The Rocks Resort [2011] QBCCMCmr 199 (11 May 2011)

Last Updated: 7 October 2011

ADJUDICATOR’S ORDER
Office of the Commissioner
for Body Corporate and Community Management

CITATION:	The Rocks Resort [2011] QBCCMCmr 199
PARTIES:	Bell & Block Pty Ltd (Applicant) The Body Corporate for the Rocks Resort (Respondent)
SCHEME:	The Rocks Resort CTS 9435
JURISDICTION:	Section 227(1)(b) and section 229(3)(a) Body Corporate and Community Management Act 1997 (Act), applying the Act and the Body Corporate and Community Management (Accommodation Module) Regulation 2008 (Accommodation Module).
APPLICATION NO:	0943-2010
DECISION DATE:	11th May 2011
DECISION OF:	J.D.M.Underdown, Adjudicator
CATCHWORDS:	MAINTENANCE OF COMMON PROPERTY INFRASTRUCTURE – sole grease trap used by one business operating from two lots – grease trap used by body corporate for plumbing washing machine – Whether use by restaurant falls into exceptions for general maintenance of common property. Section 20 Act; Section 157 Accommodation Module. BODY CORPORATE RECORDS – availability to tenants. Section 205(6) Act

ORDERS MADE:

I hereby order as follows – 1. that the body corporate undertakes maintenance and repairs of the grease trap situated on the common property as necessary, and as particularised in a letter dated 29th September 2010 from Allconnex Water to the body corporate “attention Mr Ray Crowe”; 2. that the body corporate shall effect such repairs within two months of the date of this order; 3. that the body corporate is responsible for all repairs and maintenance of the grease trap past and future; 4. that the body corporate shall within 14 days of the date of this order reimburse the tenant of Lot 4 and Lot 5, Bell and Block Pty Ltd the sum of $433.38 in respect of servicing charges paid to Zappaway (Transpacific Industries Pty Ltd); 5. that a letter from Gold Coast City Council which was tabled at a committee meeting on 8th October 2010 be made available to Bell and Block Pty Ltd, occupier of Lot 4 and Lot 5, as a body corporate record; and 6. that the body corporate amends page 9 of the minutes of a committee meeting held on 8th October 2010 to show that a letter tabled by Kevin Bell was from Allconnex Water and not from the Gold Coast City Council. In all other respects this application is dismissed. The above order was appealed in the Queensland Civil and Administrative Tribunal – Appeal no. APL219-11.

REASONS FOR DECISION

APPLICATION

_[1] This is an application dated 10th October 2010 and amended on 1st November 2010 by Bell and Block Pty Ltd, trustee of the occupier of Lot 4 and Lot 5, against the body corporate for the Rocks Resort CTS 9435 for orders as follows –

1. that by 29th November 2010 the body corporate undertakes necessary and suitable maintenance, repairs or replacement of the grease trap located in the basement car park;
2. that the body corporate reimburses the Applicant the sum of $433.38 paid by it for the cleaning the grease trap;
3. that the body corporate continues to service, repair and maintain the grease trap as required;
4. that the body corporate withdraws a letter dated 9th July 2010 from its solicitors to the Applicant;
5. a declaration that the Applicant is not liable for any amount previously expended or owing in relation to the grease trap;
6. that the body corporate provides to the Applicant a letter alleged to be from the Gold Coast City Council and tabled at a committee meeting on 8th October 2010; or in the alternative correct inaccuracies in the minutes of that committee meeting in relation to the alleged letter; and
7. that the body corporate corrects inaccuracies in the committee minutes of a committee meeting held on 8th October 2010 concerning an employee of the restaurant placing a letter in front of the committee.

THE ISSUE

_[2] The main question in this application is whether the sole grease trap in the scheme should be maintained and repaired by the restaurant which uses it, or by the body corporate, in whose common property it is situated.

_[3] The legal issue is whether the grease trap “relates only to supplying utility services to the owner’s lot” so that it falls outside the general rule which is that the body corporate must maintain utility infrastructure as common property.

