Ballymore Heights Villas [2004] QBCCMCmr 176 (31 March 2004)

TAKE NOTICE that pursuant to an application made under the abovementioned Act by: Christine Frances CLAYTON, as the owner of Lot 8; and Ewan Cameron MACKENZIE and Alison MACKENZIE, as the co-owners of Lot 9,

I hereby order that within three (3) months of the date of this order, the owners of Lot 8 and Lot 9 must carry out such work as is necessary to waterproof the courtyard and garden bed areas of their respective lots, at their own cost, to prevent water penetration through to the supporting framework underneath, including as recommended in Items 1 and 2 of the Mullins Consulting Pty Ltd engineering report of 6 March 2003 the removal of the bed and courtyard paver bricks, cleaning of the slab, screeding to provide adequate fall and other works to provide efficient drainage, and application of the designated waterproofing membrane.

I further order that in respect of Items 3 and 7, the cost of the works must be apportioned between the body corporate, the owner of Lot 8 and the owner of Lot 9, according to the cost of the actual work done on the common property, Lot 8 and Lot 9 respectively, except that the body corporate is wholly responsible for the construction of the earth spoon drain described in Item 7.

I further order that in respect to Items 4, 5, 6, 13, 14, 15, and 16 the body corporate is solely responsible for the cost of the works, to be levied on all owners in the normal manner in proportion to their respective contribution schedule lot entitlements.

I further order that in respect to Items 8, 9, 10, 11, and 12 the cost of the works is to be borne equally by the body corporate (but excluding any contribution by the owners of Lot 8 or 9) in a half-share, and the owners of Lots 8 and 9 jointly in the other half-share.

I further order that the body corporate secretary must forward a copy of this order and the accompanying reasons to all lot owners.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0623-2003

"Ballymore Heights Villas" CTS 20903

The applicants, Christine Clayton of Lot 8, and Ewan and Alison Mackenzie of Lot 9, have sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 ("the Act") -

JURISDICTION:
The applicant owners are seeking a declaratory order as to whether they (for their respective lots) or the body corporate are responsible for the costs of rectification work recommended in Items 1 and 2 of an engineering report compiled by Mullins Consulting Pty Ltd, Civil Structural Engineering Consultants of Indooroopilly. A declaratory order sought under section 227(1)(b) concerning owners and their body corporate is a "dispute" under section 227(2) of the Act; it is also a dispute falling within sections 228(1)(b) and 276(1)(b) of the Act giving jurisdiction to determine the application.

General powers of an Adjudicator in making an order:
Section 276(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 –

An order may require a person to act, or prohibit a person from acting, in a way stated in the order (section 276(2) of the Act). An adjudicator’s order may contain ancillary or consequential provisions the adjudicator considers necessary or appropriate (section 284(1) of the Act).

APPLICATION AND SUBMISSIONS:
Under section 243 of the Act, a copy of the application was provided to the respondent body corporate (committee) and the other owners, with an invitation to respond to the matter of dispute raised in the application. Submissions were received from George Moore of Lots 5 and 6, and Pamela Champion of Lot 3. No submission was received from the committee. The applicants did not view the submissions and therefore did not lodge a written reply to them (see sections 246 and 244 of the Act respectively).

This is one of two applications for the scheme both of which concern the same question as to cost responsibility for rectification work, the other being Application 690-2003 lodged by Elizabeth Finney, Sheue Ooi, and Catherine Curry as owners of Lots 1, 2 and 4 respectively. They are seeking a declaration as to the responsibility for the works set out in Items 7 to 13 of the same engineering report, though have also sought an additional order against the owners of Lots 8 and 9 to rectify the water seepage problem in their courtyard areas.

As both applications concern recommendations by Mullins Consulting Pty Ltd, (later set out in dot form as Appendix 2 "Specification for Remedial Work" based on the report recommendations) (hereafter "the report"), there is a large degree of commonality in the history, facts and grounds relied on by both parties in their respective applications. I assume this is why neither applicant made submissions to the other’s application. In the circumstances, and as this was the first application lodged, I shall set out the history and facts of the situation in these reasons and aspects of the law bearing on maintenance responsibility, and adopt them in my reasons to the second application by quoting the relevant areas.

