FINANCIAL MANAGEMENT - where it is claimed the body corporate failed to issue the applicant with water bills on a quarterly basis, whether the body corporate contravened one of its duties and caused the applicant to suffer financial loss in the form of charges for water usage relating to a water leak on the applicant's lot.

• [1] This application is about billing for water usage in a residential body corporate - Gracemere Island One - that is part of the Hope Island Resort development.
• [2] The applicant purchased a lot in Gracemere Island One in November 2022. The applicant says the "body corporate", through a body corporate manager, bills lot owners for water usage on a quarterly basis. However, she says that she received no bills for water usage from November 2022 until September 2023, a period of 10 months. The applicant says around September 2023 she received a notice advising of significantly higher water usage. At or around the same time, she also received a consolidated water bill for $4,439.60 covering water usage over the period from purchase until 21 August 2023.
• [3] After receiving the bill and notice, the applicant investigated leading to the discovery of a water leak in the garden of the lot. The applicant says the leak was promptly fixed.
• [4] The applicant asserts the body corporate failed to timely provide quarterly bills or notifications of high usage. She says this was a breach of the body corporate's duty to act reasonably and to properly manage the body corporate, including its finances, by.
• [5] The applicant claims that, if the body corporate had done so, the leak would have been detected and rectified in late January 2023. She says the body corporate's failures directly caused losses in the form of excessive water charges. As a result, the applicant is asking that the body corporate be ordered to pay $4,080.05 of the water bills representing the billing for water usage from January 2023 through to September 2023.
• [6] The body corporate opposes the application. It says the applicant is responsible for leaks within the boundaries of the lot. It also says the quarterly meter read is conducted by the facilities manager for Hope Island Resort Principal Body Corporate (HIR PBC).
• [7] For the reasons given below, I am not satisfied there is a basis on which to make the orders sought and I have dismissed the application.

• [8] Gracemere Island One group titles plan 107087 is a residential body corporate comprising of 60 lots. It is a plan registered under the Integrated Resort Development Act 1987 (IRD Act) and is part of the Hope Island Resort development.
• [9] The applicant is the proprietor (owner) of Lot 31 in Gracemere Island One. Lot 31 is found on GTP 107087.
• [10] The respondent is The Proprietors - Gracemere Island One GTP 107087, referred to herein as the "body corporate" or Gracemere Island One.
• [11] The applicant seeks the following orders:
  1. An order requiring the Body Corporate for Gracemere Island One G.T.P 107087 to pay me the sum of $4080.05. This amount represents the excessive water charges incurred due to the Body Corporate's failure to provide timely water usage bills and notifications of high consumption for the periods from [23/01/2023 to 24/11/2023]
  2. An order requiring the Body Corporate for Gracemere Island One G.T.P 107087, through its Body Corporate Manager Cambridge Management Services, to provide a comprehensive written explanation [including for the delays in providing water bills and a reconciliation].
  3. An order requiring the Body Corporate for Gracemere Island One G.T.P 107087, through its Body Corporate Manager Cambridge Management Services, to provide a formal, detailed written response addressing the denial (if any) of the orders sought in points 1 and 2.

• [12] Two pieces of legislation apply to give a referee jurisdiction to make determinations and issue orders relating to certain disputes at Gracemere Island One. Section 325(2)(a) of the Body Corporate and Community Management Act 1997 (Qld) (BCCM Act) provides that the BUGT Act continues to apply to plans registered under that Act for a "specified Act." The IRD Act is one such "specified" Act.[1]
• [13] Where Gracemere Island One was registered under the IRD Act, the BUGT Act thus applies to substantively regulate Gracemere Island One.
• [14] For dispute resolution, the BUGT Act provides that certain persons, including proprietors, may make a written application for orders from a referee to settle a dispute or rectify a complaint, about the exercise of powers or performance of functions conferred or imposed by the BUGT Act. A referee has a general power to make orders pursuant to section 77(1) and the power to make the more specific orders described in sections 75 to 94B of the BUGT Act.[2]
• [15] The applicant is a proprietor, seeking an order against the body corporate about the exercise of powers or performance of functions under the BUGT Act in relation to the parcel. The applicant is also seeking orders pursuant to section 84 of the BUGT Act that the body corporate provide certain information. Prima facie, I am satisfied I have jurisdiction under section 77(1) of the BUGT Act to make determinations and orders for this dispute as they relate to the applicant and to Gracemere Island One.
• [16] The respondent and all owners were invited to make a submission on the application for final orders. The committee for Gracemere Island One made a submission on behalf of the respondent. The applicant provided a reply.

