Cameron Place [2009] QBCCMCmr 347 (11 September 2009)

Last Updated: 9 October 2009

REFERENCE: 0310-2009

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	13064
Name of Scheme:	Cameron Place
Address of Scheme:	82 Cameron Street NUNDAH QLD 4012

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Annette Fitzgerald, the owner of Lot 4

I hereby order that the application for an order by Annette Fitzgerald, the owner of Lot 4 against the body corporate for Cameron Place community titles scheme 13064 seeking the following outcomes: That either Jones Roofing or Sykes Roofing carry out the roof and gutter rectification/replacement work in accordance with their attached quotes, and that a special contribution be fixed to cover the full cost of rectification/replacement work and that owners pay the contribution within 30 days of the order being made. That either Paul Leventis Builder or Yeoman Building carry out the soffit rectification/replacement work in accordance with their attached quotes, and that a special contribution be fixed to cover the full cost of rectification/replacement work to the soffits and that owners pay the contribution within 30 days of the order being made. That the large and the 'noxious weed' trees (eg. chinese elms and tipuanas) be removed, that all other trees be pruned so that they cannot cause leaves/debris to get into the gutters and cause deterioration of the gutters and so that scaffolding can be erected for the roof/gutter/soffit work to be carried out. That the bougainvillea vine growing onto the building and into the soffits and gutters be removed. That the executive committee members consider the attached four quotes, seek further information if necessary, and reach a decision as to which tree specialist to appoint to do this work within 30 days of the order being made. That the cost of the work be paid for out of the existing Administration Fund or Sinking Fund to a maximum of $2,000. That the Body Corporate comply with the requirements of Building Fire Safety Regulations (2008). That Quality Building Management (QBM) provide the services outlined in their attached quote and that a special contribution be struck to cover the cost of this work and that all lot owners pay this contribution within 30 days of the order being made. is dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0310-2009

“Cameron Place” CTS 13064

The scheme
“Cameron Place” community titles scheme 13064 is subject to the Body Corporate and Community Management Act 1997 (Act) and the Body Corporate and Community Management (Standard Module) Regulation 2008 (Standard Module).

Application
This application made on 1 April 2009 is by Annette Fitzgerald, the owner of Lot 4 (Applicant) against the Body Corporate seeking the following outcomes:

1. That either Jones Roofing or Sykes Roofing carry out the roof and gutter rectification/replacement work in accordance with their attached quotes, and that a special contribution be fixed to cover the full cost of rectification/replacement work and that owners pay the contribution within 30 days of the order being made. That either Paul Leventis Builder or Yeoman Building carry out the soffit rectification/replacement work in accordance with their attached quotes, and that a special contribution be fixed to cover the full cost of rectification/replacement work to the soffits and that owners pay the contribution within 30 days of the order being made.
2. That the large and the 'noxious weed' trees (eg. chinese elms and tipuanas) be removed, that all other trees be pruned so that they cannot cause leaves/debris to get into the gutters and cause deterioration of the gutters and so that scaffolding can be erected for the roof/gutter/soffit work to be carried out. That the bougainvillea vine growing onto the building and into the soffits and gutters be removed. That the executive committee members consider the attached four quotes, seek further information if necessary, and reach a decision as to which tree specialist to appoint to do this work within 30 days of the order being made. That the cost of the work be paid for out of the existing Administration Fund or Sinking Fund to a maximum of $2,000.
3. That the Body Corporate comply with the requirements of Building Fire Safety Regulations (2008). That Quality Building Management (QBM) provide the services outlined in their attached quote and that a special contribution be struck to cover the cost of this work and that all lot owners pay this contribution within 30 days of the order being made.

Outcome 1 – Roof, gutter and soffit rectification/replacement
The Applicant submits that before the last annual general meeting and the last extraordinary general meeting she tried to encourage some owners to get quotes to repair the roof/gutters, but these owners did not want to do this. The Applicant states the building presents a safety risk to occupiers and in the event of flood or fire damage it is likely that insurers would decline claims on the grounds that the building has not been properly maintained.

