Kirk v The Owners - [2017] ACAT 102

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

KIRK v THE OWNERS – UNITS PLAN NO 2992 (Unit Titles) [2017] ACAT 102

UT 6/2017
Catchwords: UNIT TITLES – owners corporation powers and duties – maintenance and repair of common property – water pooling on balcony – defective building work – agreed scope of repair works to balcony – water ingress to property from balcony – whether owners corporation liable for internal damage – common law negligence – owners corporation duty of care – reasonable foreseeability of internal damage

Legislation cited: ACT Civil and Administrative Tribunal Act 2008 ss 18, 48

Strata Scheme Management Act 1996 (NSW) ss 62
Unit Titles (Management) Act 2011 ss 9, 16, 24, 31, 102 125, 129
Unit Titles Act 2001 ss 15

Cases cited:Bennett v Owners Units Plan 932 (Unit Titles) [2016] ACAT 57
Castro v Owners Unit Plan No 246 [2016] ACAT 111
Garcia v The Owners – Units Plan 10 [2017] ACAT 91
McElwaine v The Owners Strata Plan Number 75975 [2017] NSWCA 239
Ridis v Strata Plan 10308 [2005] NSWCA 2
The Owners Strata Plan 50276 v Thoo [2013] NSWCA 270

Tribunal: Presidential Member E Symons

Date of Orders:  5 December 2017
Date of Reasons for Decision:         5 December 2017
AUSTRALIAN CAPITAL TERRITORY )
CIVIL & ADMINISTRATIVE TRIBUNAL       )          UT 6/2017

BETWEEN:BRIDGET YVONNE KIRK
Applicant
AND:THE OWNERS – UNITS PLAN NO. 2992
Respondent

TRIBUNAL: Presidential Member E Symons

DATE:5 December 2017

ORDER

The Tribunal orders that:

Within 42 days the Owners Corporation procure with AES Homes the remediation of the external works as contained in Annexure A to these orders.
The Owners Corporation pay AES for the external works in Annexure A.
Within 14 days of these Orders the Owners Corporation arrange a builder to inspect and quote on necessary repair work to the interior of unit 3/12 Challis Street, Dickson (the internal works).
Within a further 21 days the Owners Corporation provide the quotation referred to in Order 3 to the Executive Committee of the Owners Corporation to approve the cost of the internal works.
Within a further 42 days the Owners Corporation procure the remediation of the internal works.
The Owners Corporation pay for the costs of the internal works.
The applicant do all things necessary to provide access to the contractor engaged by the Owners Corporation to undertake the works in orders 1, 3, and 5.
The Owners Corporation pay $145.00, being the filing fee paid by the applicant, to the applicant by close of business 22 December 2017.
The respondent has liberty to apply to the Tribunal on three days’ notice in the event of a failure by the applicant to comply with order 7.
That the applicant has liberty to apply to the Tribunal on three days’ notice in the event of a failure by the respondent to comply with orders 3, 4 and 5.
………………………………..
Presidential Member E Symons

REASONS FOR DECISION

Background

The applicant is the owner and occupier of a unit (the unit) in Units Plan No. 2292 (UP 2292) located in Dickson. The Strata Manager for the UP 2292 at all relevant times was Link Corporate Services Pty Ltd trading as Link Strata Management (Link).
This application arises from water ingress to the applicant’s unit since at least May 2013.

