Isle of Palms Resort [2005] QBCCMCmr 270 (23 May 2005)

Last Updated: 5 July 2005

REFERENCE: 0654-2004

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	20860
Name of Scheme:	Isle of Palms Resort
Address of Scheme:	21 Coolgardie Street ELANORA QLD 4221

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Eastmond Enterprises Pty Ltd and Varindi Pty Ltd, the co-owners of Lot 180 and the caretaking service contractor for "Isle of Palms Resort" Community Titles Scheme 20860.

I hereby order that the application for an order by Eastmond Enterprises Pty Ltd and Varindi Pty Ltd, the co-owners of Lot 180 and the caretaking service contractor for "Isle of Palms Resort" Community Titles Scheme 20860 seeking the following outcomes, quote: (1) An order requiring the Respondent to ensure at all times there is a sufficient supply of pool heating gas to maintain the front swimming pool and adjacent wading pool at a minimum temperature of 26 degrees Celsius. (2) An order that the Respondent pay any cost of and incidental to this application. (3) The Respondent is to accept liability for the cost of the supply of 500 litres of pool heating gas delivered to Isle of Palms Resort on or about the 22 October 2004. is dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0654-2004

"Isle of Palms Resort" CTS 20860

APPLICATION

This application is by Eastmond Enterprises Pty Ltd and Varindi Pty Ltd, the co-owners of Lot 180 and the caretaking service contractor for "Isle of Palms Resort" Community Titles Scheme 20860, (applicant) against the body corporate (respondent). The applicant is seeking the following outcomes, quote:

(1) An order requiring the Respondent to ensure at all times there is a sufficient supply of pool heating gas to maintain the front swimming pool and adjacent wading pool at a minimum temperature of 26 degrees Celsius.
(2) An order that the Respondent pay any cost of and incidental to this application.
(3) The Respondent is to accept liability for the cost of the supply of 500 litres of pool heating gas delivered to Isle of Palms Resort on or about the 22 October 2004.

JURISDICTION

"Isle of Palms Resort" Community Titles Scheme 20860 is a scheme under the Body Corporate and Community Management Act 1997 (Act) and the Body Corporate and Community Management (Accommodation Module) Regulation 1997 (Accommodation Module).

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)).

SUBMISSIONS

The applicant’s main submissions were to the effect that:

• The Resort has two swimming pools and a wading pool. Two of the pools are heated by gas heater.
• The applicant, as the letting agent for the scheme, acts for a number of lot owners. The applicant has promoted the availability of a heated swimming pool.
• In consultation with the committee, the heating of the pools has ceased around the end of the September/October subject to the prevailing weather conditions.
• The committee advised the applicant not to order any further gas for pool heating after 13 September 2004 and the last delivery of gas occurred on 14 September 2004.
• From the time that the gas supply ended to 18 October 2004, it was unnecessary to heat the pool due to prevailing weather conditions. However, on 18 October 2004, the weather conditions caused the pool temperature to drop significantly. As a consequence, the applicant’s staff received complaints from holiday guests. By letter dated 18 October 2004, the applicant requested body corporate authority to purchase 1000 litres of gas to heat the pool. The chairperson responded by letter dated 19 October 2004 stating that the body corporate cannot authorise any further supplies of gas at this time
• The holiday bookings for October were nearly at full capacity for our holiday letting units. Permanent residents and holiday guests have a right to expect a heated pool as it is promoted as being available.
• A copy of Tax Invoice 24052230 from Origin Energy to "Isle of Palms Resort" indicates that 500 litres of gas was supplied on 22 October 2004 at a cost of $312.55.

In accordance with the Act, submissions were called and a copy of the application was provided to the body corporate manager for distribution to the owner of each lot and the committee.

