Sail Isle v Body Corporate for Surfers Aquarius
[2006] QDC 109
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- Unreported Judgment
- Sail Isle v Body Corporate for Surfers Aquarius[2006] QDC 109
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Sail Isle v Body Corporate for Surfers Aquarius[2006] QDC 109
Sail Isle v Body Corporate for Surfers Aquarius[2006] QDC 109
DISTRICT COURT OF QUEENSLAND
CITATION: | Sail Isle v Body Corporate for Surfers Aquarius [2006] QDC 109 |
PARTIES: | SAIL ISLE PTY LTD ACN 010 954 748 Plaintiff and BODY CORPORATE FOR SURFERS AQUARIUS COMMUNITY TITLES SCHEME 11295 Defendant |
FILE NO: | SD54/06 |
PROCEEDING: | Defendant’s application for declaration claim not properly started, for want of jurisdiction |
ORIGINATING COURT: | District Court Southport |
DELIVERED ON: | 19 May 2006 |
DELIVERED AT: | Southport |
HEARING DATE: | 15 May 2006 |
JUDGE: | Robin QC DCJ |
ORDER: | The defendant should have the relief sought in its application, which includes costs. |
CATCHWORDS: | Body Corporate and Community Management Act 1997 s 229, s 276, s 281 – Uniform Civil Procedure Rules r 7 r 16 r 144 Adjudicator held to have exclusive jurisdiction in dispute between a lot owner and the body corporate – the lot owner had done work which was the body corporate’s responsibility and sought reimbursement – defendant Body Corporate granted relief under r 16 although its application under r 144(3) was filed late Cases cited: James v Body Corporate Aarons Community Title Scheme 11476 – BC 200207018 James v Body Corporate for Aarons Community Title Scheme 11476 [2004] 1 Qd R 386 |
COUNSEL: | Mr Barlow – plaintiff Ms Moody – defendant |
SOLICITORS: | Home Wilkinson Lowry – plaintiff Herd Law – defendant |
- [1]This issue is whether an adjudicator under the Body Corporate and Community Management Act 1997 has exclusive jurisdiction in respect of the subject matter of the plaintiff’s claim which seeks a declaration of the defendant Body Corporate’s liability for “structural repairs pursuant to the order dated 11 November 2005” under chapter 9 of the Act, $47,955.87, interest and costs. Mr Barlow informed the Court that the declaration is no longer sought.
- [2]On 22 March 2006 the Body Corporate filed a conditional notice of intention to defend under rule 144(1) of the Uniform Civil Procedure Rules, asserting that there was a “dispute” within s 227 of the Act, which “may be resolved by a dispute resolution process.” The words quoted come from s 229 of the Act:
“229Exclusivity of dispute resolution provisions
- (1)Subsection (2) applies to a dispute if it may be resolved under this chapter by a dispute resolution process.
- (2)The only remedy for the dispute is—
(a)the resolution of the dispute by a dispute resolution process; or
(b)an order of the District Court on appeal from an adjudicator on a question of law.
- (3)However, subsection (2) does not apply to a dispute if—
(a)an application is made to the commissioner; and
(b)the commissioner dismisses the application under part 5.
- (4)Also, subsection (2) does not apply to a dispute about the adjustment of a lot entitlement schedule.”
- [3]The defendant was a day late in filing the application required under rule 144(3) if it was to avoid its notice being treated as an unconditional one under sub-rule (4). Indeed, by way of acknowledging sub-rule (5), a defence was filed on 10 May 2006. Ms Moody, for the defendant, sought an extension of time under rule 7. While in an appropriate case, retrospective relief of that kind may well be available, no particular circumstances of sympathy (apart from one’s natural reluctance to penalise such a minimal delay) appear. In my opinion, the defendant’s ability to apply as it has done under rule 16(a) and (e) is not lost because of the “late” filing of the application. It seems unnecessary to have recourse to rule 7.
- [4]The underlying differences between the parties relate to the plaintiff’s ground floor unit in the relevant building, specifically to where the responsibility lies for the upkeep of a roof above an external area of the plaintiff’s lot which forms (although the Court was told it is not used as) an extension of the balcony of the unit above.
- [5]An adjudicator brought in by the plaintiff’s Dispute Resolution Application dated 15 March 2005, under the Act, gave notice dated 11 November 2005 of the following order:
“I hereby order that the body corporate shall, at its expense, and in a reasonable time, undertake and complete all necessary structural and other repairs to the balcony slab of unit 2A so as to protect or maintain the structural integrity of the balcony slab and to prevent water ingress to lot 1, and thereafter to reinstate improvements necessary to be removed to undertake the necessary repairs (the work) PROVIDED THAT the owner of lot 1, Sail Isle Pty Ltd as Trustee, shall allow access to the body corporate, its contractors or tradespersons during reasonable times so that the work might be undertaken.
