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The Centre [2010] QBCCMCmr 17 (14 January 2010)

Last Updated: 19 March 2010

REFERENCE: 0588-2009


ORDER OF AN ADJUDICATOR


MADE UNDER PART 9 OF CHAPTER 6


BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997


Number of Scheme:
14718
Name of Scheme:
The Centre
Address of Scheme:
3131 Gold Coast Highway SURFERS PARADISE QLD 4217

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Philip Tyler, the owner of Lot 29


I hereby order that Mr. Philip Tyler, the owner of Lot 29 (the applicant) is entitled to maintain a connection to the existing grease trap located within the common property provided that:
(i) The applicant provides complete details to the body corporate of the work undertaken to effect the connection;
(ii) If necessary, the applicant gives notice in accordance with section 68(2) of the Body Corporate and Community Management Act 1997;
(iii) The connection does not interfere unreasonably with the use and enjoyment of the lot or the part of common property against which it is made and is not exercised in a way that unreasonably prevents or interferes with the use and enjoyment of a lot or common property;
(iv) The applicant bears all costs associated with the connection; and
(v) The applicant repairs, at their cost, any damage caused to the common property or a lot in the scheme by the connection.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0588-2009


“The Centre” CTS 14718

The Centre community titles scheme 14718 (The Centre) consists of 69 lots and common property. The community management statement (CMS) for The Centre indicates that the Body Corporate and Community Management (Commercial Module) Regulation 2008 (Commercial Module) applies to the scheme. Department of Natural Resources and Water records show the scheme is registered as Building Units Plan 343.

APPLICATION

Pursuant to the Body Corporate and Community Management Act 1997 (Act), this application was made by Phillip Tyler, Owner of Lot 29 (applicant) on 25 June 2009. The applicant seeks a final order against the Body Corporate for The Centre (respondent) in the following terms:

To allow use by my tenant of the grease-trap/sump located outside Lot 29.

The applicant previously sought an interim sought order against the Body Corporate for The Centre (respondent) in the following terms:

To allow use by my tenant of the grease-trap/sump located outside Lot 29.

This action is required urgently as otherwise, if Lot 29 is disconnected from the grease-trap, my tenant will be unable to operate his restaurant business.

On 16 July 2009, an adjudicator made the following interim or temporary order:

That, pending a final determination on this matter, the Body Corporate for The Centre shall not implement the resolutions passed by the Body Corporate Committee on 2 June 2009 regarding the connection of Lot 29 to the grease trap or otherwise take any steps to disconnect Lot 29 from the grease trap.

BACKGROUND

The application relates to the use of a grease trap located on common property adjacent to Lot 29. The applicant says that he applied (through his property manager) to the Body Corporate for consent for his tenant to use the grease trap/sump in mid April 2009. On 30 April 2009 the Body Corporate requested that he have a plumber certify that the capacity of the existing grease trap was sufficient to cater for the extra usage and to provide a plumbing drawing for the connection pipe work. The applicant says this information was provided to the Body Corporate by the plumber and it appears that the tenant proceeded with the connection to the grease trap.

On 2 June 2009 the Committee issued a notice of a motion for consideration outside a committee meeting proposing that the Body Corporate engage tradesmen to reinstate the common property by removing the connection to the grease trap which was allegedly connected by the occupier of lot 29 without authority, and to invoice the applicant for the cost of the work. The note to the motion indicates that connection compromises the integrity of the common property with potential health and safety issues and says the lot owner was given notice to remove and reinstate but made no response.

The applicant received a copy of the proposed motion on 9 June and wrote to the Body Corporate on 10 June making the following submissions:


The Body Corporate Manager (BCM) acknowledged receipt of this correspondence on 15 June and on 16 June the Committee wrote making the following submissions:


The applicant’s solicitors wrote again to the Committee on 18 June. The letter noted:

The applicant notes that his tenant previously leased Lot 28 and no formal arrangement was required for him to connect to the grease trap from Lot 28. He argues that his tenant has complied with all requirements of local authorities. Further correspondence from the applicant refers to the hydraulic plans approved by GCCC and says they show Lot 28 has been ‘capped off’ and Lot 29 approved to discharge 1,170 litres into the 2,000 litre grease trap, leaving a balance of 830 litres.

