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Klinger v Body Corporate for Costa D'Ora Apartments[2007] QDC 300

Klinger v Body Corporate for Costa D'Ora Apartments[2007] QDC 300

DISTRICT COURT OF QUEENSLAND

CITATION:

Klinger & Anor v Body Corporate for Costa D’Ora Apartments [2007] QDC 300

PARTIES:

TREVOR KLINGER AND MELISSA KLINGER

Appellant

v

BODY CORPORATE FOR COSTA D’ORA APARTMENTS

Respondent

FILE NO/S:

No 47 of 2007

DIVISION:

Civil

PROCEEDING:

Appeal

DELIVERED ON:

14 September 2007

DELIVERED AT:

Brisbane

HEARING DATE:

27 July 2007

JUDGES:

Searles DCJ

ORDER:

  1. 1.Appeal allowed.
  2. 2.Decision of Adjudicator Rosemann varied to:
  1. (a)
    Declare under s 276 of the BCCM Act that:
  1. (i)
    the Respondent was liable under regulation 109(1) of the Standard Module to maintain the balcony fascias of the Appellants’ lot in a good condition, including a structurally sound condition;
  2. (ii)
    the Respondent was liable under regulation 109(2)(a) of the Standard Module to maintain, in a good condition, the waterproofing membranes on each of the balconies of the Appellants’ lot;
  3. (iii)
    the Respondent was liable under regulation 109(2)(b) of the Standard to maintain, in a structurally sound condition, each of the balconies of the Appellants’ lot;
  4. (iv)
    in breach of its obligation under s 109(1) and (2) of the Standard Module, the Respondent:
  1. A.
    failed to maintain in a good condition, including in a structurally sound condition, the balcony fascias on the Appellants lot; and
  2. B.
    failed to maintain in a good condition the waterproofing membranes on the Appellants’ lot; and
  3. C.
    failed to maintain in a structurally sound condition the balconies on the Appellants’ lot.
  1. (v)
    the Respondent is now liable to reimburse the Appellants for the cost of removing and replacing all tiles and screed on the Appellants’ balconies, such costs being reasonably incurred by the Appellants as a result of the need to repair and replace the balcony waterproofing membranes, and to effect structural repairs to the balconies.
  1. (b)
    order that, pursuant to s 276 of the BCCM Act, the Respondent reimburse the Appellants for repairs which they carried out to their balcony fascias (being areas of common property) in the amount of $7,598;
  2. (c)
    order that, pursuant to s 276 of the BCCM Act, the Respondent reimburse the Appellants the sum of $414 for structural repairs to the balconies;
  3. (d)
    order that, pursuant to s 276 of the BCCM Act, the Respondent reimburse the Appellants the sum of $5,539 for costs incurred in repairing and replacing waterproofing membranes on the balconies;
  4. (e)
    order that, pursuant to s 276 of the BCCM Act, the Respondent reimburse the Appellants the sum of $21,435 for costs incurred in removing and replacing all tiles and screed on the Appellants’ balconies.
  1. 3.That the Respondent pay the Appellants’ costs of and incidental to the appeal as accessed on the standard basis.
  2. 4.Order that the Appellants be exempt from any contribution to the above amounts ordered to be paid by the Body Corporate, including the costs of this appeal.

CATCHWORDS:

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997 – ROLE OF ADJUDICATOR – FAILURE TO GIVE PROPER REASONS – INSUFFICIENT EVIDENCE – IRRELEVANT CONSIDERATIONS – DENIAL OF NATURE JUSTICE – PROCEDURAL FAIRNESS

COUNSEL:

Ms S Moody for the Appellant

Mr B G Cronin for the Respondent

SOLICITORS:

Herdlaw Solicitors for Appellant

Adamson Bernays Kyle and Jones for the Respondent

  1. [1]
    This is an appeal against a decision dated 27 November 2006 of an Adjudicator from the Office of the Commissioner for Body Corporate Community Management who was appointed pursuant to Chapter 6 of the Body Corporate and Community Management Act 1996 (Act).  The Adjudicator’s decision was consequent upon a dispute resolution application lodged by the Appellants under s 239 of the above Act dated 3 January 2006 seeking a declaration that certain remedial work carried out by the Appellants on Unit 8, Costa D’ora, Golden Four Drive, Palm Beach, Gold Coast, Queensland was the responsibility of the Body Corporate.  The Adjudicator was appointed pursuant to s 248 of the Act.

HISTORY OF MATTER

  1. [2]
    The Appellants purchased Unit 8 in the complex in 2002. The Costa D’ora Apartments community titles scheme consists of nine lots and a common property. The scheme was registered as Building Units Plan 106081 in July 1997 and the community management statement indicates that the Body Corporate Community Management (Standard Module) Regulation 1997 (Standard Module) applies to the scheme.
  1. [3]
    The complex is a five storey apartment building and the Appellants’ occupies part of the top two storeys of the building and has one upper balcony and two lower balconies. On the upper floor of the unit is the main bedroom and a north-east facing balcony. The lower floor contains the main living areas and two more balconies the larger of which faces north-east and the smaller south-east.
  1. [4]
    The top floor balcony forms part of the roof of the downstairs living area and balcony. That top floor balcony has no roof and is open to the elements.
  1. [5]
    Underneath the tiled surface of each balcony there is a waterproofing membrane and beneath that, a concrete slab contiguous with the roof/floor of the main structure of the building. At some time in the past the concrete fascias of all the balconies in the complex had been tiled with terracotta tiles. In May 2000 the Body Corporate became aware that the tiles on the Appellants’ Unit 8 balcony fascias were falling off exposing the bare concrete fascia beneath. That is evidenced by the minutes of a meeting of the committee of the complex held on 6 May 2000. Those minutes record that some of the terracotta tiles to the vertical edge of the Lot 8 balcony had fallen off.  Pursuant to the recommendation of the committee of the Body Corporate (Committee), a report was obtained from JHA Australia dated 10 August 2000.  The second of the five problems identified in that report was described as “tiles falling off the balcony fascias”.  The author of the report Mr Geoffrey Hills, a registered engineer, identified the cause of the detaching tiles as concrete shrinkage and tile growth and recommended that all balconies have expansion joints installed on the fascia tiles spaced at approximately every five metres.  The report is a very detailed one but for present purposes it is sufficient to record that the report identified the problem of the detached tiles and proffered a solution.  The quoted cost of repairing the problem was $4,900.  The evidence was silent on whether or not the Body Corporate acted upon the JHA report in having the fascia tiles repaired.
  1. [6]
    Some time prior to 18 November 2004, when the Appellants’ contractor Jonco Construction Services Pty Ltd (Jonco) commenced the subject rectification work on the Appellants’ unit, a series of photographs were taken showing deep cracks and fissures in the Appellants’ balcony fascias. The Appellants say that those photographs show the state of the fascias as at late 2003 and early 2004 but the index to the Appeal Book does not date the photographs but says they were taken before and during works by Jonco which works commenced on 18 November 2004. As will appear in para 11, the first time the photographs were given to the Body Corporate can be sourced to early July 2004.
  1. [7]
    The Appellants say that they notified the Body Corporate manager, Ms Wendy Steadman, verbally in late 2003 and early 2004 and point to a letter from the Appellant, Ms Klinger, on their behalf to Ms Steadman, dated 5 March 2004[1], where there is reference to the Appellants having verbally raised the issues in that letter in the past.  Of the four issues in that letter the first one was “rapid deterioration of concrete facia (sic) edge”.  So, certainly by 5 March 2004, the issue of the deterioration of the fascias had been notified to the Body Corporate.
  1. [8]
    In that letter the Appellants, in reference to the fascia problem, explained that the area of fascia deterioration ran the full perimeter of Unit 8’s top balcony and that the cracks extended the entire distance around the concrete fascia. They said that since first becoming aware of the deterioration and making their verbal comments to Ms Steadman the situation had rapidly deteriorated over the previous past months, and that the situation continued to worsen and that they now had concerns that a piece of the cracking concrete may dislodge and fall onto their lower balcony or to a lower level balcony resulting in personal injury.  They expressed their understanding that any external building structural damage of the nature in question was to be handled by the Body Corporate and should be covered under the building insurance or building warranty.  They raised the issue of liability in the original builder of the complex and expressed their concern at the possible cost of repair.  Finally, they relayed an opinion given to them by a professional tradesman associate of theirs who had expressed the view that rust marks shown in the concrete of the fascias could be the result of steel reinforcement rusting inside the concrete, causing the concrete to explode resulting in further structural damage.
  1. [9]
    In that same letter the Appellants also identified another issue, namely water leakage, which was number three of the four issues raised with Ms Steadman. They said that a further water leak had been noticed in the left-hand corner of the lower balcony of Unit 8, which appeared to be linked with the deterioration of the fascia which sits above that area.
  1. [10]
    It was common ground that on 5 March 2004 a cyclone hit Palm Beach and the Appellants’ unit suffered internal water damage from water leaking in through their balconies.  The Body Corporate accepted responsibility and made an insurance claim, a copy of which was in evidence.  That cyclone caused damage to the seal of the Appellants’ balcony sliding doors and the Appellants obtained a quote from Jonco to repair the doors which was carried out with the approval of the Body Corporate.
  1. [11]
    By letter of 6 July 2004 to the Body Corporate chairman Mr Barry Mathews, the Appellants told Mr Mathews that, upon Jonco commencing rectification work on the balcony sliding doors, the latter discovered that the water entry, building structural deterioration and cracked tiles were all interrelated as one major problem which Jonco considered far more serious then they had projected from their initial inspection. They said two copies of a report from Jonco dated 28 May 2004 (first Jonco report[2]) had been given to Ms Steadman on 1 June 2004.  In Jonco’s opinion, according to the Appellants, rectification work was imperative to prevent further deterioration of the concrete fascia edge, cracking and movement of tiles on both balconies and the water leakage.  The Appellants also referred to photographs together with the Jonco report which had been given to Ms Steadman and passed onto Mr Mathews.  I infer that the photographs referred to are those earlier mentioned, so, as I have said, that dates them or at least their first production to the Body Corporate at around July 2004.  The $260 fee charged by Jonco for the building inspection was reimbursed to the Appellants by the Body Corporate.
  1. [12]
    In that same letter of 6 July 2004 the Appellants placed on record that their first report regarding water leakage dated back to late February 2003 and at that time the concrete fascia was starting to deteriorate. They expressed concern that nothing significant had been done by the Body Corporate to address these problems despite the efforts of the Appellants in bringing it to their attention.
  1. [13]
    The first Jonco report of 28 May 2004 referred to the photographs accompanying the report and, by reference to them where relevant, raised the following matters: -
  1. (1)
    No expansion had been left around the columns to upstairs and downstairs balconies and, due to movement, the tiles were cracking and breaking;
  2. (2)
    That as a result of the titles cracking and breaking moisture was getting in under the tiles and finding its way behind the external rendered finish causing the render to crack and break away causing a potential danger to the balcony area below and to Unit 5 which was below the balcony of Unit 8;
  3. (3)
    There were signs that moisture had penetrated the membrane and slab evidenced by rust marks on the lounge balcony ceiling and the bubbling, moulding paint on the lounge room ceiling.

