Sunstate Court [2002] QBCCMCmr 649 (25 October 2002)

RA MeekREFERENCE: 0524-2002

ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	3157
Name of Scheme:	Sunstate Court
Address of Scheme:	69 Secam Street MANSFIELD QLD 4122

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

Iggi Kalatzis, the representative of I&M Kalatzis Pty Ltd, a co-owner of lot 3, Gino Massa, a co-owner of lot 4, and Lynette Vivienne Gilbert, a co-owner of lot 5



RA MeekI hereby order that the body corporate for Sunstate Court is responsible to immediately undertake the eradication of active termite infestations both on the common property, and within lot 1.

I further order that the body corporate shall thereafter regularly maintain termite barriers, to prevent re-infestation, including the filling or sealing of all expansion joints on common property.

I further order that when the eradication of termites has been completed, and within three (3) months of the date of this order, the body corporate shall be responsible to undertake necessary rectification work internal to lot 1 so as to rectify damage caused to that lot by the termite infestation. n
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STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0524-2002

“Sunstate Court” CTS 3157

The application:

The applicants Iggi Kalatzis, the representative of I&M Kalatzis Pty Ltd, a co-owner of lot 3, Gino Massa, a co-owner of lot 4, and Lynette Vivienne Gilbert, a co-owner of lot 5, has sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act), quote -

That an adjudicator be appointed to determine who should be responsible for the termite treatment in unit 1 of “Sunstate Court”.

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 information of the parties:

In the supporting grounds, the applicants state that the owner of lot 1, Rebara Pty Ltd (Rebara) has sought that the body corporate carry out a termite treatment as Rebara “believes that the termites have entered from the common property”. A motion considered at the AGM on 10 May 2002 to accept a quotation for termite treatment of lot 1 was not carried. The applicants state that the motion was not carried “for the reasons as stated in the quotation”.

WG Watson, Director has responded on behalf of Rebara. Watson indicates that he undertook renovation work of the lot in 2001, and observed “that termites had entered the building on the ground floor and had damaged the skirting and paper at the back of plasterboard walls at various locations throughout the office”. Watson states that “this information was communicated to the strata manager” and “verbally requested a pest control contractor be appointed to resolve the problem”. The submission states that the body corporate manager responded that “they were having difficulties obtaining quotations” and the debate has continued since this time. Rebara completed the renovation work, including the replacement of damaged works and repainting.

Watson states –

To this day no action has been taken, but infestation has re-occurred and spread throughout a large area of our property. We have no obligation as I understand it, nor do we have the right to carry out work which is clearly the responsibility, in our view, of the body corporate.

Watson further states that he does not think that the body corporate has undertaken regular termite inspections of the premises.

The reply of Lynn Gilbert and Gino Massa to the submission of Rebara is as follows –

The problem of termites in unit 1 was initially discussed at the AGM in May 2001. Relying on information contained in Quotation 0129 ... it was felt by the committee that the overflow on to the ground from the air-conditioning unit which had been illegally and incorrectly installed in unit 1 had created moisture that attracted termites. Construction faults with the building – expansion joints not solid ie. silicon bead on exterior of blockwork and again on interior join hollow in between also contributed to the termite problem. It was felt that the owner of unit one should be responsible for this problem.

It is clear from the reply that Gilbert and Massa consider Rebara to be responsible not only for the rectification work to lot 1, but also for the termite treatment to prevent further infestation, and possibly even maintenance of common property, including repair of expansion joints and the like.

The inspection:

On Thursday 25 October, 2002 I undertook an inspection of the parcel, and met with the parties, including the applicants and a representative of Rebara.

Lot 1 is one of 5 lots in this scheme, which is registered as a building unit plan (now a building format plan). The lots are used for commercial or industrial purposes. The lots run side by side south to north.

The evidence of termite infestation is presently confined to the southern end of the building, appearing on the south internal wall of lot 1. From an internal visual inspection, it is clear the termites are active in the ground floor level of lot 1.

On the exterior southern wall of the building, the besser block wall of the complex is butted by concrete slab work. Approximately 2/3^’s along the southern boundary block wall, there are 4/5 stairs down. At the bottom of the stairs, there is evidence of water seepage or down flow from an air-conditioning pipe servicing lot 1. I was informed that the outflow of water from this air-conditioning overflow pipe has only recently been piped to the main drainage system at the rear of the building. Formerly, and for a number of years, the water was simply allowed to flow down the side of the building at the point it was discharged from the lot. There was clear discolouration of the wall to evidence this fact.

The legislation:

The obligation of a body corporate to maintain common property is contained in section 109, quote –
109 Duties of body corporate about common property—Act, s 114
(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—
(i) relates only to supplying utility services to a particular lot; and
(ii) is 1 of the following types—
• hot-water systems
• washing machines
• clothes dryers
• another device providing a utility service of a domestic nature to a lot.
Examples for subsection (3)(b)—
1. An air-conditioning 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 air-conditioning equipment.
2. A hot-water system is installed on the common property, but supplies water only to a particular lot. The owner of the lot would be responsible for maintaining the hot-water system and the associated pipes and wiring.
(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.

