La Porte D'Or [2001] QBCCMCmr 232 (30 April 2001)

C G YOUNGREFERENCE: 0179-2001

ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	12681
Name of Scheme:	La Porte D' Or
Address of Scheme:	3422 Gold Coast Highway SURFERS PARADISE QLD 4217

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

C G YOUNGI hereby order that in respect of the air-conditioning systems situated on, and servicing the lots comprising, each floor of the building –

1. The body corporate is responsible for the maintenance of: the compressor and pump situated in the plant room of each floor; both the chilled-water and return-water circuit pipes situated in each floor foyer and walkway area; and so much of the pipes connected to the common property circuit pipes which service each lot as is situated on common property or within the boundary walls of each lot.

2. Each lot owner is responsible for the maintenance of the Fan Coil Unit or Units, the ducts, vents and thermostat switches situated within their lot, and so much of the service pipes connected to the common property circuit pipes as are contained within the lot up to the inner surface of the boundary walls. 2n

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0179-2001

“La Porte D' Or” CTS 12681

This is the final order to an application by the body corporate for La Porte D'Or which has sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (“the Act”), quote -

1. The repair and maintenance of those parts of the air conditioning system with each lot owner’s apartment (fan coil units and drip trays) are the responsibility of the respective lot owners; and

2. Lot owners are responsible for any damage caused to other lots by their respective air conditioning units,

The applicant also sought an interim order in like terms which was dismissed by Interim Order 179-2001 issued on 28 March 2001 on the grounds that neither the nature of the application nor the degree of urgency were sufficient to warrant the issue of an interim order in the matter.

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)).

Introduction:
To assist in my understanding of the arrangement of the air-conditioning system in La Porte D’Or, on Tuesday 24 April 2001 I visited the scheme and inspected the system in both the common property area and in two representative units (“lots”), in the presence of committee members Vito Georgio (chairperson) and Yvonne Duniam.

My primary task is to determine the apportionment of responsibility between the body corporate and the individual lot owners for the maintenance of the air-conditioning systems servicing the lots in the building. The application has been precipitated by both a large number of service calls being made to attend air-conditioning problems in lots, and the partial flooding of a lot (Unit 1001) causing damage to carpets and furniture within the lot and water penetration damage to the ceiling of the lot below. Most service calls relate to the overflow of condensation water through ceilings. The building is now 25 years old and the system is experiencing a problem in the breakdown of fibreglass insulation wrapped around pipes and fan coil units, as for example in Unit 1001 where moulting fibreglass insulation clogged the condensation outlet.

I will first describe the air-conditioning system and then apply the relevant provisions of the Act and the regulations applicable to the scheme, the Body Corporate and Community Management (Standard Module) Regulation 1977 (“the Standard Module”). I will separately deal with the second order sought by the applicant after determining the air-conditioning matter.

Description of Air-conditioning System:
Each floor of the building has its own air conditioning plant which services the 5 or 6 lots situated on the floor, consisting of a compressor to chill water and a pump to circulate the chilled water through a system of piping. The plant servicing a floor is actually situated on the floor above so the pipe carrying the chilled water passes through the floor slab then travels in a circuit over the common property foyer and walkway areas attached to the underside of the slab but hidden by a false ceiling.

There are two pipe circuits; one carrying the chilled water from the plant and the other returning used water to the compressor plant for re-chilling. The chilled water is channelled into each lot by means of an individual pipe connected to the chilled water circuit pipe. Each such pipe brings chilled water into a lot where it passes through one or more fan coil units (“FCU’s”) and then exits by another individual pipe connected to the used water circuit pipe.

The FCU’s are wholly situated within the lot (some evidently have up to three FCU’s servicing multiple rooms) and can be likened to a car radiator – cool air is produced by an electric fan blowing over a coiled pipe through which the chilled water is passed. The cooled air is vented into one or more rooms by the use of ducting. The pipe bringing the chilled water into the lot, the FCU (s), the ducting, and the return pipe for used water, are all situated in, and hidden by, either a false ceiling or a drop panel (best described as a partial false ceiling). There is a removable panel underneath each FCU for inspection and maintenance purposes.

Each FCU is insulated by fibreglass and a metal jacket around the coil system. The unit has a drip-tray slung underneath to catch the condensation drips, which are then piped into an internal plumbing stack (drain pipe) outlet. I have already commented on moulting fibres falling into the drip-tray which can eventually clog the outlet. The trapped condensed water overflows causing water penetration through the inspection panel beneath. This has occurred in many instances causing the body corporate to expend sizeable sums in service calls.

The fan is connected to the relevant lot’s power supply, as is the thermostat switch situated on an internal wall of the lot which is used by occupiers to regulate the degree of coolness.

