Sanctuary Gardens [2007] QBCCMCmr 678 (28 September 2007)

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

I hereby order that the application for an order "body corporate should honour the commitment made by the previous body corp. that is the undertaking of remedial action for my damaged balcony (water damage) – minuted by the body corporate in Feb 2004 well before the builders warranty expired in 2005." is dismissed

In lieu I order as follows -

1. that the safety of the structure of the balcony is paramount. The body corporate shall take immediate emergency measures if necessary (prior to engaging a civil engineer) to ensure the safety of the balcony of Lot 59;
2. that the body corporate within 14 days of the date of this order and at its expense, engages an independent civil engineer to report into the current state of the Applicants’ balcony at Lot 59 and the reason for its deterioration. The independent civil engineer shall not be Burchill Partners Civil and Consulting Engineers and Planners or one of its associated companies or employees;
3. that rectification work as recommended by the independent civil engineer shall be the responsibility of, and performed at the expense of, the body corporate and/or the Applicant in accordance with section 108 Accommodation Module and as set out in the decision herein;
4. that if both the body corporate and the Applicant are responsible for rectification work, that they may agree a builder to perform the work, or each engage separate qualified tradesmen to perform specific works;
5. that any reports obtained by the body corporate preparatory to remedial works being undertaken shall be shown to the Applicant;
6. that the rectification or rebuilding work shall be commenced within one month of the report being obtained and that the work shall be finalised as soon as reasonably possible; and
7. that the Applicant shall make Lot 59 available to the independent civil engineer or his staff and to the persons effecting the remedial works, if necessary.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0215-2007

"Sanctuary Gardens" CTS 22798

APPLICATION

This is an application dated 2nd March 2007 and lodged on 13^th March 2007 by Alison Collett (the Applicant) owner of Lot 59 in the scheme against the body corporate for Sanctuary Gardens CTS 22798 (the body corporate) for an order that the "body corporate honour its commitment made by the previous body corp. that is the undertaking of remedial action for my balcony (water damage) – minuted by the body corporate in Feb 2004 well before the builder’s warranty expired in 2005."

JURISDICTION

"Sanctuary Gardens" Community Titles Scheme 22798 is a community titles scheme governed by the Body Corporate and Community Management Act 1997 (the Act) and the Body Corporate and Community Management (Accommodation Module) Regulation 1997 (the Accommodation Module). There are 100 lots in the scheme created under two Group Title Plans of subdivision, GTP 104325 and GTP105954 and four Building Format Plans (BFP) of subdivision, SP114229, SP114517, SP114511 and SP114510. Lot 59 is in SP 114517 which is stated to be a Building Format Plan of subdivision.

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-

(b) the exercise of rights or powers, or the performance of duties, under the Act or the community management statement; or

(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

The Applicant says that she bought Lot 59 in November 2003 and that she lives on site. She was made aware of the defects in her balcony prior to purchase when her building inspector alerted her to the problems. She reported it to Grant Tippett the caretaker, (Mr Tippett). Balcony number 59 was "tabled in the committee minutes" in February 2004 and she provides a copy of the committee meeting minutes for 5^th February 2004. Between 2004 and 2005, her enquires to Mr Tippett were always met with "it’s all in hand." She was also told by Mr Tippett that the builders’ warranty did not expire "until 2006." She believes that it in fact expired "2005 Jan – Feb" which she was told by the former chairman John Arthur. Mr Tippett left in March 2005. In February 2007, she received a letter from the body corporate dated 12^th February 2007 which was addressed to the owners of Villas 59, 61, 63, 66, 70, 73 and 94. This letter appears to be in response to a letter dated 1^st January 2007 from the owners of Lots 61, 66, 64, 70 and the Applicant at lot 59.

The body corporate’s letter advises that it is the responsibility of each lot owner to maintain or repair their lots because the scheme consists of buildings created under a Group Title Plan of subdivision (now known as a Standard Format Plan of subdivision.) It refers to the committee having previously taken solicitor’s advice on this point. The letter notes that some owners have filed a complaint with the "Master Builders Association" and that some have had remedial work done by the builder although the standard of that is not known. It urges owners who have no further claims to pursue with the Master Builders Association to fix their balconies since the body corporate insurers will not cover third party insurance on a defective balcony, adding that some balconies have become unsafe. The Applicant responded to this letter on 20^th February 2007 re-affirming her view that the body corporate had previously undertaken to get defects fixed and should now do so.

The application contains a document setting out the Applicant’s case and signed by her, as well as Susan Chang for Mr and Mrs Bayliss, of Lot 61; Jean-Marc Moutin of Lot 66; and David Hale of Lot 70; all of whom have lodged separate dispute resolution applications about their respective balconies giving identical supporting grounds for their claim that the body corporate should be responsible for their repair.