• [17] The applicant says she purchased the lot in November 2022 and occupied it. Regarding water usage and billing, the applicant says:
  1. usage for individual lots is billed quarterly by the body corporate and is managed by a body corporate manager (BCM)
  2. from settlement in November 2022 until 20 September 2023, no water usage bills or any notification of water consumption were received
  3. on 20 September 2023, the body corporate issued a notice of significantly abnormal water usage for the periods as follows:
     1. 02/11/2022 - 23/01/2023 (314 kL)
     2. 23/01/2023 - 24/04/2023 (378 kL)
     3. 24/04/2023 - 21/08/2023 (299 kL)
  4. at or around the same time, she received a consolidated bill for $4,439.60 at which time a water leak on the property was identified, which was promptly fixed
  5. after the leak was fixed, water usage was significantly lower (around $700 per quarter)
  6. had the body corporate provided timely bills or notifications after the first abnormal period (e.g., in late January 2023), she would have detected and rectified the leak much earlier, preventing the subsequent escalation of water usage and costs, and
  7. since October 2023, she has made diligent attempts at self-resolution, including extensive back-and-forth communication, with the BCM responses described as consistently vague, evasive, and lacking clear explanations for the billing delays or resulting financial burden.
• [18] As grounds for the first order sought, the applicant says the body corporate has failed to perform its functions and has breached its duty to act reasonably. She says a referee has the power to make an order pursuant to section 77(1)(a) of the BUGT Act that the body corporate pay the applicant $4,080.05 to resolve the dispute about the breach of duties,
• [19] For the second order sought, the applicant says a referee has the power to make an order pursuant to section 84 of the BUGT Act that the body corporate provide information and that such an order would align with sections 38D and 40 of the BUGT Act that relate to record keeping by the body corporate. The applicant says this order is warranted because:

... As a lot owner, I have a right to clear and accurate information regarding the financial management of the scheme, particularly concerning charges levied against my lot. The Body Corporate has a duty to provide such information. Their current responses have been consistently vague and have not adequately addressed my specific questions regarding the billing delays, water read fee discrepancies, or the identical transactions.

Accountability: A detailed explanation is essential for the Body Corporate and its manager to be held accountable for their procedural failures and to demonstrate a commitment to good governance.

• [20] For the third order sought, the applicant says the order is warranted as a matter of procedural fairness and to improve processes because:

... If any of my requested outcomes (particularly compensation) are denied, I am entitled to a clear, legally-supported explanation for that decision. This ensures transparency and allows me to understand the basis of their position.

Prevention of Recurrence & Duty of Care: The prolonged failure to bill and notify indicates systemic issues in the Body Corporate's management processes. An order for confirmation of improved processes is vital to prevent similar situations from affecting me or other lot owners in the future. The Body Corporate Manager has a duty to exercise reasonable skill, care, and diligence and to keep the Body Corporate informed of significant developments .... Their failure to do so directly contributed to this dispute.

• [21] In response, the respondent body corporate says the quarterly meter read is conducted by the Hope Island Resort Principal Body Corporate (HIR PBC), the first bill was mailed to the applicant in July 2023 due to timing of consolidated billing and reconciliation processes, and the HIR PBC sent the applicant a notice of high water usage on 16 August 2023.
• [22] Moreover, it says the water leak was located within the boundaries of the applicant's lot and is therefore an owner not a body corporate responsibility. The committee says the body corporate has no obligation under the BUGT Act to monitor individual lot consumption or proactively detect leaks. It says water usage is billed on actual consumption and the body corporate is not liable for internal plumbing issues or leaks on private property. It says the applicant's claim for $4,080.05 is not supported by the legislation
• [23] The committee says the body corporate has acted in good faith by: assisting with leak identification, providing access to his historical billing and statements, and offering to meet with the applicant.

• [24] Although she accepts "that the leak was located within my lot's boundaries," the applicant says, the body corporate has a duty to process and issue water bills in a timely manner because it is the party responsible for consolidated billing and reconciliation.
• [25] The applicant says it was the body corporate's failure to promptly relay critical financial and usage information to a lot owner that "directly prevented me from exercising my right to identify and address the leak promptly" and directly caused an avoidable financial burden. She estimates the additional costs or financial loss as $3,032.90.

• [26] In order to succeed on the first claim, the applicant needs to establish that the body corporate owed a duty - whether statutory or otherwise - to the applicant, that it breached that duty, and the breach caused the loss claimed by the applicant. I will consider those questions before addressing the second and third orders sought.

• [27] Section 51 of the BUGT Act is entitled "Duties of proprietors and other occupiers of lots." It provides in relevant part that:

(2) A proprietor or mortgagee in possession ... shall repair and maintain his or her lot (including any part of a pipe, pole, wire, cable or duct which is intended to be used solely for the servicing or enjoyment of the lot and is within the lot but not within a wall, floor or ceiling forming a boundary of that lot) and keep the same in a state of good repair, reasonable wear and tear, and damage by fire, storm, tempest or act of God excepted.

