retaining wall does not come within the second limb. The retaining wall does not exist for the purpose of supporting and maintaining the fence. It exists to retain the land of lots 9, 10 and 11. The retaining wall would need to continue in existence even if the fence was removed.

There is legal authority that considers whether a retaining wall comes within the first limb. The matter was considered by the New South Wales Court of Appeal in Kontikis v. Schreiner (1989) 16 NSWLR 706. In that case the Court considered whether a retaining wall came within the following definition of “fence”:

“...a structure of posts and boards, palings, rails, galvanised iron, metal, or wire, enclosing or bounding land, or a wall, ditch, or embankment enclosing or bounding land, and includes any foundation, foundation wall, or support reasonably necessary for the support and maintenance of the fence, but does not include a wall which is part of a house or other building.”

It will be observed that the definition of fence considered in that case and the definition provided in the Queensland Act are very similar. There are no substantive differences for the purposes of this application. In particular, the first limb of the New South Wales definition contains the word “wall”.

In Kontikis Mahoney JA relevantly stated:

“It would, I think, be strange if an Act of the present kind had been intended to govern the cost of the erection and repair of what might be large and expensive structures such as retaining walls or structures of similar dimensions.”

His Honour then illustrates the point by an example. If retaining walls are covered by the Dividing Fences Act, an owner of land could be compelled to contribute to the cost of erecting or maintaining the wall even though that owner obtains no benefit from the wall. In this case that would be the Council. His Honour then states:

“Anomalies and incongruities are not unknown when legislation framed in general terms must be applied to different factual situations. But they are to be taken into account in determining, having regard to the purposes of the legislation, the ambit of the operation of its terms. I do not think that it was contemplated that the Act would apply to cases in which large consequences such as cost of retaining walls and the like are in question.

On the alternative view, the definition, and so the Act, applies only where the wall not merely bounds the land in fact but is to have or was constructed to have that function. Therefore, if the function of the wall be to retain A’s land rather than to bound it, that is, to mark out the limitations of it, the Act would not apply to it.

That view would require determination in each case of what was the function of the wall erected or to be erected. That would, in most cases, pose little difficulty. The Court would, I think, look to the real reason why the particular wall was or was to be erected, that is, whether the particular wall or kind of wall was chosen to bound land or whether it was chosen because it was necessary or appropriate to perform another function, for example, of retaining A’s land. Where the reason for choosing that wall or that kind of wall be not to bound but to support or retain the land, then the wall would not fall within the definition. The wall to be erected might in fact fulfil two purposes: it might retain the land and might mark out the boundary between it and other land. But, for the purposes of deciding whether the wall chosen was within the Act, the court would ask: Why was this wall or this kind of wall chosen rather than some other wall? If the reason be to retain rather than to bound the land, it would not be within the definition.

It is not possible to exclude the possibility of a case in which the particular wall or kind of wall was, in a real sense, chosen both because such a wall was necessary properly to mark the boundary of the land and because it was necessary for another reason, such as supporting one of the adjacent lots. In that case, the particular wall or kind of wall would be chosen because functionally it was necessary both for bounding and retaining. If such a case should arise, it would, I think, be open to the Court to hold that, as the particular fence was, or was to be, erected for the purpose of bounding the land, it was a wall bounding the land within the definition, notwithstanding that it was also erected for another purpose as well.”

The other two Judges in Kontikis, Hope JA and Priestly JA, agreed with Mahoney JA.

It will be observed that Mahoney JA held that a retaining wall could be classified into one of three categories. Firstly, the wall was chosen to bound land. Secondly, it was chosen to perform another function such as retaining land. Thirdly, it was chosen to both bound and retain land. If a wall falls into the first or third categories, then it would be within the definition of “fence” and subject to the Dividing Fences Act. If a wall fell within the second category, then it would not be within the definition of “fence” and not caught by the relevant legislation.

In this case, it is clear that the retaining wall was chosen to retain the land comprised in lots 9, 10 and 11. It is a wall within the second category. I inspected the wall on 3 July 2000. It is a substantial structure. The engineering report from Brian Stanway dated 22 June 1999 indicates it is 1.6 metres high at the back of lot 9. That was prior to the construction of the brick wall servicing lot 9. The wall shortens at the northern boundary of lot 11.

I have formed the view that the retaining wall was chosen to retain the land of lots 9, 10 and 11. It also serves to mark the boundary of these lots, however, the real reason for it being chosen and its real purpose is to retain land.

The Body Corporate is not responsible to maintain the retaining wall. Liability to maintain the wall vests in the owners of lots 9, 10 and 11: section 120(2) of the Regulation. The question that now needs to be resolved is whether the owners of lots 9, 10 and 11 should reimburse the Body Corporate for the work that was done on the wall.