I further order that the application by the owner of lot 1, Sail Isle Pty Ltd as Trustee for an order that the body corporate pay to it the sum of $9537.00 for reimbursement for repairs carried out to the unit by the owner and costs of carrying out temporary measures to avoid further damage to the unit, is dismissed.
I further order that within one (1) calendar month of the date of this order, the body corporate shall pay to the owner of lot 1, Sail Isle Pty Ltd as Trustee the sum of $1553.20 for reimbursement of the reasonable value of repairs carried out to the property by the owner in consequence of the damage caused by water ingress.”
- [6]Some months before the order was made, and presumably without any advice to the adjudicator, the work had already been done by the plaintiff, which, accordingly, seeks reimbursement. Mr Barlow, on its behalf, describes the claim as one for restitution, based on unjust enrichment. The idea is that the Body Corporate has had its obligation discharged by the plaintiff. It is not suggested that the Body Corporate in any way requested that this occur. For present purposes, there is no need to examine contentions the Body Corporate may wish to make, as foreshadowed by Ms Moody, about the extent, quality or cost of work done, whether all was to “common property” as opposed to the higher lot, and other possible complications to do with insurance, the processes to be gone through before the Body Corporate could lawfully have the work done, and the like.
- [7]There is authority in the Supreme Court of Queensland that its jurisdiction is excluded by the predecessor of s 229: James v Body Corporate Aarons Community Title Scheme 11476 – BC 200207018, affirmed [2004] 1 Qd R 386. Unfortunately, although there may be no relevant changes in the substance (as opposed to the precise wording) of the legislation, there has been wholesale renumbering of sections. Section 229 was formerly s 184. Section 223 has become s 276 and s 227 has become s 281. Enforcement of an adjudicator’s order occurs through registration in the Magistrates Court: s 286 (formerly s 232).
- [8]At first instance in James, Holmes J said:
“[17]Chapter 6, as already outlined, creates the positions of commissioner, adjudicators and mediators, and provides for case management and for management and adjudication in such a way as to constitute, in my view, a comprehensive code for dispute resolution. The existence of such a code for dealing with the subject matter is at least an indication of exclusivity. As Lunn AJ observed in Hemruth Advertising v Karafotias:
‘The efficient operation of a specialist tribunal with powers to conciliate and to resolve disputes in an expeditious and inexpensive way would be partly defeated if parties to such a dispute could resort to other courts as they saw fit.’
The combined functions of commissioner, mediator and arbitrator under chapter 6 constitute a specialised mechanism peculiarly suited to speedy, cheap and relatively informal resolution of community titles scheme disputes.
[18]The conclusion that exclusivity is intended in respect of the disputes to which s 184(2) applies is reinforced by the existence of provisions which have the effect of allowing recourse to other remedies (including court orders) in specified situations: subs 184(3), which removes the dispute from the purview of s 184(2) if the commissioner dismisses the application, and s 201(2), which entitles the commissioner to dismiss an application if he or she is satisfied that it should be dealt with in a court of competent jurisdiction.
[19]S 184(2) has, I conclude, the effect of confining those remedies which may be given in disputes to which it applies to those available from an adjudicator under the chapter. Other orders or declarations - for example as to the jurisdiction of the commissioner, or of an adjudicator - are unaffected; but any order such as that sought in the present case, designed to resolve a dispute which can equally be resolved by an adjudicator's order under s 223, is unavailable. It follows that the jurisdiction of the court to provide any remedy in respect of this dispute is excluded by s 184.”
- [9]Upon appeal, Davies JA, Jerrard JA and Mackenzie J concurring, said:
“[11]This was plainly a dispute in respect of which an adjudicator may make an order under ch. 6 within the meaning of s. 184. It was, at the very least, both a dispute between the body corporate and the owner of a lot included in the scheme and a dispute between the body corporate and a letting agent for the scheme. In the end, the only questions in issue in this appeal are whether the order which an adjudicator may make to resolve this dispute is one pursuant to s. 223 or one pursuant to s. 227; or whether the adjudicator may make such an order under either section.
[12]Section 184 does not speak in terms, specifically, of jurisdiction to hear and decide but in terms of providing a remedy. However I think its plain intention is that the adjudicator is to have exclusive jurisdiction to make orders of the kind which the Act prescribes, relevantly in s. 223 and s. 227, in disputes of the kind to which s. 182 refers, subject to any statutory exception or limitation. Mr Savage S.C., for the appellants did not argue to the contrary.
