Nautilus On The Esplanade [2011] QBCCMCmr 169 (19 April 2011)

Last Updated: 17 June 2011

REFERENCE: 1066-2010

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	683
Name of Scheme:	Nautilus On The Esplanade
Address of Scheme:	279 The Esplanade CAIRNS QLD 4870

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

The Body Corporate,

I hereby order that the application is dismissed on the basis that the dispute should be dealt with in a court or tribunal of competent jurisdiction.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 1066-2010

“Nautilus On The Esplanade” CTS 683

APPLICATION

This application is brought by the Body Corporate for Nautilus on the Esplanade Community Titles Scheme 683 (the Body Corporate), against the Owners of lots 19 (Vyncan Pty Ltd) and 20 (David and Carol Hartley) (Respondents), seeking the following orders:

1. A ruling that the original pergola to the building is common property.
2. A ruling that the roof over the pergola abutting lots 19 and 20 is not a roof structure falling within s.159(2) of the Standard Module that requires the body corporate to maintain roofing membranes. Rather, the roof structure is solely for the benefit of the owners of the lots therefore, the owners are responsible for all maintenance issues.
3. An order requiring the owners to:
   1. Obtain body corporate approval, and building approval for the timber decks, glass balustrades and dividing wall erected on the roof over the balconies of lots 19 and 20; or
   2. Remove the timber decks, glass balustrades and dividing wall and make good and safe any attachment points of the timber decks and balustrades to the roofing/pergola system and permanently lock the existing glass access doors leading from the level I (mezzanine), to prevent ready access to the roof.
4. An order for costs, requiring the owner of the lots to pay for any costs incurred in meeting the requirements of any order made under outcome 3 above, including, but not limited to:
   1. Extraordinary general meeting;
   2. Preparation and registration of a new Community Management Statement
      

The body corporate provides the following background to the dispute:

The Hartley Group (Dave and Carol) developed the Nautilus apartment complex which went on sale in 1989. Dave and Carole Hartley, and their company, Vyncan Pty Ltd, have owned the penthouse units, lots 19 and 20, continuously from 1989 to date. Lots 19 and 20 are over two levels. The main level 7 is referred to as level “H” in the building units plan. The mezzanine level is known as level 8 or level “I”. A feature of the building was a pergola constructed at a similar level to the mezzanine of lots 19 and 20.

A marketing brochure distributed in the 1990’s was supplied with the application. It depicts a picture of the building, showing the pergola construction described and a floor plan of the penthouse lots.

Sometime later, the Respondents added roof sheeting and underside lining to the pergola. Later again, timber decks were added above the roof sheeting, followed by glass balustrades. All of the above works were done at the owners’ cost, without body corporate approval.

In 2005 and again in 2006 Dave Hartley attempted to register a new Survey Plan. This survey plan shows the timber decks as belonging to lots 19 and 20 and has been used in applications for building approval. The Department of Environment and Resource Management has twice rejected the request to register the survey plan.

On 12 May 2008, Dave and Carol Hartley (lot 20) and their building company, Vyncan Pty Ltd (lot 19), lodged a claim on the body corporate for various internal and external water damages to the 2 penthouse units, lots 19 and 20. Whilst the main internal leak has been resolved, the claim for external damage relates to the improvements made to the pergola structure.

The Respondents claimed the repairs to the above improvements to be a body corporate responsibility as they say the roof structure is common property. The body corporate denied responsibility. The matter went before this Office on 23 August 2010. No agreement was reached. However, since the conciliation session, the Hartley Group, or Vyncan Pty Ltd, has carried out the repairs. To date, no attempt to claim for costs of these works has been made to the body corporate.

To facilitate the repairs to the roof structure, the Respondents removed the timber decks and balustrades in early March 2010. These improvements were re-installed in October 2010. The Cairns Regional Council has written to both the Applicant and Respondents, in regard to these works, as no building approvals have been lodged with the Council.

The body corporate wishes to resolve:

1. Who has responsibility for the roof structure above the level H external balcony, and
2. The issue of the timber decks and glass balustrades on the mezzanine level of lots 19 and 20 which have neither body Corporate approval, nor building approval.
   

JURISDICTION

“Nautilus on the Esplanade” was registered as a building units plan (now known as building format plan) of subdivision on 5 September 1989 comprising 20 lots and common property. The scheme is regulated by the Body Corporate and Community Management Act 1997 (the Act) and the Body Corporate and Community Management (Standard Module) Regulation 2008 (the Standard Module).

This is a dispute between the body corporate and the owners of two lots and, on its face, comes within the dispute resolution provisions of the Act (see sections 226, 227 & 228). As will become apparent, however, a preliminary question arises which involves title to land. In any event, for reasons detailed below, I am of the view that the dispute should be dealt with in a court or tribunal of competent jurisdiction.

