Villa Estoril [2004] QBCCMCmr 248 (13 May 2004)

Last Updated: 30 September 2005

REFERENCE: 0018-2004

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	16553
Name of Scheme:	Villa Estoril
Address of Scheme:	102 Indooroopilly Road TARINGA QLD 4068

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Donald Richards, the owner of lot 4 and Bronwyn Richards, the occupier of lot 4

I hereby order that the validity of motion 10 headed Appointment of Herdlaw is strictly limited to the terms of the original committee approval which it purports to ratify, and to the extent to which it purports to authorise Herdlaw to provide continuing advice, is invalid and of no effect. I further order that the application by Donald Richards, the owner of lot 4 and Bronwyn Richards, the occupier of lot 4 for various orders invalidating or overruling motions 11, 16, 33, 34 and 40, is dismissed. I further order that the body corporate of Villa Estoril is entitled to proceed immediately with the implementation of motions 33 and 34 carried at the AGM of the body corporate held on 22 December 2003. I further order that within one month of the date of this order, the body corporate Secretary shall provide to the owner of lot 4, Donald Richards an up to date statement of the current position regarding contributions of all owners in the scheme including lot 4. The above order was appealed to the District Court at Brisbane on 24 June 2004. The appeal was finalised when a Notice of Agreement to Dismissal of Appeal was filed on 24 February 2005.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0018-2004

"Villa Estoril" CTS 16553

The applicants, Donald Richard, the owner of lot 4 and Bronwyn Richards, the occupier of lot 4 have sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act) quote -

• That motions 10 and 16 be overturned.
• That the cost of audit ratified in motion 11 be borne by committee members who approved it.
• That, based on other owners approvals, the occupant of lot 4 also be given approval to keep a small dog.
• That a revised levy payment schedule and apology be forwarded without delay.

The applicants also sought an interim order that repair work approved in certain motions at the AGM held on Monday December 22, 2003 not commence until the body corporate determine the level of responsibility of the original builder and the BSA. On 12 February 2004, the following interim order was made –

I hereby order that motions 33 and 34 resolved by the body corporate of Villa Estoril at the AGM held on 22 December 2003 shall not be implemented or otherwise acted upon until a final order to this application is made.

I further order that the application by Donald Robert Richards, the owner of lot 4 and Bronwyn Richards, a committee member seeking an interim order in respect of motion 35, is dismissed.

I further order that the application by Donald Robert Richards, the owner of lot 4 and Bronwyn Richards, a committee member seeking an interim order that all BSA files are made available to Don Richards and Keith Leong, is dismissed.

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)).

It is clear from the terms of the order sought that the applicants also seeks the requested interim orders as final orders. This however is subject in my view to the interim orders in fact made.


In his reply to submissions, the applicant has indicated his dissatisfaction with certain aspects of the interim orders made, and states that in respect of two of the determinations that he would be appealing the decision to the District Court. This is the applicant’s prerogative, however I will not be reviewing my orders in light of these statements.

I wish to deal with a further aspect of the applicant’s reply. In his concluding paragraph he states –

... and whilst I am certain Mr Meek is prejudiced towards me, I trust that the evidence of previous owners will help establish the credibility I believe I deserve.

I understand this statement to be an assertion that Mr Richards believes that I will be "prejudiced" against him in my determination of this application. "Prejudice" is another way of alleging bias. If a decision maker considers that others would have some reasonable basis to consider or conclude that the determination of the decision maker would be biased against the person in question, then it is prudent, and in fact required, for the decision maker to withdraw from considering the application.

When it was made, this was the fifth application made in respect of the scheme, and the third made by the applicants. There has since be a least one further application made in respect of this scheme. The body corporate and the applicants, and other individual owners and the applicants, are clearly in a situation of ongoing conflict and dispute. The nature of this jurisdiction is that it is a "repeat" jurisdiction. Given the low cost and ease of accessibility, the dispute resolution service is often used by parties on a repeat basis.