The Applicant provided a copy of a 24 page ‘Building Defects Listing Report’ prepared on 27 March 2009 by QBM. The page 2 “Executive Summary’ stated; “The box gutters are badly rusted...The flashings are rusted...There are some holes in some of the roof sheets... [there is an indication] the roof is rusting from below...in the event of a storm, the roof may be partially or completely ripped off...The large holes in the eaves allows easy access to roof space by vermin. This can result in vermin chewing electrical wiring, creating a high risk of fire.” At page 3, QBM recommended replacement of the roof, box gutters, flashing and eaves.

The Applicant also provided a copy of a quotation from:

• Jones Roofing dated 25 February 2009 stating the “soffits are in extremely poor condition...holes have resulted from rot and this allows access to vermin and birds. The vermin present a further danger in that they may chew the electrical wires and could cause a fire hazard...box gutters have so deteriorated that repairs are not possible...The supporting structures for the box gutters have also been extensively damaged...The roof...is also in poor condition.” In March 2009, Jones quoted $26,673 to remove and replace roof and guttering.
• Sykes Roofing dated 12 March 2009 stating the “Roof sheets are quite rusted ...Internal box guttering to units needs replacing...Rusted gutters are already causing damage to soffits...There is also a possibility of...water entering into main building...If kiplock roof is left much longer, the same damage will occur to ceiling of units, and also the possibility of the roof being unable to stand severe storms...In my opinion the roof and gutters require urgent replacement.” In January 2009, Sykes quoted $27,120 to remove and replace roof and guttering.
• Murray Plunkett Services dated 23 March 2009 stating: “...the gutters and sumps are in a very poor state. The roof also shows signs of serious rust...There is no way of repairing this...unless the roof is replaced further damage will occur.” In March 2009, Plunkett quoted $34,177 to remove and replace roof and guttering.
• Langfield Industries dated 28 March 2009 stating the “Roof is in bad condition...Gutters are in very/extremely bad condition...Soffits are in very/extremely bad condition in many places”. In February 2009, Langfield quoted $52,855 to replace roof and guttering.
  

The Applicant also provided a copy of quotations to replace soffit lining: on 9 February 2009 Paul Leventis Builder quoted $12,375; on 11 February 2009 Yeoman Building quoted $9,889; and on 12 February 2009 J&D Contracting quoted $12,045.

Outcome 2 – Removal or pruning of trees and plants
The Applicant submits that tradespeople inspecting the roof have advised: leaves/debris from overhanging trees in gutters causes gutters to rust/deteriorate and will block gutters; and the vine is growing into the soffits and gutters causing damage. She says they have stated the vine will need to be removed and the trees pruned to allow setting up of scaffolding to work on the roof, gutters and soffits. The Applicant argues the trees have the potential to cause damage to buildings and other structures and that if money is spent on the roof etc, the removal of the trees and vine will lessen the possibility of future deterioration. The Applicant provided four quotations ranging in price from $740 to $1408 to do this work. The QBM ‘Building Defects Listing Report’ stated (at page 2): “Debris/leaves from the trees and vines in the vicinity can adversely effect the roofing system. If the large trees were to come down in a storm, damage to both Cameron Place and neighbouring properties could result. Roots of the large growing trees may also damage nearby foundations, driveways, paths and plumbing/sewerage systems.” At page 3 of the report, QBM recommended heavily pruning trees and vines and removing large growing trees.

Outcome 3 – Fire services
The QBM ‘Building Defects Listing Report’ recommended (at page 3): “Due to amended Fire Regulations, it is now compulsory to upgrade/develop Fire and Evacuation Plans and Diagrams and conduct full training of occupants of the building. Re-assessment of these plans and training is required each year. It is also a requirement that a certification of all fire installations is sent to the local office of the Fire and Rescue Service. The first compliance date is 1 July 2009 and then each year thereafter.” The Applicant provided a copy of a quotation from QBM dated 31 March 2009 “to undertake the Fire Safety Services...to comply with the Building Fire Safety Regulations (2008)” for $736.55.

