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Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders |
Last Updated: 30 September 2008
ORDER OF AN ADJUDICATOR
MADE UNDER PART 10 OF CHAPTER 6
BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997
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Number of Scheme:
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3563
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Name of Scheme:
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Olims Hotel Brisbane
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Address of Scheme:
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355 Main Street KANGAROO POINT Q 4169
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TAKE NOTICE that pursuant to an application made under the abovementioned Act by
Jason Griffiths, the owner of lot 53
I hereby order that motion 10 relating to carpet damage compensation carried at the committee meeting held on 30 October 2002 was at all times invalid.
I further order that the owner of lot 29, Colleen Anne Hackett, shall within 3 months of the date of this order reimburse the body corporate in the sum of $7,000.00 paid to her by the body corporate as compensation for her damaged carpet.
I further order that the owner of lot 29, Colleen Anne Hackett, shall within 3 months of the date of this order reimburse the body corporate in the sum of $1,056.00 on account of repairs effected to a burst pipe within her lot.
The above order was appealed to the District Court at Southport. On 22 September 2003 Judge O’Sullivan DCJ, delivered the following order:
“THE ORDER OF THE COURT IS THAT:
STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0743-2002
“Olims Hotel Brisbane” CTS 3563
The applicant, Jason Griffiths, has sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act), quote -
That motion 10 passed at the committee meeting held on 30 October 2002 be withdrawn.
That a ruling be made on the committee’s decision to replace the air conditioner in lot 29 at body corporate expense.
That a ruling be made on the validity of Steve Andelkvic’s membership of the committee.
That the adjudicator note the parking of two committee members’ vehicles in a personally allocated car park, and the installation of a non-approved air-conditioner in unit 102.
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 –
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 or consequential provisions the adjudicator considers necessary or appropriate (section 284(1)).
In the supporting grounds, the applicant expresses concern over a number of committee decisions made in recent times relating to the replacement of carpet and an air conditioner in lot 29, owned by a committee member, Colleen Hackett, and the presence on the committee of another owner, who has, in the applicant’s view, also been engaged by the body corporate as a service contractor. Finally, the applicant expresses concern over parking issues, and the allegedly unauthorised installation of an air conditioner in unit 102 (lot number not supplied).
The body corporate committee, the body corporate manager, Mr Steve Andelkovic and Mrs Colleen Hackett were all invited to respond to the application. Submissions were received from Mrs Hackett; the chairperson, Mr Martyn Barsby; and a committee member, Mr Gerard Rutten. An unsolicited submission was also received from the owner of lot 87, Ms Oriana Barsby. Much of the material provided in the submissions dealt with issues peripheral to the actual orders sought. To the extent that this was so, I have disregarded that material.
That motion 10 passed at the committee meeting held on 30 October 2002 be withdrawn.
The committee considered this motion entitled “carpet damage compensation” at its meeting held on 30 October 2002. It was resolved that the owner of lot 29 (Mrs Hackett) be compensated $7,000.00 for damage caused to carpet in her lot when a water pipe, the property of the body corporate and located in the air conditioning equipment, burst and flooded the lot on 20 May 2001. Mrs Hackett was present at the meeting, but, having a direct interest in the issue being considered, abstained from voting, as required by section 34(2) of the Standard Module. The motion was carried 5-0, with one abstention.
The applicant bases his objection on the fact that the carpet in lot 29 is not common property and is therefore not the responsibility of the body corporate. He correctly asserts that the carpet is not common property. However, section 281 of the Act allows for an order to be made to repair damage or reimburse an amount paid for carrying out repairs in certain circumstances.
Section 281 of the Act provides:
281 Order to repair damage or reimburse amount paid for carrying
out repairs
(1) If the adjudicator is satisfied that the applicant 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 the applicant an amount fixed by the adjudicator as
reimbursement for repairs carried out to the property by the
applicant.
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 an appropriate amount as reimbursement for amounts incurred by the owner in
repairing the property.
(2) The order can not 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 fixed by
the adjudicator would be more than $10 000.
The next issue to be determined is, therefore, whether the damage to Mrs Hackett’s carpet occurred because of a contravention of the Act.
Section 152 of the Act requires the body corporate to administer manage and control the common property and body corporate assets reasonably and for the benefit of owners, and also requires the body corporate to comply with the obligations with regard to common property imposed under the regulation module applying to the scheme. Section 109(1) of the Body Corporate and Community Management (Standard Module) Regulation 1997 (the Standard Module) requires the body corporate to maintain common property in good condition. Section 20 of the Act extends the definition of common property to include utility infrastructure, with certain exceptions.
