Body Corporate for “Golden Sands Highrise” CTS 10906 v Galtos
[2000] QDC 416
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- Body Corporate for “Golden Sands Highrise” CTS 10906 v Galtos[2000] QDC 416
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Body Corporate for “Golden Sands Highrise” CTS 10906 v Galtos[2000] QDC 416
Body Corporate for “Golden Sands Highrise” CTS 10906 v Galtos[2000] QDC 416
DISTRICT COURT OF QUEENSLAND |
|
CITATION: Body Corporate for “Golden Sands Highrise” v. Galtos & Anor.
PARTIES:
BODY CORPORATE FOR “GOLDEN SANDS HIGHRISE” CTS 10906 | (Appellant) |
V
NICHOLAS JOHN ALEXANDER GALTOS and KATHRYN JANE GALTOS | (Respondents) |
FILE NO/S: Appeal No 33 of 1999
DIVISION: District Court
PROCEEDING: Appeal
ORIGINATING COURT: Southport
DELIVERED ON: 10 March 2000
DELIVERED AT: Brisbane
HEARING DATE: 1 February 2000
JUDGE: P.D. Robin, Q.C., D.C.J.
ORDER: The appeal is dismissed with costs.
CATCHWORDS:
Appeal to District Court from order of Adjudicator under s. 190 of Body Corporate and Community Management Act 1997 - Adjudicator ordered appellant body corporate to “maintain” by doing work to waterproof the roof of its building, which formed part of one of the lots under s. 109 of the Body Corporate and Community Management (Standard Module) Regulation 1997 - events rendering such maintenance necessary occurred before 13 July 1997, when s. 109 came into force - body corporate unsuccessfully argued s. 109 should not be given retrospective effect - Acts Interpretation Act 1954 s. 20(2) considered - adjudicator erred in determining the previous legislation in s. 33(5) of the Building Units and Group Titles Act 1980 authorised the order made - insufficient evidence the defective waterproofing was “likely” to adversely affect another lot - appeal dismissed.
COUNSEL: | Mr A Crowe (for the Appellant) |
| Mr R Traves (for the Respondent) |
SOLICITORS: | Attwood Marshall (for the Appellant) |
| McCullough Robertson (for the Respondent) |
- [1]This is an appeal by the body corporate against an order made by an adjudicator appointed under s. 190 of the Body Corporate and Community Management Act 1997 on 2nd December 1998 as follows:
“TAKE NOTICE that pursuant to an application made under the abovementioned Act by Nicholas John Alexander Galtos and Kathryn Jane Galtos, the owners of lot 66
I hereby order that within three (3) months of the date of this order the body corporate is to engage a suitably qualified trades person or company to undertake and complete the waterproofing of the upper level roof slab of lot 66 located on level S of the building, so as to prevent further water penetration through the roof slab to the lot below.
I further order that the owners of lot 66 are to allow access to the body corporate and the tradesperson or company engaged by it, for the purpose of completing the waterproofing of the upper level roof slab of that lot in accordance with the terms of this order PROVIDED THAT the same is to be at the cost of the body corporate and is to be done in a professional manner using proper materials and in such a way as to be as unobtrusive as possible.
I further order that the body corporate is responsible for repair of internal water damage to lot 66 caused as a consequence of water penetration through the roof slab into the lower level of the lot, and that the body corporate shall, at its cost and in a professional manner using proper materials and in such a way as to be as unobtrusive as possible, effect repairs in respect of such damage, within one (1) month of completion of repairs to the upper level roof slab.”
- [2]Under Part 12 of Chapter 6 of the Act (which may be referred to as “the new Act”) an appeal to this court is available to the person aggrieved by the order (as the appellant is) “but only on a question of law”: s. 237(2).
- [3]Although the notice of appeal filed 14th January 1999 contains a dozen grounds, the argument of Mr Crowe for the appellant was essentially based on a single ground, namely that the events giving rise to the dispute which came before the adjudicator in all essentials happened before 12th July 1997 when the Act came into force, and, accordingly, are governed by the legislation previously in force, namely the Building Units and Group Titles Act 1980. It is convenient to quote from Mr Crowe's further outline of argument for the appellant:
“6. The evidence as to the defects and when they existed is primarily ascertained from an analysis of the report by G and S Frame dated 13 November 1997 which reveals the following:
- (3)In April 1996 after some heavy rain, a water leak became apparent over the kitchen sink and water was found in a light fitting. During completion of this work, it was noticed that there was a crack in the concrete slab. This was sealed by Dolphin waterproofing. The work was completed by July 1996.