Submissions to the Commissioner
The Commissioner provided a copy of the application to Skehan Body Corporate Managers (Body Corporate Manager) for distribution to the owner of each lot (excluding the Applicant) and the committee, with an invitation to respond to the matters raised in the application (s 243, Act).

The owner of Lot 1 submits he does not dispute repairs needed to be made, but is concerned the Applicant did not consult with him or other owners. He states he was not invited to be involved in discussions or to present alternative suggestions and he first became aware when he received notice of an Extraordinary General Meeting to be held on 4 April 2009 (EGM). He says he did not have access to the QBM report until two days before the EGM.

The owner of Lot 2 states she was not contacted by anyone regarding this matter.

The owner of Lot 3 supports the first outcome submitting that the second and third outcomes can wait until a normal Body Corporate meeting.

The owner of Lot 5 submits the Applicant has not made an attempt to resolve anything with owners. She says the roof does not appear to be leaking into any of the 4 top floor units, the box gutters have been leaking and the roof sheets have not been lifted. The owner states the committee have obtained quotes supporting their findings about the condition of the box gutters and the roof. The owner submits: the box gutters should be fixed; the roof sheeting patched and if required replaced in 12 to 18 months; and the damaged soffits should be replaced and all soffits painted. She says her partner has had 28 years experience in high rise construction. Attached to her submission is his response to the QBM report and the quotations saying: the box gutters can be replaced without removing roof sheets; the roof sheets are in fair condition; the flashings around vents are in good condition; the box gutters are leaking in three areas causing damage to the soffits; the entire soffits on the northern side of Lot 3, some panels on the northern side of Lot 6 and on the northern side of Lot 4, and some panels on the southern side need to be replaced

Committee members (owners of Lots 1, 5 and 6) questioned the existence of a dispute as the Applicant had not communicated with them about these matters. They say the condition of the roof is the Applicant’s opinion based on reports from companies that have a financial interest in replacing the roof, and the QBM report was paid for personally by the Applicant and is biased as the QBM representative had read the roofing companies reports. They state there is no independent report. They say members have investigated the supposed unsound state of the roof and consider the most critical repair is to the box gutters. The members say the committee is aware of the fire regulations. They submit a strategy considered in April involving replacing the box gutters now, repairing the soffits, and patching the roof with a view to replacing it in 2010. The members believe owners need time to fund the work. They do not oppose Outcome 3.

In her reply to submissions:

• By the owner of Lot 5, the Applicant states: there is evidence of water damage in Lot 4; it is the opinion of specialists in the industry that the roofing system is not in a sound state; she fails to see how all the specialists could be wrong about replacing the gutters and the condition of the roof; while all soffits are not visibly damaged, specialists have stated deterioration happens from the top down and it would make economic sense to replace the soffits while the scaffolding is erected; and she is not aware of the owner’s partner’s qualifications in the roofing industry, she has relied on the advice of roofing and industry specialists who hold the appropriate qualifications and licences.
• From committee members, the Applicant states: she does not believe these companies would falsify or exaggerate the contents of quotes and reports; QBM received a fee for their report and do not obtain a further financial gain; and the submissions should be excluded for not being properly authorised.
• The Applicant requests that additional reports from Rod Staley of Dilapidation Surveys Australia (DSA) and from Ian Jackson of Lysaght/Bluescope (Lysaght) be considered as part of the response (see below under ‘Investigation’).
  

Adjudication
A dispute resolution recommendation has been made under section 248 of the Act referring the dispute to departmental adjudication.

Jurisdiction
An adjudicator may make an order to resolve a dispute, in the context of a community titles scheme, about a claimed or anticipated contravention of the Act; or the exercise of rights or powers, or the performance of duties, under the Act (s 276(1), Act).

