The Centre [2010] QBCCMCmr 42 (3 February 2010)

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

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The Centre [2010] QBCCMCmr 42 (3 February 2010)

Last Updated: 23 March 2010

REFERENCE: 1115-2009

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

Stavros Katsikalis, the Owner of lot 6

I hereby order that Mr. Stavros Katsikalis, the owner of Lot 6 (the applicant) is entitled to connect lot 6 to the sewerage line via the grease trap which is located on common property adjacent to lots 8 and 9, 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 1115-2009

“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 Stavros Katsikalis, 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:

Approval to connect my lot (6) to the sewerage and grease trap service.

BACKGROUND

The applicant is seeking an order that he is entitled to connect lot 6 to the grease trap and sewerage facility adjacent to his lot. Lot 29 and refers to his letter to the body corporate committee dated 29 September 2009 which includes the following:

“I request to connect lot 6 onto the same grease trap that lot 8 wishes to connect to. Please respond to this matter within 14 days.”

By letter dated 22 October 2009, Challenge Strata Management responded on behalf of the body corporate committee in the following terms:

“We have been instructed by the committee to advise that they are unable to consider your request as recent investigations by them into the status of grease traps on common property suggests that 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.

We are further instructed to advise that the body corporate records do not define if there are any grease traps particularly owned by the body corporate or installed for common usage.

The committee understands that lot 8 has previously used the grease trap that you have indicated and you may wish to contact the owner of lot 8 to negotiate usage. ”

In a reply dated 6 November 2009 the owner of lot 6 (the applicant) wrote:

“I am in receipt of your letter of 22October 2009. Your response to my request is negative. This response is lacking the common service and responsibilities the committee should be providing to all lot owners. The common responsibilities of the committee cannot serve the chairman’s interests alone. It is clear that the grease trap in question is common property and being on common property the committee should have the full knowledge of how many shops can connect and thus advise the neighbouring shops their intentions to connect and use. If the grease trap needs upgrading it is a matter of sharing the costs or the body corporate paying for it. It is not up to the chairman to connect his lot onto the grease trap and refuse everybody else, which is the same case the chairman is pursuing on lot 29.”

The committee, which the applicant believes to be controlled by the Chairman, has approved the connection of lot 8, which is owned by the chairman, to the grease trap but refuses to allow the applicant to access the same grease trap. The applicant argues that because the grease trap in question is common property, no exclusive use has been granted to any particular lot owner and therefore the body corporate is no entitled to refuse access to such utility infrastructure . The capacity of the grease trap and the number of lots which may connect to it is a matter for determination by the GCCC is a separate issue.

The applicant also believes that the Chairman organised the inclusion of motion 10 on the agenda for the last AGM. This motion provided as follows:

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

Accompanying the application was a copy of the minutes of a Committee meeting held on 4 august 2009 where it was resolved that the following decision made since the last committee meeting be ratified:

“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”

Although 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, the body corporate refused the applicant permission to connect to the same grease trap on the basis that lot 8 is entitled to exclusive use.

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

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

• The Centre was registered on a Building Unit Plan in January 1969;
• Body corporate records do not record any grease traps as common infrastructure but the records do show that since the 1980’s individual lot owners have from time to time made application for body corporate consent to install grease traps for the benefit of their lots;
• As ownership of the grease trap cannot be confirmed the committee is of the view that it cannot give permission to connect to it;
• The owner of lot 8 has not connected lot 8 to the grease trap and now withdrawn its request for permission to connect;
• The committee is of the view that grease traps are not a body corporate service as the scheme land is not exclusively approved for food outlets as may be the case, for example, for a food court. The mix of lots has evolved over the years to include food outlets but modifications are required to lots and common property in order top accommodate the service of food;
• The committee believes that the body corporate should not be expending body corporate funds to install grease traps or to increase the capacity of grease traps for the benefit of particular lot owners;
• The act and regulations preserve the rights of individual lot owners to make improvements to common property at their individual expense by authority of a committee resolution or resolution of a general meeting;
• Motion 10 carried at the last AGM on 14 October 2009 did not seek to alter the rights and privileges of any lot owner but to preserve in the minutes of the body corporate, a record of the fact that improvements have been made for particular lots over the years;
• The applicant will need to ascertain the ownership of the grease trap or if it is determined that it is common property, make application to the committee for permission to make an improvement to common property;
• This scheme is registered under the Commercial Module Regulation and therefore approval of improvements to common property is not a restricted issue for the committee.
  

