Grut-Mackay v Cherwood Lodge CTS 20711
[2004] QDC 229
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- Grut-Mackay v Cherwood Lodge CTS 20711[2004] QDC 229
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Grut-Mackay v Cherwood Lodge CTS 20711[2004] QDC 229
Grut-Mackay v Cherwood Lodge CTS 20711[2004] QDC 229
DISTRICT COURT OF QUEENSLAND
CITATION: | Grut-Mackay v Cherwood Lodge CTS 20711 [2004] QDC 229 |
PARTIES: | SHARON GRUT-MACKAY Appellant v BODY CORPORATE FOR CHERWOOD LODGE COMMUNITY TITLE SCHEME NUMBER 20711 Respondent |
FILE NO/S: | BD3124/03 |
DIVISION: | |
PROCEEDING: | Appeal |
ORIGINATING COURT: | District Court, Brisbane |
DELIVERED ON: | 9 August 2004 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 21 July 2004 |
JUDGE: | McGill DCJ |
ORDER: | Appeal allowed, application remitted to adjudicator for further consideration. |
CATCHWORDS: | HOME AND COMMERCIAL UNITS – Body Corporate and Community Management Act – obligations of body corporate – whether liable for termite damage to unit. HOME AND COMMERCIAL UNITS – Body Corporate and Community Management Act – dispute resolution – investigation process – requirements for – whether error of law by adjudicator. Body Corporate and Community Management Act ss 276(1), 281(1) |
COUNSEL: | P M Robinson for the appellant D A Quayle for the respondent |
SOLICITORS: | Winchester Young and Maddern for the appellant H W Litigation for the respondent |
- [1]This is an appeal from a decision of an adjudicator under Part 11 of Chapter 6 of the Body Corporate and Community Management Act 1997. The appeal is only on a question of law: s 289(2). The appellant applied to the commissioner for an order that the body corporate rectify damage caused to the appellant’s property as a result of termite damage coming from a colony on the common property of the body corporate. The matter was referred to a departmental adjudicator for adjudication, and the adjudicator on 11 August 2003 dismissed the application.
- [2]The appellant alleged that the adjudicator in deciding the application applied the wrong test, and failed to have proper regard to the evidence which was before the adjudicator.
- [3]Under s 276(1) of the Act the adjudicator may make an order that is just and equitable to resolve a dispute about a claimed contravention of the Act or the Community Management Statement, or the exercise of rights or powers or the performance of duties under the Act or the Community Management Statement. The relevant obligation under the Community Management Statement was identified by the adjudicator as that arising under s 109(1) of the Standard Module Regulation under the Act, which was incorporated by default into the Community Management Statement. That subsection provides: “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.” Subsection (2) provides some additional obligations in circumstances where the scheme is a building format plan of subdivision, but the scheme in the present case is not, and therefore that subsection does not apply. Relevantly therefore the appellant must allege that the body corporate had failed to maintain the common property in good condition.
- [4]It is also relevant to refer to s 281 which provides in subsection (1) as follows: “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.” Subsection (2) makes it clear that there is a limitation on an order under paragraph (a) of a cost of $75,000, and a limitation under paragraph (b) of an amount of $10,000. Presumably this specific limitation would override the otherwise general statement about the orders adjudicators may make in s 276.
- [5]Although the argument before me proceeded at times as if it was an action in negligence, to invoke the jurisdiction of the adjudicator it was necessary to show therefore that there had been a contravention of the Community Management Statement by the respondent body corporate, and that the appellant had suffered damage to property because of that contravention.
- [6]The applicant set out to show this by saying that the body corporate had failed to maintain the common property in good condition, because it had failed to take effective steps to exterminate termites on the common property, and as a result of this she had suffered damage to common property, in that foraging termites had come onto her lot and into her unit (unit 43), and damaged timbers including a structural beam. There is no doubt that there was significant damage caused to the appellant’s unit by the action of termites. The crucial questions therefore were whether there had been a failure of the body corporate to maintain the common property in good condition in relation to termites, so that the body corporate had contravened s 109(1) of the module and hence the Community Management Statement, and whether the damage the appellant had suffered was suffered because of that contravention.
- [7]The appellant relied before the adjudicator on a report from a Mr Langley, who has a formidable list of courses, professional licences, memberships and professional experience in the pest control field. The adjudicator was critical of his report, on the basis that it was “littered with statements and conclusions, mostly as to responsibility and liability for termite control and damage, which I consider to be outside his field of expertise.” There are certainly some examples of this, which are not helpful, but it is relatively easy to filter out this material.