I have adjudicated one previous dispute involving the current parties. In that determination, the applicant Bronwyn Richards was successful in part. Again in the interim order to this application, the applicants were successful in part. As part of both orders, a statement of reasons for the adjudicator’s order were provided; a requirement of the legislation. Certain comments in those reasons might not be considered favourable to the applicants. However, none of these aspects indicate bias on my part I consider. I consider that I am not biased or prejudiced against the applicants and intend to continue my determination of this application. In a repeat jurisdiction, the allegation of bias is an easy allegation to make; to my mind it usually involves the maker seeking to have the application determined by a different decision maker. Whilst I would relish the prospect of not determining this application, as it has been allocated to me, and as I do not consider myself to be biased against the applicants, or either of them, then I will continue.

Before proceeding to a determination, I make the further observation that this application is not straightforward. The issues are not clear and are often subjective, and the material, including accusations and counter accusations, are voluminous. This office sought submissions in respect of the application from all owners and the committee. In addition, the applicants have replied in detail to the submissions of 3 of the remaining 4 owners. I am concerned that the applicants have replied in more detail than contained in their original application. From the point of view of natural justice considerations, this aspect is of concern in that the material on which an applicant relies should be set out in the application, and not the reply; other parties get to respond to the application but not the reply. Consequently, I have discounted the applicants reply except in so far as I consider it a reply to the submissions made. I do not intend to set out in any detail the applicant’s grounds, nor the contents of submissions in response, nor the applicants reply. I am satisfied that all parties are aware of the position of the other from the application, submissions and the right of reply processes. I therefore intend only to refer to those materials necessary for a determination of the issues raised.

Determination

I intend to consider the motions sought to be invalidated inturn.

Motion 10

Motion 10 headed Appointment of Herdlaw resolved that the body corporate ratifies the appointment of Herdlaw Solicitors to provide advice.

The applicants state that the notice of AGM contained no material relating to this appointment, in particular with the costs associated with the provision of advice. They state –

We have no idea how often a solicitor will be required and we have no idea of the fee.

Further, the applicants complain that they should not have to contribute to a solicitor "who it appears is primarily employed to work against us".

On the final point, there is no impediment to a body corporate, as a separate legal entity to owners, engaging a solicitor to act on its behalf, or to represent it in proceedings. I certainly will not be intervening in the appointment on this basis.

The validity of this motion is not properly addressed in the respondent body corporate’s submission, nor the submissions of individual owners. I will go so far as to suggest that the solicitor responding on behalf of the body corporate has somewhat misrepresented and glossed over my previous statements regarding this point. He states –

The adjudicator in his reasons determined that he would not exclude the applicants from the costs of engaging a solicitor and body corporate manager indicating that the payment of these fees could be ratified in the AGM.

I consider that in the order 611 of 2003, I was more circumspect than this. What I stated was as follows –

Given the fact of the resignations, then the committee meeting on 26 August 2003 was in my view valid. There is a qualification to this however. Firstly, the committee was subject to the financial limitations of the committee; namely $100 per lot in respect of any items of expenditure. This may affect the appointment of Herdlaw Solicitors. I note that at the meeting, Robert Herd indicated that his initial fee (at least) had been or will be paid by an individual owner and not the body corporate. Mr Herd should be aware of conflict of interest considerations in this arrangement, which I consider are sufficiently obvious.

More importantly, the second qualification is that a committee has no power to engage a body corporate manager. Only a body corporate in general meeting, by ordinary resolution, can engage a body corporate manager (see section 87 of the standard module). Parties might argue that the manager engaged was only to provide "consulting services" however I do not accept this. The legislation intends that body corporate managers be appointed in general meeting by ordinary resolution. If a fiction was created by calling a body corporate manager a consultant, then the requirements of the legislation would be totally negated. The requirements of the legislation are there to be observed.

I conclude that the "Appointment of an Interim Body Corporate Manager" by the committee is invalid and of no effect. I intend to order this. I do not intend to consider the impact of this on the body corporate in terms of liability. It will be dependent on what fees have been incurred, and whether the body corporate in general meeting choose to ratify the payment of those fees if a motion to this effect is included on the agenda of a general meeting. I do however consider that all other resolutions carried by the committee at the meeting were valid, including the serving of the section 152 notice on the Richards. I do not intend to order in terms of the second order sought by the applicant that she be excluded from the costs of engaging a solicitor and body corporate manager, for the reasons explained.