[13]It was submitted by Mr Savage S.C. that s. 227, at least indirectly, provided such a limitation which effectively excluded the adjudicator's jurisdiction in this case. The submission was that this case came within s. 227(1) but, because the cost of carrying out repairs to the common property was substantially more than $75,000, the adjudicator had no jurisdiction to make such order. It was submitted that even if this case also came within s. 223, it was subject to the limitation in s. 227(2). Accordingly, it was submitted, the court had jurisdiction in the matter.
[14]The critical question, on the appellants’ argument, is whether the relief which the appellants seek, which is, effectively as Mr Savage S.C. concedes, an order that the respondent repair the roof membrane, is an order of a kind which, subject to the exception contained in s. 227(2), an adjudicator could make under s. 227. That question, in turn, depends on whether “damage to property” in s. 227(1) includes, where the applicant is a lot owner, damage to the roof membrane.
[15]Section 227 was not necessary to enable the adjudicator to order a body corporate to have repairs to the roof membrane carried out. Section 87(1) of the Act and s. 108(1) and s. 108(2)(a)(iii) of the Regulation required a body corporate to maintain it in good condition; and an order requiring the body corporate to have repairs carried out, in compliance with that obligation, was an order which the adjudicator was empowered to make, under s. 223(3)(c), in any dispute coming within s. 184. So much was accepted by Mr Savage S.C. However he submitted that an order requiring the body corporate to repair the roof membrane would also be an order made under s. 227 and consequently that it would be subject to the limitation contained in s. 227(2).
[16]There can be no doubt that s. 227 confers jurisdiction on an adjudicator to make an order to carry out stated repairs or to pay compensation which would not be an order of a kind which could be made under s. 223(3)(c). An example of such an order is given in the example contained in s. 227(1) which is in the following terms:
‘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, on the application of the lot's owner, order the body corporate to have the damage repaired or to pay appropriate compensation.’
The damage referred to in the example is plainly the damage to the wallpaper and carpets in the lot. Mr SavageS.C. did not contend that an order of the kind envisaged in the example could be made under s. 223(3)(c).
[17]If Mr Savage S.C.’s submission is correct, s. 227 would apply, not only in the case of damage to the separate property of a lot owner or of the occupier of a lot, but to damage to the common property falling within the power to order repair already conferred by s. 223(3)(c). It would also, on that submission, both expand that power (by the power to order compensation for damage in s. 227(1)(b)) and limit it (by s. 227(2)). And it would do so without any reference to s. 223(3)(c). In my opinion that would be a surprising result.
[18]It would be surprising for two reasons. The first is that when, in an Act, a section confers power to do an act, which at the same time in this case also confers jurisdiction, it would be surprising to find, in a later section, the conferral of the same power, albeit together with the conferral of another power. And the second is that it would be even more surprising to find, in the later section, that the power conferred by the earlier section is not only conferred once again but also expanded in one way and limited in another. If s. 227 can be given a sensible construction which does not have those effects I think it should be given that construction.
[19]In my opinion s. 227 can be given such sensible construction, having as its purpose the conferral on an adjudicator of a limited power, additional to those already conferred, to provide remedies, including one of compensation, to a lot owner or occupier whose property has been damaged by a contravention of the Act or the community management statement. So, in a case like the present where the breach is alleged to consist in the failure of the body corporate to maintain the roof membrane in good condition, s. 227 confers a power in the adjudicator, additional to the power already conferred to order repair of the membrane, to require the body corporate to make repairs to or to pay compensation in respect of damage to property of the owner or occupier in consequence of that failure. But in my opinion, reading s. 223(3)(c) and s. 227 together requires the conclusion that, just as damage to the property of a lot owner or occupier could not be the subject of an order made under s. 223(3)(c), damage to the common property could not be the subject of an order for repair or compensation under s. 227.
[20]It was submitted by Mr Savage S.C. that such a construction would have the curious result of conferring on an adjudicator under s. 223(3)(c) a power to make an order, unlike other orders of the kind which can be made under s. 223(3), which may involve expenditure of substantial money, as it seems in this case; whereas orders which can be made under s. 227 are limited in amount to $75,000 for repairs and $10,000 for compensation. I do not find that curious. Orders of the kind which the adjudicator is given power to make by s. 223(3) are all orders with respect to matters which might be expected to arise in the administration of the affairs of the body corporate including the obligation of the body corporate to maintain the common property in good condition. Orders which the adjudicator is given power to make under s. 227 are orders of a quite different kind. They are orders to remedy a civil wrong causing damage to property where that wrong arises out of a contravention of the Act or the community management statement. In this respect they trespass into the field ordinarily occupied by the common law. It is therefore unsurprising, it seems to me, that the power which is conferred on an adjudicator to make orders of that kind should be limited in amount.”
