Underwood Centrepoint [2002] QBCCMCmr 539 (29 August 2002)

RA MeekREFERENCE: 0320-2002

ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	11029
Name of Scheme:	Underwood Centrepoint
Address of Scheme:	Cnr Welch Street & Logan Road UNDERWOOD QLD 4119

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Spiro Raissis, the representative of Raissis Enterprises Pty Ltd as Trustee, the owner of lot 3

RA MeekI hereby order that the body corporate of Underwood Centrepoint shall within one (1) month of the date of this order and at its expense, attend to the re-connection of the air conditioning system to lot 3 such that the air conditioning service to that lot is resumed.

I further order that thereafter the on-going responsibility for maintenance of that air-conditioning system, shall be as determined by the body corporate in general meeting, and shall be the same as applies to all other lots which are supplied individually with air conditioning from “original” air conditioning systems.

n
STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0320-2002

“Underwood Centrepoint” CTS 11029

The applicant Spiro Raissis, the representative of Raissis Enterprises Pty Ltd as Trustee, the owner of lot 3, has sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act), quote -

That body corporate re-instate air conditioning to unit 3. That the adjudicator determine the responsibility for the ongoing maintenance of air conditioning system.

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 applicant states that he recently received notification from the body corporate that the air conditioning unit servicing both lots 3 and the adjoining lot 4 would be disconnected, for the reason that the owner of lot 4 had decided to install individual air conditioning for that lot. The applicant states that he was informed that it was the owner’s responsibility to re-connect the air-conditioning in lot 3. The applicant considers this to be the responsibility of the body corporate on the basis of certain resolutions carried at meetings of the body corporate in 1998 and 1999. The applicant concludes –

... in our view the body corporate are the owners of the a/c unit and should be responsible to re-connect the a/c for lot 3.

At the 1998 AGM, the body corporate agreed to “resume responsibility to insure and maintain all air-conditioning units”.

At the 1999 AGM, the body corporate resolved that “whilst the various air conditioning units in their existing state are being repaired and maintained at the expense of the body corporate, as these units fail and become unrepairable, the individual lot owners shall become liable for the replacement (if necessary) and the maintenance of their respective replacement units”.

The applicant alleges that, notwithstanding that the owner of lot 4 agreed to replace the air-conditioning unit servicing their lot, that his discussions with the tradesperson indicated that the unit was still capable of being repaired. On this basis, the applicant considers that the body corporate is responsible under the terms of the resolutions carried.

A relevant factor in the determination of this application is the fact, acknowledged by the body corporate, that the air conditioning system servicing lots 3 and 4 was a shared system “since completion of the building about 24 years ago”. It seems that this was the only shared system servicing any of the lots. The body corporate submission states in part that –

The system was set up with the compressor outside on the common landing and the condenser located in the ceiling of unit 4.

I understand that the condenser unit originally in the ceiling of unit 4 is now in the possession of the applicant. However it is not clear whether it has been refitted in unit 3. Aside from the above information, the body corporate submission does not really argue against the application.

The solicitors for the owners of lot 3 have also responded to the application. That submission states that –

There is a provision in the relevant legislation to the effect that each lot owner must maintain domestic services which provide a utility service to their particular lot.

The submission further argues that previous resolutions of the body corporate which purport to have either transferred responsibility to the lot owners or the body corporate “are ambiguous and / or unclear”.

The submission concludes that “... we consider that the requirements of the legislation should apply and all owners should assume responsibility for the plant and equipment servicing their particular lot/s”.

The section of the commercial module referred to in the submission is section 89 which provides –

89 Duties of body corporate about common property—Act, s 114 [SM, s 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 relates only to supplying utility services to a
particular lot.
Example for subsection (3)(b)—
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.
...

The submission relies on subsection 3(b). However, there is a problem with the application of this provision to the instant case. The fact is that the air conditioning unit in question did not relate only “to supplying utility services to a particular lot”. Rather it supplied air conditioning services to two lots. In the circumstances, this section cannot be relied upon to make the applicant responsible for the repair or reconnection of air conditioning services to his lot.

I consider that section 21 of the Act is relevant to the present scenario. Section 21 provides –

21 Utility infrastructure as common property
(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.
(2) However, common property does not include utility infrastructure positioned within common property if—
(a) its positioning is the subject of an agreement to which the original owner or the body corporate is a party; and
(b) under the agreement, ownership of the utility infrastructure does not pass to the original owner or body corporate.
Example of utility infrastructure for subsection (2)—
Cable television wires positioned in the service shaft of a multistorey building that is scheme land for a community titles scheme, if the wires remain in the ownership of a cable television provider.
(3) In this section—
“boundary structure”, for a lot included 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.

The effect of section 21 of the Act is to include as common property (for which the body corporate is responsible to maintain under section 89) “utility infrastructure” provides it does not fall within the exemption set out in section 21. Utility infrastructure would include the plant and equipment by which lots 3 and 4 were previously supplied with air conditioning services.

Given that the air conditioning system in question previously serviced more than one lot, then the exemption in section 21 does not apply, and I conclude that the body corporate is responsible for the air conditioning system as utility infrastructure forming part of the common property of the parcel.

In the circumstances, I conclude as follows –

• The owner of lot 4 is entitled to “opt out” of the shared air conditioning system, and to install at the owner’s expense, an individual air conditioning system, for which the owner will be responsible to maintain;

• In this eventuality, the body corporate, pursuant to its obligation to maintain utility infrastructure servicing more that one lot, is responsible to ensure that the air condition service is re-connected to lot 3, and thereafter, to maintain that system to the same extent that it has agreed to maintain all other original air conditioning systems throughout the complex as per the 1998 and 1999 resolutions;

• However, once the air conditioning service is reconnect to lot 3, I consider that the status of that system changes from a shared system for which the body corporate is responsible under the Act, to an individual system servicing only one lot, and therefore subject to future determinations of the body corporate regarding the maintenance of such systems. Effectively, this means that following the reconnection of the system to lot 3, lot 3 will be in the same position as all other lots;

• If in the future, the body corporate resolves contrary to the 1998 and 1999 resolutions, and to the effect that section 89(3)(b) will apply, then the owner of lot 3, as will all other owners, will be responsible to thereafter maintain their individual air conditioning systems. This is a matter for the body corporate in general meeting.

I have ordered that the body corporate will at its expense, attend to the reconnection of the air conditioning system to lot 3 such that the air conditioning service to lot 3 is resumed.
n