Investigation
In accordance with the investigative powers of an adjudicator stated in section 271 of the Act on 2 September 2009, the Applicant was contacted about the additional reports included with her reply to submissions; reports that may constitute new material. The Applicant had been informed by the Commissioner on 15 May 2009 that pursuant to section 244 of the Act: “...your reply to submissions must be limited strictly to matters canvassed or issues raised in the submissions. In particular, you should not raise new material or issues in your reply. If in the opinion of the Adjudicator determining the application, your reply does raise new issues then, at the discretion of the Adjudicator, the new material may be disregarded on the basis of the obligation to observe natural justice to all parties (see section 269(2) of the Act).”

It could be argued the additional reports may be a response to the claims made in submissions about the impartiality or independence of the persons who reported or quoted on the condition of the building. In the circumstances I do not consider it is necessary to make any determination about this matter. Even though the Applicant was alerted to the possibility that the parties to the application may be given opportunity to make submissions about the new material, I have decided that this is not necessary. I do not consider there would be any benefit in further delaying the determination of this application to seek submissions on this material; material which is not significant to the determination of the outcomes sought. Nevertheless, I have referred to parts of the reports in these reasons. I have done this given the arguments being presented about the extent of work that is necessary for the Body Corporate to comply with its legislative obligations.

Decision
The scheme and Body Corporate
The ‘Cameron Place’ scheme consists of the 6 individually owned lots and common property; land which is owned by the lot owners as tenants in common (s 10 and 35(1), Act). The lot owners are the members of the Body Corporate (s 31, Act). The Body Corporate’s functions include administering the common property for the benefit of the lot owners (s 94, Act). Its duties about common property include administering, managing and controlling common property reasonably and for the benefit of lot owners (s 152(1), Act). The Body Corporate must maintain common property in good condition (s 159(1), Standard Module).

A body corporate’s duty to maintain includes “...an obligation to keep the thing in proper order by acts of maintenance before it falls out of condition, in a state which enables it to serve the purpose for which it exists [Hamilton v National Coal Board [1960] AC 633, 647 (Lord Keith of Avonholm); Haydon v Kent County Council [1978] QB 433, 464 (Shaw LJ); Ridis v Strata Plan 10308 [2005] NSWCA 246, [161]] and “...as soon as something in the common property is no longer operating effectively or at all, or has fallen into disrepair, there has been a breach of the...duty [cf Ridis [177]]”: [Seiwa Pty Ltd v Owners Strata Plan 35042 [2006] NSWSC 1157 at paragraphs 3, 4 and 5].

Common property
The boundaries of lots and common property are shown on the registered plan of subdivision; Building Units Plan 2060 registered by the registrar of titles in 1976. When the Act commenced in 1997, a building units plan was taken to be building format plan of subdivision under the Land Title Act 1994 (LTA) (s 331(2), Act). A building format plan defines land using the structural elements of a building, including, for example, floors, walls and ceilings (s 48C(1), LTA). 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 (s 49C(4), LTA).

On the basis of BUP 2060 and the provisions of the LTA, it is apparent the land around the building and the roof of the building is common property. Guttering is utility infrastructure by which lots or common property is supplied with a utility service (schedule 6, Act). Guttering that drains water from the roof of the building is common property (s 20(1)(b), Act).

Authorising Body Corporate maintenance
The Applicant proposes that the Body Corporate replace the roof, guttering and soffits at a cost of at least $30,000; remove or prune vegetation at a cost of at least $700; and have a fire safety report completed at a cost of over $700. The way the Body Corporate authorises this work is largely dependent on the proposed cost.

The committee can authorise spending up to its relevant limit for committee spending which, unless the Body Corporate has set another amount is $1200 (6 lots multiplied by $200, s 151 and schedule, Standard Module). A decision of the committee that is not a decision on a restricted issue is a decision of the body corporate (s 100, Act and s 42, Standard Module). The regulation also makes provision for procedures to make committee decisions; either at a committee meeting or by voting in writing outside a committee meeting (s 44 to 57, Standard Module).