The submission lodged on behalf of the Committee at the interim stage opposes the application and includes the following arguments:

Prior to making final orders submissions were sought from all lot owners and from the body corporate committee.

The following additional submissions were made on behalf of the body corporate committee:


20 Utility infrastructure as common property

(1) Common property for a community titles scheme includes all utility infrastructure forming part of scheme land, other than—

(a) utility infrastructure that is—

(i) a device for measuring the reticulation or supply of water for a community titles scheme established after 1 January 2008; and

(ii) installed after 1 January 2008, in relation to a compliance request made under the Plumbing and Drainage Act 2002 after 31 December 2007, on infrastructure supplying water to a lot or land that is common property for the community titles scheme; or

(b) utility infrastructure, other than utility infrastructure mentioned in paragraph (a), that is—

(i) solely related to supplying utility services to a lot; and

(ii) within the boundaries of the lot (according to the way the boundaries of the lot are defined in the

plan of subdivision under which the lot is created); and

(iii) located other than within a boundary structure for the lot.

(2) However, common property does not include utility infrastructure positioned within common property if—

(a) its positioning is the subject of an agreement to which the original owner or the body corporate is a party; and

(b) under the agreement, ownership of the utility infrastructure does not pass to the original owner or body corporate.

Example of utility infrastructure for subsection (2)—

cable television wires positioned in the service shaft of a multistorey building that is scheme land for a community titles scheme, if the wires remain in the ownership of a cable television provider

(3) In this section— boundary structure, for a lot included in a community titles

scheme, means a floor, wall or ceiling, other than a false ceiling, in which is located the boundary of the lot with another lot or common property.


45. The Council of the Body corporate may from time to time at its discretion and on such terms and conditions as it shall deem proper permit any proprietor to install such works as may reasonably be necessary for the conduct by the proprietor of his business or which may be necessary to enable such proprietor to comply with the requirements of the Local Municipal Health, Factories and Shops or other competent authorities.”

47. The proprietor for the time being of lot 30 shall be entitled at any time hereafter at his expense and in a proper and workman like manner to connect his premises to sump on common property into which such proprietor may construct a discharge pipe in accordance with the Local Municipal Health, Factories and Shops or other competent authorities.”

“New grease trap for lot 27 & 28. Approval was given to fit a new grease trap to replace the existing grease trap to lot 27 to incorporate lot 28 and meet Gold Coast City Council specifications.”

Through its solicitors the applicant made the following submissions:

BUGTA must be referred to and applied in order to categorise the nature of the grease trap not the BCCMA;

Section 17 of BUGTA provides as follows:

17 Services

In respect of each lot there shall be implied--

(a) in favour of the proprietor of the lot and as appurtenant thereto, easements for the passage or provision of services (including water, sewerage, drainage, gas, electricity, garbage, artificially heated or cooled air, heating oil, telephone, radio and television) through or by means of any pipes, poles, wires, cables or ducts to be laid down or erected or which are for the time being existing in or over the parcel to the extent to which those services are capable of being used in connection with the enjoyment of the lot;

(b) as against the proprietor of the lot and to which the lot shall be subject, easements for the passage or provision of services (including water, sewerage, drainage, gas, electricity, garbage, artificially heated or cooled air, heating oil, telephone, radio and television) through or by means of any pipes, poles, wires, cables or ducts to be laid down or erected or which are for the time being existing within that lot as appurtenant to the common property and also to every other lot capable of enjoying such services;

but the easements conferred by this section shall not be exercised by any proprietor in such a manner as unreasonably to prevent any other proprietor from enjoying the use and occupation of the proprietor's lot and the common property.


20 Utility infrastructure as common property

(1) Common property for a community titles scheme includes all utility infrastructure forming part of scheme land, other than—

...............