In 1998 after the steel structure supporting the suspended concrete slabs for Lots 8 and 9 and part of the common property driveway area was seen to show signs of corrosion from water penetration, the body corporate committee engaged a service provider, Opat, to carry out certain rust prevention treatment. An inspection by Bill Finney (father of the owner of Lot 1, Elizabeth Finney) of the structure and the treatment work, found the work unsatisfactory in remedying the corrosion.

At a committee meeting on 7 November 2002 it was resolved that a structural engineer be commissioned to report on the status of the supporting structure and the remedial work necessary. As a result, on 2 January and again on 30 January 2003 Peter Mullins of Mullins Consulting Pty Ltd, with Bill Finney, carried out an inspection and engineering survey of the structure and other areas of the scheme. The report is the result of that survey, setting out the problems and 16 recommendations to rectify the problems; tenders for the recommended work were obtained from three builders, Eggert & Leighton, Roof & Building Service and Mainline Technologies. Owners have a copy of the report and should be generally aware of the problems. I will set out the main problems here and deal with each in more detail when determining maintenance responsibility for each area.

To assist in my understanding of the problem, on 25 March 2003 I carried out an inspection of the relevant scheme areas in the company of Bill Finney, Pamela Champion of Lot 3 (representing the applicants for Application 690-2003), Christine Clayton of Lot 8 and Alison MacKenzie of Lot 9.

The buildings which comprise Lots 8 and 9 are wholly supported by a framework of metal posts, supporting metal beams and Bondek sheets in which the floor concrete slabs have been set. The posts are bolted to concrete pads set into the ground. The pebble-coat slabs which form the driveway area (hereafter "the driveway area") lying between Lots 5, 6 and 7 and the courtyard areas (and garages) of Lots 8 and 9, are similarly supported by a system of metal posts, beams, and Bondek. The posts under the driveway area slab and the posts under Lots 8 and 9 have some common connecting framework.

Extensive corrosion is evident in many parts of the steel framework with significant corrosion under the garden beds situated at the southern end of the two courtyards (Lots 8 and 9), particularly under the block-wall behind (southern end) the garden beds (see page 12 of report), and under the brick wall which separates both courtyards from the indented garage entrance (hereafter "the garage entrance"). At the time of the survey on 30 January, water was seen leaking down from under the length of the garden bed for Lot 8 (presumably it had been watered earlier) and was wetting the supporting Bondek and slab, and continued for several hours (see page 2).

Many post base-plates and the securing bolts and nuts are corroded from water ponding in the hollows dug to take the concrete pads. A large part of the water causing this damage comes from rainwater flowing down the eastern side of the scheme land, coming from the front and some off the driveway area slab, and then flowing diagonally under Lots 8 and 9. There is some flow of rainwater from the driveway area (which slopes from Lots 5, 6 and 7 down to the courtyards of Lots 8 and 9) to the box spoon drain situated before the garden beds and the other box drain situated at the base of the indented garage entrance (just outside the garage doors for Lots 8 and 9). The report shows that the drains are not adequate to capture the water flow. There is also some seepage through the driveway area slab joints.

The above sets out the major problems and some probable causes – each of the problem areas will be addressed separately under the following heading, with reference to the items of work recommended in the report.

DETERMINATION:
"Ballymore Heights Villas" was registered as a group titles plan (now termed a standard format plan) on 12 July 1988 and comprises 9 residential lots. It is regulated by the Body Corporate and Community Management (Standard Module) Regulation 1997 ("the Standard Module").

This application seeks orders concerning Items 1 and 2 of the report, however as the problems relating to all of the other recommended rectification items (ie Items 3 to 16) are intertwined, and Application 690-2003 puts Items 7 to 13, in issue, I intend to deal with all of the problems in the one statement of reasons. This will mean that there will be common statements of reason for both applications, and orders, with the reasons here merely adopted by quoting in the reasons to the other order. This is a commonsense approach and it will not deprive any party from their rights of appeal.