The first issue that needs to be addressed is whether the applicant can validly challenge the resolutions passed at the EGMs on 28 April 1999 and 28 September 1999. The issue arises because of section 193 of the Act which provides as follows:

Time limit on certain applications

193.(1) This section applies to an application for an order declaring

void—

(a) a meeting of the committee for the body corporate, or a general

meeting of the body corporate; or

(b) a resolution of the committee or body corporate; or

(c) the election of an executive or other member of the committee.

(2) The application must be made within 3 months after—

(a) if subsection (1)(a) applies—the meeting; or

(b) if subsection (1)(b) applies—the meeting at which the resolution

was passed or purported to be passed; or

(c) if subsection (1)(c) applies—the meeting at which the executive or

other member was elected.

(3) However, if the making of the application does not comply with

subsection (2)—

(a) the commissioner must deal with the application (including

making a case management recommendation for the application)

as if the making of the application complied with subsection (2);

and

(b) an adjudicator to whom the application is referred for specialist or

department adjudication may, for good reason, waive the

non-compliance.

Section 193 is relevant to this application. The applicant effectively seeks orders declaring resolutions passed at the EGMs on 28 April 1999 and 28 September 1999 void, so that the owners of lots 9, 10 and 11 can be compelled to repay the money that was spent. The application was not made until 21 February 2000. This was more than three months after the two EGMs. I can only waive the non-compliance where there is “good reason”: subsection (3)(b).

In the appeal of Weeks v. Commissioner for Body Corporate (Maroochydore District Court Appeal 13/99) Judge Dodds made the following statement about section 193 at pages 4 and 5 of the judgment:

“... the objects of the Act, for instance section 5(a) and (h) militate against too strict or legalistic a view about good reason for waiving non-compliance with the time limit. What will be required is a balancing of the length of the delay; the reason for the non-compliance; the effect of delay on others who are affected by the matter in dispute and importantly, whether apart from the question of non-compliance with the time requirement, an applicant will be entitled to the relief sought. The applicant, being the person seeking a waiver, will have the task overall of satisfying the adjudicator that the time limit should be waived in all the circumstances.”

I will initially consider the application of section 193 to the owners of lot 9, Mr and Mrs Rogers.

It will be recalled that the owners of lot 9 obtained no value for the work done to their retaining wall by the contactor. They erected a new brick wall. In my view the delay in bringing this application has significantly affected the owners of lot 9. If the application had been brought within three months of the first EGM on 28 April 1999, the owners of lot 9 may not have considered erecting a completely new wall if faced with the prospect that they would have to pay for the work that had already been done and they may have carefully supervised the contractor if they knew they would have to pay for the work or there was the possibility of that occurring. Additionally, as stated above the owners of lot 9 have wasted $583 in reinstating their garden. The delay in respect of the owners of lot 9 is significant. The application was brought 10 months after the EGM on 28 April 1999. I do not need to consider the second EGM, as no work was done to the retaining wall of lot 9 arising out of that EGM. The reason for the delay offered by the applicant is that he was waiting on a decision in respect of a prior application 606-1999. In my view that reason does not carry substantial weight as the applicant did not need to wait until a decision of application 606-1999 had been made prior to bringing this application. The final matter to be considered is whether the applicant will be entitled to the relief sought. In my view, there is a prima facie case against the owners of lot 9 although it would have to be considered whether a “just and equitable order” could be made that they repay the money: section 223(1) of the Act. Overall, I have come to the view that the applicant has not established “good reason” to waive non-compliance with section 193 in respect of the owners of lot 9. I decline to make an order that the owners of lot 9 reimburse the Body Corporate for the work done to their retaining wall.

I will now consider the position of the owners of lots 10 and 11. They have obtained value for the work done to their lots. It was necessary for the work to the retaining wall to be done. It is not as if work was done that may have been delayed or may not have been needed. The delay is not significant. The application was brought only two months out of time. Once again, I do not give substantial weight to the reason of the applicant for bringing the application at a late stage. In my view, the applicant would be entitled to the relief sought. I find that in respect of the owners of lots 10 and 11 there is good reason to waive the non-compliance with section 193.

I propose to order that the owners of lots 10 and 11 repay back to the Body Corporate the amounts spent on maintaining their retaining walls. The invoice for this work is in the sum of $1310. That figure is an overall amount for work to the retaining walls servicing lots 10 and 11. I have spoken to the contractor, Mr Indan. He informed me that the cost of working on the retaining wall of lot 11 was $400. That involved the cost and labour of replacing 4 foundation posts. The remainder of the invoice, $910, represents the cost of repairing the retaining wall for lot 10. I propose to order that the owners of lot 11 pay the Body Corporate $400 and the owners of lot 10 pay the Body Corporate $910.

I do not propose to order the Body Corporate to refrain from spending money on other retaining walls on the boundary of lots and other land as each case will need to be separately assessed. Additionally, there is no material before me that suggests the Body Corporate intends to maintain retaining walls that are the responsibility of lot owners.