Utility infrastructure and utility services are defined in Schedule 6 of the Act as follows:
“utility infrastructure” means—
(a) cables, wires, pipes, sewers, drains, ducts, plant and equipment
by which lots or common property are supplied with utility
services; and
(b) a device for measuring the reticulation or supply of a utility
service.
“utility service” means—
(a) water reticulation or supply; or
(b) gas reticulation or supply; or
(c) electricity supply; or
(d) air conditioning; or
(e) a telephone service; or
(f) a computer data or television service; or
(g) a sewer system; or
(h) drainage; or
(i) a system for the removal or disposal of garbage or waste; or
(j) another system or service designed to improve the amenity, or
enhance the enjoyment, of lots or common property.
Section 20 of the Act provides as follows:
20 Utility infrastructure as common property
(1) Common property for a community titles scheme includes all utility
infrastructure forming part of scheme land, except utility infrastructure—
(a) solely related to supplying utility services to a lot; and
(b) within the boundaries of the lot (according to the way the
boundaries of the lot are defined in the plan of subdivision under
which the lot is created); and
(c) located other than within a boundary structure for the lot. (emphasis added)
(2) However, common property does not include utility infrastructure
positioned within common property if—
(a) its positioning is the subject of an agreement to which the
original owner or the body corporate is a party; and
(b) under the agreement, ownership of the utility infrastructure does
not pass to the original owner or body corporate.
Example of utility infrastructure for subsection (2)—
Cable television wires positioned in the service shaft of a multistorey building that is
scheme land for a community titles scheme, if the wires remain in the ownership of a
cable television provider.
(3) In this section—
“boundary structure”, for a lot included in a community titles scheme,
means a floor, wall or ceiling, other than a false ceiling, in which is
located the boundary of the lot with another lot or common property.
On 22 May 2003, I spoke by telephone with Mr Peter Dawson, the principal of Daco Building Services Pty Ltd. Mr Dawson stated that he was not handling the air conditioning repairs for this scheme when the pipe originally burst. At that time, the pipe was sealed off from outside, so that water would not continue to be pumped through the pipe and into Mrs Hackett’s lot. Mr Dawson confirmed that the burst pipe, which resulted in water entering Mrs Hackett’s lot, was situated in the plant room within the lot. Mr Dawson explained that the main air handler servicing Mrs Hackett’s lot was also situated in the plant room, and was the original equipment installed when the building was built. He said that the equipment occupied the whole of the floor space in the plant room, and the burst pipe was behind it against the wall. As a result it was impossible to access the burst pipe to repair it unless the air handler was removed from the plant room. In order to do this, Mr Dawson stated it would have been necessary to remove the side wall of the building and remove the air handler with a crane. It was for this reason that it was decided that it was more economical to dismantle the air handler, thereby rendering it inoperable, repair the burst pipe, and then install a new air handler. Even this procedure required a cavity brick wall adjacent to the stairwell to be partially demolished, and then rebuilt. Mr Dawson estimated that the cost of dismantling the air handler, repairing the pipe and installing a new air handler was approximately 30% less than the cost of removing the old air handler, repairing the pipe, and then replacing the old air handler.
Mr Dawson also explained that the refrigerated water was produced in a large chiller situated in the main building and then pumped via insulated pipes to each lot, which in turn had an air handler located within the lot.
On 27 May 2003, I inspected the scheme. I had arranged to meet with Mr Dawson on site. Mr Dawson pointed out the main building and the main plant room in which the large chiller is located. He also pointed out the pipes carrying the chilled water located on the outside of both buildings. I also observed that on each floor further pipes branched off the main pipe to the lots situated on that floor. Mrs Hackett’s lot is situated on the top floor of the riverside building. I noted that the main pipe came up through the concrete landing (common property) outside Mrs Hackett’s lot, and entered the plant room through a hole cut in the brick wall. Mrs Hackett provided access to the plant room. Mr Dawson pointed out the new air handler, and also showed me the repaired pipe against the back wall. The section of the pipe which had burst was over a metre inside the plant room, and therefore well within Mrs Hackett’s lot. It was apparent that the pipe would have been difficult to repair with the old air handler in place, given the dimensions of the old air handler.
