Gemini [2006] QBCCMCmr 596 (15 November 2006)

Last Updated: 19 December 2006

REFERENCE: 0623-2006

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	9828
Name of Scheme:	Gemini
Address of Scheme:	Landsborough Parade, GOLDEN BEACH QLD 4551

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

Mr John Hamilton, the Owner of lot 99 (unit 90).

I hereby order that the application for the following orders: The Body Corporate Committee arrange without further delay (since the Body Corporate Committee has already had two and a half years to do the renovation work)to complete the entire renovation of the lift lobby to units 90/ 91 being adjoining and the only units at the Penthouse level of the North Tower of the Gemini resort. Such renovation to be in accordance with the design approved prior to the special levy being paid by owners of all units in early 2004 for the renovation of all lobbies throughout the South and North Towers of Gemini resort. Further to ensure that:That such work follows the design concepts used for the similar lift lobby of the Penthouse level of the South Tower.That in the process of performing the renovation works, the existing floor tiles of the lift lobby to units 90/ 91 be lifted at the expense of the body corporate (estimated cost $500 - $600) and new tiles laid in the manner described in Mr. Hamilton’s Fax(es) to North Coast Body Corporate Services dated 18/7/2006 and 26/7/2006 – attachments (5) and (6). That since the levy was paid by Mr. Hamilton on 15/3/04 and the renovation work for which such payment was made (also by Mrs. Gowan) has not been carried out, resulting in these owners being deprived of both the enjoyment of the new renovations and simultaneously the use of $4152.00 each has paid, the Body Corporate compensate each owner at the rate of 7% per $4152.00 from March 2004 until the work is completed. If, in the circumstances of this dispute should the Adjudicator deem reasonable that the Body Corporate be ordered to reimburse Mr. Hamilton the cost of the Health and Safety Report of 13/7/06 amounting to $269.50.is dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0623-2006

"Gemini" CTS 9828

ApplicationThe applicant, John Hamilton, is the owner of lot 99 (unit 90) and has sought the following orders of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act): Final Outcomes
The Body Corporate Committee arrange without further delay (since the Body Corporate Committee has already had two and a half years to do the renovation work)to complete the entire renovation of the lift lobby to units 90/ 91 being adjoining and the only units at the Penthouse level of the North Tower of the Gemini resort. Such renovation to be in accordance with the design approved prior to the special levy being paid by owners of all units in early 2004 for the renovation of all lobbies throughout the South and North Towers of Gemini resort.
Further to ensure that:That such work follows the design concepts used for the similar lift lobby of the Penthouse level of the South Tower.
That in the process of performing the renovation works, the existing floor tiles of the lift lobby to units 90/ 91 be lifted at the expense of the body corporate (estimated cost $500 - $600) and new tiles laid in the manner described in Mr. Hamilton’s Fax(es) to North Coast Body Corporate Services dated 18/7/2006 and 26/7/2006 – attachments (5) and (6).
That since the levy was paid by Mr. Hamilton on 15/3/04 and the renovation work for which such payment was made (also by Mrs. Gowan) has not been carried out, resulting in these owners being deprived of both the enjoyment of the new renovations and simultaneously the use of $4152.00 each has paid, the Body Corporate compensate each owner at the rate of 7% per $4152.00 from March 2004 until the work is completed.
If, in the circumstances of this dispute should the Adjudicator deem reasonable that the Body Corporate be ordered to reimburse Mr. Hamilton the cost of the Health and Safety Report of 13/7/06 amounting to $269.50.Interim Orders
That the Gemini Body corporate committee be directed not to carry out the renovation of the lift lobby to units 90/91 unless the existing floor tiles are first removed and the floor slab properly prepared in the manner described in Mr. Hamilton’s faxes to North Coast Body Corporate Management Services dated 18/7/06 and 26/7/06 – Attachments 5 & 6 and the new tiles laid so as to eliminate all safety hazards (slips, trips & falls) described in the Health and safety report dated 13/7/06 – attachment 5 prepared by Risk and safety Management Pty. Ltd.

