Palazzo Colonnades [2008] QBCCMCmr 312 (4 September 2008)

Last Updated: 13 October 2008

REFERENCE: 0221-2008

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	28032
Name of Scheme:	Palazzo Colonnades
Address of Scheme:	2988-2994 Gold Coast Highway Surfers Paradise QLD 4217

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

Body Corporate,

I hereby order that the body corporate is authorised to engage Quality Painting & Maintenance Pty Ltd (Trading as Opat Gold Coast) in accordance with their quotation dated 16 July 2008 (Reference Q7930) to undertake the work specified in that quotation, in the amount of $6,363.50 (including GST). I further order that the owner of lot 62, Kasumitsu Koybayashi, must provide appropriate access to lot 62 to enable the repair work to be undertaken. I further order that the owner of lot 62, Kasumitsu Koybayashi, must pay to the body corporate the quoted amount of $6,363.50 within seven days of the work being completed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0221-2008

“Palazzo Colonnades” CTS 28032

Application

This application is brought by the body corporate for Palazzo Colonnades against the owner of lot 62, Kasumitsu Koybayashi, seeking the following orders:

That the owner of lot 62 be ordered to carry out necessary repairs to his balcony to prevent further water leaks and to the roofing of lot 55 to bring it back to its condition prior to the leaks.

Further, that should the owner of lot 62 not carry out the repairs the body corporate be authorised to carry out the repairs to the balcony of lot 62 and the ceiling below and recover the costs from the owner of lot 62 as a liquidated debt.

The grounds to the application are to the following effect:

• On 21 April 2005 the body corporate corresponded with the owner of lot 62 advising of the damage being caused by the over watering of his plants and the subsequent leaking of his balcony to the lot below (lot 52). The correspondence requested that action be taken to repair the area.
• On 27 April 2005 the owner of lot 62 corresponded with the body corporate advising that he accepted no liability for the damage caused and requesting evidence that it was his lot causing the damage.
• On 31 May 2005 the body corporate corresponded with the owner of lot 62 enclosing a report from GK Consulting Engineers evidencing the cause of the leak and subsequent damage.
• On 5 August 2005 a Mr G Frazer submitted a report from Building Survey Australia on behalf of the owner of lot 62.
• On 14 December 2005 the body corporate provided a follow up report from GK Consulting Engineers in reply to the report from Building Survey Australia and again requested that rectification work be carried out.
• On 5 January 2006 the owner of lot 62 corresponded with the body corporate advising that he would not accept any liability for the work or damage caused to lot 55.
• A delay in taking further action on this matter was caused due to an ongoing action through the Building Services Authority regarding building defects in areas of common property which took up a great deal of time and a change of body corporate manager contributed to this delay.
• Following several attempts by the building manager to obtain authority to enter the property to carry out further investigations the body corporate issued an entry notice on the owner of lot 62 on 12 September 2007 and it was evident that there was deterioration to the tiling in lot 62 and further damage to lot 55.
• On 7 November 2007 the body corporate again corresponded with the owner of lot 62 inviting him to discuss the matter with the body corporate to finalise the matter.
• On 20 December 2007 the body corporate manager met with the owner of lot 62 and his agent to discuss the matter and the owner of lot 62 confirmed his belief that the damage was not being caused by his lot but was being caused by the adjacent lot. The body corporate manager advised that as agreement could not be reached the matter would have to be referred to the Office of the Commissioner for Body Corporate and Community Management. The owner of lot 62 agreed that this was the only course of action available to determine this matter.
• The body corporate is seeking an order under section 281 of the Body Corporate and Community Management Act 1997 (the Act), section 120 of the Body Corporate and Community Management (Accommodation Module) Regulation 1997 (the Accommodation Module) or such other relevant section/s of the legislation, as the owner of lot 62 has failed to properly maintain his lot in accordance with section 119(2) of the Accommodation Module.
  