The document says that water damage to balconies was reported by many owners to the body corporate committee and to the then resident manager in 2002 when the buildings were still under the builders’ warranty. "The body corporate committee failed to take action to advise the BSA within three months of the defects becoming obvious", and the situation dragged on until the warranty period had expired. The body corporate and/or the resident manager were negligent in this regard and the body corporate has refused to say how many balconies are affected in this way. The body corporate now says that owners are responsible to remedy the defects.

The builder was Rubicon Pty Ltd (Rubicon), and in October 2002, 23 balconies "were reported", (although the document does not say who by, or to whom) under the terms of the construction warranty. A copy of the construction warranty is not supplied. The faults complained of were leaks, lifting tiles, and collapsing timbers. This became "phase one" of certain warranty work and was to be overseen by the caretaking service contractor for the scheme. Remedial work was started spasmodically and continued for the next two years. By October 2004, despite continual complaints to Rubicon, none of "phase one" work had been completed. More faulty balconies have since been reported.

There was a body corporate committee meeting in November 2004, when the committee received a report from Rubicon listing all ‘phase one’ works as "completed" which the Applicant says was not the case. The committee decided to investigate lot owners’ rights as a matter of urgency, with a view to reporting Rubicon to the Building Services Authority (BSA). The committee was also concerned about the viability of Rubikon but "it was understood that if they did go into liquidation we would be protected under the terms of the insurance cover provided by the BSA." The Applicant does not say whether this was her understanding or the understanding of the committee, or how that information was communicated to her personally.

The then caretaking service contractor, Tippo Pty Ltd, represented by Grant Tippett (Tippo) also advised "that as the matter had been reported to the builder within the warranty period so that we were legally covered for any work not completed at the expiration of the warranty period"; and that the "warranty period was a total of seven years. (Ending in 2006.)" However, the then chairman discovered just before Christmas 2004, after contacting the BSA that a formal submission had to be made to the BSA within the warranty period for the work to be covered by the BSA’s insurance, and that the warranty period was six and not seven years, and expired in mid-February 2005. Tippo had not made a formal submission to the BSA.

It was agreed between a sub-committee and Tippo that as a matter of urgency they obtain the appropriate submission forms from the BSA and then the chairman would distribute the forms to on-site owners, collect them and forward them to BSA. Tippo would do same for off-site owners whom he knew wanted "warranty repairs". The Applicant does not say on what date this occurred, or how they were aware of this arrangement or the details of it.

As a result of this failure, "we believe that approximately 19 villas - although reported to the resident manager during this time, had not been reported to the BSA, and may have warranty repairs outstanding." The outstanding repairs are known as "Phase Two" of the warranty work.

In summary, the Applicant claims that Tippo had agreed to "supervise this work (from late 2002) as part of Resident Managers duties" ; gave incorrect advice to the committee about the warranty time frame; failed to inspect work adequately when the builders said it was completed; failed to submit requests to Rubikon in writing or failed to produce reports to the committee when asked; failed to send the BSA forms to off-site owners; and that the body corporate is therefore liable for Tippo’s actions since Tippo was "appointed" by the body corporate. The joint submission adds that the then body corporate managers Silver Stewart King and Burns (SSKB) also knew what was going on and were "at times acting as the Body corporate Committee on behalf of owners" and gave improper advice. She implies that either SSKB or the body corporate for engaging SSKB, is culpable. Further she asks that the body corporate committee be instructed to obtain an independent inspection of all balconies in the scheme and "as a result of ongoing negligence the cost of repairs be borne by the body corporate committee." She does not say which committee members these should be.

The Applicant also attaches extracts from the minutes of committee meetings held on 29^th July 2004, 30^th November 2004 and 28th April 2005 to support their claim.

The extract from the minutes of 29^th July 2004 says that Rendell Digby of Burchill Partners Civil and Consulting Engineers and Planners (Burchills) is continuing to supervise the "work on balconies, garage ceilings and building cracks in consultation with the Resident Unit Managers."

The extract from the minutes of 30^th November 2004 says that the "Building Managers" advised that they were not happy with the progress of the repairs despite frequent contact with Rubikon. The committee resolved to have the chairperson contact the builder for a copy of the builder’s work-list, signed off as each is completed and to advise the builder that body corporate would be "notifying the Building Services Authority if a satisfactory outcome was not forthcoming within two weeks." It was also resolved that the chairman would contact the BSA for their advice and for a complaints form. The Body Corporate Manager was to forward a copy of the building defects report from Burchills to the chairman and to tell Burchills "not to proceed with any further work in relation to building defects on behalf of the committee at this time."

