Vardon Point Apartments [2011] QBCCMCmr 32 (2 February 2011)

Last Updated: 7 March 2011

REFERENCE: 0825-2010

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	29516
Name of Scheme:	Vardon Point Apartments
Address of Scheme:	1 Millennium Circuit PELICAN WATERS QLD 4551

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

Robert and Ann Webb, the Owner(s) of unit 29

I hereby declare that the body corporate for Vardon Point Apartments was responsible for repairs to the lock for the common property storeroom near units 28-30, up until 20 December 2010 when the grant of exclusive use of this storeroom to unit 29 was recorded. I further order that, in its future financial records, the body corporate must not include any costs associated with the 10 December 2009 repair of this lock as an amount payable by the owners of unit 29.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0825-2010

“Vardon Point Apartments” CTS 29516

Introduction

Robert and Ann Webb, the owners of unit 29 have applied for an order to require the body corporate to remove a disputed amount of $344 from their body corporate account. This $344 was for the cost of repairing a lock on the door to a storage room that was being used by Mr and Mrs Webb.

This application raises the question of who was responsible for the cost of repairing the door lock. I will decide this question with reference to the Body Corporate and Community Management Act (Act) and the Act’s Accommodation Module Regulation (Accommodation Module).

Jurisdiction

The application is within the jurisdiction of an adjudicator because it is a dispute about body corporate maintenance obligations and the exercise of the body corporate’s financial powers. If the body corporate wanted to obtain an order requiring payment of the disputed $344 then it would need to bring debt recovery proceedings in a different jurisdiction such as in QCAT or the local Magistrates Court (Act, 229A). However, QCAT would appear not have jurisdiction in the current application by an owner seeking rectification of the body corporate’s financial records.[1] I am further satisfied the current dispute is not a ‘debt dispute’ within the meaning of section 229A.[2]

This dispute should therefore be determined by following the procedures set out in Chapter 6 of the Act.

Analysis of factual issues

Issues raised by the submissions

In keeping with the procedures in Chapter 6 of the Act, the Commissioner invited each owner to make a submission on the application. The Commissioner also invited the body corporate committee to make a submission. Submissions were received from Mrs Humphries, Mr and Mrs Debnam, Mr and Dr Weidenbach, Mr and Mrs Matthews, and from the committee.

The submissions indicate there have been a number of problems with the locks at Vardon Point Apartments. In 2003 the committee knew there was a major problem with the Gainsborough lock system that was originally designed for 40 different keys but was required to cater for 105 different keys within Vardon Point. In 2005 the body corporate therefore replaced most locks with the Lockwood Generation 6 system. However, some of these Lockwood locks have also subsequently failed.

Mr and Mrs Webb say one of their locks failed on 10 December 2009. They say this was one of the locks replaced by the body corporate in 2005 and is a lock that the body corporate is required to maintain. However, Mr and Mrs Webb say the body corporate is unlawfully seeking to recover the 10 December 2009 repair costs from them.

Submissions by other owners raise a number of queries including:

1. Was the lock for an extra storeroom that Mr and Mrs Webb were using rather than for the door to their unit?
2. Was this lock ever changed from the Gainsborough lock to the Lockwood Generation 6 system?
3. Did Mr or Mrs Webb install their own lock or say they would maintain the lock themselves?
4. Was the locksmith only needed because Mr or Mrs Webb damaged the lock or locked their keys in the room?
5. Was the locksmith only needed because Mr and Mrs Webb insisted on having a lock that was keyed differently so the caretaker’s master key did not work?
6. Were additional costs incurred because Mr or Mrs Webb unreasonably insisted on the body corporate repairing the lock urgently?

Investigations

In order to clarify these factual issues I wrote to Mr and Mrs Webb and the body corporate seeking further information. These requests for further information were by letters dated 23 November 2010, 10 December 2010, and 23 December 2010.