Jurisdiction

“Palazzo Colonnades” Community Titles Scheme 28032 was registered as a building format plan of subdivision on 10 May 2000 comprising 66 lots and common property. The scheme is regulated by the Act and the Act’s Accommodation Module. In considering the legislative requirements relating to the order sought, I have had regard to the provisions of the Accommodation Module as in force at the time that the events in question occurred, that is the Body Corporate and Community Management (Accommodation Module) Regulation 1997 (the Accommodation Module)[1]. However, I draw the parties’ attention to the fact that the Accommodation Module has since been changed.

This is a dispute between the body corporate and the owner of a lot concerning an alleged contravention of the legislation and comes within the dispute resolution provisions of the Act (see sections 226, 227 & 228).

Procedural Matters

On 28 March 2008, a copy of the application was provided to the body corporate care of Mr Michael Groves of Strata World Pty Ltd (the then body corporate manager) for distribution to the owner/s of each lot (specifically including the owner of lot 62), with an invitation to respond to the matters raised in the application. Submissions were made by two lot owners, both of which supported the application by the body corporate.

Submissions

Submission was made by the owners of lot 55 to the following effect:

• Their concern is to have the damage to their property rectified and that the necessary steps are taken to ensure that further deterioration does not occur because of continuing water leakage from lot 62.
• Damaging leakage onto lot 55 from lot 62 has been an ongoing problem for some years now and since the matter was first raised formally with the owner of lot 62 on 21 April 2005 and over the course of subsequent communications, he has refused to accept liability for the repair.
  

The owners of lot 2 made submission to the following effect:

• With extensive water proofing carried out by Opat over 2 years ago on the roof and level 10 (level of lot 62) plus the vertical structural slab between lot 62 and the adjacent lot it is evident that the damage to lot 55 has been from above. This was also conclusively shown by reports from G K Engineering.
• Prior to this problem being brought to the attention of the owner of lot 62 he had an extensive garden on the deck for the 6 months of each year he lives at Palazzo Colonnades. The fertilisers etc would have contributed to the breakdown of the grouting seen on engineering reports.
• The problem for lot 55 is unsightly and extensive.
  

Interestingly, the owner of lot 62 did not make any submission. Because of the lack of any submission from the respondent and the conflicting reports given by Building Survey Australia (obtained by the respondent) and GK Consulting Engineers Pty Ltd (obtained by the body corporate), I wrote to the respondent and asked him to request Building Survey Australia to respond to the letter dated 30 October 2005 by GK Consulting Engineers Pty Ltd commenting on their report. Building Survey Australia’s reply was received on 25 July 2008.

Determination

Applicable Law

Section 281 of the Act, the section under which the body corporate seeks an order against the respondent, provides as follows:

281 Order to repair damage or reimburse amount paid for

carrying out repairs

(1) 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—

(a) to carry out stated repairs, or have stated repairs carried

out, to the damaged property; or

(b) to pay the applicant an amount fixed by the adjudicator

as reimbursement for repairs carried out to the property

by the applicant.

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 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.

(2) The order can not be made if—

(a) for an order under subsection (1)(a)—the cost of

carrying out the repairs is more than $75000; or

(b) for an order made under subsection (1)(b)—the amount

fixed by the adjudicator would be more than $10000.

The body corporate alleges that the respondent has breached section 119(2) of the Accommodation Module which provides as follows:

119 Obligations of owners and occupiers—Act, s 160 [SM, s

120]

(2) The owner of a lot included in the scheme must maintain the

lot in good condition.

The body corporate asserts a right to carry out repair work, based on section 120 of the Accommodation Module, which provides as follows:

120 Body corporate may carry out work required of owners

and occupiers—Act, s 161 [SM, s 121]

(1) This section applies if the owner or occupier of a lot included

in the scheme does not carry out work that the owner or

occupier has an obligation to carry out under—

(a) a provision of the Act or this regulation, including a

provision requiring an owner or occupier to maintain a

lot included in the scheme; or

(b) a notice given under another Act or a Commonwealth

Act; or

(c) the community management statement, including the

by-laws; or

(d) an adjudicator’s order; or

(e) the order of a court.