That completes a simple description of the air-conditioning system that services each floor of the building. In summary: the communal portion of each floor system comprises the compressor plant, pump, and the dual pipe circuits; while the portion solely used by each lot comprises the FCU’s, the pipes connecting each lot to the circuit pipes, the ducts, vents and thermostat switches. This division between communal and individual lot parts of the system, is physically marked by valves installed at the junction of the lot pipes and circuit pipes, which can be closed to isolate a lot from the rest of the floor system for maintenance purposes.

Application of the relevant law:
La Porte D”Or was registered as a building units plan under the previous legislation, the Building Units and Group Titles Act 1980. Under section 9(5)(a) of that previous legislation, the boundary of a lot is the centre of the wall, floor and ceiling, and section 7 interpreted “ceiling” as not including a false ceiling. Under the transitional provisions of the (new) Act, a building unit plan becomes a building format plan. In any case, section 281 of the Land Title Act 1994 continues the centre point boundaries, and the Schedule 4 Dictionary of the (new) Act also defines a ceiling as excluding a false ceiling.

The presence of a false ceiling, and likewise a “drop panel” covering pipes, ducts and other like infrastructure items for part of a room ceiling, is therefore irrelevant in determining the boundaries of a lot. Accordingly, the FCU’s and associated piping, ducting and wiring contained in the void between a false ceiling or drop panel and the slab ceiling, must be regarded as being situated within the lot.

Section 120 of the Standard Module provides –

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Obligations of owners and occupiers—Act, s 122

120.(1) An occupier of a lot included in the scheme must keep the parts

of the lot readily observable from another lot or common property in a clean

and tidy condition.

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

good condition.

(3) The owner’s obligation under subsection (2) to maintain the lot in

good condition does not apply to a part of the lot the body corporate is

required under this regulation to maintain in good condition.

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

infrastructure within the boundaries of the lot, and not part of common

property, in good condition and, if it is in need of replacement, must replace

it.

(5) This section applies only to a lot that is not a community titles

scheme.

(my underlining)

Under this provision, owners are responsible for the maintenance of their lot, including any utility infrastructure, except where the Standard Module provides that the body corporate is responsible for “part of the lot” or where part of the infrastructure in a lot is “common property”. These exceptions are set out in section 21 of the Act.

Section 11 of the Act defines the common property (essentially that part of a scheme that is not a lot) and its scope is extended by section 21 in respect of “utility infrastructure”. “Utility infrastructure” is defined in Schedule 4 of the Act as including pipes, ducts, wires, plant and equipment, and which supplies “utility services” to a lot. “Utility service” is also defined in that schedule and includes air-conditioning. Section 21 (1) states –

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Utility infrastructure as common property

21.(1) Common property for a community titles scheme includes all

utility infrastructure forming part of scheme land, except utility

infrastructure—

(a) solely related to supplying utility services to a lot; and

(b) within the boundaries of the lot (according to the way the

boundaries of the lot are defined in the plan of subdivision under

which the lot is created); and

(c) located other than within a boundary structure for the lot.

(3) In this section –

“boundary structure”, for a lot include in a community titles scheme, means a floor, wall or ceiling in which is located the boundary of the lot with another lot or common property.

(my underlining)

In applying the above provisions to the system, the FCU’s being situated within the lot are the responsibility of the owner to maintain and repair (including any replacement). Also, the pipe connected to the chilled water circuit pipe bringing the chilled water to the FCU(s) is the responsibility of the body corporate from the point of the joining of the pipes to the inner surface of the boundary structure wall situated between the lot and the common property foyer. It is similarly responsible for the exit piping connecting to the used water circuit pipe from the point where it enters the boundary structure wall to the joining of the pipes. Conversely, the owner is responsible for that portion of those pipes from where they enter and exit the lot at the boundary wall. Of course all of the circuit pipes and plant (compressor and pump) on each floor, being situated on common property, are the responsibility of the body corporate.

In the grounds to the application the applicant suggests that section 109 of the Standard Module applies to the situation. If so, this would result in owners being similarly responsible for the maintenance of the FCU’s, but also for the full length of the two pipes connecting to the circuit pipes rather than merely internally to the inner surface of the lot boundary walls when section 21 applies. I do not agree with this. Section 109 states –

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Duties of body corporate about common property—Act, s 114

109.(1) The body corporate must maintain common property in good

condition, including, to the extent that common property is structural in

nature, in a structurally sound condition.