The extract from the minutes of 28^th April 2005 state that "John Arthur noted that owners of units who had not complete a submission to the BSA may be facing the cost of having this work carried out at own expense."

Also attached is a letter dated 10^th April 2004, from Don Dennis of Lot 73 sent to all owners headed "A matter of concern," referring to "a body corporate meeting" held on 5^th February 2004. The letter says that 23 units are awaiting completion or waiting for warranty work to commence on balconies and that the repairs have been outstanding for over two years. He warns "the result of inaction could be costly," and that the body corporate must get Rubikon to honour its warranty obligations. There is no evidence provided by the Applicant about what action she took in response to Don Dennis’ letter.

On 1^st January 2007 the Applicant, with other lot-owners Mr and Mrs Bayliss (Lot 61), Jean-Marc Moutin (Lot 66), Michael Nitschke (Lot 64) and David Hale (Lot 70) wrote a joint letter to the committee following receipt of a letter "recently received" from the current body corporate manager Cambridge Management Services, (the body corporate manager) advising them that the balcony repairs were the responsibility of each owner. A copy of the received letter is not provided in the application. They ask the body corporate urgently to obtain an engineers’ report on the condition, especially the safety, of every balcony in "Stage 2" of the scheme in time for the next committee meeting on 17^th February 2007. They point out that some owners had their balconies repaired by the body corporate in the warranty works that were done by the builders, and that they should not be disadvantaged by the mismanagement of SSKB. This document, without the introductory paragraph and paragraph 10 about SSKB, is repeated as "Appendix B" also lodged with the application. Appendix B is a document created by Don Dennis, the owner of Lot 73.

In accordance with section 243(2)(b) Act, submissions were invited from all lot owners.

Max Bond, owner of Villa 17, explains that the first stage of Sanctuary Gardens does not have the same type of balconies as those in Stage 2 of the development and it is the Stage 2 balconies which have the problems. He recalls that the problems with the Stage 2 balconies were well-known and voiced between 2004 and 2006. He was left with the impression that those lot owners affected had been advised to "lodge a submission to have the defects rectified by the builder before the builder’s warranty period expired...." which he thinks was in March 2005. He sympathises with the application but does not support that the body corporate should become responsible if owners are now facing the costs of repair.

Colleen Greenwood, owner of lot 77, says that the committee (she does not say which committee) should be responsible. She says that the balconies are part of the structure of the building. The builders also used the "wrong timbers etc etc." She thinks the repairs should be paid for from the sinking fund, or maybe by a loan. She has no specific evidence about the Applicant’s balcony.

Donald Dennis, owner of Villa 73 says that he reported his own defective balcony in September 2003 to Grant Tippet who was at that time also the chairman of the committee. He gives no personal knowledge of the Applicant’s balcony. Remedial works took place around the complex to defective balconies. By 1st April 2004 there had been no start on his balcony which was now "sagging considerably". He then circulated a letter to all lot owners, and gathered support to discuss the matter at the next general meeting in May 2004. Again the "Resident Manager assured everyone that all reporting had been made" and that we were covered by the BSA warranty. SSKB said the matter had not been reported to the BSA and the lot owners at the meeting requested that this be done. The caretaking service contractor said that it had "in effect" been done by raising the matter with the builder.

In August 2004 his balcony repairs were commenced but remained incomplete. The repair was found to be unsatisfactory one month later when the main beam was found to be rotted and he had to have the balcony taken down and rebuilt.

A new committee took up the matter conducting a thorough investigation about the facts and lot owner rights and lot owners learned that the warranty would expire on 6th February 2005. He says that it is unfair that the body corporate now says that owners must repair their own balconies when it has already fixed several small faults which it has acknowledged are its responsibility."

Lindsay Dowrick and Jennifer Coupe, (Resident managers) owners of Lot 76 say that respective lot owners should pay for repairs and that the body corporate is not responsible. As new owners they have taken their viewpoint from body corporate records. They agree that the balconies have been poorly built and that the repairs appear to be of a poor standard. However, their submission is that the Applicant has owned Lot 59 since August 2003 and that she was also a member of the body corporate committee from September 2004 – Sept 2005 prior to the builder’s warranty expiring. Further, that Burchills "signed off" on the balcony of Lot 59 in April/May 2005. To rebuild the balcony in hardwood would be very expensive, give the Applicant a further 10 year warranty period, and there are some units which do not have balconies, and so it would be unfair for the cost of a new balcony to be shared by all. The total bill if the body corporate were to pay would require a very large levy.

