Sections 227(1)(a) and 229(3)(a) of the Body Corporate and Community Management Act 1997 (Qld) (Act), applying the Act and the Body Corporate and Community Management (Standard Module) Regulation 2008 (Standard Module).

PROPERTY DAMAGE - whether an owner has suffered damage to property; whether the damage occurred because of a contravention of the Act or community management statement; whether there are reasonable grounds to find a person responsible for the contravention; whether the person responsible for the contravention has to pay the owner an amount as reimbursement for repairs to damaged property.

Act, s 281; Standard Module, s 170

1. I hereby order that Nola McSweeney, the owner of lot 201, must pay Sandra Mannering, the owner of lot 101, the amount of $1,500 in reimbursement for the cost of re-carpeting bedroom 2 of lot 101. Payment is to be received by Sandra Mannering within 14 days of the date of this order.
2. I further order that, in all other respects, the application is dismissed.

[1] This is an application by the owner of lot 101 at Riva on Duporth, Sandra Mannering, seeking the following order against the owner of lot 201, Nola McSweeney:

"I ask that the respondent be ordered to reimburse me the sum of $5,200 (inclusive of GST) being the sum paid by me to Neuendorf Interiors for the replacement of my carpet."

[2] Ms Mannering claims that the carpet required replacement after water escaped from the respondent's spa bath and entered bedroom 2 within her lot.

[3] Riva on Duporth CTS 40014 is a 20 lot community title scheme in Maroochydore registered under a building format plan of subdivision and regulated by the Standard Module.

[4] It is common ground between the parties that the spa bath in lot 201 had water standing in it overnight on 26-27 December 2013, the water leaked from the spa bath due to what was subsequently found to be a perished o-ring, and it entered lot 101 below and wet the carpet in bedroom 2.

[5] The applicant claims that the respondent should reimburse her the $5,200 she spent on a new carpet for her lot on the following grounds:

• It was unreasonable and negligent of the respondent to leave her spa bath full of water, as she could have reasonably foreseen that it may have resulted in water entering the lot below;

• The applicant's carpet was damaged beyond repair and required replacement; and

• As the damaged carpet is no longer in production, it was necessary to replace all of the carpet in her lot to ensure that it matched.

[6] The respondent argues that:

• She could not possibly have foreseen that the o-ring in her spa bath would perish and permit water to escape into the lot below;
• Only a strip of carpet in one bedroom got wet, which does not justify replacement of an entire 5 year old carpet throughout the lot; and
• It may have been possible to restore the carpet to its original condition through the use of large dryers and dry cleaning.

[7] After receiving the application, the commissioner invited the respondent and the committee to make submissions about the matters raised.[1] After the applicant replied to the respondent's submissions, the commissioner referred the application to departmental adjudication.[2]

[8] I am satisfied that this matter falls within the legislative dispute resolution provisions.[3] If I am satisfied that the applicant has suffered damage to property because of a contravention of the Act or the community management statement, I may order the person who I believe, on reasonable grounds, to be responsible for the contravention to pay the applicant an amount fixed by me up to $10,000 as reimbursement for repairs carried out to the property by the applicant.[4]

[9] In accordance with my investigative powers under section 271 of the Act, the parties and Mark Fitzgerald of Neuendorf Carpet Court have, at my request, provided further submissions.[5]

[10] As I indicated at paragraph 8, section 281 of the Act confers the jurisdiction to decide this dispute. Given section 281(1), the questions to be decided are:

1. Did the applicant suffer damage to property?

2. If this is the case, did the damage occur because of a contravention of the Act or the community management statement?

3. If this is the case, do I believe, on reasonable grounds, that the respondent is responsible for the contravention?

4. If this is the case, should the respondent pay the applicant an amount as reimbursement for repairs carried out to the damaged property?

[11] As section 281 does not require that I delve into questions of negligence, I have not given consideration to the applicant's and respondent's arguments on that point. Further, the parties' discussion of insurance issues will have no bearing on determining the above questions.

[12] The first question is whether the applicant suffered damage to property?

[13] The applicant states that water from the respondent's lot stained and shrank the carpet in bedroom 2 of lot 101. The evidence indicates that only the applicant and her de facto husband, Raymond Norrie, saw the carpet after water leaked from the respondent's spa bath. There is no independent evidence of the extent of the damage to the carpet. While the applicant submitted a letter from Mr Fitzgerald[6] and the respondent supplied a statutory declaration from Phillip Allan Carroll[7], neither person saw the wet carpet in bedroom 2.

