The Dees [2002] QBCCMCmr 629 (15 October 2002)

DJ ReardonREFERENCE: 0350-2002

ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	14477
Name of Scheme:	The Dees
Address of Scheme:	12 Murlong Crescent PALM BEACH QLD 4221

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

Michael Lockhart and Dorothy Lloyd, the Owners of Lot 1

DJ ReardonI hereby order that the motion proposed by the Owners of Lot 1, seeking the approval of the Body Corporate for the enclosure of an area located on the north-eastern side of Lot 1 (identified on the registered building units plan as a “sundeck”), as considered and defeated by the Body Corporate at the annual general meeting of 18 May 2002, is declared carried.

I further order that the Owners of Lot 1 may retain the enclosed sundeck for the time being.

I further order that within 2 months of the date of this order, the Body Corporate must arrange for a suitably qualified engineer to inspect, assess and provide a written report on the north-eastern aspects of Lot 1, including the sundeck, and the adjacent areas of common property, with particular attention to the following issues:

• Whether or not the enclosed sundeck is structurally sound,

• The cause of the cracking evident on the outer edge and lower side of the sundeck,

• Recommended action to rectify the cracking.

I further order that the Body Corporate shall not engage any engineer previously engaged to examine and report on the sundeck.

I further order that the Body Corporate shall provide the Owners of Lot 1 with at least 7 days notice of the inspection.








I further order that the Owners of Lot 1, or their representative, may attend the engineer’s inspection, and must allow the engineer reasonable access to Lot 1 for the purposes of the inspection.

I further order that within 1 week of receipt of the engineer’s report, the Secretary for the Body Corporate shall provide each owner of a lot included in the scheme with a copy of the engineer’s report.

I further order that within 14 days of receipt of the engineers report, the Committee shall hold a committee meeting to consider the report, and to decide on an appropriate course of action, including if necessary obtaining quotations for rectification of cracking to the outer edge and lower side of the sundeck, and calling a general meeting of the Body Corporate.
STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0350-2002

“The Dees” CTS 14477

1. Orders sought

The Applicants, the Owners of Lot 1, have sought the following orders of an adjudicator under the Body Corporate and Community Management Act 1997 (“the Act”), quote-

“Final Order 1

We request that the decision made on Motion 10 at the body corporate AGM on 18/5/02 (defeated 3:2) be overturned, and approval be given for the enclosure of Lot 1 eastern side balcony/sundeck, so that we can proceed with a Gold Coast City Council development application.

Final Order 2

We want the body corporate to accept responsibility for the maintenance and repair of the lower slab edge of the eastern side balcony on Lot 1, which is on the outside of the building.

Prior to removing the interim order No.1 on our original application regarding this, we want the body corporate to arrange for a qualified engineering inspection, with Lot 1 owners to receive adequate notification of the date and time of this inspection so that our witnesses can be present.”

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 the Act or the community management statement; or
c)	a claimed or anticipated contravention of the terms of, 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 Dees” community titles scheme consists of 5 lots and common property, and was originally created under a building units plan of subdivision (now known as a building format plan) registered on 7 September 1971. The community management statement for “The Dees” indicates that the Body Corporate and Community Management (Standard Module) Regulation 1997 (“the Standard Module”) applies to the scheme.

2. Application and submissions

This dispute resolution application was made on 29 May 2002. This is one of 2 applications concerning the Body Corporate for “The Dees” currently before this Office. The other application, reference number 0255-2002, will be the subject of a separate order and statement of reasons.

On 8 July 2002, the Commissioner for Body Corporate and Community Management invited the Body Corporate Manager and Committee for the Body Corporate, and all owners of a lot included in the scheme, to make written submissions about the application. A number of owners of lots included in the scheme have made submissions about the application. In accordance with section 196 of the Act, the Applicants requested, and were provided with copies of the written submissions. The Applicants have made a written reply to the submissions.

