Body Corporate for Metro Quays v Three Islands Pty Ltd & Ors

This was an application for an extension of time to seek leave to appeal from a decision of the QCATA that the applicant had responsibility for the maintenance of the roof of premises subject to the Body Corporate and Community Management Act 1997.  The substantive dispute turned to the question of the meaning of the term “lots” in s 170(2)(b) Body Corporate and Community Management (Accommodation Module) Regulation 2020 and s 180(2)(b) Body Corporate and Community Management (Standard Module) Regulation 2020. The applicant contended that the reference to “lots” in those provisions ought to be construed to include a layered arrangement of community titles schemes such that even though the roofing structure providing protection was not the common property of the body corporate for a principal scheme, it was that body corporate who was legally responsible for the cost to maintain it. The Court construed the provision narrowly such that “lots” was limited to mean a “separate distinct parcel of land” as defined under the Land Title Act 1994. As a result, the principal scheme was not liable for the costs of maintaining the roof of the relevant building.

Morrison and Boddice JJA and North J

12 September 2023

Background

The parties to this dispute were each part of a layered arrangement of community titles schemes that made up a multi-storeyed high-rise building. [6]–[7]. The third respondent, Metro Community Titles Scheme 28454 (“the principal scheme”) was the principal scheme. [7]. It was made up of three members. [7]. The applicant, Metro Quays Community Titles Scheme 28461 (“Metro Quays CTS”) being the owners of the residential apartments within the scheme. [7(a)]. In 2016, the principal scheme arranged and paid for work to be carried out to the roof of the building. [8]. It later contended that Metro Quays CTS was responsible for maintaining the whole of the roof, except for the concrete part covering the stairwell and lift. [8]. Metro Quays CTS denied responsibility for the roof.

The other two members of the scheme brought an adjudication application seeking orders that Metro Quays CTS was responsible for the maintenance of the roof, including historic work to the roof. [10]. The adjudicator allowed the application, and the Queensland Civil and Administrative Tribunal (Appeals) dismissed an appeal of the adjudicator’s decision. [11]. The matter was appealed to the Court of Appeal out of time, such that the issue was whether the applicant should be granted an extension of time to seek leave to appeal. To answer that question, the Court primarily considered whether the appeal would have merit.

The issues in dispute were governed by s 170(2)(b) Body Corporate and Community Management (Accommodation Module) Regulation 2020 (“Accommodation Module”) and s 180(2)(b) Body Corporate and Community Management (Standard Module) Regulation 2020 (“Standard Module”). Those provisions are in identical terms, as follows:

(1)The body corporate must maintain common property in good condition…

(2)To the extent that lots included in the community titles scheme are created under a building format plan of subdivision, the body corporate must—

(a)maintain in good condition…

[…]

(iii)roofing membranes that are not common property but that provide protection for lots or common property; and

(b)maintain in a structurally sound condition the following elements of scheme land that are not common property…

[…]

(ii)roofing structures providing protection…

It was not in dispute that the roof was the common property of Metro Quays CTS. [21]. It was also not in dispute that the community title scheme was created under a building format plan subdivision. [22]. The principal scheme argued that the effect of s 170(1) of the Accommodation Module was that Metro Quays CTS was required to maintain its common property, including the roof. [18]. Alternatively, the principal scheme argued that “lots” in s 170(2)(b) did not include subsidiary community titles schemes in a layered arrangement. [19]. Notably, Schedule 6 of the Body Corporate and Community Management Act 1997 (“BCCM Act”) defines a “lot” as meaning “a lot under the Land Title Act, but if the lot is included in a community titles scheme other than a basic scheme, the lot could be another community titles scheme”. [28]. On the other hand, the Land Title Act 1994 defines “lot” as meaning a “separate, distinct parcel of land”. [32].

Metro Quays CTS contended that under s 170(2) “lots” bears the meaning given under Sch 6 of the BCCM Act, such that a “[lot] includes a subsidiary community titles scheme in the context of the layered arrangement of community titles schemes”. As a result, the body corporate, being the principal scheme, would be responsible for maintaining the roofing structures in a structurally sound condition under s 170(2)(b)(ii).

The Court rejected this argument. [22]. Section 170(2) creates additional obligations for bodies corporate created under a building format plan of subdivision. [25]. A building format plan defines land using “the structural elements of a building including, for example floors, walls and ceilings”. [27]. As a result, structural elements, such as the roof, may form part of a “lot” rather than part of the common property. [27]. For that reason, there is a need to impose a specific obligation on a body corporate to maintain roofing when it is created under a building format plan. [27].

Other references to “lot” in s 170 are also more consistent with a narrow definition of “lot” including, for example s 170(4)(b) which makes “the owner of the lot” responsible for “maintaining the tray of a shower”. [29]. Clearly that provision does not contemplate “lot” as including a body corporate. In addition, to construe “lot” as including a community title scheme, would create a conflict between s 170(1), and s 170(2), where the former would place the obligation to maintain the roof on Metro Quays CTS, while the latter would place the obligation on the principal scheme. [30].

For those reasons, the Court held that QCATA was correct in finding that the principal scheme was not liable to maintain the roof. On that basis, the Court refused the application for an extension of time in which to seek leave to appeal. [38].

L Inglis