Admiralty Towers II [2007] QBCCMCmr 468 (6 August 2007)

Number of Scheme:	15344
Name of Scheme:	Admiralty Towers II
Address of Scheme:	501 Queen Street BRISBANE QLD 4000

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Michael and Honorah Pinnock, the owner of Lot 47

I hereby order that the application for an order by Michael and Honorah Pinnock, the owner of Lot 47 seeking to overturn the committee resolution made at its meeting dated 19 March 2007 not to pay the invoice from Climacool totalling $836.00 to replace a seized gate valve on a condenser water pipe in Lot 47, is dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0299-2007

"Admiralty Towers II" CTS 15344

Application
This application is by Michael and Honorah Pinnock, the owner of Lot 47 (applicants) against the body corporate seeking an outcome that the resolution contained in S5.3 of the minutes of the Committee Meeting dated 19 March 2007 be overturned.

Item 5.3 dealt with a letter from the applicants "requesting that the body corporate Committee reverses its decision in regard to not paying an invoice from Climacool totalling $836.00". The minutes state "John Rae advised the Committee that Greg Hannant had previously advised the Committee that it was the owners responsibility as the area in question was the air conditioning pipe servicing apartment 47 only and that the amendments to the Body Corporate and Community Management Act as of December 2003 had clearly indicated that infrastructure servicing the one lot was a maintenance responsibility of the owner of that lot. After discussion it was RESOLVED by the Committee that the body corporate would not pay for the invoice in question based on the understanding it was the responsibility of the owner to maintain the subject area".

Jurisdiction
"Admiralty Towers II"is a community titles scheme under the Body Corporate and Community Management Act 1997 (Act) and the Body Corporate and Community Management (Standard Module) Regulation 1997 (Standard Module).

An adjudicator may make an order that is just and equitable in the circumstances to resolve a dispute, in the context of a community titles scheme, about a claimed or anticipated contravention of the Act; or the exercise of rights or powers, or the performance of duties, under the Act (section 276(1), Act).

The applicants seek an outcome questioning a committee resolution. Given that a decision of the committee is generally a decision of the body corporate (section 100, Act), I am satisfied that a dispute exists between the body corporate and the owner of a lot (section 227, Act).

Procedural matters
On 17 May 2007, a copy of the application was provided to Body Corporate Services (the body corporate manager) for distribution to the owner of each lot (excluding the applicants) and the committee, with an invitation to respond to the matters raised in the application. Submissions were made on behalf of committee and by a number of lot owners.

A dispute resolution recommendation has been made under section 248 of the Act referring the dispute to departmental adjudication.

Submissions
The applicants submit that "the faulty valve is an integral part of the water cooling and supply pipes in our "riser room" without which, our a/c unit cannot function". They say that Climacool advised them "the valve was part of the water pipes connected to the cooling tower and allowed the Body Corporate to meet its obligation to supply water to each a/c unit". In their letter to Mr Hannant (from the office of Body Corporate Services) the applicants state that engineers confirmed to them "that the fault occurred in the water pipes connected to the cooling tower"; the pipes supply the whole building; the body corporate has funded several other similar cases; the contractors informed Mr Pinnock "that if there were to be difficulties in accessing the water pipe valve, they would either have to a) shut the complete plant in the building, or b) freeze a section of pipe which would include other units" (the applicants whether they would have to pay for this work). The applicants state that they have paid Climacool and seek reimbursement from the body corporate.

Steve Fisher of Apartment 20, and John and Wendy Campbell of Apartment 165 described the piping system stating that "two pipes pass vertically through every lot ... (they) carry condensate cooling water from each lot to the roof-top coolers, and subsequently return the cooling water back to each lot ... The defective valve ... is attached to the ... pipes ... (and) is fitted regardless of whether the lot has air-conditioning installed or not, and it is therefore not part of the air-conditioning installation. The valve functions to prevent loss of condensate water from the common system. This is to the benefit of all lots ... The valves ... become defective, in consequence of corrosion of the internal working parts of the valve ... caused by harmful substances that are present in the condensate cooling water. It is the duty of the Body corporate to prevent the ingress of corrosive elements to the cooling water. If the corrosive substance was not present, the valves would not fail. A filtering system should be present at the roof-top coolers to prevent ingress of foreign material, and a proprietary corrosion inhibitor should be added to the cooling water by the Body Corporate. It is not feasible for lot owners to add a corrosion inhibitor."