Jonco suggested as a solution to the problem: -

  1. (4)
    Remove the tiles on the upper balcony, clean off all damaged render from them and inject any cracks with epoxy;
  2. (5)
    Repair/replace the membrane to the deck and balcony area;
  3. (6)
    Relay the tiles with a fall away from the unit;
  4. (7)
    Re-render the external face of the balcony and paint;
  5. (8)
    Leave a minimum ten mm expansion gap around columns and posts and fill with grey sika flex pro Z50-A1 grey (concrete colour).

The identification by Jonco of the lack of expansion capacity (see subparagraph (1) above) was the same issue identified earlier by JAJ Australia in its 10 August 2000 report to the Body Corporate.  Jonco also recommended that the Queensland Building Services Authority (QBSA) be informed of the repairing problems to facilitate having the problems fixed by the original builder.

  1. [14]
    On 26 July 2004 the Appellants lodge a complaint with QBSA (reference number
    3-3564-04) but by letter dated 13 October 2004 from QBSA to the Appellants, the Appellants were advised that the QBSA was without jurisdiction given the effluxion of time since the original building work was completed.  The Appellants took the matter no further with the QBSA.
  1. [15]
    On 25 August 2004 the Body Corporate obtained the first of three quotations to paint the exterior of the buildings. The first was dated 25 August 2004 from Opat Consolidated Services Pty Ltd quoting $29,946 for maintenance painting. Importantly that quote contained the following passage: -

“Notes:

  • Balcony tiles need to be sealed as major cracking to balcony edges is occurring and will get worse due to moisture penetrating into substrate.
  • This is only a Budget Price as no access to top floor balconies was available.”
  1. [16]
    On 28 September 2004 Building Maintenance and Painting provided the second quote to the Body Corporate for exterior re-painting at a cost of $34,980. The final quote was dated 16 October 2004 from ANP Painting Contractors whose price was $17,380.
  1. [17]
    On 19 October 2004 the Appellants wrote to the Body Corporate manager, Steadman, enclosing a copy of the abovementioned letter from QBSA of 13 October 2004 and advising that they would be contacting Jonco to arrange for a detailed quotation for the rectification work. That quote was provided by Jonco and dated 5 November 2004. That quote gave a figure of $6,544 for the repair to the lower level balcony fascia, being repair costs of $5,728 plus $816 to replace tiles required to be replaced as a result of the work on the fascia.
  1. [18]
    The 5 November 2004 Jonco quote was sent by the Appellants to the Body Corporate manager Steadman under cover of a letter of 8 November 2004. The Appellants set out details of legal advice they had been given in relation to a possible appeal from the QBSA decision communicated in its letter to the Appellants of 13 October 2004 which appeal they said would need to be lodged by the Body Corporate rather than themselves.  They said that, having considered the advice of their solicitor, they had decided to carry out the rectification work themselves rather than seek to have the Body Corporate lodge an appeal against the QBSA decision.  They went on to say that the Jonco assessment of the problems confirmed that the concrete fascia on the top unit slab was a safety issue such that if the condition was allowed to go any further pieces would start to break away from the main edge and fall down.  It was against this background that the Appellants made the decision to undertake the rectification work themselves.  They asked Ms Steadman in that letter to advise them at her earliest convenience if any of the items in the Jonco quote of 5 November 2004 were the responsibility of the Body Corporate.  They then gave formal notice that the repair work would commence on Monday 15 November at 7.00 am and continue between the hours of 7.00 am and 5.00 pm Monday to Friday until completion, with the anticipated completion date being Friday, 3 December 2004, subject to weather conditions.
  1. [19]
    By a notice dated 8 November 2004 to all other unit holders, the Appellants gave them the same information about the proposed construction as had been given to the Body Corporate.
  1. [20]
    Upon commencing the rectification works on 15 November 2004, Jonco found that further work was required to address the problems of Unit 8. In a letter to the Appellants of 25 November 2004[3] (second Jonco report), Jonco provided a further report identifying the following issues: -
  1. (1)
    Upon removing the defective render to the Level 2 balcony edge it was found that the perimeter row of header terracotta tiles coupled with the base bed had delaminated from the balcony slab surface;
  2. (2)
    The black waterproof membrane under the bed had flaked considerably and, was extremely thin and patchy in nature and ineffective for its intended purpose overall as a waterproof barrier over the habitable area;
  3. (3)
    The sand/cement bed under the tiles appeared quite porous due to inconsistent mixing of the sand and cement;
  4. (4)
    The balcony terracotta tiles/bed system was subject to “clay tile growth” expansion causing blown render edging and cracking of tiles and the bed at vertical elements;
  5. (5)
    Most of the tile/bed system was extremely drummy;
  6. (6)
    The high porous, high movement terracotta tile, bed, membrane system was inadequate and ineffective over a structural slab in its location given its exposure to high salt and high wind in its south-east exposed location;
  7. (7)
    Penetration of moisture and salt would continue due to the porousity of the surface;
  8. (8)
    That a budget of $8,100.00 had been agreed with the Appellants for the replacement of the tiles/beds/membrane system to the Level 2 balcony slab;
  9. (9)
    It was revealed upon removing the tiles/screed that the base structural slab surface on the Level 2 balcony sloped towards the building with evidence of previous repairs carried out to the slab against the building line under both bedroom/ensuite window. (my emphasis)
  1. [21]
    By letter dated 1 December 2004 the Appellants’ solicitors wrote to the Body Corporate notifying them of matters requiring urgent repair, relevantly, the waterproof membrane on the upper and lower balconies, the fascia to the upper and lower balcony slabs and water penetration to the bedroom and bathroom on the upper level of their clients’ unit.
  1. [22]
    That letter made it clear that the Appellants regarded the Body Corporate as responsible for the cost of the work which their solicitors said was of the order of $20,000. That letter advised that the Appellants required the meeting of the Committee to be held with the view to calling a general meeting within ten days failing which the Appellants would be forced to make immediate application to the Commissioner’s office for an order compelling the Body Corporate to comply with its duties and an order requiring the Body Corporate to reimburse the Appellants for the costs incurred. No such application was made and the Appellants had the subject work completed at their own expense.
  1. [23]
    By letter dated 9 December 2004 the Body Corporate responded to the Appellants’ solicitors making, relevantly, the following points:
  1. (1)
    most of the subject work on Unit 8 was within Lot 8;
  2. (2)
    the Body Corporate had already addressed the problems with repairs to the balcony fascia by including it in works to be carried out in early 2005 when building painting was to be carried out.  In that regard, quotes were to hand and an EGM was to be called in the new year for approval for that work;
  3. (3)
    as discussed between the Appellant, Mrs Klinger, and the Body Corporate Chairman, an allowance would be made for the expense of repairs to the balcony fascia as it seemed more practical for the Appellants’ contractor to do the work on the fascia whilst they had scaffolding in place than to leave it and do it in early 2005 with the other painting work;
  4. (4)
    the bulk of the work carried out by the Appellants was on private property totally within Lot 8;
  5. (5)
    the matter of the tiles on the Appellants’ two decks were to be at the Appellants’ expense as those tiles had been replaced during occupancy by a previous owner of Lot 8 and no further problems had occurred after replacement of the tiles during their occupancy;
  6. (6)
    the Body Corporate was never requested to become involved in the Appellants’ rectification works as it (sic) was always considered to be an issue between the owners of Lot 8 and the original builder;
  7. (7)
    the Body Corporate objected to the Appellants having the work done and trying to retrieve funds from the Body Corporate after the event.  If any areas of damage were common property then in accordance with sections 103 and 104 of the Standard Module, all works in value of $1,800 in this case, would require a minimum of two written quotes, which in turn would need to be presented to the Committee who would request a general meeting of the Body Corporate to deal with the matters raised;  and
  8. (8)
    if necessary, the issues could be discussed in January or February 2005 at the EGM and it was not intended to call a general meeting before then.

