Admiralty Towers II [2008] QBCCMCmr 335 (19 September 2008)

Last Updated: 14 October 2008

REFERENCE: 0370-2008

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	15344
Name of Scheme:	Admiralty Towers II
Address of Scheme:	501 Queen Street, Brisbane QLD 4000

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

Ruth Bonnett and Richard Beardsley, the Owner(s) of lot 92

I hereby order that the application for orders requiring the owners of the highrise units to pay additional maintenance and operating costs regarding certain common property and utility infrastructure, is dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0370-2008

“Admiralty Towers II” CTS 15344

Application

Admiralty Towers II Community Titles Scheme (Admiralty II) is a 193 lot scheme under the Body Corporate and Community Management Act 1997 (Act) and the Act’s Standard Module Regulation (Standard Module). The scheme is designed for residential purposes.

This application is by Ruth Bonnett and Richard Beardsley, owners of lot 92 (applicants) seeking orders against the body corporate (respondent). The applicants describe Admiralty II as being quite unique in that it is a single building that is effectively divided into two separate buildings. The two sections of the building are floors 1 to 21 (the lowrise) and from floors 22 to 37 (the highrise). Both the highrise and the lowrise have their own separate entrance foyers and lifts. There are also two separate areas containing pools and other facilities, one located adjacent to the lowrise areas and the other located on the rooftop. The applicants say that the body corporate currently maintains all relevant areas with owners of the highrise and the lowrise units contributing similar amounts after a recent adjustment of lot entitlements. However, the applicants say that by-law 28 grants exclusive use of the highrise foyer, lifts and entertainment area for the benefit of occupiers of the highrise units and that the costs of maintenance and operation of these exclusive use areas should be paid solely by the owners of the highrise units. The applicants seek orders to this effect.

Decision

Investigation and Submissions

Submissions

The main grounds in support of the application, provided on behalf of the applicants, were to the effect that:

• By-law 28 says that the owners of the highrise units have exclusive use of certain areas;
• Section 109 says that the owner of a lot is responsible for maintaining utility infrastructure, including utility infrastructure located on common property in good order and condition;
• Section 123 states that the owner of a lot to whom exclusive use is granted is responsible for the maintenance and operating costs of that area;
• The lifts, foyer, pool and entertainment area contain utility infrastructure that supply utility services to the highrise lots and should be maintained at the cost of those lots.
  

The body corporate was given an opportunity to provide written submissions. The main submissions on behalf of the committee were to the effect that:

• The contribution schedule lot entitlements were adjusted pursuant to an order of the specialist adjudicator, Gary Bugden of 10 August 2007;
• This adjustment was based on schedule B of the Leary Report.
• Regarding lifts, the Leary Report noted in the report that the distance the lift carriage travels while in motion is a relatively minor factor in the total lift maintenance, that there is no reliable way to quantitatively assess how many trips occupants make, and that the body corporate has a single ten year maintenance contract that does not differentiate between the highrise and lowrise lifts. It was also noted that there was not likely to be a substantial predictable long term occupancy variation between lots regardless of which lots were involved. The report therefore allocated maintenance and service costs for the lifts equally between all lots;
• Regarding the level 1 recreational facilities, the Leary Report said it was appropriate for both the highrise and lowrise lot owners to contribute equally to the maintenance costs;
• Regarding the roof top level recreational facilities, the Leary Report said that because by-law 28 grants exclusive use of the area to occupiers of the highrise lots but with maintenance at the expense of the body corporate, it was appropriate for only the highrise lot owners to contribute to the costs of maintenance of the roof top level facilities.
• By-law 28 specifically requires that the body corporate is responsible for the maintenance of the exclusive use areas.
• The adjustment of lot entitlements takes into account a number of matters including that the owners of highrise lots pay the costs of maintaining the roof top level recreational facilities and also that a number of the lowrise units are bigger than many of the highrise units;
• The application should be dismissed as frivolous, vexatious, misconceived and without substance and the maximum costs of $2,000 should be awarded against the applicants.
  

All owners were given an opportunity to provide written submissions. All submissions are available for inspection by interested persons and it is unnecessary to summarise the submissions here.