Riyadh and Mabina Alaka submitted that the valve is part of the lot as built.

John Rae (from Body Corporate Services) made submissions on behalf of the committee relying on section 109(3)(a)(b)(i) and (ii) of the Standard Module and stating "that the faulty valve only services the air conditioning unit in Lot 47 and the pipe that is controlled by the valve only services Lot 47 and therefore the maintenance of such valve and pipe is the responsibility of the owners of the Lot. The subject pipe takes water for Lot 47 from the main water pipe which runs down the building from the cooling tower and the valve in the pipe allows the pipe to close off the supply of water to the air conditioning unit of Lot 47 only."

Further information and inspection
Section 271 of the Act outlines the investigative powers of an adjudicator. The adjudicator may require a party to the application to give the adjudicator a report or other information (section 271(1)(a)) and may inspect a lot included in the scheme concerned (section 271(1)(d).

In response to my request, on 25 July 2007 the applicants provided a copy of the invoice from Climacool dated 17 November 2006. The job description on the invoice states "Found gate valve on condenser water pipes seized. Performed pipe freezing on branch line and replaced valve as required".

On 30 July 2007, I inspected Lot 47 in the presence of Mr Pinnock, Mr Smith (committee member) and Mr Rae. The primary purpose of the inspection was to identify the location of the vertical pipes and the valve on the branch line mentioned in the submissions and by Climacool. These pipes are in a cupboard internal to Lot 47 and are connected to the air conditioning equipment servicing Lot 47.

Determination
Utility infrastructure
Utility infrastructure is defined in the schedule 6 Dictionary of the Act to mean (in part) cables, wires, pipes, sewers, drains, ducts, plant and equipment by which lots or common property are supplied with utility services. Utility service is defined in schedule 6 to mean (in part) water supply, gas supply, electricity supply, air conditioning or another system or service designed to improve the amenity or enhance the enjoyment, of lots or common property.

Given the nature of community titles schemes, particularly those created by building format plan for a multi-level building, it is common for a lot included in the scheme to be supplied with a utility service from utility infrastructure which supplies the same service to another lot (if not all lots) in the scheme. Obvious examples include infrastructure supplying water and electricity, and sewerage and drainage infrastructure. In these cases, there normally is primary infrastructure connecting the service to the scheme and servicing any number of lots, with secondary infrastructure branching off to the individual lots being supplied with the service. This type of system can be contrasted with infrastructure such as a hot water system which is situated within a lot in the scheme and which only supplies a service to that particular lot.

Maintenance of utility infrastructure
The above examples highlight the fact that it is normal for some utility infrastructure situated on scheme land to supply services to more than one lot included in the scheme while other infrastructure is specific to one lot. Given the complexities related to utility infrastructure, the legislation provides a detailed framework with respect to its treatment.

A body corporate has a general function to administer common property for the benefit of lot owners (section 94(1)(a), Act); and general duty to administer, manage and control common property reasonably and for the benefit of lot owners (section 152(1)(a), Act). A body corporate must maintain common property in good condition (section 109(1), Standard Module). A lot owner has a specific obligation to maintain the person’s lot in good condition (section 120(2), Standard Module).

Section 20 of the Act specifies when utility infrastructure is common property. Relevantly, section 20(1) and (3) states:

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

While section 109(1) of the Standard Module requires a body corporate to maintain common property, subsections (2) and (3) provides some exceptions to the general rule. Relevantly, section 109(3)(b) obligates a lot owner to maintain utility infrastructure (including infrastructure on common property) where it only supplies a utility service to the owner’s lot and is of a type such as a hot-water system, washing machine etc. Additionally, section 120(4) specifies The owner of a lot ... must maintain the utility infrastructure within the boundaries of the lot, and not part of common property, in good condition and, if it is in need of replacement, must replace it.