There are two types of community titles schemes in Queensland. A standard format plan (group title plan) is a subdivision of land and therefore owners of lots have ownership of the land comprised within their lot boundaries which usually includes a building sited within the lot, as is the case with Ballymore Heights Villas. Ownership is similar to that of a normal freehold block of land as the lot owner owns the land beneath and the air above. This is in contrast to the alternative type of community title scheme, a building format plan (formerly "building units plan"), where owners only own to the centre-point of the floor, walls and ceiling of that part of the building that comprises their lot. The external surface of the building, the roof and the foundations are therefore common property under a building format plan.

In Ballymore Heights Villas, owners own their building completely (and to the centre-point of the common wall where lot buildings are adjacent), including the roof and the foundations and ground underneath. In the case of Lots 8 and 9 the "ground underneath" includes all of the supporting structure (posts, beams, Bentok, slab) situated directly under their lot building as well as the ground surface and underneath that surface.

Generally, the maintenance responsibility for common property (and body corporate assets) falls on the body corporate and the maintenance responsibility for a lot falls on the lot owner. Common property is defined as scheme land other than lots (see section 10 of the Act) but is extended by section 20 to include certain utility infrastructure (the significance of this will be seen later).

In respect to the division of maintenance responsibilities in a standard format plan, the respective responsibilities of the body corporate and owners are set out in the legislation as follows –

In regard to owners, section 120 of the Standard Module states –

Subsection(2) sets the general rule; the lot owner must maintain their lot in good condition. This means that the owners of Lot 8 and 9 are prima facie responsible for the maintenance of their lots which includes their lot building, the courtyard, the garden bed and the supporting structure items (post, beams etc) underneath. I have qualified the responsibility because there are two issues here that alter that strict responsibility. I will deal with these two issues separately under the first issue I shall also discuss the body corporate’s general maintenance responsibility.

THE FIRST ISSUE is in respect to certain utility infrastructure that have a shared purpose with at least one other lot owner, in particular the box drain situated at the end of the indented garage entrance (see part Item 4) and pipe hangers supporting various pipes under the lots (see Item 14). These matters are those referred to as exceptions in subsections 120(3) and (4) above, however I shall discuss the maintenance responsibility for these items in the following examination of body corporate maintenance responsibilities.

In regard to the body corporate, section 109(1) of the Standard Module states –

The reference to "structural common property" would include, for example, the structural frame work under the driveway area (being part of common property), but not the structure under Lots 8 and 9 (being part of the respective lots). As well as the general duty under section 109, the body corporate has a separate and specific maintenance responsibility under section 20 of the Act regarding certain utility infrastructure (pipes, wires, etc) which provides –

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.

"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.

Under Schedule 6 Dictionary to the Act, "utility infrastructure" includes cables, wires, pipes, sewers, drains...by which lots ... are supplied with utility services. The term "utility services" is defined as including ...sewer system, drainage. Accordingly, although the drain at the northern end of the garage entrance is actually sited under the eaves of Lots 8 and 9 ("the relevant lots"), and therefore presumably inside the boundary of their lot (if it is not it is a body corporate responsibility anyway), the drain services both lots and therefore under section 20(1)(a) is not an exception and therefore is the responsibility of the body corporate to maintain. Similarly, there are a number of stormwater pipes positioned (by pipe hangers affixed to the underside of the slab) under both lots that service the scheme generally; like the drain, under section 20 these are also the responsibility of the body corporate.

Accordingly, the work described in Item 4 for the rectification of both box drains, and the work described in Item 14 for the replacement of nine stormwater pipe hangers, are both wholly the responsibility of the body corporate.

Before moving on to the second issue that impacts on the strict liability of the relevant owners under section 120 of the Standard Module, I will consider the remaining report items that do not concern the supporting structure under the relevant lots. Thus far I have found that Items 4 and 14 are the responsibility of the body corporate, however for completeness I shall also include them in the list but with only a reference to the reasons set out above determining responsibility.