Generally, spending above the relevant limit for committee spending limit is authorised in general meeting. A general meeting may be called internally with committee authorisation (s 65, Standard Module) or if owners request an extraordinary general meeting in accordance with section 67 of the Standard Module. The regulation contains detailed provisions about procedures for giving notice of a general meeting and about the conduct of a general meeting (s 65 to 96, Standard Module).

In this case, it is clear that the proposed work to the roof/guttering and soffits involves spending above the relevant limit for committee spending. The spending proposed in the second outcome may be within the committee spending limit provided this work is not treated as comprising the same project as the work stated in the first outcome. The work stated in the third outcome is within the committee spending limit.

The Applicant essentially argues that the Body Corporate is not complying with its legislative obligation to maintain common property in good condition. She contends that work of the nature stated in the various reports and quotations should be carried out at the cost of the Body Corporate. Significantly however, the Applicant cannot demonstrate that the Body Corporate has opposed this work and has decided not to do any other work to comply with its legislative obligation. There is no evidence that the Body Corporate in general meeting has decided not to do any of the work stated in the outcomes sought, or that the committee has opposed work, the cost of which is within its spending limit. The second outcome refers specifically to executive members; there is nothing to suggest these members, and not the committee, have an obligation to do what is proposed.

The Applicant proposes fixing a special contribution to fund work proposed in the first and third outcomes. A body corporate must, by ordinary resolution, fix a special contribution if “a liability arises for which no provision, or inadequate provision, has been made” in a budget (s 141(2), Standard Module). A motion is decided by ordinary resolution in general meeting (s 108, Act). The Applicant has not demonstrated that a liability has arisen and that the Body Corporate has opposed funding approved work. In addition, the Applicant proposes applying monies from the administrative or sinking funds to meet the cost of the work proposed in the second outcome. The Applicant has not provided any material evidencing an allocation in either fund for the stated work, nor has she argued for example, that there is capacity to adjust a budget to accommodate this cost.

I note that the EGM had been called and that the business on the agenda included motions about the first and second outcomes. The calling of this meeting is the subject of another dispute resolution application (Ref. 0288-2009). An interim order was made on 2 April 2009 “that, pending a final determination, the body corporate for Cameron Place must not take any action to implement any resolutions passed at the extraordinary general meeting proposed for 2 April 2009 (including as rescheduled to 4 April 2009 or another date)”. It is apparent that the EGM did not proceed. I have today made an order dismissing this application.

A dispute may arise between a lot owner and the body corporate if for example, the owner argued a decision made in general meeting or by the committee did not comply with a provision of the legislation. A person may make an application if the person is a party to and is directly concerned with a dispute, and has made reasonable attempts to resolve the dispute by internal dispute resolution (s 238(1), Act). Internal dispute resolution means (in part) resolution using body corporate processes such as for example, the presentation of a motion for consideration at a general meeting (schedule 6, Act).

The Applicant has explained the attempts she made to resolve the matter internally. She contends she has spoken to a number of owners, something that is not accepted by some owners. Even if it was clear that the Applicant had communicated with owners individually and they had opposed her proposition, this is not sufficient to demonstrate a dispute between the Applicant and the Body Corporate. It would seem from submissions that the Applicant’s proposals particularly about the replacement of the roof would be opposed if submitted for consideration in general meeting. However, the indication of the views of owners in submissions does not constitute a Body Corporate decision to warrant making an order in the terms sought. There is no evidence that the Body Corporate had been asked before the application was made to consider the matters stated in the outcome sought.

The Applicant has also raised the question of urgency. It is noted that the application was not referred to an adjudicator because it relates to emergency circumstances (s 243A, Act). I am not satisfied this is a basis for proceeding to making an application against the Body Corporate when it is apparent a Body Corporate decision had not been made about any of the issues stated in the outcomes sought.

