La Porte D'Or [2003] QBCCMCmr 584 (19 June 2003)

Last Updated: 12 September 2007

REFERENCE: 0698-2002

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	12681
Name of Scheme:	La Porte D’Or
Address of Scheme:	3422 Gold Coast Highway SURFERS PARADISE QLD 4207

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

Donjen Nominees Pty Limited, the Owner of lot 141

I hereby order that the application for an order that the committee of the body corporate of La Porte D’Or CTS 12681 arrange the replacement of the air conditioning plant serving level 26 of the Golden Gate building with a plant similar to the plants recently installed for other residential levels of the building, is dismissed.


STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0698-2002

"La Porte D’Or" CTS 12681

The applicant, Donjen Nominees Pty Limited, has sought an order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act) as follows:

That the committee of the body corporate of La Porte D’Or CTS 12681 arrange and ensure that without delay the replacement of the air conditioning plant serving level 26 of the Golden Gate building with a plant similar to the plants recently installed for other residential levels of the building.

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 applicant states that it has been advised that the plant serving level 26 of the Golden Gate building is irreparably dilapidated and functioning to less than 50% of its low design capacity. The applicant further states that it has replaced, to the value of about $10,000.00, the fan cooled units serving the applicant’s lot, however, because of the body corporate’s failure to replace the plant serving level 26, no effective cooling is being delivered to the applicant’s lot. The applicant claims that the body corporate committee has replaced plant on other levels within the building, incurring expenditure to which the applicant has contributed through levies, yet the applicant is not being provided with effective cooling. The applicant submits that this constitutes discrimination against the applicant by the body corporate committee, contrary to the Act. The applicant concludes that the body corporate is obliged, under the Act, to maintain utility infrastructure which includes air conditioning plant and is patently and discriminately failing to do so in relation to the plant serving level 26. The applicant also claims that the failure by the committee to discharge its obligations and its discrimination against the applicant by not replacing plant with plant similar to those recently installed to serve other levels is likely to pose health danger to the principal of the applicant.

The body corporate manager and the body corporate committee were invited to respond to the application. A submission was received from the body corporate manager, on behalf of the body corporate committee. The body corporate manager explained the program established by the committee whereby an air conditioning expert checks all body corporate plant every two months and reports on any deficiencies in the system. The manager further stated that the procedure adopted by the body corporate is to replace air conditioning plant when it fails if the air conditioning expert advises the plant is unable to achieve the desired water temperature and is irreparable or uneconomical to repair.
The manager further stated that plant serving various floors has been replaced following this procedure, with new plant about to be installed on another floor, and with quotations being obtained for a further floor. The manager stated that all other plant is currently producing the desired water temperature and is capable of being maintained to continue to provide the desired water temperature.

The manager further explained that there has been no patent or discriminate failure by the committee to maintain the utility infrastructure servicing the applicant’s lot. He stated that the committee treats all owners equally, and makes decisions in accordance with a fair and established procedure. The manager denied that there was discrimination or favouritism for or against any owners, including numerous other owners in poor health.

On 11 June 2003 I conducted a telephone conference with Mr Munz, the principal of the applicant, and Mr Dring, the body corporate manager. I referred Mr Munz to the report dated 24 December 2002, provided by Mr David Randell, of Gold Coast Commercial Air Conditioning Services Pty Ltd, and enquired if Mr Munz had noticed any improvement in his air conditioning after the HP/LP control fault was rectified. Mr Munz replied that his air conditioning is still not operating efficiently. Mr Dring reiterated that the body corporate could not afford to replace all water chillers at once, unless a significant special levy were raised, and that the programme put in place and described in the committee’s submission, was the most efficient way of addressing the problem. Mr Dring also explained that the body corporate has budgeted for two chillers to be replaced per year, whether both refrigeration circuits have failed or not, so that the entire building will gradually have new plant installed in an orderly fashion.

A report on the options for amelioration of the air conditioning system in this scheme prepared in October 1999 by EMF Griffiths, Consulting Engineers, found that the plant was undersized and was not capable of maintaining design conditions of 24 degrees centigrade. The report also found that the existing air conditioning systems serving the apartments were beyond their expected life for the type of systems installed and the building’s location. In addition, the report noted that the installation had been poorly maintained and much of the plant had failed and/or disconnected and been left in a derelict and dangerous state.

On 18 June 2003, I spoke by telephone with Mr Mark Baston of EMF Griffiths, Gold Coast office. I informed Mr Baston of the contents of Mr Randell’s report and invited Mr Baston’s comments on Mr Randell’s statement that the chiller on level 26 was cycling at 6 degrees centigrade supply water temperature even though the unit was running at 50% capacity, with the second refrigeration circuit being uneconomical for repairs to be effected. Mr Baston stated that the industry accepted design conditions for the Gold Coast provided for air conditioning to achieve 24 degrees centigrade inside with the outside temperature up to 31-32 degrees centigrade. Mr Baston further stated that any unit operating at 50% capacity would not achieve design indoor conditions. He explained that the water temperature could have been cycling at 6 degrees centigrade at the time of the inspection to which Mr Randell referred because the inspection took place in the early morning, or because it was a mild day. In essence, Mr Baston’s view was that a unit running at 50% capacity, as is occurring on level 26 of the scheme, would be able to provide air conditioning at less than optimum levels, and on a hot day (such as 31-32 degrees or higher) would not achieve 24 degrees. Mr Baston therefore agreed that the air conditioning could properly be described as "not operating efficiently".

The task before me is to determine whether the body corporate should be required to replace immediately the air conditioning plant serving level 26.



The body corporate is required to maintain common property, which includes utility infrastructure (section 20 of the Act) in good condition (section 109 of the Standard Module). This means keeping the common property in a satisfactory or adequate state. It is common ground that the air conditioning plant in this scheme requires replacement, and that the cost to replace it all at once would be prohibitive. I consider that the body corporate is entitled to provide for a staged replacement process if owners have rejected a proposal, as has happened here, to replace the plant all at once. Mr Munz states that his air conditioning is not operating efficiently, and Mr Baston agrees that that assessment is probably correct, on the technical evidence disclosed in Mr Randell’s report. However, whilst the air conditioning might be barely sufficient, I am not satisfied that there is any evidence that the body corporate committee has discriminated against Mr Munz by implementing its policy of replacement of the chillers only when both refrigeration circuits fail.

The air conditioning plant is inspected every two months. Mr Dring states in his submission that plant has been replaced on the ground floor, floors 5, 8, 17 and 21, and probably by now, floor 7. Furthermore quotes are being obtained for new plant for floor 23. Mr Dring pointed out during the teleconference that other owners have accepted the terms of the replacement programme, and would be disadvantaged if the chiller on Mr Munz’s floor were to be replaced before it failed completely, when they had waited their turn.

In the circumstances, I am satisfied that the body corporate is meeting its obligations under the legislation in respect of air conditioning plant in this scheme. Whilst all owners would undoubtedly welcome the immediate replacement of all air conditioning plant throughout the building if funds had been budgeted for such a project and accumulated over time, but the practical reality is that, in the absence of accumulated funds, the imposition of a large special levy would probably disadvantage many owners. The approach adopted by the body corporate appears to maintain a proper balance. I therefore propose to dismiss the application.