Sanctuary Gardens [2007] QBCCMCmr 680 (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 our 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 97;
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 97 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 Applicants 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 Applicants shall make Lot 97 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 0534-2007

"Sanctuary Gardens" CTS 22798

APPLICATION

This is an application dated 13^th June 2007 by Lynne Mathias and Louise Mathias, co-owners of Lot 97, (the Applicants) against the body corporate for Sanctuary Gardens (the body corporate) for an order that "Sanctuary Gardens Body Corporate should honour the commitment made by the previous body corp. which was minuted in February 2004 before the warranty expired to repair our damaged balcony (water damage.)"

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 of subdivision, SP114229, SP114517, SP114511 and SP114510. Lot 97 is in BFP 114510. A new Community Management Statement was recorded on 21^st August 1999.

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 Applicants say that they purchased Lot 97 in August 2003. At they time they were notified of the damage to the balcony (they do not say by whom) and were informed that Lot 97 was "on the list to be repaired by the builder under warranty." They do not say who informed them of this, but this information was "confirmed" by the then caretaking service contractor Grant Tippett (Mr Tippett). Between September 2003 and August 2005, the Applicants occupied the Lot and enquired of Mr Tippett "between 6 – 10 times" what the progress of repairs was and were told that "the builders are currently working on several properties, and yours is still on the list...." The Applicants were also told that the warranty period expired "in 2006" and that they were covered since they had reported the damage within the warranty period.

In March 2005, the Applicants were told at least twice by the new caretaking service contractors that their lot was still on the list for repairs to be done. As at the date of this application, there had been no repairs effected to the Applicants’ balcony and there had been no correspondence from the body corporate or the builders about when the work would be starting. They noticed work going on, on other balconies but the work never seemed to be finished. The Applicants advise that the defect was not made the subject of a complaint to the Building Service Authority (BSA) within the warranty period. The Applicants have not lived in Lot 97 since August 2005.

In June 2007 their letting agent sent them photographs, which they attach to the application. They say that the photographs show a worse position than in 2005. They attach three photographs of a lifting or badly fitting paver at the edge of the balcony floor, with lifting grout or spacer material showing on the capping tiles topping the ‘hebel’ fascia of the balcony. They are of the view that Mr Tippett and Stewart Silver King and Burns, the former body corporate managers are "guilty of negligence", since they had a duty to pursue the necessary works to be carried out on behalf of owners within a specified time frame. Because the defects were not reported to the BSA in a timely manner, the owners will suffer monetary loss.

In support of their application they attach extracts from committee meetings minutes of 29^th July 2004; 30^th November 2004 and 28^th April 2005. They also attach a letter dated 10^th April 2004 from lot owner Don Dennis 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 Applicants about what action they took in response to Don Dennis’ letter.

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

Chana and Malcolm Scotcher, (Mr and Mrs Scotcher) owners of Lot 49, support the application. They feel that the balconies were poorly built and that material selection and installation may both be to blame. The builder was well aware of the defects before the warranty period expired, but they also feel that the Mr Tippett the caretaking service contractor was "less than persuasive" in encouraging the builder to meet its obligations. The body corporate managers were also "slow to advise the ... committee on the best course of action" to ensure the builders were obliged to carry out necessary work to repair balconies already identified as degenerating, and to investigate others. Owners should not have to pay for repairs which were the responsibility of the original builder. They would like a general inspection of all balconies ordered in the affected phase of the development, if such is within the Commissioner’s power.

David Greig of Lot 98 states that the rectification works were not completed as originally documented at the time. He purchased his lot in October 2003 and was advised that his balcony would have remedial work undertaken, but he does not know if they were completed. He provides no evidence about the Applicants’ balcony.

The body corporate who is the Respondent in this application did not make a submission.

DETERMINATION

This Office has no general powers to police buildings in bodies corporate, and has no jurisdiction to entertain actions for negligence. The Applicants may have some civil claim for relief against other persons, but this is something about which they must seek legal advice. An adjudicator may make an order which is fair and equitable on assessing whether provisions of the Act or the community management statement for a scheme has been breached.

I have some knowledge of this scheme and the history of the defective balconies. I have seen body corporate committee minutes relating to this scheme in applications submitted by Lots 61, 66, 59 and 70.

The Applicants say that the committee meeting minutes "in February 2004" show the commitment made by the body corporate for the "undertaking of remedial action for our damaged balcony. (water damage.)" However, the Applicants do not provide copies of any committee minutes dated February 2004 in order to support their application, and there is no evidence provided at all that the body corporate committee made any such undertaking. I am aware of committee meeting minutes for 5^th February 2004 which state at Motion 5 as follows -

Motion 5 "Balcony Repairs"

At the same meeting, at Motion 19 (headed "Developer Repairs") under "matters arising from previous minutes", 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 would continue to contact the builder to complete this urgent work.

I am of the view that there was no decision taken at this meeting that the body corporate would make itself liable for repairs to respective lot owners’ balconies. The commitment, if any, was to chase the builders to get them to effect repairs. It is no more than a report to the committee of the remedial work being done and the continued monitoring of the situation by the committee.

