Surfers International [2001] QBCCMCmr 79 (13 February 2001)

RA MeekREFERENCE: 0668-2000

ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	12247
Name of Scheme:	Surfers International
Address of Scheme:	7 Trickett Street SURFERS PARADISE QLD 4217

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

Tinpin Investments Pty Ltd, the owner of lot 136



RA MeekI hereby order that the body corporate of Surfers International is responsible to undertake the preliminary work, namely the –

1. Removal of all timber decking and brick piers from the slab area, and

2. Removal of pool filtration equipment, and

3. Removal from the western parapet wall all brackets and spacers of the pool canopy

subject to it giving to the owner of the lot reasonable notice in writing of its intention to commence the preliminary work, and further subject to the right of the owner of the lot, up until the date specified in the body corporate notice of intention to undertake the preliminary work, to remove all improvements in or on the affected area as the owner of the lot intends to re-install at a subsequent time.

I further order that Tinpin Investments Pty Ltd, the owner of lot 136 is responsible for the costs of reinstating the new piers and support timbers for the deck, together with the existing wall fixings, spacers and brackets (including treatment of the base of all the support poles) for the pergola.

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STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0668-2000

“Surfers International” CTS 12247

The applicant Tinpin Investments Pty Ltd, the owner of lot 136, has sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act), quote -

The applicant seeks the following:

a) A determination be made as to which party is responsible (that is, the applicant or the body corporate) for the costs of:

i.	The preliminary work which was necessary to allow the body corporate to undertake the work required in order to prevent water penetration to the applicant’s unit;
ii.	Reinstating the new piers and support timbers for the deck, together with the existing wall fixings, spacers and brackets (including treatment of the base of all the support poles) for the pergola.

b) An order that the body corporate pay those costs for which it is found to be responsible.

c) Such further or other orders as the office of the commissioner for Body Corporate and Community Management considers appropriate.

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)).

RA MeekI made the preliminary order in respect of this dispute which provided that the body corporate was responsible to maintain, in a structurally sound condition, those parts of the window walls of lot 136 which provide structural support, including load-bearing, for the roof (see application 0639-2000). n

The applicant has now indicated that the parties are in further dispute regarding –

... whose responsibility it is for the costs of the preliminary work and the costs of reinstating the new piers and support timbers for the deck, together with the existing wall fixings, spacers and brackets (including treatment of the base of all the support poles) for the pergola. The applicant asserts that it would not have been necessary to remove these items in the first place but for the work that the body corporate was responsible to carry out in order to rectify the water penetration problem.

Section 109 of the standard module provides as follows -

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.
...
(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.
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It is clear, and it is acknowledged by the parties to this application, that the responsibility for replacement of the water proofing membrane located on the roof of lot 136 is that of the body corporate under section 109(2)(a)(iii) of the standard module. What the parties are in dispute over however is the responsibility for both the work required preliminary to, and post the affixing of the new membrane. I have recently had cause to consider in detail the questions of responsibility for what might be termed work both preliminary to and post the replacement of a roof top water proofing membrane located within the boundaries of a lot. Whilst the facts might be a little different, the issues for determination are in my view identical. I intend the follow the conclusions I reached in that decision, relevant extracts which I will quote in these reasons, to determine the issues now before me.

In application 0363 of 2000, I concluded as follows (reference to aspects clearly not relevant to this application have been deleted, although the headings have been retained) –

Responsibility for repair of the water proofing membrane

Given my above finding, I now turn to consider the responsibility for repair of the water proofing membrane located on the roof terrace area of level V of lot 129. ...

To clarify the matter somewhat, I consider that it can be said with certainty that were it not for the refurbishment of the roof terrace of lot 129 (the refurbishment), then there would be little doubt in my mind that responsibility for replacement of the water proofing membrane (the membrane) would be the responsibility of the body corporate.

I say little doubt, because the body corporate has argued that it is not so responsible because the membrane only affords protection to level U of lot 129. The body corporate submits that “the relevant membrane is not of the type referred to in paragraph (2(a)(iii)). It does not provide protection “... for lots or common property”.” The body corporate submits that the express purpose of the provision is to allow the body corporate to intervene in a situation where a problem in a lot was affecting another lot in a scheme”. The body corporate states that in this case, the membrane in question affects only the lower level of lot 129. That it does not affect any other lot or any common property.

I do not agree with this restricted interpretation of the subsection. I consider that there is nothing in the wording of the section to support this interpretation. Moreover, I consider that to adopt this interpretation could lead to seemingly arbitrary determinations (ie. the body corporate is responsible except where ...), or worse, scenarios where two different parties are each partly responsible for maintenance of a membrane (ie. where a membrane provides protection for part of the same lot located on a lower level, but also another lot, and / or common property).