The owner of lot 29 made the following submissions:

• He agrees with the submissions made by the applicant who is simply trying to connect his lot to the closest grease trap on common property;
• The Gold Coast City Council has verified that certain common grease traps were installed when the centre was built in 1969 and there may be plans in existence showing that lot 6 was previously connected to the grease trap;
• It is for the Gold Coast City Council rather than the body corporate to police the use of grease traps.
  

The owners of some 10 lots made the following submissions:

• There are some 69 lots in the arcade but only a few are trading as restaurants which are required by law to be connected to a grease trap;
• Grease traps are not provided by the body corporate but rather, various owners have sought body corporate permission to install grease traps over the years;
• The applicant wrote to the body corporate manager on 6 November 2009 seeking unconditional approval within 48 hours for connection to the grease trap which, it is submitted, was harsh and unreasonable;
• The owner of lot 8 has not connected lot 8 to the grease trap and now withdrawn its request for permission to connect;
• Motion 10 carried at the last AGM on 14 October 2009 did not seek to alter the rights and privileges of any lot owner but to confirm that grease traps were not standard infrastructure but rather, were improvements made for particular lots over the years;
• If any occupier of a lot wishes to have usage of a grease trap for the benefit of their lot, they should make application to the body corporate for approval and pay all costs of making the improvement. Otherwise it would be unfair to other owners;
• The committee consists of the Chairman as well as six other voting members and the Chairman cannot control how other members vote.
  

In response, the applicant made the following submissions:

• He has owned lots in this scheme for the last 35 years and believes that the grease trap in question has never been used during this time;
• He previously operated a restaurant in lot 27 and used a grease trap which was also used by lot 28. At that time no one claimed ownership of the grease trap and the owners of lots 27 & 28 shared the cost of cleaning and maintaining the grease trap;
• If certain lot owners were given ownership of grease traps they could seek to charge other lot owners for usage of the grease traps;
• No particular lot owner has claimed ownership of the subject grease trap and there are no resolutions contained in the body corporate records granting ownership of the grease trap;
• As the owner of lot 8 no longer seeks to use the grease trap, there is no reason why the applicant should not be able to use it;
• Numerous lot owners have individually installed grease traps over the years but only one lot owner has sought exclusive use of a grease trap. In all other cases there has been no grant of exclusive use.
  

JURISDICTION

I am satisfied that this is a matter which falls within the legislative dispute resolution provisions.[1] 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.[2] An adjudicator's order may contain ancillary and consequential provisions the adjudicator considers necessary or appropriate.[3]

DETERMINATION

The order sought by the applicant is as follows:

Approval to connect my lot (6) to the sewerage and grease trap service.

The main arguments relied upon by the body corporate and the lot owner opposing the application are as follows:

(1) Body corporate records do not record any grease traps as common infrastructure but the records do show that since the 1980’s individual lot owners have from time to time made application for body corporate consent to install grease traps for the benefit of their lots. As ownership of the grease trap cannot be confirmed the committee is of the view that it cannot give permission to connect to it.

(2) The mix of lots has evolved over the years to include food outlets but the scheme land is not exclusively approved for food outlets e.g. as in a food court. The committee is of the view that in this scheme the provision of grease trap facilities is not a body corporate service and the body corporate should not be expending body corporate funds to install grease traps or to increase the capacity of grease traps for the benefit of particular lot owners.

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.

Subsection 20(1) of the BCCM Act provides as follows:

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.

An exception to the above is contained in subsection 20(2) of the BCCM Act provides as follows:

(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.

Having regard to the above subsection, I acknowledge the possibility that although a grease trap may be utility infrastructure, it is not necessarily common property i.e. where the positioning of the utility infrastructure is the subject of an agreement with the body corporate or original owner and under that agreement ownership does not pass to the body corporate or original owner. However, in this instance there is no evidence to suggest that the grease trap was the subject of an agreement contemplated by subsection 20(2).