The minutes of a committee meeting on 6th 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 was received. The minutes of the annual general meeting 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." There is no specific mention of Lot 97.

There was general talk about remedial work to balconies at a committee meeting on 30th November 2004 with the body corporate again noting with concern the delay by the builders, and resolving that the chairman John Arthur should contact the BSA. There is no mention of Lot 97 at this meeting. I am aware that six lots were in fact made the subject of a complaint to the BSA in about February 2005, but have no details of how that complaint was made. Lot 97 was not one of those lots.

There is no evidence provided by the Applicants that the body corporate or the caretaking service contractor undertook to perform any special service for the Applicants in relation to reporting building defects to the BSA prior to the expiration of the warranty period. The body corporate is also not responsible for the actions of a caretaking service contractor, but only for decisions taken by the committee as a committee, or by the body corporate at general meetings. (Section 100 Act).
There is nothing to stop any lot owner from making a claim to the BSA within the warranty period, and it is not a duty of the body corporate to lodge a complaint. If the body corporate committee had volunteered to do work which it then did not do, any lot owner could have taken up the matter with regard to his or her own lot, and it seems that some did do so. Once the building is completed, and 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. There is however, no duty on the body corporate to bring a proceeding on behalf of an owner. There is no evidence provided to show that the Applicants requested that the body corporate commence proceedings on their behalf against the builder.

There is also no evidence to show that the Applicants are currently in dispute with the body corporate. Again, in reliance on documents to be found in body corporate records, the body corporate wrote to "all owners" on 27^th November 2006, stating that since the scheme was registered as a Group Title Plan that all dwellings were the responsibility of the lot owner to repair. The Applicants do not mention receiving this letter although I am giving them the benefit of the doubt that they did, and that it was this letter that triggered their application.

I am aware that there are genuine concerns about defects to balconies in this scheme, and that the current position, regardless of what has gone before, is that the Applicants have some damage to their balcony. The Applicants say that the balcony has been defective since their purchase in 2003. Whilst they lived in the lot for two years, they clearly did not find the balcony to be in a dangerous state. They report no water leaks or damage to the lower level. They say that since 2005, the balcony has worsened although they do not say in what way the raised tile shown in the photographs is worse than it was before, or whether the tile was not raised before and now is. From the photographs the damage might be only cosmetic.

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).....

The body corporate is of the view 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. In fact, this scheme has buildings created under two Group Title Plans and four Building Format Plans (numerated as Survey Plans as stated above.) This is most unusual but not unknown. 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 lot owner is also responsible for the maintenance of his lot save for certain exceptions set out under section 108 Accommodation Module, for example, where the body corporate becomes responsible 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 97 is within SP 114510 which is a Building Format Plan of subdivision.

Exactly what is wrong with the Applicants’ balcony, and how it might be repaired is therefore crucial in the examination of who is now responsible for the repair of it. The Applicants have provided no quotations for repair or reports about the effective way to remedy the current problems.

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 so that the timber rots, 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 a membrane was applied to Lot 70 sometime before February 2004. Certainly that fact was stated by Burchills to the committee. (see Motion 5 committee meeting 4^th February 2004.) The body corporate has a duty to make sure that this membrane is effective.

Section 108(2)(b)(i) Accommodation Module
The body corporate is responsible for any foundation structures. I am not satisfied that the balconies are " foundation structures," in that it appears possible from quotation provided for another lot in the scheme, to remove and rebuild them without having to shore up the rest of the house.

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 the Applicant has complained about water in light fittings 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 (5 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 bearer beams 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.

I am unable to tell from the quality of the application, and its relevance to the balcony of this lot, the exact cause of the damage to the Applicants’ balcony, or what is required now to remedy the problems. It would seem that there is damage to a fascia tile which would be the responsibility of the body corporate under section 108(2)(a)(i) Accommodation Module.

I 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 the damage. 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, although this is not alleged by the Applicants. 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 payment for the works shall be in accordance with section 108 Accommodation Module, that is if essential supporting framework or the membrane is to be repaired, the body corporate must pay for this part of the repair howsoever caused, but if repair is for a lifting tile or is merely cosmetic on the floor of the balcony, and there is no structural damage, then it will be the responsibility of the Applicants. It might be that following the engineer’s report that the body corporate and the Applicant may be jointly liable for the repairs, in equal or unequal amounts.

Rectification or rebuilding work should be commenced within one month of the report being obtained and finalised as soon as reasonably possible. Any reports obtained by the body corporate should be shown to the Applicants. The Applicants shall make the lot available to the engineer and the persons effecting the remedial works.

I note in the submission of Mr and Mrs Scotcher that "owners should not have to pay for the repairs which are the responsibility of the original builder." It is unfortunately the case for any freehold owner that this can happen if available remedies, such as they are, are not pursued by the owner. It is certainly not the duty of the body corporate, which is made up of all the lot owners in the scheme, to pay for the repairs instead. I also note that Mr and Mrs Scotcher would like an order that all balconies be inspected. It is up to every owner to maintain his or her own lot. If on inspection, an owner is concerned about the maintenance of or damage to his or her balcony, and believes that the body corporate may have liability for maintenance or repair, he or she should contact the committee for the scheme.

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 680 (28 September 2007)