It can be seen from the above provisions, that a body corporate has a general obligation with respect to infrastructure on common property, especially infrastructure related to supplying a utility service to more than one lot. This obligation will also exist for infrastructure within a lot provided the infrastructure is supplying a service to more than one lot. A lot owner’s maintenance obligation is limited to infrastructure wholly within the owner’s lot and supplying a service only to that lot (other than for example, the section 109(3) exceptions or other infrastructure installed by a lot owner).

Order
Given the submissions, the vertical pipes carry water to and from more than one lot included in the scheme to the roof-top coolers. In this circumstance, it can be concluded that section 20(1)(a) of the Act does not apply as these pipes supply utility services to more than one lot. Therefore, these pipes must be treated as common property.

The pipe which includes the replaced valve branches from one of the vertical pipes and connects to the equipment which air conditions Lot 47 (there is another connection to the other vertical pipe). The vertical pipes continue to levels above and below Lot 47. It would seem that the vertical and the branch pipes form part of the original infrastructure for the scheme.

In my view, the vertical pipes allow owners to be supplied with a service provided by the body corporate. However, I do not consider the fact that the body corporate provides an essential element for air conditioning connected lots necessarily obligates the body corporate to maintain the entire original infrastructure (unless the circumstances warrant it). The branch pipe allows Lot 47 to be connected to the main cooling system and facilitates the air conditioning of the Lot. This pipe does not relate to the supply of a service to other lots in the same way as the vertical pipes. In this case, the valve was replaced to rectify a problem with the air conditioning being supplied to the Lot. It has not been argued that the defective valve in Lot 47 similarly affected the air conditioning in other lots included in the scheme. Given the identified problem, I do not consider the fact the body corporate provides the primary service is relevant. In these circumstances, I am of the view that the branch pipe containing the valve is solely related to supplying utility services to the Lot.

The vertical pipes and the branch pipes are situated in a cupboard which is internal to Lot 47. The boundaries of the Lot are determined by reference to Building Units Plan 105471 (a building units plan is now referred to as a building format plan) and the Land Title Act 1994 (LTA). A building format plan "defines land using the structural elements of a building, including, for example, floors, walls and ceilings" (section 48C(1), LTA) and the boundary of a lot separated from another lot or common property by a floor, wall or ceiling, must be located at the centre of the floor, wall or ceiling (section 49C(4), LTA). The cupboard is not identified on the survey plan as being common property and it is bounded by other parts of Lot 47. Consequently, the cupboard and the branch pipe containing the valve are within Lot 47.

In these circumstances, I am satisfied that the branch pipe is infrastructure of the type mentioned in section 20(1)(a) to (c) and is not part of common property. Given the terms of section 120(4), the applicants as the owner of Lot 47 were responsible to replace the defective valve.

While not mentioned by the applicants, Steve Fisher of Apartment 20 and John and Wendy Campbell of Apartment 165 made submissions claiming that harmful substances present in the condensate cooling water caused the valve to become defective and state that the body corporate could initiate measures to limit the effect of such substances. These owners have not provided any material demonstrating for example: that it would be normal or reasonable for a body corporate in complying with its legislative obligations with respect to common property to take steps of the nature mentioned in the submissions; or that the body corporate was aware that these substances could damage the air conditioning infrastructure and it did nothing about it; or that there is an endemic problem with the infrastructure; or that it is clear that these substances caused the damage to valve in Lot 47. If factors of this nature could be clearly demonstrated and it became apparent that the body corporate had not maintained the common property infrastructure in good condition and that this caused damage to the infrastructure within an owner’s lot, then it may be reasonable to require the body corporate to repair damage or to reimburse a lot owner (section 281, Act). However, I am not satisfied from the submissions that there is any basis for giving consideration to these factors in this case.

The applicants have stated that they have paid the Climacool invoice. In my view, the applicants were responsible for work carried out by Climacool. For these reasons, the application is dismissed.

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Admiralty Towers II [2007] QBCCMCmr 468 (6 August 2007)