JURISDICTION

_[4] “The Rocks Resort” CTS 9435 is a community title scheme governed by the Body Corporate and Community Management Act 1997 (the Act) and the Body Corporate and Community Management (Accommodation Module) Regulation 2008 (Accommodation Module). There are 124 lots in the scheme created under Building Unit Plan of subdivision 5771.

_[5] 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) a claimed or anticipated contravention of the Act or the community management statement; or

(b) the exercise of rights or powers, or the performance of duties, under the Act or the community management statement; or

(c) a claimed or anticipated contractual matter about-

(i) the engagement of a person as a body corporate manager or service contractor for a community titles scheme; or

(ii) the authorisation of a person as a letting agent for a community titles scheme.

_[6] An order may require a person to act, or prohibit a person from acting, in a way stated in the order (section 276(2)). An adjudicator's order may contain ancillary and consequential provisions the adjudicator considers necessary or appropriate (section 284(1)).
_[7] I note references to conciliation in this application. I have no access to information provided or documents discussed at any conciliation session hosted by this Office. An application for adjudication is a new application in which the applicant must prove his or her case on merit.

SUBMISSIONS

_[8] Bell and Block Pty Ltd (the Applicant) is the lessee of Lot 4 and Lot 5 in which it has operated a business called “Point Restaurant and Bar @ The Rocks Resort” since September 2009.
_[9] In June 2010, the Applicant received a bill for $194.69 from Zappaway for cleaning the grease trap. The body corporate manager said that the committee had re-directed the bill to the Applicant.
_[10] On 6th July 2010, the Applicant received a solicitor’s letter from the body corporate saying that the Applicant was responsible for maintaining the grease trap, and also requesting reimbursement and cleaning costs relating to a time prior to the Applicant entering the lease. The Applicant had had no previous correspondence about the grease trap despite the solicitor’s letter mentioning this. It appears that there was correspondence pre-dating the Applicant’s takeover of the business.
_[11] In an attempt to resolve the matter, the drainpipes into the grease trap were inspected in the presence of the secretary and the caretaker on 26th August 2010. The Applicants say that the inspection revealed that there was a drainpipe from the building maintenance room. They say that this means that the cleaning residue from the holiday rental units goes into the grease trap, as well as “other wastes form various areas...” These wastes are in addition to the trade waste from the Applicant’s restaurant kitchen.
_[12] On 22nd September 2010 Allconnex Water, (Allconnex) the entity now responsible for trade waste auditing, audited the grease trap and found that there was one grease trap installed on the common property. The grease trap had “badly corroded interior walls, bases and baffles” which compromised the integrity of the trap. The trap also required vermin-proofed mica flaps and a non-return valve to be installed. Allconnex required certain works to be undertaken within 30 days. The letter was addressed to both the body corporate, the owner of Lot 4 and Lot 5 and the Applicant. Allconnex also asked the Applicant to apply for a Trade Waste Approval within 21 days. The Applicant says that the approval cannot be granted until the trap is repaired to the required standard.
_[13] Allconnex describes the 1000-litre grease trap as a “shared facility” in a letter dated 29th September 2010 sent to the body corporate. It again asked the body corporate to attend to five items of repair and maintenance in connection with the grease trap, some within 30 days and some within 60 days.
_[14] On 6th September 2010, the Applicant received another invoice from Zappaway for $194.69 for quarterly cleaning of the grease trap. The body corporate has refused to pay this bill. The Applicant says that they have been told by Zappaway that the body corporate paid Zappaway’s bill “for quite a number of years previously. Zappaway has also quoted to the body corporate for relining the trap. The name on Zappaway’s account was changed from the body corporate to the restaurant operators in April 2010.
_[15] The Applicant has now paid the last two bills from Zappaway in good faith. It has also obtained quotations for cleaning and relining the grease trap.
_[16] On 14th October 2010 the Applicant asked for minutes of a committee meeting on 8th October 2010 to be corrected as the minutes contained inaccuracies which were “potentially damaging” to the Applicant and its business. The committee has not responded.
_[17] In accordance with section 243(2)(b) Act submissions were invited from all lot owners.
_[18] The application attracted nine submissions from owners.[1] Those in support of the application say -

• it is well known that the grease-trap is a shared facility and has always been the responsibility of the body corporate;
• the committee is being “totally unreasonable in its dealing with the restaurant.”
• That the body corporate has paid the grease trap bills for over 10 years, and a body corporate washing machine is also connected to the grease trap.