SUBMISSIONS

In accordance with section 243 of the Act, a copy of the application was provided to the Respondents and the body corporate manager, Ms Mandy Sapper of Stewart Silver King and Burns (the BCM), for distribution to all owners, with an invitation to respond to the matters raised in the application. The Respondent made submission to the following effect:

• The application should not proceed because it does not have current committee approval. Minutes of Voting Outside a Committee Meeting dated 27 September 2010 indicate that three of five Committee members supported the lodgement of the application by the body corporate. There was no meeting held to pass the resolution and the record of it was not signed or authorised by the chairperson and/or secretary. One of the three members who voted in support of lodging the application, in an email to this office dated 3 December 2010, stated that she wished to withdraw her support for the application. This Committee member is also advising that several of the owners also disagree with the continuation of the application.
• On the application form, the Respondent is described only as “an owner”, when the respondents are both committee members as well.
• The Arup report referred to by the committee is totally incorrect. The building is not the age they asserted, the height is incorrect, they did not get the construction correct, they did not get the roof sheeting specification correct, they did not get the rectification correct. If the Committee had acted on Arup’s recommendations, the roof leak repair would have cost the community in excess of $130,000 as against Mr Hartley’s repair, which cost $3,157.00.
• The original “pergola” was the structural frame for the proposed roof to the building. The original Phillips Hartley Architects approved plans detailed a roof structure to the balconies of units 701 and 702 but due to financial issues at that time the structural frame for the roof was installed to appear as a pergola but the roof was not applied. Within the first year there was an issue that arose in the course of the rain season that resulted in water penetration occurring to level 6 units. The resolution agreed was to install the roof, which was done at Vyncan Pty Ltd’s expense and all problems were solved. This was body corporate approved at that time and on the registered original survey plans the roof area to the units 701 and 702 is noted as common property. This roof has been in place for the past 20 years without an issue. It is part of the roof to the building and provides a roof to the building, no different to the tile over concrete roof to the remainder of the building. There are down pipes for the roof cast into the main structural columns (common property) at the front of the building. How could they be there if a roof was not to be installed in the first place? (You can’t install them after the structural columns are poured and in place). The current registered survey plan proves and shows the roof (not pergola) is clearly identified as common property.
• The roof is a roof structure that is within common property. It is identified as common property on the registered survey plans. The roof is in the original design. It was installed to rectify water leaks into level 6 units. If the roof were to be removed now, water would recommence leaking into level 6.
• Body Corporate approval was obtained for the timber deck, glass balustrade and dividing wall additions.
• The owners of lots 19 and 20 have already accepted and paid the costs to install the decks. The costs incurred for the roof leak rectification are the responsibility of the body corporate. The maintenance of common property is the responsibility of the body corporate.
• There was an error on the original survey plans – level 8 was not identified as part of the lot for unit 701 and 702 and was identified as common property. As a new survey plan had to be prepared to address the agreed patio addition to level 8, Mr Hartley undertook to prepare a new survey plan which rectified the error and incorporated the patio addition.
• Although there were delays with the registration of the new survey plan, it was finally registered on 13 October 2010.
• In 2008 the Committee failed to repair roof leaks to the main roof; their delay increased the internal damage and cost to repair. Mr and Mrs Hartley were asked to go back on the Committee in 2010 and immediately arranged for the repair at a cost of $3,157, as against the Committee’s quotes which were in excess of $130,000.
• The failure of the previous committee to repair the external foot to the patios has caused further damage and increase in the cost of repair.
• At the time of the repair to the main roof, Mr Hartley arranged for removal of the existing deck to allow related roofing contractors to inspect and provide quotes for the roof replacement. The Committee fully agreed to this work. Mr Hartley proceeded with the work at a quoted price of $9,600 (compared with a quote of $15,376 which did not include scaffolding, and related safety equipment obtained by Mr Standfield), with Mr Standfield’s agreement and all is now rectified.
• The repair of the removal of the timber deck to allow the common area roof replacement and reinstallation of the timber deck is considered minor building work and does not require building approval.
• Council has issued a letter dated 31 January 2011 advising that no building requisitions exist on the related lots 19 and 20.
• The roof to the building is common property and has been in place from 1990 and protects the building. Either on the original survey plan and/or the new survey plan this roof area is defined as common property.
• The timber decks and glass balustrades do have body corporate approval; it was agreed in body corporate meetings back in 2003.
• The deck and balustrade does have building approval.
  

Individual submissions were made by the owners of seven lots. Of these seven submissions, six supported the application and one, by a committee member who initially supported the application, purported to withdraw her support of the application to stem the flow of further costs.