The proceedings

On 20 March 2017 the applicant filed an application under the Unit Titles (Management) Act 2011 (UTM Act) against the Owners Corporation. Section 9(2)(c) of the UTM Act provides that an owners corporation may sue and be sued in its corporate name: The applicant seeks the following orders:
That the Body Corporate Committee immediately (but no more than 14 days hence) appoint an ACT Licensed Builder to perform the remediation works to the water effected areas of the property in accordance with the building report of Lawrie Paul Enterprises dated 16 Oct 2014 and such monies be provided from the funds of the owners of the units plan to cover the works and directly related costs.
On 5 April 2017 the matter was listed for a directions hearing. At this hearing the matter was listed for a preliminary conference on 10 April 2017, directions were made for the filing of further material and the matter was set down for hearing on 29 May 2017. The orders which issued after the directions hearing included the following notation:
The Tribunal notes: the parties should ensure their evidence and documents focuses on the issues for consideration at hearing which are:
Does the balcony need repair:
·      If so the extent of the repairs;
·      If so who should undertake the repairs and when;
·      If so who should pay for the repairs.
Has there been consequential damage to the applicant’s unit and should the Owners Corporation rectify that damage or pay compensation for it?
After the parties attended a preliminary conference on 10 April 2017 Presidential Member Daniel made the following orders:
By Consent:
1.The Owners Corporation will arrange a builder to inspect and quote on necessary repair work to the interior, façade and balcony of (the) unit by close of business 11 April 2017.
2.Ms Kirk will facilitate access to the premises by the builder on 11 April 2017.
3.The builder’s quote will be provided to the executive committee of the Owners Corporation which will agree a scope of works to be urgently undertaken.
The Tribunal notes: the executive committee will advise Link Strata of the agreed urgent works to be undertaken, and Link Strata is to liaise with the builder and Ms Kirk and her attorney Mr Brennan to facilitate the completion of the works in a timely manner.
Both parties filed material in accordance with the directions.
The matter was heard over two days, 29 May 2017 and 29 July 2017. On 29 May 2017 the applicant was represented by Christopher Brennan pursuant to a general power of attorney filed with the Tribunal on 10 April 2017. The applicant gave evidence and was cross examined. The respondent, who was represented by Mark Flint, solicitor, called evidence from Adrian Lewis, a civil and structural engineer,[1] Peter Leary, an accredited and licensed builder and accredited and licensed building consultant,[2] and Kevin Graham, a unit owner and occupier in UP 2292 and a member of the Executive Committee (EC) for 18 months to January 2012 and from 19 August 2013.[3] Mr Lewis’s report dated 3 February 2014 was marked exhibit R1, Mr Leary’s witness statement dated 8 May 2017 and his inspection report dated 18 July 2013 were marked exhibit R2. Mr Lewis, Mr Leary and Mr Graham were cross examined. The hearing was adjourned.
[1] Exhibit R3 page 2
[2] Ibid page 3 at [2]
[3] Ibid page 4 at [2]
At the conclusion of the first day’s hearing the parties reached the following agreement for the scope of external works for the unit:
AGREED SCOPE OF WORKS (EXTERNAL)
The parties agree that the following scope of works, as adapted from the Peak Consulting report dated 18 July 2013. Is appropriate for external rectification works in (the unit).
a.    Strip out balcony tiles
b.    Strip out cement bedding material
c.    Remove adjacent partitions so as to allow full membrane installation
d.    Prepare the substrate for re bedding
e.    Revise the current waste receptacle and ensure that it has correct control leak flanges and is adequate for the catchment
f.     Install new graded bedding to provide adequate fall away from the building and to the installed waste receptacle
g.    Install approved waterproofing membrane system ensuring all upturns are installed in accordance with relevant standards
h.    Ensure the waterproofing membrane system has all necessary bond breaking measures and is designed to cater for all differential movements of adjacent elements
i.   Supply and install new floor and skirting tiles ensuring all upturns and corners are sealed in accordance with relevant standards
j.     Undertake an inspection of the sub sill flashings of the window adjacent to the balcony and the sliding door. Rectify any flashings of the window adjacent to the balcony and the sliding door. Rectify any flashings or anti capillary measures that are not properly installed and functioning.
Link obtained three quotations for the agreed scope of works:
(a)AES Homes Pty Ltd (AES) - $12,850 exclusive of GST.
(b)A Watson Industries P/L (A Watson) - $17,478 inclusive of GST.
(c)Shaw Building Group (SBG) - $24,234.79 inclusive of GST.
The hearing resumed on 29 July 2017. Daryn Griffiths, solicitor, appeared for the applicant and Mark Flint, solicitor, appeared for the respondent. After hearing submissions from Mr Griffiths and from Mr Flint the Tribunal reserved the decision. This is the Tribunal’s decision.