They attach minutes of committee meetings held on 5^th February 2004, 6^th May 2004, 29^th July 2004, 30^th November 2004 and of the annual general meeting of 30^th September 2004.

The minutes of the 5^th February 2004 record at Motion 5 (headed "Balcony Repairs") that Burchills reported that the builder had applied waterproof membrane to Lots 57, 62, 63, 70, 79, 80, 87, 90 and 93 ; " that the balcony tiles are to be replaced and the texture finish and painting to be completed." A waterproof membrane was still to be applied to Lot 89, and Lot 81 was "still to be completed." Lots 81, 89, 32, 39, 40, 59, 66, 73, 74, 94, 96, 97 and 98 were showing signs of deterioration and water penetration, and Lot 73 was in urgent need of repair. It was resolved that the Resident Manager keep in constant contact with builder to ensure remedial work is finished as soon as possible. At Motion 19 ( headed "Developer Repairs") the committee resolved to accept the "site inspection report" from Burchills in relation to remedial work being done by the original builder on the balconies, leaking showers, ‘hebel’ fascias and that the Resident Manager will continue to contact the builder to complete this urgent work.

The minutes of 6^th May 2004 show at Motion 12 headed "Builder’s Repairs" that the committee "discussed the matter at length with the Building Manager and noted his comments about the delays with the contractors completing the works required." The committee resolved to give the builder 7 days grace and then "a letter to be forwarded" to the Building Services Authority within 14 days if no action is received. This motion also tabled a letter from "the owner of Lot 59" asking if the unit was on the list for repair of the damaged balcony. The Building Manager confirmed that Unit 59 was "on the list for repair," and it was resolved that the body corporate "write to this owner advising this."

The minutes of the AGM held on 30th September 2004 show that following the AGM, the new committee was asked to address the time-line for the completion of the building defects as a matter of urgency with a view to proceeding to the BSA " if there is not prompt completion of this work by the builder."

The minutes of 30th November 2004 detailed at Motion 1 (headed "Balcony Repairs) that the Resident Manager was not satisfied with progress of the builders. It was resolved that chairman, John Arthur, would contact the builders for their work list and notify the BSA as has been detailed above. They supply a copy of a letter dated 2^nd February 2005 from the BSA to Burchills, envisaging a site visit by a BSA inspector on 15^th February 2005. The letter shows that a complaint had been laid in relation to Lots 59, 63, 66, 73, 76, and 94.

They also provide a list of defects by unit, which I understand to be an extract from the "site inspection report" (the site inspection report) prepared by Burchills, referred to at the committee meeting of 5^th February 2004. This report, headed "Sanctuary Gardens – Inspection Summary" says that rear balconies 57, 62, 63, 70, 73, 79, 80, 81, 85, 87, 89, 90 and 93 are under repair, and units 39, 71, 72, 94, 97, and 98 need attention by the builder and an inspection should be arranged at the earliest convenience. It says "If any of them have structural defects, they would be classified as Category 1 and be referable to the builder." The remainder indicate "normal shrinkage and movement" and the report says that the builder should perform random checks.

David and Jennifer Thomas, owners of Lot 88, support the application.

Joanne Bowen, owner of lot 31, says that she became aware of the building history at a general meeting on 15^th February 2006. She had noticed water seeping through her downstairs patio light fitting once after heavy downpour. She checked it after that and applied sealant over the grouting between the tiles and no more water seeped through until mid December 2006 after heavy rain. She has now fixed her own balcony in February 2007, by engaging a waterproofer at a cost of $1371. She has no evidence about the Applicant’s balcony.

Douglas Schmidt, (Mr Schmidt) owner of Lot 44 says he totally disagrees with the application. He says that maintenance is the lot-owners’ responsibility since the complex is registered under a standard format plan of subdivision, and that others who have had the same problem with balconies have sorted it out themselves, instead of letting it get out of hand to a stage where it is a hazard. He further says that the committee alone did not have the power to make a decision about taking on remedial work, which is something which would have had to be out to a general meeting of the body corporate, and it never was so approved.

Lynne and Louise Matthias, owners of lot 97, support the application. They are concerned about the "lack of management of this problem..." by Tippo, when Grant Tippett was chairman and by SSKB. They were aware of a problem with their own balcony before they purchased in September 2003 but they were "assured it would be dealt with under the building warranty..." These submitters lodged their own application for dispute resolution on 13 June 2007. They have no evidence about the Applicant’s balcony.

Ronald and Judith Munro owners of lot 37 say they don’t know how widespread the issue is. Kerrin and Norman Ambrose owners of lot 57 made a submission in this application on a dispute application form. They have noticed some cracked grouting on their own balcony. They " were advised by owners" in 2007 that balconies 26 – 100 were built without using treated timbers and water penetration has got into the structure and rotted them.