Items 1 and 2 concern the courtyards and garden beds of the relevant lots, these are clearly part of the respective owner’s lot and therefore under section 120(2) are the responsibility of the owners to maintain. The areas do not include any common utility infrastructure that would displace owner’s responsibility in favour of the body corporate.

However, while the relevant owners have the responsibility to rectify the courtyards and garden beds so that there is no further water penetration through to the slab and structure below (which incidentally also answers the second order sought in Application 690-2003), they need not necessarily follow all of the remedial work as set out in the report. That is, where the report talks of removing and replacing the existing paver bricks in the courtyards, and sealing the garden bed and replacing the soil and shrubs, the owners may wish to lay new tiles and to do away with the garden beds altogether and instead extend the courtyard. Of course the By-law 10(f) controls in a limited manner renovations to lots (whereas lot buildings are more strictly controlled), I cannot see why the body corporate would not give consent to such changes, or indeed to replacing the lattice work fence now sited on top of the boundary block wall forming the southern edge of the garden beds. In effect, though the owners of Lots 8 and 9 are wholly responsible for waterproofing their courtyard area, and must carry out the work as soon as possible, there is an opportunity to, in today’s reality parlance, "make-over" their respective courtyard areas.

Accordingly, in respect to the orders sought by the relevant owners in Application 623-2003, I will not be merely ordering that they are responsible to both pay for and implement the recommendations in Items 1 and 2, but will phrase the order such that both are responsible for having done at their own expense all that is necessary for the waterproofing of their respective courtyards including the garden bed areas. This will include the cleaning of the area, screeding to provide proper fall, rectification of the drainage system and the application of the recommended membrane, but will allow for the owners to make whatever changes to the area that they wish and is approved by the body corporate.

Item 3 concerns the installation of lengths of 25mm angle aluminium under the edge of the slab (on both sides of the slab) so as to prevent water flowing over the slab edge and back under the slab to wet the supporting metal beam causing corrosion over time. This is an example of a simple, low-cost procedure that by its omission at the time of construction has caused unnecessary damage; along with the omission of membranes in the garden beds, wrongly placed drainage pipes, lack of drainage fall, post base-plates set below ground level, etc., it is indicative of poor workmanship.

The installation cannot be regarded as coming within the ambit of those items of utility infrastructure set out in the Schedule 6 Dictionary for the body corporate to assume responsibility. Therefore, the cost ($801) must be apportioned according to where the work is carried out and the extent of the work – the installation will need to follow all of the suspended slab area and therefore will need to be apportioned between the body corporate for the driveway area, and the respective owners for their lot areas. An easy and reasonably accurate method is to apportion according to the length of the installation and my order is to this effect.

Item 4 – already determined as a body corporate responsibility.

Item 5 concerns waterproofing the joints in the slabs which comprise the suspended driveway area between Lots 5, 6 & 7, and Lots 8 & 9. It involves grinding out the joints (between slabs, and between slabs and buildings), cleaning and sealing (cost $1,462). This concerns only common property and therefore is the responsibility of the body corporate.

Item 6 concerns the construction of a box drain to capture rainwater draining down the eastern side of the building (including run-off from the driveway area slab) to prevent it from overflowing under Lots 8 and 9 where it has contributed to the ponding around the posts and the corrosion of the base plates and bolts over time. (I will be referring to this damage when discussing the second issue). This "cut-off" drain which is to be constructed in reinforced concrete, will be on common property to remedy a common property problem and is therefore at the cost of the body corporate ($2,409).

Item 7 concerns the lowering of the ground level around the metal posts under the driveway area and the relevant lots. The responsibility for this cost will be shared between the body corporate and the relevant owners according to the proportion of work done in respect to that area under the common property driveway area and the respective lot. This may result in a difference in cost apportionments between Lots 8 and 9. From my observation, the main work will be in the area under the relevant lots. The spoon drain that needs to be constructed which is to service both lots (with or without servicing the common property as well) will fall into that category of utility infrastructure for which the body corporate has responsibility. In summary, the body corporate is responsible for the levelling work on common property and for the construction of the spoon drain; and the relevant owners are responsible for the cost of the levelling work actually carried out on their respective lots.