The applicants exercised the right to inspect the submissions and then replied to those submissions to the effect that:

• The application is not vexatious, frivolous and misconceived. It is necessary for a definitive unbiased decision and the application is intended to complement the decision on lot entitlements rather than subvert that decision. The present contribution lot entitlement schedule is not disputed;
• If it is decided that section 109 and section 123 apply to the charging of exclusive use the costs of the highrise lifts, pool, gym and foyer can be itemised and calculated; and
• If three highrise lifts supply 87 units the service will be superior to the three lifts servicing the 125 lowrise units. Occupiers who enjoy the enhanced lift service should pay for it.

Further enquires

The above submissions dealt satisfactorily with the issues raised. It was therefore unnecessary for me to carry out any further investigation of the application.[1]

Issues for determination

Applicable law

The present Standard Module commenced on 30 August 2008, replacing the previous Standard Module Regulation that operated from July 1997 (Previous Module) and references will be made to the present Standard Module or the Previous Module as relevant.

Anything done under the Previous Module will not generally be affected by the commencement of the present Standard Module (Acts Interpretation Act 20). Further, a number of provisions of the Standard Module are the same, or substantially the same as provisions in the Previous Module despite the provisions having different section numbers and these provisions are generally to be dealt with as replacements of the similar provisions of the repealed legislation (Standard Module 209-216). A number of specific transitional provisions are also provided including related to continuing to conduct a general meeting according to the Previous Module where that meeting was called under the Previous Module (Standard Module 217-230).

Legislation relevant to the present dispute has provisions to the effect that:

• The body corporate must maintain common property in good condition (Previous Module, 109(1));
• The body corporate is not responsible for maintaining utility infrastructure, including utility infrastructure situated on common property, to the extent that the utility infrastructure relates only to the supply of utility services to a particular lot and is a hot water system, washing machine, clothes dryer or another device providing a utility service to a lot (Previous Module, 109(3)(b));
• An exclusive use by-law is taken, in the absence of other specific provision in the by-law, to make the owner of the lot to whom exclusive use is given responsible of the maintenance of and operating costs for the part of the common property to which the exclusive use by-law applies (Previous Module, 123).

Summary of issues

The main issues for determination can be summarised as follows:

1. Are the lifts, foyer infrastructure or the rooftop entertainment area utility infrastructure required to be maintained by the owners of the highrise units?
2. Are the lifts, foyer and rooftop entertainment area exclusive use areas required to be maintained by the owners of the highrise units?

Utility infrastructure

Findings

Section 109(3)(b) of the Previous Module and 159(3)(b) of the Standard Module provide:

the owner of the lot is responsible for maintaining utility
infrastructure, including utility infrastructure situated on
common property, in good order and condition, to the
extent that the utility infrastructure—

(i) relates only to supplying utility services to a

particular lot; and

(ii) is 1 of the following types—

• hot-water systems

• washing machines

• clothes dryers

• another device providing a utility service to a

lot;

The applicants argue that the lifts, infrastructure in the foyer, and the pool, sauna, gym and associated infrastructure on the rooftop all comprise infrastructure related only to supplying particular lots that should be maintained at the cost of those lots.

To determine which of the above arguments is correct, it is necessary for me determine the intention of the legislature by construing the words used in the section. Regard is to be had to the desirability of a provision being interpreted as having its ordinary meaning but regard can be made to explanatory notes and other relevant extrinsic material and an interpretation that will best achieve the purpose of the Act is to be preferred to any other interpretation (Acts Interpretation Act 14A, 14B).

The first question is whether the utility infrastructure referred to by the applicants that is for the exclusive use of the owners of the highrise units "relates only to supplying utility services to a particular lot". Submissions indicate that the infrastructure in question is common property that services 87 of the 193 units. The ordinary meaning of the words "a particular lot" indicate that an owner of a lot is responsible for maintaining devices that service their particular lot and their particular lot only. If the legislation used only the words "a lot" then the singular would normally be read to include the plural subject to a contrary intention in the legislation.[2] However, the use of the word "particular" indicates a contrary intention.

I conclude that section 109(3)(b) does not apply to the lifts, foyer infrastructure and rooftop entertainment area infrastructure as claimed by the applicants. This is on the basis that that infrastructure services multiple lots.

Maintenance of exclusive use areas

Section 123(2) of the Previous Module and section 173(2) of the Standard Module provide:

An exclusive use by-law is taken, in the absence of other

specific provision in the by-law for maintenance and

operating costs, to make the owner of the lot to whom

exclusive use or other rights are given responsible for the

maintenance of and operating costs for the part of the

common property to which the exclusive use by-law applies.