In short, apart from the repairs to the fascia, the Body Corporate wiped its hands of the problem and the repairs.

  1. [24]
    On 15 February 2005 the EGM was held and under the General Business item was resolved that the Appellants would be recompensed for repair work on the balcony fascia “as previously agreed”.  I take the reference to the previous agreement as being a reference to the previous discussions between the female Appellant and the Chairman of the Body Corporate referred to by the Body Corporate Manager in her letter to the Appellants’ solicitors of 9 December 2004.  That letter refers to discussions rather than an agreement but in any event, whether or not a legally enforceable agreement had been reached prior to the EGM of 15 February 2005, the resolution above referred to makes it clear that the Body Corporate resolved to recompense the Appellants for the work on the balcony fascia.
  1. [25]
    Following the EGM, the Body Corporate sought and obtained two quotes for maintenance work from Building Maintenance and Painting dated 16 February 2005 and 11 March 2005.  The first of these quotes refers to work to be done on Unit 4 and the second for work in relation to Unit 7.  Neither of those relate to the Appellants’ unit.
  1. [26]
    On 5 January 2006 the Appellants filed their application with the Office of the Commissioner for Body Corporate and Community Management for the resolution of their dispute with the Body Corporate and by letter dated 4 October 2006 the Appellants’ solicitors gave up‑to‑date details of the amount being claimed.  For the purpose of the present appeal, the only relevant costs sought in that letter were:
  1. 1.Balcony fascia repairs (Levels 1 and 2) - $7,598
  2. 2.Level 2 balcony tile and screed removal;  new screed,

re‑tile and expansion jointing -  $8,864}

  1. 3.Level 1 balcony tile and screed removal;  new screed,

Re-tile and expansion jointing - $12,571} $21,435

MAINTENANCE RESPONSIBILITIES

  1. [27]
    Section 109 of the Standard Module sets out the Body Corporate’s maintenance responsibilities as follows:

“109 Duties of Body Corporate about Common Property – Act

s 52

  1. (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. (2)
    To the extent that lots included in the Scheme are created under a building format plan of subdivision, the Body Corporate must –
  1. (a)
    maintain in good condition –
  1. (i)
    railings, parapets and balustrades on (whether precisely, or for all practical purposes) the boundary of a lot and common property; and
  2. (ii)
    doors, windows and associated fittings situated in a boundary wall separating a lot from common property; and
  3. (iii)
    roofing membranes that are not common property but that provide protection for lots or common property; and
  1. (b)
    maintain the following elements of Scheme land that are not common property in a structurally sound condition –
  1. (i)
    foundation structures;
  2. (ii)
    roofing structures providing protection;
  3. (iii)
    essential supporting framework, including load-bearing walls.
  1. (3)
    Despite anything in subsections (1) and (2) –
  1. (a)
    the Body Corporate is not responsible for maintaining fixtures or fittings installed by the occupiers of a lot if they were installed for the occupier’s own benefit; and
  2. (b)
    the owner of the lot is responsible for maintaining utility infrastructure, including utility infrastructure situated on common property, in good order and condition, to the extent that the utility infrastructure –
  1. (i)
    relates only to supplying utility services to particular lot; and
  2. (ii)
    1 of the following types –
  • hot-water systems
  • washing machines
  • clothes dryers
  • and other device providing a utility service to a lot

Examples for subsection (3)(b) –

  1. 1.An air-conditioning plant is installed on the common property, but relates only to supplying utility services to a particular lot.  The owner of the lot would be responsible for maintaining the air-conditioning equipment.
  2. 2.A hot-water system is installed on the common property, but supplies water only to a particular lot.  The owner of the lot will be responsible for maintaining the hot-water system and the associated pipes and wiring.
  1. (c)
    The owner of the lot is responsible for maintaining the tray of a shower that services the lot, whether or not the tray forms part of the lot.
  1. (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 may recover the prescribed costs, as a debt, 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.
  2. (5)
    in this section –

‘prescribed costs’ means the proportion of the reasonable cost to the Body Corporate of carrying out the maintenance it can, in the Body Corporate’s reasonable opinion, be fairly attributed to the person’s actions.”

Common property for a Community Title Scheme is noted in the footnote to s 10(2)(d) of the Act as “… effectively, freehold land forming part of the Scheme land, but not forming part of a lot included in a Scheme’.  Pursuant to s 49C(4) of the Land Titles Act 1994, the boundaries of a lot in a building format plan of subdivision, the boundary of the lot with common property or another lot is the centre of the wall, floor or ceiling.”