In my reasons, I placed the following qualifications on the appointment of a solicitor, namely:-

• Subject to the committee expenditure limits;
• Subject to conflict of interest considerations; and
• The reference to ratification in general meeting was made in respect of the "appointment of an Interim Body Corporate Manager"; not to the engagement of a solicitor.

I request in future that Mr Herd, if he wishes to rely on my statements as supporting his client’s position, do so accurately.

I do have serious concerns with the validity of motion 10. To ratify is to authorize after the event some previous action or approval. Consequently, the validity of and scope of the ratification is limited to the original action or approval. The ratification is limited to the original approval. At the motion reads however, it is very general. One wonders if it purports to be a ratification or approval for the giving of future "advice" including say, the engagement of Herdlaw to respond on behalf of the body corporate to this current application. This it cannot be.

The engagement of a solicitor or legal representative is subject to the same financial limitations and other requirements, as all other engagements are subject to. For example, it is subject to the financial limits of committee approval, a matter I referred to in my previous order. If the cost of the engagement exceeds this ($125 per lot or $625 for this scheme), then the proposal / engagement can only be approved by the body corporate in general meeting, and if the cost exceeds $250 per lot or $1250 for this scheme, then section 104 applies and two quotes are required to be provided, and submitted as part of an alternative motion seeking approval for the relevant engagement.

In the circumstances, motion 10 is valid only to the extent that it seeks to ratify the terms of the previous committee approval. It is not valid as a general authorisation for Herdlaw to provide "advice" on a continuing basis.

Motion 11

Motion 11 headed Appointment of Auditor proposes that the body corporate ratifies the expenditure for the audit of preceding years accounts of $500.

The applicants allege that an audit for this period had been voted against by the body corporate at the previous AGM, and that the findings of the audit were insubstantial, a waste of money, and "was not approved in the proper manner according to the legislation". The applicants do not specify what this proper manner of approval is.

Section 106(4) of the Standard Module provides as follows -

(4) Even if the body corporate resolves not to have its statement of accounts for a particular financial year audited, the body corporate may, by ordinary resolution, resolve to have its accounting records for a particular period, or for a particular project, audited and appoint an auditor for the purpose.

I make the observation that the original committee authorisation for the audit in question was made by the committee. The above section, which authorises an audit notwithstanding previous contrary resolutions of the body corporate, requires that the audit in question must be approved by the body corporate in general meeting by ordinary resolution. To this extent the original committee approval of the audit was invalid and of no effect. Does the subsequent ratification by ordinary resolution in general meeting validate that which was previously invalid. Whilst I consider that the original approval should have followed the correct procedure (ordinary resolution in general meeting), I conclude that the ratification is effective to validate the appointment of the auditor. In the circumstances, I am not prepared to order that the cost of the audit be borne by the committee members who initially authorised it.

Motion 16

Motion 16 headed Watering System resolved that the body corporate return the watering system to a manual timetable so that watering could be adjusted to meet the prevailing weather conditions. The applicant seeks that this motion be invalidated and "the body corporate resume watering with the automatic sprinkler".

I do not propose to deal with this issue in any detail. The information provided suggests that the applicants have somewhat misrepresented the true facts of the situation. I am informed that the automatic sprinkler system had been broken, but that approval was recently given for its replacement / repair and that repairs have since been affected, and the sprinkler system is again operating on an automated schedule. The applicants acknowledge that the gardens are again being watered by the automatic sprinkler system in their reply, but preface this with "after months of neglect". This neglect was not the case on the information before me. The situation was at all times explainable and reasonable. I conclude that the applicants have a view of this aspect that they are not prepared to depart from, notwithstanding objective factual evidence to the contrary. I find this attitude on the part of the applicants (not to accept objective facts or evidence where they is contrary to their position on the matter) a recurring theme in the applicants conduct. The applicants reply contains several example of this.

Motions 33 and 34

The applicants seeks that resolutions carried in respect of these motions at the recent AGM not be implemented and by way of final order, that the body corporate defer the implementation of these motions "until the body corporate determine the level of responsibility of the original builder and the BSA". The two resolutions were as follows –

33. That the body corporate repair the pathway to unit 2 for wheelchair access (Special levy of $1400.00).
34. That the body corporate repair the deck and membrane on unit 5 which forms the roof of unit 3, and repair guttering in the internal roof spaces attached to the deck. (Special levy of $9817.50).