John Norrish, the body corporate chairperson made a submission to the effect that:

• The caretaker, Warner banks was told on 19 October 2004 not to order any more gas to heat pools. His partner, Bob Eastmond has agreed that further gas supplies would not be required in 2004.
• Warner Banks ordered the gas saying that he would pay for it himself. However, it was billed to and paid for by the body corporate. The chairperson has provided an Origin Energy statement as at 31 October 2004 which includes the gas delivery on 22 October 2004 costing $312.55 and which indicates that this amount has been paid.

The applicant made a written reply to submissions under section 244 of the Act.

DETERMINATION

The applicant has sought an outcome that the body corporate "ensure at all times there is a sufficient supply of pool heating gas to maintain the front swimming pool and adjacent wading pool at a minimum temperature of 26 degrees Celsius". The basis of this claim is that permanent residents and holiday guests have a right to expect a heated pool as this feature is promoted as being available at this complex. This view has not been confirmed or denied by lot owners who generally did not respond to the invitation to make a submission on the application.

The promotion of the scheme is performed by the applicant who is authorised to conduct a letting agent business for the scheme and acts as an agent for those lot owners who choose to use the applicant’s services for letting their lot. It would seem therefore that the promotion activities conducted by the applicant relate solely to the letting agent business and for the benefit of those persons associated with the conduct of this business.

Section 94 of the Act provides the body corporate’s general functions and states that the body corporate must administer the common property and body corporate assets for the benefit of the owners of the lots included in the scheme, and to enforce the community management statement for the scheme. The body corporate has an obligation to act reasonably in anything it does under section 94. The body corporate has all the powers necessary for carrying out its functions (section 95, Act). Section 152 of the Act provides that the body corporate must administer, manage and control the common property and body corporate assets reasonably and for the benefit of lot owners.

The pools are common property and the body corporate has an obligation under section 94 and section 152 of the Act with respect to the administration, management and control of the common property. In addition, the body corporate has a duty under section 108 of the Accommodation Module to maintain common property in good condition. There has been no material presented which demonstrates that the body corporate has breached its functions and duties with respect to the common property pools. It would seem that the body corporate has adopted a policy of heating two pools during the colder months only. In my view, it is a matter for the body corporate to determine the period of time that a common property pool is heated. The applicant has not shown that the body corporate has indeed given its consideration with respect to extending the period of time that a common property pool is heated. While a body corporate may make decisions regarding this matter, it does not have a legislative obligation to ensure that a pool is heated at all times. In the absence of any such decision by the body corporate, I consider that a dispute does not exist. Therefore, this outcome sought is dismissed.

Secondly, the applicant has sought an outcome that the respondent pays costs incidental to this application. This request is dismissed as an adjudicator does not have a power to make such a decision.

Thirdly, the applicant has sought an outcome that the "Respondent is to accept liability for the cost of the supply of 500 litres of pool heating gas delivered to Isle of Palms Resort on or about the 22 October 2004". John Norrish, the body corporate chairperson made a submission that this expense was billed to the body corporate and has been paid by the body corporate. The Origin Energy statement as at 31 October 2004 provided by the chairperson certainly confirms the fact that the body corporate has paid the account which includes the gas delivery on 22 October 2004 costing $312.55. As the body corporate has accepted this liability without argument that it not be held liable, in my view this outcome sought has been resolved. As there is no further need to consider the circumstances relating to this event, this order sought is dismissed.

In the reply to submissions, the applicant states that the amount of $312.55 was paid by the applicant to Origin Energy by telephone on 2 November 2004, and that this dispute is not resolved. I do not agree. The applicant made this payment after the application was lodged, and after the body corporate had paid the account, an account which the applicant acknowledges was billed to the body corporate. However, the application has not been amended to reflect reimbursement from the body corporate for this payment. The body corporate was notified of the dispute based on the terms sought by the applicant and the body corporate has not had an opportunity to be heard on this matter. Therefore, I am not prepared to make an order with respect to this payment. If this payment has been made to the body corporate Origin Energy account matter, I would suggest the applicant approach Origin Energy or the body corporate regarding a reimbursement for this amount.