Prudence Court [2006] QBCCMCmr 309 (15 June 2006)

Last Updated: 19 December 2006

REFERENCE: 0048A-2006

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	11744
Name of Scheme:	Prudence Court
Address of Scheme:	48 Oceanic Drive MERMAID WATERS QLD 4218

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

George Zamola, the Owner of lot 5

I hereby order that the Body Corporate reimburse the owner of lot 5 the sum of $800 within two (2) weeks of the date of this order.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0048-2006

"Prudence Court" CTS 11744

The Application

The applicant, George Zamola, is the owner of lot 5 in the Prudence Court Community Titles Scheme (Prudence Court). In early August 2005 a leak occurred in the water pipe servicing the applicant’s bathroom. The water pipe is located within the concrete slab which is the applicant’s floor and also the ceiling of the lot below him – lot 2. The applicant called a plumber who effected the necessary repairs to the water pipe at a total cost of $800.

Prudence Court engages Strata and Body Corporate Services as its Body Corporate Manager (the Manager). The applicant submitted his plumber’s bill to the Manager for reimbursement but this was declined on the basis that the repairs did not involve infrastructure on common property. The applicant subsequently obtained a second receipt detailing that the work did affect the pipes located in the concrete slab between lots 5 and 2. This second claim for reimbursement was also declined on the basis that the repair was still not considered to be the responsibility of the Body Corporate.

The applicant has consequently lodged this application seeking an order for reimbursement of the $800 repair bill.

Section 276(1) of the Body Corporate and Community Management Act 1997 (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)).

My Decision

A Body Corporate is nominally responsible for the maintenance and repair of utility infrastructure – cables, wires, pipes, sewers, drains and ducts, plant, equipment and service meters. There are a number of exceptions for this responsibility; these are set out in section 20 of the Act.

Section 20 states:

20 Utility infrastructure as common property

(1) Common property for a community titles scheme includes all utility infrastructure forming part of scheme land, except utility infrastructure--

(a) solely related to supplying utility services to a lot; and

(b) within the boundaries of the lot (according to the way the boundaries of the lot are defined in the plan of subdivision under which the lot is created); and

(c) located other than within a boundary structure for the lot.
(2) However, common property does not include utility infrastructure positioned within common property if--

(a) its positioning is the subject of an agreement to which the original owner or the body corporate is a party; and
(b) under the agreement, ownership of the utility infrastructure does not pass to the original owner or body corporate.

Example of utility infrastructure for subsection (2)--

Cable television wires positioned in the service shaft of a multistorey building that is scheme land for a community titles scheme, if the wires remain in the ownership of a cable television provider.

(3) In this section--

"boundary structure", for a lot included in a community titles scheme, means a floor, wall or ceiling, other than a false ceiling, in which is located the boundary of the lot with another lot or common property.

The application of section 20 of the Act to this matter could not be clearer. The broken pipe was located within the concrete that is the floor of lot 5 and the ceiling of lot 2. This is a "boundary structure" as defined in sub-section 20(3). While I acknowledge the sub-section is framed in the negative, its meaning is simple – utility infrastructure that is located within a boundary structure is "common property".

Section 109 of the Act sets out the duties of a body corporate concerning common property; this section states:

109 Duties of body corporate about common property--Act, s 152

(1) The body corporate must maintain common property in good condition, including, to the extent that common property is structural in nature, in a structurally sound condition.

(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.

(3) Despite anything in subsections (1) and (2)--

(a) the body corporate is not responsible for maintaining fixtures or fittings installed by the occupier of a lot if they were installed for the occupier’s own benefit; and
(b) the owner of the lot is responsible for maintaining utility infrastructure, including utility infrastructure situated on common property, in good order and condition, to the extent that

the utility infrastructure--

(i) relates only to supplying utility services to a particular lot; and
(ii) is 1 of the following types--

• hot-water systems
• washing machines
• clothes dryers
• another device providing a utility service of to a lot; and

Examples for subsection (3)(b)--

1. An airconditioning plant is installed on the common property, but relates only to supplying utility services to a particular lot. The owner of the lot would be responsible for maintaining the airconditioning equipment.
2. A hot-water system is installed on the common property, but supplies water only to a particular lot. The owner of the lot would be responsible for maintaining the hot-water system and the associated pipes and wiring.

