Alexander House - Toowoomba [2011] QBCCMCmr 579 (22 December 2011)

Last Updated: 4 January 2012

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

CITATION:	Alexander House - Toowoomba [2011] QBCCMCmr 579
PARTIES:	Ruth Aveyard, Owner of Lot 1 (applicant) Body Corporate for Alexander House - Toowoomba (respondent)
SCHEME:	Alexander House - Toowoomba CTS 33722
JURISDICTION:	Body Corporate and Community Management Act 1997 (Qld) (Act), ss 227(1)(b), 229(3)(a) Body Corporate and Community Management (Standard Module) Regulation 2008 (Standard Module).
APPLICATION NO:	0956-2011
DECISION DATE:	22 December 2011
DECISION OF:	ID Rosemann, Adjudicator
CATCHWORDS:	COMPENSATION – whether the carpets in a lot have been damaged by water ingress from an exterior wall – whether the water ingress arose from a failure to maintain the exterior wall – whether the lot owner should be reimbursed for the cost of rectifying the damage. Act, s 281

ORDERS MADE:

I hereby order that within thirty (30) days of the date of this order the Body Corporate for Alexander House - Toowoomba shall pay Ruth Aveyard, Owner of Lot 1, the amount of $1,325.80 as reimbursement for repairs to damaged carpet in Lot 1.

REASONS FOR DECISION
Introduction

[1] This application relates to the applicant’s request for reimbursement of her costs in rectifying damage to her lot from water seepage through the exterior wall of the lot. The Body Corporate has rectified the seepage issue but failed to pass a motion to reimburse the applicant for the cost of carpet cleaning and new carpets in two bedrooms.
[2] The Body Corporate has not commented on the application.
[3] The issues to be determined in this application are whether the there was damage to the applicant’s lot, whether the damage arose from some maintenance failure of the Body Corporate, and whether the claimed reimbursement is reasonable in the circumstances.

Preliminaries

[4] Alexander House - Toowoomba community titles scheme 33722 (Alexander House) consists of 20 lots and common property. The community management statement (CMS) shows the Standard Module applies. The scheme is registered as Survey Plan 176361 and 176411.
[5] This application was lodged under the Act on 18 October 2011 seeking the following order:

I would like motion 3 from the Extraordinary General Meeting held on the 14th September 2011 to be deemed carried. I would like to be reimbursed the $1328.80 I paid for cleaning and carpet replacement. I have attached the invoices.

Jurisdiction

[6] I am satisfied that this matter falls within the legislative dispute resolution provisions.[1]
[7] An adjudicator may make an order that is just and equitable in the circumstances 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 performance of duties under the Act or the CMS.[2] An order may require a person to act, or prohibit a person from acting, in a way stated. An order may contain ancillary and consequential provisions the adjudicator considers necessary or appropriate.[3]

Procedural matters

[8] The Commissioner invited the Committee and all owners to make submissions in respect of the application[4]. The Body Corporate Manager (BCM) for the scheme provided confirmation that the notice inviting submissions had been distributed. No submissions were received.
[9] A member of the Commissioner’s Office contacted the BCM to ascertain whether the Committee wished to respond to the application. He verbally advised that he had not been asked to and he understood that owners ‘could not be bothered’.
[10] A dispute resolution recommendation[5] was made referring the file to department adjudication.
[11] I then investigated the dispute[6], which included reviewing the application and titles records for the scheme, and seeking clarification from the applicant.

Matters in dispute

[12] The applicant says the outside wall of her lot has been seeping water for over a year. Apparently delay occurred because it was difficult to locate the source of the problem. She says it has now been properly sealed. The applicant has indicated that a Body Corporate meeting in March 2011 approved expenditure on works to seal the western wall.
[13] The period of seepage resulted in serious mould problems within her unit. She says they paid for cleaning on two occasions and had the carpet replaced. The application includes evidence of the following payments:

1. Carpet cleaning (dated 4 March 2010) for $77
2. Carpet cleaning (dated 25 February 2011) for $165

100. Carpet replacement (dated 11 July 2011) for $1,083.80

[14] On 1 August 2011 the applicant asked the Body Corporate to consider an EGM motion reimbursement of the carpet cleaning and replacement. The EGM was held on 14 September 2011. Motion 3 failed (2 for and 6 against) the applicant’s proposal to reimburse the costs incurred as a result of the leaking block work.

Analysis

[15] I will first look at the applicable legislation regarding maintenance. I will then consider whether there was damage to the applicant’s lot, whether the damage arose from some maintenance failure of the Body Corporate, and whether the claimed reimbursement is reasonable in the circumstances.