(b) utility infrastructure, other than utility infrastructure mentioned in paragraph (a), that is—

(i) solely related to supplying utility services to a lot; and

(ii) within the boundaries of the lot (according to the way the boundaries of the lot are defined in the plan of subdivision under which the lot is created); and

(iii) located other than within a boundary structure for the lot.

The body corporate has relied upon subsection 20(1)(b)(i) as being a reason alone for the grease trap not to be considered common property, but those words need to be read in conjunction with (ii) and (iii). When one does that, the exception cannot apply because the grease trap is not within the boundaries of lot 28 (or any other lot);


(2) However, common property does not include utility infrastructure positioned within common property if—

(a) its positioning is the subject of an agreement to which the original owner or the body corporate is a party; and

(b) under the agreement, ownership of the utility infrastructure does not pass to the original owner or body corporate.

Example of utility infrastructure for subsection (2)—

cable television wires positioned in the service shaft of a multistorey building that is scheme land for a community titles scheme, if the wires remain in the ownership of a cable television provider

However the exception in section 20(2) is of no relevance as it is aimed at dealing with circumstances where utility infrastructure is owned and continues to be owned by a third party.


The owner of lot 6, Mr. Katsikalis, made submissions in support of the applicant and these submissions included the following:


That the body corporate acknowledges that the grease traps installed on the common property, currently being used by food outlets are improvements to the common property installed by individual lot owners from time to time for the benefit of their respective lots and are for the use of those lots only. All costs in relation to ongoing maintenance shall be paid by the owner or their approved user(s).

Although this motion was carried as a resolution of the AGM, he believes that it is invalid because a resolution without dissent is required to give exclusive use of the grease trap;


That consent be given to the tenant of lot 8 to connect to the grease trap outside their lot which is currently not being used.

However, when he recently requested permission to connect lot 6 to the same grease trap used by lot 8 , the body corporate advised by letter dated 22 October 2009 that –

“the committee is unable to consider your request ...as grease traps have been installed on common property over the years by individual owners for the benefit of their lot and accordingly, it is the view of the committee that they do not have jurisdiction in determining whether another owner may connect to an existing grease trap.”

The body corporate gave permission to the owner of lot 8 to connect to the grease trap on the basis that it was common property, but when Mr. Katsikalis, as the owner of lot 6 sought to connect his drainage to the same grease trap, the body corporate refused on the basis that lot 8 is entitled to exclusive use of the grease trap – a clear dichotomy.

The owner of lots 23, 24, 59, 60, 61 & 62 made submissions including the following:

JURISDICTION

I am satisfied that this is a matter which falls within the legislative dispute resolution provisions.[2] However, I would note that the question of whether GCCC approval was improperly gained is beyond the scope of matters which an adjudicator can consider, as it relates to the decision and the decision-making process of an external body. Any concerns in that regard should be raised directly with GCCC.

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 claimed or anticipated contravention of the Act or the CMS; or the exercise of rights or powers, or the performance of duties, under the Act or the CMS; or a claimed or anticipated contractual matter about the engagement of a person as a body corporate manager or service contractor; or the authorisation of a person as a letting agent.

An order may require a person to act, or prohibit a person from acting, in a way stated in the order.[3] An adjudicator's order may contain ancillary and consequential provisions the adjudicator considers necessary or appropriate.[4]

DETERMINATION

The order sought by the applicant is as follows:

To allow use by my tenant of the grease-trap/sump located outside Lot 29.

The events that precipitated this application are as follows. The owner of lot 29 applied to the body corporate in mid April 2009 seeking permission for his tenant to use the grease trap. On 30 April the body corporate requested the owner to have a plumber certify that the capacity of the grease trap was sufficient to cater for the extra usage and provide plans regarding connection to the grease trap. It would appear that this information was provided to the Body Corporate by the applicant’s plumber. The applicant and his tenant believed they had complied with the body corporate’s requirements and instructed their plumber to connect the lot 29 drainage pipe to the grease trap.

