Eastpoint [2004] QBCCMCmr 180 (1 April 2004)

Last Updated: 30 September 2005

REFERENCE: 0134-2004

INTERIM ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	19570
Name of Scheme:	Eastpoint
Address of Scheme:	9 - 15 Harrier Drive BURLEIGH WATERS 4220

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

Stuart Kapper, the Owner(s) of lot 41

I hereby order that, pending any final orders in relation to painting services offered by the body corporate in circulars dated between 9 July 2003 and 20 February 2004, the body corporate cannot rely on those services having been validly offered by the body corporate and agreed to by owners. However, this interim order does not stop the body corporate committee from passing a resolution setting out the services the body corporate has decided to offer owners and from acting on any subsequent agreement from individual owners to take advantage of those services (Standard Module, 113). Further, this interim order does not stop the body corporate committee from passing a resolution regarding action the body corporate proposes to take for maintenance of common property utility infrastructure, provided that the proposal falls within the relevant limit for committee spending (Standard Module, 103). I further order that the body corporate is to send a copy of this order to all owners within 7 days of the date of this order. Individual owners should be aware that they do not have to accept services offered by the body corporate and that the body cannot place any additional requirements on owners to paint their lots beyond what is required by the legislation and by-laws. Owners should also be aware of the opportunity to submit a notice of opposition to some types of committee resolutions (Standard Module, 37). This is an interim order and will remain in effect for a period of not longer than six months. It is the responsibility of the applicants to apply to extend this order if no final determination has been made within that period. This order will automatically lapse upon a final order being made or this application being withdrawn.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0134-2004

"Eastpoint" CTS 19570

Interim Application

Eastpoint Community Titles Scheme (Eastpoint) is a 44 lot scheme under the Body Corporate and Community Management Act (Act) and the Act’s Standard Module Regulation (Standard Module).

This is an application for interim orders. It arises out of an application by Stuart Kapper, owner of lot 41 (applicant) seeking orders against the body corporate for Eastpoint (respondent).

Interim Orders Sought

This is a dispute about the painting of the exterior of units within the scheme.

The applicant seeks an interim order to stop the painting of units proceeding until this dispute is resolved. The dispute appears to centre on whether gutters, downpipes, facia and garage doors should be painted or not. The applicant seeks final orders that this issue be presented to all owners for a vote, that the body corporate explains exactly what services are being provided, or that the process of deciding on the painting of units be restarted.

Submissions

The applicant has provided submissions to the effect that:

• Someone made a decision not to paint the gutters, downpipes, facia and garage doors but unit owners were never informed of this decision;
• This decision was not mentioned in committee minutes or letters to unit owners;
• Owners are proposing to pay for services that have not been properly described;
• The body corporate committee has not followed procedural requirements and not acted in a reasonable manner over this critical decision.

Submissions on behalf of the body corporate are to the effect that:

• The applicant was formerly the chairperson and had proposed painting of the scheme. However, the motion submitted was ruled out of order because painting is an individual owner responsibility rather than a body corporate responsibility;
• The applicant did not attend the annual general meeting when painting was discussed and where all owners present agreed that the gutters and downpipes did not need to be painted because they were of colorbond material;
• The applicant resigned as chairperson, and the subsequent chairperson obtained quotes and authorised a circular offering the painting service. Forty-two of the forty-four owners accepted this service, with the applicant electing to paint himself and the body corporate being unable to contact the remaining owner;
• Subsequently, the body corporate sent out another circular to all owners who had accepted the service which clearly stated the painting included eaves, cladding, gables, verandahs, unit entry doors. It also stated "This quotation includes pressure cleaning of all previously painted exterior surfaces, plus all facias, gutters, downpipes and garage doors. As decided by owners present at the Annual General Meeting, the powdercoated surfaces (eg. gutters, garage doors) are not being painted. In a trial cleaning, the dirt was removed and it was found that they do not require painting"; and
• No objections have been received to this circular.