DECISION OF ADJUDICATOR

  1. [28]
    In her decision dated 27 November 2006, the Adjudicator relevantly made the following findings of fact and law:[4]

Relevant legislation

  1. (a)
    The Body Corporate and the scheme are governed by:
  1. (i)
    the BCCM Act; and
  2. (ii)
    the Body Corporate and Community Management (Standard Module) Regulations (Qld) (the “Standard Module”);
  1. (b)
    The building is a building format plan of subdivision;[5]

Balcony fascias

  1. (c)
    The fascias on the Appellants’ balconies are common property;[6]
  2. (d)
    The Body Corporate is obliged to maintain the Appellants’ balcony fascias in “good condition” and, to the extent that those balcony fascias are structural in nature, in a “structurally sound condition” pursuant to s 109(1) of the Standard Module;[7]
  3. (e)
    The Appellant carried out repairs to the fascias of all three of its balconies at a cost of $7,598.00 (including scaffolding);[8]
  4. (f)
    The Body Corporate is responsible for repairs to the balcony fascias;[9]

Waterproofing Membranes

  1. (g)
    The waterproofing membranes on the Appellants’ balconies are “roofing membranes” within the meaning of that expression in s 109(2)(a)(iii) of the Standard Module;[10]
  2. (h)
    The Body Corporate is obliged to maintain the waterproofing membranes on the Appellants’ balconies in “good condition” pursuant to s 109(2)(a)(iii) of the Standard Module;[11]
  3. (i)
    The waterproofing membranes on the Appellants’ balconies were “not in good condition”;[12]
  4. (j)
    The Appellant carried out repairs to the waterproofing membranes on all three of its balconies at a cost of $2,934.00 for the lower two balconies, and $2,605 for the upper balcony;[13]
  5. (k)
    The repairs which the Appellant carried out were within the scope of the Body Corporate’s responsibilities;[14]
  6. (l)
    The Body Corporate was responsible for the repairs to the waterproofing membranes on the balconies;[15]

Balconies

  1. (m)
    The Appellants’ balconies are “roofing structures providing protection” within the meaning of that expression in s 109(2)(b)(ii) of the Standard Module;
  2. (n)
    Alternately, the Appellants’ balconies are “essential supporting framework” within the meaning of that expression in s 109(2)(b)(iii) of the Standard Module;[16]
  3. (o)
    The Body Corporate is thus obliged to maintain the Appellants’ balconies “in a structurally sound condition” pursuant to s 109(2)(b) of the Standard Module;[17]
  4. (p)
    The Appellant carried out structural repairs to the upper balcony at a cost of $414;[18]
  5. (q)
    The Appellant also carried out other works to the balconies (described as “tile & screed removal; new screed; retile and expansion jointing”[19]) at a cost of $12,571.00 for the 2 lower balconies, and $8,864.00 for the upper balcony[20] (the Disputed Balcony Repairs);
  6. (r)
    The Body Corporate is responsible for structural repairs to the balconies,[21] and for any repairs that were necessitated by the defect in the waterproofing membrane;[22]

Quantum of reimbursement

  1. (s)
    The total cost of the Appellants’ repairs (structural balcony repairs, waterproofing membrane, balcony fascias) for which the Body Corporate is liable is $13,551.00;[23] and
  2. (t)
    However, this amount should be discounted by 50 per cent, and the Body Corporate should reimburse the Appellants the sum of $6,775.00.[24]
  1. [29]
    The Appellants did not dispute the Adjudicator’s findings at subparas 28(a) to (r) above. The Appellants in their submission included another finding as subparagraph (s) to follow (r) above, the finding being that “it is just and equitable that the Body Corporate reimburse the Appellants for the cost of the repairs which they carried out and for which the Body Corporate was responsible”. They relied on page 11 of the Adjudicator’s decision but I can find no such express finding to support that submission. What the Adjudicator did say on page 11 was:

“The applicants have acted inappropriately and incorrectly by proceeding with work without formal Body Corporate approval.  Notwithstanding this, I am of the view that it would not be just and equitable for the Body Corporate to avoid any financial outlay for work which would normally be its responsibility because the Appellants failed to follow the appropriate process.”

THE APPELLANTS’ APPEAL

  1. [30]
    The Adjudicator’s decision is appealed on three grounds:-
  1. 1.Insofar as the Adjudicator ordered that the Respondent reimburse the Appellants for repairs which they carried out to the balconies of their lot totalling $13,551 and comprised (sic) of:
  1. (a)
    $7,598 for repairs to balcony fascias;
  2. (b)
    $5,539 for repairs to waterproofing membrane;
  3. (c)
    $414 for balcony structural repairs;

the Adjudicator erred at law insofar as he then ordered that each of the above amounts be discounted by 50 per cent, thereby awarding the Appellants total reimbursement for the above repairs in the sum of $6,775;

  1. 2.The Adjudicator erred at law insofar as he concluded that there was no basis upon which we he was entitled to conclude that the costs incurred by the Appellants in the repairing and replacing the tiles and screed on their balconies was wholly related to the need to effect structural repairs to the balcony and to repair and replace the waterproofing membranes on the balconies;
  2. 3.The Adjudicator erred at law by failing to order that the Respondent reimburse the Appellants the sum of $21,435 for repairs which they undertook to each of their three balconies involving the complete removal and replacement of all tiles and screed, or alternatively to order that the Appellants be given a certificate entitling them to pursue this aspect of their claim in a court of competent jurisdiction.

Appeal ground 1 – discounting of repair expenses

Repairs to fascias

  1. [31]
    I confess to some difficulty in understanding the Adjudicator’s reasoning pattern when she addressed this issue. For example on page 4 when considering the repairs to the balcony fascia, the Adjudicator said:

“It is alleged that there was deterioration of the ends of the concrete slabs which caused cracking and crumbling of the fascia.  The extent of the deterioration and its safety impact is not necessarily conceded by the Body Corporate, however their responsibility for the balcony fascia is accepted.”

Two paragraphs later, the following is said:

“The Body Corporate claims it has already repaired the lower balcony fascia and provided a quote dated 20 August 2002 for $3,773 which covered two units.  The applicants have not responded to the claim that the Body Corporate previously undertook fascia repairs and it is unclear whether they dispute the repairs occurred, or allege further deterioration occurred.”

  1. [32]
    From those statements it seems apparent the Adjudicator, whilst accepting that the Body Corporate was responsible for the balcony fascia, saw that there was an issue as to the extent and proper cost of rectification of the balcony fascias. She speaks of the Body Corporate having already repaired the lower balcony fascia and providing a quote dated 20 August 2002 for $3,773 covering two units.  I could see nothing in the evidence before me of that quote of 20 August 2002 for $3,773 or which two units it is said to refer to.  The only figure of $3,773 in evidence is a figure shown in the actual expenditure on balcony repairs in the financial year ending 30 June 2003 set forth in the statement of income and expenditure of the building[25].  No more detail is given as to what balcony was repaired or the nature and extent of those repairs.  That is not a matter the Adjudicator should have taken into account unless there was sufficient evidence to connect it with the Appellants’ Unit 8.  It was an irrelevant consideration.  Yet it was a matter which exercised the mind of the Adjudicator because she concluded that the Appellants had not responded to the Body Corporate’s claim of that expenditure previously on fascia repairs and had not, in any such response, made it clear to the Adjudicator whether they, the Appellants, disputed that the repairs occurred or, by implication, accepted that they had occurred, but alleged that there had been further deterioration since the repairs were effected.  That entire statement of the failure of the Applicants to so respond is not supported by any evidence I could see and was based on the unproven premise that the $3,773 spent on balcony repairs, said to be evidenced by a quote not put in evidence, had a connection with Lot 8.  It was a further irrelevant consideration.
  1. [33]
    At the top of page 5 of her reasons, the Adjudicator then goes on to make the following statement:

“In early 2005, the owners agreed to work to the value of $7,656 to ‘repair balcony faces (sic) and general building maintenance.’  A Committee meeting on 30 March 2005 refers to this vote in the context of proceeding with (sic) a quote for $4,400 ‘to remove all remaining fascia tiles, render and repaint’”[26]

The basis for saying that the owners agreed was presumably the presence of the female Appellant at the committee meeting on 30 March 2004[27], when this resolution was passed:

“Balcony fascia tiles: quotes from Building Maintenance and Painting in the sum of $4,400 to remove all remaining fascia tiles, render and repaint.  Rectification work to proceed immediately.”