(c) the owner of the lot is responsible for maintaining the tray of a shower that services the lot, whether or not the tray forms part of the lot.

(4) To avoid doubt, it is declared that, despite an obligation the body corporate may have under subsection (2) to maintain a part of a lot in good condition or in a structurally sound condition, the body corporate may recover the prescribed costs, as a debt, from a person (whether or not the
owner of the lot) whose actions cause or contribute to damage or deterioration of the part of the lot.

(5) In this section--
"prescribed costs" means the proportion of the reasonable cost to the body corporate of carrying out the maintenance that can, in the body corporate’s reasonable opinion, be fairly attributed to the person’s actions.

The applicant has cited an analogous circumstance to his which was the subject of a previous adjudication – 49 Old Burleigh Road [2004] QBCCMCmr 566 (the Old Burleigh matter). The Manager has distinguished the circumstances of that previous matter from this situation arguing that in this case the leaking water pipe supplies water only to lot 5.

The Manager has relied on the exception in sub-section 109(3)(b) of the Standard Module to argue that because the pipe supplies water solely to the applicant’s lot, the obligation under section 109(1) does not arise. However, the flaw in the Manager’s argument is that she appears to have read sub-section 109(3)(b) as a stand-alone provision. Rather, sub-section 109(3)(b) must be read in conjunction with sub-section 109(3)(a). The use of the conjunction "and" means the obligation of the occupier of a lot to maintain the utility infrastructure providing a unique service to that lot arises only when the occupier has themselves installed the infrastructure. Section 109 of the Standard Module must also be read in conjunction with section 20(1) of the Act.

In this matter there is no information that the water pipe that is the subject of this application is other than what it appears – the infrastructure provided to each lot at the time of the building’s original construction that is located in the boundary structure. For this reason I find the Body Corporate is responsible for the repair of the water pipe in the applicant’s lot.

I do not agree with the Manager’s argument the circumstance that is the subject matter of this application can be distinguished to that of the Old Burleigh matter. I consider that the circumstances in the two cases are directly analogous. For a start, there is no information in the decision in the Old Burleigh matter that the leaking water pipe did not provide water solely to that affected lot. Certainly, the Body Corporate Manager in the Old Burleigh matter also unsuccessfully tried to rely on sub-section 109(3)(b) of the Standard Module as a defence to non-payment without reference to sub-sections 20(1) and (3) of the Act.

I would presume the Manager of Prudence Court considers that she is acting in the best interests of the Body Corporate by rigorously defending the applicant’s claims for reimbursement. The Adjudicator in the Old Burleigh matter commented at length that one of the significant advantages to engaging a Body Corporate Manager was they possess a thorough knowledge and understanding of the Act and the associated regulations so that actions performed on behalf of the Body Corporate are consistent with the legislative obligations. It is unnecessary for me to repeat that comment beyond that I concur with its sentiment and consider it applicable to this situation. I note the applicant had to source an additional invoice, lodge this application and wait over 10 months to be reimbursed which should have happened as a matter of course when the repair was first brought to the Body Corporate’s attention.

I have noted that the applicant unilaterally undertook the repairs and then invoiced the Body Corporate. While usually, notice of a broken water pipe would be communicated to the Body Corporate so that it could arrange for the appropriate tradesperson to effect the repair, the applicant’s action has denied the Body Corporate their choice of tradesperson. However, I find that nothing hangs off this omission; the nature of the damage required prompt attention to minimise the damage and, as the Manager’s response has subsequently shown – the Body Corporate would not have considered it to be their responsibility to remedy the broken pipe.

For the above reasons I order pursuant to section 281(1)(b) of the Act that the Body Corporate pay the applicant the sum of $800 being reimbursement for the repairs carried out to the broken pipe in his floor. The payment is to be made within two (2) weeks of the date of this order.