That if the Gemini Body corporate committee arranges for the new tiles to be laid over the existing tiles thus creating the safety hazards referred to in the above mentioned Health and Safety Inspectors Report of 13/7/06, THEN as part of carrying out the renovation of the lift lobby for Units 90/91 the existing and the new tiles all be removed at Gemini Body Corporate expense to permit the final tiling work to be completed in the manner described in the paragraph above and as intended in the original design approved by the body corporate general meeting on which the special levy was based.On 7 September 2006, I made a determination dismissing the request for interim orders on the grounds that in the absence of any demonstrated urgency, the requested interim orders and final outcomes should be the subject of one determination. I also expressed my preliminary view that if the applicant wanted the existing tiles to be removed prior to the laying of new tiles, it was just and equitable that the applicant be required to bear the cost of removing the existing tiles.

The matter was referred back to the Commissioner to be administered in accordance with the Act and affected parties were given an opportunity to make further written submissions about the orders sought by the applicant and the applicant will have a right of reply.

The SchemeThe Gemini community title scheme consists of 99 lots registered on a building format plan (previously known as a building unit plan) and is regulated by the Accommodation Module Regulation.Background

The applicant is seeking an order that the body corporate complete renovation of the lift lobby for units 90 and 91 and that existing floor tiles in that lift lobby be removed and replaced with new tiles at the body corporate expense.

In support of the application for interim orders the applicant previously made the following submissions:

• Two members of the current body corporate committee were members of the body corporate committee 10 years ago when the existing tiles were laid in the lift lobby;
• The current treasurer was on the committee at the time an application for resolution of a dispute regarding the external appearance of the building was submitted with this Office;
• He was not the owner of lot 90 when the existing tiles were laid as part of renovation work undertaken in 1996 as he was not an owner until 1999;
• However the applicant does admit that in 1996 unit 90 was owned by Alturas investments Ltd., a company controlled by the applicant;
• The body corporate proposal to lay tiles over the existing tiles creates a safety hazard;
• In about 2003 a general meeting of the body corporate approved the renovation of all lift lobbies with no conditions such as those that the body corporate is now trying to impose on the applicant;
• The applicant is concerned that the proposed work could void the legal liability insurance and adversely affect the resale value of units 90 & 91; and
• Laying tiles over existing tiles could lead to a higher risk of slips, trips and falls through changing floor levels and raised lips at door entrances or tiles angled up or down to take account of the contours of the existing floor.

In response to the application for Interim Orders, the body corporate made the following submissions:

• In 1996 the applicant was the controlling shareholder of a company which previously owned unit 90 and without body corporate approval, tiled the common property foyer that adjoins units 90 & 91 at the same time that extensive renovations were being undertaken in unit 90;
• The decision of the body corporate to renovate all the foyers of the complex has been gradually carried out;
• The committee agreed to refurbish the foyer to lots 90 and 91 but requested the applicant to remove existing floor tiles to allow new floor tiles to be laid in the common property foyer;
• The committee does not believe it should bear the cost of removing tiles installed on common property without body corporate approval;
• Following the carrying of the resolution at the general meeting, a levy was imposed to fund the renovation of various common property areas. The body corporate does not believe that any particular owner should be reimbursed because of a delay in completion of the work; and
• In any event, even if it was agreed that some monies should be refunded, it would be appropriate that all lot owners receive a proportionate share of the amount.

The owners of lot 84 in the scheme made the following submissions:

•	The fact that two members of the current committee were also members of the 1996 committee at the time that tiles were laid in the lift lobby in breach of the by-laws does not bind the body corporate and cannot amount to ratification of the breach;
•	Pursuant to section 37A of the Building Units and Group titles Act, which was in force in 1996, an owner was only authorised to effect improvements to common property by resolution without dissent of the body corporate and no such resolution was obtained;
•	In any event section 37A of that Act required any owner who made improvements to the common property to meet the Body corporate’s obligations under section 37(1)(c ) of that Act, namely the repair, including renewal or replacement of common property;
•	The dispute resolution application submitted with this Office in 1997 related to the external appearance of the building and has no application to this dispute;
•	It is not appropriate for the applicant to rely on the fact that ownership of the unit was in the name of his private investment company in 1996;
•	From the report commissioned by the applicant it is clear that it is an option to lay new tiles over the existing tiles and that laying new tiling over existing tiling would cause less disruption;
•	Appropriate workplace health and safety measures can be undertaken to ensure that any impact through change of floor levels can be managed by appropriate contouring to the existing floor;
•	Jack hammering of tiles would cause disruption and impact on holiday lettings in neighbouring units;
•	Therefore the body corporate should be permitted to complete the renovation of the lift lobby by laying new tiles over existing tiles with appropriate regard to any health and safety standards; and
•	If an order is made that the tiles should be removed, the cost should be borne by the applicant .