For reasons which will become apparent, the reference to agreement by the owners/appellants is misleading.

  1. [34]
    The figure of $7,656 in the above extract of the Adjudicator’s decision represents the total of the two quotes obtained by the Body Corporate from Building Maintenance and Painting dated respectively 16 February 2005 ($4,400) and 11 March 2005 ($3,256) both of which I have earlier found to be irrelevant to work carried out on the Appellants’ unit.  The first refers to maintenance in relation to Unit 4, then owned or occupied by persons named Ida & Aurthur (sic), and the second relates to Unit 7.  Consideration of those two quotes was another irrelevant consideration. So, to the extent the Appellants were said to have agreed by voting for the above resolution, any such agreement was not relevant to this matter.
  1. [35]
    The Adjudicator continued in the same paragraph of the above extracts:

“However, a range of quotes of various dates have been provided by all parties with little clear explanation of exactly what they cover, which were approved and what work was actually undertaken.  Regardless, the Body Corporate says it approved the repair of the fascia and that it would have reimbursed the applicants for the balcony fascia if they had received a specific invoice for the work.”[28]

This statement is again consistent with the Body Corporate accepting responsibility for the repair to the fascia but remaining to be satisfied as to the extent and cost of the work done.  In that regard the Adjudicator in the next paragraph on p 5 of her judgment immediately following the above quote said:

“The cost of repairing the upper and lower balcony fascia was $7,598, which included scaffolding, balcony and balustrade protection.  The Body Corporate says its planned repairs would have cost about $500 per unit plus scaffolding costs and so a maximum of $500 would be appropriate.”[29] 

  1. [36]
    No evidence of the figure of $500 was put before me or, so far as I can see, before the Adjudicator. The only mention of it that I could find was in the Body Corporate submission in response to the Appellants’ application to the Commissioner in para 1(b) under the heading “The Fascia” where it is said that the Body Corporate was of the opinion that a maximum of $500 would be payable in this regard and no invoice has been received by the Applicants for the fascia repairs[30].  It is clear to me that the Body Corporate’s proffered repair cost of $500 per unit plus scaffolding costs operated on the mind of the Adjudicator in determining what should be compensated to the Appellants in compensation for the payment by them of the $7,598 to Jonco.  It was an irrelevant consideration.
  1. [37]
    On p 11 of the decision appealed from, the Adjudicator said:

“The applicants have acted inappropriately and incorrectly by proceeding with work without formal Body Corporate approval.  Notwithstanding this, I am of the view that it would not be just and equitable for the Body Corporate to avoid any financial outlay for work which would normally be its responsibility because the applicants failed to follow the appropriate process.  However, I also do not consider it is appropriate that the applicants succeed in receiving the full amount that they paid for each of the items which the Body Corporate would normally be responsible for.

Had the Body Corporate had an adequate opportunity to assess the original and escalating quotes and obtain alternative building reports and quotes, the amount spent may well have been significantly lower.  In particular, the one area where the Body Corporate has obtained quotes – in respect of the balcony fascia (although it is not clear whether the quotes are directly comparable) suggests that Jonco’s costs may have been excessive and that the work could have been achieved for a substantially lower cost.”[31]

  1. [38]
    There are several mixed messages radiating from that statement:
  1. 1.that the Body Corporate may well have been able to get significantly lower quotes for the work;
  2. 2.in the one area where the Body Corporate obtained quotes (those quotes) suggest that Jonco’s costs of $7,598 for the work on the balcony fascia may have been excessive;
  3. 3.that the work could have been achieved for a substantially lower cost;  and
  4. 4.notwithstanding 2 above, it was not clear to the Adjudicator whether the quotes there relied upon to support the suggestion that Jonco’s costs may have been excessive, were even quotes directly comparable with the work carried out by Jonco.
  1. [39]
    Two things may be said about those statements. Firstly, it is clear to me that anyone reading the Body Corporate quotes referred to in the second paragraph of the above passage, being the abovementioned quotes from Building Maintenance and Painting dated 16 February 2005 ($4,400) and 11 March 2005 ($3,256) would see that they related to Units 4 and 7 and not the Appellants’ units.  As I have already found, consideration of them was an irrelevant consideration.  Secondly, there was no evidentiary basis for an argument that the Jonco costs may have been excessive.  The speculative comparison of them with the cost of the Jonco work was a further irrelevant consideration.

Repairs to waterproofing membrane

  1. [40]
    The amounts, the subject of this ground of appeal relating to the waterproofing membranes, are:
  1. 1.Upper balcony (Level 2)

Waterproof membrane repair/replacement -  $2,605

  1. 2.Lower balcony (Level 1)

Waterproof membrane repair/replacement -  $2,934

Total - $5,539

  1. [41]
    On page 7 of the Adjudicator’s decision, she sets out the above figures and concludes that she is satisfied that this work was within the scope of the Body Corporate’s responsibilities. There was no suggestion that the above charges by Jonco were other than reasonable and there was no evidence to support such a view.

BALCONY STRUCTURAL REPAIRS

  1. [42]
    These amount to $414 and details were provided to the Commissioner in the abovementioned Jonco letter of 21 September 2006 detailing its costs, which letter was sent to the Commissioner.  No issue was taken as to the reasonableness of this charge.

ADJUDICATOR’S 50 PER CENT DISCOUNT

  1. [43]
    I turn now to the decision of the Adjudicator in relation to the total of the above three items of costs claimed by the Appellants under appeal ground 1, totalling $13,551.
  1. [44]
    The Adjudicator was appointed to conduct a departmental adjudication of this dispute pursuant to s 267(1)(d) of the Act.  Section 269 provides:-

“Investigation by Adjudicator

  1. (1)
    The Adjudicator must investigate the application to decide whether it would be appropriate to make an order on the application.
  2. (2)
    When investigating the application, the Adjudicator:-
  1. (a)
    must observe natural justice;  and
  2. (b)
    must act as quickly, and with as little formality and technicality as is consistent with a fair and proper consideration of the application;  and
  3. (c)
    is not bound by the rules of evidence.”
  1. [45]
    Under s 276 the Adjudicator was empowered to make an order that was just and equitable in the circumstances (including a declaratory order) to resolve the dispute.
  1. [46]
    Having arrived at the decision that the Body Corporate was responsible for the costs of repairs to the balcony fascias, the waterproofing membranes on both balconies and the small amount ($414) of the balcony structural repairs on the upper balcony, in the absence of any proper basis it is difficult to see why the Appellants were not be entitled to a full refund of the $13,551 expended on those items. The Adjudicator proceeded on the basis that the Applicants were not to be precluded from reimbursement for the work they had paid for even though the work was not authorised strictly in accordance with ss 103 and 104 of the Act.  That approach is supported by two adjudication decisions of Terranova (2000) QBCCMC mr 44 (2 February 2000) and Lumeah (2001) QBCCMC mr 199 (3 April 2001) where the Adjudicator’s cases took a similar view.  I agree with that approach.
  1. [47]
    It is appropriate at this point to identify the nature of the role of an Adjudicator. As McGill DCJ said to Sharon Grant-Mackay v Body Corporate for Cherwood Lodge Community Title Scheme Number 20711 (2004) QDC 229 at para 21:

“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.”

  1. [48]
    Section 269(2) of the Act requires the Adjudicator to observe natural justice. More recently the concept has been described as procedural fairness.