- (3)Around Easter 1997, the owners noticed some water damage to a wall in bedroom 3. The damage was repaired.
- (3)Extensive investigation work was then undertaken by OPAT and after flooding to the external patio to the upper level for 24 hours, water leakage was noted in bedroom 3 in the same area as before. At this time it was also noted that there were several cracks in the concrete slab.
By letter dated 26 May 1997 to Ernst Body Corporate Management Pty Ltd, Mr Galtos advised that, although he had been successful in obtaining his insurer's agreement to pay for the repair to the damage to the third bedroom and for investigation expenses to date, he and his wife were not prepared to proceed with the repair as the cause of the damage was not known.
Also in the material is a report from Hi Rise and Home dated 26 May 1997 which noted cracks in the slab over the kitchen and cracks to the slab in the bedroom (which it is assumed is the third bedroom). A report from OPAT dated 6 May 1997 lists the steps completed in an attempt to ascertain the problem. It is apparent from this that the flooding referred to above occurred by 6 May 1997 and before 12 July 1997.
- (3)On 11 November 1997, Frame inspected the unit and noted signs of water ingress/damage to the bulkhead and part of the ceiling across a passage leading to bedroom 3 which was first noticed on 8 October 1997 by the respondents.
- The adjudicator found that “... the cause of the water penetration to the lot existed prior to the commencement of the [new] Act on 13 July 1997.”
[4] It may be gathered from the foregoing that the respondents' lot, lot 66, is a penthouse effectively incorporating the roof of the relevant building. The penthouse in fact contains two levels, R, which appears to reproduce the outline of units on lower floors of the building and, above it, level S, which can be reached by a connecting stairway and on which the enclosed area is substantially less, so as to create an outdoor area which can be enjoyed by the owners. Sadly, it has begun to leak, a problem apparently not reproduced in the other penthouse. However, the body corporate has not persisted with a previous allegation that work done by the respondents or previous owners of lot 66 created the problem.
[5] The respondents' successful application which the adjudicator determined on 2nd December 1998 was based on s. 109 of the Body Corporate and Community Management (Standard Module) Regulation 1997, which applies to the subject building. It is, in part:
“109.(1) The body corporate must maintain common property in good condition, including, to the extent that common property is structural in nature, in a structurally sound condition.
(2) To the extent that lots included in the scheme are created under a building format plan of subdivision, the body corporate must -
- (a)maintain in good condition -
- (i)railings, parapets and balustrades on (whether precisely, or for all practical purposes) the boundary of a lot and common property; and
- (ii)doors, windows and associated fittings situated in a boundary wall separating a lot from common property; and
- (iii)roofing membranes that are not common property but that provide protection for lots or common property;
...
(3) Despite anything in subsections (1) and (2) -
- (a)the body corporate is not responsible for maintaining fixtures or fittings installed by the occupier of a lot if they were installed for the occupier's own benefit; and
...
- (4)To avoid doubt, it is declared that, despite an obligation the body corporate may have under subsection (2) to maintain a part of a lot in good condition or in a structurally sound condition, the body corporate is not prevented from recovering an amount of damages from a person (whether or not the owner of the lot) whose actions cause or contribute to damage or deterioration of the part of the lot.”
(It was common ground there existed a “building format plant of subdivision” here.)
[6] It is convenient to state now my conclusion that s. 109 imposes a clear obligation on the appellant body corporate which applies even though circumstances calling for the carrying out of the maintenance obligation may have existed before the standard module was enacted. Whether or not, as contemplated in subsection (4) or on some other basis existing in the Building Units and Group Titles Act 1980 (“the old Act”) or elsewhere, the body corporate may indirectly be able to obtain some financial contribution from somebody else is another question.
[7] Faced with the body corporate's submission that it should not bear responsibility for maintenance which had already become necessary by 12th July 1997, the adjudicator considered the position under the old Act, in particular s. 33(5) of it, which he held justified substantial success of the application made by Mr and Mrs Galtos in any event. Section 33(5) was:
“(5) Where -
- (a)Part of a building comprised in a lot in a building units plan contains a structural defect which affects or is likely to affect the support or shelter provided by that lot for another lot in that building or the common property; or
- (b)a defect occurs in any pipes, poles, wires, cables or ducts referred to in section 51(1)(a)(ii) within a lot;
and the defect is not due to any breach of the duty imposed on any person by section 51(1)(a), the body corporate shall, at its own expense, carry out such work as is necessary to rectify the defect.”