The first question to be determined is who is responsible for the repair and maintenance of the burst pipe. The pipe is part of the utility infrastructure, but because it is solely related to supplying utility services (air conditioning) to lot 29, is within the boundaries of lot 29, and is located other than within a boundary structure (that is, it is not located in the floor, wall or ceiling of the lot), it falls within the exception to section 20(1) of the Act. Accordingly, the responsibility for the repair of the pipe falls on the owner of lot 29, Mrs Hackett. That being so, the provisions of section 281 do not apply, as the body corporate cannot be held to have contravened the Act if it did not have the responsibility to repair the pipe in the first place.
I have also considered by-law 20, which provides that the body corporate must supply conditioned air (in fact it is chilled water) and hot water to each lot. The by-law does not stipulate that the body corporate should be responsible for the pipes and air handlers within each of the lots. Accordingly, the provisions of the Act and the Standard Module to which I have referred above must be applied. I also note from the material before me that the body corporate has previously regarded the maintenance and repair of the air handlers within individual lots as being the responsibility of the lot owners.
As the maintenance, and repair, of the pipe was not the responsibility of the body corporate, it follows that the body corporate should not have accepted liability for the damage caused to Mrs Hackett’s carpet as a result of the water escaping from the burst pipe. The situation is no different from a pipe bursting within a private home. The local Council cannot be held responsible for damage caused by a pipe bursting in these circumstances. I therefore propose to invalidate motion 10 carried at the committee meeting held on 30 October 2002, and order that Mrs Hackett reimburse the sum of $7,000 paid to her by the body corporate.
That a ruling be made on the committee’s decision to replace the air conditioner in lot 29 at body corporate expense.
On 10 October 2001 the committee resolved, in respect of motion 5, “that the body corporate water supply pipe be repaired thus reinstating air-conditioning to lot 29”. As I have discussed above, the pipe that required repair was in fact the pipe located inside Mrs Hackett’s plant room, and it was therefore not “the body corporate water supply pipe” as described in motion 5.
The applicant provided an invoice dated 23 July 2002 from Daco Building Services Pty Ltd (Daco). The work performed by Daco was the installation of a new air conditioner in Mrs Hackett’s lot 29. The applicant asserted that this invoice was paid by the body corporate, whereas Mrs Hackett should have paid it. The applicant noted that by-law 21 (it is in fact by-law 20) states that the body corporate must supply conditioned air to all lots, but explained that it has been generally accepted that this only requires the body corporate to supply the chilled water to the boundary of the lot.
As discussed above, the air handler in Mrs Hackett’s plant room was only replaced because the contractor who repaired the burst pipe claimed that the pipe could not otherwise be accessed for repair, and it was more economical to carry out the repairs in this fashion. As I have already ruled that Mrs Hackett was responsible for the repair of the burst pipe, it would normally follow that any ancillary repair or replacement of the air handler should also have been carried out at Mrs Hackett’s expense. There is, however, a further factor to be considered, and that is whether the pipe could in fact have been repaired without dismantling, and therefore disabling, Mrs Hackett’s air handler, which was in working order at the time.
I note Mrs Hackett’s assertion in her email dated 17 February 2003 that the burst pipe could have been repaired without dismantling her air handler. Mrs Hackett stated:
“At a 29/01/02 committee meeting chairman Martin Barsby informed the committee that he had arranged with an air-con company called Daco to rebuild Olims plant. We took his word for it when he also said that the contractor Mick Reardon (CoolazAir) who was only two months into his new contract had said that it was not possible to reconnect lot 29’s air-con the way he had intended to and had quoted $1056 for.
Mr Reardon has now confirmed that this was not the case. It definitely was possible and going ahead....
The point is that Mick Reardon’s repair was less than $1,000 after GST refund, yet Daco/Barsby’s $5,800 job of demolition and to remove 29’s (in working order) fan motor and install a new less powerful one (as Daco obviously couldn’t do what CoolazAir was to do). In the Griffiths/Barsby application, to the owners it looks like I committed the body corporate to that figure I didn’t even know.”