Findings

Based on the submissions and further information received, my findings on the disputed factual issues are as follows:

1. The lock is for an extra storeroom that Mr and Mrs Webb use.
   1. Mr and Mrs Webb have confirmed the lock is for a storeroom located near to their unit.
   2. Mr and Mrs Webb say this storeroom was granted for the exclusive use of unit 29 at an annual general meeting in 2002 but that a new community management statement to record this grant of exclusive use was not lodged at the time. Reference is made to a decision of an adjudicator of 30 September 2010 in which the body corporate was ordered to lodge a new community management statement showing this grant of exclusive use.[3]
   100. The registered plan, the community management statement, and the previous community management statement show that this storeroom was unallocated common property of the body corporate until 20 December 2010 when the grant of exclusive use for the benefit of lot 29 was recorded.
2. The body corporate changed this storeroom lock from a Gainsborough lock to the Lockwood Generation 6 lock in 2005, at the same time that most of the other locks in the building were changed.
   1. The body corporate has provided documents indicating that it implemented a new restricted key system when the locks were replaced in 2005. Documents indicate that villa 99 did not participate in this system and that units 6, 16, 19, 29, 43, 44, 56, 57 and 84 did not participate in the system.[4] However, Mr and Mrs Webb say the body corporate still replaced the locks for their unit door and the store room. It was just that they opted not to have their locks coded into the caretaker’s key system but were told to deal directly with the locksmith to organise their own keys (including paying for additional keys). It therefore seems that, rather than Mr and Mrs Webb electing not to have their locks changed, the locks were changed but Mr and Mrs Webb asked for the locks be keyed individually rather than be keyed as part of the restricted key system administered by the caretaker.
   2. I conclude that, in 2005, the body corporate changed the lock in question from a Gainsborough lock to a Lockwood Generation 6 lock. This conclusion is supported by photographs showing the lock is a ‘Lockwood’ lock and by details of invoices from Fort Knox Locksmiths to the body corporate showing four occasions when Fort Knox has performed work described as "Replace Primary Mortice Lock Lockwood 3572SC". These are on 24 October 2008, 10 December 2009, 5 February 2010 and 28 April 2010 for units 30, 29, 6 and 3 respectively. The invoice for 10 December 2009 is apparently for the repair work that is the subject of this application, being upon a ‘Lockwood’ lock apparently installed by the body corporate in 2005.
3. Mr and Mrs Webb did not ever replace the lock for the storeroom themselves or say they would be responsible for the maintenance of this lock.
   1. I have concluded that the body corporate changed the lock from a Gainsborough lock to the Lockwood Generation 6 lock in 2005, at the same time that most of the other locks in the building were changed.
   2. The invoice for the repair of the lock indicates the lock was the same type as other locks in the building at the time it was repaired.
   100. There is no evidence that satisfies me Mr or Mrs Webb ever replaced the lock themselves or said they would be responsible for the maintenance of the lock.
4. The locksmith was needed because the lock broke.
   1. Mr and Mrs Webb say the locking mechanism broke and would not engage when Mr and Mrs Webb attempted to open it with one of their keys.
   2. The details of invoices from Fort Knox Locksmiths also support the assertion that the entire locking mechanism needed to be replaced, similar to the earlier replacement for the unit 30 lock and the subsequent replacements for the units 3 and 6 locks.
5. It would not have made a difference if Mr and Mrs Webb’s lock was part of the restricted key system and could have been opened by the caretaker’s key.
   1. The lock mechanism had broken and needed to be replaced.
   2. Mr and Mrs Webb had a key but it did not work because the lock had broken.
6. Mr and Mrs Webb did not unreasonably require the body corporate to repair the lock urgently.
   1. Mr and Mrs Webb say the lock broke on 10 December 2009, that they telephoned the manager at 7.03 am and were told to phone the locksmith. Further, they telephoned the locksmith at 7:06am and he told them that he was in the neighbourhood. The locksmith then arrived at 7:20am and replaced the lock mechanism. I accept these submissions and am satisfied that Mr and Mrs Webb did not unreasonably require the body corporate to expend unusual amounts of money on repairing the lock.
   2. In any event, the details of invoices from Fort Knox Locksmiths show the cost of repairing the lock that is the subject of this application was not significantly different from the cost of similar repairs to locks for units 3, 6, and 30.

Analysis of legal issues

Common property must be maintained by the body corporate

Generally speaking, all areas of common property must be maintained by the body corporate (Accommodation Module, 157(1)).

The plan shows that the lock requiring repair was situated on common property. Subject to some specific exceptions, the body corporate is responsible for the costs of maintenance of the lock.

