Noosa Place II [2003] QBCCMCmr 341 (22 January 2003)

Last Updated: 7 September 2007

C G YOUNGREFERENCE: 0516-2002

ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	21026
Name of Scheme:	Noosa Place II
Address of Scheme:	278 Weyba Road NOOSAVILLE QLD 4566

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

Rodney Alan PETSKY and Kathleen Mary PETSKY, as the co-owners of Lots 11 and 17,



C G YOUNGI hereby order that within three (3) months of the date of this order the body corporate must engage telecommunication technicians and such other service providers as are necessary so as to provide a private direct telephone line to Rodney and Kathleen Petsky at Lots 11 and 17, and to any other owner who requests such a telephone line.

I further order that the body corporate will have free access to both the Main Distribution Frame and the Interim Distribution Frame situated on the scheme, and may, as is necessary, install a second loop cable in the existing loop conduit situated on common property. 2y
STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0516-2002

"Noosa Place II" CTS 21026

The applicants, Rodney and Kathleen Petsky, have sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 ("the Act") –

"We are asking that we be allowed to have a telephone service installed by Telstra at Lot 17 using an existing line and retain the telephone service at Lot 11 without payment of fees to the Caretaker/Letting Agent, Mr J Wilks."

JURISDICTION:

This is a dispute between an owner (the applicants Rodney and Kathleen Petsky of Lots 11 and 17) and the body corporate (the respondent) concerning the right of an owner to access a private direct telephone line without having to negotiate the access with the Caretaker/Letting Agent ("Resident Manager"), John Wilks. This is a matter that comes 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, to all owners, and to the Resident Manager John Wilks (as an "affected person" under the application), with an invitation to each to respond to the application. Submissions were received from: Wilks as Resident Manager; A Whiley as Chairman for the Committee; F & J Zappala of Lot 12; and J & P Duffy of Lot 14. After inspecting the submissions the Petskys submitted a written reply.

The applicants state that in 1999 they had the telephone line for Lot 11 disconnected from the Resident Manager’s PABX system and re-connected as a private direct line. The owners of Lots 12 and 14 (Zappalas and Duffys respectively) did the same. When the Petskys attempted to do the same again in July 2002 for their newly acquired Lot 17, the Resident Manager refused permission for the Telstra technician to access the telephone line connection points, saying that the lines were privately owned by him.

Wilks believes that he purchased the lines in November 1993 as being part of the assets comprising the management rights package for caretaking and the letting in "Noosa Place II". He has twice upgraded the lines at his expense with the work being carried out by Sunshine Phone Systems of Noosa Junction. He states he is willing to provide lines to owners without the PABX facility, but believes he is entitled to charge a fee, and is prepared to charge less than the $27.50 per month rental his client letting (pool) owners pay. He also considers that the previous connection of Lot 11 to a direct Telstra line infringed his ownership, and the Petskys must now pay the reduced monthly fee to retain it. Relief from paying that fee is the second limb to the order sought by the applicants. Presumably the Zappalas and Duffys will also be charged this fee.

DETERMINATION:

In order to better understand the problem, on Friday 17 January 2002 I inspected the relevant parts of the telephone system in the presence of Petsky, Wilks, Whiley and Duffy.

It was found to be difficult, if not impossible, to establish the facts relating to the installation of the telephone system. What is known, and observable, is that the developer installed telephone lines connecting each lot building to an Interim Distribution Frame ("IDF") – one IDF is sited on Noosa Place II and two on Noosa Place I. Telstra, as is normal practice, connected its lines from the street to the Main Distribution Frame ("MDF"). What is uncertain is whether the IDF in Noosa Place II (the scheme relevant to this dispute) was connected to the MDF by the developer or the initial Resident Manager. Wilks believes the latter, and when he had the loop line replaced he was merely upgrading what he considers was already his asset – he supports his claim by reference to a telecommunications order to LM Ericsson Pty Ltd dated 16 August 1991 for the installation and lease of circuits, telephones, console etc., by the previous Resident Manager, Mr W Longmire.

Following the site inspection, I spoke to Longmire at his current place of business, however he was unable to recall anything regarding the telephone system, including who had installed the original loop line. Also, I was informed that none of the technicians who installed the loop are available to give information regarding either the installation order referred to above, or the loop itself which is not specifically mentioned in the order.

In summary, the absence of conclusive evidence as to who installed the original loop line, and what arrangements may have been made between the body corporate and the original Resident Manager if indeed that person installed it, requires a decision to be made on other grounds.