Background

The significant events can be summarised as follows:

• 9 July 2003 – A circular was issued to all owners by the body corporate manger stating "The Committee wishes to inform all owners that they will be proposing a motion at the Annual General Meeting that all units be painted towards the end of the year and that owners be invoiced about November for their share of the costs"
• 3 September 2003 – At the annual general meeting, a motion that the body corporate commence external painting of all 44 units as soon as possible was ruled out of order because it would contravene the legislation;
• 3 September 2003 – The minutes of the annual general meeting record some discussion about painting, stating that "After hearing advice from Mrs Hunt about the way in which Standard Format Plan schemes usually go about the matter, it was confirmed that the Committee will obtain quotations for painting of all units at the same time and the "service" will then be offered to all owners. Owners will be free to paint their own units if preferred, but the paint must be the same brand and colour as specified by the Committee. If any owner does not accept the painting service and refuses to paint their unit themselves after being given due notice, the Body Corporate will exercise its powers under Section 125 of the Act to paint any such units anyway and then recover the cost from the owner";
• 29 January 2004 – A circular was issued to all owners by the body corporate manager stating that "You therefore have two choices in this matter: 1. You can arrange the painting of your own unit but the paint must be the same brand and colour as specified and must be completed in the time frame set down by the Body Corporate Committee, OR 2. You can agree to have the Body Corporate undertake the painting for you. In this case you will be invoiced for your share prior to the commencement of painting". Forty-two of the forty-four owners agreed to option 2;
• February 2004 – The applicant raised concerns about whether all owners were being given sufficient input into the decision to paint the complex, particularly whether owners were aware of what was actually proposed to be painted;
• 20 February 2004 – A circular was issued to all owners who had accepted the painting service offered by the body corporate. This stated that eaves would be painted white, and cladding, gables, verandahs and doors would be painted to match the existing colours. It also stated that the invoice for $771 for each unit included pressure cleaning of all previously painted exterior surfaces, facias, gutters, downpipes and garage doors.

Decision

General information about maintenance obligations

Subject to some exceptions, the body corporate is responsible for maintenance of common property (Standard Module, 109(1)) and individual lot owners are responsible for maintenance of their own lots (Standard Module, 120(2)).

It is therefore necessary to identify the boundaries around the common property and around individual lots by reviewing the plan for the scheme. If the plan is a standard format plan (formerly group titles plan) then boundaries are normally determined by survey marks. If the plan is a building format plan (formerly building units plan) then boundaries are normally determined by reference to walls and other parts of the building. Where the boundary is defined by part of the building the boundary between lots will usually be at the centre of any wall, floor or ceiling separating the lots (Land Title Act 1994, 49C).

As a matter of practice, the roof and walls of a building on a lot in a standard format plan will often fall within the boundaries of the lot and therefore require maintenance by the lot owner. In contrast, under a building format plan the roof and the external face of walls almost invariably form part of the common property rather than part of any lot and therefore require maintenance by the body corporate. In either case, the internal face of walls will fall within the boundaries of the lot and be the responsibility of the lot owner.

Boundary structures such as common walls require special consideration. For example:

• Under a standard format plan, if two lots are divided by a common wall then those two lots must still maintain the wall. However, the body corporate is required to insure the entire building to its full replacement value (Standard Module, 129);
• Under a building format plan, the body corporate is required to maintain building elements in a structurally sound condition (Standard Module, 109(2)(b)) and to insure the building to full replacement value (Standard Module, 128); and
• Under a building format plan, the body corporate must maintain certain boundary structures including railings, doors, windows and roofing membranes. This is the case even if those structures, or parts of those structures, are technically located within the boundaries of a lot (Standard Module, 109(2)(a)).

Utility infrastructure also requires special consideration. For example:

• Utility infrastructure will normally be common property required to be maintained by the body corporate (Act 20(1), Standard Module 109);
• However, if the utility infrastructure solely supplies one lot, is within the boundaries of the lot, and is not in a boundary structure (such as a shared wall) then the utility infrastructure forms part of the lot and must be maintained by the lot owner (Act 20, Standard Module 120(2));
• Further, the lot owner must maintain any hot water systems, washing machines, clothes dryers, and similar devices and infrastructure that supply only their lot (even if these devices are technically on common property) (Standard Module, 109(3)).

There are also a number of exceptions to the general requirements that the body corporate maintain common property and lot owners maintain their individual lots. For example, lot owners will normally be required to maintain areas of common property granted to their exclusive use (Standard Module, 123(2)) and any improvements they have made to the common property (Standard Module, 114(4)).

Further information about maintenance obligations can be obtained from information sheets produced by this office (www.dtftwid.qld.gov.au/disputeres/bccm/brochures.asp) or by telephoning this office’s information line (1800 060 119).