On 2 June 2003, I telephoned Mr Reardon and sought his confirmation of the situation. Mr Reardon advised me that he bought out the company which had the air conditioning service contract for this scheme in July 2001. After the purchase, Mr Reardon provided an adjusted quote for work required to bring the air conditioning equipment at Olims “up to scratch”. Mr Reardon explained that the previous firm, Air Cond Cooling, had originally quoted to do this work in late 1996. Mr Reardon said that upon receipt of the adjusted quote, the chairperson, Mr Martin Barsby, contacted him and said that the body corporate didn’t want to have the equipment repaired but instead wanted a quote to install individual split systems throughout the scheme. Mr Reardon said that Mr Barsby wanted all communication to be through him, because he was the chairperson. Mr Reardon duly provided the quote, which included a quote for the repair of the burst pipe in lot 29. Mr Reardon confirmed that the amount quoted for the repair of the pipe was $1056.00 inclusive of GST. Mr Reardon said that the quote for the installation of split systems included four split systems to service lot 29. The amount for these four split systems was $12,352.36. Mr Reardon stated that at first he was told to proceed to repair the pipe, and then was told to put it on hold, whilst the body corporate considered the installation of the split systems throughout the building. Mr Reardon explained that not long after this, Mr Barsby terminated his contract, when he was unable to respond on the same day to a breakdown callout by Mr Barsby. Mr Reardon advised that the burst pipe was capable of repair without the need for the air handler to be dismantled and removed. He said that there was an access panel behind the pipe, and in addition a person could get behind the air handler. He admitted that it would have been a difficult job, because it would have been tight.
In the circumstances, I am not inclined to order that Mrs Hackett repay the body corporate the full amount for the repair of the burst pipe, because it is evident that the pipe could have been repaired without dismantling the air handler, which was in working order. Daco charged $5800.00 to repair the pipe and install a new air handler. Mr Reardon’s firm quoted $1056.00 to repair the pipe. Mrs Hackett should not be penalised for a matter over which she had no control. I therefore propose to order that Mrs Hackett reimburse the body corporate the sum of $1056.00, being the sum for which she would have been liable had the work been completed by Mr Reardon’s firm, as originally quoted.
That a ruling be made on the validity of Steve Andelkovic’s membership of the committee.
I note that there has been an annual general meeting since this application was lodged, and Mr Andelkovic was not elected to the committee. It is therefore not necessary for me to further consider the matter.
That the adjudicator note the parking of two committee members’ vehicles in a personally allocated car park, and the installation of a non-approved air-conditioner in unit 102.
I am uncertain as to why I have been invited by the applicant to “note” the parking of two committee members’ vehicles in this car park. The body corporate resolved on 28 February 2001 to grant Mrs Hackett a lease over the area in question. The lease was for an initial period of 12 months with two further periods of 12 months each. Mrs Hackett was required to pay the body corporate the sum of $500 yearly in advance for the lease. The applicant has not suggested that the lease was invalid. In the circumstances, Mrs Hackett is entitled to allow anyone she pleases to park in the leased area.
In his submission, Mr Barsby claimed that the lease precludes access to the gas meter. Mrs Hackett denied this claim, saying that the meter has been read monthly throughout the term of the lease. I do not propose to make any order in respect of this matter.
Finally, I note that on 13 December 2001 the body corporate requested the owners of lot 33 (unit 102) to remove the air conditioner installed by them without body corporate approval. It is now 18 months since the request was made and it appears that no further action has been taken by the body corporate to enforce its request. It also appears from the material that there may be a variety of unapproved installations in other lots within the scheme. The body corporate must enforce its by-laws uniformly. Owners may well believe that the body corporate has acquiesced in relation to unapproved items when there is no follow up, as appears in this case. If the body corporate wishes to have a particular by-law enforced, then it should take appropriate steps to do so, including issuing by-law contravention notices. I do not propose to make any order in respect of this matter given the paucity of material provided, and the fact that the applicant has not articulated the order being sought.
P J HANLYREFERENCE: 0743-2002A
ORDER OF AN ADJUDICATOR
MADE UNDER PART 10 OF CHAPTER 6
BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997
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Number of Scheme:
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3563
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Name of Scheme:
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Olims Hotel Brisbane
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Address of Scheme:
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355 Main Street KANGAROO POINT Q 4169
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TAKE NOTICE that pursuant to an application made under the abovementioned Act by Jason Griffiths, the owner of lot 53
is dismissed.
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STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0743-2002A
“Olims Hotel Brisbane” CTS 3563
ORDERS SOUGHT
The applicant sought the following orders of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act), quote -
That motion 10 passed at the committee meeting held on 30 October 2002 be withdrawn.