Legislation

Section 15 of the Unit Titles Act 2001 relates to external common boundaries and states:
If a class unit or unit subsidiary is bound by an external wall of the building containing the units, then, unless otherwise indicated in the relevant unit title application or units plan –
(a) the boundary of the unit or unit subsidiary lies along the centre of the wall; and
(b) the part of the wall outside the boundary is common property.
Section 16 of the UTM Act sets out the functions of the owners corporation and includes:
(b) the control, management and administration of the common property.
Section 24 of the UTM Act sets out the maintenance obligations of an owners corporation and includes:
24Maintenance obligations
(1)An owners corporation for a units plan must maintain the following:
…
(d)the defined parts of any building containing class A units (whether or not the defined parts are common property);
NoteThis does not include painting, unless the painting is required because of other maintenance (see s 26 (1)).
(2) In this section:
defined parts, of a building containing class A units, means—
(a)the following structures in the building, if load-bearing:
(i)walls;
(ii)columns;
(iii)footings;
(iv)slabs;
(v)beams; or
(b)any part of a balcony on the building.
Section 31 of the UTM Act relates to recovery of additional expenditure incurred by the owners corporation because of the wilful act or omission of a member:
31Recovery of expenditure resulting from member or unit occupier’s fault
(1)This section applies if an owners corporation for a units plan has in carrying out its functions incurred an expense, or carried out work, that is necessary because of—
(a)a wilful or negligent act or omission of a member of the corporation, or an occupier of the member’s unit; or
(b)a breach of its rules by a member of the corporation, or an occupier of the member’s unit.
(2)The amount spent or the cost of the work is recoverable by the owners corporation from the member as a debt.
(3)If the owners corporation recovers an amount under subsection (2) from a member for an act, omission or breach of an occupier of the member’s unit, the member may recover the amount from the occupier as a debt.
(4)In this section:
work, carried out by an owners corporation, means maintenance or anything else the corporation is authorised under this Act to do.
Section 125 of the UTM Act provides that it applies to a dispute relating to an owners corporation for a units plan between the corporation and an owner or occupier of a unit in the units plan. Subsection 125(2) provides that a party to the dispute may apply to the ACAT for an order in relation to the other party if the application relates to the dispute. There is such a dispute between Bridget Kirk and the Owners Corporation.
The kinds of Orders the Tribunal may make are set out in section 129 of the UTM Act. These include in subsection (1) (a) an order requiring a party to do, or refrain from doing, a stated thing; (b) an order requiring a party to exercise a function under this Act; (c) an order requiring an owners corporation to do a stated thing that is ancillary to a function of the corporation under this Act and (d) an order requiring a person to pay to the Territory or someone else an amount of not more than $1,000. Subsection (2) provides that: “The ACAT may make any other order it considers reasonably necessary or convenient to resolve a dispute under this part.” Subsection (3) provides that: “This section does not limit the orders the ACAT may make in relation to a dispute under this part.”

Issues

The issues for determination are:
(a)Who is to undertake the external works?
(b)Whether the costs of the external works are to be apportioned between the parties, and if so, how?
(c)Whether the applicant is entitled to orders in relation to the internal works?
(d)Whether the applicant is entitled to associated costs claimed for obtaining reports and quotations, namely Lawrie Paul - $450.00, H & D Developments Pty Ltd (HD) - $550.00 and GIO Assessment - $300.00?
(e)Whether the applicant is entitled to orders for the respondent to pay her legal fees and disbursements?
(f)Whether consequential orders should be made that the applicant facilitates access to her unit for the purpose of the external works being carried out?

Applicant’s contentions

In relation to the six issues the applicant contends that:
(a)either AES or A Watson carry out the external works the subject of the agreed scope of works;
(b)the respondent pay the costs of the external works;
(c)the respondent be ordered to pay for the repairs to the internal damage to the unit;
(d)the respondent be ordered to pay the costs incurred by the applicant in obtaining the reports from Laurie Paul of $450.00 (Annexure D to the applicant’s documents lodged on 17 May 2017) and HD of $550.00 (Annexure C to the applicant’s documents lodged on 17 May 2017) as the respondent requested that she obtain these reports;
(e)the respondent also be ordered to pay to the applicant the filing fee she paid on lodging the application and her legal fees; and
(f)there is no requirement for orders to be made that the applicant provide access to her unit for the purpose of the works being undertaken as the applicant agrees to permitting access.