Two committee members, Graeme Standfield and Lynda Hutchins responded to the Respondent’s submission on behalf of the body corporate, to the following effect:

• Acknowledge the registration, by David Hartley, of a new survey plan of levels H and I of the building, claiming that lots 19 and 20 include the balconies on Level I, which occupy approximately 50% of the area of the pergola/roof that is the subject of this application. Attempts to register the same survey plan were rejected in 2005 and again in 2006. The Body Corporate challenges the registration of the survey plan on the basis that the Body Corporate did not pass the requisite resolution without dissent (nor was it even given an opportunity to do so), contrary to the statutory declaration provided by Mr Hartley in order to have the new survey plan registered. Statutory declarations from three owners have been submitted, stating that at no time in the history of their ownership did they sight voting papers or were requested to vote on the matter of the transfer of part of the body corporate common property to the proprietors of lots 19 and 20.
• The Body Corporate denies damaging the roof. The allegation that it did so was only made when discussion commenced as to who was responsible for the repairs. The Body Corporate received no written notification that damage had occurred to the pergola/roof, either prior to or at the time the respondents notified the Body Corporate, on 12 May 2008, that there were water leaks in to their property.
• The roof was built for the benefit of lots 19 and 20 on level H. It did not benefit level 6. The roof was not approved by a resolution at a general meeting, nor was it paid for by the body corporate. The roof was for the benefit of level H and was built and paid for by the Respondents.
• Denies that any work has been approved by the body corporate, nor the new survey plan.
• Denies that Mr Standfield gave Mr Hartley approval to remove the timber decks; they had been removed prior to Mr Standfield taking possession of unit 502 on 10 March 2010.
  

FURTHER INVESTIGATION

By letter dated 22 March 2011, I requested the following information of the Owners of lots 19 and 20:

1. The original Phillips Hartley Architects approved plans which detailed a roof structure to the balconies of units 701 and 702.
2. Details in relation to the issue that arose in the first year after the building’s construction, in the course of the rain season, that resulted in water penetration occurring to level 6 units. Please provide copies of minutes of all relevant meetings, including the relevant resolutions of the body corporate whereby the body corporate agreed to install the roof on the balconies of lots 19 and 20 on level H.
3. Copies of relevant minutes of meetings whereby approval for the installation of the patio deck over the existing roof to the balconies of lots 19 and 20 on Level I was obtained and a copy of the building approval issued by All Construction Approvals on 31 October 2003.
4. Clarify the statement made on page 4 of the submission that “I note I proceeded with the roof repairs to Graeme Standfield’s agreement and all unit owners’ knowledge. The claim for costs for this roof repair and the internal damage and other related costs are to be claimed.” Does Mr Hartley intend to claim against the body corporate in this regard?
5. A copy of the resolution passed by the body corporate wherein the body corporate agreed to dispose or transfer part of the common property to the proprietors of lots 19 and 20 on Survey Plan SP 165811, which Dave Hartley certified had occurred, on 5 July 2006, in a Statutory Declaration made on 25 October 2010.
6. Identify who the other signatory on Annexure “A” lodged with the request to register the new survey plan SP 165811 is, described as “Committee Member”.
7. Identify the error it is claimed exists on the original survey plan, registered on 5 September 1989.
   

Mr Hartley responded by letter dated 8 March 2011 (obviously in error), received on 13 April 2011, to the following effect.

1. Did not provide any plans, stating that his personal records have only original plans and elevations. Maintains that the building design and construction proves that a roof was always intended to be the level 7 patio.
2. No minutes or resolutions provided. Stated that there were no records from 21 years ago. Maintains that the roof was always to be there; states that the original registered survey plans clearly identify this roof as common property.
3. No minutes provided. States that no records are available. Did provide a copy of the building approval issued by All Construction Approvals on 31 October 2003 which refers to a “bedroom alteration & kitchen renovation”.
4. Has issued invoice 2411 dated 17 May 2010 for the cost of the deck removal which to date has not been paid. Has not issued an invoice for the cost of repair because the previous invoice remains unpaid and the Body Corporate has commenced these proceedings. Is waiting for this decision before issuing a claim for the outstanding invoice 2411 and the roof repair costs.
5. No copies of resolutions provided. Stated that he doesn’t have copies of minutes.
6. States that there are two other signatories on the registered survey plan: Peter Berzenski (a committee member at the time) and Jessie Richardson (Body Corporate Manager).
7. States that Level I was not correctly identified on the original survey plan as to extend to the front of the internal building area; nor did it cover the raked ceiling above the external wall height of Level H.
   

DETERMINATION

Issues

In order to determine whether the Body Corporate or the Respondents are responsible for maintaining the roof/decking in question it is necessary for a finding to be made as to whether the roof/decking is common property or within the boundaries of lots 19 and/or 20. Such a question is generally fairly straight forward and resolved by examination of the registered survey plan for the scheme and application of provisions in the Land Title Act 1994 as to where the boundaries of lots and common property lie.

