McMillan Court [2003] QBCCMCmr 344 (23 January 2003)

Last Updated: 7 September 2007

RA MeekREFERENCE: 0568-2002

ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	20519
Name of Scheme:	McMillan Court
Address of Scheme:	31 McMillan Street, LABRADOR QLD 4215

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

Steven Philip Watson, the owner of lot 10



RA MeekI hereby order that the application by Steven Philip Watson, the owner of lot 10, for an order that the damage to the garage wall should be covered under the body corporate insurance policy and a claim should be filed for the damage that was accidentally imposed on the wall, is dismissed. n
STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0568-2002

"McMillan Court" CTS 20519

The applicant, Steven Philip Watson, the owner of lot 10, has sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act), quote -

The damage to the garage wall should be covered under the body corporate insurance policy and a claim should be filed for the damage that was accidentally imposed on the wall. ...

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)).

In the supporting grounds, the applicant states that damage was occasioned to the wall of the garage of his lot when he accidentally reversed into it and "due to the weak structure caused by termite infestation, (the wall) collapsed on impact". He further states –

No maintenance, as per section 37 of the Act, has been carried out to date on the complex, therefore a (?) insurance claim should be filed to pay for the repairs. ... The body corporate manager has refuses to file a claim and states it is the responsibility of the owner driver to pay for the damage.

... After seeking advice, we have been informed that it is the responsibility of the Body Corporate to be carrying out a 12 monthly routine maintenance and inspection of the external building, and common areas, including all supporting posts and beams. The termite damage was done well over a year ago and therefore should have been repaired, had a routine inspection maintenance program was in place.

In his reply to submissions, the applicant quotes section 109 of the standard module which relevantly provides as follows –

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.
...

The applicant is right on one aspect; namely that section 109 of the standard module is the relevant provision for body corporate maintenance. The chairperson, in his submission, has referred to "section 37 of the Act". This can only be a reference to the section regarding maintenance in the Building Units and Group Titles Act 1980. This legislation was replaced in 1997 by the Body Corporate and Community Management Act 1997 and regulation modules. I recommend that the body corporate committee update its legislation by the purchase of the Body Corporate and Community Management Act 1997 and the regulation module known as the Standard Module.

However the applicant is incorrect in his understanding of most other aspects of this dispute. Section 109 is the relevant section to consider. However that section requires the body corporate to maintain common property in a structurally sound condition. The applicant’s lot is registered under a group title plan of subdivision (now a standard format plan). In a standard format plan the boundary of a lot with common property is the exterior edge or surface of the lot. This is to be contrasted with a building format plan where the boundary of the lot with common property is usually the centre of the floor, wall or ceiling.

In practical terms, which this means is that given this is a standard format plan of subdivision, then common property of the scheme does not include any of the external walls of individual lots. These lots are the individual responsibility of each owner under section 120 of the module, which provides that owners must maintain their lot in good condition. This maintenance includes an obligation to prevent termite infestation to the lot. Consequently, it is the responsibility of each lot owner to carry out regular inspections of their lot, and to take all necessary steps to prevent termite infestation, including the installation of termite barriers, if these are required to prevent infestation.

The applicant also quotes section 109(2), specifically the reference to "essential supporting framework including load bearing walls". Unfortunately for the applicant, section 109(2) is specifically limited (in the opening words) to lots which are created under a building format plan of subdivision. I have already noted that this scheme is created under a standard format plan of subdivision, and consequently, section 109(2) has no application.

I conclude that the wall which has been damaged is within the responsibility of the applicant to maintain, including the prevention of termite infestation. The obligation of the body corporate is only to maintain common property. No part of the damaged wall is common property. The only possible basis of liability on the part of the body corporate 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.

The possible basis of liability under section 227 is that the body corporate failed to maintain the common property, which it is obligated to do under section 109(1), thereby allowing termites to infest lot 10 and cause damage to that lot. The applicant has alleged this but in my view has failed to evidence his allegation. The applicant’s assertion that the body corporate is responsible to carry out "a 12 monthly routine maintenance and inspection of external buildings, and common areas, including all support posts and beams" is not correct. As previously explained, in a standard format plan of subdivision, the obligation of the body corporate is essentially to maintain common property only. From the plan, it seems that the common property is limited to garden areas surrounding lots. The body corporate has no responsibility for any building or part of a building which forms part of a lot.

On the specific question of who is responsible for pest inspections, in a standard format plan I consider that both parties, the body corporate and individual owners, share this responsibility. Each party must ensure that the part of the scheme for which they / the body corporate are responsible, is free of termite activity. This requires routine termite inspections, and possible remedial action (for example, the installation of termite barriers). The responsible of each owner of a lot is very similar, if not the same, as the owner of a freestanding house in suburbia. Each individual home owner is responsible to prevent termite infestation of the house; so it is with each individual lot owners in a standard format plan of subdivision. The responsible of the body corporate is limited to common property. Since, to my knowledge, termite barriers cannot be installed in gardens, then the obligation of the body corporate is to undertake regular termite inspections, and to arrange for termite eradication if the same are discovered on common property.

As for the specific question of garden beds located against lots, it is first necessary to establish where the boundary of the lot with common property is located. Often in a standard format plan of subdivision, the lot includes a courtyard or garden areas surrounding the lot. In this application, it has not been clarified specifically that the boundary of the lot with common property is in fact the line of the garage wall which has been damaged. If it is, then the body corporate is responsible to eradicate termites when there is evidence of their presence. For the reason that it is impossible to establish termite barriers in garden areas in contrast to buildings, as it would not be cost effective to seek to prevent termites before there is evidence of their presence. In addition, it is a reasonable expectation that lot owners be vigilant in the regular inspection of their lot and immediately notify the body corporate of suspected termite activity, if it is noted in common property adjacent to the lot. It is in the interests of owners to do this.

In response to the applicant’s allegation of a lack of maintenance, the chairperson has stated that "the body corporate has two gardeners and the grounds are maintained on a regular basis". I conclude that the applicant has not established that the termites were present on common property, or that the termites entered his lot via common property. In the case of a standard format plan, the lot includes the land under his lot. It is equally possible in my view that the termites entered the applicant’s garage from the applicant’s own lot, and not common property.

Whilst the body corporate is required to insure all lots in the scheme, since each has a common dividing wall with another lot, I do not consider that the body corporate insurer would accept a claim in the circumstances outlined. Rather, I suggest that the insurer would conclude that the damage has been caused, or substantially contributed to, by the failure of the owner to properly maintain his lot. Given this, I decline to make an order in terms as sought by the applicant. I do not consider the body corporate should be required to make an insurance claim in circumstances where the body corporate is not responsible, and where it is almost certain that the claim will be refused when the correct interpretation of the law is applied to the facts at hand. Accordingly, the application is dismissed.

Given the applicant’s obligation to maintain his lot, including preventing termite infestation, I recommend to the applicant that he undertake repairs in the near future so as to prevent increased termite infestation, and consequent damage, to his lot. A further reason for timely action is that if termite activity is shown to have spread from lot 10 to the adjoining lot 9, then it may be that the applicant will be liable to indemnify the owner of that lot for damage caused.
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