Respondent’s contentions

In the respondent’s submissions the respondent contends that:
(a)AES carry out the external works the subject of the agreed scope of works as the AES quote is the cheapest of the three quotes, being $14,135 inclusive of GST;
(b)the respondent pay $9,000, being the RBS quotation of $8,250 plus CPI rounded up, towards the AES quote of $14,135 and the applicant pay the difference because:
(i)      at the request of the respondent, Link obtained a quote on 30 August 2013 from RBS for a cost of $8,250 inclusive of GST for substantially the identical works as that in the agreed scope of external works;
(ii)      at the request of the respondent Link obtained a quote from Built Environment Construction (BEC) on 16 April 2014 for $6,875 inclusive of GST which did not include the costs of completely replacing the balcony tiles;
(iii)     in October 2014 HD provided a quotation for $7,900 plus an allowance of $40 per sqm for tiles, which is roughly in line with the RBS quotation;
(iv)     the respondent was ready and willing to effect repairs in 2013 and 2014 for a cost of $6,875 being the BEC quotation;
(v)     with CPI adjustments the RBS quotation of $8,250 is worth $8,891 in 2017;
(vi)     adopting the AES quotation of $14,135 as the baseline for costs in 2017, the cost for undertaking the works has increased by $5,244 since August 2013;
(vii)    the increase of $5,244 is disproportionate to inflation and was the applicant’s fault; an inference of unreasonable obstruction is open to the Tribunal on the evidence;
(viii)   between 2013 and 2017 the respondent did not fail to maintain the common property or defined parts because of the applicant’s conduct and it should not be responsible for the increase in costs; or
(ix) the additional expense has been incurred because of the applicant’s wilful or negligent act or omission as a member and the additional expense is recoverable pursuant to section 31 of the UTM Act as a debt.
(c)the applicant’s claim for internal repairs, namely remediation of the architraves, plasterboard and carpets, must fail as:
(i)      these items are not part of the common property and not “defined parts” being load bearing walls or columns;
(ii)      remediation falls outside the respondent’s obligations to maintain;
(iii) it is not amenable to an order by the Tribunal pursuant to section 129(1)(b) of the UTM Act to exercise a function; and
(iv) a breach of statutory duty under the UTM Act does not give rise to a claim in damages.
(d)the Lawrie Paul cost was unnecessary as it added nothing to the state of the knowledge of the defects. There was no evidence in relation to HD costs incurred;
(e)the applicant’s legal costs are not claimable in an action of this kind, however the respondent’s legal costs may be claimable under section 31 of the UTM Act;
(f)an order be made requiring the applicant to do all things necessary to provide access to the contractor engaged by the respondent to undertake the works; and
(g)further, the respondent contends that, given the history of this matter that the respondent be granted liberty to apply to the tribunal on three days’ notice in the event of a failure by the applicant to comply with the access order.

The evidence

This matter has a long history. The applicant’s chronology commenced from 12 May 2013 and annexed reports obtained by Link from Peak Consulting dated 18 July 2013, and from Lewis Consulting dated 3 February 2014 as well as the report from Lawrie Paul dated 18 October 2014 whom she had contacted in response to Link’s advice that the EC requested that she:
… engage a suitably(sic) contractor to complete the scope of work as noted above [the Lewis scope]. The Executive Committee will contribute an amount up to $6,785 incl. GST [BEC quotation] on receipt of a tax invoice from an appropriately qualified contractor and subject to inspection by Adrian Lewis that works have been completed to a satisfactory standard.[4]
[4] Ibid page 118
The respondent tendered a bundle of documentation which was exhibit R3. It contained some 369 pages. It included a chronology from 22 September 2006 and various annexures comprising emails between the parties and Link and the Executive Committee (EC), reports and quotations obtained by Link, Minutes of AGM and EC meetings, reports and quotations which the EC requested the applicant obtain and letters, plans and tribunal documentation.
Given the orders which the parties seek, the Tribunal sets out the following relevant dates from the chronologies, correspondence and the various reports obtained by the parties since May 2013.