Rather, I am of the view that the grease trap in question is common property infrastructure and is not currently supplying utility services to any particular lot. It is evident that over the last 40 years, lot owners have installed grease traps to service their lots but have not sought to explore the legalities of ownership. In circumstances where such infrastructure is located on common property, I am of the view that the grease trap is body corporate property.

Further, a statutory easement exists 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.

In my view, 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).

The body corporate committee has pointed out that while the mix of lots has evolved over the years to include food outlets, the scheme land is not exclusively approved for food outlets and therefore the body corporate should not be expending body corporate funds to install grease traps or to increase the capacity of grease traps for the benefit of particular lot owners. In the circumstances, this point is somewhat academic because the applicant is only seeking approval to connect lot (6) to the sewerage and grease trap service and the applicant has indicated a willingness to meet the cost of cleaning and maintaining the grease trap.

Clearly, the body corporate has an obligation to ensure that all lots are able to access essential utility infrastructure such as the sewerage line and the body corporate has an obligation to maintain the sewerage line.

However, responsibility for maintenance of the grease trap is not as clear cut and will depend on the circumstances of each individual case. Where, for example, there is one common grease trap available to a number of lots in a scheme, each of which carry on a similar business (e.g. as in a food court), it is reasonably clear that the body corporate is obliged to maintain the grease trap.
In the present circumstances, only lot 6 will be accessing a grease trap which is located on common property. In such circumstances I recognise the concerns regarding the cost of maintaining and cleaning the grease trap.

In these circumstances I believe that section 158 of the Act may be applicable so that the body corporate may seek reimbursement from the lot owner of any costs incurred in maintaining or cleaning the grease trap.

Section 158 of the Act provides as follows:

Supply of services by body corporate
The body corporate for a community titles scheme may supply, or engage another person to supply, services for the benefit of owners and occupiers of lots in the way, and to the extent, authorised under the regulation module applying to the scheme.

Further, section 125 of the Body Corporate and Community Management (Commercial Module) Regulation 2008 provides as follows:

125 Supply of services by body corporate—Act, s 158 [SM, s169]

(1) The body corporate may supply, or engage another person to supply, utility services and other services for the benefit of owners and occupiers of lots, if the services consist of 1 or more of the following—
(a) maintenance services including, for example, cleaning, repairing, painting, pest prevention or extermination or mowing;
(b) communication services including, for example, the installation and supply of telephone, intercom, computer data or television;
(c) domestic services including, for example electricity, gas, water, garbage removal, air conditioning or heating.
Example—
The body corporate might engage a corporation to supply PABX services for the benefit of the owners and occupiers of lots.
(2) The body corporate may, by agreement with a person for whom services are supplied, charge for the services (including for the installation of, and the maintenance and other operating costs associated with, utility infrastructure for the services), but only to the extent necessary for reimbursing the body corporate for supplying the services.
(3) In acting under subsections (1) and (2), the body corporate must, to the greatest practicable extent, ensure the total cost to the body corporate (other than body corporate administrative
costs) for supplying a service, including the cost of a commercial service, and the cost of purchasing, operating, maintaining and replacing any equipment, is recovered from the users of the service.

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.

I therefore propose to make an order that the applicant is entitled to connect lot 6 to the sewerage line via the grease trap which is located on common property adjacent to lots 8 and 9, provided that the applicant

• provides complete details to the body corporate of the work undertaken to effect the connection;
• If necessary, the applicant gives notice in accordance with section 68(2) of the Body Corporate and Community Management Act 1997;
• 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;
• The applicant bears all costs associated with the connection; and
• The applicant repairs, at their cost, any damage caused to the common property or a lot in the scheme by the connection.
  

The applicant is not seeking any orders regarding responsibility for the costs of maintaining and cleaning the grease trap so I am not making any orders in that regard. I do however draw the parties’ attention to section 158 of the Act and section 125 of the Body Corporate and Community Management (Commercial Module) Regulation 2008.

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[1] See sections 227, 228, 276 and Schedule 5 of the Act
[2] Section 276(2) of the Act
[3] Section 284(1) of the Act