Pallara Court [2007] QBCCMCmr 74 (12 February 2007)

Number of Scheme:	12854
Name of Scheme:	Pallara Court
Address of Scheme:	QUEENSLAND

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

I hereby order that, within two months of the date of this order, the body corporate shall repair or replace, at its expense, the leaking hot water pipe/s embedded in the concrete slab between the floor of lot 2 and the garage ceilings of lots 2 and 6.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0851-2006

"Pallara Court" CTS 12854

Scheme

"Pallara Court" community titles scheme 12854 was registered as a building units (now known as building format) plan of subdivision on 8 October 1976 comprising 8 lots and common property. It is regulated by the Act’s Standard Module.

Application

This application is brought by the owner of lot 2, Andrea Fay Paynter, the applicant, against the body corporate, seeking an order that the body corporate repair, at its expense, the leaking hot water pipes embedded in the concrete slab floor between lot 2 and the garage ceilings of lots 2 and 6.

In the grounds to her application, the applicant states that a plumber engaged by the body corporate to find the source of a water leak in the garages of lots 2 and 6 has identified that the leak emanates from the hot water pipe leading up into lot 2.

The leaking pipe is located in the concrete slab floor beneath lot 2 which is the ceiling of the garages for lots 2 and 6.

There are two hot water systems within the complex which supply hot water to 8 units, with each system supplying four lots.

The applicant’s claim is based on s.20 of the Act. She alleges that the hot water pipe in question is common property utility infrastructure for which the body corporate is responsible, on the basis that the pipe in question is located within a boundary structure.

Submissions

Submissions in response to the application were sought from all owners (excluding the applicant) and the committee. A submission from the body corporate manager, on behalf of the body corporate, was received. The submission opposes the making of the order sought on the basis of s.114(3) Standard Module, which it states is applicable as the hot water system is installed on common property but the pipe in question supplies water to a particular lot only (lot 2) and has its own shut off valve and water usage meter.

The applicant inspected the submission made and exercised her right to make a reply. In her reply she states that she does not believe that s.114(3) of the Standard Module is applicable and that her claim is based on s.20 Act.

Jurisdiction

This is a dispute between an owner and the body corporate and comes within the dispute resolution provisions of the Act.^[1]

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

(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)).

Decision

The facts of this matter are not in dispute. There is a leak in the hot water pipe embedded in the concrete slab of lot 2’s floor, which is also the ceiling of the garages of lots 2 and 6. The hot water pipe in question services lot 2 only. There are two hot water systems, located on common property, that service the 8 lots within the scheme. The hot water system and the associated pipes and wiring are "utility infrastructure" within the meaning of that term in Schedule 6 Act.

The difference of opinion as to responsibility for the repair or replacement of the pipe in question comes down to the application of s. 20 Act and s.109 Standard Module.

S.20 Act relevantly provides as follows:

By virtue of s.109(1) Standard Module, the body corporate is responsible for the maintenance of common property. In order for the body corporate to not be responsible for the maintenance of utility infrastructure, that utility infrastructure must satisfy all three requirements of s.20(1)(a)(b) and (c) Act.

Solely related to supplying utility services to a lot

At the site inspection I conducted on 12 February 2006, I observed that there are two hot water systems servicing the eight lots within the scheme. Each hot water system services four lots. The systems are both located on common property at ground level. I observed the hot water system servicing lots 1, 2, 5 and 6. One pipe protruded from the system. From this pipe, four separate pipes with separate meters and shut off valves serviced each of the four lots. Although each lot has its own pipe coming off the main pipe protruding from the hot water system, the hot water system itself services more than one lot (four lots in this case). Therefore, criterion (a) in s.20 Act is not satisfied.

Within the boundaries of the lot

A building format plan of survey defines land using the structural elements of a building, including, for example, floors, walls and ceilings^[2]. Except to the extent permitted under a direction given by the registrar, the boundary of a lot created under the plan, and separated from another lot or common property by a floor, wall or ceiling, must be located at the centre of the floor, wall or ceiling^[3].

It is unknown whether the leak emanates from within the boundaries of the applicant’s lot, or below the centreline in the floor of lot 2 and the garage ceiling of lot 6.