John and Eileen Doherty, owners of Lot 9 say that the body corporate should honour its commitment and that the present committee refuses to discuss this issue. Christine Scales owner of Lot 81 says that the Applicant reported the damage in a timely manner and she should have been advised to complete a claim form against either the builder or the body corporate manager or resident manager at least.

Valerie and Bruce Burrow, owners of lot 45 say they have recently been made aware of the structural problems in many balconies, and that they are advised that they are not the body corporate’s responsibility because they are not part of the structure. This is a surprise to them and they thought the balconies were under the roofline and part of the structure.

The body corporate manager, Cambridge, making a submission on behalf of the body corporate, says that it has searched body corporate records and can find no record that the body corporate undertook to take remedial action for the Applicant’s damaged balcony at its cost in February 2004. It says that there was only a committee meeting on 5^th February 2004 and the only item about balcony repairs was Motion 5 wherein it was simply resolved that the Resident Manager kept in close contact with the builders "to ensure this remedial work (as noted in a site inspection report by Burchills) is finalised at the earliest possible date." The resolution was to hurry on the work, not to carry it out at the body corporate’s expense.

The body corporate manager notes that the scheme is registered as a Group Title Plan, so that all lot owners are responsible for the maintenance of their own lots. There is "no ability" for the body corporate to carry out remedial action to a damaged balcony, even if it wanted to. If some owners have reported their faulty balconies to the BSA then that is between those owners and the BSA. If some claims were made through the previous Resident Unit Manager, the owners may have some further claim but the body corporate would not be a party to that action. It provides a letter dated 19^th June 2007 from lawyers Corrs Chambers Westgarth which supports this view.

It also points out that each lot is contained within a "designated lot boundary" or is surrounded by common property over which each lot owner has an exclusive use, and that in accordance with scheme by-laws, the occupiers of lots allocated exclusive use "must perform the duties of the body corporate in respect of the exclusive use area" including maintenance of any improvements in the exclusive use area.

I sought further information from the Applicant. She replied that the damage to the balcony is caused by water entering the deck’s wood filler and subsequent waterlog congestion and swelling of the filler. This has lifted tiles and continues to lift them. The builder has "failed to place waterproofing under the tiles." The damage is now much worse than it was in 2003. She has obtained a quotation dated 25^th June 2007 from PJD Properties Pty Ltd for removing tiles, providing "new waterproof membrane", removing old railings and replacing with new; and retiling the balcony and balcony edge. She points out that the tiles are in addition to the quotation of $1860.00.

She has no knowledge of Burchills’ role in getting the defects repaired, and has not seen any correspondence from Mr Tippett or Tracey Tippett about them acting as an agent for lot owners in making a complaint to the BSA. She says that this was minuted in the "2003 – 2004 committee minutes." She has not seen the "Inspection Summary" document in the body corporate records which is the document prepared by Burchills probably in 2003.

She attaches a close-up photograph showing the tiles lifting from the floor of the balcony at the balcony edge and cracked tiles or capping concrete on the balcony fascia. She says that the four corners have lifted. The Applicant sent a further email on 22^nd August 2007 stating that the "November 2004" minutes document that (Grant Tippett) had failed to report the balconies to the BSA.

I also sought further information from the current caretaking service contractors, Lindsay Dowrick and Jenny Coupe. They do not have any copy letters between the BSA and the body corporate, or know when Burchills were called in or what Burchills were asked to do. They say that the documents "Sanctuary Gardens - defects" and "Sanctuary Gardens-Inspection Summary" were in the body corporate records and amongst their searches made on their own purchase of the management rights. They do not know who compiled them. They provide copies of committee meeting minutes for meetings held on 5^th February 2004, 6^th May 2004, 29^th July 2004, and 30^th November 2004; and a copy of the resident manager’s report dated "November 2004", saying that "work (on the balconies) should be completed by this meeting."

Further information was also sought from Cambridge, the body corporate manager who provided copies of committee minutes and minutes of general meetings, as well as copies of correspondence from Burchills in 2004.

On 21^st September 2007, whilst adjudicating in this matter I noted from documents supplied by submitters that Lot 59 had been the subject of a complaint to the BSA in February 2005. I sought further information from the BSA using the extensive powers of investigation given to an adjudicator by virtue of section 271 Act. Thereafter I asked the Applicant if she would like to comment on the documents received from the BSA, sending to her a copy of a complaint form and report from the BSA and a copy of an authorisation apparently signed by her and G. Collett to allow Burchills to act on her behalf.

