Jannie No. 9 [2002] QBCCMCmr 189 (11 April 2002)

DJ ReardonREFERENCE: 0705-2001

ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	3909
Name of Scheme:	Jannie No. 9
Address of Scheme:	9 Jannie Court LABRADOR QLD 4215

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

Sow Keng Yuen, the Owner of Lot 1


I hereby order DJ Reardonthat within 2 weeks of the date of this order, the Owner of Lot 2 must reimburse the Owner of Lot 1 the amount of $159.88, being half the cost of an insurance premium payment for insurance required to be taken out by the body corporate.2n
STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0705-2001

“Jannie No. 9” CTS 3909

1.	Order Sought

The applicant, the Owner of Lot 1, has sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (“the Act”), quote -

“Owner of unit 2 has refused to pay half of strata insurance...we want refund of half of insurance-$159-88.”

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)).

2.	Submissions

In this application, the applicant seeks reimbursement from the owners of Lot 2 of half the cost of an insurance premium. On 8 February 2002, the Commissioner for Body Corporate and Community Management provided the Owners of Lot 2 with a copy of the application, and an invitation to make a written submission about the application. Having not received a submission from the Owners of Lot 2, a member of this Office telephoned and spoke to one of the Owners of Lot 2 on 14 March 2002. The Owner confirmed that he had received a copy of the application, and he did not intend to make a written submission. On 2 April 2002, I wrote to the Owners of Lot 2 and stated that if they did not contact this Office by 8 April 2002, I intended to make an order on the basis of the material before me. To my knowledge, this Office has not been contacted by the Owners of Lot 2.

While it is obviously preferable for me to have affected parties’ views before me in determining this application, I do not intend to delay making an order further.

3.	Insurance provisions of the legislation

Section 147(1) of the Act provides that “The regulation module applying to a community titles scheme may require the body corporate to put in place insurance for the scheme”. I note that the community management statement for the “Jannie No.9” community titles scheme indicates that the Body Corporate and Community Management (Standard Module) Regulation 1997 (“the Standard Module”) applies to the scheme. Part 8, Division 9 of the Standard Module contains a number of provisions for insurance.

In relation to schemes created under a building format plan of subdivision (previously known as a building units plan), section 128(2) provides the following:

“The body corporate must insure, to full replacement value, each building in which is located a lot included in the scheme, to the extent that the building is scheme land.”

Section 128(3) provides that:

“A policy of insurance taken out under this section—

(a) must cover—

(i) damage; and

(ii) costs incidental to the reinstatement or replacement of

insured buildings, including the cost of taking away debris

and the fees of architects and other professional advisers;

and

(b) must provide for the reinstatement of property to its condition

when new.”

The terms “building” and “damage” are defined in section 126 of the Standard Module in the following terms:

“126. In this division—

“building” includes improvements and fixtures (but not including carpet)

forming part of the building, but does not include—

(a) temporary wall, floor and ceiling coverings; or

(b) fixtures removable by a lessee or tenant at the end of a lease or

tenancy.

“damage”, for coverage under insurance required to be put in place under

this division, means—

(a) earthquake, explosion, fire, lightning, storm, tempest and water

damage; and

(b) glass breakage; and

(c) damage from impact, malicious act, and riot.”

Section 127 of the Standard Module provides that the body corporate must insure common property and body corporate assets. Section 136 of the Standard Module requires the body corporate to maintain public risk insurance of firstly the common property, and secondly body corporate assets for which it is practicable to maintain public risk insurance.

Section 130 of the Standard Module makes provision for the payment of the premium for reinstatement insurance. In relation to lots created under a building format plan of subdivision (a building units plan), “the owner of each lot that is included in the scheme and is covered by reinstatement insurance required to be taken out by the body corporate is liable to reimburse the body corporate for the proportion of the premium for reinstatement insurance that reflects the interest schedule lot entitlement of the lot”. Section 127(4) makes similar provision for the payment of a premium of replacement insurance of common property and body corporate assets.

4.	Matters in Dispute

As stated previously, this application concerns contributions toward payment of an insurance premium.

The applicant has provided me with a copy of the Certificate of Currency of insurance policy 06S0779575, which indicates that the policy covers the buildings and common property, and public liability. Given that the “Jannie Court” scheme was created under a building format plan of subdivision, and in light of the insurance provisions of the Standard Module outlined previously, it appears to me that this insurance is required to be taken out by the body corporate pursuant to the Standard Module.

In the supporting grounds to the application, the applicant states that the Owners of Lot 2 have been provided with a copy of the invoice for the insurance premium, along with a letter dated 24 October 2001 requesting payment of half the cost of the premium.

The applicant states that she has paid the whole cost of the insurance premium in question. In this regard, the applicant has provided me with a copy of a receipt, which states that the sum of $319.77 was paid on 16 October 2001 in relation to policy 06S0779575.

The applicant states that the Owner of Lot 2 has failed to contribute to the cost of the insurance taken out by the body corporate.

In the circumstances, without any information from the Owners of Lot 2 refuting any part of the applicant’s claims, I am satisfied that the applicant has paid the full premium for the body corporate insurance due on 3 October 2001. As such I am prepared to order the Owners of Lot 2 to reimburse the applicant the sum of $159.88, being half the cost of the insurance.

Parties should be aware that the Act provides for the enforcement of Adjudicator orders through the Magistrates Court (see section 233 and section 234 of the Act).