The owners of lot 79 in the scheme made the following submissions:

• the applicant previously retiled the unit 90 lobby in 1996 and has the benefit of that tiled area over the last 10 years;
• prior to 1996 the lobby was mostly carpeted with a few tiles and little preparation would have been required before the applicant completely retiled the area;
• as the applicant retiled the whole area in 1996, renovation of the area would now necessitate jack hammering and removal of the old tiles unless new tiles were laid over the existing floor;
• it is unfair to require other owners to pay an additional cost for which the applicant was responsible.

Submissions on Application for Final Orders

The Body Corporate made the following further submissions:

• Previously the applicant as the controlling shareholder of the company that owned unit 90, tiled the common property foyer area in 1996 without body corporate approval;
• The decision to renovate all the foyers in the complex has been gradually carried out and the committee has requested the applicant to remove the tiles to allow the renovation works to be completed on the common property foyer of unit 90;
• The body corporate should not have to bear the cost of removing the tiles placed on common property by the applicant without the body corporate’s approval;
• Contributions were paid by owners for maintenance of common property in accordance with a resolution carried at a general meeting;
• There is no provision for reimbursement of lot owners in respect of incomplete work on common property;
• Similarly the body corporate is not required to reimburse lot owners for debts unilaterally incurred by lot owners and therefore should not have to reimburse the applicant for the cost of obtaining the "Health and Safety report".

The owners of lot 84 made the following further submissions:

• there is no basis for the body corporate to be ordered to pay interest on the amount of special levy paid because the purpose of the levy was to renovate common property such as the main foyer and not just the lift lobbies;
• renovations were purposely staggered floor by floor to minimise disruption and to take account of letting cycles;
• if the applicant had agreed to pay the cost of removing tiles for which he previously laid, the renovation works would have been carried out sooner;
• even if interest were to be paid to the applicant, it should only be paid from July 2006 when the applicant first corresponded with the committee about the matters the subject of this application;
• the "Health and Safety Report" obtained by the applicant did not conclusively support either option for tiling but simply advances the risks and advantages of each and in any event there was no suggestion that the body corporate would not take into account health and safety issues.

The owners of lot 87 made the following further submissions:

• it would appear reasonable that the cost of removal or at least 50% of the cost of removal of the tiles should be borne by the owners of lots 90 & 91 as they were responsible for the tiling and had the benefit of the tiling;
• it is proper that the body corporate proceed to refurbish the foyers of units 90 & 91 to the same standard as the other foyers.

In reply the applicant made the following submissions:

• the decision to renovate the lift lobbies included removal of all existing floor coverings;
• the levy included the cost of removing all existing lobby floor coverings;
• the renovation is neither a repair nor a replacement because the improvements have reached the end of their useful life;
• the body corporate has known that the area was tiled by the applicant’s company as it rejected his claim for reimbursement after completing the work without body corporate consent;
• the body corporate did not impose any conditions upon the applicant or the applicant’s company regarding removal of the tiles in the event of renovation;
• the special resolution was for overall renovation of the lift lobbies not the repair of lift lobby tiling and therefore section 114(4) of the Standard Regulation Module does not apply;
• the body corporate is trying to impose previously non-existing conditions.

Jurisdiction

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)).

Determination

At this point in time I am considering the request for the following Orders:

The Body Corporate Committee arrange without further delay (since the Body Corporate Committee has already had two and a half years to do the renovation work)to complete the entire renovation of the lift lobby to units 90/ 91 being adjoining and the only units at the Penthouse level of the North Tower of the Gemini resort. Such renovation to be in accordance with the design approved prior to the special levy being paid by owners of all units in early 2004 for the renovation of all lobbies throughout the South and North Towers of Gemini resort.Further to ensure that:That such work follows the design concepts used for the similar lift lobby of the Penthouse level of the South Tower.