The BSA complaint form asked the BSA to look into "defective balcony construction at Unit 59." A BSA inspector Tony Santer inspected Lot 59 on 15^th February 2005 with Mr Tippett, the Burchills representative Rendell Digby, Mr Dennis committee member, and the builder’s representative Tony Smith, and reported that "a shade sail ......with connections to the front leading edge and bolts passing through from the box frame of the sail to the bottom cord of the handrail" had put extreme pressure on the handrail, distorting it " causing ties to dislodge and making the handrail and possibly the balcony insecure..." On 22^nd February 2005 Tony Santer wrote to Mr Digby as the Applicant’s representative that "the Authority cannot be an adjudicator of the contractual issues in your dispute" and advising the Applicant of an opportunity to review the BSA’s decision within 28 days to the Commercial and Consumer Tribunal.

The Applicant responded that the "four people who visited" did not check on the water ingress damage complained of by her but noted only a cracked tile caused by the strain of a shade sail which she had erected. The inspector "apparently thought no further." The shade sail was installed five months after she had reported the water damage to Mr Tippett, and the shade sail damaged only a tile in the centre front edge and did not affect the corner tiles. This does not affect the "fact there’s no waterproofing, as promised." The Applicant supplied three further coloured photographs showing the damaged tile at the centre front of the balcony, and the two lifting front tiles in each corner of her balcony

The Applicant sent further information by email on 25^th September 2007 saying that a builder had ‘dismantled’ the balcony on 24^th September 2007 and found that the tiles are lifting owing to poor quality glue having been used and/or possibly incorrect use of the glue; the waterproofing had holes in it; that "foul water" was sitting on some of the waterproofing material; that the waterproofing was not sealed at the deck’s corners where the tiles have lifted; and that the foundation cross beams were dry.

DETERMINATION

The Applicant’s case is that the body corporate has failed to repair her balcony after undertaking to do so in February 2004. She says that the committee meeting minutes "in February 2004" show the commitment made by the body corporate for the "undertaking of remedial action for my damaged balcony. (water damage.)" However, the only committee minutes for February 2004 provided by her are those of 5^th February 2004 which state as follows -

Motion 5 "Balcony Repairs"

There is no mention of Lot 59 in this minute. Nor is Lot 59 specifically mentioned in the site inspection report considered at the meeting on 5^th February 2004. That document contains a list of units numbered 26 – 100 inclusive and for Lot 59 states "rear balcony- Category 1- Refer summary" where it merely notes in the summary: "if any of these balconies are determined to have structural defects, then they would be classified as Category 1 and referable to the builder."

Lot 59 is mentioned only in minutes of the committee meeting held on 6^th May 2004. At this meeting the committee was advised by Mr Tippett that Unit 59 was still on the list for remedial repairs by the builder, and the Applicant was to be advised of this by letter.

I do not find that the body corporate made any undertaking to the Applicant that it would repair her balcony. If any undertaking was made at all from this limited discussion of Lot 59, it was that the committee was going to chase the builders to get on with remedial works, and keep monitoring the situation. There is no transfer of the burden of completing the defects from the builder to the body corporate.

The Applicant further says that the body corporate is liable because Mr Tippett failed to report her damage to the BSA within the warranty period. However, a complaint about the defective balcony was in fact made to the BSA prior to the expiration of the warranty period. The Applicant signed the complaint form on 22^nd December 2004 giving authority for Rendell Digby of Burchills to act as her agent, and Lot 59 was inspected on 15^th February 2005. The Applicant did not get the result she wanted, but it is not demonstrated that Mr Tippett prejudiced her claim to the BSA in any way. However, the Applicant may like to take legal advice about any claim she may have in negligence against Mr Tippett or Burchills or against the former body corporate managers SSKB, about which she has provided no evidence at all. A decision of the body corporate can only be made by a resolution of the committee or a resolution of the body corporate, that is, lot owners in a general meeting, (Section 100 Act) and a body corporate does not take liability for the actions of a body corporate manager or a caretaking service contractor, or any other committee member who may volunteer their services or expertise to lot owners, unless those persons are acting on the instructions of the committee.

Once the scheme has been established upon registration of the plan, the body corporate assumes its responsibility notwithstanding that there might be some redress against the builder for a certain period of time.

A lot owner is generally responsible for the maintenance of his or her own lot save in some circumstances which are specifically defined in the legislation. Section 108 Accommodation Module states the exception as follows –

(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

(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).....

