Nankita [2005] QBCCMCmr 560 (11 October 2005)

Last Updated: 19 July 2006

REFERENCE: 0407-2005

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	12000
Name of Scheme:	Nankita
Address of Scheme:	3 Orvieto Terrace CALOUNDRA QLD 4551

TAKE NOTICE that pursuant to an application made under the abovementioned Act by

Justin Anthony Moynihan & Julie Margaret Moynihan, the co-owners of lot 1

I hereby order that the application for an order that the body corporate of Nankita CTS 12000 pay compensation to the applicants in the sum of $10000.00 for damage to lot 1 Nankita CTS 12000 and consequential loss of rental caused by termite infestation to lot 1, is dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0407-2005

"Nankita" CTS 12000

ORDER SOUGHT

The applicants have sought an order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act) as follows:

That the body corporate of Nankita CTS 12000 pay compensation to the applicants in the sum of $10000.00 for damage to lot 1 Nankita CTS 12000 and consequential loss of rental caused by termite infestation to lot 1.

JURISDICTION

The application evidences a dispute between an owner of a lot included in a community titles scheme and the body corporate for the scheme (section 227(1)(b) of the Act).

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)).

SCHEME DETAILS

Nankita registered as a building units plan (now described as a building format plan) on 14 December 1978. The scheme comprises 9 lots and common property, and is regulated by the Body Corporate and Community Management (Standard Module) Regulation 1997 (Standard Module).

BACKGROUND

The applicants stated that they purchased their lot in 1999, and prior to doing so, they had a pest inspection, which revealed no termite infestation and no areas susceptible to termite activity. The applicants further stated that they raised the issue of regular termite inspections of the building as a preventative measure at the annual general meeting in 2000. The suggestion was raised in general business and was not on the agenda of the meeting. The applicants alleged that the meeting decided not to take the matter further, although they concede that the alleged discussion was not minuted.

The applicants further stated that the issue was again raised at the annual general meeting on 5 April 2003. In relation to Pest Control the minutes recorded that "the committee will consider and if required arrange an inspection for termites." Such an inspection was carried out in December 2003, when termites were discovered in the garage of lot 5, in a piece of furniture in the garage of lot 9 and in timber retaining walls on the common property. Treatment was carried out by Active Pest Control.
The applicants explained that termites were discovered in their lot in June 2004, and treatment was carried out immediately. The cost of the work to repair the termite damage was detailed in the applicants’ supporting grounds. A claim was also made for loss of rental income during the period that the lot had to remain vacant because the applicants were unable to engage workmen to complete the repairs. The amount in excess of the allowable figure of $10,000.00 was abandoned.

The body corporate committee and all owners were invited to respond to the application. Submissions were received from 5 owners, one of whom also identified himself as a member of the body corporate committee. Those owners were all of the view that the body corporate had not failed in its duty in respect of termite management. One owner suggested that the applicants might have a claim against Active Pest Control.

DETERMINATION

Section 120(2) of the Standard Module provides that the owner of a lot included in a Community Titles Scheme must maintain the lot in good condition. The body corporate is obliged to maintain common property in good condition (section 109(1) of the Standard Module).

The applicants arranged for a pest inspection of their lot before they purchased it in 1999, but in spite of the recommendations in that report for annual inspections thereafter, as well as a full termite protection program, it does not appear that either of these recommendations was acted upon. The applicants contend that their lot was regularly inspected either by them or by their letting agent, but it appears that none of these parties was a qualified pest control inspector. Furthermore, it appears that a visual inspection would not have revealed the presence of the termites, as they were hidden behind various walls. Only the specialized equipment of a pest control inspector would have been likely to detect their presence without actually removing walls.

In spite of the applicants’ belief that the body corporate has been derelict in its duty in relation to the common property which has in turn lead to the termite infestation in the applicants’ lot, I do not consider that the evidence supports that view.

Firstly, even if the applicants raised the issue of regular termite inspections by the body corporate in 2000 as they have alleged (and I have no reason to doubt that the matter may have been raised in general discussion), the regulations provide that a general meeting may pass a resolution on a motion only if the motion is included as an item of business on the general meeting agenda and stated in a voting paper accompanying the notice of meeting, (section 52(5)(a) of the Standard Module), or in certain other circumstances which do not apply here. The applicants do not appear to have proposed a motion in relation to termite inspections, which they could have done as owners at any time (section 41 of the Standard Module). Furthermore the male applicant has also been a committee member from time to time.

Secondly, the applicants have not explained their own failure to have annual inspections of their lot, as recommended by their pest inspector on 29 November 1999.

Thirdly, the actual source of the termite activity in the applicants’ lot has not been identified. In the report dated 3 March 2005 from Pest Busters, the following comments appear:

• It can be extremely difficult to collate termite activity, entry points and or damaged timber. In this case, an extensive renovation to the bathroom has followed repair work after last June’s termite attack. This makes the task of determining entry points even less likely.

• ...as termites were earlier located in garage 9 and this shares a common wall with your damaged bathroom it is conceivable that the entry was from the adjacent garage.

• ...during renovations when the bathroom vanity or shower was removed the plumbing through the concrete floor slab was in an open hole with bare earth visible. This could also have proven a likely entry point but it was reported that no evidence of termite workings were seen in this area.

• ...the construction of the garage for your unit is such that concrete walls on either side and brick wall at rear were erected before the concrete slab was poured. Subsequent shrinking of the concrete slab will leave a gap large enough for termites to travel through.

• The fact that your bathroom plumbing had a leak, presumably behind a wall or cupboard (otherwise it would have been noticed) would have been an attraction to foraging termites.

In a letter dated 9 May 2005, Pest Busters provided additional information which included the opinion that there was no evidence of a chemical perimeter having been installed across the front door area of the entry foyer, which meant that the barrier was incomplete and that could leave the area susceptible to termite entry.

The rear wall of the garage of lot 9 abuts the western wall of the applicants’ lot, however this shared wall is not common property. The applicants and the owners of lot 9 respectively own to the midpoint of the shared wall, and apart from the obligation on the body corporate in relation to maintaining load-bearing walls which are not common property in a structurally sound condition under section 109(2)(b)(iii) of the Standard Module, there is no other responsibility that can be attributed to the body corporate in relation to this wall. Accordingly, even if it could be determined that the termites entered the applicants’ lot from the garage of lot 9, that area is part of a lot, and is not common property and the body corporate cannot be held responsible for events emanating from it.

On the other hand there is evidence of leaking plumbing within the applicants’ lot (Henzells’ report dated 2 March 2004) and the presence of termite damage in the wall where the leak occurred as well as under the shower bath, where more moisture was found (R.T. Schoeman’s letter dated 25 July 2005). It seems likely, in my view, that the presence of this moisture at the very least facilitated the termite activity.

In addition, there was never any suggestion that Active Pest Control had inspected individual lots when it carried out treatment to the garages of lots 5 and 9, and subsequently treated the internal walls of all garages nor was there any obligation on the body corporate to have individual lots inspected. However, it was certainly open to the applicants to have their own pest inspection carried out immediately they learned of termite activity in lot 9’s garage, but it appears that they did not do this either.

I am not satisfied that the body corporate has contravened the Act. I do not consider that the body corporate has been derelict in relation to its duty concerning the maintenance of common property. Having so found, it follows that the body corporate is not liable under section 281 of the Act to pay compensation to the applicants and I therefore do not propose to make the order sought by them.

In light of this finding it is not necessary for me to consider the quantum of the applicants’ claim. However it is appropriate to point out that a claim for loss of rent does not fall within the ambit of section 281 of the Act.