Newell Trade Centre [2002] QBCCMCmr 409 (24 June 2002)

P J HANLYREFERENCE: 0165-2002

ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	800
Name of Scheme:	Newell Trade Centre
Address of Scheme:	175 Newell Street WESTCOURT CAIRNS QLD 4870

TAKE NOTICE that pursuant to an application made under the abovementioned Act by the Body Corporate for Newell Trade Centre CTS 800

I hereby order that the owner for the time being of lot 9 shall be responsible for maintaining (including replacing if necessary) the improvements installed on common property, being two refrigeration compressor units supplying utility services to lot 9.

I further order that the owner for the time being of lot 9 shall also be responsible for returning the common property to its original condition in the event that the refrigeration compressor units are ever removed.

I further order that the owner for the time being of lot 9 shall also be responsible for the public liability insurance and any other applicable insurance required to adequately cover the installation and operation of the refrigeration compressor units.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0165-2002

“Newell Trade Centre” CTS 800

The applicant, the Body Corporate for Newell Trade Centre, has sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act), quote –

The body corporate requests an order to determine whether the two refrigeration compressor units installed adjacent to lot 9 on common property of the body corporate for Newell Trade Centre CTS 800 to operate cold rooms within lot 9 are classified as:

(a) an improvement to common property by a lot owner, or

(b) a utility service.

Who is responsible for repairs and maintenance of the refrigeration units and public liability insurance?

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 prior to 1996 refrigeration units were installed on the common property to operate cold rooms within lot 9. The applicant further states that a former owner of the lot carried out the installation without having first obtained body corporate consent, although the applicant is not requesting the removal of the units. The applicant further states that the new owner of lot 9 only purchased the lot on 12 November 2001. The applicant has concerns in respect of maintenance and public liability issues and seeks a declaratory order.

The respondent, the present owner of lot 9, and all other owners were invited to respond to the application.

One submission was received on behalf of the owners of lot 6. It stated, in essence, that approval should have been obtained; that the refrigeration units were not an improvement but were rather a detriment; and that the owner of lot 9 should bear the burden of maintenance and insurance. It further stated that the consent of the body corporate should be obtained, as the plant should not be eligible to have the benefit of the easement referred to in section 61 of the Act. The author of the submission also requested that any other submissions be provided to him, for comment by his clients. This was not done, as the only party with a right of reply to submissions is the applicant.



Another submission was received from the owner of lot 4, who is also the chairperson. This submission supported the application in its entirety, and expressed dismay that this office was
“requesting the same information as already put forward.” Mr Curtin appears to be unaware of the procedures of this office, and the provisions of the Act, and therefore appears not to appreciate that in many applications owners are given the opportunity of expressing their views on the subject matter of an application, including where the application is made by the body corporate. It is therefore not a matter of the “personal views of any individual taking precedence over legislation”, but rather the principles of natural justice dictating that those who may wish to be heard, may in fact be heard.

Finally, a submission was made on behalf of the owner of lot 9. The submission was to the effect that the owner of lot 9 and his tenant are willing to accept responsibility for the repairs and maintenance of the refrigeration units, and for the public liability insurance. It was further stated that the owner of lot 9 adopted the contentions of MacDonnells, solicitors, in their letter dated 7 November 2001 to the body corporate, namely that under section 61 of the Act, body corporate consent to the installation of the compressor units was not required.

This scheme is regulated by the Body Corporate and Community Management (Commercial Module) Regulation 1997 (the Commercial Module). Section 94 provides that the body corporate may, if requested by the owner of a lot, authorise the owner to make an improvement to common property for the benefit of the owner’s lot, on conditions the body corporate considers appropriate. The section further provides that an owner who is given authority under the section must comply with the conditions of the authority and must maintain the improvement in good condition, unless excused by the body corporate.

This view is further reinforced by the by-laws recorded in the community management statement lodged on 17 May 2000. By-law 8.4 provides that no structural alteration shall be made to any lot (including any alteration to gas, water, electrical apparatus or installation of any outside aerials, air-conditioning system including whirly-birds) without the prior permission in writing of the body corporate committee. The by-law further provides that if the owner removes the items at any time, the common area must be returned to “as original” condition. The by-law imposes an obligation on the owner to maintain the items and that part of the common property on which they are installed in good condition; it states that all costs are to be the responsibility of the owner; that the owner is to indemnify the body corporate against any claims arising from the installation and operation of the items and that all items must be installed to local authority specifications.

The relevance of section 61 of the Act is that, having first obtained the approval of the body corporate for the installation of the improvement, the owner then derives the benefit of an easement in favour of the owner’s lot and against other lots and common property for that improvement which is for supplying utility services (of which air conditioning is a part) to the lot and establishing and maintaining utility infrastructure reasonably necessary for supplying the utility services. It is incorrect to state that section 61 relieves an owner of having to apply to the body corporate for authority to make an improvement, which is essentially for supplying a utility service to a lot.

As can be seen from this discussion, the previous owner of lot 9 should have obtained the authority of the body corporate before installing the refrigeration compressor units. However, in this instance, the body corporate is not seeking to have the compressor units removed, but merely wishes to ascertain whose responsibility they are. Furthermore, it is apparent that the compressor units are improvements to common property (which improvements happen to provide the supply of a utility service to the lot). Under section 94 of the Commercial Module and by-law 8.4, the owner for the time being of lot 9 is responsible for maintaining (including replacing if necessary) the improvement. The owner for the time being of lot 9 shall also be responsible for returning the common property to its original condition in the event that the compressor units are ever removed. The owner for the time being of lot 9 shall also be responsible for the public liability insurance and any other applicable insurance required to adequately cover the installation and operation of the compressor units.

I have ordered accordingly.2n