Kookaburra Park Eco Village [2003] QBCCMCmr 332 (16 January 2003)

Last Updated: 7 September 2007

C G YOUNGREFERENCE: 0530-2002

ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	19671
Name of Scheme:	Kookaburra Park Eco Village
Address of Scheme:	MS 368 Kookaburra Park GIN GIN QLD 4671

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

Rudolf ONDRICH, as a co-owner of Lot 73,



C G YOUNGI hereby order that the body corporate must immediately obtain public risk insurance for the purposes and the amount of cover provided for in section 136 of the Body Corporate and Community (Standard Module) Regulation 1997. 2n
STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0530-2002

"Kookaburra Park Eco Village" CTS 19671

The applicant, Rudolf Ondrich of Lot 73, has sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 ("the Act") -

"That the children’s playground and sporting facilities installed on the common land be upgraded to the standard required and be included in the public liability insurance.

That the children’s playground and sporting facilities not be used and a safety barricade be placed around as indication, until the matter of upgrading to the legal standard and insurance are sorted out."

JURISDICTION:

This is a dispute between an owner (the applicant Ondrich of Lot 73) and the body corporate (the respondent) concerning the maintenance, standards compliance and use of certain body corporate assets, namely playground equipment, and bicycle-jump, situated on common property. These are matters that come within the dispute resolution provisions of the legislation (see sections 182, 183 and 223 of the Act).

General powers of an adjudicator in making an order:
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) of the Act). An adjudicator’s order may contain ancillary or consequential provisions the adjudicator considers necessary or appropriate (section 230(1) of the Act).


APPLICATION AND SUBMISSIONS:

In accordance with section 194 of the Act, copies of the application were provided to the body corporate (committee) as the respondent in the dispute, and to all owners, with an invitation to respond to the application. Because of the volume of the material submitted, only the first three pages of the application were required to be distributed to owners, with the arrangement for any owner to request a complete copy from the secretary. This strategy has been adopted with schemes such as "Kookaburra Park Eco-village" which has an inordinate number of applications, where considerable body corporate funds would otherwise be expended in the photocopying and mailing of the full applications.

The secretary, George Mingin, referred to this problem in his submission, stating that the cost of copying and distributing/mailing even the three pages for this application will cost around $100 - and that does not include any cost for his labour as secretary.

I have said previously in my reasons to other orders, that one would expect persons buying into an eco-village to be persons with a more sharing and co-operative attitude than the average citizen, however the disputes that arise, and the predilection of some to resolve them by formal application, is surprising. Owners should remember that a body corporate is not a commercial organisation but a collective of owners, administered by an elected committee. Committee members are owners, sometimes tenants, who almost invariably carry out their duty in the best interests of owners, without payment and often without any thanks. It is a simple occupation to criticise committee decisions, often with the benefit of hindsight, but it would be fairer and the mix more beneficial, if all occupiers were to serve on the committee for at least one term.

Turning to the application itself, the orders sought are identical to two alternative motions that the applicant Ondrich submitted to the secretary. Since lodgement of the application, the motions have since been decided upon at the annual general meeting held on 12 October 2002. The applicant did not seek an interim order in the matter and therefore presumably did not regard it as one of any urgency. That being so, as pointed out by the secretary (Mingin) in his submission, this application should not have been made until after the body corporate in general meeting had considered the motions. For, had a majority of voters agreed with the second motion (the applicant states he withdrew the first) then the application was redundant and the time and money spent by this office, and the time and money ($100+) of the body corporate, would have been wasted.

The application concerns the presence of a "bike-jump" and items of playground equipment on the common property, being used by children in the scheme and likely visiting children. The applicant believes the equipment and its installation do not comply with the Australia Standards (copy enclosed with application). He also considers the children’s use of both the equipment and the bike-jump are not properly supervised – he evidences this state of affairs by having observed children not wearing helmets when using the bike-jump and the absence of proof that the equipment is standards compliant. He believes the equipment is too old and should be destroyed.