Chronology and reports

On 20 May 2013 the applicant notified the Owners of UP 2292 (Owners Corporation) by notification to its EC and by notification to Link, of inadequate drainage of water from the unit’s balcony, leaking pipes and storage of water in the wall of the unit causing rot to the internal wall.
Link authorised an inspection by Peter Leary from Peak Consulting who inspected the unit on 16 July 2013 and provided a written report dated 18 July 2013 (Peak Report)[5] to Link which stated, inter alia:
[5] Ibid page 53
Findings –
…
3.4    We observe that the balcony has no visible upturns of membranes and/or skirting tiles present.
…
3.6     We noted a floor waste receptacle to be present at the southern end, adjacent to the air conditioner unit.
3.7     We confirmed the floor waste receptacle to be blocked with debris. No water was escaping.
3.8     The subject balcony has a large overflow relief outlet which was not found to be operational at the time of inspection as the water would need to pool extensively in order for this receptacle to come into play.
3.9     The removal of damaged skirting and subsequent electronic moisture encountered test revealed excessively high moisture levels within the masonry substrate behind the already damaged components.
3.10 The removed linings and skirting revealed the presence of mould which is consistent with long term water ingress.
…
3.12 The direct area of internal damage correlates exactly to the rendered wall which was found to be saturated as a result of pooling water on the subject balcony. It is reasonable to assume that this wall, being devoid of any visible upturn of balcony membrane or skirting tile, combined with the fact that the render was found to be slightly spalling with evidence of failed paintwork, would be allowing water to ingress and rise up the otherwise unprotected masonry where it then saturates the directly affixed plasterboard linings and skirting.
3.13 We immediately cleared the surface drainage receptacle of the subject balcony and shortly after this, all pooled water had evacuated from the subject balcony.
3.14 A close inspection of this drainage outlet receptacle revealed it to be blocked with debris which had caused the water to pool heavily on the balcony.
…
Conclusion
4.1     As the subject balcony was found to be excessively inundated with pooling water and the balcony has no visible upturn of balcony membrane or skirting tiles we conclude that the localized damage found to the interior of the subject unit is directly resultant of saturation of the masonry wall and directly affixed plaster linings and skirting trims.
4.2     A secondary conclusion (not yet proven due to total saturation of the subject masonry) is that the window and sliding door installation may not be properly flashed and as a result of inadequate anti capillary measures moisture which accumulates on the external frames and tracks may not be correctly draining away. The aluminium sub sill and sill flashing of the aluminium sliding door may not have the correct anti capillary breaks which are causing moisture ingress to the corner extremities where it will then be able to wick across the subject masonry wall.
4.3     Due to the overwhelming amount of water found on this balcony we cannot form any additional conclusions other than the water ingress at the perimeter of the balcony and masonry wall.
…