Another section I consider to be relevant is section 227 of the Act, quote –

227 Order to repair damage or pay compensation
(1) If the adjudicator is satisfied that the applicant for the order has suffered damage to property because of a contravention of this Act or the community management statement, the adjudicator may order the person who the adjudicator believes, on reasonable grounds, to be responsible for
the contravention—
(a) to carry out stated repairs, or have stated repairs carried out, to the damaged property; or
(b) to pay compensation of an amount fixed by the adjudicator.
Example—
A waterproofing membrane in the roof of a building in the scheme leaks and there is damage to wallpaper and carpets in a lot included in the scheme. The membrane is part of the common property and the leak results from a failure on the part of the body corporate to maintain it in good order and condition, the adjudicator could, on application of the lot’s owner, order the body corporate to have the damage repaired or to pay appropriate compensation.
(2) The order cannot be made if—
(a) for an order under subsection (1)(a)—the cost of carrying out the repairs is more than $75 000; or
(b) for an order made under subsection (1)(b)—the amount of the compensation is more than $10 000.

My determination:

In the case of a building format plan, the boundary of a lot with common property, or another lot, is the centre of the wall, floor or ceiling. The body corporate is at all times responsible to maintain the common property. There is no suggestion in this case that the termites have been brought onto the lot by an owner, for example, in a piece of wood. Rather, it seems clear that the termites have entered the lot from common property. The duty of the body corporate to maintain the common property includes the duty to maintain termite barriers and prevent termite infestation.

On the information available, it seems clear to me that the body corporate has failed in its duty to properly maintain the common property against termite infestation. It seems that no regular termite inspection has been carried out. Moreover, when informed by Rebara in 2001 that termites had infested the lot, there has been no action on the part of the body corporate, excepting perhaps the obtaining of certain quotes suggesting that the cause of the termite infestation was the moisture created by the air-conditioning water overflow.

The question which arises is, given the fact of the water discharge over a long period of time from the air conditioner installed in lot 1, is the owner of that lot partially or wholly responsible for both the rectification work, and for termite treatment. I consider that the owner of lot 1 is not so responsible.

The body corporate is and at all relevant times was responsible to maintain the common property. As I have stated, this includes the maintenance of termite barriers and the prevention of termite infestation. I consider that until 2001 when certain internal renovations were undertaken to lot 1 by Rebara, the body corporate would have been unaware of the termite infestation. However, it is clear that Rebara advised the body corporate of this fact. At this point, I consider that the body corporate was required to act positively in respect of the termite infestation. To simply obtain quotes, and to then decline to act further on the basis that the quotes suggest fault or contribution on the part of the owner of lot 1, is not sufficient.

The body corporate had an obligation to undertake some program of eradication of the termites, consistent with its duty to protect and maintain the common property on behalf of all owners. The failure of the body corporate to pass the resolution submitted by the owner of lot 1 to the May 2002 AGM dealing with termite treatment is further evidence of the failure of the body corporate to act on this issue. Following the eradication /prevention of termites, the question of contribution on the part of lot 1 might have been considered. In this regard, the provisions section 109(4) might have been relevant.

I will now address the question of the liability, if any, of lot 1. The only evidence available is the “Quotation” from the Letts Group which states –

Inspection of unit 1 and external surrounds revealed:-1) active termites in southern wall (internal) of unit 1; 2) air conditioner condenser run off saturates ground externally near stairs of southern wall; 3) Expansion joints are not solid ie silicon bead on exterior of block wall and again on internal join – hollow in between; 4) expansion joint nearest to steps / condenser overflow is current entry point for termites :- but any other joint could be susceptible to attack.

This report, although not detailed, appears to suggest that the action of the owner of lot 1 in allowing the run off from the air conditioning has resulted in saturation of the ground “externally near stairs of southern wall”. The report however does not relate this fact explicitly or directly to the entry of termites. The report does not even state that termites are attracted to wetter areas. This point could only be implied, if that, from the report.

What the report states is that “expansion joints are not solid ie silicon bead on exterior of block wall and again on internal join – hollow in between; 4) expansion joint nearest to steps / condenser overflow is current entry point for termites :- but any other joint could be susceptible to attack.”

I consider that the conclusion of the report is that termites have been able to gain entry to the lot in consequence of expansion joints not being solid. The concrete surrounds of the building are common property, the responsibility of the body corporate to maintain. I conclude that that findings of the report point more to the failure of the body corporate to maintain the common property by filling / sealing expansion joints etc, then any action on the part of the owner of lot 1.

In the circumstances, the body corporate is responsible to immediately undertake the eradication of termites both on the common property, and within lot 1. Thereafter the body corporate is required regularly maintain termite barriers, to prevent re-infestation. This includes the filling / sealing or all expansion joints on common property. Finally, I intend to order that when the eradication of termites has been completed, the body corporate is responsible to undertake necessary rectification work internal to lot 1 so as to rectify damage caused by the termite infestation. I have ordered accordingly. n