Aquila Apartments [2005] QBCCMCmr 49 (31 January 2005)

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Alvezio Marmotta, the owner of lot 7

I hereby order that the application by Alvezio Marmotta, the owner of lot 7 for orders, quote –

1. Enforcing s.109(2)(b) where body corporate must maintain elements of a scheme that are not common property such as roofing or other covering structures providing protection;
2. Invalidate the resolution passed at the AGM on August 11 2004 not to appoint an auditor to audit body corporate’s accounts,

is dismissed.

I further order that the body corporate of Aquila Apartments must take all necessary steps to expeditiously implement the resolution carried by the body corporate at its AGM held on Wednesday 11 August 2004 headed "Roof Repairs", and to have the dispute referred to the BSA for determination as soon as possible.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0643-2004

"Aquila Apartments" CTS 1826

The applicant, the owner of lot 7 has sought the following orders of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act) quote –

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

(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 8 lots recorded under a building unit plan of subdivision. The regulation module applying to the scheme is the standard module.

I do not intend to restate the applicant’s grounds in any detail. These are known to the other party, namely the body corporate, which has responded by way of a submission from the body corporate manager, Australian Unit Administration Pty Ltd (AUD).

It is relevant to note that the applicant was the developer / builder of the complex, and continues as the owner of lot 7. The roof of the building is alleged to be leaking, however the body corporate consider that repairs to the roof remain the responsibility of the applicant as the original builder on the basis of an extended warranty which arose due to some earlier repairs. The applicant denies that the extended warranty exists in respect of that part of the roof which he alleges is now leaking, and considers or believes that the original warranty period has now expired. Given this, the applicant consider that the repair of the roof is the responsibility of the body corporate under section 109(2)(b) of the standard module, quote –

(2) To the extent that lots included in the scheme are created under a building format plan of subdivision, the body corporate must--
(a) maintain in good condition--
(i) railings, parapets and balustrades on (whether precisely, or for all practical purposes) the boundary of a lot and common property; and
(ii) doors, windows and associated fittings situated in a boundary wall separating a lot from common property; and
(iii) roofing membranes that are not common property but that provide protection for lots or common property; and
(b) maintain the following elements of scheme land that are not common property in a structurally sound condition--
(i) foundation structures;
(ii) roofing structures providing protection;
(iii) essential supporting framework, including load-bearing walls.

It seems to me that there is the proverbial Mexican standoff happening. The applicant is claiming that the extended warrant does not apply to the area of the roof now requiring repair, and the body corporate is contending otherwise. In the meantime it appears that nothing is being done regarding the roof. I do note that at its AGM held on 11 August 2004, and shortly before this application was made, the body corporate resolved by 5 votes in favour with one against, to approve the body corporate proceeding with legal action to enforce the extended warranty on the roof as advised by the BSA.

I am not in any position to make a determination of whether or not the area of the current leak is the area still the subject of the extended warranty. This is a determination only the BSA can make. It has the records of the previous dispute. I therefore conclude that if it has not done so already the body corporate must now take all necessary steps to expeditiously implement the above resolution, and to have the dispute referred to the BSA for determination. Once a determination is made by the BSA of whether the area the subject of the current leak is the area subject to the extended warranty, then all parties will know how next to proceed. In particular, if the leak(s) are occurring in the area the subject of the extended warranty, then presumably the BSA will make necessary orders compelling or requiring the builder to make further repairs. Alternatively, if it is not so, then clearly the responsibility for repair will fall back to the body corporate which, as the applicant correctly points out, would otherwise be responsible for repairs on the basis of section 109. In the circumstances, I proposed to order that the body corporate must take all necessary steps to expeditiously implement the above resolution, and to have the dispute referred to the BSA for determination.

In respect of the second order sought by the applicant, I note that the applicant seeks to invalidate a resolution carried at the AGM in August 2004 not to audit the accounts. In his grounds the applicant states that the reason why he would like the accounts audited "is that they have not been audited since it was established. I have noticed over the past 6-8 months that expenditure has been carried out by the committee and I have not received any minutes / correspondence from them stating the nature or purpose of the expenditure. I believe there is no control in the body corporate’s spending and would like accounts audited for those reasons".

I am satisfied that the body corporate has correctly resolved not to have its accounts for the financial year audited. The applicant has not provided me with any compelling or event satisfactory reason why I should overturn a valid resolution of the body corporate in general meeting, and to put the body corporate to expense which it has resolved not to undertake, and I decline to do so. The applicant is entitled to appoint his own auditor if he is seriously concerned with body corporate expenditure, or in fact to undertake his own audit of the accounts. However such action or appointment can only be at the expense of the applicant.

Number of Scheme:	1826
Name of Scheme:	Aquila Apartments
Address of Scheme:	14 Third Avenue PALM BEACH QLD 4221

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Aquila Apartments [2005] QBCCMCmr 49 (31 January 2005)