In the interim order, I did order that -

I hereby order that motions 33 and 34 resolved by the body corporate of Villa Estoril at the AGM held on 22 December 2003 shall not be implemented or otherwise acted upon until a final order to this application is made.

In my reasons for the interim order, I concluded as follows –

The applicants content that the subject of the motions were the subject of "the repair work ordered by the BSA and completed in 2001". The applicants state that such work automatically carries a 6 year warranty. The applicants then provide their version of the background to these matters, or at least, events occurring since 2001.

... In the circumstances, on its face I consider that I must accept the applicants’ submission that this is work which may very well be the subject of a further order of the BSA, and given this, that owners or the body corporate should not proceed to undertake the work as per the motion. ... I consider that the above conclusion applies equally in respect of motion 34.

It should be noted in determining the application for interim orders, I was forced to take at face value several assertions of the applicants. I expressed reservations in doing so, but concluded I had no alterative.

In their reply, the applicants better explain their position. They state –

When the BSA investigated the leak in the ceiling of unit 3 and ordered rectification it was should that the leak was caused by eater collecting on the balcony of unit 5. Therefore if the leak was still occurring in the same place then the original problem has not been rectified and Gangemi is still responsible. ...

I believe the reason the BSA has closed the file is because Fitzgerald’s application (which I have now seen for the first time) was submitted incorrectly. ... The application to re-open the case should have been with regard to the leak in unit 3 but the application was for a claim for repairs to her balcony, and had I known I would have corrected the error. ...

I have doubts regarding the applicants’ statements. Rather than being part of the solution which the applicant now suggests that he would have been had he been consulted, other evidence suggests to me that the applicant (Don Richards) was in fact much of the problem. As a member of the committee, the evidence shows that Mr Richards refused to accept that the body corporate was responsible for repair of the waterproofing membrane on the balcony of lot 5, the failure of which was and is causing damage to the ceiling of lot 3. I have first hand knowledge of this fact as at the meeting of the parties convened for the purpose of investigating application 0611 of 2003, Mr Richards refused to accept or acknowledge body corporate responsibility for this aspect, and notwithstanding that I indicated such responsibility and read to him the relevant legislative provision (section 109(2) of the standard module), he still appeared to deny such responsibility.

Moreover, Ms Fitzgerald has received a finding or determination from the Commercial and Consumer Tribunal that (at "Reasons for Decision"):

• The construction of the property was completed by the builder in excess of 6 years and 3 months prior to notification of the current defect (being defective tiles and waterproof membrane to the terrace of unit 5). ...
• No building work carried out by the builder pursuant to Direction to Rectify 20571 has caused the current water penetration of the terrace to unit 5.
• Accordingly, ... the Authority has no power to direct the builder to rectify the water penetration through the terrace of unit 5.

Given Mr Richards position on the matter, and the above quoted tribunal finding, I accept in preference the statements of two other owners that they, as members of the committee, have made exhaustive enquiries into the issue of the responsibility of the builder for rectification of the balcony of unit 5 and the ceiling of unit 3, and found that no liability can be attributed.

Mr Richards contention that Ms Fitzgerald’s application to the QBSA was dismissed because of a technicality is tenuous in my view. It is simply his belief, not supported by any objective evidence. I conclude that the body corporate is now entitled to proceed on the basis that all avenues for redress against the original builder via the BSA have been exhausted. In respect of the section 104 issue I referred to in the interim order, the final body corporate submission states that the committee has complied with section 104 in that two quotes for all expenditure above the major spending limit were obtained and these quotations accompanied the AGM notice. Whilst motion 34 is not correctly put as a motion in the alternatives (see section 42(B) of the standard module), I am nevertheless satisfied that owners were provided with two quotes for the work and I intend to order that motion 34 can now be implemented without further delay. I see no reason to further delay the implementation of repairs to the balcony of lot 5 and the ceilings of lot 3.

