Villa Estoril [2004] QBCCMCmr 671 (14 July 2004)

Last Updated: 13 July 2007

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.