Applicable law

[16] Pursuant to section 159 of the Standard Module, the Body Corporate is responsible for maintaining common property in good and structurally sound condition. Under section 160 of the Standard Module, owners must maintain their lots in good condition.
[17] Under a building format plan of subdivision (which Alexander House is) the lot boundaries are defined on the survey plan by the structural elements of a building, including the floors, walls and ceilings. Where a lot is separated from another lot or common property by a floor, wall or ceiling, the boundary is the centre of the floor, wall or ceiling.[7] Therefore, prima facie, an owner is responsible for all maintenance within the boundaries of their lot, and the Body Corporate will be responsible for the exterior of the building.
[18] Also of relevant to this dispute is section 281 of the Act which provides as follows:

281 Order to repair damage or reimburse amount paid for carrying out repairs

(1) If the adjudicator is satisfied that the applicant has suffered damage to property because of a contravention of this Act or the community management statement, the adjudicator may order the person who the adjudicator believes, on reasonable grounds, to be responsible for the contravention—

(a) to carry out stated repairs, or have stated repairs carried out, to the damaged property; or

(b) to pay the applicant an amount fixed by the adjudicator as reimbursement for repairs carried out to the property by the applicant.

Example—

A waterproofing membrane in the roof of a building in the scheme leaks and there is damage to wallpaper and carpets in a lot included in the scheme. The membrane is part of the common property and the leak results from a failure on the part of the body corporate to maintain it in good order and condition. The adjudicator could order the body corporate to have the damage repaired or to pay an appropriate amount as reimbursement for amounts incurred by the owner in repairing the property.

(2) The order can not be made if—

(a) for an order under subsection (1)(a)—the cost of carrying out the repairs is more than $75000; or

(b) for an order made under subsection (1)(b)—the amount fixed by the adjudicator would be more than $10000.

[19] In addition, I note that the Body Corporate and its Committee must act reasonably in undertaking its functions, including in making or not making decisions.[8]

Damage to Lot 1

[20] The applicant has asserted that water seepage into her lot over the course of a year has caused mould which has damaged her carpet. It seems that she cleaned the carpet on two occasions and ultimately replaced the carpet in two bedrooms. No submission has been made by the Committee or any owner disputing that the carpet was damaged or that the damage arose from water seepage from the exterior wall. Therefore in the absence of evidence to the contrary, I accept the applicant’s assertions.
[21] The exterior wall of the building is a Body Corporate responsibility to maintain. As it appears that the Body Corporate has undertaken repairs to seal the wall, it would seem that the Body Corporate accepts this responsibility. If this wall was damaged, deteriorated or otherwise inadequately sealed such that water could seep into Lot 1, this was a failure to properly maintain the exterior wall.
[22] It follows then that the Body Corporate is responsible for rectifying the damage occurring to Lot 1 arising from insufficient maintenance. I am satisfied this liability exists even if the Body Corporate did not know of the leak (at least before the seepage was first reported) or if it had generally acted diligently and in good faith in the maintenance of the building. The applicant has suffered loss from a cause emanating from common property and the Body Corporate is responsible for it.
[23] No submission has been made by the Committee or any owner disputing that the costs claimed by the applicant are reasonable or that she has actually paid the amounts claimed. There is no suggestion that the applicant contributed to the cause of the damage or failed to take action that could have mitigated her loss. The applicant has provided receipts and the amounts included do not appear to be excessive. Under section 281 of the Act, a claimant is entitled to reimbursement of the actual amounts incurred in rectifying the physical damage to property (subject to the $10,000 limit)[9].

Conclusion

[24] In the circumstances, and in the absence of any evidence to the contrary, I find that:

1. the damage has occurred to the carpets in Lot 1;
2. the damage was caused by water ingress through the exterior wall of the building;

100. the maintenance of the exterior of the wall of the building was the responsibility of the Body Corporate;

4. the water ingress arose from a failure to adequately maintain the exterior wall;
5. the Body Corporate is liable to reimburse the applicant for costs expended by her as a result of the damage;
6. the costs claimed by the applicant are reasonable; and
7. it was unreasonable of the Body Corporate to refuse to reimburse the applicant.

[25] Accordingly I intend to make the order sought by the applicant, and provide for the reimbursement of $1,325.80[10].
[26] It may be that the Body Corporate’s insurers will provide coverage for damage of this nature. If so, the Body Corporate should pursue a claim if it has not already done so. However the applicant’s right to be reimbursed by the Body Corporate is not contingent on whether or not the Body Corporate is successful in any insurance claim.

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[1] See sections 227, 228, 276 and Schedule 5 of the Act
[2] Section 276 of the Act
[3] Section 284(1) of the Act
[4] Section 243 of the Act
[5] Section 248 of the Act
[6] The investigative powers of an adjudicator are set out in section 271 of the Act
[7] Sections 48C and 49C(4) of the Land Title Act 1994
[8] Sections 94(2) and 100(5) of the Act

[9] See Beaumont [2009] QBCCMCmr 240 (29 June 2009) for a more detailed discussion on the approach to compensation for damage in such circumstances.

[10] There appeared to be a minor error in the calculation of the total of the three receipts in the order originally sought by the applicant.