No specific exceptions apply

Relevant provisions of the legislation indicate that the body corporate will be responsible for the costs of repairing the common property lock unless either:

1. The lock was for Mr and Mrs Webb’s exclusive use area (Accommodation Module, 171(2)).
2. Mr and Mrs Webb had installed the lock themselves or taken over maintenance responsibilities for the lock (Accommodation Module 157(3)(a), 162).
3. Mr and Mrs Webb had caused damage to the lock (Accommodation Module, 157(4)).
   

Due to my findings on the factual issues above, none of these exceptions applies.

Firstly, a formal grant of exclusive use does not take effect until the relevant by-law is recorded (Act, 179). The body corporate was therefore responsible for repairs to the common property store room area until the recording of the by-law on 20 December 2010.

Secondly, the evidence suggests that Mr and Mrs Webb never installed their own lock for the storeroom or refused permission for the body corporate to upgrade the lock. Rather, it seems that Mr and Mrs Webb simply liaised directly with the locksmith to obtain their own keys for the new lock being installed on the storeroom at the time that the body corporate acted in 2005 to replace the Gainsborough lock system with the Lockwood Generation 6 system.

Thirdly, the evidence supports a conclusion that the storeroom locking mechanism broke and required repair. There is no evidence that satisfies me that Mr or Mrs Webb damaged the lock or required the lock to be replaced because they did not have a key.

Concerns that it is unfair for other owners to have to contribute to the costs of this lock

Some owners consider it unfair that the body corporate pay the costs of repairing a lock that is only for the benefit of unit 29. While it seems acceptable that all owners contribute to the costs of repairing common locks and the lock on the front door of each unit, some owners consider that costs relating to the extra exclusive use storeroom of unit 29 should be paid by the owners of unit 29.

In particular, it is common ground that the resolution to grant exclusive use of the storeroom to unit 29 was adopted back in 2002 and that Mr and Mrs Webb were for all practical purposes using the storeroom exclusively for their own purposes at the time the lock broke.

However, an adjudicator cannot simply make an order according to what he considers to be a fair allocation of costs. Rather, the adjudicator must decide a dispute according to the principles of law and equity.[5] As a matter of law, anyone within Vardon Point Apartments would have been able to make reasonable use of the storeroom up until the exclusive use by-law being recorded. Mr and Mrs Webb’s responsibility for the maintenance and operating costs of their exclusive use storeroom therefore only applies to costs incurred after 20 December 2010 when the exclusive use by-law was recorded.

Rectification of financial records

Due to the above, I will make a declaration that the body corporate was responsible for the repair of the lock. I will further order that, in its future financial records, the body corporate must not include any costs associated with the 10 December 2009 repair of this lock as an amount payable by the owners of unit 29.

However, I am not satisfied that I should make any orders requiring the body corporate to alter its existing financial records. The present decision will form part of the body corporate’s records and will hopefully assist in clarifying the status of any amounts shown in existing records. There is no proper legal basis for requiring the body corporate to modify its existing records as those records accurately reflect that the body corporate was seeking payment of the amount even if the body corporate was not legally entitled to do so.

Conclusion

As a matter of law, the body corporate is responsible for the $344 spent on repairing the lock for the storage room that was being used by Mr and Mrs Webb.

Some owners may consider that Mr and Mrs Webb have escaped liability for this cost upon the technicality that the exclusive use by-law relating to the storeroom was not registered until more than eight years after the resolution granting exclusives use had been adopted. However, Mr and Mrs Webb are correct in saying that the body corporate replaced the lock in 2005 and was responsible for the repair in 2009. If the body corporate was concerned about the amount it had spent on maintaining the storeroom prior to it formally being granted to the exclusive use of unit 29 then it should have raised these concerns when the order to allow for the belated recording of the exclusive use by-law was sought.

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[1] Randall v Body Corporate for Runaway Cove Bayside [2010] QCAT 485 at paragraph 12.
[2] For the meaning of ‘debt dispute’, refer Q1 [2010] QBCCMCmr 433.
[3] Vardon Point Apartments [2010] QBCCMCmr 453.
[4] Or at least that unit 29 is only participating in this restricted key system to the extent that the key for the basement storage area for unit 29 is within this system.
[5] Body Corporate for Palm Springs Residences CTS 29467 v J Patterson Holdings Pty Ltd [2008] QDC 300 at paragraphs 80-100.