In respect of motion 33, I am less certain whether this item was ever the subject of an application to the QBSA by the body corporate. The final body corporate submission states that –

Further, the alleged defective work specifies subsistence (sic) under the front and rear pathways. We are instructed that the front partway referred to is the path leading to the front portico and not the side pathway which provides wheelchair access to Mr Douglas’s unit.

This submission is more fully detailed and evidenced in the submission of Saunders, the owners of lot 3.

In his reply, Mr Richards states –

With regard to the pathway repairs, it appears the BSA ordered Gangemi to rectify the path leading to unit 2 on site. There are several issues that were raised on site including Gangemi having to repair the seal in the bathroom of lot 4 and we assumed that the BSA would have records to substantiate them. If they do not, it then becomes the word of myself and the previous owners against Gangemi. Mr Gangemi has not acted responsibly in any dealings with the body corporate and he must be greatly relieved to be not only ‘getting off the hook’ with regard to the repairs, but actually getting paid to repair his own damage.

Clearly, Mr Richards cannot substantiate with any written or documentary evidence his allegation that the pathway in question was the subject of a previous QBSA rectification order. His argument is as limited as "the word of myself and the previous owners against (the builder)". I am not prepared to subject this body corporate, and in particular the co-owner of unit 2 Mr Douglas, to a further interminable delay in the repair of this pathway whilst Mr Richards endeavours to pursue a claim which I consider had negligible chance of success and further, appears to be based on a personal belief of Mr Richards that the builder failed in his responsibilities, and should be pursued. I intend to order that motion 33 can be implemented without further delay.



Motion 35

This motion was the subject of a requested interim order, which was dismissed. I do not propose to revisit my earlier determination regarding this motion.




Motion 40

Motion 40 headed Keeping of animals proposed that the body corporate approves the request by lot 4 for written approval to keep a small dog.

The applicant states that this motion was lost because the "other three owners felt they required more information". The applicants claim that the motion was self explanatory and further believes that a precedent has been set by the owners of lot 2 having approval to keep a small dog.

The body corporate submission states that –

The members were concerned to know the breed or type of dog that the applicant proposed, however the applicant refused to provide any further information or elaborate on his interpretation of "small dog". Further, the body corporate state that other approvals already given "have been based on a non permanent keeping of an animal and that the body corporate merely approved entry of an animal on a casual basis. Further, the consent was limited to a specific animal for which the breed and size of the dog was known.

I am not satisfied that the body corporate has acted unreasonably in this matter. The body corporate is entitled to satisfy itself that any proposed animal will not, or is not likely to cause a nuisance. Further, the requirement of further information regarding the type of dog avoids potential future dispute regarding the likely nature or size of the dog. I consider that the applicants must have some idea of the type of dog they propose to obtain. If not, then they should indicate their own criteria for selecting the dog, including where they intend to obtain the dog from (a breeder, pet shop or the local animal refuge) and request approval on this basis. I suggests the applicants need to be more forthcoming in their information regarding the dog, the type and size they propose, and unless and until they are, the refusal of the body corporate to give authorisation is not unreasonable.

Finally, the applicant seek an order that a revised levy payment schedule and apology be forwarded without delay.

The first point to note is that I do not consider it part of my role to order that apologies be given. Apologies are sought in my view as a way of implicating the maker of the apology in wrongful conduct. In my estimation not too many of the parties before me believe or acknowledge that their conduct is wrongful. If a person considers of their own volition that an apology should be given then an apology in such circumstances would be genuine. However I do not consider a forced or ordered apology a practical or appropriate way of resolving any dispute. It immediately creates a further problem; refusal to make the apology would constitute non-compliance with an order. Is any court going to be prepared to make an order enforcing an order that a party apologise. I very much doubt it.

In any event, the following statement is contained in the submission of Robert Douglas, the co-owner of lot 2 –

Given that we have now installed a professional body corporate management company, I do not feel that this should cause any further issues or concern for Mr Richards. I have apologised to Mr Richards at the AGM for the errors and at no time were they an attempt to enhance the position of the units impacted by them.

Firstly, this statement indicates that an apology has already been made. If this occurred, then I suggest that the apology was genuine, not forced. Secondly, this statement very clearly implies to me that Mr Douglas has acknowledged some error in records regarding contributions. The statement however does not go on to elaborate what action or steps have been taken to rectify or remedy this.