Items 8, 9, 10, 11 and 12 - see SECOND ISSUE later.

Item 13 concerns the fixing of angle iron to outside posts so as to support the bottom of the large wooden lattice panels that are fixed to the sides and back of the suspended slabs. The lattice panels look slightly untidy because of their age and the fact that they are unsupported at the base. It appears that no allowance has been made in the quote of $3,841 for the replacement of any panel. A large part of the cost here is undoubtedly because of the need for scaffolding.

While it is true that the lattice panels are fixed to the side of the slabs of the relevant lots, the purpose of the lattice is as a decorative feature to hide the supporting structure both under the driveway area and the relevant lots, and the pipes (stormwater, waste and sewerage) suspended amongst the supporting structure or against the block wall under the boundaries of Lots 5, 6 and 7. Accordingly, the lattice can be regarded as performing a function for the scheme as a whole in contributing to the overall presentation of the scheme building. There is also the fine distinction that the lattice is affixed at the boundary of the relevant lots and common property and, more correctly just over the common property, and therefore should be a responsibility of the body corporate in any case. It is my view that in the circumstances the body corporate should wholly bear the responsibility here.

Item 14 – already determined as a responsibility of the body corporate.

Item 15 concerns stairs that are fixed to the side of the driveway entrance area and are part of the common property. The body corporate is wholly responsible for this item ($1,053).

Item 16 concerns the repair and stabilisation of the handrail fixed to the eastern side of the driveway entrance slab. It is part of the common property and wholly the responsibility of the body corporate ($923).

THE SECOND ISSUE that impacts on the strict liability of the relevant owners under section 120 of the Standard Module to repair all on their lot (eg supporting framework), concerns the issue of negligence. Simply put, it could be argued by the relevant owners that the failure by the body corporate to carry out certain remedial measures (eg sealing the slab gaps, ensuring drains worked properly) under its duty to maintain the common property, has contributed, unintentionally but carelessly, to the damage caused to the supporting structure of their lots. Such an action needs to be argued in the civil court – it is not a matter that I can determine in this jurisdiction.

However, 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...the performance of duties under this Act." That is, I have discretion to make a determination of a dispute that is just and equitable in the circumstances; that allows me to take all matters into account, including any breach of duty under the Act that has caused damage. The legislation provides an avenue of appeal to the District Court on a question of law (see section 289) if an "aggrieved person" (applicants, lot owners affected, owners who made submissions) is dissatisfied with the order.

The remaining items to be determined, Items 8 to 12, all concern damage to the supporting structure under the relevant lots (lot property) and the driveway area (common property), comprising the steel posts (including base plates), the steel beams, the Bondek sheets, and minor steel components and fixing bolts etc. The major item is Item 8 costing $6,090 with Items 9 to 12 totalling $1,253. Item 8 is for the cleaning of all steel work (including sandblasting), application of rust inhibitor and application of membranes as set out in the Mullins Consulting report. Item 10 is to cut back corroded Bondek; Item 12 is to paint all cleaned steelwork with silicate and silver steel paint.

Item 9 is a special case; it is costed at $176 which is for the removal of a number of bricks from the triangular portion of the brick wall dividing Lot 8 from the garage entrance, to be able to examine the extent of the corrosion to the steel beam (angle) the wall rests on. A structural engineer (presumably Mullins) needs to be present to determine what remedial action is necessary. There may or may not be a further cost involved here. If there is a future cost, then it should be funded in the same manner as set out in the order to this application.

In regard to the damage covered in the other items (Items 8, 10, 11 and 12), my views on responsibility, based largely on opinion expressed in the report and my observations to an extent, is as follows.

The scheme buildings are now nearly 16 years old and it would appear that the water seepage and resulting corrosion problems have been occurring all that time as most seepage is related to the manner of construction and design, for example, lack of drainage, lack of or inadequate waterproofing membranes, inadequately sealed joints, omitted or inadequate soil removal, etc.