_[19] Those in support of the body corporate say –

• the body corporate does not need a grease trap;
• the grease trap should be paid for by the sole user, the restaurant;
• the pipe from the cleaning room is connected illegally;
• ‘back charges’ for servicing the grease trap should be reimbursed;
• That the former committee erred in paying bills associated with the grease trap;
• That the grease trap was “apparently installed after the building was constructed for the purpose of intercepting grease from the restaurant”.

_[20] The respondent body corporate provided a plan of the water supply and sewerage. The plan “clearly shows that the grease trap ......was installed to service the restaurant” and that other parts of the building use different hydraulic lines. It says that the trap was installed after the building was constructed in 1982 solely for the restaurant, and that the other 122 lots are residential. It says that “no other lot is connected to the grease trap.”
_[21] In respect of the waste pipe from the basement storeroom it says -

“[a]t sometime in the past the building manager unlawfully connected a waste pipe from the kitchen (sic) to the grease trap. This pipe services a small, domestic washing machine which the building manager uses from time to time for washing cleaning rags. It is believed that this connection was installed by the previous building manager who also operated the restaurant at that time.”

_[22] There is no evidence on body corporate records that such a connection was authorized by the body corporate, and committee members have no knowledge of it.

_[23] In early 2010 the current committee started referring the grease trap cleaning invoices to the owner of Lot 4 and Lot 5, and to the Applicant. The committee also referred invoices for “substantial repairs and maintenance following a notice issued by the Gold Coast City Council”. The Council inspected the grease trap in “late 2009” and found that it required re-lining at a cost of approximately $10,000. It was then that the Applicant brought the pipe “from the manager’s washing machine” to the committee’s attention which was the first the committee was aware of it.
_[24] The Applicant arranged an inspection by Allconnex which confirmed that “the building manager’s waste pipe was ....illegally fitted” and that this waste could be diverted. The body corporate has now instructed that this connection is removed from the grease trap. Allconnex has confirmed that the sole purpose of the grease trap is for the restaurant.
_[25] The treated waste runs into a second pit after it goes through the grease trap so that the cost of pumping out the pit and servicing it should be shared between the Applicant and the body corporate, whilst all maintenance and cleaning of the grease trap is the responsibility of the Applicant . The body corporate should be able to reclaim past charges which it has paid.
_[26] The body corporate says that it does not understand the outcome sought at point 4.
_[27] The Applicant exercised its right of Reply on 10th December 2010 and provided additional material in its application in connection with an observation made by a submitter that there was a “mystery drainpipe” also feeding into the grease-trap. The Applicant was advised on 3rd December 2010 that the “mystery drainpipe” runs from four electric BBQs situated at the rear end of the resort through the locked generator room to the grease trap, and provided photographs.
_[28] It says that allegations that Allconnex has said certain things are not substantiated by evidence. A future diversion of the “building manager’s” waste pipe can have no bearing on what has taken place and currently exists. They say that “the grease trap will remain a shared facility due to the other connections to it.”
_[29] It also points out that the restaurant is a facility enjoyed by other owners and occupiers and guests, so that the grease trap is a benefit to many and not just to the operators of the restaurant.
_[30] This new information resulted in a late submission from Terry Gale, owner of Lot 81, who says that he was a member of the committee from 2004 to 2010 and his wife has owned Lot 81 since the early nineties. He recalls that the grease trap served the restaurant “and other connections” and for as long as he can remember the body corporate has been responsible for the upkeep of the grease trap.