I consider that the wording of section 109(2)(a)(iii) should be given a meaning such that it applies if there is a membrane located within a lot which provided protection to any lot (including the lot in which the membrane is located) or common property. It should not be restricted to applying if the protection is provided to a lot other than a lot in which the membrane is located.

I conclude that on the basis of the provisions of section 109(2)(a)(iii), the body corporate is prima facie responsible to maintain in good condition the roofing membrane located on the roof terrace of level V of lot 129. The next aspect to be considered is whether this duty is affected by the fact of the refurbishment.

The refurbishment

The applicants consider that the body corporate is obligated to undertake the repairs to the lot, and “after rectification work has been completed, should commence proceedings to recover the costs of such rectification work against the previous owners”. Moreover, the applicants rely on the fact that they were not the owners of lot 129 at the time the refurbishment work was undertaken.

The body corporate contends that it is not “just and equitable in the circumstances” to order the body corporate to “remedy defective workmanship in lot 129 which the applicants should have protected themselves about, in the context of acquiring lot 129. A proper Building Inspection Report obtained at the time from an appropriately qualified expert should have warned about the defects in the way in which the wearing surface and membrane had been installed on level V of lot 129.”

I consider that it would have been difficult, if not impossible, for a prospective purchaser to have anticipated the defective workmanship involved in the refurbishment of the roof terrace of lot 129. The first evidence of water penetration to the lot occurred in or about May 1997, after the applicant’s had purchased the lot. Consequently, there would have been no information on the body corporate record which might have indicated a potential problem.

Moreover, given that the consent of the body corporate to the refurbishment is in issue, then there would have been very little on the body corporate record to indicate that refurbishment of the roof terrace had even occurred, so as to even raise the possibility of defective workmanship. I am not saying that the applicants would have been total unaware that the roof terrace had been refurbished, but this knowledge probably arose more from the fact that they were already owners of another lot in the scheme (hence general knowledge that the roof terrace had been refurbished) or alternatively, were informed of the refurbishment directly in the context of the purchase of the lot.

I suggest that the potential for the problem which subsequently arose would have only been discovered after a very thorough and probably invasive inspection of the roof terrace of lot 129. Given that there would have been no indication of a problem from the body corporate record (and therefore nothing to suggest a potential risk), I doubt the vendors would have agreed to such an inspection being undertaken by the purchasers (now owners).

In the circumstances, I reject the body corporate’s contention that the applicants should have protected themselves about the defective workmanship in the refurbishment of the roof terrace, in the context of acquiring lot 129. I consider that this is an unreasonable expectation in the circumstances.

I consider the applicant’s contention that the body corporate is obligated to undertake the repairs to the lot, and “after rectification work has been completed, should commence proceedings to recover the costs of such rectification work against the previous owners”, is essentially correct, although I consider the applicants have expressed this obligation in very wide terms. This contention is consistent with the provisions of the section. The body corporate has a duty to maintain in good condition roofing membranes that are not common property but that provide protection for lots or common property.

I consider that the strict duty of the body corporate to undertake the necessary maintenance, and thereafter seek restitution for a person whose actions caused or contributed to the damage, is put beyond any reasonable doubt by virtue of the provisions of section 109(4). That section has been framed in such a way so as to prevent a body corporate from refusing to undertake maintenance for which it is deemed to be responsible under (2), by reason of the fact that it alleges that the actions of another have caused or contributed to the damage. The section requires that the body corporate undertake the maintenance and thereafter is entitled to recover “an amount of damages from a person (whether or not the owner of the lot) whose actions cause(d) or contribute(d) to damage or deterioration of the part of the lot.”

This leads me to the next equally disputed aspect; namely the extent of the body corprorate’s duty to maintain in good condition the roofing membrane.

The body corporate’s duty to maintain the roofing membrane in good condition

The applicants seek to express the duty of the body corporate in very wide terms. The applicants seek an order that the body corporate be directed to “undertake all necessary rectification works”. Since it is not expressed more specifically, I can only assume that the applicant’s seek that the body corporate be ordered to undertake all aspects of the rectification including, but without limiting other actions which might be required in the course of rectification, the following -

• The removal of all existing tiling, and both the new and old (original) membrane;

• The preparation of the roof terrace surface including remedial works to any steel reinforcing located in the cement floor slab which might have become corroded due to water penetration;

• The affixing of a new water proofing membrane to the roof terrace of lot 129;

• The laying of a new flooring surface to the roof terrace of lot 129;

• The repair of all damage to the interior of lot 129 on level U caused by the water penetration.

In contrast, at paragraph 18.11 and 18.12 of its submission, the body corporate submits that –

... on any reasonable meaning of the word “maintain” it cannot be held to include a process of:

a) Removing bad workmanship previously done by others;

b) Removing the wearing surface so as to provide access to the membrane;’

c) Replace the membrane entirely;

d) Removing other structures installed by a proprietor of lot 129;

e) Fixing in place a new wearing surface presumably to be selected by the applicants.

