Bahia [2007] QBCCMCmr 581 (4 October 2007)

Last Updated: 10 October 2007

REFERENCE: 0414-2007

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	13693
Name of Scheme:	Bahia
Address of Scheme:	154 The Esplanade SURFERS PARADISE QLD 4217

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Kim McKinley, the owner of Lot 10

I hereby order that the application for an order by Kim McKinley, the owner of Lot 10 seeking an outcome that the body corporate for Bahia community titles scheme 13693 pay all expenses involved in moving the air conditioning infrastructure installed on Lot 10, is dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0414-2007

"Bahia" CTS 13693

Application
This application is by Kim McKinley, the owner of Lot 10 (applicant) against the body corporate seeking an outcome that the body corporate pay all expenses involved in moving the air conditioner which was put in the wrong place by the managers while under their control in the letting pool. The applicant states that the body corporate was negligent in ensuring that the managers upheld the letting agreement.

The applicant’s main submissions were to the effect that:

• The manager organised a bulk installation of air conditioning for owners in 2006.

• All work was completed by Christmas 2006.

• The manager never told the applicant there was a problem about where the unit had been installed.

• The committee at its meeting held in February 2007 brought up that the units for 10 and 13 were installed in the wrong place and that they must be moved at the owner’s expense.

• The cost should be paid for by the body corporate or the managers as she did not have anything to do with the organisation or installation, as Lot 10 is in the letting pool and under the manager’s control.

• The manager should know the by-laws and should have known that the unit should not have been placed where it was in the first place. It is totally their fault and it is unacceptable that the body corporate expect the owners to pay for the manager’s mistake.

• The body corporate has not done its job in making sure the managers know the by-laws and therefore should be accountable.

The applicant provided a copy of a letter from Mark & Tiana (Managers Bahia Beachfront Apartments) and dated September 2006 which in relation to air conditioning stated "If you require A/C to be installed in your apartment ... Please advise us directly if you require air conditioning installed in your unit and you wish to be part of the mass installation ... If so, please complete the following form and return it to us ... Please note that you are completely free to choose your own air conditioning contractor ... if you wish to install air conditioning yourselves, please note that you must adhere to body corporate specifications and obtain written approval as per the by-laws".

The applicant also provided a copy of documents relating to Mark and Tiana’s (Pullen’s) responsibilities highlighting that they include organising renovations, revamps, upgrades, replacements for letting agents, dealing with tradespeople, managing body corporate related issues and supervising the observance of by-laws.

Jurisdiction
"Bahia" is a community titles scheme under the Body Corporate and Community Management Act 1997 (Act). 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 community management statement; or the exercise of rights or powers, or the performance of duties, under the Act or the community management statement (s276(1), Act).

Procedural matters
On 19 July 2007, a copy of the application was provided to Archers Body Corporate Management (the body corporate manager) for distribution to the owner of each lot (excluding the applicant) and the committee, with an invitation to respond to the matters raised in the application (s243, Act). Submissions were made on behalf of the 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
Mr Vincent (chairperson and on behalf of the committee) submitted that when the committee granted permission to owners to install air conditioning, Mr and Mrs Pullen (the then managers) offered to arrange quotations and facilitate installation for owners; the offer was conveyed to owners in the manager’s next newsletter; where owner’s sought the involvement of the managers, it was a matter between the owners and the managers; all work was conducted on private property; the body corporate did not fail to uphold the Caretaking agreement; and the owner should be aware of the by-laws.

The application was supported by two owners for reasons including: the action of the past manager was unconscionable; and they did not comply with the by-laws which states "Installation of the air conditioning must be co-ordinated with resident manager".

The owner of 2 lots opposed the application for reasons including each owner had a responsibility for the installation of air conditioning and the individual owners had contracts with the contractor and the management had a co-ordinating role only. The Crawford’s of Lot 13 submitted that they resolved the issue for their lot at a cost of $450.