_[31] The body corporate made a second submission on 21st January 2011 in response to the additional information about the BBQs.
_[32] The body corporate denies that the unexplained pipe is from the electric BBQs, but is an odour ventilation pipe from the grease trap which goes into the atmosphere near the BBQ area. On receipt of the additional information, the body corporate arranged for an engineer’s inspection and had the pipe checked. Their report says that there is no pipe draining fats or other waste from the BBQ area to the grease trap. It says that the BBQs do not need grease traps and are of the type installed by councils in public parks. The fat drains into collection tins which are cleaned manually every few months.
_[33] The body corporate also advised that the washing machine has now been directed away from the grease trap, and that the only waste now going into the grease trap comes from the restaurant. The body corporate further said that the original plans for the building did not include a restaurant. The basement slab has been cut to create a pit later.
_[34] The Applicant made a second reply on 17th February 2011, accepting that it was wrong about the “mystery pipe.” However, on 23rd February 2011, the Applicant provided more information received from the building manager. The building manager advised that from 2000 when the current building manager was engaged, the tins in which the BBQ fat is collected were tipped directly into the grease trap. This method was supported by Zappaway who notified the office prior to a grease trap service. The building manager’s cleaners would then meet the contractor in the basement and tip waste as the suction pump was removing the residue. This system changed in 2009 when the Applicant allowed the manager to tip the BBQ waste into another container in a more accessible location at the restaurant.
_[35] The body corporate was again invited to make a further submission in respect of this new information. It says that the new information is not persuasive since the building manager has previously alleged that the fat from the BBQs is led into, or drained into, or poured into the grease trap, none of which is factually correct. The grease trap has a very heavy lid, strong enough for cars to pass over it, which can not be lifted by one person without a special tool.
_[36] The building manager has not said previously mentioned this in the application although he has said it to the committee. He also provided the information about the pipe from the BBQs which turned out to be a vent pipe. The body corporate says that the building manager is hostile to the committee and his recollections are therefore unreliable.
_[37] In respect of the ‘illegality’ of the washing machine which was plumbed to the grease trap, the body corporate says that it was advised by Allconex that the connection could flush grease into the sewerage so that waste would not be clean enough to comply with the trade waste approval. Allconnex said it should not be fitted and should be disconnected from the trade waste line, which the body corporate has now done.
_[38] The body corporate provided a plan showing that silt interceptor traps were not connected to the grease trap, but run into a pit that houses the sewerage pump. The cleaning of the silt interceptor traps is a body corporate responsibility.
_[39] I sought further information from the Applicants about the position of the drains leading from both Lot 4 and Lot 5, and the generation of grease from the restaurant. The Applicants replied that there are no drain pipes to the grease trap leading from Lot 4. Lot 5 has three sinks, a dishwasher and a floor drain connected to the grease trap.
_[40] The restaurant continues to operate purely on the good grace of Allconex. Lot 5 has a Council food premises licence, but the restaurant has been unable to apply for the trade waste approval because of the poor state of the grease trap.
_[41] The Applicant points out that there is no agreement between the body corporate and the restaurant to share the costs of the grease trap.