[8] The adjudicator in effect found that, while the old Act was in force, deterioration in the waterproof membrane constituted “a structural defect ... likely to affect the support or shelter provided by (the respondents') lot for another lot ... or the common property;” the adjudicator relied on “potential” effect. Mr Crowe submitted there was a reviewable error of law in this finding. To the extent he may have been submitting that leaks leading to minor cracking, staining and the like did not constitute a “structural defect”, I would accept the response of Mr Traves (for the respondents) that it is appropriate to categorise defects or the work necessary to correct them as either “structural” or “decorative”, and that on this basis the unwanted ingress of water compromising the integrity or impermeability of a building should be accounted structural. See Granada Theatres Ltd v Freehold Investment (Leytonstone) Ltd [1958] 2 All E.R. 551.
[9] More pertinently, Mr Crowe submitted the evidence before the adjudicator was insufficient to support the necessary finding that circumstances existed which were “likely to affect ... support or shelter ...”. The evidence was an expert report to the following effect:
“... we can safely state the following:
- (a)Any work completed in sealing the cracks at the lower (or downstream) end will only result in the water finding another channel and point of egress.
- (b)In addition the water moving within the slab will eventually rust out some of the reinforcement.
- (c)In these situations the water may even bypass Penthouse Unit 2 and find its way to other units lower down in the building.
- (d)The only really satisfactory way of curing the problem is to prevent the ingress of water at the point of entry.”
[10] Mr Crowe's point was that (c) goes nowhere near establishing likelihood. I was reminded of the Macquarie Dictionary definition of “likely” as follows:
“Probably or apparently going or destined (to do, be, etc.); likely to happen.”
[11] The appellant's submission was that “likely” focuses upon the probability of an event rather than a mere possibility. Mr Traves countered with examples from case law where, in particular contexts, “likely” has been held appropriate to describe circumstances where there is “a real chance or possibility.” See, for example Tillmanns Butcheries Ptv Ltd v Australasian Meat Industry Employees Union (1979) 42 FLR 331, 339 (per Bowen CJ), 346-47 (per Deane J). The real difficulty in the way of holding that s. 33(5) applies is in the identification of “another lot” that may be affected by the failure of the waterproof membrane contained in Mr and Mrs Galtos' lot. Damage that had happened or was threatened to their own lot is beside the point here. Even if “likely” is given the extended interpretation contended for, it appears to me that on the evidence before the adjudicator, the whole matter is far too tenuous. It can not be said, in my opinion, it supports anything as strong as a “real possibility or chance”.
[12] My conclusion that s. 33(5) of the old Act imposed no obligation on the body corporate in the circumstances means the obligations of the body corporate must be assessed in light of the standard module provision now applicable. I agree with Mr Crowe's submission that s. 37(1)(c)(iii) of the old Act can not provide an alternative basis for an obligation on the body corporate to s. 33(5). In my opinion, the waterproof membrane can not be regarded as a “fixture or fitting ... intended to be used for the servicing or enjoyment of any other lot or the common property.” I agree with Mr Crowe that sections 33(5) and 37 are dealing with different subjects, namely parts of the building, on the one hand, and fixtures or fittings on the other.
[13] Section 20(2) of the Acts Interpretation Act 1954, on which the appellant relies for protection against s. 109 of the standard module fixing it with an obligation to do maintenance rendered appropriate by circumstances existing as at 12th July 1997 is:
“(2) The repeal or amendment of an Act does not -
- (a)revive anything not in force or existing at the time the repeal or amendment takes effect; or
- (b)affect the previous operation of the Act or anything suffered or begun under the Act; or
- (c)affect a right privilege or liability acquired accrued or incurred under the Act; or
- (d)affect a penalty incurred in relation to an offence arising under the Act; or
- (e)affect an investigation proceeding or remedy in relation to a right privilege liability or penalty mentioned in paragraph (c) or (d).
- (3)The investigation proceeding or remedy may be started continued or completed and the right privilege or liability may be enforced and the penalty imposed as if the repeal or amendment had not happened.”