However on 9 June the committee resolved to request the applicant to remove the connection at his expense. In response to the above, the applicant advised the body corporate of his intention to lodge a dispute resolution application with this office. Subsequent to the lodgement of this application, this matter was considered at a committee meeting on the 4 August 2009 where it was resolved that “the application made by lot 29 dated 20/04/2009 to connect into the existing grease trap on common property”, be declined. It can therefore be said that the committee has formally declined the applicant’s request for permission to connect to the grease trap

While the submission by the body corporate is quite lengthy, the 2 main arguments relied upon by the body corporate are as follows:


(1) The grease trap is utility infrastructure as defined by the BCCMA and relates solely to the supply of utility services to lot 28, and its positioning is the subject of an agreement to which the original owner or the body corporate is a party; and under the agreement, ownership of the utility infrastructure does not pass to the original owner or body corporate (see subsection 20(2) of BCCMA).

or alternatively,

(2) the grease trap is an improvement to the common property effected by the owner of lot 28.

According to the first argument, grease traps installed by owners or their occupiers represent utility infrastructure installed by respective owners and that the right to connect to such utility infrastructure rests with the respective owners and not with the body corporate. The problem with this argument is that the evidence suggests that the grease trap in question has always serviced more than one lot, and in any event there is no evidence to suggest that the grease trap was the subject of an agreement contemplated by subsection 20(2).

Rather, it is probable that over the years the grease trap has been used by up to four lots, namely lots 27, 28, 29 and 30. The plan attached to the body corporate submission[5] shows two pipes running to the subject grease trap. One waste pipe runs diagonally through lots 27 & 28 while the other waste pipe runs diagonally through lots 29 and 30. However this does not mean that all four lots were connected to the grease trap at any one particular time because the need for a grease trap connection is determined by the nature of the business carried on within a lot.

The body corporate refers to a plumbing, drainage and works approval given by the GCCC to Mr David Lee who was the tenant of lot 28, on 23 November 1989. It is argued that if the grease trap was common property infrastructure not related to supplying utility services to any particular lot, then the approval would have been applied for and obtained by the body corporate with a subsequent connection approval granted to the occupier of lot 28. I do not think anything turns on this point as this work appears to relate to a connection to, or upgrade of an existing grease trap and in any event, there is no resolution without dissent giving exclusive use of common property to the lot owner. As mentioned above, this building is some 40 years old, numerous tenancies would have been entered into over the years and the grease trap would be connected, disconnected or upgraded according to the nature of the business carried on within the lots. I see no reason why the connection to the utility infrastructure would not be effected by the tenant or owner of a lot rather than the body corporate.

The prior existence of the grease trap servicing multiple lots (i.e. lots 27 to 30) is verified by the evidence of Mr Katsikalis who states that he was the owner of lot 27 some 35 years ago and operated a restaurant from that lot. He further states that at the same time, the owner of lot 28 ran a restaurant and used the same grease trap which is the subject of this dispute. Although they each paid half of the cleaning fee, they regarded the grease trap as a body corporate asset and neither of them claimed ownership to the grease trap. He states that he sold lot 27 after 15 years but did not sell the grease trap with it as it was always accepted that the grease trap a body corporate asset.

Secondly, there is little evidence to support the contention that the grease trap is an improvement to the common property effected by the owner of lot 28. Further, and in any event, there is no evidence that exclusive use of this common property has been granted to the owner of lot 28 by way of a resolution without dissent as required by section 171 of the Body Corporate and Community Management Act 1997 (or, prior to 13 July 1997, section 37A of the Building Units and Group titles Act 1980).

Clearly, the grease trap and its associated connections are utility infrastructure supplying a utility service to lots in the scheme (Schedule 6 of the Act) and the body corporate is obliged to administer, manage and control the common property reasonably and for the benefit of lot owners (see section 152 of the BCCM Act) and maintain the common property in good condition. A statutory easement exists against other lots and over the common property for utility services and utility infrastructure pursuant to section 115O of the Land Title Act 1994 which provides as follows:

Easements in favour of lots for utility services and utility infrastructure

(1) An easement exists in favour of a lot and against other lots and common property for supplying utility services to the lot and establishing and maintaining utility infrastructure reasonably necessary for supplying the utility services.