By-law 28 provides:
Exclusive use of Facilities/Use of Lifts

(a) The Owners for the time being of Lots 126-193 inclusive shall be entitled to the exclusive use and enjoyment (for himself/herself and his or her licensees) of the common property situated on Level 00 as hachured in solid black lines on the Level 00 plan attached hereto and shown in Schedule E.

(b) The Body Corporate shall continue to be responsible to carry out its duties pursuant to Section 109 Standard Module and at its own expense in respect of the Level 00 area in the preceding paragraph.

(c) Owners or Occupiers of lots 1-125 shall use only the lowrise foyer and lifts to gain access to their lot. Owners of Lots 126-193 shall use only the highrise foyer and lifts to gain access to their lot and may use the lowrise foyer and lifts to gain access to facilities on Level E.

I note that the applicants do not challenge the present contribution lot entitlement schedule or the validity of by-law 28.

Rooftop entertainment area

By-law 28 specifically provides for "exclusive use... of the common property situated on Level 00" and that "The Body Corporate shall continue to be responsible to carry out its duties pursuant to Section 109 Standard Module and at its own expense in respect of the Level 00 area".

Some questions may arise about whether an exclusive use by-law can effectively attach to multiple lots. In any event, the use of the words "The Body Corporate...at its own expense" indicate that the body corporate is to be responsible for the maintenance and operating costs rather than the owners of the lots to whom exclusive use has been granted. On this basis, I do not accept the arguments of the applicants that under section 123 only the owners of the highrise lots should contribute to these costs.

I do note that a number of owners made submissions arguing that it was unfair for all owners to contribute to the cost of maintenance of this area. However, I further note submissions to the effect that the recent adjustment of lot entitlements was based upon the Leary Report that calculated those entitlements based on only the highrise lot owners contributing to the costs of maintenance of the roof top level facilities.

Highrise foyer and lifts

By-law 28(c) provides that “Owners or Occupiers of lots 1-125 shall use only the lowrise foyer and lifts to gain access to their lot. Owners of Lots 126-193 shall use only the highrise foyer and lifts to gain access to their lot and may use the lowrise foyer and lifts to gain access to facilities on Level E”.

I have formed the view that 28(c) is not an exclusive use by-law within the meaning as used in the legislation. This is because the by-law does not attach to a lot so as to "give" the occupiers of that lot any special rights about the common property (Act, 170). Rather, the by-law purports to "prohibit" the occupiers of certain lots from using certain areas.[3] In any event, even if by-law 28(c) did purport to be an exclusive use by-law it would not be valid. This is because the legislation specifically provides that an exclusive use by-law must not give exclusive use or other special rights about utility infrastructure that is common property or a body corporate asset (Act, 177).

In these circumstances I am not satisfied that section 123(2) of the Previous Module or 173(2) of the Standard Module has any application in respect of the lifts or foyer area.

The applicants’ submissions allege unfairness in all owners contributing equally to lift costs given the different ratio of lifts for the lowrise and the highrise lots. However, any unfairness does not render the highrise owners liable to pay for these facilities on the basis they are an exclusive use area. Rather, it is an issue that can be raised upon any future adjustment of lot entitlements or on any dispute regarding the validity of the by-law.

Order

For these reasons, the applicants have failed to satisfy me of the merit of claims that the maintenance and operating costs of the areas in dispute should be paid by owners of highrise units on the basis of section 109 or 123 of the Previous Module.[4] The application is therefore dismissed. However, the application is not dismissed on the basis that it is frivolous, vexatious, misconceived or without grounds and no order of costs will be made.

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[1] Hablethwaite & Anor v Andrijevic & Ors [2005] QCA 336, Jerrard JJA, Keane JJA, Cullinane J, 9 September 2005 at paragraphs 31 and 17.
[2] Refer Acts Interpretation Act 1954 sections 4, 32C.
[3] Refer McColl v The Body Corporate for Lake View Park [2004] QCA 44, de Jersey CJ, Davies & Williams JJ, 27 February 2004. Unlike the circumstances in this decision, the by-law for Admiralty Towers II does specify particular lots. However, by-law 28(c) is still the converse of an exclusive use by-law in that it prohibits use by some lots rather than granting exclusive rights to a lot.
[4] Or on the basis of sections 159 or 173 of the present Standard Module.