Daniells Terraces [2005] QBCCMCmr 78 (11 February 2005)

Last Updated: 5 July 2005

REFERENCE: 0660-2004

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	4489
Name of Scheme:	Daniells Terraces
Address of Scheme:	47 Daniells Street CARINA QLD 4152

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

Mr Peter Blondell, the Owner of lot 3

I hereby order that the application for an order that if at the end of 90 days, the body corporate for Daniells Terraces has not installed two water outlets (one each at the eastern and western ends of the common property) for the purpose of common water usage, then the body corporate must write to Brisbane Water advising that the Body Corporate wishes to withdraw from the individual water metering option is dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0660-2004

"Daniells Terraces" CTS 4489

Application

Daniells Terraces, which consists of 4 lots and common property, was originally created under a building units plan of subdivision (now known as a building format plan). The Body Corporate and Community Management (Standard Module) Regulation 1997 applies to the scheme.

This scheme has five water meters- one meter for each of the units, and one meter which measures the aggregate use by the four units. There is no separate meter for the body corporate because although there is an external tap outside each unit, these taps are connected to the lines which service the individual lots.

At an extraordinary general meeting of the body corporate for this scheme, held on 21 July 2004, it was resolved by a majority of 3 to 1 to adopt sub-meter water billing so that water consumption could be billed individually to the four lots in the scheme. The applicant voted against this motion.

The applicant, who is also the chairman of the body corporate, submits that in order to comply with section 154 (now renumbered as section 196) of the Act, a separate water pipe, meter and taps should be installed to service the common property. Alternatively, the applicant submits that the scheme should revert to receiving a singe bill for water usage to which each lot owner would contribute equally.

The three lot owners who voted in favour of the motion are happy to meet the cost of any water sourced for common property purposes from the taps outside their lots as part of their individual bill.

Jurisdiction

Section 227(1)(b) of the Act provides that a dispute between an owner or occupier of a lot and the body corporate, is a dispute which may be resolved under the dispute resolution provisions of the Act. As this is a dispute between a lot owner and the body corporate, it is a dispute which may be resolved under the dispute resolution provisions 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)).


Submissions

Other lot owners have advised that they did not mind individually bearing the cost of water drawn for common usage from outlets connected to their lots, and consider the cost (in excess of $2,300) of installing a separate water line and two taps for the common property to be prohibitive relative to the potential cost of common water usage. They submit that the amount of water used for common purposes is relatively small and in any case, tends to be used by unit owners to occasionally water garden areas adjacent to the individual lots.

While the applicant is concerned that the tap outside his unit will be used to supply water for common purposes at his cost, the other owners suggest that he could install a lockable tap and that they are happy to supply water for common purposes.

Decision

The relevant section of the Act provides as follows:

196 Utility services not separately charged for
(1) This section applies to a community titles scheme if--

(a) there is no practicable way available to a utility service provider to measure the extent to which the utility service is supplied to--

(i) each lot included in the scheme; and

(ii) if the utility service is also supplied to the common property--the common property; and

(b) the supply of the utility service to scheme land is charged according to usage, and is not charged for on the basis of the unimproved value of land.
(2) A lot owner is liable to the utility service provider for a share of the total amount payable for the provision of the utility service to scheme land.
(3) The share is proportionate to the contribution schedule lot entitlement for the lot.
(4) However, the body corporate may, by arrangement with the utility service provider, take on liability for owners or occupiers of the lots for the utility service supplied for the benefit of owners or occupiers.
(5) If an arrangement is in force under subsection (4), the utility service provider can not separately charge the owners or occupiers for the utility service to which the arrangement relates, and the body corporate must satisfy the liability to the utility service provider out of--

(a) the contributions paid by lot owners to the body corporate under the regulation module applying to the scheme; or

(b) a levy imposed on the individual lot owners in the way stated in subsection (6).
(6) The levy must be made--

(a) for lots for which the body corporate has a way of measuring the extent to which the utility service is supplied to each lot--according to the extent of supply; and

(b) for lots for which the body corporate does not have a way of measuring the extent to which the utility service is supplied to each lot--
(i) equally between the lot owners; or

(ii) proportionately among the lot owners according to the contribution schedule lot entitlement for each lot.

The applicant argues that as there is no practicable way to measure the extent to which water is supplied to the common property, each lot owner is liable to the water provider for a share of the total cost of supplying water to the scheme land, proportionate to the contribution schedule lot entitlement for the lot.

I do not believe that this is necessarily the case. For example it could be argued that the developer of the complex never intended that a utility service be supplied to the common property, and that the location of a tap in the boundary wall outside each unit involves an implied easement in favour of each unit owner to use the tap for their own purposes. The individual lot owners are then free to "donate" water for common property use.

Another possible argument is that as the three lot owners who voted in favour of the motion are happy to meet the cost of any water used for common purposes, and are agreeable to the tap outside lot 3 being locked, it cannot be said there is no practicable way available to the service provider to measure the extent to which water is supplied to each lot included in the scheme and the common property.

The Body Corporate and Community Management Act 1997 establishes rights and imposes obligations on participants in community titles schemes to promote the provision of flexible and contemporary communally based arrangements. One of the specified objects of the Act is "to balance the rights of individuals with the responsibility for self management as an inherent aspect of community titles schemes".

As outlined above, Section 276(1) of the Act provides that an adjudicator may make an order that is just and equitable in the circumstances. In the present case, three out of four owners have voted in favour of individual billing and are happy to meet the cost of any water used for common purposes. Further, they have no objection to the tap outside lot 3 being locked off so that it may only be used by the occupants of lot 3. In these circumstances it is difficult to see how making the requested order would be just and equitable, and I therefore decline to make such an order.

I do note however, that circumstances can change, and current arrangements for supply of water for common purposes, are always subject to future negotiation and change by resolution of the body corporate as the circumstances require.