- [10]Mr Barlow is correct that James concerned repairs, not a claim like the present, whether characterised as compensation, reimbursement, restitution, etc. His argument is that the “dispute” which, for purposes of the Act, he conceded exists, is not capable of being resolved within s 276:
“(1)An adjudicator to whom the application is referred 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 this Act or the community management statement; or
- (b)the exercise of rights or powers, or the performance of duties, under this 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.
(2)An order may require a person to act, or prohibit a person from acting, in a way stated in the order.
(3)Without limiting subsections (1) and (2), the adjudicator may make an order mentioned in schedule 5.
(4)An order appointing an administrator—
- (a)may be the only order the adjudicator makes for an application; or
- (b)may be made to assist the enforcement of another order made for the application.
(5)If the adjudicator makes an order in a form agreed to by the parties to the application following mediation or conciliation, the order—
- (a)may include only matters that may be dealt with under this Act; and
- (b)must not include matters that are inconsistent with this Act or another Act.”
- [11]It was conceded that subsection (2) extends to an order to pay money. It would appear correct that (subject to whatever subsection (3) may add), there must be something under (1)(a),(b) or (c) – here (a) or (b). Mr Barlow submits there is not. He points to s 281:
“(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, on application of the lot’s owner, 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.”
which deals with damage to an applicant’s property, offering in terms the prospect of an order for payment on account of repairs “carried out,” and contends that the absence of equivalent provision in respect of common property means an adjudicator has no jurisdiction or power to make an equivalent order where the repairs are to common property. The underlying notion is the correct one that an adjudicator may do no more than the Act allows.
- [12]In my opinion, s 276 does cover the plaintiff’s claim, with the consequence that this Court lacks jurisdiction to entertain it. The extension of s 276 might be noted, including from Schedule 5:
“4.An order requiring the body corporate … to have repairs carried out.”
s 152(1):
“(1) The body corporate for a community titles scheme must –
- (a)administer, manage and control the common property and body corporate assets reasonably and for the benefit of lot owners; and
- (b)comply with the obligations with regard to common property and body corporate assets imposed under the regulation module applying to the scheme.”
and s 108 of the Body Corporate and Community Management (Accommodation Module) Regulation 1997:
“(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; and
- (b)maintain the following elements of a scheme land that are not common property in a structurally sound condition –
- (i)foundation structures;
- (ii)roofing structures providing protection;
- (iii)essential supporting framework, including load-bearing walls.
…”
- [13]Acknowledging the strange chronology of events here, whereby the plaintiff had taken upon itself to do “repairs” before the adjudicator made his order, I think we are dealing with a “claimed contravention” by the Body Corporate, namely failure to look after the relevant roof or “membrane” (however it is to be described). Section 288, imposing penalties for contravention of an order of an adjudicator, has the effect of creating a duty and requirement that such an order be complied with. Cf Kelly v Alford [1988] 1 Qd R 404, 408. It would be an odd (and inconvenient) situation that an adjudicator might make orders that repairs be carried out, which identify how the cost should be borne, but (even where the adjudicator has previously ordered the particular repairs) may not make an order about how the costs should ultimately be borne. It occurs to me that there may be emergency situations (it was not suggested the present is one) in which, for practical reasons, it is imperative that an owner (like the plaintiff) have urgent repair work done, leaving for later determination (on the “just and equitable” basis) the question of who should bear the cost. I do not think it should matter whether the contractor carrying out the work has been paid or not.
- [14]The Court of Appeal’s approach in James acknowledges that an adjudicator may be brought in under more than one section to resolve a particular dispute, with some financial limits applicable in one scenario but not in another. (Here, Mr Barlow made it clear that the limits in s 281 create no problem.) In the circumstances, s 281 does not appeal to me as a reason for reading down s 276.
- [15]The defendant should have the relief sought in its application, which includes costs.
- [16]If my decision is wrong, nevertheless, as a determination binding on the parties, it must, one would think, be accepted by the adjudicator, if one is asked to resolve the dispute. Subject to special considerations such as failure to meet a time limit, and to reservations of the kind alluded to in para [6] above, the defendant will hardly be in a position to dispute the adjudicator’s jurisdiction, having asserted it here. One would not expect the adjudicator to decline jurisdiction. It is unfortunate that the Act contains no clear power for an adjudicator to deal with issues that arise from the working out of an order made by him or her.