[14] The respondent states that only a strip of carpet in bedroom 2 was affected. This is at odds with the applicant's contention that some 100 litres of water entered bedroom 2 over the course of 3 days, and a statutory declaration from Mr Norrie stating that the carpet in bedroom 2 was "soaking wet". The respondent does not explain how she knows that only a strip of carpet was affected, nor does she provide any evidence to support that statement.

[15] On the basis of submissions, I do not consider any further investigation will elicit any material evidencing the damage to the carpet. I am persuaded by a report from F & M Plumbers[8] that water leaked from the spa bath in lot 201 and entered lot 101. No one has denied that the water entered bedroom 2.

[16] All of the circumstances of this matter indicate that the carpet in bedroom 2 was affected.[9] I am therefore satisfied on the balance of probabilities that the carpet in bedroom 2 was water damaged.

[17] It is therefore necessary to explore whether the damage occurred because of a contravention of the Act or the community management statement and if so whether, on reasonable grounds, the respondent is responsible for the contravention.

[18] Lot owners are obliged to maintain their lot in good condition, including any utility infrastructure that is not part of common property and is within the boundaries of the lot.[10] Section 20(1)(b) of the Act provides that utility infrastructure is not common property where it is:

"(i) solely related to supplying utility services to a lot; and

(ii) within the boundaries of the lot (according to the way the boundaries of the lot are defined in the plan of subdivision under which the lot is created); and

(iii) located other than within a boundary structure for the lot."

[19] A building format plan of subdivision "defines land using the structural elements of a building, including, for example, floors, walls and ceilings".[11] The boundaries of a lot created under such a plan are the centre of the wall, floor, or ceiling that separates the lot from another lot or common property.[12]

[20] A photograph submitted by the respondent shows that the spa bath and pump are sitting atop the slab in the respondent's bathroom. They are above the middle of the floor separating lot 201 from lot 101 below and are therefore within the boundaries of the respondent's lot. To the extent that the spa pump qualifies as utility infrastructure, it meets the criteria in section 20(1)(b) and is not common property. I conclude that the respondent is obliged to maintain her spa bath and spa pump in good condition.

[21] The respondent states that it is very uncommon for an o-ring in a spa pump to fail "...and in that regard I am at a loss to understand how I could have foreseen that an internal O-Ring within a pump that is in turn sealed under a spa bath had perished". However, I do not consider that the section 170 duty to maintain the lot and utility infrastructure in good condition only arises when an owner can reasonably anticipate that something may be subject to falling into disrepair.

[22] In Magog[13], the Queensland District Court referred to the Supreme Court of New South Wales' judgement in Seiwa[14]. Seiwa involved the interpretation of section 62 of the Strata Schemes Management Act 1996 (NSW) concerning a duty to "properly maintain and keep in a state of good and serviceable repair"[15]. Brereton J stated that this duty:

"...is not one to use reasonable care to maintain and keep in good repair the common property, nor one to use best endeavours to do so, nor one to take reasonable steps to do so, but a strict duty to maintain and keep in repair.

4 The duty to maintain involves an obligation to keep the thing in proper order by acts of maintenance before it falls out of condition, in a state which enables it to serve the purpose for which it exists [Hamilton v National Coal Board [1960] AC 633, 647 (Lord Keith of Avonholm); Haydon v Kent County Council [1978] QB 433, 464 (Shaw LJ); Ridis v Strata Plan 10308 [2005] NSWCA 246, [161]]. Thus the body corporate is obliged not only to attend to cases where there is a malfunction, but also to take preventative measures to ensure that there not be a malfunction [Greetings Oxford Koala Hotel Pty Ltd v Oxford Square Investments Pty Limited (1989) 18 NSWLR 33 (Young J); Ridis, [162]-[163]]...

5 It follows that as soon as something in the common property is no longer operating effectively or at all, or has fallen into disrepair, there has been a breach of the s 62 duty [cf Ridis [177]]."

[23] Consistent with this authority, I am satisfied there are reasonable grounds to find that the respondent was in breach of the legislative obligation to maintain her lot and utility infrastructure within it in a good condition as soon as her spa pump fell into disrepair due to the failure of the o-ring. The fact that she could not anticipate this event is immaterial.