Submitters have importantly mentioned that the buildings in the scheme are created under a Group Title Plan of sub-division, and the body corporate has relied on that fact when sending out a letter dated 27^th November 2006 to lot owners, (which letter does not form part of this Application but has been referred to in other applications concerning balconies in this scheme). The Applicant provides a copy of the letter dated 12^th February 2007 from the body corporate which repeats this view. In fact, this scheme has buildings created under two Group Title Plans (one as a re-subdivision or GRP) and four Building Format Plans (numerated as Survey Plans or "SPs" as stated above.) This is most unusual but not unknown.

This scheme was developed in this way by the original developers. The Community Management Statement lodged for the scheme on 16^th June 1998 explains at Schedule B that the scheme land is to be developed in four stages, Stages 1A and 1B had at that time been completed and comprised 25 lots. It says -

The responsibilities of the body corporate differ between a Building Format Plan and a Group Title Plan (now known as a Standard Format Plan). In a Group Title Plan, the owner is responsible for the maintenance of his lot. (Section 119 Accommodation Module) In a Building Format Plan, the owner is responsible for the maintenance of his lot with certain exceptions for which the body corporate is responsible, by virtue of section 108 Accommodation Module, for example, for the maintenance of foundation structures and essential supporting framework, and for those parts of the building on the boundary between the lot and common property, such as doors and windows.

Lot 59 is within SP 114517 which is stated on the plan to be Building Format Plan of subdivision.

Exactly what is wrong with the Applicant’s balcony, and how it might be repaired is therefore crucial in the examination of who is now responsible for the repair of it. A quotation for repair has now been provided, envisaging removing tiles, applying a new membrane and new railings and relaying tiles.

Section 108(2)(a)(i) Accommodation Module
The body corporate is responsible for maintenance and repair of facias, railings, balustrades, fittings and any part of the balcony which forms a boundary between the owner’s lot and the (air space) common property, even if the lot owner has an exclusive use of the common property immediately around the balcony.

Section 108(2)(a)(iii) Accommodation Module
The body corporate is responsible for the maintenance of any waterproof membrane within the balcony floor if that membrane can be described as a "roofing membrane" which provides protection for another part of the lot (or common property.) Clearly the balcony floors and tiles are within respective owner’s lots in this scheme. The body corporate would not generally be responsible for cracks and lifting tiles. However, if cracks are caused by structural movement, or if cracks allow water to penetrate timber because there is no membrane at all or insufficient sealing under the tiles which is the case put forward here, then the body corporate might be responsible if the membrane is a "roofing membrane."

I understand that the balconies provide a "roof" and ceiling to patios below, and I am of the view that a membrane in the balconies can be describes as a "roofing membrane." It appears from documents attached to submissions that there may be some balconies which were constructed without membranes (see minutes of committee meeting 5^th February 2004) and which may now have had membranes applied by the body corporate during initial remedial works, or which may still be without membranes.

I find that there is no duty on the body corporate under this section to repair a membrane if the balconies are constructed without a membrane. However, there is a duty on the body corporate to take steps to maintain the structure of a lot, and it may be that providing a membrane is the way to do that.

Section 108(2)(b)(i) Accommodation Module
The body corporate is responsible for any foundation structures. From the somewhat limited evidence, it would not appear that the balcony or any part of it is a "foundation structure".

Section 108(2)(b)(ii) Accommodation Module
The body corporate is responsible for "roofing structures providing protection."

A previous adjudication has considered the issue of whether balconies are "roofing structures", in a scheme where "...each balcony is also the ceiling/roof of the balcony below...". The adjudicator made the following comments in his order:

The legislation is not explicit as to whether any structure that provides protection (whether that is it is the primary purpose of the structure or not), but that is not at the top of the entire building, can be a roof or not. The Concise Oxford English Dictionary suggests the ordinary definition of ‘roof’ as: "...upper covering of house or building or room usu. supported by its walls...". These sources are not conclusive. Accordingly the question must rely on the specific circumstances.

On balance, I am of the view that the balconies in this particular scheme are "roofing structures." They provide cover to a small area, and some owners have complained about water in light bulbs of the patio ceiling below. The patios seem to be adjacent to garages, and the balconies give protection to occupants entering and leaving the garages. The balcony area is identical to the patio area (7 square metres) serving exactly as a roof for the lower area.

Section 108(2)(b)(iii) Accommodation Module
Finally, the body corporate is responsible for "essential supporting framework, including load-bearing walls."

Whilst the question of whether the balconies are also roofs may be a fine point, there is no room for doubt that the balcony bearers and supports are "essential supporting framework" for the balcony. The balconies are part of the lots in question. The body corporate is responsible for seeing that the balconies are structurally sound, and fit for use for their ordinary purpose.