There is nothing technical about the principles of natural justice. Where it applies, it simply requires fairness at each stage of a decision making process.  The numerous authorities in the area establish the following:

  1. (a)
    that a person whose rights, interests or legitimate expectations are at risk of being affected by any decision maker, full particulars of the matters upon which the decision maker intends to rely must be given to that person;
  2. (b)
    that person is entitled to be heard before any decision is made.  The entitlement to being heard does not in every case entitle that person to a hearing in the accepted sense but what it does ,as a minimum,  entitle that person to is to make submissions in response to the particulars provided by the decision maker before any decision is made.  In any case where the particulars provided by the decision maker are inadequate further particulars should be provided to allow the person whose interests, rights or legitimate expectations may be affected the opportunity to fully comprehend the issues and to respond to them by submission; and
  3. (c)
    finally, there is the obvious requirement that the decision maker not be biased.
  1. [49]
    In accordance with the above principles, if the Adjudicator held the view that any of the three items of cost under consideration totalling $13,551 were unreasonable, or was not satisfied they were reasonable or that there was any other basis for not reimbursing them fully, then, in accordance with the principles of natural justice and consistent with her investigative role she should have identified her concerns to the Appellants and provided them an opportunity to address her concerns before any decision was made. Similarly, if she was considering a discount on the payment, to which on their face the Appellants were entitled, again the principles of natural justice dictated that she alert the Appellants of that consideration and the basis upon which she was considering to so discount. She should have provided them with an opportunity to make a submission on that issue before any final decision was made. See Sharon Grut-Mackay v Body Corporate for Sherwood Lodge Community Title Scheme No. 20711 [2004] QDC 29.  This was not done.  Rather the Adjudicator moved straight to her decision to discount the $13,551 figure by 50 per cent to $6,775.  Her failure to act as outlined above denied the Appellants natural justice resulting in an error of law.
  1. [50]
    This error is exemplified by FAI Insurances Ltd. v Winneke[32] which involved the application to renew a Licence to conduct an Insurance business. At paragraph 6 Brennan J, as he then was, said:

“On 18 May 1981, the Minister, having made his decision to recommend to the Governor in Council  that F.A.I. be not approved as an Insurer beyond 1 June 1981, wrote to advise F.A.I. of his decision and to furnish what the Minister described as ‘a summary of the case against the applicants companies.’”

At paragraph 27 Brennan J, as he then was said:

“Between 2 December 1980 and 18 May 1981, F.A.I. was given no advice as to the points in the summary nor any opportunity to deal with them, though is clear that F.A.I. would have wished to provide some further information upon some if not all of those points. When the Minister wrote on 18 May 1981, it was too late to affect the advice which was to be tendered to the Governor in Council. That advice was tendered and accepted on 26 May 1981. It was unfair not to let F.A.I. know what were the grounds of the Minister’s concern so that the company might have had an opportunity to dispel what it regarded as the misconceptions which led the Minister to advise refusal of its application to renew. ”

  1. [51]
    Finally, there is another basis mitigating against allowing the decision to discount to stand and that is the failure of the Adjudicator to provide any proper reasons for her decision. In Pettit v Dunkley[33] the New South Wales Court of Appeal reviewed the authorities dealing with the obligation of trial judges and magistrates to give reasons for their decisions.  It is clear from that case that there is a duty on any such judicial officer to provide reasons in support of any decision except in exceptional circumstances which do not apply here.  Apart from such a course enabling litigants to properly understand the basis of a court’s decision, there is another dimension, namely the right of appeal.  It is the duty of any trial judge or magistrate to provide sufficient reasons for their decisions to enable an appeal court to properly deal with any appeal from that decision.
  1. [52]
    Given that the Adjudicator’s decision affected the Appellants’ rights and was itself amenable to appeal, I see no reason why the obligations of trial judges and magistrates would not extend to an Adjudicator in those circumstances.
  1. [53]
    Pettit v Dunkley further held that the failure of a trial judge to give reasons for his decision constituted an error of law because such failure made it impossible for the appellate court to determine whether or not the verdict was based on an error of law so as to give effect to the plaintiff’s statutory right of appeal.
  1. [54]
    In my view the decision of the Adjudicator in relation to the discounting of the relevant costs miscarried for the reasons I have above outlined being the consideration of irrelevant matters, the denial of natural justice and the failure to provide reasons. It should be set aside.

Appeals Grounds Two and Three – Repairing and Replacing Tiles and Screed on Two Balconies

  1. [55]
    The claim by the Appellants under this head is for reimbursement of the sum of $21,435 being the following costs:-
  1. (a)
    Removal of tiles and screed from upper balcony Level 2, replacement with new screed, retiling and expansion jointing  $8,864
  1. (b)
    Removing tiles and screed on Level 1 balcony, installing new screed, retiling and expansion jointing including the retiling and jointing of outside wall line upturn ($2,971) $12,571

Total $21,435

  1. [56]
    These costs were disallowed by the Adjudicator. At page 11 of her decision she said:-

“I have been provided with no clear evidence that the tiling work on the balconies was necessitated by a membrane or structural defect, and accordingly determined that this work was the responsibility of the applicants.”[34]

Earlier at page 7 of her decision the Adjudicator said:-

“In addition the Body Corporate must maintain roofing membranes in ‘good condition’.  Therefore if those membranes are not in good condition – as indicated by the Jonco report – the Body Corporate is responsible for the costs of repairing or replacing the membrane, including any costs directly incurred in achieving the repair or replacement.  For example, if repairing the membrane necessitated the replacement of balcony tiles, this would be at the Body Corporate’s expense.”[35] (My emphasis)

  1. [57]
    The issue then is whether the Adjudicator erred in law in denying to the Appellants reimbursement of the above costs. The Adjudicator found that the Appellants’ balconies were “roofing structures providing protection” within s 109(2)(b)(ii) of the Standard Module, that the Body Corporate was obliged to maintain those balconies “in a structurally sound condition” pursuant to s 109(2)(b) of that module and that the Body Corporate was also responsible for maintaining any waterproofing membranes on the subject balconies in “good condition” pursuant to s 109(2)(a)(iii) of the Standard Module.  She then considered whether or not the expenditure claimed by the Appellants could be said to be caught by the above Body Corporate obligations so as to render the Body Corporate liable to meet those expenses.
  1. [58]
    In pursuit of the answer to that question, a letter I have earlier referred to was written by the Commissioner to the Appellants’ solicitors dated 3 August 2006 seeking an itemised breakdown of all costs being claimed by the Appellants in areas therein identified which included, relevantly, the waterproof membrane repairs/replacement to both the upper and lower balconies. The letter asked that the Appellants explain, where it was not otherwise self explanatory, why each aspect of the work identified was necessary in regard to the basis of the Appellants’ claim. The letter went on to ask the Appellants to obtain from Jonco written clarification as to:-
  • What (if any) of the work undertaken was structural in nature;
  • What aspects and proportion of the work undertaken on the upper and lower balconies was necessary as a direct result of a structural defect; and
  • What aspects and proportion of the work undertaken on the upper and lower balconies was necessary as a direct result of the defective waterproof membrane.  (My emphasis)
  1. [59]
    It would have been apparent to the Appellants’ solicitors that the Adjudicator was seeking to identify from the Appellants any relevant nexus between the work, the subject of the Appellants’ claim, and the legal obligation on the Body Corporate in relation to structural and waterproof membrane defects in the balconies. The only way the Appellants could claim the cost of the work was if they could establish that nexus.
  1. [60]
    The Commissioner’s letter of 3 August referred to was responded to by the Appellants’ solicitors under cover of a letter of 21 September 2006 enclosing a letter of similar date from Jonco addressed to them. The Jonco letter set out a cost breakdown in relation to the two categories of work, being the work carried out on upper balcony Level 2 and lower balcony Level 1. The upper balcony work was dealt with in paras 2(a) and (b) and the lower balcony work in paras 3(a) and 3 (b) of the Jonco letter. The relevant parts of the letter were:

“2.Upper balcony (Level 2)

  1. (a)
    waterproof membrane repair/replacement$2,605
  2. (b)
    structural repairs$ 414
  3. (c)
    Level 2 balcony balcony tile and screed removal;

new screed, re-tile and expansion jointing$ 8,864

  1. Lower balcony (Level 1)
  1. (a)
    waterproof membrane repair/replacement

Nb. This includes external wall upturn$ 2,934

  1. (b)
    structural repairsNil
  2. (c)
    Level 1 balcony tile and screed removal; new

screed, re-tile and expansion jointing

Nb. This includes re-tiling and jointing of

Outside wall line up turn (value $2,971)$12,571”

The Appellants’ solicitor’s covering letter of 21 September sending the Jonco letter to the Commissioner invited the Commissioner to contact Mr Bainbridge of Jonco “to clarify construction details and apportionment of our client’s application.”