The courtyards and the garden beds of the relevant lots have no proper waterproofing membrane, or proper drainage (see prior comments) and this has allowed water to leak down into the supporting structure underneath causing corrosion, over time, to the framework of steel posts, beams, Bondek and other steel items (angle iron, fixing bolts etc). In regard to the damage to the beams and Bondek under the relevant lots, this is significant damage, especially under the garden beds and the southern block wall of the garden bed (see page 12 of report). While water from rain and watering of the garden has obviously seeped down, there is also the inadequacy of the box drain in front of the garden beds on the driveway area (see prior comments). Water not captured by the drain would hit the side of the garden bed wall resulting in some water entering into the block wall and later leaking down into the framework. As commented under "Application and Submissions" in respect of this area, "At the time of the survey on 30 January, water was seen leaking down from under the length of the garden bed for Lot 8 (presumably it had been watered earlier) and was wetting the supporting Bondek and slab, and continued for several hours (see page 2)."

Also commented on under "Application and Submissions" there is significant corrosion under the brick wall which separates both courtyards from the indented garage entrance. The water causing this damage would be from the (lot) courtyards and from the (common property) garage entrance, with water entering the framework underneath through the brick wall and the joint between the two areas.

Again under "Application and Submissions", I have commented on water flow from the eastern side of the scheme and off the driveway area slab flowing under the driveway area and the relevant lots area, ponding in the post hollows causing corrosion of the steel posts and base-plates. This work, which in my view the body corporate (more precisely the builder at the outset) could have avoided with proper drains to prevent the flow of water under the suspended slab, is included in Item 8 along with the cleaning and treatment of all corroded steel work. However, in respect of the cleaning of the posts and base-plates under the relevant lots, this does not mean that the body corporate is wholly responsible – the relevant owners are not separate persons to the body corporate as, for example, is the case between two neighbours, but are part of the body corporate; as well, they have a duty to maintain their lot, including the posts, and therefore a responsibility to check their building for damage (the rust is quite evident in most parts of the framework) and take steps to prevent further damage, including notifying the body corporate of the drainage problem.

Apportionment: From the above comments it should be apparent to owners that, while the owners of Lots 8 and 9 have total responsibility for rectifying their courtyards, and the body corporate has total responsibility for certain other rectification work, there are areas of work recommended that will have to be apportioned according to the actual work done on the common property or lot (see Items 3 and 7) or, in the case of Items 8 to 13, there needs to be an apportionment between the body corporate and the relevant owners based on an assessment of the source of the water penetration and damage. It would be a difficult exercise to determine the extent the water from the various sources contributed to the damage; perhaps an expert in the area (hydraulic engineer or hydrographer) could set up instruments to measure flow over time, but this would be expensive, delay the rectification work, measure future not past flow and in the end the result would have to evaluated and accepted by the parties. It is my view that the responsibility of the relevant owners to rectify the framework on their lots should be reduced to the extent that they together contribute half the cost and the body corporate (without any contribution by the relevant owners for these Items 8 to 12 only) contribute the other half.

I making this decision I have been mindful that where the body corporate has a responsibility to fund works, the relevant owners will also be sharing in that cost through their normal contributions based on contribution lot entitlements, where their contribution is 8/55 compared to 4 owners with 6/55 lot entitlements (Lots 1 to 4), and the remaining 3 owners (Lots 5 to 7) with 5/55.

Number of Scheme:	20903
Name of Scheme:	Ballymore Heights Villas
Address of Scheme:	41 Scott Road HERSTON QLD 4006

*(1)*	An occupier of a lot included in the scheme must keep the parts of the lot readily observable from another lot or common property in a clean and tidy condition.
*(2)*	The owner of a lot included in the scheme must maintain the lot in good condition.
*(3)*	The owner’s obligation under subsection (2) to maintain the lot in good condition does not apply to a part of the lot the body corporate is required under this regulation to maintain in good condition.
*(4)*	The owner of a lot included in the scheme must maintain the utility infrastructure within the boundaries of the lot, and not part of common property, in good condition and, if it is in need of replacement, must replace it.
*(5)*	This section applies only to a lot that is not a community titles scheme.

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 contractual matter about –

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Ballymore Heights Villas [2004] QBCCMCmr 176 (31 March 2004)