The Peak Report included the following Scope of Works (Peak Scope of Works)[6]:
[6] Ibid page 55
6.1 Strip out all balcony tiles.
6.2 Strip out cement bedding material.
6.3Remove adjacent partitions so as to allow full membrane installation.
6.4 Prepare the substrate for re bedding.
6.5 Revise the current waste receptacle and ensure that it has correct control leak flanges and is adequate for the catchment.
6.6 Install new graded bedding to provide adequate fall away from the building and to the installed waste receptacle.
6.7 Install approved waterproofing membrane ensuring all upturns are installed in accordance with relevant standards.
6.8 Ensure that the waterproofing membrane system has all necessary bond breaking measures and is designed to cater for the differential movement of adjacent elements.
6.9 Supply and install new floor and skirting tiles ensuring all upturns and corners are sealed in accordance with relevant standards.
6.10 During the course of the work it is suggested that the sub sill flashings and anti-capillary measures are in fact installed and functioning.
6.11 Following on from this scope of work it is suggested that monitoring be conducted to ensure rectification has been successful. If further water ingress occurs at the localized area adjacent to window and door frames these units may require removal with a view to a revision of flashings and anti-capillary measures, which may be required.
The report included 14 photographs of the balcony, the external wall and the interior of the unit.
On 10 August 2013 Reliance Building Services (RBS) provided a quotation to Link for the repairs to the unit of $8,250 including GST (Reliance quotation)[7]. The Reliance Quotation included the Peak Scope of Works as well as:
(a)allowance to remove floor mounted AC unit to allow for balcony floor replacement and store for later refit; and
(b)disposal of debris generated by the Peak Scope of Works and this work.
[7] Ibid page 65
On 4 September 2013 the respondent’s EC resolved:[8]
to accept the (RBS) quote subject to ensuring the quote including refitting the air conditioning unit and can be done in a reasonable time frame. A quote to be sought from Reliance for the internals to unit 3 … The report relevant to unit 3 can be released to the owner.
[8] Ibid page 69
The work was scheduled for November 2013.
Around 25 September 2013 the applicant discussed with RBS whether access to the balcony could be gained externally rather than through the unit. Peter Dragisic from RBS emailed Link about access stating – “The occupant is very hesitant to allow us constant access through the apartment to complete the balcony repairs and would prefer access to the balcony to be obtained externally.”[9] He sought and obtained a quote for external access to the balcony from their scaffolding contractor for the required period which was $2,750 inclusive of GST (external access quotation).[10] On or about 9 October 2013 RBS notified Link of the external access quotation and, in relation to Link’s request to provide a quotation for internal repairs stated:[11]
Please note that to avoid further inconvenience to the occupant we would suggest that the quote for internal repairs be held in abeyance until such time as the external balcony repairs commence in early November (Pending EC approval for external access to the balcony).
The internal repairs that I sighted are not major and are unable to be commenced until such time as the externals are completed anyway?
We are still awaiting your further update from the EC on the quoted external scaffold access lift quote for this balcony repair.
[9] Ibid page 75
[10] Ibid page 73
[11] Ibid page 73
On 2 October 2013 the applicant emailed Link in which she stated:[12]
I would reclassify the outdoor/indoor works with the indoor being the priority, given that I have a huge exposed mouldy rotten part of my wall that needs fixing straight away. … As far as access goes for the outside we have made arrangements that suit all, however the inside is getting worse since the builder took the big scoop out of the wall, its all started to crumble and the cracks and mould are exposed up the wall.
[12] Ibid page 76
As stated in [29] above, RBS notified Link that an arrangement for access had not been made as it was waiting advice from the EC on the external access quotation.
On 20 November 2013 the EC met and, inter alia, declined the external access quotation for the unit and recorded in the minutes of that meeting:
…confirmed that no internal repairs were to be done until the external repairs were completed and the water ingress problem resolved.
Link is to write to the owner of unit 3 to clarify the EC position and to ensure that the owner is aware that under the Unit Titles (Management) Act 2011 that it is a requirement that the owner allow/arrange access so the external repairs can be completed in a timely manner.[13]
[13] Ibid, page 84
The applicant told the Tribunal that she was not aware of the EC’s decision until she spoke with Peter Leahy from Peak Consulting on 23 December 2013.[14] She said she was aware that there was a minute dated 21 December 2013 of the owners’ corporation’s decision of 20 November 2013 but she had not received it as at that time she had an issue with her computer.