DETERMINATION

_[42] In this matter the Applicant, which operates a restaurant from two lots in the scheme, Lot 4 and Lot 5, seeks orders and declarations concerning the responsibility for the maintenance of a grease trap situated on common property. It also seeks a copy of a letter mentioned at a committee meeting held on 8th October 2010; and requires certain committee meeting minutes to be amended.

Grease trap maintenance

_[43] The community management statement for the scheme says that Lot 4 and its exclusive use area may be used for the purpose of operating an office and cocktail bar. It further says that Lot 5 and its exclusive use area may be used for the purpose of operating a restaurant.[2] There is no connection made by Lot 4 to the grease trap, even though Lot 4 and Lot 5 have no interior dividing walls and are both used collectively as a restaurant.
_[44] Utility infrastructure, such as a grease trap, is common property and therefore the responsibility of the body corporate except in certain circumstances. Section 157(3)(b) Accommodation Module details an exception and that is where utility infrastructure situated on common property “relates only to supplying utility services to the owner’s lot” and is a “device providing a utility service to a lot.”
_[45] It is admitted by the body corporate that until after the lodging of this application, and it seems to me until about the middle of January 2011, that there was also a connection to the grease trap from the body corporate “room service room” or a cleaners’ room which has a 7kg washing machine in it. The body corporate has now arranged to have the washing-machine disconnected from running into the grease trap which is not a proper use of the grease trap. The body corporate says that the connection from the cleaners’ room to the grease trap should never have been made, and was “illegal” or unauthorised by the body corporate.
_[46] There is no date given in the material submitted for the installation of the pipe from the washing-machine in the cleaners’ room. The pipe was in place on 26th August 2010 when the grease trap was inspected. However, it is an agreed fact that until “early 2010”, that the body corporate paid for the cleaning and pumping out of the grease trap. The current committee is of the view that such maintenance was not the body corporate responsibility, and has now forwarded bills for cleaning and pumping out to the Applicant, the reasoning being that the Applicant is the sole user of the grease trap for the business of the restaurant.
_[47] The body corporate is also of the view that it has a right to require reimbursement of its former payments for maintenance and cleaning from the Applicant, even though some of those payments were made during the period of occupancy by predecessors of the Applicant. However this is not part of this application, although the Applicant seeks a declaration that it is not liable for any past costs.
_[48] The body corporate says in respect of the pipe from the body corporate washing machine that it was installed “some time in the past” by “the previous building manager who operated the restaurant at that time.” Whilst it says that the current committee had no knowledge of the washing-machine pipe, and that the connection is not referred to in any body corporate records, I am not satisfied that the body corporate as an entity, rather than individual current committee members, did not have knowledge of the existence of the pipe and the use made of it, whether or not it was “authorised” by any formal process. This is a common property cleaning room, running a pipe to common property infrastructure which at the time was maintained by the body corporate. I question what authorisation would have been required such that it would show in body corporate records?
_[49] Submitters who were previously on the committee knew of it, and the body corporate has been paying for the maintenance of the grease trap for over 10 years. If it did not query in that period what equipment or services were connected to the grease trap, then it had a duty to do so. I find that the washing machine was connected to the grease trap prior to the occupation of the Applicant and in all likelihood from at latest 2000 when the current building manager was engaged, and probably before that time.
_[50] I therefore find that until the disconnection by the body corporate of the pipe from the washing machine in the cleaners’ room, which I believe occurred on a date in January 2011, that the grease trap was a shared facility, and did not relate only to supplying utility services to Lot 5. It was therefore infrastructure situated on common property which it was the body corporate’s duty to maintain in the usual way, pursuant to section 20 Act.
_[51] The use made by the body corporate must have contributed by normal wear and tear to the present poor state of repair of the grease trap.
_[52] I find that there are no other pipes carrying any type of waste to the grease-trap from lots or the common property. I find there is insufficient evidence as to whether or not fat and grease from the BBQs has ever been emptied into the grease trap manually.
_[53] I have considered the fact that “the restaurant”, which is said by the body corporate to be the reason why the grease-trap was installed, is in fact two lots. Whilst the connection to the grease trap is made only from Lot 5, it seems to me that there is an argument that the grease trap in fact supplies utility services to two lots, since the cocktail bar and office use in Lot 4 does not operate as a business alone, and the restaurant in Lot 5 would be severely disadvantaged without the use of Lot 4. The grease trap therefore could be said not to relate to supplying a utility service merely to one lot, and not to fall within the exception to the general maintenance rule. However, I have not invited legal argument on this point and do not make any decision in that regard.
_[54] The decision in The Centre[3] envisaged that owners who were not connected to an existing grease trap were able to join to it despite its limited capacity. The body corporate was not entitled to refuse an owner access to utility infrastructure. It is not impossible that Lot 4 might one day wish to connect to the grease trap in the legitimate commercial use of the lot.
_[55] It appears now however since at latest 1st February 2011, that Lot 5 is the only lot connected to the grease trap, and the only lot having use of the grease trap. It does not seem reasonable to me that simply because utility infrastructure on common property is suddenly used only by one lot, that that lot should take on the burden of paying for it. Other lots, in reality probably only Lot 4, or other parts of the common property, for example the BBQ facilities, may make use of the grease trap as the body corporate requires in future. The fact that they do not currently do so is not material.
_[56] It is not disputed by the parties that the grease trap is now in need of certain repairs. On 29th September 2010, Allconnex required the body corporate to attend to the following matters –

• draining, cleaning, repairing and re-lining with a non-corrosive liner or coating;
• installation of a vermin-proof mica flap to the induct vent pipe;

The work in connection with the grease trap, was required to be done within 60 days.