Nature of damage
I am not able to tell from the application, what is the exact cause of the damage to the Applicant’s balcony. Whether or not a membrane was applied originally, or has become defective is not clear. The Applicant says both that there was no waterproofing, and that there are holes in the membrane. Whether the holes have occurred or the membrane was always defective is also not clear. Water is getting into the "filler" which is lifting the tiles. I understand that the bearer beams are not rotted and are dry. The quotation is for $1860 which may or may not include tiles. The Applicant notes that tiles will be extra, but the quotation appears to cater for tiles by the metre. If the body corporate has to repair the membrane, the railings or the any of the structure of the balcony and in doing so has to remove, or breaks tiles, then tiles of the same standard must be replaced by the body corporate. If the Applicant wishes to change or upgrade the tiles, then this will be at her expense.

I accept that the defect has been in existence since at least 2003 and that it is work which should have been put right by the builder. Because it was not done by the builder it does not become the responsibility of the body corporate, unless it is now of the type of maintenance or repair for which the body corporate is liable by virtue of section 108 as set out above.

I shall therefore order that the body corporate immediately and at its expense, seeks an independent civil engineer’s report into the current state of the Applicants’ balcony, as has been suggested in the past, and the reason for its deterioration. The safety of the structure of the balcony is paramount. Immediate emergency measures should be taken by the body corporate if this balcony is unsafe. The independent engineer shall not be Burchills or one of their associated companies.

Rectification work should be undertaken as suggested by the independent engineer and the engineer should be able to comment on the work proposed in the two quotations obtained by the Applicants. Rectification or rebuilding work should be commenced within one month of the report being obtained and finalised as soon as reasonably possible. Any reports should be shown to the Applicants. The Applicants shall make the lot available to the engineer and the persons effecting the remedial works.

Exclusive uses
The fact that the Applicant has exclusive use of the area immediately external to her balcony does not change the responsibility attributed by section 108 Accommodation Module to the body corporate. The exclusive uses detailed in Schedule E of the community management statement concern keeping the exclusive use area tidy, maintaining the exclusive use area, which does not include the balcony, but which is outside the balcony; and maintaining any improvements on the exclusive use area. The balcony is not within the exclusive use area, and is not an "improvement" in the exclusive use area.

The passage of time
I find that the Applicant has not pressed her claim against the body corporate with any vigour. Section 108(4) Accommodation Module allows the body corporate to recover "prescribed costs" from anyone whose actions cause or contribute to damage or deterioration of the part of the lot. "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. .

However, I find that the body corporate did not until 27^th November 2006 inform lot owners that the body corporate was not going to take responsibility for the balconies, and that despite the delay it was reasonable in the circumstances and taking into consideration the background to this scheme, that the Applicants continued to expect the body corporate to effect repairs.

I note the remark made by Mr Schmidt that owners should have acted earlier and not let their balconies become a hazard. Where the body corporate is responsible for maintenance, the duty to maintain cannot be transferred, and whilst some owners took the situation into their own hands, the body corporate remains responsible for those balconies which are now in a worse state of repair, because of the body corporate’s inaction.

The body corporate may like to take legal advice in respect of any claim which it may have against Rubikon, or Tippo or SSKB or Burchills in the civil courts. The evidentiary burden will of course be on the body corporate to prove its claim. Tippo is no longer the caretaker of this scheme and has not been invited to make a submission in this application, and nor has SSKB who is no longer the body corporate manager

Lot owners within the four Building Format Plans of subdivision, (Lots 27 – 101), who have effected their own repairs to balconies, may, in the light of this order and bearing in mind the division of responsibility detailed at Section 108 Accommodation Module set out above, ask the body corporate to consider reimbursement of all or parts of their costs for repair.

Without intending any criticism of the Applicant, as a general point, I note from certain submissions that certain lot owners have expected the "body corporate" as a nebulous entity, to report if there are repairs needed to lot-owner’s units, and then to take action to repair whatever is necessary. This is not the role of the body corporate or of the resident manager. The lot owner must maintain his own lot, and report to the body corporate if there is a matter which he believes it is for the body corporate to repair. Cracked tiles are not generally the responsibility of the body corporate. The resident manager may be asked to organise builders or quotations but it is for the lot-owner to look after his own investment. If the repair is the responsibility of the body corporate and the body corporate does not act quickly enough, a motion may be put to a committee meeting or a general meeting by the lot-owner or an application for dispute resolution may be made to this Office.

Number of Scheme:	22798
Name of Scheme:	Sanctuary Gardens
Address of Scheme:	30 Caseys Road, Hope Island, 4212

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Sanctuary Gardens [2007] QBCCMCmr 678 (28 September 2007)