(2) The body corporate may carry out the work, and may recover

the reasonable cost of carrying out work from the owner of the

lot as a debt.

Report Findings

A report commissioned by the body corporate on 8 May 2005, by GK Consulting Engineers Pty Ltd, observed that:

The balcony to Lot 62 is directly above the balcony to Lot 55. There is water seepage from above and a build up of calcium to the soffit and walls at the North end of unit 55 balcony.

The walls to Lot 62 are not affected by any moisture damage and the moisture is evident through the balcony floor of Lot 62, this is caused by the excessive watering of plants on the balcony and the use of fertilizers has penetrated through the tile grout into the bed below passing through the concrete slab. Inspection of Lot 63 adjacent to this unit does not exhibit any breakdown of grout or moisture in the walls.

Conclusion

Evidence of water staining and ponding on the floor of the balcony to lot 62 and the breakdown of the grout and early signs of concrete decay caused by the over watering of the plants has overflowed and seeped into the unit below this balcony (Lot 55) is the cause of calcium and chemical build up to the balcony of Lot 55. Inspection of the balcony to Lot 63 does not exhibit any signs of such deterioration, and we therefore must conclude that the damage has not been caused from this lot, but from Lot 62.

We recommend that the Body Corporate request that the occupier of Lot 62 does not continue to water the plants as there is potential for further damage to the concrete and in particular the reinforcement within the balcony that can lead to concrete spalling.

A report commissioned on behalf of the respondent on 27 July 2005, by Building Survey Australia, concluded that:

There is obvious water seepage onto the balcony area of unit 903 via and/or through the concrete slab above. It would be difficult to conclude that the water seepage/damp deterioration could be for cause of watering plants on the balcony above: VIZ

1/ The tiles are intact with no visible deterioration to cause water seepage through the tiles and/or grout. It is assumed that the external tiling does have a waterproof membrane substrate to the underside of the tile installation (particularly to the top floor balcony with no roof cover).

2/ The water test concluded that the efficient water run-off did not deposit any and/or very little water to the area of concern below (cognizance to the likelihood of adverse rain/wind conditions). The amount of water runoff to cause such seepage would be negligible even if it is fertilizer laden.

3/ Why is the soffit adjacent to the window and wall of unit 903 similarly affected when the water sheds sufficiently away from the wall.

4/ Where does the air conditioning condensate drain discharge?

5/ The greater risk for seepage would originate from the balcony of the next door unit 1004.

6/ What is the status of waterproofing, weatherproofing and seal to the blockwork party/screen wall and/or roof top parapets etc?

The body corporate provided a copy of the report by Building Survey Australia to GK Consulting Engineers Pty Ltd and invited them to comment on it. GK Consulting Engineers Pty Ltd commented, on 30 October 2005, as follows:

We find their report inconclusive, they asked many questions, however, do not attempt to answer any of them.

Their report indicates the greatest risks are seepage that would originate from the balcony of the unit next door ie 1004. Our dye test indicated there was no water penetrating from unit 1004 into unit 1003. Therefore, this can be conclusively dismissed.

It is without doubt, the fertiliser from the plants has caused the damage. We have answered the question by Building Survey Australia, that the water penetration is not coming from the adjoining units – our dye test conclusively confirms that it is not.

On our first inspection that plants with their overflowing water has caused the problem to the lot below is confirmed to be correct.

It is our opinion, the damage caused should be repaired immediately as the fertilizer settling within the concrete will deteriorate the surface allowing chlorides to enter, thereby creating concrete spalling.

Investigation

In the absence of any submission from the respondent in this matter and given the inconsistent findings of the reports from GK Consulting Engineers Pty Ltd and Building Survey Australia, I requested the respondent to obtain from Building Survey Australia, a written response to the letter of GK Consulting Engineers dated 30 October 2005.