  1. [61]
    The Commissioner wrote again to the Appellants’ solicitors by letter of 26 September 2006 reiterating the questions in the earlier letter, noting that they were not specifically addressed in the response and, importantly, stating:-

“Please note that if no further information is provided in respect of these issues, the Adjudicator will assume that the only costs directly resulting from structural defects are those itemised at 2(b) and 3(b) of the Jonco breakdown and the only costs directly resulting from defects to the membrane are those itemised at 2(a) and 3(a).  If this is not your position, please provide a response to those questions urgently.”

  1. [62]
    By letter dated 4 October 2006 the Appellants’ solicitors responded to the Commissioner’s letter of 26 September. In that letter they repeated the costs being claimed for the 2 balconies, namely $8,864 and $12,571 and said:-
  1. “(a)
    That there was an existing structural defect in that the balconies sloped back towards the lot and not away towards the leading edges of the balconies, which had the effect of allowing water flow towards the habitable areas with consequent pooling of water.  This in turn caused a water bubble under the tiles, lifting and breaking them, causing further instability on the balcony;
  2. (b)
    It was only after lifting the tiles on the balconies that the true extent of the degradation of the waterproof membrane could be seen and that degradation was exacerbated by the abovementioned structural defect causing pooling of water;
  3. (c)
    The combination in effect of the water pooling and the degradation of the membrane on both balconies was the cause of all the damage.” (my emphasis)[36]

The letter then went on to invite the Commissioner to seek any further clarification as to engineering or structural advice from Jonco.

  1. [63]
    That letter was saying to the Commissioner in the plainest terms that the relevant costs set out in that letter were necessary to repair the subject damage to the subject balconies and that the damage to the balconies was caused by the structural defect resulting in the water pooling, and the degradation of the membrane on both balconies. Given that, it was, to my mind, entirely reasonable for the Appellants to proceed on the bases that, having heard nothing further from the Adjudicator on the issue of the 2 items of expenditure of $8,864 and $12,571 under discussion, the Adjudicator had sufficient to allow her to make a decision and that she entertained no unresolved questions. We now know that that was not the Adjudicator’s state of mind because in her decision at page 11 she said:-

“Further, it seems that the inappropriate balcony tiles may have contributed to the failure of the waterproof membrane.  To the extent that the tiles have led to the problem, the lot owners would be liable as they remain responsible for the tiles regardless of who decided that they be installed.  Given that the work has already occurred and there is little detail on the relevant contribution of the different factors to the membrane failure, it is not possible to apportion responsibility.  However I have had regard to this factor in reaching a conclusion with respect to the amount recoverable.”[37]

  1. [64]
    To my mind, any lingering concerns the Adjudicator was entertaining on the issue of recoverability and/or apportionment of those two sums should have been communicated to the Appellants to allow them the opportunity to allay any such concerns or doubts in the mind of the Adjudicator. That was not done. Instead the Adjudicator moved to a decision denying the Appellants remuneration for the entire amount claimed. I do not accept that a reading of the Appellants’ solicitors’ response letter of 4 October 2004 could be said to have conveyed a message to the Adjudicator that the relevant claimed costs were not still being pursued. But even if I am wrong on that issue, the Adjudicator was not justified in moving to her final decision given her state of mind. That state was that the Appellants’ solicitors had not adequately responded to the questions asked which she still had queries about. They were important questions going to the heart of the matter and the Adjudicator should have pursued inquiries to resolve any doubts or concerns she had. In failing to do so she denied the Appellants natural justice and that error was an error of law.
  1. [65]
    In the absence of any evidence to the contrary, it seems to be plain to me that the work which was necessary to be done to address the structural issue of the wrongly sloping balcony and the defective membrane on each balcony required Jonco to pull up all tiles, the waterproofing membrane and the screed, replace the waterproofing membrane and screed with new and effective ones, and then retile the balconies. That was obvious from the exchange of correspondence with the Commissioner between 3 August and 4 October 2006. As I have said, if the Adjudicator entertained any doubt as to that, she should have continued her investigative role by contacting Jonco and to satisfy herself on the issue. There was a standing invitation to the Adjudicator in the 4 October 2004 letter to contact Jonco if she was of a different view or she was unable to form a view.
  1. [66]
    The Body Corporate was aware of the problems with this building as far back as 1 June 2004 when Ms Steadman was given the first Jonco report but chose to do nothing in response to the Appellants’ notification.  It was in breach of its obligations to maintain “in good condition” and in a “structurally sound condition”, the common areas of the property the subject of the Appellants’ complaints, namely the balcony fascias, the area on each balcony past the balustrade and the balcony waterproofing membranes. (Standard Module s 109(1)).  Further it was in breach of its statutory duty pursuant to Standard Module s 109(2)(a)(i) to maintain in good condition the balcony parapets, balcony railings and balustrades and the waterproofing membranes.  Finally the inactivity on the part of the Body Corporate placed it in breach of its statutory duty to keep the floor of the Appellants’ balconies in a structurally sound condition in breach of Standard Module s 109(2)(b).
  1. [67]
    The statutory duty imposed on the Body Corporate in relation to the above matter is one which obliges it to remedy any defect as soon as any of the building parts covered by the duty fall into disrepair or were not operating properly. Failure to do so, once aware, gave rise to a breach of its duty. See Seiwa Pty Ltd v Owners, Strata Plan 35042 (2006) NSWSC 1157 at paras 4-6.  The statement of the Body Corporate to the Appellants’ solicitors of 9 December 2004[38] that it was never requested to become involved in the rectification works as it was always considered to be an issue between the Appellants and the original builder evidences a misconception by the Body Corporate of its statutory duty.  The fact that the Appellants did at one point investigate through the QBSA the possible responsibility of the building builder, did not, and cannot, relieve the Body Corporate of its ongoing statutory obligations..
  1. [68]
    In my view the Appellants cannot be criticised or penalised for going ahead and rectifying that which the Body Corporate was duty bound to do but had failed to do. As I have already said, the Body Corporate was aware since at least 5 March 2004 of the issue of the deterioration of the fascias and were given the first Jonco report dated 28 May 2004 on 1 June 2004 when two copies were given to Ms Steadman. Having received no action from the Body Corporate, the Appellants went ahead and undertook the work themselves. The full nature and extent of the work did not become apparent until Jonco commenced work on 15 November 2004. The Adjudicator correctly, in my view, did not see that the failure on the part of the Appellants to comply with ss 103 and 104 of the Standard Module prevented them from recovering costs for work which the Body Corporate should have undertaken.
  1. [69]
    Apart from the lengthy notice the Body Corporate had as to the work it was duty bound to carry out, it should also be said that the Appellants in their letter to the Body Corporate of 5 March 2004 expressed their concern that personal injury may result if the cracking concrete on the fascia dislodged and fell onto their lower balcony or another lower balcony. So the Appellants were driven not only by a desire to have the work carried out but driven by a concern that someone may be injured. They were justified in carrying out the work to address that risk to avoid any common liability caused through injury from falling concrete.
  1. [70]
    In my view the decision of the Adjudicator to proceed on the basis, effectively, that the amounts claimed were not related to the structural or roofing membrane defect was against the body of the evidence and amounted to an error in law. The compelling conclusion open to the Adjudicator on the material was that the Appellants had carried out work which had the relevant connection with a structural defect and a roofing membrane defect and were entitled to be reimbursed subject to two matters. These matters are the reasonableness of the charges and secondly, state of the balcony tiles at the time of commencement of the works, relevant to possible apportionment of the costs.
  1. [71]
    As to the reasonableness of the charges, in my view the Body Corporate had ample time to make its own enquiries and obtain its own quotations in relation to the works. It did not do so and the Appellants’ cannot now be penalised for that. There is no evidence to suggest that the charges of Jonco were other than reasonable.