• [28] Gracemere Island One is registered as a group titles plan. There is no suggestion the applicant's lot shares a common wall with a structure on a neighbouring lot or that the leaking pipe is on the boundary of the lot, or that the pipe serves any other lot. Thus, there is no dispute that the applicant is the party wholly responsible for maintaining pipes within the lot boundaries which are solely for servicing the lot. The applicant acknowledges this responsibility. In my view, the applicant is the party that bears the responsibility for detecting water leaks on her lot.
• [29] During the period from November 2022 through to September 2023, I am satisfied it is more probable than not that there was a leaking or broken pipe on the applicant's lot. The applicant states a leak was identified and repaired in or around September 2023 and the water usage for the lot dropped after that time. Accordingly, I am satisfied it was the leaking pipe - for which the applicant was responsible - that directly caused the water usage for Lot 31 to be higher than usual. As a direct result of the increased water usage, the charges for water during the relevant periods were also higher.
• [30] Notwithstanding the above, the applicant is claiming the body corporate should bear some of the responsibility for the costs of excess water usage caused by the leaking pipe. The applicant argues that the body corporate has fundamental duties to properly manage the scheme and act reasonably in making decisions.[3] The applicant suggests the body corporate breached these duties when it failed to issue water bills on a quarterly basis. If it had done so, the applicant claims the leak on Lot 31 would have been identified and repaired sooner and her water usage and bills reduced. In the applicant's own words. "[t]his prolonged oversight directly prevented me from detecting and repairing the leak in a timely manner."
• [31] In my view, this argument fails at each stage. Firstly, the body corporate is likely facilitating the supply of water and/or associated billing services pursuant to section 37(2) of the BUGT Act. That section leaves it to the parties to agree on the terms and conditions of the provision of such services. The applicant has offered no evidence of an agreement by which the body corporate promises to read the meters or to bill quarterly.
• [32] I am also not persuaded the body corporate's duties to act reasonably or manage the scheme meant it was somehow obligated to read the meters and/or issue water bills on a quarterly basis. I am not aware of any express section of the BUGT Act that would require the body corporate to do so. Nor am I persuaded that the body corporate's general duty to manage finances would extend to necessarily require it to read meters and invoice on a set schedule. I take judicial notice that even large providers of utility services only "aim" to read meters on a quarterly basis and state they may instead use estimates of water usage for billing purposes.[4]
• [33] Secondly, even if the body corporate's duty to act reasonably in "the control, management and administration of the common property"[5] applied generally to its decisions about issuing water bills, I am not satisfied in the circumstances that the body corporate failed to act reasonably. It appears some issues with billing meant the applicant did not receive an invoice until 20 July 2023, some 8 months after taking possession of the property. The body corporate attributes the delay to the timing of consolidated billing and reconciliation processes. While billing at this frequency may not be ideal, it not automatically unreasonable.
• [34] Thirdly, even if there had been a breach by the body corporate of any duty, in my view, the direct cause of the increased water usage was a pipe for which the applicant was responsible. The intermittent billing by the body corporate did not cause the excess water usage or resulting charges for that usage. As noted above, in my opinion it was the applicant's responsibility to maintain the pipes on her lot which included detecting leaks
• [35] Moreover I reject the applicant's suggestion that the delay in billing "directly prevented me from exercising my right to identify and address the leak promptly." To the contrary, there was nothing preventing the applicant from reading her own meter nor from taking other steps to detect leaks on her lot. Finally, I note from the materials provided that the applicant was overseas and was not occupying the property for much of 2023. Those circumstances may have contributed to the delays in her identifying a water leak on her lot.

• [36] The applicant is also seeking an order that the body corporate direct its BCM to provide a comprehensive written explanation about the delays in billing in 2023, discrepancies between the water billing relied on for the settlement of her purchase of the property and subsequent bills, and about alleged duplicate billing that caused more confusion.
• [37] I am not satisfied in the circumstances that such an order is warranted. In my view, any issues with statements relating to settlement accounts would be a matter for the applicant, as the purchaser of the lot, and the seller of the lot.
• [38] Regarding the other explanations sought, the applicant accepts the meter readings and does not dispute the water usage for the period through to when the leak was repaired in September 2023. Moreover, there is no evidence that the issues with quarterly billing have continued. For those reasons, it does not strike me as necessary or appropriate to make this order.

• [39] The applicant is also seeking an order requiring the body corporate to direct its BCM to provide a formal, detailed written response addressing its opposition to the first and second orders sought.
• [40] Where the body corporate provided a submission about the application and where I have given reasons for declining to make the first and second orders sought, I am satisfied the applicant has been afforded natural justice. In addition, there is no evidence
• [41] For these reasons, I do not consider it necessary or appropriate to make the third order sought.

• [42] I have dismissed the application for the above reasons.
• [43] No-one likes to receive large, unexpected bills. The applicant was not in residence at her property for much of 2023 and is clearly frustrated by the large water bill. She will, no doubt, be disappointed by the outcome of this application. Although it may seem unfair, the applicant is ultimately responsible for detecting and rectifying water leaks on her lot.

[2] Even if the applicant demonstrates a legal basis for the first order sought, section 78(1)(a) of the BUGT Act provides a referee can only make orders for payment not exceeding $1,000.

[3] It is not entirely clear which body corporate - HIR PBC or Gracemere Island One - is providing water to Lot 31 or is undertaking the billing function for water usage. Given I have found there is no legal basis for the relief sought, I did not consider it necessary to investigate this issue further.

[4] See e.g., Urban Utilities at https://www.urbanutilities.com.au/residential/help-and-advice/water-meters

[5] See Sections 27(3) and (4) of the BUGT Act (emphasis added)