On 12 September 2002, the Commissioner for Body Corporate and Community Management made an initial case management recommendation that the application should be the subject of departmental adjudication.

3. Matters in dispute

As stated previously, the Applicants have sought 2 main orders in this application. I intend to consider each of the orders sought in turn.

3.1 “Final Order 1

We request that the decision made on Motion 10 at the body corporate AGM on 18/5/02 (defeated 3:2) be overturned, and approval be given for the enclosure of Lot 1 eastern side balcony/sundeck, so that we can proceed with a Gold Coast City Council development application.”

This dispute resolution application primarily concerns the north-eastern aspect of Lot 1. The area in question is identified on the registered plan of the scheme as a “sundeck”. It appears from the material before me, that the area was enclosed between 20 and 30 years ago, however the parties are not certain of an exact date. It is also evident that the Local Authority has no record of the enclosure being approved. Similarly, there does not appear to be a record of the Body Corporate giving approval for the enclosure of the sun deck.

I understand that the Applicants wish to obtain the approval of the Body Corporate for the enclosure of the sundeck, so that they may proceed to apply for the approval of the local authority for the enclosure of the sundeck.

I am also aware that the Applicants submitted a motion seeking approval for the enclosure of the sundeck for consideration of the Body Corporate, which was considered and defeated at the annual general meeting of the Body Corporate, held on 18 May 2002. The notice of the meeting record the motion in the following terms:

“10. (Ordinary Resolution - Proposed by the Owners of Lot 1)

That the existing enclosure of the eastern side balcony/sundeck (comprising roof & supports, windows, security door), which is wholly within the boundaries of Lot 1, be approved by the Body Corporate. This items is shown on the enclosed Level B plan of BUP 599 as a sundeck.

Explanatory Note from the owners of Lot 1: This enclosure has been in place for at least 20 years, but as both Council and Body Corporate records are incomplete, there is no longer evidence of its approval. It is consistent with Item 8(b) on our Community Management Statement in providing security for Lot 1. The matter has been discussed with senior Council Building Inspectors, and as the enclosure is in sound condition they would be happy for it to remain.”

From the material before me, I understand that the enclosure has been in place prior to each current owner becoming an owner of a lot included in the scheme.

Owners who have made submissions about the application raise a number of concerns about giving approval for the sundeck, including the impact of the sundeck on views and breezes enjoyed by other lots, and the impact that the weight of the enclosure on the structural integrity of the building.

In my view, it is not just and equitable for the Body Corporate to refuse approval for the enclosure after clearly acquiescing to its existence for such a long period of time. In light of this acquiescence, I find the arguments concerning views and breezes presented by owners refusing to approve the balcony unconvincing. For this reason, I intend to order that the motion seeking approval of the Body Corporate for the enclosure is carried. I will consider the repair and maintenance implications of the enclosure in the next part of this statement of reasons.

3.2 “Final Order 2

We want the body corporate to accept responsibility for the maintenance and repair of the lower slab edge of the eastern side balcony on Lot 1, which is on the outside of the building.”

This order sought by the Applicants again concerns the sundeck area of Lot 1. However, more specifically, this order sought by the Applicants seeks a determination of responsibility for significant cracking to the outer face, and lower side of balcony slab forming the base of the sundeck area. Briefly, I understand that the Applicants consider that these are areas of common property and should be maintained by the Body Corporate. Other owners of lots included in the scheme have suggested that the weight of the enclosure of the sundeck has caused or contributed to the cracking of the balcony slab, and therefore the Applicants should bear the cost of appropriate action to rectify the cracks.

For reasons that will be outlined in more detail below, I do not consider that I am in a position to make a determination of this issue at this time. However, what I intend to do is to set out orders that will facilitate the Body Corporate resolving this issue, including making some general comments about repair and maintenance responsibilities under the Act, and how they relate to the balcony slab in question.