CONDITION OF ORIGINAL TILES

  1. [72]
    As to the state of the tiles, as I have said, the Adjudicator did not pursue the issue and there was no sufficient evidence before her or before me to found any decision to reduce the Appellants’ entitlement to reimbursement by reason of apportionment due to the state of the tiles. Further, the Respondent did not seek to argue any apportionment, which is understandable given that lack of evidence. Accordingly, I see no obstacle to the Appellants being entitled to full reimbursement of the costs of $21,435.
  1. [73]
    Finally, the Respondent submitted that any order in favour of the Appellants would be governed by s 281 of the Act limiting the payment to $10,000, I do not agree.  That issue was considered by the Court of Appeal in James v Body Corporate for Aarons Community Title Scheme 11476 [2003] QCA 329 where the court considered a matter similar to the present except that the Appellants were seeking an Order for common property to be repaired.  Davies J having considered the inter relationship between two sections under the Act since amended, namely s 223 (now s 276) and s 227 (now s 281) and said at para 19:-

“… 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 consequent to 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…  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.  These 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…”

  1. [74]
    I order the following:-
  1. 1.
    Appeal allowed.
  1. 2.
    Decision of Adjudicator Rosemann varied to:
  1. (a)
    Declare under s 276 of the BCCM Act that:
  1. (i)
    the Respondent was liable under regulation 109(1) of the Standard Module to maintain the balcony fascias of the Appellants’ lot in a good condition, including a structurally sound condition;
  2. (ii)
    the Respondent was liable under regulation 109(2)(a) of the Standard Module to maintain, in a good condition, the waterproofing membranes on each of the balconies of the Appellants’ lot;
  3. (iii)
    the Respondent was liable under regulation 109(2)(b) of the Standard to maintain, in a structurally sound condition, each of the balconies of the Appellants’ lot;
  4. (iv)
    in breach of its obligation under s 109(1) and (2) of the Standard Module, the Respondent:

A. failed to maintain in a good condition, including in a structurally sound condition, the balcony fascias on the Appellants lot; and

B. failed to maintain in a good condition the waterproofing membranes on the Appellants’ lot; and

C. failed to maintain in a structurally sound condition the balconies on the Appellants’ lot.

  1. (v)
    the Respondent is now liable to reimburse the Appellants for the cost of removing and replacing all tiles and screed on the Appellants’ balconies, such costs being reasonably incurred by the Appellants as a result of the need to repair and replace the balcony waterproofing membranes, and to effect structural repairs to the balconies.
  1. (b)
    order that, pursuant to s 276 of the BCCM Act, the Respondent reimburse the Appellants for repairs which they carried out to their balcony fascias (being areas of common property) in the amount of $7,598;
  2. (c)
    order that, pursuant to s 276 of the BCCM Act, the Respondent reimburse the Appellants the sum of $414 for structural repairs to the balconies;
  3. (d)
    order that, pursuant to s 276 of the BCCM Act, the Respondent reimburse the Appellants the sum of $5,539 for costs incurred in repairing and replacing waterproofing membranes on the balconies;
  4. (e)
    order that, pursuant to s 276 of the BCCM Act, the Respondent reimburse the Appellants the sum of $21,435 for costs incurred in removing and replacing all tiles and screed on the Appellants’ balconies.
  1. 3.
    That the Respondent pay the Appellants’ costs of and incidental to the appeal as accessed on the standard basis.
  1. 4.
    Order that the Appellants be exempt from any contribution to the above amounts ordered to be paid by the Body Corporate, including the costs of this appeal.

Footnotes

[1] Appeal Book p 105

[2] Appeal Book p 113

[3] Appeal Book p 140

[4] See pp 1 to 12 of Appeal Book

[5] See s 48C of the Land Title Act 1994 (Qld)

[6] See p 4 of the Adjudicator’s decision (p 5 of Appeal Book)

[7] See p 4 of the Adjudicator’s decision (p 5 of Appeal Book)

[8] See p 5 of the Adjudicator’s decision (p 6 of Appeal Book)

[9] See p 11 of the Adjudicator’s decision (p 12 of Appeal Book)

[10] See p 6 of the Adjudicator’s decision (p 7 of Appeal Book)

[11] See p 6 of the Adjudicator’s decision (p 7 of Appeal Book)

[12] See p 7 of the Adjudicator’s decision (p 8 of Appeal Book)

[13] See p 7 of the Adjudicator’s decision (p 8 of Appeal Book)

[14] See p 7 of the Adjudicator’s decision (p 8 of Appeal Book)

[15] See p 11 of the Adjudicator’s decision (p 12 of Appeal Book)

[16] See p 6 of the Adjudicator’s decision (p 7 of Appeal Book)

[17] See p 6 of the Adjudicator’s decision (p 7 of Appeal Book)

[18] See p 7 of the Adjudicator’s decision (p 8 of Appeal Book)

[19] See the letter from Herdlaw to the Commissioner dated 4 October 2006 (pp 60 to 62 of Appeal Book)

[20] See p 7 of the Adjudicator’s decision (p 8 of Appeal Book)

[21] See p 11 of the Adjudicator’s decision (p 12 of Appeal Book)

[22] See p 11 of the Adjudicator’s decision (p 12 of Appeal Book)

[23] See p 11 of the Adjudicator’s decision (p 12 of Appeal Book)

[24] See p 11 of the Adjudicator’s decision (p 12 of Appeal Book)

[25] Appeal Book p 99

[26] Appeal Book p 6

[27] Appeal Book p 157

[28] Appeal Book p 6

[29] Appeal Book p 6

[30] Appeal Book p 40

[31] Appeal Book p 12

[32] [1982] 151 CLR 342

[33] (1971) NSWLR 377

[34] Appeal Book p 12

[35] Appeal Book p 8

[36] Appeal Book p 60

[37] Appeal Book p 12

[38] Appeal Book p 148

Close

Editorial Notes

  • Published Case Name:

    Klinger & Anor v Body Corporate for Costa D'Ora Apartments

  • Shortened Case Name:

    Klinger v Body Corporate for Costa D'Ora Apartments

  • MNC:

    [2007] QDC 300

  • Court:

    QDC

  • Judge(s):

    Searles DCJ

  • Date:

    14 Sep 2007

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

Cases Cited

Case NameFull CitationFrequency
A v V [2004] QDC 29
1 citation
Jump To
Cite 1 - [2004] QDC 29
FAI Insurances Ltd v Winneke (1982) 151 C.L.R 342
1 citation
Jump To
Cite 1 - (1982) 151 C.L.R 342
Grut-Mackay v Cherwood Lodge CTS 20711 [2004] QDC 229
1 citation
Jump To
Cite 1 - [2004] QDC 229
James v The Body Corporate Aarons Community Title Scheme 11476[2004] 1 Qd R 386; [2003] QCA 329
1 citation
Jump To
Cite 1 - [2003] QCA 329
Klinger & Anor v Body Corporate for Costa D'Ora (2001) QBCCMC mr 199
1 citation
Jump To
Cite 1 - (2001) QBCCMC mr 199
Klinger & Anor v Body Corporate for Costa D'Ora Apartments (2000) QBCCMC mr 44
1 citation
Jump To
Cite 1 - (2000) QBCCMC mr 44
Pettit v Dunkley (1971) NSWLR 377
1 citation
Jump To
Cite 1 - (1971) NSWLR 377
Seiwa Pty Ltd v Owners (2006) NSWSC 1157
1 citation
Jump To
Cite 1 - (2006) NSWSC 1157

Cases Citing

Case NameFull CitationFrequency
Febray v Equititour [2009] QDC 2811 citation
Maartens v Body Corporate for Montague Markets South [2025] QCATA 32 citations
1

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