As the body corporate has failed to adequately explain to me what error in fact occurred and what was done to rectify this (in fact, I consider the response of the body corporate on this aspect contained in the interim order submission to be somewhat evasive, and seeks to impugn the conduct of the applicant rather than explain the error as it should), then I do consider that the applicants should be provided with an up to date statement of the current position regarding contributions of all owners in the scheme including themselves. I have ordered to this effect.

REFERENCE: 0018-2004B

INTERIM ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	16553
Name of Scheme:	Villa Estoril
Address of Scheme:	102 Indooroopilly Road TARINGA QLD 4068

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Donald Robert Richards, the owner of lot 4

I hereby order that the order dated 30 June 2004 staying the implementation of the order made by Adjudicator R A Meek on 13 May 2004 shall be revoked at midday on 14 July 2004 subject to the applicant Donald Robert Richards being afforded a reasonable opportunity, prior to midday on 14 July 2004, to cause his authorised agent to inspect the intended work to be carried out on the gutters by means of access through lot 3 and lot 5.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0018-2004B

"Villa Estoril" CTS 16553

The original application in this matter was made by Donald Robert Richards. A final order determining that application was made on 13 May 2004 by Adjudicator R A Meek. The applicant lodged an appeal against that order in the District Court on 24 June 2004. On 25 June 2004, the applicant/appellant’s solicitors requested a stay of the order made on 13 May 2004. On 30 June 2004 the order was stayed on certain conditions.

On 2 July 2004 the body corporate’s solicitors (Herdlaw) requested that the stay be revoked on the following basis:

1. The balance of convenience is in favour of the body corporate being able to perform the repair for these reasons
a. The damage being sustained to unit 3 is in excess of the cost of proceeding with the repair
b. The body corporate is clearly in breach of its duty to maintain common property, which has resulted in damage to the lot. The lot owners have now notified that they will be pursuing the body corporate for substantial damages.
c. There is an extremely dangerous situation caused to the electrical wiring in the building by water penetration.
2. The grounds for granting the stay have not been properly considered in accordance with the principles applied by courts or tribunals in granting stays. There has been no examination or consideration of the merits of the appeal. We submit that a close examination of the grounds of the appeal will reveal that they have not been properly formulated and do not disclose valid grounds for appeal.

On 5 July 2004 the solicitors acting on behalf of the owners of lot 3 (Deacons) similarly requested that the stay be revoked. The basis for the request was outlined as follows:

The general rule is that an applicant for a stay must demonstrate some good reason why the general rule that an appeal does not operate as a stay should be departed from Croney v Nand [1999] 2QdR 342; Berry v Green (unreported, CA (Qld) 07/09/99).

We submit that the balance of convenience overwhelmingly favours the lifting of the stay so that the source of the water damage can be removed and our clients’ unit can be repaired.

There would not appear to be any reason why photographs could not be taken of the allegedly defective work, or an inspection undertaken by an appropriately qualified expert should Mr Richards choose to engage one to give evidence in whatever proceedings he contemplates pursuing in respect of the allegedly defective work.

Our clients are innocent third parties, are not involved in, and have not contributed to, the matters which Mr Richards complains of. Our clients are now informed that the situation with respect to water penetration of their unit is now "potentially dangerous". In this regard, we enclose an email from Geoff Morrison, an electrician, to our client dated 1 July 2004.

On 13 July 2004 I conducted a teleconference with the following parties:

• Mr Robert Herd – Herdlaw, the solicitor for the body corporate
• Mr Steven Forrest – Deacons, the solicitor for the owners of lot 3, Mr and Mrs Saunders. Mr Saunders was present with Mr Forrest during the teleconference
• Ms Jacqueline Wheeler – Baker Lawyers, the solicitor for the applicant/appellant

During the course of the teleconference (which was suspended for a short time to allow certain further enquiries to be made by Mr Herd and Ms Wheeler) I was advised by Mr Saunders that, contrary to the belief expressed by Mr Douglas, (the body corporate secretary), during an earlier teleconference on 30 June 2004, the problem of water penetration into lot 3 has not been completely resolved by the laying of the new roof membrane.