Located other than within a boundary structure for the lot

At the site inspection I conducted on 12 February 2007, I observed evidence of water leaking into the garage of lot 2 and evidence of water damage to the ceiling of the garage of lot 6. The body corporate manager, Ms Kim Day, commented at the inspection that the plumber advised that the water damage to the ceiling of the garage of lot 6 could be from water pooling or being pushed from the leak which may emanate from the slab above lot 2’s garage only. While I concede this possibility, my observation of the water damage to the ceiling of lot 6 indicated that it was also possible the leak emanates from a pipe located within the slab separating the garage of lot 6 and the floor of lot 2. I note that the plumber did not specify exactly where the leak was coming from, other than to say (bolding my emphasis) "There is a leak in the hot water service to Unit 2 somewhere in the concrete slab between the hot water unit and the fixtures and this pipe only services lot 2 and nobody else." I was not convinced that the leaking pipe was located other than within a boundary structure. I therefore regard criterion (c) as not satisfied.

With criterion (a) and (c) not satisfied, the body corporate remains responsible for the maintenance of the utility infrastructure by virtue of s.20 Act.

The body corporate asserts that s.109(3)(b) Standard Module is applicable to exempt the body corporate from its maintenance responsibility in this particular instance. That section relevantly provides as follows:

In order 0145-2006, my colleague, Adjudicator Underdown, made the following finding in relation to the second example given in s.109(3)(b) Standard Module.

In the example, the words "hot water system" refer only to the water heater, ie the tank. The "pipes and wiring" are not part of the "hot water system" but associated with it. This fits in with the rest of the section which talks about "devices" installed on common property for the benefit of only one particular lot, eg a washing machine, clothes dryer or "another device". This is in accordance with s.20 Act. Where the tank and associated pipes provided a hot water service only to one lot, then the beneficiary of that service would be responsible for the system, pipes and wiring.

As with the case Adjudicator Underdown considered, that is not the case here. The hot water system services four lots and the pipework associated with it remains the responsibility of the body corporate. Furthermore, the pipework appears to be situated within a boundary structure embedded in the structure of the building.

As Adjudicator Underdown commented, s.109 Standard Module requires the body corporate to maintain foundation structures which are not common property^[4]. It is not envisaged by the legislation that individual owners would be expected or permitted to excavate into the structure of the building to remedy their own piping defects.

I conclude that the body corporate is responsible for the pipes in the circumstances in which this leak arose.

Adjudicator Underdown further commented in order 0145-2006, that it is not uncommon for this office to deal with disputes involving buildings of this age where water pipes have been laid directly into suspended concrete floors between the lots. Due to differing rates of expansion and contraction between the copper pipes and encasing material, it is almost inevitable that in time, the pipes begin to leak, causing water to seep upwards or downwards through the concrete slab and sometimes causing the steel reinforcing to corrode. The common practice to effect the repair is to disconnect the suspect pipes and run new pipes outside the lot or building. Often, this necessitates replacement tiles or fittings in a bathroom, and the dispute is then how much of the plumber’s invoice relates to an applicant’s renovations and how much to unavoidable damage and an inability to match existing tiles or fittings.

However, there is no dispute raised on quantum at this stage, only on liability. Since the body corporate is liable, it must now obtain a quote or quotes for the work required and attend to the necessary repair or replacement as soon as possible. The body corporate should be mindful of its relevant limit for committee spending of $1,000. If the cost of the repair or replacement is to exceed this amount, general meeting authorisation will be required. If the cost is to exceed the body corporate’s relevant limit for major spending of $2,000, then at least two quotes must be obtained and presented to owners in general meeting as a motion with alternatives. Depending on the body corporate’s financial position, it may also be necessary to strike a special levy to cover the cost of the work.

I am mindful of the inconvenience caused to the applicant’s tenants and also the occupants of lot 6 while the leak remains unfixed. I have therefore imposed what I consider to be a reasonably tight timeframe of two months for the body corporate to obtain the necessary quote/s and appropriate authorisation and have the necessary work completed. The applicant, of course, is liable as a member of the body corporate to be levied for her contribution, if a special levy has to be raised.

^[1] See ss.226,227 & 228 Act
^[2] s.48C Land Titles Act 1994
^[3] s.49C Land Titles Act 1994
^[4] s.109(2)(b)(i)

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Pallara Court [2007] QBCCMCmr 74 (12 February 2007)