It is submitted that the work to be done in terms of the order sought by the applicants extends far beyond a concept of “maintenance”.

At paragraph 19.6, the submission states –

The (body corporate) has offered to fix the membrane itself leaving the applicants to attend to the other necessary work particular the re-installation of the wearing surface.

Replacement of the membrane

There is no doubt that “maintain” does include replacement, where maintenance or repair of the original is either not practical or possible. The Taylor Report, at paragraph 5.1.1, clearly contemplates replacement of the original membrane. There is no doubt that in this instance, the body corporate is required to replace the (original) membrane, with a new one.

The selection of an effective membrane and appropriate method of application is a matter for the body corporate entirely. This is not a matter in respect of which the approval or consent of the owner of the lot is required. Perhaps the owners might be consulted out of courtesy, but in my view, the final determination is a matter for the body corporate alone. The body corporate should be aware though that should either the type or method of affixation of the membrane be inappropriate, and fails to prevent further water penetration to the lot, then it will be required, pursuant to its duty under section 109(2)(a)(iii), to again maintain the membrane. Therefore it is in the interests of the body corporate to get it right.

Preparation work necessary to replace the membrane

The duty of the body corporate is to maintain in good condition the roofing membrane. The body corporate has argued that it should not be responsible for removing bad workmanship previously done by others; removing the wearing surface so as to provide access to the membrane; or ... removing other structures installed by a proprietor of lot 129.

I have found this aspect difficult and have given the matter considerable thought. The body corporate has indicated to me certain definitions of “maintain” and also cited the decision of the Supreme Court of Queensland Court of Appeal in Julian-Armitage v. The Proprietors Astor Centre. With respect, I find extract of the decision referred to me to be of no assistance with the present aspect.

The fact is that the body corporate is obliged to replace the membrane. However, the body corporate considers that it should not be required to undertake all necessary preparation work; principally removal of all wearing surfaces and other structures installed by a proprietor. It is not strictly correct for the body corporate to suggest that the wearing surface (for want of a better term) was a fixture installed by an owner. The original membrane had affixed to it a wearing surface installed by the developer. Had the membrane required maintenance, then the body corporate would certainly have been required to remove the original wearing surface. I consider that this approach is equally applicable even where an owner has installed a new wearing surface. The area was always designated a roof terrace, and it was always envisaged that the area would be fully utilised by the owners of the lot as living space. Given this, then it is not surprising to find a wearing surface has been installed over the membrane, for protection of the membrane as much as aesthetics.

I draw the analogy with painting. Had the body corporate been required to paint part of a lot, then by implication, it would have been a reasonable expectation, in my view, that the body corporate would also have been required to prepare the area to be painted. I consider the removal of the tile floor, and to the greatest extent possible the acrylic, and finally the original tar membrane, together with the removal of other structures (ie. the BBQ and shade structure) and any other preparatory work required to be done, to be, by implication, part of the obligation of the body corporate under section 109(2)(a)(iii).

I have one qualification to add to this. I consider that the body corporate in removing any such improvements (in particular, the BBQ and shade structure) is under no obligation to preserve them such that they can be replaced by the owner at a later date. I consider that the making of improvements by an owner in circumstances such as exist here are subject always to the possibility that the improvements might need to be dismantled, or even destroyed, by the body corporate in the performance of its obligations under section 109(2). Therefore it may be in the interests of an owner to dismantle and remove any improvements which the owner might want to re-install at a later date. I will not impose on the body corporate an obligation to remove, and store, improvements in such a way that they might be subsequently re-installed by an owner at a later date. Such an obligation would be too onerous.

In the context of being required to undertake all necessary preparation work, the body corporate should remember its right preserved in section 109(4). Namely, that in the event of being obliged under section 109(2) to perform work to maintain part of a lot in good condition, the body corporate has a right to recover “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”. In my view, the cost of removal and all other necessary preparation work would be capable of inclusion in any claim for damages against a person whose actions the body corporate considered caused or contributed to the damage or deterioration of part of the lot.

In my view, it is for the body corporate to determine whether to pursue legal action against the previous owners of lot 129 if it considers that the actions of those owners have caused or contributed to the damage which has apparently been done to the water proofing membrane which the body corporate is responsible to maintain in good condition. Whilst the issue of body corporate consent to the improvements made by those owners has been raised before me, I consider that this issue is properly one for any legal action the body corporate might consider appropriate against such owners. I intend to say no more regarding this aspect.

Rusting or other damage to the steel in the concrete roof slab forming the roof structure of lot 129

...

The parapet walls

...

The laying of a new wearing or flooring surface following maintenance to the membrane

I do not consider the responsibility of the body corporate for maintenance of the membrane extends to the laying of any new floor covering or surface over the new membrane which has been laid. The body corporate is obliged by section 109(2)(a)(iii) to maintain in good condition the roofing membrane; not to reinstate the lot to its former condition.