- [8]Mr Langley inspected the premises on 24 December 2002 and identified two visible entry points at the external front and rear perimeter concrete slab on the ground. He said in his report at para 2.4: “The external termite entry into unit 43 could be tracked to timber retaining wall and associated fence line at the front and dividing unit 43 with unit 42.” Termites, of the same species as were found to have done the damage inside the unit, were found within this retaining wall, which extended to common areas that are throughout the complex. He said that there were indications of alate flight emergence cuts to the surface of the sleepers indicating that the colony was at least three years old, and that “this subterranean termite has established a thriving colony within the sleeper retaining wall that forms common landscaping throughout the complex.” Other retaining walls throughout common areas showed numerous signs of past and present termite infestation of other species of termites. They had caused considerable damage to the timber retaining walls, which he concluded were untreated. He noted that a neighbouring block of units had also experienced a termite problem with a unit opposite the rear of unit 43 sustaining a major subterranean termite infestation. He therefore concluded with a recommendation: “3.1 There is conclusive evidence to support my professional opinion the subterranean termite infestation sustained at unit 43 is a direct result from an established termite colony of a major pest of timber in service located at timber retaining walls, considered to be common.”
- [9]There are some statements in the reasons of the adjudicator which suggest that he thought there was some misunderstanding on the part of Mr Langley as to what areas were part of the common property within the scheme. The adjudicator had available as one of the documents on his file the Group Title Plan for the scheme number 2158, which shows that the individual lots occupied a particular area within the scheme, much like an ordinary subdivision, with the balance of the land within the scheme being common property. The area of lot 6 (unit43) was 206 square metres, most of which was in a relatively long strip 5.25 metres wide. Mr Langley’s report refers to unit 43 being one of four units in a detached building forming part of the scheme, so presumably there was one building which overlapped four of these lots. The plan shows the total area of the common property for the scheme was 5,968 square metres, and there appear to be 49 individual lots. There is nothing in the material on the file that I can see which relates the boundaries between the lots to the footprint of the buildings on the site, or to any retaining walls.
- [10]Obviously there may well be retaining walls which are wholly within an individual lot, or on the boundary between one lot and an adjoining lot. On the other hand, there is plenty of room in the common property for there to be retaining walls in those areas. The obligation under s 109(1) is limited to maintaining in good condition those retaining walls which are situated within the common property. Insofar as that imposes any obligation to do anything in relation to termites, it is limited to doing things in respect of termites within the common property.
- [11]It does not necessarily follow however that any damage from termites off the common property can be ignored. If as a result of a failure to maintain the common property in good condition a termite infestation on the common property becomes established, to the extent that it spreads onto an individual lot and ultimately leads to termite penetration of a unit on that lot, then it could well be that there has been a contravention of the Community Management Statement, and as a result of that contravention the owner of that lot, here the appellant, has suffered damage to property. It was not submitted on behalf of the respondent that liability could not arise in this way, rather that the material before the adjudicator was properly identified as not establishing that liability did arise in that way.
- [12]The adjudicator was critical of a statement by Mr Langley in the following terms: “Where it can be demonstrated the subterranean termite infestation within units is associated directly with a subterranean termite colony source to the common areas, it is my understanding the body corporate should address rectification and damage repairs.” That statement is unhelpful, not only because it is inappropriate for an expert on termites to be making statements about the operation of the Act and the Community Management Statement and the obligations under it, but because it does not correspond with the obligations on the body corporate as I have outlined them.
- [13]The adjudicator however went on to say at p. 3: “The duty of the body corporate is to undertake adequate termite monitoring of common property, and if discovered, to ensure the eradication of termites from the common property.” It was not submitted that that statement revealed any error of law as to the obligations imposed by the Act and the Community Management Statement, and none is apparent to me. He went on: “However, in my opinion, it does not extend to the body corporate becoming responsible for rectification of any damage to a lot caused by termite damage.” Counsel for the appellant was critical of this statement, but if one puts the emphasis on the word “any”, so that in effect one reads the statement as if the word “necessarily” were included, it is unexceptionable. The adjudicator continued: “For a body corporate to become responsible for such damage, it would need to be shown conclusively that the body corporate had failed to take measures to control known termites on common property, and further, that the termites started on common property and then moved to a lot, and not vice versa.” He went on to note that it was the duty of the owner to ensure the prevention and/or eradication of termites within the owner’s lot.