(2) To the extent that lots included in the scheme are created under a

building format plan of subdivision, the body corporate must—

(a) maintain in good condition—

(i) railings, parapets and balustrades on (whether precisely, or

for all practical purposes) the boundary of a lot and common

property; and

(ii) doors, windows and associated fittings situated in a

boundary wall separating a lot from common property; and

(iii) roofing membranes that are not common property but that

provide protection for lots or common property; and

(b) maintain the following elements of scheme land that are not

common property in a structurally sound condition—

(i) foundation structures;

(ii) roofing or other covering structures providing protection;

(iii) essential supporting framework, including load-bearing

walls.

(3) Despite anything in subsections (1) and (2)—

(a) the body corporate is not responsible for maintaining fixtures or

fittings installed by the occupier of a lot if they were installed for

the occupier’s own benefit; and

(b) the owner of the lot is responsible for maintaining utility

infrastructure in good order and condition, to the extent that the

utility infrastructure—

(i) relates only to supplying utility services to a particular lot;

and

(ii) is 1 of the following types—

•	hot-water systems
•	washing machines
•	clothes dryers
•	another device providing a utility service of a domestic

nature to a lot.

Examples for subsection (3)(b)—

1. An airconditioning plant is installed on the common property, but relates only

to supplying utility services to a particular lot. The owner of the lot would be

responsible for maintaining the airconditioning equipment.

2. A hot-water system is installed on the common property, but supplies water

only to a particular lot. The owner of the lot would be responsible for maintaining

the hot-water system and the associated pipes and wiring.

(4) To avoid doubt, it is declared that, despite an obligation the body

corporate may have under subsection (2) to maintain a part of a lot in good

condition or in a structurally sound condition, the body corporate is not

prevented from recovering an amount of damages from a person (whether

or not the owner of the lot) whose actions cause or contribute to damage or

deterioration of the part of the lot.

(my underlining)

Both section 21 of the Act and section 109(3)(b) of the Standard Module concern maintenance responsibility for utility infrastructure. Section 21 is the general provision in defining maintenance responsibility while section 109 is a specific provision which applies only where particular circumstances exist. Under the rules of statutory interpretation, such a specific provision prevails over the general provision to the extent of the inconsistency between the provisions.

Section 109(3)(b) only applies where the utility infrastructure is one of the devices listed out in sub-paragraph (3)(b)(ii), “hot-water systems...”, including “another device providing a utility service of a domestic nature to a lot”. That an air-conditioner comes within the scope of the latter “another device...” is verified by its adoption in the first example of “Examples for subsection (3)(b)”. However, the sub-section requires in (i) that the infrastructure device must supply utility services to a “particular lot.” That is, it only applies where there is a particular device sited on common property which supplies utility services to one lot. That excludes the instant situation where there is a common air–conditioning plant servicing all of the lots on a floor. Even though the two connecting pipes are solely providing and retrieving chilled water to a lot, that does not bring them within the scope of section 109.

Finally, none of the infra structure pipes in the lots also service another lot or lots and therefore are not part of common property. I do notice from the plan of the building that some lots do contain common property vertical ducts between certain floors which would contain, presumably, some electrical wiring, water pipes etc. However these are not of relevance here.

Responsibility for Damage:
The second order sought by the body corporate is that owners are responsible for damage caused to other lots by their air-conditioning units. I gather that this refers to water damage caused by overflowing drip trays to both the owner’s lot and other lots or the common property.

I cannot make such a blanket order – each of those situations where damage has resulted will need to be examined and a decision made in regard to the particular circumstances. The question of insurance also arises which no doubt the owner would pursue initially.

Conclusion:
For the reasons above, my order is that the owners are responsible for the FCUs, and all internal piping. This means that owners are themselves responsible for maintaining the FCU’s in their lot including the drip tray and ensuring that the fibre glass insulation does not block the drip tray outlet. They will also be responsible for replacement of the insulation if that is necessary, and in time, the replacement of the FCU itself.

In a building where there are absentee owners, this may create a maintenance problem for those owners. It will be a matter for them to arrange maintenance of their air-conditioning equipment in the same manner they arrange for the maintenance of internal plumbing and contents generally.

Given that a failure to maintain the air-conditioning may well void any insurance claim, and may cause damage to another lot or the common property (as happened where the air-conditioner was left running for a long period in an unoccupied lot), it would be in everyone’s interest if the body corporate committee were to bring the problem to the notice of owners generally. Some owners may wish to replace the insulation to avoid a likely problem but at the minimum owners will need to monitor their system for this problem. This is an area that the committee may wish to consider what advice it can give in the interests of owners. Section 119 of the Standard Module does allow for a body corporate to provide services to an owner which would otherwise be own responsibility, providing it is not imposed on owners but is only supplied to those owners who want it, and the full cost is met by the participating owner or owners and is not a body corporate expense.