If an owner has chosen to install, or to replace, a floor covering or surface over a membrane which the body corporate is responsible to maintain, and the membrane does thereafter require maintenance, then the replacement of any future floor covering or surface is a matter for the owner. It is part of the risk that the owner takes in choosing to install, or to replace, the floor covering or surface.

Moreover, in taking any action to install a new floor covering or surface, or in fact in choosing not to replace a previous floor covering or surface over a membrane, the owner of a lot might be liable to a claim for damages arising under the operation of section 109(4) of the standard module, in the event that the actions of that person cause or contribute to any damage or deterioration of the membrane. What I am saying is that in the same way as the provisions of section 109(4) might be relevant to the damage done to the membrane in the refurbishment undertaken by the previous owners of the lot, the installation of any future floor covering or surface, or for that matter, the affixing of any improvements, by the lot owner might be similarly affected.

Consequently, I suggest that the installation of any future floor covering or surface by the owners should be done in consultation with the body corporate, and in accordance with advice received from the manufacturer or installer of the membrane as to how the membrane should be treated or dealt with.

Internal damage to the applicant’s lot

...

Costs of the application to be taxed

...

The applicant seeks two orders. The first is to determine which party is responsible for the costs of the preliminary work which was necessary to be undertaken to allow the body corporate to undertake the work required in order to prevent water penetration to the applicant’s unit.

As per the body corporate’s letter to the applicant of 7 June 2000, the preliminary work appears to include –

1. Removal of all timber decking and brick piers from the slab area, and

2. Removal of pool filtration equipment, and

3. Removal from the western parapet wall all brackets and spacers of the pool canopy

(hereinafter referred to as “the preliminary work”).

Based on my reasoning in application 0363 of 2000, which I intend to adopt here, I conclude that the body corporate is responsible for the preliminary work. That is, the body corporate is responsible to undertake all work necessary to prepare the area in question, such that the new water proofing membrane can be affixed.

However this is subject to the significant proviso as noted in the reasons for application 0363 of 2000 and that relates to improvements which have been made to the area in question. I reiterate the qualification I set out above –

I consider that the body corporate in removing any such improvements (in particular, the BBQ and shade structure) is under no obligation to preserve them such that they can be replaced by the owner at a later date. I consider that the making of improvements by an owner in circumstances such as exist here are subject always to the possibility that the improvements might need to be dismantled, or even destroyed, by the body corporate in the performance of its obligations under section 109(2). Therefore it may be in the interests of an owner to dismantle and remove any improvements which the owner might want to re-install at a later date. I will not impose on the body corporate an obligation to remove, and store, improvements in such a way that they might be subsequently re-installed by an owner at a later date. Such an obligation would be too onerous.

Basically, if the applicant intends to reinstate any or all of the improvements at a later date, then the applicant should take steps to remove the improvements and to store them until such time as they are later required. Whatever the applicant does not remove, the body corporate, in undertaking the preliminary work, is entitled to remove and to dispose of, without any reference to the applicant as owner of the lot, and without concern for destruction or disposal of the improvements.

In the circumstances, I intend to order in respect of this aspect that the body corporate is responsible to undertake the preliminary work, subject to giving reasonable notice (a minimum of 7 days notice in writing in accordance with section 125 of the Act) to the applicant as owner of the lot.

The second order sought by the applicant is a determination of which party is responsible for the costs of reinstating the new piers and support timbers for the deck, together with the existing wall fixings, spacers and brackets (including treatment of the base of all the support poles) for the pergola.

I consider this aspect is similarly clear based on my reasoning in application 0363 of 2000. It is the responsibility of the owner to reinstate all or any improvements to the subject area which might have formerly existed or been in place. The body corporate is not responsible for this aspect. I refer generally to my comments under the heading The laying of a new wearing or flooring surface following maintenance to the membrane above which are relevant to this aspect. In particular, in replacing the improvements to the subject area, the applicant must ensure that no damage is done to the water proofing membrane. In my view, the provisions of section 109(4) would be applicable should any damage within the scope of that section be occasioned.

I note in this regard that the body corporate has sought that certain work be done “if the existing improvements are to be re-installed after completion of the body corporate’s work” including that –

1. All rusted fixing be repaired / replaced and treated with an anti-corrosion material;

2. The metal frame be repainted;

3. All timber to be painted / stained;

4. An engineer’s report to be provided to certify that the improvement has been installed in a safe manner and that it has not breached the integrity of the new membrane.

Whilst I am not certain that the body corporate can demand that these matters be done, certainly it is very much in the interests of the applicant, as owner of the lot, to ensure that whatever is done does not cause damage or deterioration to that part of the lot, in particular to the water proofing membrane installed by the body corporate.