There is nothing in the minutes of meetings (either committee or general) that records any arrangement such as that referred to above. If the Resident Manager did install the connecting loop, and the proper requirements were met, then the records should at least show a minute authorising the Resident Manager to effect an improvement to common property, namely the installation of the loop cable and conduit and any associated fittings on the MDF and IDF. As that would have taken place when the governing legislation was the Building Units and Group Titles Act 1980, then a resolution without dissent under section 37A of that legislation was necessary to approve a formal motion to that effect -

37A. Improvement etc to common property by proprietor of lot.

A body corporate may, upon such terms as it considers appropriate, at the request of a proprietor of a lot, by resolution without dissent, authorize the proprietor of a lot to effect improvements (including erect or install fixtures and fittings) in or upon the common property for the benefit of that proprietor.

However, even that authority, if it existed, would not have been sufficient authority as not only was an improvement (the loop) being installed on common property for the benefit of the Resident Manager, he was also being given access (in practical terms an exclusive access) to the individual lines from the IDF to lots, in order to be able to commercially offer a telephone service to owners. The PABX facility incorporated into the system was only an addition to the basic telephone service. This use of the IDF and the lines to each lot, involved both a use of common property (where the lines and conduit passed over common property) and private property (where the lines and conduit passed over the lots, these being lots in a group title plan).

The current legislation would only allow such an arrangement in exceptional circumstances. The legislation generally provides that utility infrastructure, which includes utility services such as a telephone service (see schedule 4 of the Act), is part of the common property which cannot be interfered with so as to affect supply of the service to another (section 128 of the Act) or be the subject of an exclusive use by-law, or special rights, for the benefit of an owner (sees section 139 of the Act). The intention of these provisions and prohibitions is for the body corporate to retain ownership and control over utility infrastructure for the benefit of owners.

In a scheme such as "Noosa Place II" with a large proportion of lots being for short-term holiday rental, there is a need for a PABX facility in the hands of the Resident Manager to monitor and charge for tenant calls on a daily basis. Owner-occupied lots, and lots let through an outside agent, generally have no need for PABX monitoring and either no phone or a normal Telstra line is all that is required.

In my view, owners in "Noosa Place II" have the right to the alternative of either connection to the Resident Manager’s PABX system or a private direct line.

Section 223 of the Act provides that an adjudicator has an overarching responsibility to make an order to resolve a dispute that is just and equitable in the circumstances.

It seems to me that the most appropriate determination I can make in the circumstances of this scheme, is that the body corporate must provide a private, direct telephone line to any owner that requests one. The body corporate, in my opinion, improperly allowed a person (the Resident Manager, at some point in time) to install a connecting loop cable in an open telephone system installed by the developer, for private commercial purposes. The PABX system should, however, continue for the benefit of letting pool owners, even though the ownership of the loop cable at this time remains unresolved.

The simplest way in which direct lines can be made available, is for the body corporate to install a parallel connection between the MDF and the IDF by installing a second loop cable through the existing conduit. Because the original loop conduit was changed to accommodate the installation of the spa-pool, Paul Malmstrom of Suncoast Communications (who also attended at the inspection) advises that it may or may not be possible to thread a cable through the conduit, depending on the position of the bends and the condition of the conduit (eg whether depressed by spa or tree root). If this is not possible, then either a new trench between the IDF and MDF will need to be dug, or alternatively a trench dug out to the scheme boundary to meet an additional MDF. The installation may be quite cheap or relatively expensive, depending on what work is required. If Wilks has any reservation about the body corporate using a conduit that he regards as his property, my response is: that in the absence of any documentary proof that (a) the loop cable is his property, and (b) both its installation and the use of common property and private lines were properly authorised by the body corporate, the loop conduit is merely a fixture attached to common property - in these circumstances, my order provides specific authority to the body corporate to use it.

In any case, I believe that Wilks will recognise the fairness in my determination and accept it as a solution suitable to all parties.

As well, new Telstra lines and disconnecting-points will have to be acquired and installed. I am unsure exactly which lots in the scheme are serviced by the IDF situated on "Noosa Place II" – if it services the lots of those owners who are presently affected (Petskys, Duffys and Zappalas), then that is the only work that needs to be done at this time (assuming the Duffys and Zappalas ask for a private direct line). If another IDF is involved (ie one of the those situated on stage I) then the same alternative cable process will have to be repeated to supply one or more of the affected owners. However, I understand that the telephone system in "Noosa Place I" is in the possession and control of the body corporate, in which case a simple connection rather than an alternative loop cable may be all that is necessary.

My order is that the body corporate must provide a direct line to the Petskys as the applicants, and allows other owners to make a similar request of the body corporate (eg Duffys and Zappalas). It may be prudent for the body corporate, when installing the loop cable, to make provision for future demands by installing excess lines.

I have allowed the body corporate three months in which to explore the best alternatives and select the best service provider – the committee may, on the authority of the order, make the decision even though the cost may exceed the committee’s normal statutory expenditure limit (see section 103(1)(d) of the Standard Module regulations.