Durack Place [2004] QBCCMCmr 495 (20 October 2004)

Last Updated: 30 September 2005

REFERENCE: 0283-2004

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	22975
Name of Scheme:	Durack Place
Address of Scheme:	21 Durack Street, MOOROOKA QLD 4105

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Dianne Lorraine Parsons, the owner of lot 1

I hereby order that the body corporate resolution numbered 3 carried at the EGM held on 15 January 2003 to the effect that the owner of lot 1, Dianne Lorraine Parsons, was to provide a written undertaking that any damage caused to the common property be repaired without cost to other lot owners, is invalid, on the basis that it is superfluous and unnecessary. I further order that the owner of lot 1, Dianne Lorraine Parsons, is authorised in terms of the resolution numbered 4 carried at the EGM held on 15 January 2003 to proceed with access /occupation of common property to allow the proposed underpinning work to lot 1 to proceed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0283-2004

"Durack Place" CTS 22975

The applicant, Dianne Lorraine Parsons, the owner of lot 1, has sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act) quote –

1.

That motion No. 3 made at the EGM of the owners of "Durack Place" on 15 or 22 January 2003 be set aside.

2.

That the body corporate for "Durack Place" forthwith grant its consent for the applicant’s builder D&CC Neilsen Pty Ltd or such other registered builder as she may engage to have such access and permission to enter upon and use the common property and in so doing take up and replace so much of the driveway as is necessary to enable it to affect the repairs to the applicant’s unit in accordance with NP Krogh’s report No. 4453 dated 9 October 2002.

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)).

The scheme is a subdivision of 4 lots registered under a group title plan of subdivision (now a standard format plan). The standard module applies to the scheme.

Submissions were sought in respect of the application from the body corporate committee and all other owners. No submissions were received in respect of the application. File notes indicate the following conversation with a Patrick Symes, the owner of lot 3 in the scheme, quote -

Patrick said that he doesn’t think the committee will be lodging a submission as he has spoken to a few members and nobody has any objections to the application. Patrick stated that they have already given permission and that the application states this. Either way the decision goes, Patrick feels it doesn’t really concern himself or the committee.

Notwithstanding the above response, it is still necessary to make a determination in respect of the application. I do not intend to restate the facts pertaining to the application. I consider these are known to all parties, and are not in dispute. The applicant seeks to invalidation of motion 3 carried at the EGM held on 15 January 2003. That resolution resolved to "request the owner of lot 1 to provide a written undertaking that any damage caused to the common property be repaired without cost to other lot owners" (the indemnity agreement). In motion 4, the owners agreed to grant approval for the "access /occupation of common property to allow proposed underpinning work" to proceed. Though not specifically stated, resolution 4 appears to be implicitly subject to resolution 3.

The applicant states that "the body corporate’s insistence upon obtaining an indemnity from the applicant in the terms set out above is misconceived and improper and grossly unreasonable". The applicant then lists five reasons supporting this contention, including "(c) The body corporate carriers (sic) compulsory building insurance and can claim upon this policy for damage sustained to the body corporate property by the applicant’s builders. Other lot owners can claim upon their own policies of insurance or take their own action against the applicant’s builders for any damage to their own property caused by the applicant’s builders". This statement is patently incorrect in my view. No insurance company would willingly pay for damage sustained to property caused by the owner of the property willing allowing another to undertake work of the nature proposed. This statement suggests that insurance companies will indemnify one party for contemplated actions, and not simply for accidental damage. I consider it is only the latter that an insurance company will pay for.

Of the other reasons advance by the applicant, I for the most part do not agree with them. I conclude that in the circumstances, the body corporate is reasonable in seeking to ensure that all damage caused by the applicant, or her contractors, is repaired or reinstated.

However the one factor in my view not contemplated by the body corporate in requiring the indemnity is that there is an overarching legislative scheme extending and to an extent governing the relationship of the parties. In most circumstances where the requirement of an indemnity is raised, no such overarching legislative scheme exists.

In particular, I are referring to provisions such as –

167 Nuisances
The occupier of a lot included in a community titles scheme must not use, or permit the use of, the lot or the common property in a way that--
(a) causes a nuisance or hazard; or
(b) interferes unreasonably with the use or enjoyment of another lot included in the scheme; or
(c) interferes unreasonably with the use or enjoyment of the common property by a person who is lawfully on the common property.

This section governs the way the works will be carried out; in particular so as not to cause a nuisance or hazard; or to interfere unreasonably with the use or enjoyment of another lot or of the common property included in the scheme.

Additionally, section 281 of the Act provides –

281 Order to repair damage or reimburse amount paid for carrying out repairs
(1) If the adjudicator is satisfied that the applicant has suffered damage to property because of a contravention of this Act or the community management statement, the adjudicator may order the person who the adjudicator believes, on reasonable grounds, to be responsible for the contravention--
(a) to carry out stated repairs, or have stated repairs carried out, to the damaged property; or
(b) to pay the applicant an amount fixed by the adjudicator as reimbursement for repairs carried out to the property by the applicant.
Example--
A waterproofing membrane in the roof of a building in the scheme leaks and there is damage to wallpaper and carpets in a lot included in the scheme. The membrane is part of the common property and the leak results from a failure on the part of the body corporate to maintain it in good order and condition, the adjudicator could, on application of the lot’s owner, order the body corporate to have the damage repaired or to pay an appropriate amount as reimbursement for amounts incurred by the owner in repairing the property.
(2) The order can not be made if--
(a) for an order under subsection (1)(a)--the cost of carrying out the repairs is more than $75 000; or
(b) for an order made under subsection (1)(b)--the amount fixed by the adjudicator would be more than $10 000.

The provisions of this section are self explanatory, and in my view might be relevant to a situation the body corporate finds itself in.

Additionally, there are the general dispute resolution provisions of the legislation, including the ability of adjudicators to make orders which are "just and equitable" for the resolution of a dispute.

Given all the above, I consider that there are sufficient safeguards governing the relationship of the parties such that the required indemnity is superfluous and unnecessary. For this reason, and not for the reasons proposed by the applicant, I am prepared to order in terms as sought. I consider that it is the applicant’s ongoing responsibility to ensure that her contractors not cause or create a nuisance, not cause unnecessary damage to the common property, and any damage necessarily caused be repaired or reinstated.