(2) However, the exercise of rights under the easement must not interfere unreasonably with the use or enjoyment of the lot or part of common property against which the easement lies.

The applicant is entitled to exercise rights against the common property under that statutory easement, subject to the requirement that such exercise must not interfere unreasonably with the use and enjoyment of the lot or the part of common property against which the easement lies, i.e. it “must not be exercised in a way that unreasonably prevents or interferes with the use and enjoyment of a lot or common property” (section 68(1), Act), and notification is given to the body corporate if access is required to carry out works (section 68(2), Act). This is a statutory right which cannot be fettered by a by-law such as by-law 15 or by-law 45 which purport to grant the body corporate a discretion to refuse access.

While the body corporate committee has expressed concerns regarding the capacity of the existing grease trap, it is my view, that if the body corporate is providing a service, it has an obligation to reasonably ensure that the service is available to lot owners generally. In this circumstance, limited capacity of the infrastructure is not sufficient reason to deny access to a lot owner. If capacity is a problem, the body corporate has an obligation to have the necessary work performed to rectify the problem. In my view, the body corporate cannot reasonably discriminate against the applicant while allowing other lot owners to have use of the infrastructure.

I also believe that the reasoning of the New South Wales Supreme Court in Lin & Anor v The Owners – Strata Plan No. 50276 [2004] NSWSC 88 is apposite to the circumstances of this case. In Lin the body corporate refused an owner access to a common property exhaust ventilation system because there was insufficient capacity in the system. In his decision Justice Gzell found that this refusal was “...wrongful interference with their (the owner’s) right to the use and enjoyment of the exhaust system as common property.”[6] He noted the finding in another case[7] that “...an owners corporation’s power of management and control of the use of common property does not extend to overriding the proprietary right that a lot owner has in that common property.” Gzell also found that the owners’ corporation’s obligation to properly maintain the common property included necessary actions in regard to the exhaust system to “...increase its capacity to service all lot owners ... who might seek reasonable access to the system.”[8]

Other Arguments/ Matters

I agree with the applicant that a number of submissions made by the body corporate are not relevant to the determination of this dispute. For example, it is of little relevance that:

I also agree with the submission by Mr. Katsikalis of lot 6 that the resolution upon motion 10, carried at the last AGM on 14 October 2009, cannot of itself confer exclusive use of grease traps on common property to particular lot owners. Exclusive use of common property can only be granted by a resolution without dissent.

CONCLUSION

In summary, I believe that the grease trap in question is utility infrastructure which is part of the common property and that the applicant is entitled to exercise rights against the common property under that statutory easement provided for by section 1150 of the Land Title Act. However, the applicant must not unreasonably interfere with other lot owners and is required to give the body corporate reasonable notice of its intention to connect to the grease trap. The body corporate is not entitled to refuse a lot owner access to a service because of limited capacity, but rather, has an obligation to have the necessary work performed to ensure that the infrastructure has sufficient capacity.

I therefore propose to make an order that the applicant is entitled to maintain a connection to the existing grease trap which is located on common property, provided that:

[1] An attachment indicates that on 16 April 2009 the GCCC gave approval for the issuing of a compliance permit for the plumbing and drainage works subject to certain conditions.
[2] See sections 227, 228, 276 and Schedule 5 of the Act
[3] Section 276(2) of the Act
[4] Section 284(1) of the Act
[5] Page 5 of bundle marked PWG 1.
[6] Gzell J in Lin at para 56
[7] Young v Owners – Strata Plan No 3529 [2001] NSWSC 1135; (2001) 54 NSWLR 60, citing in Lin Case at para27
[8] Gzell J in Lin at para 47 to 54

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