Aarons [2003] QBCCMCmr 252 (27 November 2003)

Last Updated: 17 May 2005

REFERENCE: 0351-2003

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	11476
Name of Scheme:	Aarons
Address of Scheme:	3355 Gold Coast Highway SURFERS PARADISE QLD 4217

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

Robert Charles James & Kathryn Margaret James, the co-owners of lot 1

I hereby order that within 1 month of the date of this order the body corporate committee shall obtain a report from a suitably qualified person as to the manner in which the flooding in the basement of the scheme can be reduced or overcome. I further order that the committee shall place a motion on the agenda of the next general meeting based on the report’s recommendations, including, if necessary, a further motion to raise a special levy to cover the cost of such works as may be required. I further order that the secretary shall provide a copy of this order and the accompanying statement of reasons for decision to all owners with the notice of meeting of the next general meeting.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0351-2003

"Aarons" CTS 11476

The applicants, Robert Charles James & Kathryn Margaret James, have sought an order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act) that the body corporate rectify the flooding of the basement of the scheme.

Section 276(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 contractual matter about-

(i) the engagement of a person as a body corporate manager or service contractor for a community titles scheme; or

(ii) the authorisation of a person as a letting agent for a community titles scheme.

An order may require a person to act, or prohibit a person from acting, in a way stated in the order (section 276(2)). An adjudicator's order may contain ancillary and consequential provisions the adjudicator considers necessary or appropriate (section 284(1)).

In the supporting grounds, the applicants, who are also the resident managers of the scheme, stated that the basement of the resort has been flooding after heavy rain for many years. The applicants further stated that they have kept the drains clear and have the lines cleared by "Zappaway", but during heavy rain the drainage to the basement is grossly inadequate. The applicants explained that the Gold Coast City Council has reconstructed the drains adjacent to the complex and a neighbouring scheme has modified its driveway at the request of Council, but this has failed to rectify the problem. The applicants also detailed contact with Energex over the past number of years in relation to the scheme’s electrical switchboard. The applicants stated that they have suffered financial losses in the past when stock has been water damaged, and they have had to spend many hours cleaning the basement.

The body corporate committee and all owners were invited to respond to the application. Submissions were received from two owners and from the body corporate manager, on behalf of the committee.

Both of the owners who responded confirmed that the building has had problems with water entering the basement, and supported any measures which might rectify the problem.

The body corporate manager stated that the committee opposed the application for the following reasons:

• The driveway, grated drain and stormwater pits in the garage have not been altered since the building was constructed in 1980 and to the best of the committee’s knowledge the drain and stormwater pits are functioning to their capacity
• Short term flooding does occur in torrential rain because water flows down the driveway to the basement garage, which is below street level
• Gold Coast City Council has recently added one or two new stormwater drainage pits in the street from which entry is gained to the garage
• Owners have recently approved major works to be carried out at the scheme and have had to pay significant special levies to meet the cost of those works
• There are currently no electrical safety improvement notices issued by the Electrical Safety Office
• Although the problem of flash flooding in the basement is not new, there have been modifications carried out by Council in surrounding streets which have alleviated the flooding in the basement, but more could be done by Council
• The body corporate committee has taken into account the financial burden placed on owners by special levies over the past 15-16 months when considering other works that may be desirable to be carried out but at this stage cannot be funded without rasing a special levy

I note that the managers’ reports of September 2002, November 2002, February 2003 and May 2003 all refer to the bilge pump located near the games room in the basement area as being "completely ineffective during heavy rain/inundation". The reports recommend that a large bilge pump and drain are needed at the entrance to the garage.

On 26 November 2003 I spoke by telephone with Mr Bruce Adam, the body corporate manager, and Mrs James, one of the applicants. Mr Adam advised me that recent works undertaken on the podium had not made any appreciable difference to the flooding problem. Mrs James confirmed that flooding continues to occur, with the most recent episodes being on 6 October and 24 October respectively.

Mr Adam stated that an extraordinary general meeting had been held on 19 November 2003, but no motions relating to the flooding problem were listed on the agenda of the meeting. Mr Adam also advised me that a new body corporate manager will commence on 14 December 2003. He further advised that the next general meeting will most likely be the annual general meeting due to take place in about April next year. The next committee meeting is likely to be in January 2004, but no date has been set as yet, because of the incoming manager. Mr Adam confirmed that the flooding problem had only been discussed at committee level at this stage.

Mrs James reiterated the comments made in her application that the committee had obtained many reports in the past, and had even gone so far as to have drawings submitted to Council to obtain a permit for drainage to the driveway but had not taken the next step and authorised the work to be done. Mrs James also stated that the bilge pump is only the size required for domestic purposes and requires upgrading to a commercial size.

Section 152 of the Act provides as follows:

152 Body corporate’s duties about common property etc.

(1) The body corporate for a community titles scheme must--

(a) administer, manage and control the common property and body

corporate assets reasonably and for the benefit of lot owners; and

(b) comply with the obligations with regard to common property and

body corporate assets imposed under the regulation module

applying to the scheme.

(2) Nothing in this part, or in a regulation made under this part, stops--

(a) an item of personal property that is a body corporate asset from

becoming part of the common property because of its physical

incorporation with common property; or

(b) a part of common property from becoming a body corporate

asset because of its physical separation from common property.



It appears to be common ground that the basement of the building floods when there has been a heavy downpour of rain. It is also common ground that the physical location of the building predisposes it to such flooding, given that the basement is below street level. The body corporate committee has also not denied that the flooding has caused problems with the electrical safety of the building in the past, although it states that there are currently no electrical safety improvement notices outstanding. However the fact that the basement floods obviously represents a safety concern, from the point of view of cars entering the basement to access parking spaces and owners having to walk across wet, slippery concrete when entering or exiting their cars, or using the area generally (the games room, linen room, power room, basement foyers and reception/kiosk all being in this area). Mrs James confirmed that when the area floods a great deal of soil from the garden beds also spreads over the floor, hence the slipperiness. The submission of one owner revealed that he had had to "wade through water" on two occasions, in March and May 2003.

During the teleconference, Mr Adam advised me that the committee had previously considered the flooding problem, but had gone no further than to commission certain reports. It is my view that the issue of safety cannot be ignored, and therefore the body corporate committee must address the matter, and at the very least propose motions for owners to approve the upgrading of the bilge pump and the drain and stormwater pits, if that is in fact what is recommended by a suitably qualified person. It is not satisfactory to delay the implementation of remedial works simply because owners have had to fund other significant works in the scheme. I consider that there is a potential for a significant public liability claim if anyone were to be injured as a result of the flooding. In that case, the body corporate insurers might take a very dim view of the body corporate’s tardiness, particularly as the issue has been highlighted in the managers’ reports for over 12 months on the material before me. It would be foolhardy for the body corporate to expose itself to the possibility that its insurer might decline to accept a claim, on the basis of undisclosed (to the insurer) risk.

I have therefore ordered that the committee shall obtain a report from a suitably qualified person, such as an hydraulics engineer, as to the manner in which the flooding in the basement can be reduced or overcome. I have further ordered that the committee shall place a motion on the agenda of the next general meeting based on the report’s recommendations, including, if necessary, a further motion to raise a special levy to cover the cost of such works as may be required. I have further ordered that a copy of my order shall be provided to all owners, but with the notice of meeting for the next general meeting, so as to save on postage costs.