I was further advised by Mr Forrest that the cost of the work stayed by the order of 30 June 2004 is $875.00 and sharing the cost will incur a liability for each owner in the sum of $175.00. Mr Forrest stated that it was absurd that the applicant/appellant’s desire to relieve himself of the payment of such an insignificant amount of money could form the basis for the staying of work which has significant ramifications for the owners of lot 3 and, ultimately, the body corporate. Mr Forrest reiterated that the allegedly defective work could be photographed and a report could be prepared for use at a later time if necessary. Mr Forrest also pointed out that the major cause of the water penetration into lot 3 has been, and continues to be, the blocked box gutters, and not the failed roof membrane.

Mr Herd pointed out that the body corporate has an obligation to maintain common property in good condition, and that the failure to carry out the work exposes the body corporate to potential liability, particularly in light of the evidence from Mr Morrison that the electrical wiring in lot 3 is now in a dangerous state as a result of the water penetration, which itself is only continuing to occur because the work has not been completed. Mr Herd stated that at the very least the applicant/appellant should be required to give an undertaking to the body corporate that he will indemnify it in respect of any on-going damage which might be caused by the incompletion of the work.

Ms Wheeler advised that the applicant/appellant would welcome the opportunity to inspect and photograph the subject areas as suggested by Mr Forrest, but that he has in the past been denied access to do so. Mr Forrest stated that neither of the owners of lots 3 and 5 was prepared to allow the applicant/appellant to have access to their lots because of his behaviour on previous occasions. However, they were prepared to allow an independent third party nominated by the applicant/appellant to have access to the subject areas so as to take photographs and prepare a report.

At this point, the teleconference was adjourned.

Upon resumption, I was advised by Mr Herd that the tiler is expected to complete the tiling on lot 5’s balcony on 14 July 2004, and that, if the stay were to be lifted, the builder would expect to be able to commence work on the box gutters on 14 July 2004, particularly if there were any further threat of rain.

Ms Wheeler advised me that the applicant/appellant was arranging for a builder to inspect the subject areas on the morning of 14 July 2004, and, further, that he understood that under no circumstances would he be allowed to accompany the builder for the inspection. Ms Wheeler further advised that the applicant/appellant did not consider it necessary in the circumstances to give any undertaking to the body corporate.

Since making my decision to stay the order on 30 June 2004 additional evidence has come to light.

Firstly, I was advised by the applicant/appellant during the teleconference on 30 June 2004 that part of the work he wished to have stayed involved the demolition of a wall. I was of the view that if that wall were defective as alleged, then its demolition would make any later attempt to determine what, if any, defects were present almost impossible. I have now been advised that the work does not involve demolition of any wall.

Secondly, I have now been informed that the major cause of the water penetration into lot 3 is the blocked box gutter (this is confirmed by the report dated 7 November 2003 from Eurocom Projects Pty Ltd and the report dated 28 November 2003 from Building Certification of Australia Pty Ltd.). Accordingly, I accept that the laying of the new roof membrane will not have completely resolved the problem of water penetration into lot 3.

Thirdly, I have been informed that the continuing water penetration into lot 3 has created a potentially dangerous situation in relation to the electrical wiring.

Fourthly, the owners of lots 3 and 5 have agreed to allow the applicant/appellant’s agent to gain access to their lots for the purposes of taking photographs and preparing a report on the allegedly defective gutters for use in any subsequent proceedings that the applicant/appellant might commence if his appeal were to be successful. On this basis I am not persuaded that there will be any disadvantage to the applicant/appellant if the remaining work is completed. On the other hand, I consider that there is the potential for considerable disadvantage to the owners of lot 3 if the water penetration into their lot is allowed to continue. There is also considerable potential liability for the body corporate, particularly in relation to public safety.

Section 291(2)(c)(i) of the Act permits me to revoke or amend a stay. I am therefore satisfied that the stay of order made by me on 30 June 2004 should be revoked as from midday on 14 July 2004, subject to the condition that prior to that deadline the applicant/appellant shall be afforded a reasonable opportunity to cause his authorised agent to inspect the intended work to be carried out on the gutters by means of access through lot 3 and lot 5.