- [14]Counsel for the appellant understandably took objection to the word “conclusively” in that passage, and also submitted that the obligation was not limited to controlling “known termites on common property”. The latter point is of course correct, but the adjudicator had already recognised in the same passage that the duty of the body corporate extended to undertaking adequate termite monitoring of common property, and I would not read this later passage in isolation. It also needs to be understood in the context that there was material before the adjudicator indicating that there had been for some time awareness on the part of the body corporate that there was a termite problem in these timber retaining walls.
- [15]The use of the term “conclusively” is not possible to justify however, and it is disconcerting. It appears to be directed to the issue of standard of proof, but there is nothing in the Act to suggest that such a high standard of proof is required before an order can be made. Although s 281(1) talks of the adjudicator being satisfied, there is no particular reason to read that as requiring a standard of conclusiveness. In a criminal trial, the term “satisfied” in relation to a jury would be taken as implying satisfaction beyond reasonable doubt, but this is not a criminal proceeding. It is not necessarily appropriate to talk in terms of an onus or standard of proof in the context of an administrative decision,[1] where the emphasis is on the adjudicator arriving at the correct or preferable decision, but for a matter of this nature one would assume that the starting point was that any satisfaction required was at the level of the balance of probabilities,[2] subject to the ordinary qualification that allegations in civil proceedings of serious misconduct by an individual would require careful consideration to see whether that had really been shown.[3]
- [16]If this part of the reasons indicates that the adjudicator’s approach was that it was necessary for an applicant to demonstrate conclusively that the factual basis had been shown for an order under s 281(1), in my opinion that was an error of law on the part of the adjudicator. I am conscious that reasons of this kind should not be read too strictly, or with too acute an eye for legal error,[4] particularly bearing in mind that there is no statutory requirement that a departmental adjudicator be a lawyer: s 236. One would not necessarily conclude that there was an error of law simply because of one inappropriate word in reasons; it is necessary to consider the reasons as a whole in order to assess whether they indicate that there really has been an error of law on the part of the adjudicator.
- [17]In those circumstances, it is necessary to consider the balance of the reasons. The adjudicator then drew attention to that part of the report which traced the termite infestation in unit 43 to a timber retaining wall between units 43 and unit 42, which is of course not part of the common property, and then the passage from paragraph 2.6, part of which I have quoted earlier. The adjudicator then continued: “Importantly, what the report fails to evidence is that the termites originated on common property and then moved to individual lots. However this is the basis of its claim to body corporate responsibility. From my experience in determining applications involving termites, they are not aware of boundaries, and in this regard, they are not discerning as to how they enter a lot. It is just as possible in my view that the termites started from a lot in the scheme, rather than common property, and then moved to common property. If this were to be established, it would not mean that the owner of the lot in question should be responsible/liable for all damage caused to common property or other lots, in consequence of the failure of the initial owner to control the termite infestation. In this regard, from the report, there is evidence of termite infestation in the lot immediately adjoining the applicant’s lot at the rear. Perhaps the source of infestation was from the adjoining property, through the applicant’s lot 6 and into common property. The point I am making is that the mere existence of termites on common property does not render the body corporate liable or responsible for all termite infestation and consequent damage to any lot in the parcel.”
- [18]The last point is correct, but not helpful; the issue is whether the evidence shows that this termite infestation did originate on common property. To say that the report fails to evidence that the termites originated on the common property and then moved to individual lots seems to me to involve a failure to understand what the report is saying. Part of the difficulty is that, although the report speaks about things happening on common property, it does not identify more specifically what place is being spoken of. It is not really a matter for Mr Langley to say what is and what is not common property; rather he ought to have identified the particular place from which in his opinion the termites originated; it was then a matter for the adjudicator to decide whether or not that place is in the common property. The matter is complicated by this inappropriate approach of Mr Langley, but, just as the adjudicator’s reasons should not be read too strictly with an eye to error, neither should Mr Langley’s report. The rules of evidence do not apply, and the adjudicator investigating an application must act with as little formality and technicality as is consistent with a fair and proper consideration of the application, although the adjudicator must observe natural justice: s 269(2).