Generally, the body corporate for a community titles scheme is required to maintain the common property for the scheme in a good condition (see section 109(1) of the Standard Module). Similarly, owners of lots in a community titles scheme are required to maintain their lots in a good condition (see section 120(2) of the Standard Module).

As stated previously, “The Dees” was originally created under a building units plan of subdivsion (now referred to as a building format plan). This type of plan defines land using the structural elements of a building including walls, floors and ceilings, and the projections of those structural elements (see section 48C of the Land Title Act 1994). Generally, where a lot is separated from another lot, or common property by a floor, wall or ceiling, the boundary of the lot is the centre of the wall, floor and ceiling (see section 49C(4) of the Land Title Act 1994).

Looking at the registered building units plan, and the photographs that have been provided in respect of the application, it seems to me that the balcony slab in question separates Lot 1 from common property for the scheme. Applying the general principles above, the boundary between Lot 1 and the common property in this area would be the mid-point of the balcony slab.

Notwithstanding the general provisions regarding maintenance of lots and common property described previously, section 109(2)(b)(ii) provides that in the case of a scheme created under a building format plan, the body corporate must maintain roofing and other covering structures providing protection in a structurally sound condition, even though those structure may not form part of the common property for the scheme.

In my view, despite the fact that the upper half of the balcony slab forms part of Lot 1, section 109(2)(b)(ii) of the Standard Module imposes an obligation on the Body Corporate to maintain the balcony slab in a structurally sound condition. In addition, because the lower part of the balcony slab forms part of the common property, the Body Corporate has a general obligation to maintain the lower half of the slab in a good condition (for example by maintaining paint work).

The issue is complicated in that, in my view, the cause of the cracking has not been sufficiently identified. The second complication arises in that because the cause of the cracking has not been sufficiently identified, it is unclear what remedial action should be taken.

If the cracks are unrelated to the enclosure of the sundeck, I consider it is clear that the Body Corporate is responsible for the rectification of the cracks to the side and lower face of the balcony slab. However, I also consider that the fact that previous owners of Lot 1 enclosed the balcony, and that the Body Corporate has acquiesced to its existence for such a long period of time seriously detracts from any responsibility the Applicants have to repair the cracks in question, even if the cracks are caused by the weight of the enclosure. For similar reasons, if it were found that the enclosure is causing serious structural faults in the balcony and should be removed, I consider that it would be difficult to argue that the Applicants should bear the cost of removing the enclosure.

Of course, the engineer could find that while the enclosure is causing the cracks, additional reinforcement could be put in place to suitably support the enclosed balcony. In such circumstances, it could be reasonable that the Body Corporate and the Owners of Lot 1 share the cost of reinforcement. However, despite my comments above, until such time as the particular cause of the cracks is identified, it is difficult to speculate about what should be done, and by whom the cost should be borne.

For the above reasons I intend to issue the following orders. Firstly, I intend to require the Body Corporate to engage a suitably qualified engineer to inspect, assess and provide a written report on the area in question. I will also require that the engineer engaged by the Body Corporate not be an engineer who has already examined and reported on the building. My reason for this is certainly not that I am concerned about the professionalism or expertise of engineers who have previously been engaged by the Body Corporate, however, I am aware that the Applicants have raised concerns about Mr Kilmister’s report with the Board of Professional Engineers, and with Mr Kilmister directly and I am keen to avoid any suggestion of bias or prejudgement, regardless of the merits or otherwise of any such suggestion.

I also intend to require the Body Corporate to notify the Applicants of the time and date of the engineer’s inspection so that they may be present. In addition, I intend to order that the engineer’s written report be provided to each lot owner.

Upon receipt of the engineer’s report, I intend to require the Committee for the Body Corporate to meet to consider the implications of the report and if appropriate, take necessary steps to call and hold a general meeting of the Body Corporate.

If after this process the Body Corporate has still been unable to reach a conclusion regarding the repair and maintenance of the balcony slab, an interested party could consider lodging a further application seeking specific orders regarding the matter in light of the engineer’s report.