That in the process of performing the renovation works, the existing floor tiles of the lift lobby to units 90/ 91 be lifted at the expense of the body corporate (estimated cost $500 - $600) and new tiles laid in the manner described in Mr. Hamilton’s Fax(es) to North Coast Body Corporate Services dated 18/7/2006 and 26/7/2006 – attachments (5) and (6).That since the levy was paid by Mr. Hamilton on 15/3/04 and the renovation work for which such payment was made (also by Mrs. Gowan) has not been carried out, resulting in these owners being deprived of both the enjoyment of the new renovations and simultaneously the use of $4152.00 each has paid, the Body Corporate compensate each owner at the rate of 7% per $4152.00 from March 2004 until the work is completed.If, in the circumstances of this dispute should the Adjudicator deem reasonable that the Body Corporate be ordered to reimburse Mr. Hamilton the cost of the Health and Safety Report of 13/7/06 amounting to $269.50.

Although this dispute has generated a lengthy application and submissions, the subject matter of this dispute is some relatively minor work involving removal of a small area of ceramic tiles and adhesive, which is estimated to cost in the vicinity of $500 to $600. The subject tiles were laid some 10 years ago when the applicant was the controlling shareholder of a company which then owned unit 90. At that time extensive renovations were being undertaken in unit 90 and the applicant arranged to have carpet removed from the common property foyer adjoining units 90 & 91, and to have ceramic tiles laid although formal approval was not obtained. Nevertheless, the applicant submits that the body corporate committee was aware of the renovation work and raised no objection at the time.

Having regard to the documentary material and submissions lodged with this Office, I do not believe the applicant has established that he is entitled to the orders sought. While it may have been resolved that the refurbishment of the various common property foyer areas would include removal of floor coverings, I am unaware of any specific proposal to remove ceramic floor tiles in the common property foyer adjoining units 90 & 91. Indeed I note from the minutes of committee meeting it was proposed that new tiles would be laid over existing floor tiles. Obviously, in other areas that were carpeted, the carpet would need to be removed before tiles could be laid. However, as the applicant expressed a desire for the existing tiles to be removed before new tiles were laid, the body corporate adopted the position that the applicant should bear the cost of removing the tiles.

Notwithstanding the applicant’s arguments, I believe that there is some substance to the submissions by the owners of lot 84 to the effect that at the time of the renovations, section 37A of the Building Units and Group titles Act required an owner who made improvements to the common property to also meet the body corporate’s obligations under section 37(1)(c ) of the Act, namely the repair, including renewal or replacement of common property. Further, as I pointed out in my Interim Order, under section 114(4) of the Body Corporate and Community Management (Standard Module) regulation 1997, a lot owner must maintain an improvement made on common property unless excused by the body corporate. While the existing floor tiles may still be functional, it is common practice for common property areas to be refurbished from time to time. There have been previous Adjudications^[1] by this Office in which it has been determined that renovations of this nature fall within the broad definition of "maintenance". Similar adjudications have been upheld on appeal where appellate tribunals have, for example, held that "the term repair may also be interpreted to include replacement, refurbishment and maintenance and I accept that the repairs may invoke an element of improvement, but may still remain within the general concept of repair".^[2]

In any event however, I do not believe the applicant has established that the body corporate’s proposal to place new tiles over the existing tiles is unreasonable. As the applicant has not established that the proposal is contrary to the Building Code of Australia or Australian Standards applicable to floor tiling, I am not convinced that the existing tiles must be removed before laying the new tiles. If the applicant requires the common property adjoining his unit to be completed to a higher standard than that proposed by the body corporate, It is just and equitable that he make some contribution to the additional cost involved, particularly when the additional cost has been occasioned by work undertaken on the common property by a related entity without body corporate approval.

I have no jurisdiction to order payment of interest on the special levy paid by the applicant. In any event, the special levy does not relate specifically to the foyer adjoining the applicant’s unit but rather, all of the common property foyer areas.

Similarly, I am not empowered to order that the applicant be reimbursed for the cost of the report prepared by Risk and Safety Management Pty. Ltd.

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^[1] Application 0412-2004, RA Meek, 16 November 2004.
^[2] Proprietors "The Rocks Resort" v. Costi, Building Units Appeal Tribunal No 227 of 1997, O’Driscoll SM, 24 September 1997.