At the annual general meeting, Motion 14 (identical to the first orders ought) was withdrawn by the applicant, and Motion 15 (identical to the second part of the order sought) failed on a vote of 8 in favour and 23 against (with 7 abstentions). That is, a majority of voting owners rejected the proposal that the children’s playground and "sporting facilities", presumably the bike-jump, be barricaded to prevent its use until standards and insurance matters are resolved.

DETERMINATION:

The body corporate has a problem with its public liability insurance that it must resolve promptly.

Section 136 of the Standard Module regulations requires that the body corporate must have public liability insurance coverage (for personal injury and property damage) to the extent of at least $10m for a single event/claim. There is no choice in the matter – it is mandatory for each body corporate.

I understand that the body corporate has been without this insurance for some months. Following refusal by the previous insurer, Suncorp, the committee has spent time searching for an insurer willing to offer public liability cover. I understand that Suncorp has now offered cover but at a premium of some $40,000 a year. That is an immense sum of money for the purpose and is an almost unbelievable multiple of the previous premium. However, it is in keeping with the kind of leaps in public liability insurance costs that have occurred all over Queensland and in all other States. These changes, and the large damage awards that have caused them, have been news items for some time and I’m sure all owners in the scheme are aware of the general problem.

Owners are likely wondering whether they can afford the premium and what is the alternative. Even putting aside the fact that the cover is mandatory on the body corporate, there is a more compelling reason for owners to pay the price – that being the unlimited liability of owners under the legislation for the debts of the body corporate. And "debts" includes any damages award given by a Court against the body corporate, which of course may be a sum of millions of dollars. The unlimited liability of owners is not restricted to moneys held by the body corporate, or even the surrender of owners buildings and lots, but owners will be required to meet their share of the debt from all of their personal wealth, money and possessions, whatever the source. A large successful claim could likely financially destroy most if not all owners, and owners are taking that risk each day they remain without public liability cover.

(Comment: It seems that the body corporate is seeking a single policy with an insurer, with individual owners taking out their own private dwelling insurance with various insurers of their choice. As a standard format plan with stand-alone dwellings (ie not having common walls as with, for example, town houses), owners have the option of establishing a "voluntary insurance scheme" with an insurer under section 134 of the Standard Module. The committee may wish to discuss such an arrangement with insurers to determine whether it will change public liability insurance availability and premium cost as an adjunct cover rather than a single cover. The difficulty lies with all owners having to insure uniformly, however that may be the lesser of evils. I am not saying that this arrangement is an available alternative to "Kookaburra Park Eco-village", only that it is a possibility worth investigating).

The applicant is correct in saying that, until public liability cover is obtained, the most prudent course for the body corporate is to take all necessary steps to reduce the possibility of a claim against it for personal injury or property damage, particularly the former, by identifying and eliminating or reducing risks. The applicant has previously provided to the body corporate, and again through inclusion in this application, notice of playground equipment standards. He has also stated that children are using the bike-jump without head protection and unsupervised. Having knowledge of these things, the body corporate is in an even more exposed position.

While the applicant has referred to the particular risk involved in the bike-jump and the playground equipment, there is likely to be other features of the common property and assets that also pose a risk, for example, even something as basic as the state of the internal roads (potholes, incorrect camber, lack of necessary sign for a hazard, etc). I do not know if the body corporate has had a Workplace, Health and Safety audit carried out, and complied with the recommendations, or what the common property and assets comprise. Accordingly, I see no point in my making an order in respect of the bike-jump and the playground equipment and ignore what ever other common property and asset aspects that may be placing the body corporate at an equivalent or higher risk. The point is simply that the body corporate must as soon as possible take out public liability insurance cover so that it is indemnified against all possible events giving rise to a claim against it.

In the circumstances, my order is therefore simply that the body corporate must immediately obtain this insurance and levy the premium amongst the owners of the 74 lots which comprise the scheme.