[14] Transcript of proceedings page 41, lines 19, 20
On 10 January 2014 Link sent the following email to the applicant:[15]
To expedite this matter the works, being the balcony repairs as quoted and agreed by the Executive Committee including the internal repairs be conducted shortly thereafter as instructed by the Executive Committee. We request that access be provided so the works can be completed.
To facilitate the works Reliance (cc’d) will liaise with you in writing i.e. via email keeping Link cc’d on all correspondence. Reliance have also suggested that works could be scheduled from mid-February.
Therefore we request that you contact Reliance to schedule the works keeping Link cc’d in on the correspondence.
Please Note: we advise if access is not provided at any time after an agreed date/time has been made any additional costs will be forwarded to you for reimbursement to the owners corporation as allowed under section 31 of the Unit Titles (Management) Act 2011.
We thank you in advance for your assistance and cooperation in this matter.
[15] Exhibit R3 page 98-99
The applicant responded to this email on the same day. The applicant appeared to accept the advice in the email from Link set out in the preceding paragraph but complained in her email that Link was not taking responsibility for the maintenance work at her unit, particularly the wall repairs which she alleged were urgent and needed specialist testing. She stated:[16]
This should have been investigated in the first instance when it was reported to Links in Oct 13, it would have also avoided the extent of the repair works required given that the ongoing damage that is now critical.
[16] Ibid page 98
In January 2014, RBS advised Link that they would not be undertaking the work at the unit as they:
…have severe reservations that the occupant will not be placated regardless of any future repairs or inspections that are completed. The relationship between the occupant and strata management is currently compromised and Reliance Building Services does not wish to be involved in such a hostile environment.[17]
[17] Ibid page 97
Link then arranged for Lewis Consulting Engineers (Lewis) to inspect and provide a report (Lewis report) on the necessary rectification works to the unit. Lewis inspected the unit on 29 January 2014 and provided a report dated 3 February 2014 to Link. The EC accepted the Lewis report and authorised getting a quotation for the rectification works. The Lewis report recommended the following course of action:[18]
[18] Ibid page 126
At this stage we do not see any requirement to totally demolish the balcony tiles, or to remove and reset the windows. A simple and inexpensive sequence of repair should be tried in the first instant to see if the water entry can be blocked. We suggest the following:
1.Remove tiles 2 wide around the edge of the window units, and separating walls. Remove screed and any waterproofing back to base concrete. This will require cutting back the render on the block column. Also note that the AC unit may have to be removed for this work.
2.Waterproof slab and up the side of the concrete step to the underside of the window. Use Mapei or Ardex proprietary liquid membrane system and procedures.
3.Install backing foam bead seal to the underside of the sills and seal over using “seal and Fix”.
4.Remove the vertical angle fixing to the window and door units to gain access to the vertical frame joints to the block and concrete walls. Seal these joints and refix the angles.
5.Cut back the gyprock on the block wall to full height.
6.Seal the joint between the mullion and sill and sub sill.
7.Seal the block wall inside and outside with a 2 part tanking with neg pressure capability. Render ready for tiling. Repaint to say 1m height.
8.Replace inside window rubber gaskets pieces with a continuous rubber. Seal end joints.
9.Clean out and clear seal over aluminium joints.
10.Install screed, wetseal over, retile.
11.Run 30mm angle down each side of block wall, batten out, and fix gyprock wall panel. Stop and paint to match.
It will be necessary for the owner/occupier to control internal moisture levels within the unit and a dehumidifier will be required to prevent the extent of condensation in the unit that we suspect has been occurring.
Lewis arranged for BEC to provide a quotation “for repairs in respect of water damage sustained to the premises and for further exploration of water/leakage issues in the unit.”[19]
[19] Ibid page 123
BEC provided the following quotation dated 16 April 2014 for $6,875 inclusive of GST (BEC quotation):
·        Removal and make good fixed window
·        Remove damaged gyprock and replace
·        Remove and replace skirting
·        Exploration of water/leakage issues with video cam
·        Tiling of two (2) rows in height on balcony. Waterproofing will be included.
·        Air conditioning unit will be disconnected and reconnected on completion of works.
·        Repainting of all repaired surfaces[20]
[20] Ibid
However, by letter dated 22 April 2014 Lewis advised Link that it had reconsidered the state of the balcony tiles and stated:[21]