I am satisfied from the material that none of the work proposed in the outcomes sought has been considered in general meeting or by the committee, or that the committee has without good reason refused to consider the proposed work or has refused to convene a general meeting for this purpose. It would also seem that the work proposed with respect to the replacement of the guttering and the carrying out of a fire safety inspection has support. In this circumstance, there is a question as to whether a dispute exists. “There must be a “dispute” before an adjudicator has jurisdiction...the nature of the permission sought...was such that the body corporate itself must give permission or authority; it never having been asked...to do so there can be no dispute involving it as a party, and therefore no right...to apply to the adjudicator on the basis that they are parties to “a dispute” for the purposes of s.192(1)(a) [s 192 is renumbered as s 238]...The existence of a “dispute” is fundamental to an adjudicator having jurisdiction”: K.G. Tully & Anor. V. The Proprietors The Nelson Body Corporate [2000] QDC 031 at paragraph 3.

For these reasons, I have dismissed the application.

Dealing with the issues
While submissions indicate a general willingness to have some work carried out; the extent of this work appears to differ from that argued by the Applicant. It would seem there is a view that the work recommended in the reports and quotes is overstated. In my view, nothing has been presented to objectively support the submitted opinion of some owners that the persons who gave reports or quotations to the Applicant did not have appropriate qualifications, skills or expertise, did not provide independent or impartial advice, or were otherwise influenced by some other reason such as monetary gain. In my view, the Applicant is entitled to rely on the information she obtained to propose a particular course of action.

While the outcomes sought have been dismissed for the abovementioned reasons, I consider there is material available to the Body Corporate warranting its attention. The Body Corporate has notice that particular work is necessary to maintain the identified parts of common property in good condition.

It must act reasonably when carrying out its functions including making or not making a decision (s 94(2), Act). Ordinarily, this involves consideration of what is objectively reasonable in the circumstances. I have noted submissions from owners offering contrary opinions about the extent of the work that may be necessary. However, these submissions have not been substantiated; there is no evidence that a contrary opinion has been expressed by a person/s with appropriate qualifications, skills or expertise. The weight of evidence provided by the Applicant from a variety of sources consistently recommends work of a similar nature. In the reply to submissions, the Applicant provided additional material from Ian Jackson of Lysaght/Bluescope and from Rod Staley of DSA. In an email to the Applicant dated 27 May 2009, Mr Jackson recommended replacement of the roof saying that the gutters cannot be replaced without lifting the roof. Mr Staley’s roof condition report dated 29 May 2009 determined the roof structure had reached the end of its life. He also made comments about possible issues relating to building insurance. This information tends to support the views of the persons who had initially given quotes to the Applicant.

While the Body Corporate is not compelled to have work of the nature proposed in the outcomes sought carried out, to satisfy its legislative obligations it should do what is reasonable and necessary to establish whether the recommended work should be carried out and if so, when. This may involve the committee undertaking investigations, authorising work and/or providing options to owners in general meeting. It may involve the Body Corporate engaging the services of a person considered to be independent who has appropriate qualifications or expertise (for example, an engineer) to report on the condition of the roof and provide recommendations. The Body Corporate needs to consider its obligations and possible implications if something suggested or recommended is not carried out. It should be noted that a body corporate may sue and be sued (s 33(2), Act). The Body Corporate may also be responsible for damage caused to property (such as for example, a lot included in the scheme) because of a contravention of the Act.

While there would seem to be support for some issues raised by the Applicant, owners would seem to prefer delaying replacement of the roof for at least 12 months to enable sufficient funds to be allocated for this work. The primary concern should be about properly maintaining the roof in good condition. If this requires work to be done reasonably quickly, and there are inadequate monies budgeted for the expense, the Body Corporate may need to fix a special contribution to be paid by owners. The Body Corporate may also consider other financing alternatives, including for example borrowing money (s 150, Standard Module). If it becomes apparent that the Body Corporate unnecessarily delays consideration of motions proposing authorising work to maintain common property in good condition or other work required by legislation, then a dispute may arise. It should be noted that if the committee does not authorise calling a general meeting, in a scheme of 6 lots at least two owners can request an extraordinary general meeting pursuant to section 67 of the Standard Module.