Building Survey Australia responded directly to this office on 25 July 2008 as follows:

Paragraph 2 – As stated in the BSA report (dated 27th July, 2005) there were several questions asked and recommendation made – these questions remain unanswered.

Paragraph 3 – With reference to the dye test carried out from Unit 1004 – Who were the witnessing parties at this test? What test method was used? Is there formal record/evidence available?

Paragraph 4 – Is there supporting evidence to substantiate this conclusive confirmation? There remains areas of investigation recommended that have not been carried out.

Paragraph 5 – There appears to be no formal supporting evidence to substantiate the assumption of confirmed correct.

Paragraph 6 – Is there any evidence of concrete spalling or deterioration to date

My Findings

After considering the initial and subsequent reports provided by both engineers in some detail, I prefer the report of GK Consulting Engineers Pty Ltd over that of Building Survey Australia. I consider the report of GK Consulting Engineers Pty Ltd more credible. I note that the report of Building Survey Australia was based on the assumption that “the external tiling does have a waterproof membrane substrate to the underside of the tile installation (particularly to the top floor balcony with no roof cover)”. However, this assumption is dubious. The quote from Building Rectification Services to repair the damage states that “After inspection of your balcony to the unit on level 10, we found that there is no waterproofing to the balcony”. Further, I agree that the response by Building Survey Australia to GK Consulting Engineers Pty Ltd’s letter of 30 October 2005, simply asks more questions and does not specifically refute any of the conclusions reached by GK Consulting Engineers Pty Ltd. Further, I note that Building Survey Australia do not speculate on a cause for the damage to the lot below the respondent’s, but states that “it would be difficult to conclude that the water seepage/damp deterioration could be for cause of watering plants on the balcony above”. Building Survey Australia do not discount the possibility that the cause of the damage is from the watering of plants on the balcony above, merely suggest that it would be difficult to conclude that. However, GK Consulting Engineers Pty Ltd specifically conclude that the cause of the damage is from lot 62 and particularly from the over watering of plants.

I have perused an inspection report prepared by the Building Services Authority on 9 October 2005, following an inspection on 7 October 2005 in relation to building defects within the scheme. I note that the problem with water penetration into the balcony of lot 55 had been raised prior to this time (in April 2005) and that water penetration onto balconies was not mentioned in that report. I am therefore satisfied that the water penetration into the balcony of lot 55 is not the result of a building defect.

Conclusion

Based on my findings, it seems reasonable to conclude that the respondent has, as alleged by the body corporate, failed to maintain his lot in good condition. Specifically, he has not repaired damage to his balcony found to have been caused by the over watering of plants on his balcony and use of fertilizers. This constitutes a breach of section 119(2) of the Accommodation Module. The damage to the balcony railings and roofing structure of lot 55 is damage that the body corporate is prima facie, responsible to repair, based on section 108 of the Accommodation Module. In the circumstances, it appears to me to be just and equitable to make an order under section 281 to require the respondent to pay the body corporate a fixed amount as reimbursement for repairs to be carried out. I understand that the respondent resides in Japan. For this reason, I consider it just and equitable to authorise the body corporate to engage a contractor to undertake the necessary repair work and to order the respondent to reimburse the body corporate the cost of that repair.

The body corporate have provided me with three quotations to have the necessary repairs undertaken. The three quotations (including GST and replacement tiles for the balcony of lot 62) are as follows:

Building Rectification Services $7,425
MINC Services (GCC) $4,909
Opat $6,363.50

I note from the submission of the owner of lot 2 that Opat has performed water proofing work for the body corporate previously and that their quotation is neither the least nor most expensive. I consider it reasonable for the body corporate to engage their services and for the respondent to pay the quoted amount for the repair of $6,363.50 to the body corporate, within seven days of the repair work being completed. The respondent will also be required to ensure that the relevant personnel have appropriate access to his lot to enable the repair work to be undertaken.

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[1] Section 20, Acts Interpretation Act 1954