Blue Waters Caloundra [2005] QBCCMCmr 37 (25 January 2005)

Last Updated: 5 July 2005

REFERENCE: 0387-2004

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	6440
Name of Scheme:	Blue Waters Caloundra
Address of Scheme:	15 The Esplanade KINGS BEACH QLD 4551

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Walter William Charles Bengtsen and Maureen Joan Bengtsen, the co-owners of lots 10 and 11

I hereby order that the application by Walter William Charles Bengtsen and Maureen Joan Bengtsen, the co-owners of lots 10 and 11 for orders that – 1. upon the completion of rectification works to the waterproofing membrane on the roof of the Scheme building, the body corporate of Blue Water Caloundra immediately obtain all necessary quotes and hold all necessary meetings to cause the repair of all internal damage to property in lots 10 and 11 in the scheme, including: a) Remove and re-plaster approximately 364 m2 of ceilings; b) Remove and re-plaster approximately 200 linear metres of cornice ceiling; c) Repaint affected ceilings; d) Remove and replace cupboards in bathroom of lot 11 And that the applicants either not be required to contribute to the cost of such repairs or, contribute in such amount as the adjudicator determines is just and equitable in the circumstances. 2. immediately upon the completion of rectification works to the waterproofing membrane and balustrading, the body corporate of Blue Water Caloundra obtain all necessary quotes and hold all necessary meetings to cause: a) Approximately 20m2 of sandstone tiles to be supplied and laid in the bar-b-que area, and b) Approximately 280m2 of outdoor carpet to be supplied and laid to other walking areas, Of the exclusive use area in the Scheme to protect the membrane and restore the applicant’s amenities, and that the applicants either not be required to contribute to the cost of such supply and installation, or contribute in such amount as the adjudicator determines is just and equitable in the circumstances, is dismissed under section 270(1)(b) of the Body Corporate and Community Management Act 1997 as the dispute should be dealt with in a court or tribunal of competent jurisdiction.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0387-2004

"Blue Waters Caloundra" CTS 6440

The applicants, Walter William Charles Bengtsen and Maureen Joan Bengtsen, the co-owners of lots 10 and 11 have sought the following orders of a adjudicator under the Body Corporate and Community Management Act 1997 (the Act) quote –

1.

An order that upon the completion of rectification works to the waterproofing membrane on the roof of the Scheme building, the body corporate of Blue Water Caloundra immediately obtain all necessary quotes and hold all necessary meetings to cause the repair of all internal damage to property in lots 10 and 11 in the scheme, including:

a. Remove and re-plaster approximately 364 m2 of ceilings;
b. Remove and re-plaster approximately 200 linear metres of cornice ceiling;
c. Repaint affected ceilings;
d. Remove and replace cupboards in bathroom of lot 11

And that the applicants either not be required to contribute to the cost of such repairs or, contribute in such amount as the adjudicator determines is just and equitable in the circumstances.

2.	An order that immediately upon the completion of rectification works to the waterproofing membrane and balustrading, the body corporate of Blue Water Caloundra obtain all necessary quotes and hold all necessary meetings to cause:

a. Approximately 20m2 of sandstone tiles to be supplied and laid in the bar-b-que area, and
b. Approximately 280m2 of outdoor carpet to be supplied and laid to other walking areas,

Of the exclusive use area in the Scheme to protect the membrane and restore the applicant’s amenities, and that the applicants either not be required to contribute to the cost of such supply and installation, or contribute in such amount as the adjudicator determines is just and equitable in the circumstances.

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 11 lots recorded under a building unit plan of subdivision (now a building format plan). The regulation module applying to the scheme is the standard module. On 8 September 2004, the parties were advised that the dispute resolution recommendation for the application was that it be the subject of departmental adjudication.

The application is a complex dispute regarding water penetration through the slab roof of the building, causing internal damage to the applicant’s lots 10 and 11. The body corporate have acknowledged responsible for repair of the waterproofing membrane, and I understand that the work has now largely been undertaken. However, the parties appear to have been in continuing dispute throughout the entire repair process with allegations of delay and obstruction, and further damage, amongst other allegations, by both parties of the other.

As a departmental adjudicator, I considered the application in early November, 2004 and under my investigation powers, wrote to the applicants seeking further clarification of their application, quote –

In determining this application, there are two issues to be considered – liability and quantum.

Much of the material associated with the application, submissions and reply deals in a fashion with the issue of liability. In contrast, very little is directed towards the quantum of the claim. This is, aside from any considerations or determination of liability, what is the measure of damage which has been occasioned.

It seems that your application seeks replastering of the ceiling and the replacement of the cornice in virtually the entirety of your combined lots 10 and 11. Additionally, it seeks the supply of a combination of both sandstone and outdoor carpet in most if not all of the exclusive use area. Evidence to substantiate the quantum of these claims is in my view lacking, and to an extent, your claim resembles an ambit claim.