[24] On the above analysis, I am satisfied the applicant suffered damage to carpet in bedroom 2 of lot 101 because of a contravention of the Act by the respondent.

How much reimbursement should the applicant receive?

[25] The last question therefore is whether the respondent should pay the applicant $5,200 as reimbursement for repairs carried out to the damaged property.

[26] The applicant's $5,200 claim is the amount she paid to Neuendorf's Pty Ltd to supply and install carpet "to the corridor and three bedrooms including all robes". The applicant makes this claim notwithstanding that there is no evidence that carpet was water damaged anywhere in lot 101 but bedroom 2. In fact, the carpet throughout the rest of the lot was reportedly in very good condition. Mr Fitzgerald states that it was "...a very heavy quality 100% wool product...showing no sign of wear...it would have had many, many years of wear left in it."

[27] The applicant argues she is entitled to the reimbursement claim because: there was matching carpet throughout lot 101 prior to the leak; the particular white wool carpet that was in the three bedrooms and the corridor (all contiguous) prior to the leak was out of production; and she is entitled to be restored to the position she was in prior to the leak. The applicant has provided a statement from Mr Fitzgerald to the effect that it would have been "near to impossible" to exactly match a section of replacement carpet in bedroom 2 with the carpet throughout the rest of the lot.

[28] The jurisdiction under section 281 relates specifically to repairs to damaged property. As I have said, I am satisfied the carpet in bedroom 2 is damaged property. The applicant seeks to extend the damaged property to all carpet in lot 101. I do not consider any difficulty the applicant may have had exactly matching carpet means all carpet in the lot is damaged property. Nor do I consider a claim that the specific carpet product in lot 101 was no longer available means all carpet in the lot is damaged property. In the circumstances of this dispute, I am not satisfied it is established that the applicant suffered damage to all the carpet in lot 101 because of a contravention of the Act by the respondent.

[29] For these reasons, I have dismissed the outcome sought to the extent the applicant claims reimbursement of $5,200.

[30] Given the jurisdiction conferred by section 281, I consider the applicant's reimbursement claim is limited to restoring the damage suffered to the carpet in bedroom 2. The applicant should not be disadvantaged because she replaced the carpet in this room seemingly without exploring alternative (and possibly cheaper) methods of repairing the damage. I am satisfied by submissions that, on the balance of probabilities, the carpet in bedroom 2 suffered damage necessitating its replacement.

[31] As the parties are aware, I wrote to Neuendorf Carpet Court and asked the price for re-carpeting bedroom 2 only, and received a quote for $1,500. Neither party questioned this amount. Accordingly, I fix $1,500 as the amount the respondent must pay the applicant as reimbursement for the repairs she carried out to the damaged property. The respondent must pay the amount within 14 days of the date of this order.

[1] Section 243, Act.

[2] Section 248, Act.

[3] Sections 227, 228 and 229, Act.

[5] My letters dated 1 October 2014 and 20 February 2015. The applicant's letters dated 21 January, 27 April and 18 May 2015. The respondent's letters dated 4 February and 30 April 2015. The Neuendorf Carpet Court letter dated 24 February 2015.

[6] Neuendorf Carpet Court supplied and installed new carpet in lot 101.

[7] Claims to be a qualified water and carpet restorer.

[8] Who investigated the incident on the day the leak was discovered.

[9] E.g. The respondent's husband states he saw the applicant hanging strips of carpet and underlay out to dry on the morning of 27 December 2013; the email correspondence in the month after the event is all about the water-damaged carpet in bedroom 2; when Mr Fitzgerald attended lot 101 he found the carpet removed from bedroom 2 only.

[10] Section 170(2) & (4), Standard Module.

[11] Section 48C(1), Land Title Act 1994.

[12] Section 49C(4), Land Title Act 1994.

[13] Magog (no.15) Pty Ltd v The Body Corporate for the Moroccan [2010] QDC 70.

[14] Seiwa Pty Ltd v Owners Strata Plan 35042 [2006] NSWSC 1157.

[15] Seiwa related to the obligations of an owners corporation, the New South Wales terminology for a body corporate. Given a lot owner has the same duty as a body corporate to maintain in good condition, I consider Seiwa also applies to lot owner maintenance obligations.