That a ruling be made on the committee’s decision to replace the air conditioner in lot 29 at body corporate expense.
That a ruling be made on the validity of Steve Andelkvic’s membership of the committee.
That the adjudicator note the parking of two committee members’ vehicles in a personally allocated car park, and the installation of a non-approved air-conditioner in unit 102.
On 4 June 2003, the following order was made:
I hereby order that motion 10 relating to carpet damage compensation carried at the committee meeting held on 30 October 2002 was at all times invalid.
I further order that the owner of lot 29, Colleen Anne Hackett, shall within 3 months of the date of this order reimburse the body corporate in the sum of $7,000.00 paid to her by the body corporate as compensation for her damaged carpet.
I further order that the owner of lot 29, Colleen Anne Hackett, shall within 3 months of the date of this order reimburse the body corporate in the sum of $1,056.00 on account of repairs effected to a burst pipe within her lot.
The owner of lot 29 subsequently appealed to the District Court against this order.
On 22 September 2003 the Court allowed the appeal and made further orders as follows:
“THE ORDER OF THE COURT IS THAT:
JURISDICTION
The application discloses a dispute between the owner of a lot included in a community titles scheme and the body corporate for the scheme (Act s227(1)(b)).
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 –
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 or consequential provisions the adjudicator considers necessary or appropriate (section 284(1)).
BACKGROUND
It is appropriate to summarise the material which was set out in the statement of reasons accompanying the original decision, insofar as it relates to the matter which has been referred to the adjudicator by the learned Appeal Judge.
The applicant stated that he disagreed with a committee decision to pay compensation to the owner of lot 29 for damage to her carpet and for the replacement of her air conditioner. The applicant based his objection on the fact that the items in question were not common property and therefore not the responsibility of the body corporate.
The damage to the carpet was caused by a burst water pipe. The pipe delivered chilled water from the water cooling unit on the ground floor of the main building into lot 29. The new air conditioner was required because the burst pipe could not be repaired without removing the previous air handler, which could not then itself be repaired. The body corporate’s decision was based on its belief that the body corporate was responsible for maintaining the pipe.
The owner of lot 29 and all other owners were invited to respond to the application. Submissions were received from two owners and from the owner of lot 29.
The applicant did not exercise a right of reply to the submissions.
After the original order was made, the owner of lot 29 and several owners contacted the Commissioner’s Office stating that the chilled water was delivered to all lots within the scheme through a continuous pipe system. The owners explained that, for various reasons, they had not responded to the original invitation to lodge a submission. The owners and the owner of lot 29 requested that the original order be re-considered. At that stage, the adjudication process was complete, and the adjudicator was “functus officio”, that is, unable to make any further determination on the application.
The owner of lot 29 then appealed to the District Court. The appellant filed further material in the Court in support of her appeal. Two new reports included in that material were subsequently provided to the Commissioner’s Office, after the learned Appeal Judge allowed the appeal, and remitted the matter to the adjudicator for further consideration.
The two new reports were:
The body corporate committee and the applicant were invited to comment upon the two reports.
The applicant lodged a submission in which he identified himself as an ordinary member of the body corporate committee, and on that basis the submission purported to be from the body corporate.
It is not clear from the submission whether there has been a committee meeting to approve the contents of the submission, which concluded by expressing the view that the body corporate is responsible for some, but not all, of the recirculation system pipe work. The rationale for this view appears to be that once the pipe work enters a lot then it has “branched” into that lot to supply the chilled water, and can therefore properly be described at that point as supplying a service to that lot only.
DETERMINATION
Section 152 of the Act requires the body corporate to administer manage and control the common property and body corporate assets reasonably and for the benefit of owners, and also requires the body corporate to comply with the obligations with regard to common property imposed under the regulation module applying to the scheme.
Section 109(1) of the Body Corporate and Community Management (Standard Module) Regulation 1997 (the Standard Module) requires the body corporate to maintain common property in good condition. Section 20 of the Act extends the definition of common property to include utility infrastructure, with certain exceptions.
Utility infrastructure and utility services are defined in Schedule 6 of the Act as follows:
“utility infrastructure” means—
(a) cables, wires, pipes, sewers, drains, ducts, plant and equipment
by which lots or common property are supplied with utility
services; and
(b) a device for measuring the reticulation or supply of a utility
service.