Applicable law

Eastpoint is registered under a group titles plan (or standard format plan). Relevant legislation includes:

• The body corporate must maintain common property in good condition (Standard Module, 109);
• The owner of a lot must maintain the lot in good condition (Standard Module, 120(2));
• By-laws may provide for regulation of lots included in the scheme (Act, 169);
• If an owner fails to carry out work required by the legislation or by-laws then the body corporate can carry out the work and recover the costs from the owner (Standard Module, 121);
• The body corporate may, by agreement with an owner, engage a person to supply painting services to the owner (Standard Module, 119).

Concerns with process followed

After review of the minutes and circulars sent to owners, I have some concerns about the process followed. These include concerns about:

• Whether owners (particularly those who did not attend the annual general meeting) were aware of what surfaces required maintenance by the body corporate and what surfaces are the owners’ responsibility;
• Whether the committee properly resolved to clean gutters and downpipes constituting common property, and determined that the cost of cleaning was within the relevant limit for committee spending;
• Whether the committee properly finalised the details of the painting service the body corporate intended to offer to owners and whether it passed a resolution to this effect;
• Whether the committee is entitled to specify the timeframe for painting and the brand and colour of paint in the absence of a by-law to that effect, particularly if any colours are to be different from the existing colours; and
• Whether the cost-sharing proposal is equitable, given that some units may require more paintwork than others.

On the other hand, there is a claim that forty-two of the forty-four owners wish to have their lots painted by the service contractor proposed by the body corporate. There may be significant advantages in terms of price and consistency of appearance in these owners taking advantage of this opportunity. I have not inspected or been provided with photographs of units, but it may be the case that the paintwork on all units is in poor condition and that owners would be contravening the legislative requirement to maintain their lots in a good condition if they refused to paint their unit. Owners may be satisfied that the proposal by the body corporate is the best way to comply with their maintenance obligations.

Interim orders

An interim order will not be granted unless is it necessary due to the nature or urgency of the circumstances to which the application relates (Act, 279). Further, any orders granted must be just and equitable in the circumstances (Act, 276).

The applicant is seeking interim orders to stop any painting going ahead until after the validity of the processes engaged in by the body corporate have been investigated and a final determination is made. For it to be just and equitable to grant relief at this stage, before full and final consideration of all the issues raised, I would need to be satisfied that the application raises a serious question to be determined. I would also need to be satisfied that the balance of convenience between the parties justifies the grant of injunctive relief. That is, I would need to balance the inconvenience of delaying painting if it is ultimately determined that procedures were satisfactory against the inconvenience of allowing painting to proceed if it is ultimately determined that procedures were not properly followed.

Serious question to be determined

As stated above, I have some concerns about the procedures followed. Painting of walls that are within the boundaries of an owner’s lot is generally seen as a maintenance obligation of that owner. The owner generally has some scope to decide when it is necessary to paint and which contractor they wish to engage to perform the painting. My main concern is that the circulars may have given owners the impression that the body corporate had the sole power to determine how and when painting must occur.

There may well be advantages in all owners using the same contractor and painting at the same time. However, for all owners to be required to do this, the body corporate would need to pass a by-law to that effect. This would require a special resolution to be passed by all owners.

It is a concern that some owners may have been under the impression that their only choice was to accept the proposal offered or do the painting themselves. It is also of concern that many owners appear to have agreed to the painting proposal without being given full details of what exactly was involved.

It is not possible to make a final determination on these issues without submissions from all owners and I am reluctant to allow painting to proceed without some confirmation that owners have been properly informed. On the other hand, there are arguments against delaying the painting if owners do wish the painting to proceed.

Balance of convenience

If painting was to proceed and it was subsequently determined that owners were mislead or the painting was not justified then it may be difficult and expensive to rectify the situation.

On the other hand, if the vast majority of owners wish to proceed then I am reluctant to place any painting on hold until after this office can determine the issue. I am also aware that the grant of the interim order sought would only prevent the body corporate from offering a painting service to owners and would not prevent owners from proceeding to paint their own lots with a painter of their own choice. Further, even if there have been procedural problems in the body corporate’s handling of the issue, there does not appear to be any reason why these procedural problems cannot be rectified without the significant delay that would result if I were to order that the body corporate not offer the proposed painting services until after a final determination was made.

There are concerns about whether necessary resolutions have been passed for the body corporate to offer the painting service. There are also concerns about whether owners have provided their informed agreement to take advantage of the services. I therefore consider it is appropriate to issue an interim order that the body corporate cannot rely on any purported agreement already given. However, this order will not stop the body corporate from correcting any problems by passing any necessary resolutions and reconfirming agreements from individual owners that they wish to take advantage of the painting service offered by the body corporate.

Order

For these reasons, I make the interim order above.