Before proceeding further with my investigation, please provide evidence that the entire ceiling and cornicing of your combined units requires replacement, or whether more limited levels of repair are possible. If not, then why not. I suggest that this evidence be provided in the form of an expert report of some type. Further I consider that the body corporate should be afforded the opportunity to –

1. Inspect the level of damage within your lots, including all aspects thereof, and
2. To comment on or respond to the evidence you provide in response to this request.

To facilitate this, I suggest that the body corporate secretary should be provided with a copy of your additional material, and then have the opportunity to make a submission to this office in respect of that additional material.

In respect of your claim for sandstone tiles and outdoor carpet, please advise if, and to what extent these items were previously installed on the exclusive use area, and to what extent their replacement was necessitated by the membrane work undertaken. Again, a copy of this material should be provided to the body corporate for its comment, and further submission.

Following receipt of this additional material, and subject to its receipt, I propose to convene a meeting of the parties at this office, 259 Queens Street, Brisbane to consider issues associated with this application. All parties (yourselves as the applicants and the body corporate committee as the representative of the body corporate) will be required to attend this proposed meeting.

I have recently received the applicant’s reply to my request for clarification of their application. Whilst the reply, in the form of a report by a Ray Griffiths of Building & Homebuyer Services, does to some extent clarify aspects of the quantum of the applicant’s claim as requested, the report, and accompanying correspondence by the applicants appears to escalate the dispute further, quote –

As the is now evidence of further major failures of the water proofing membrane work at the above complex, I am submitting further reports for your consideration (by the applicants in their covering correspondence).

I actually thought the applicants were providing the report in response to my request for further information / clarification of their application. In any event, the writer of the report does conclude that the repairs undertaken by the body corporate to date have been ineffective, quote "opinion on page 9"

From my inspection of the tanking to the concrete roof slab above, it appears to me the application of and indeed methodology contains many deficiencies which all have the potential to negate the effectiveness of the work. ...

In my opinion, there is absolutely no sense in undertaking remedial work on the ceiling finishes to the unit until the problems with what I believe to be water and moisture ingress problems are addressed as the same problem will simply reoccur and destroy any new applications.

These conclusions, and submissions, are in addition to the original submissions of the applicants, in respect of which the body corporate has responded.

I intend to dismiss this application, and do so for a number of reasons. Firstly, the claim appears to fall within the ambit of section 281 of the Act, quote -

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.

This section has an upper financial limit of $75,000. It appears likely to me that the applicant’s claim, if successful, might exceed this amount. In the Griffiths report, two estimates of likely cost are given. Firstly, to undertake parts of the first order sought, the cost of "at least $33,816.60" is given. However there is no reference in this estimate to either (c) (repainting) and (d) (removing and replacing bathroom cupboards) of the applicant’s requested order. Presumably these two aspects would be in addition to the estimated costs. Secondly, to undertake the second order sought, Griffiths estimates that the likely cost would be "at least $25,438.70".

These two figures amount to an estimated cost of just under $60000. This figure however does not include the two items of repainting and replacing bathroom cupboards. Further, the figure does not in any way seek to address rectification works now alleged by the applicants to be required even before the above works can be undertaken.

I conclude that it is very likely that the extent of the applicant’s claim might easily exceed the limit of $75,000 in respect of such orders.

However, the application is dismissed not for this reason alone. Section 270 of the Act headed Dismissal of applications provides in part that an adjudicator may make an order dismissing the application if--
(a) it appears to the adjudicator that the adjudicator does not have jurisdiction to deal with the application; or
(b) the adjudicator is satisfied the dispute should be dealt with in a court or tribunal of competent jurisdiction; or
(c) it appears to the adjudicator that the application is frivolous, vexatious, misconceived or without substance; or
(d) the applicant fails, without reasonable excuse, to comply with a requirement of the adjudicator under section 271(1).

Subsection (2) provides that the adjudicator’s power to make an order under this section may be exercised--
(a) without investigating the detail of the application; or
(b) before an investigation has ended.

I conclude that this dispute is one which should be dealt with in a court or tribunal of competent jurisdiction. The nature of the allegations / evidence relied on by both parties make it necessary in my view for the parties and / or their witnesses to be cross examined. The processes / mechanism for departmental adjudication are essentially determinations on the papers. Whilst there are limited investigation powers, these do not included formal hearings, and the taking of evidence on oath.

Moreover, the issues in dispute are themselves very complex and in my view, beyond that intended to be resolved in the context of a high volume, low cost essentially paper based dispute resolution process.

Accordingly, I dismiss this application on the basis that it contains a dispute which should be dealt with in a court or tribunal of competent jurisdiction. I recommend to the parties that they retain their own legal advice in relation to this outcome.