The owner of Units 23 and 29 submitted that they were not consulted as to the location of the condenser units and the installation was directed/arranged by the managers at that time. It is submitted that the body corporate should not be responsible for the cost, and that an action should be taken against the then managers.

Further Information
In accordance with the investigative powers of an adjudicator stated in section 271 of the Act:

• By letter to the applicant dated 18 September 2007 I stated "The material you provided indicates that air conditioning was installed after certain lot owners completed a form and returned it to the managers. If this is the case, did you complete the form and return it to the managers? On what date did you do this? Please explain the contents of the form and the information you completed. In addition, please provide information explaining whether you have moved the air conditioner. If so, please provide information explaining whether it has been moved to a position agreeable to the body corporate and indicating the costs of the removal".

• By letter to the body corporate committee dated 18 September 2007. I stated "The applicant has provided a copy of one page of a Notice Of Motion To Be Voted On Outside of Committee Meeting which included a proposed motion regarding the installation of air conditioning. Please provide a copy of the resolution made by the committee on this issue. In addition, you are requested to make submissions explaining the information the committee had at its disposal when it gave consideration to the installation of air conditioning. Was a copy of the above resolution given to the owner of each lot included in the scheme? If so, on what date was the copy given?

The applicant has also provided a copy of the minutes of the committee meeting dated 16 February 2007. The minutes note that the air conditioner condenser for Unit 10 is in a position that is visible from outside the scheme, differs from other units and does not meet the installation guidelines. Please make submissions explaining the basis for these concerns with reference to the conditions on which the committee gave approval and the scheme by-law/s relied on".

By letter dated 19 September 2007, the applicant:

• Provided a copy of the form sent to her in October 2006 regarding air conditioning. The applicant signed the form on 9 October 2006 agreeing to the installation of air conditioning in Unit 10 and to being part of the bulk air conditioning installation to be undertaken by Thompson Cooling.

• Stated that the air conditioning has not been moved.

By letter dated 21 September 2007, Mr Vincent:

• Provided a copy of the committee resolution dated 30 November 2006 where it "resolved that the Body Corporate grant approval to the owners of lots 1, 4, 5, 6, 7, 10, 12, 12A, 14, 15, 16, 17, 19, 20, 23, 24, 25, 26, 29, 30, 31, 32, 33, 34, 36, 37, 38 to install air conditioning, subject to" 16 conditions.

• Stated that he received a copy of the above resolution on 5 December 2006.

• Demonstrated by reference to minutes of various committee meetings held since March 2004 that the committee has given consideration to owners wanting to install air conditioning including: agreeing to the installation of conduit to facilitate waste water from air conditioners (14 October 2004); resolving that Mr and Mrs Pullen take ownership of the installation process going forward (19 May 2005); instructing the body corporate manager (Archers) to inform all owners that no air conditioners will be approved until the electrical capacity issue is resolved and that written body corporate approval is required to install air conditioning (28 July 2005); and noting that the electrical upgrade had commenced in August 2006 (15 August 2006).

• With respect to the committee’s concerns about the installation on Lot 10, referred to the condition that the condenser unit must be placed in a uniform position in the building.

Determination
Given the material provided by the parties, it is apparent that:

• The issues surrounding the air conditioning of some or all lots in the scheme have been considered by the committee since 2004 and that the committee recognised that the then resident unit manager had a role with respect to the installation process.

• In September 2006, the then resident unit manager wrote to some or all owners (including the applicant) about the proposed mass installation of air conditioning for lots in the scheme. The letter included a form for owners to indicate their willingness to be part of this installation.

• On 9 October 2006, the applicant agreed to be part of the bulk air conditioning installation proposed to be undertaken by Thompson Cooling.

• On 30 November 2006, the committee gave approval to the owners of 27 lots in the scheme (including to the owner of Lot 10) to install air conditioning. The approval was subject to a number of conditions.