“utility service” means—
(a) water reticulation or supply; or
(b) gas reticulation or supply; or
(c) electricity supply; or
(d) air conditioning; or
(e) a telephone service; or
(f) a computer data or television service; or
(g) a sewer system; or
(h) drainage; or
(i) a system for the removal or disposal of garbage or waste; or
(j) another system or service designed to improve the amenity, or
enhance the enjoyment, of lots or common property.
Section 20 of the Act provides as follows:
20 Utility infrastructure as common property
(1) Common property for a community titles scheme includes all utility
infrastructure forming part of scheme land, except utility infrastructure—
(a) solely related to supplying utility services to a lot; and
(b) within the boundaries of the lot (according to the way the
boundaries of the lot are defined in the plan of subdivision under
which the lot is created); and
(c) located other than within a boundary structure for the lot. (emphasis added)
(2) However, common property does not include utility infrastructure
positioned within common property if—
(a) its positioning is the subject of an agreement to which the
original owner or the body corporate is a party; and
(b) under the agreement, ownership of the utility infrastructure does
not pass to the original owner or body corporate.
Example of utility infrastructure for subsection (2)—
Cable television wires positioned in the service shaft of a multistorey building that is
scheme land for a community titles scheme, if the wires remain in the ownership of a
cable television provider.
(3) In this section—
“boundary structure”, for a lot included in a community titles scheme,
means a floor, wall or ceiling, other than a false ceiling, in which is
located the boundary of the lot with another lot or common property.
(Emphasis added)
On 12 September 2007 I spoke by telephone with Mr Ray Duffy, Accounts Manager, Haden. Mr Duffy advised me that the author of the Haden report dated 6 August 2003, Mr Russell Lamb, was no longer in the employ of the company. Mr Duffy stated that he is familiar with the chilled water reticulation system operating at the scheme.
Mr Duffy explained that the system is known as a closed loop system, whereby the chilled water leaves the chilled water plant room at the ground level of the building and makes its way through the flow and return pipe work delivering chilled water to all of the residential lots within the complex. Mr Duffy said that the same water that leaves the plant room at approximately 6 degrees Centigrade returns to the plant room at approximately 12 degrees Centigrade after it has circulated to all of the lots. The water is then re-chilled and the process begins again.
I asked Mr Duffy if the pipe which enters and leaves the individual lots could be described as a branch of the main system, and he replied in the negative. He reiterated that it is a continuous circulation system, and although the pipe enters and leaves each lot, if individual lots did not want to be part of the system, they would not be able to simply “turn off” the water. He stated that in those circumstances, it would be necessary for a by-pass to be carried out so that the continuous loop of the pipe could be maintained.
I note from the material that after the pipe burst in lot 29, a by-pass was effected, and lot 29 was then without chilled water for approximately 18 months, whilst the remaining lots within the scheme were still receiving the benefits of the chilled water from the continuous loop water reticulation system.
Mr Duffy also stated that individual thermostats regulate the amount of chilled water required in the lots at any given time, but he said that this did not change the fact that the system is a single continuous system servicing multiple lots.
On the basis of this explanation, I am satisfied that the chilled water reticulation system at the scheme is utility infrastructure which supplies a utility service to more than one lot within the scheme, and that it therefore does not fall within the exception to section 20(1) of the Act, detailed above. It follows that the body corporate is responsible to maintain the chilled water reticulation system in good condition.
Although the nature of this scheme is such that it might have been difficult for the body corporate to conduct regular inspections of the pipes, that did not relieve the body corporate of its responsibility to do so. Had such inspections been carried out, then the damage to the pipe should have been detected before the pipe burst, thereby avoiding the damage caused to lot 29 by the ensuing flood.
It is clear from the evidence that the body corporate did not conduct regular inspections of the pipes, and it thereby contravened the Act, in that it failed to perform its obligations under section 109 of the Standard Module.
That being so, then the previous decision by the body corporate to reimburse the owner of lot 29 for damage caused to her lot and to replace her air conditioner was a valid decision, based upon section 281 of the Act, which provides:
281 Order to repair damage or reimburse amount paid for carrying
out repairs
(1) If the adjudicator is satisfied that the applicant 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 the applicant an amount fixed by the adjudicator as
reimbursement for repairs carried out to the property by the
applicant.
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 an appropriate amount as reimbursement for amounts incurred by the owner in
repairing the property.
(2) The order can not 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 fixed by
the adjudicator would be more than $10 000.
The application is therefore dismissed.
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