Club One [2007] QBCCMCmr 69 (8 February 2007)

Last Updated: 20 February 2007

REFERENCE: 0802-2006

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	4735
Name of Scheme:	Club One
Address of Scheme:	293 North Quay BRISBANE QLD 4000

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

Mr G Elliott, the Owner(s) of lot 43

I hereby order that the resolutions of the committee meetings of 31 January 2005 and 23 February 2005 and of the annual general meetings of 29 June 2005 and 7 July 2006 to not pay the applicant for damages arising from ingress of water into Lot 43 were invalid.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0802-2006

"Club One" CTS 4735

Application

Gary Elliott, the owner of Lot 43 has sought the following orders against the Body Corporate:

Invalidation of a resolution of the Body Corporate in respect of my claim for damages arising from ingress of water into Lot 43, which resolution was passed at the Annual General Meeting held on 7 July 2006.

The Scheme

Club One CTS 4735 is a 134 lot scheme registered under the Body Corporate and Community Management Act 1997 and is operating under the Body Corporate and Community Management (Accommodation Module) Regulation 1997. Typically, this module is intended for residential arrangements. It is registered in accordance with a standard format plan.

Jurisdiction

Section 276(1) of the Act provides that an adjudicator may make an order that is just and equitable in the circumstances (including a declaratory order) to resolve a dispute, in the context of a community titles scheme, about -

(a) a claimed or anticipated contravention of the Act or the community management statement; or

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

(c) a claimed or anticipated contractual matter about-

(i) the engagement of a person as a body corporate manager or service contractor for a community titles scheme; or

(ii) the authorisation of a person as a letting agent for a community titles scheme.

An order may require a person to act, or prohibit a person from acting, in a way stated in the order (section 276(2)). An adjudicator's order may contain ancillary and consequential provisions the adjudicator considers necessary or appropriate (section 284(1)).

Grounds

The applicant states as follows:

On 24 December 2004 and 2 February 2005 damage was caused to Lot 43 by water leaking into the room through the window during heavy rains. The details of the damage are as follows:

1. 24 December 2004 Ingress:
1.1 Costs of drying and deodorising the wet carpet in the room: $1,050.00
1.2 Costs of replacing the damaged furniture in the room: $150.00

2. 2 February 2005 Ingress:
2.1 Costs of drying and deodorising the wet carpet in the room: $1,050.00
2.2 Costs of replacing the damaged furniture in the room: $0.00
2.3 Costs of repairing water damage behind the room lining adjacent

to the leaking window: $265.00
TOTAL: $2,515.00
The above damage resulted from the Body Corporate’s failure to fulfil their duties under Section 152(1) of the Body Corporate and Community Management Act 1997 (Qld) and Section 108(2)(a) of the Body Corporate and Community Management (Accommodation Module) Regulation 1997 (Qld), that is, to maintain in good condition windows and associated fittings situated in a boundary wall separating Lot 43 from common property.

The body corporate manager has rejected my claim (please refer to the attached correspondence and a copy of the minutes of the committee meeting of the Body Corporate held on 31 January 2005 and on 23 February 2005). The claim was also rejected at the annual general meeting of the Body Corporate held on 29 June 2005 (please refer to attached copy of minutes). On 31 March 2006 I submitted a request for motions for the 2006 annual general meeting, which was held on 7 July 2006. On 11 July 2006, the Body Corporate administrator informed me that the claim was rejected again (please refer to the attached copy of the administrator’s letter).

It is the Body Corporate’s responsibility to maintain external doors, windows and associated fittings of the lots. Therefore, the Body Corporate should be liable for the damaged caused to Lot 42 by the ingress of water.

All relevant documentation is attached, apart from receipts for the expenses said to have been incurred.

Submissions

Three submission cover sheets were received from owners. One made no observations and two opposed the application on the basis that the matter had been resolved against the applicant in a number of meetings which followed correct procedures.

Maintenance Generally

Following are a series of extracts from the fact sheet produced by the Office of the Commissioner for Body Corporate and Community Management titled Maintenance.

Survey Plans

The survey plan for a community titles scheme shows the boundaries of the common property and the lots in that scheme. There are various types of survey plans and boundary definitions may differ depending on the type of plan registered. Copies of registered survey plans can be purchased from the Land Registry offices of the Department of Natural Resources and Water.

The two common types of survey plans are building format plans and standard format plans.

Building Format Plans (previously building units plans (BUP))

A building format plan is a form of subdivision that usually occurs within a building. A building format plan defines land using the structural elements of a building, including, for example, floors, walls and ceilings.

Where a lot is separated from another lot or common property by a floor, wall or ceiling, the boundary of the lot is the centre of the floor, wall or ceiling (Sections 48C and 49C (4) of the Land Title Act 1994). An example of a community titles scheme established as a building format plan is a multi-storey block of residential units.

Where a balcony is included in a lot ...... the boundary of the lot is the face of the balcony.

Maintenance under a building format plan

The body corporate is usually responsible for:

•	The maintenance of the outside of the building including railings or balustrades on, or near to, the boundary of a lot and common property. This would include the balustrade on a private balcony.
•	Gardens and lawns on common property.
•	The foundations of the building.

Generally any doors or windows, and their fittings, that are situated in a boundary wall between a lot and the common property (including common property balconies). This also includes garage doors and their fittings.

The lot owner is generally responsible for:

•	Doors and windows leading onto a balcony that forms part of the lot.
•	Kitchen, bathroom, bedroom cupboards.
•	Sinks, dishwashers, garbage disposal units, shower screens and shower trays.