_[57] Allconnex also required the body corporate to attend to the following within 30 days -

• arrangement for regular servicing of the silt interceptor traps connected to the garbage rooms on a twelve weekly frequency;
• re-seating of the silt trap covers to their frames;
• installation of vermin proof mica flaps to the three induct vents.
  

_[58] On 5th November 2010, Tweed Heads Plumbing (THP) quoted for rehabilitating and lining the grease trap, including removing the grease trap and the silt trap lids and resetting them correctly for $10,633.17, and this quotation was updated and confirmed on 3rd December 2010.
_[59] I declare and order that the body corporate is now and has been responsible for the maintenance and repair of the grease trap, and that it must now do repairs as required by Allconnex and/or the Council. The repairs/update must be performed by the body corporate within two months of the date of this order. I note that the committee spending limit in this scheme is within the quotations received for the work on the grease trap, the quotations ranging from $7,694 (Corrosion Protection Services) to $10,633.17 (THP). The committee may therefore undertake this pressing and outstanding maintenance without the need to put the quotations to a general meeting of the body corporate.
_[60] I also order that the body corporate reimburses the Applicant the sum of $433.38 being the sum for two quarterly services by Zappaway paid at the non-discounted rate.
_[61] If the Applicant has paid for any further quarterly services since September 2010, (possibly December 2010 and March 2011) these too should be reimbursed to the Applicant by the body corporate. I do not make this part of the order since the body corporate has not had the opportunity of making submissions about any further claims. However, in the light of the order now made, the body corporate will be aware of its responsibilities.

Letters and corrections of minutes

_[62] The Applicant is upset that it received a “solicitor’s letter” when minutes of a committee meeting did not apparently authorise such action to be taken against it. On 7th June 2010 the committee decided merely to ask the secretary to notify the Applicant of the committee’s concerns.
_[63] The body corporate says it does not understand this outcome sought. I agree that it is not in the nature of a dispute which can be settled by this adjudication process. A letter has been sent, and cannot be “withdrawn”. The solicitor’s letter, dated 9th July 2010, covered matters which are not relevant to this application. There is a paragraph about the grease trap. No action is proposed, although the body corporate says that the Applicant is failing to maintain the grease trap, and that the body corporate has incurred charges. The letter merely asked the Applicant for a response. The Applicant disputes that it received certain correspondence in 2008 and 2009 as alleged.
_[64] I make no order in respect of this letter. In the circumstances of the order now made about the grease trap, the paragraph in the letter about the grease trap can be ignored.
_[65] The sixth outcome sought is that the body corporate either shows to the Applicant a copy of a letter from the Council, or alternatively corrects the minutes of a committee meeting held on 8th October 2010. If the body corporate has received a letter about Lot 5 from the Council, in the ordinary administration of the body corporate that letter should be part of the records of the body corporate, and available to any interested person, particularly a lot owner or an occupier[4], unless the body corporate is claiming some privilege in respect of the letter.
_[66] The body corporate makes no submission in respect of the sixth outcome sought. The minutes say that the body corporate has received a letter from the Council “confirming that the grease trap was only required to service the restaurant. It was noted that the restaurant is exceeding the capacity of the grease trap and the GCCC are actioning this.”
_[67] I order that the letter from the Council which was tabled be made available to the Applicant as a body corporate record on the usual terms as set out in the legislation.
_[68] By the seventh outcome sought, the Applicant asks for the minutes of the same meeting to be corrected. The minutes say that Kevin Bell, whom I understand to be an employee of the restaurant, interrupted the committee meeting to place a letter from the Council in front of Terry Gale. The letter was not from the Council but from Allconnex. This is the letter dated 29th September 2010.
_[69] The body corporate has not made a submission on this point. I ask the body corporate to review the minutes of the committee meeting of 8th October 2010 and amend page 9 accordingly. There is no need to re-distribute the amended minutes.

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[1] Submissions were received from the owners of Lots 6, 15, 42, 45, 56, 77, 102,103 and 111. A subsequent submission was received from Terry Gale, owner of Lot 81.
[2] At By-law 13
[3] The Centre 2010 QBCCMCmr 17

[4] Section 205(6) Act