[14] Mr Crowe relied particularly on (2)(c). In line with views stated already, it may be accepted that the appellant body corporate was under no obligation as the law stood immediately before 12th July 1997 to deal with the leaking roof problem which was already manifest. Literally, s. 109(2) of the standard module which then came into effect imposes such an obligation. The body corporate submits, without explanation, that s. 109(2) is not retrospective in effect. Accepting that there is a disinclination to accord retrospective effect to legislation, there must be many situations in which legislation attaches new obligations in situations which already exist. Thus, provisions requiring the fencing of swimming pools may well apply to existing pools as well as new ones; provisions mandating that firearms be cared for or stored in particular ways may well apply to firearms in circulation when the change comes in as much as to those acquired thereafter. I have no difficulty whatever in regarding the legislature here as quite deliberately imposing on body corporates an obligation to maintain in good condition everything listed in s. 109(2). It is an uncalled for gloss to suggest that the obligation is to maintain in the condition which existed on the commencement of the new provision, as opposed to the “good condition” which the new provision expressly mentions.
[15] During the argument on the appeal, there was discussion of the absurdity of having to make inquiries (perhaps years and years in the future) as to the condition of parts of a building at the commencement of s. 109 before it could be ascertained whether or not the body corporate had an obligation to do work. I would be unwilling to ascribe to the legislature any intention to establish such a curious regime. On the other hand, it seems perfectly sensible that lot owners in a body corporate should have imposed on them, effectively, a common responsibility for the matters dealt with in s. 109.
[16] Should the body corporate be put to undue expense by the operation of s. 109, it may well have rights over against other persons and, indeed, the Acts Interpretation Act may preserve those. In my opinion, it has no effect of protecting the body corporate in the present situation. I think it is a misapplication of the language used in the Acts Interpretation Act to say that the absence of an obligation in the body corporate under the old Act to do the work which the adjudicator has now ordered it to do amounted to a “right” or “privilege” acquired or accrued under the old Act.
[17] During the hearing of the appeal, Mr Crowe sought to bring into evidence an affidavit indicating a reputable engineer's recommendations as to a solution to the problem in the roof area of the building. This was in response, I gather, to a similar affidavit which Mr Traves' clients had prepared (but did not place before the Court), contending for a much more expensive solution. Mr Traves objected to tender of the evidence. He submitted, and it seems right, that factual matters more appropriate for the adjudicator's resolution were involved here. I think that it so.
[18] The adjudicator came under some criticism for leaving some matters to be resolved by the parties. However, this may well be the practical course where co-operation is necessarily required. Speaking for the court, I would commend the adjudicator's order that “the body corporate is to engage a suitably qualified tradesperson or company to undertake and complete the waterproofing”. It is only to be expected that the body corporate, on the one hand, and Mr and Mrs Galtos, on the other, may have very different views as to the work that ought to be done, the standard of finishes and the like. It seems to me this is inherent in a situation where work has to be done at the expense of A, whereas B obtains the practical benefit, or is subjected to the outcome of the work. I think the adjudicator was perfectly right to decline to stipulate that work ought to be planned and done to the satisfaction of Mr and Mrs Galtos. Whoever pays the piper ought to be able to call the tune. In my opinion, the body corporate ought to have a reasonably wide discretion in determining how it carries out its obligation. It may well be objectionable that the lot owners as a body should have to pay beyond the minimum necessary to provide a building that does not leak. If Mr and Mrs Galtos want more, perhaps they will have to pay for it. I do not wish to anticipate difficulties. Rather, I would anticipate, as the adjudicator did, that the parties will act reasonably, in the knowledge that if differences remain, another adjudicator can be expected to decide what outcome would be fair and reasonable, or, to quote s. 233(1) of the new Act, “just and equitable”.
[19] The determination of this appeal has been delayed to permit the body corporate to secure an ordinary resolution that the appeal be brought, to overcome the difficulty his Honour Judge Quirk held confronted the body corporate appellant in Bodv Corporate for “Surfers Waters” CTS 20377 v Angland Plaint 428 of 1999 (Brisbane), 19.8.99, following his Honour Judge Hall's decision in The Bodv Corporate for “The Dorchester” v DA & DB Tavlor (Appeal No 177 of 1999, 9.4.99). I express no view as to the combined effect of s. 26(3) and s. 259(2) of the new Act. The parties agreed this appeal should be heard, in the expectation (since realised) that the resolution would be forthcoming to authorise it. My impression was that there would be no objection to an order in due course nunc pro tunc extending the time for appeal.
[20] The appeal should be dismissed, it seems, and with costs. The parties will have the opportunity to submit for other orders after consideration of these reasons.