Cherwood Lodge [2003] QBCCMCmr 59 (11 August 2003)

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Sharon Mackay, the co-owner of lot 6

I hereby order that the application by Sharon Mackay, the co-owner of lot 6 for an order requiring all repairs and damage caused by termite infestation to be rectified plus all costs incurred to be reimbursed by the body corporate, is dismissed.

I further order that a copy of this order shall be sent to each owner of a lot in the scheme according to the roll.

The above order was appealed to the District Court at Brisbane. On 9 August 2004 Judge McGill SC, delivered the following order:

"THE ORDER OF THE COURT IS THAT:

1. The appeal be allowed.
2. The application be remitted back to the Adjudicator for further consideration.
3. The respondent pay the appellants costs of the appeal to be assessed.
4. The respondent have a certificate under the Appeal Costs Fund Act."

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0081-2003

"Cherwood Lodge" CTS 20711

The applicant, Sharon Mackay, the co-owner of lot 6 has sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act), quote –

The applicants have then claimed an amount of $15901.80 in "compensation" and "on completion of repairs to have cleaning done and carpet relayed".

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

(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)).

The applicants principally rely on a report by an "independent termite entomologist". In the material prepared by the applicant’s agent, Gail Radford, it is stated –

The report relied on by the applicant was prepared by a Chris E Langley of LTD (Consultant) Services. At the outset, I consider that Mr Langley’s report is littered with statements and conclusions, mostly as to responsibility and liability for termite control and damage, which I consider to be outside his field of expertise. Mr Langley’s field of expertise is presumably in the understanding of, detection of, and methods of eradication of termites and other such pests. I recommend that in future Mr Langley confine himself to such matters, and to leave the determination of issues of responsibility for termite control and liability for termite damage once caused to persons whose responsibility it is to determine such matters.

The plan of subdivision for this scheme was a group title plan (now a standard format plan). The fact of it being a standard format plan is significant in determining responsibility for repair. In contrast to a building format plan, which is the subdivision of a building, and where the body corporate retains significant maintenance responsibilities due to the existence of significant areas of common property, a standard format plan is the subdivision of land. As a subdivision of land, it is usually the case that only limited areas of common property are created by registration of the plan. These areas are normally gardens, common walkways and facilities (eg. pools etc). Common property in a standard format plan does not usually include parts of buildings containing lots.

Section 109 of the standard module provides for the body corporate’s duty to maintain common property. Section 109 relevantly provides -
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(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

(iii) essential supporting framework, including load-bearing walls.

The distinction to be drawn in section 109 is clear. In section 109(1), the body corporate is required to maintain common property. This applies to common property in every body corporate. Section 109(2) goes on to extend the responsibility of the body corporate to a number of very specific areas. However, section 109(2) is limited to schemes created under a building format plan of subdivision.

In the context of this body corporate, created under a standard format plan of subdivision, the responsibility of the body corporate under section 109 is limited to the maintenance of common property under section 109(1). In contrast to a building format plan, where the boundary of a lot with common property is usually the centre of the floor, wall or ceiling, in the case of a standard format plan, there is no such boundary line. Theoretically, the owner of a lot in a standard format plan, subject to the overriding law, owns to the centre of the earth under the lot, and to the heavens above.

In the case of vertical side boundaries of the lot, where the lot adjoins another lot, then the boundary is the centre of the dividing structure, with each adjoining owner owning, and being responsible for the maintenance of their half of the wall or boundary dividing structure. However in the case of a boundary with common property, then the boundary of the lot is as specified on the plan, and in the case where a wall or other dividing structure is the boundary line, then the boundary is the exterior or external surface of that wall or other dividing structure.

Returning to the LTD Services report, it states at para 1.4 –

I do not consider this statement to be correct. The body corporate has a duty to maintain common property, and owners to maintain their lots (see section 120 of standard module). The duty of the body corporate is to undertake adequate termite monitoring of common property, and if discovered, to ensure the eradication of termites from the common property. However, in my opinion, it does not extend to the body corporate becoming responsible for rectification of any damage to a lot caused by termite damage. For a body corporate to become responsible for such damage, it would need to be shown conclusively that the body corporate had failed to take measures to control known termites on common property, and further, that the termites started on common property and then moved to a lot, and not vice versa. Moreover, given that it is the duty of an owner to maintain their lot, and given the comments made above about the extent of the boundaries of a lot in a standard format plan, then it is similarly the duty of an owner in such circumstances to ensure the prevention and / or eradication of termites to their own lot.

In paras 4.2 and 4.3, the LTD Services report states –

Importantly, what the report fails to evidence is that the termites originated on common property and then moved to individual lots. However this is the basis of its claim to body corporate responsibility. From my experience in determines applications involving termites, they are not aware of boundaries, and in this regard, they are not discerning as to how they enter a lot. It is just as possible in my view that the termites started from a lot in the scheme, rather than common property, and then moved to common property. If this were to be established, would it not mean that the owner of the lot in question should be responsible / liable for all damage caused to common property or other lots, in consequence of the failure of the initial owner to control the termite infestation.

In this regard, from the report, there is evidence of termite infestation in the lot immediately adjoining the applicant’s lot at the rear. Perhaps the source of infestation was from the adjoining property, through the applicant’s lot 6 and onto common property.

The point I am making is that the mere existence of termites on common property does not render the body corporate liable or responsible for all termite infestation and consequent damage to any lot in the parcel. In a standard format plan, each lot owner has a responsibility to maintain their lot in such a way as to prevent the infestation by termites.

The figures attaching to the LTD Services report evidence that there is ground level termite activity within the lot boundaries of lot 6, or at least the boundary it shares with the adjoining lot 5. For example, fig.3 states that "retaining wall dividing front courtyards of unit 42 and 43 have a major infestation of (termites) not identified by the body corporate or addressed directly for control". Fig. 7 states "the characteristic earthen workings identified as (termites) were located at retaining wall timbers dividing unit 42 and 43. The infestation at unit 43 was tracked to this colony location". And finally, fig. 9 which states "At front courtyard of unit 43 the termite inspection on Nov. 01 reported this earthen gallery from active subterranean termite infestation".

All these statements indicate that the termites affecting lot 6 infested that lot from within the ground boundaries of that lot, not common property. In these circumstances, the owner of the affected lot is responsible for repair of damage caused, and not the body corporate as alleged.

I have further ordered that a copy of this order be circulated to all owners so as to draw to their attention their responsibility to maintain their lots in such a way as to prevent the infestation of it by termites. It may also be that the body corporate should consider the removal of any retaining walls etc which are attractive to termites.

Number of Scheme:	20711
Name of Scheme:	Cherwood Lodge
Address of Scheme:	71 Olsen Avenue, LABRADOR QLD 4214

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Cherwood Lodge [2003] QBCCMCmr 59 (11 August 2003)