The committee made the November 2006 decision given the terms of By-Law 13.2 stated in the scheme’s community management statement. Relevantly, By-Law 13.2 states No air conditioning to any Lot may be installed without prior consent in writing of the Committee ... Where the Committee grants its conditional consent, such conditions are to include, but not be limited to, the following 16 conditions. The body corporate may make by-laws regulating the use and enjoyment of lots included in the scheme (s169(1), Act) and the CMS for a scheme is binding on the body corporate and on lot owners (s59(2), Act). The conditions of the committee’s consent were those stated in the By-Law. As there has not been a question raised about this decision, I am satisfied the committee could consent to an owner’s request to install air conditioning on the owner’s lot in the way it did at the November 2006 meeting.

The applicant argues that she did not have anything to do with the organisation or installation of the air conditioning; the body corporate should have ensured that the resident unit manager knew the by-laws; the manager should have known that the unit could not be placed in its present location; and it is unacceptable that the body corporate expect the owner to pay for the manager’s mistake.

Nothing in the committee’s consent indicates that the body corporate or the committee had an ongoing role with the installation of the air conditioning infrastructure. The installation is on the owner’s lot and is for the benefit of that lot. The owner was required by By-Law 13.2 to seek committee consent prior to installing the infrastructure. Additionally, the owner had to install the infrastructure in accordance with the terms of the consent. The fact that the owner may have permitted or authorised another person (not the body corporate) to essentially act for the owner does not affect the owner’s obligation to the body corporate to ensure that the work was completed in accordance with the consent given.

The fact that the committee acknowledged the involvement of the resident unit manager or that the body corporate at the relevant time had a service contractor and/or letting agent agreement with the manager are not reasons for the body corporate being responsible for the installed infrastructure. The acknowledgement did nothing more than recognise the involvement of the manager in the project. The significant decision is that made on 30 November 2006 to authorise the owners of certain lots to install air conditioning. The existence of the above agreement/s is not relevant to this issue and nothing in the list of manager responsibilities provided by the applicant suggests otherwise.

The applicant is the person responsible for the installation of infrastructure on her lot for the benefit of the lot. She agreed to have air conditioning installed and the conditional committee approval was given to her as the owner of Lot 10. Ultimately, she was the person responsible for ensuring that the infrastructure was installed in accordance with the approval.

At its meeting dated 16 February 2007, the committee "noted that the air conditioning condensers for units 10 & 12A have been installed in a position that is visible from outside the scheme, differs from the other units and does not meet the installation guidelines. Mr Pullen (the resident manager) reported that upon finding the condensers installed this way he contacted the contractor, who advised that the installation was to conform to workplace health & safety Fall from Height requirements as the sliding balcony doors of these two units differ from the remaining apartments ... The minimum distance from the balustrade must be 600 mm which would place the condenser protruding partly into the balcony doorway. It was noted that ... the Managers had facilitated installation of air conditioners for multiple apartments by a single contractor, however neither the Body Corporate not the Managers were a party to the contract between the contractor & individual owners ... the contractor had installed the condenser without reference to the Manager’s or respective owners. The Committee resolved that the owners of units 10 & 12A be formally advised that the air conditioning installations do not meet the Body Corporate guidelines and rectification is required". A function of the body corporate is to enforce the CMS (including the by-laws) reasonably (s94, Act). The applicant has not disputed this decision to relocate infrastructure and it is apparent that the owner of Unit 12A (Lot 13) has moved the infrastructure on that lot.

The applicant had air conditioning installed on her lot contrary to the consent given by the committee. The risk taken by an owner installing air conditioning infrastructure contrary to By-Law 13.2 was demonstrated in a previous dispute resolution application for this scheme. In Application 0465-2006, the adjudicator (in part) required the owner of Lot 9 to remove the air conditioner compressor from her balcony or relocate it so that the top of the compressor is at least 900 millimetres away from the top of the balcony railing.

For the above reasons, the application is dismissed.