- [19]Although Mr Langley’s report might have been better worded, it seems to me that, on a fair reading of it, it is susceptible of an interpretation that it is his opinion that the termite infestation originated in timber retaining walls which were on common property, and spread from them to the retaining wall between units 42 and 43, from which in turn it spread into unit 43, and that was the source of the damage to unit 43. It is true that there are matters raised in the report which invite further questions, such as the possible connection with the termite infestation in the adjoining property, particularly in circumstances where Mr Langley said that he identified an entry point at the rear perimeter of the concrete slab, as well as to the front: para 2.4. No further reference seems to have been made to this rear entry point. Although Mr Langley says that there is conclusive evidence to support his opinion that the termite infestation came from the timber retaining walls on common property, he did not detail what that evidence was.
- [20]On the other hand, just as a court is not bound to accept expert evidence merely because it is uncontradicted, neither is an adjudicator. The proposition that termites are no respecters of boundaries is obviously correct, and indeed something to the same effect was stated by Mr Langley, but it is not helpful in determining the issue the adjudicator had to decide. The proposition that if there were termites at point A and at point B they might have originated at point B and spread to point A, or they might have originated at point A and spread to point B, is also obvious enough, but not in itself really an answer to the opinion of an expert that in this case the termites did originate at point A and spread to point B. To say that it is just as possible that the termites originated from the individual lot and spread to the common property as vice versa really appears to be disregarding the opinion of Mr Langley to the contrary, without actually rejecting it, much less providing reasons for rejecting it. It is of course not a reason to reject an opinion which is within the expertise of the expert that the expert has also expressed opinions on matters not within his expertise, which other opinions ought to be rejected.
- [21]There is also an issue here about whether the adjudicator really has provided natural justice to the applicant. In circumstances where there is some lack of clarity, and perhaps some questions left unanswered, by the expert report, rather than simply rejecting the application on the basis that the evidence in support of it was inadequate, the adjudicator should have drawn these deficiencies to the attention of the applicant, so as to give the applicant the opportunity of putting further material before the adjudicator. It must be borne in mind that the procedure of adjudication established under the Act does not appear to be an adversarial one; rather it is an inquisitorial one. The obligation of the adjudicator is to investigate: s 269(1). That involves a proactive approach to the dispute and the factual basis for it, rather than merely a reactive response. If there was concern for example about whether Mr Langley had correctly identified the source of the infestation as lying on common property, he could have been asked to identify just where he said the relevant infestation was, so the adjudicator could determine for himself whether or not that was part of the common property.
- [22]In these circumstances there is nothing in the latter part of the reasons which dispels the concern generated by the use of the word “conclusively”, that the adjudicator was setting too high a standard of proof before it was appropriate to make an order under s 281. On the other hand, there are certainly deficiencies in the material, and in my opinion the problem in this case is rather that the adjudicator terminated the investigation prematurely. Perhaps the adjudicator should have interviewed Mr Langley, or at least sought further information from him, perhaps in conjunction with an inspection of the site. Perhaps the adjudicator could have obtained a report from an independent expert. I have not investigated the question of whether the body corporate was given a proper opportunity to respond to Mr Langley’s report. I assume it was. It certainly ought to have been.
- [23]It was submitted by the respondent that, insofar as the adjudicator was adopting the wrong test in view of the use of the term “conclusively”, it did not involve the question of causation, and that on the material before the adjudicator it would not have been open to him, applying the correct test, to have been persuaded that, assuming there was a contravention of the Community Management Statement by the body corporate, the applicant had suffered damage to property because of that contravention. In my opinion however it is by no means clear that the high standard implicit in the use of the word “conclusively” did not cover both the clause commencing with the word “that” immediately following it, and the clause commencing with the word “that” which then followed the conjunction “and further”. In any case, the adjudicator does not seem to have had sufficient regard to the material from Mr Langley. That is not to say that the adjudicator was required to accept that material. But I think it was an error for the adjudicator to treat that report as not providing any evidence that the termites originated on common property and then moved to the applicant’s lot. I think on a fair reading of the report it provides some evidence of that. That is not to say that there were not difficulties with that material, and that it was not open to the adjudicator to reject that opinion, although in my opinion the matter should have been investigated further before that uncontradicted expert opinion was rejected.
- [24]It follows that there has been an error of law in the approach of the adjudicator to the resolution of this application. It also follows that it is not possible for me to say on the material presently available what the outcome of the application ought to be. In those circumstances the appropriate course is for me, through the commissioner, to refer the order back to the adjudicator to pursue further his investigation of the application, and in deciding the application to approach the issues he had to decide in accordance with the law as expounded in these reasons: s294(1)(c).