In this case however, the question is extremely complicated. The original survey plan, which was registered on 5 September 1989 does not depict either the original structure, or the structure as it exists now. The level I component of lots 19 and 20 is shown as comprising a total area of 51 square metres per lot. There is no balcony of any description depicted on level I of the building. The survey plan registered on 5 September 1989 appears to me to be consistent with the marketing brochure’s floor plan of the penthouses, and picture of the building, which was supplied by the Body Corporate. The new survey plan, which was only registered on 13 October 2010, depicts the level I component of lots 19 and 20 as comprising a total internal area of 111 square metres each, as well as a balcony of 17 square metres each. Contrary to assertions by Mr Hartley, the balconies are clearly within the boundaries of lots 19 and 20, as depicted on the most recently registered survey plan. This is also a necessary implication of the new survey plan being registered, as the body corporate had to consent (by resolution without dissent) to a disposal or transfer of common property to the owners of lots 19 and 20 in order for the Level I floor area of each lot to be extended beyond the originally surveyed boundaries. The Body Corporate challenges the registration of this survey plan on the basis that the Body Corporate did not pass the requisite resolution without dissent (nor, it states, was it even given an opportunity to do so), contrary to the statutory declaration provided by Mr Hartley in order to have the new survey plan registered. Statutory declarations from three owners have been submitted, stating that at no time in the history of their ownership did they sight voting papers or were requested to vote on the matter of the transfer of part of the body corporate common property to the proprietors of lots 19 and 20. Mr Hartley was not able to provide a copy of the resolution in question in response to my request to do so.

Exclusive Jurisdiction

The Act establishes procedures that comprise an exclusive jurisdiction for the resolution of most disputes between an owner and the body corporate of which they are a member (Act 227, 229). This dispute relates to alleged contraventions of the Act in terms of whether the Body Corporate or the Respondents are responsible for maintaining the structures in question and whether Body Corporate approval for them was required and given. On its face, it is a dispute within the context of a community titles scheme and of a nature intended to be dealt with by processes under Chapter 6 of the Act (228, 229(3)). However, a preliminary question arises as to title to the area in which the structures are situated. Section 285 of the Act provides that an Adjudicator does not have power to resolve a question about title to land. It has been held that Section 116 (now section 154) of the Act, which deals with the disposal of common property and the grant or amendment of a lease or licence over common property, relates to title to land[1]. In this case, there is a question not about the validity or otherwise of a resolution purporting to dispose of or transfer, common property (which an Adjudicator does have jurisdiction to determine), but rather whether there is any resolution in the first place and therefore, any purported disposal or transfer of common property at all.

Dismissal for Court of Competent Jurisdiction

Even where a dispute is within the exclusive jurisdiction established by Chapter 6 of the Act, an adjudicator may make an order dismissing the application if the adjudicator is satisfied the dispute should be dealt with in a court or tribunal of competent jurisdiction[2].

In this instance, I am satisfied that I do not have power to resolve the preliminary question of title to the area in which the structures in question are situated. Even if I did have such power, I am of the view that the dispute should be dealt with in a court of competent jurisdiction. This is because questions concerning the validity of the recently registered survey plan have been raised. Mr Hartley signed a statutory declaration stating that the Body Corporate had authorised the disposal or transfer of part of the common property to the owners of lots 19 and 20, by resolution without dissent, in accordance with section 111 of the Standard Module (now section 161 of the Standard Module). The Body Corporate contends that no such resolution was ever passed, or even considered. Mr Hartley contends that the structures in question were part of the original design for the building, but has not been able to provide plans which confirm this. The Body Corporate asserts that they were not. The picture of the building and the floor plan for the penthouse units as depicted in the marketing brochure distributed in the 1990s and the original survey plan registered in 1989, appear to me to support the Body Corporate’s assertion.

There are inherent difficulties in assessing these conflicting claims regarding the original design for the building and the passing of requisite resolutions in order to have had the recently registered survey plan registered that are likely to be better assessed by procedures that allow for the giving of evidence under oath and cross examination.

In the circumstances, I am satisfied that, even if I did have power to determine the preliminary question regarding title, it would be preferable to dismiss the present application on the basis it should be dealt with in a court or tribunal of competent jurisdiction (Act, 270(1)(b)). This gives the
applicant Body Corporate the opportunity to pursue the issues raised in this application
in an appropriate forum.

Order

The application is therefore dismissed on the basis that the dispute should be dealt with in a court or tribunal of competent jurisdiction.

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[1] Independent Finance Group Pty Ltd v Mytan Pty Ltd & Anor [2001] QCA 306 @ para 83
[2] Section 270(1)(b), Act