Maintenance in this Scheme

Club One is registered under Building Units Plan of Subdivision and therefore attracts the application of the discussion extracted from the fact sheet (above). Following is a view of Level L of BUP 10816 (Club One):

Planter boxes protrude from the walls around Lots 42, 43, 45 and 46 and are recessed in lots 44 and 47. The fact sheet produced by Office of the Commissioner for Body Corporate and Community Management does not necessarily state whether the boundary for lots in this scheme will follow a notional vertical line from the top of the planter box to the bottom of the next level (like a balcony does), or follow a lateral view of the planter box. I have therefore accessed the Register of Titles Directions for the Preparation of Plans^[1].

Direction 9.6.4 in part states:

Where a part lot outside a building or structure is ...... other than a private yard (eg a balcony or a courtyard, etc), it shall be shown on the level diagram ...... for the level on which it lies and ......

for vertical definition:

•	Where the part lot is fully or partially defined by structural elements ...... no additional definition is required;

•	Where there is no upper structural element, this shall be defined by the extension of the ceiling of the adjoining part of the lot within the structure.

I therefore conclude that the airspace above the planter box comprises part of the lot and therefore any window over the planter box is the responsibility of the lot owner.

Further Information

Given the above background, it became apparent to me that some apportionment of damage may be necessary between the Body Corporate and the applicant. Therefore I sought submissions from both the Body Corporate and the applicant in relation to the positioning of windows within the lot, along with percentage estimates of how the apportionment of liability should be calculated.

Despite a number of attempts by this office for input from the Body Corporate, no response was received. However the applicant did suggest a percentage allocation that I will not disclose here, as I consider further negotiations between the parties may need to take place.

Determination

I would first like to note that the issue of insurance is not relevant in relation to my decision as to who is responsible to meet the cost of any damage incurred. An order can only be made against the applicant or the respondent and is not based on who should or shouldn’t have a fall back means for meeting the cost.

Section 108(1) of the Accommodation Module states that "the Body Corporate must maintain common property in good condition, including, to the extent that common property is structural in nature, in a structurally sound condition".

Section 152 of the Act provides that the body corporate for a community titles scheme must administer, manage and control the common property and body corporate assets reasonably and for the benefit of lot owners. Also it must comply with the obligations with regard to common property and body corporate assets imposed under the regulation module applying to the scheme.

The body corporate has not disputed the ingress of rain water into the applicant’s lot on either occasion and there is evidence that the body corporate has initiated steps to fix the seals around the windows. However, the Body Corporate does not accept that it follows from the obligation on the Body Corporate to repair and maintain an owner’s lot, that they are liable for any resultant damage. They appear to reason this out on the basis that it is the lot owner’s responsibility to insure contents and therefore it is not their problem that the owner has not adequately insured themselves. However as mentioned before, the presence or otherwise of insurance does not determine liability.

The applicant needs to show the body corporate has contravened the legislation. However for this purpose, it is sufficient for the applicant to show that the body corporate has contravened its maintenance obligations in that the common property is not in good condition. In this case the maintenance obligations of the body corporate are only satisfied if significant water ingress is prevented in normal weather conditions. The legislation makes no reference to the issue of negligence in repairs or maintenance, nor does it make provision for a party to first have an opportunity to be passively alerted to a problem before they become responsible for maintenance.

Given the evidence that this problem is not only restricted to the applicant’s lot, it appears apparent that there has been a gradual deterioration in the seals since the scheme was originally built, and this has not been adequately addressed by the Body Corporate. In this matter the applicant has satisfied me that the seals around the windows of the units where leakage occurred (on both occasions) were either inadequate or in poor condition.

The applicant is seeking to recover damage to his unit and some of the contents from the Body Corporate. All evidence that has been presented to me is that the damage has occurred through water penetration from windows. The evidence presented to me also indicates the Body Corporate has the responsibility to reimburse the application for most of, if not all, the resultant damage.

I will therefore invalidate the resolution of the Body Corporate not to meet the applicant’s claim for repair of damage or reimbursement for carrying out repairs.

Section 281 of the Act states that If the adjudicator is satisfied that the applicant has suffered damage to property because of a contravention of this Act or the community management statement, the adjudicator may order the person who the adjudicator believes, on reasonable grounds, to be responsible for the contravention to pay the applicant an amount fixed by the adjudicator as reimbursement for repairs carried out to the property by the applicant.

This section gives the following example:

A waterproofing membrane in the roof of a building in the scheme leaks and there is damage to wallpaper and carpets in a lot included in the scheme. The membrane is part of the common property and the leak results from a failure on the part of the body corporate to maintain it in good order and condition, the adjudicator could, on application of the lot’s owner, order the body corporate to have the damage repaired or to pay an appropriate amount as reimbursement for amounts incurred by the owner in repairing the property.

While I have sought some information from the parties that would have assisted me in considering making ancillary orders in this matter I have not made ancillary orders because:

•	The applicant has not provided supporting evidence of the amounts of claims, mitigation or comparability of replacement items chosen; and
•	The respondent has not made any submissions as to the extent of their liability.

I believe it would be in the applicant’s best interests to attempt to negotiate reimbursement from the Body Corporate, with the fall back that, if the applicant is unable to negotiate a satisfactory outcome with the Body Corporate then, application for orders under Section 281 could be made.

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^[1] http://www.nrw.qld.gov.au/property/titles/rdpp/pdf/section_9.pdf