Whilst we have scoped the work to provide an edge seal to the balcony step up it is obvious that in the rain periods just experienced the balcony floods as the slope is inwards to the step up. It may be an appropriate time to consider retiling this balcony correctly. Let me know asp (sic) if you are in agreement and I will get this work requoted.
[21] Ibid page 122
It appears that Link did not respond to this letter from Lewis.
Link and the applicant settled on three possible starting dates for the works in July 2014.
On 25 July 2014, at a meeting between Lewis, BEC and the applicant, BEC informed the applicant that they could not exactly match the existing balcony tiles. The applicant required the existing tiles to be matched with tiles around the unit complex or for the respondent to be responsible for the cost of replacing the tiles.
On 5 August 2014 BEC advised Link that they were not going ahead with the works at the applicant’s unit. Link informed the EC that the reason for BEC’s decision was that they had been unable to resolve the applicant’s concerns regarding tile selection and access.[22]
[22] Ibid page118
On 6 August 2014 Link sent an email to the applicant, as instructed by the EC, asking her to organise a contractor and access to complete the works within the budget quoted by the previous contractor (BEC).
On 18 August 2014 the applicant was elected to the EC at the Annual General Meeting (AGM). The issue of repairs to the applicant’s balcony was raised at the AGM and it was agreed that this would be discussed at a meeting of the EC following the AGM. The minutes of the EC meeting in relation to the unit state:[23]
It was noted that the issues with the balcony works have been going on for some time. Two contractors as well as accompanying project managers/engineers have now declined to do the work due to access and other issues. The previous Executive Committee instructed Link Strata Management after discussion with the Office of Regulatory Services to notify the owner (email sent on 6 August 2014 of Unit 3) that it would now be up to them to organise a contractor and access to complete the works within the budget as quoted by the previous contractor. If the unit owner decides that they would like additional works completed that would go over this amount, these costs would be the responsibility of the unit owner.
Action: Unit 3 owner to organise a contractor and provide access to complete works within approved budget.
[23] Ibid page 142
The applicant resigned from the EC on 18 November 2014.
Following on from the email from Link dated 6 August 2014 and the EC meeting on 18 August 2014 the applicant engaged Lawrie Paul Enterprises (LPE) to inspect her unit and prepare a report. LPE’s report dated 16 October 2014 (LPE report) contained the following scope of works:[24]
[24] Ibid page 240
BALCONY
(1)     Remove sufficient floor tiles to achieve adequate fall to the balcony drains, those tiles remaining will need to be cleaned and primed to insure good adhesion.
(2)     Reset floor wastes with control leak flanges to correct levels.
(3)     Provide new bedding with falls away from the building, suggest 1:60 fall.
(4)     Install proprietary brand recognised waterproofing and flashings to best practice including upturns to neighbouring balcony partitions and bond breaks to building,
(5)     Retile floor and provide skirting tiles as necessary sealing all change of tile planes with a waterproof flexible sealant to joints.
(6)     Remove aluminium window trims and check for any moisture penetration at sides and sills, check also for any weep holes or bond breaks.
(7)     Whilst the blockwork wall complies with the building code for such elements it is thought possible moisture may be migrating across the cavity via the blockwork internal webbing, with the plasterboard adhered directly to the blockwork any moisture migration will affect the plasterboard, to this end waterproofing and repainting of this external wall is recommended, this work will need to be carried out whilst the window trims are removed and prior to balcony returns being installed.
(8)     Interior rectification work should be left until after several wet weather cycles and no further moisture readings can be obtained.
In October 2014 the applicant requested HD provide a quotation for the work in the LPE report to Link. HD provided to Link a quotation (HD quotation)[25] for $7,900 including GST for the water damage repairs to the unit. The HD quotation stated:
[25] Ibid page 238
Inclusions
Supply labour and materials to prepare and paint external walls in Emiclad membrane.
Repaint areas to match existing external wall colour.
Remove and repair existing damaged plasterboard and skirtings.
Repaint internal areas to match existing.
Supply labour and materials to prepare external balcony.
Supply and install etched primer, waterproof membrane and retile total balcony area.
Includes waterstop edges to boundary.
Remove storm moulds and seal around window.
Remove and re-install a/c unit.
By email dated 18 November 2014 Link advised the applicant that the EC:[26]
…have decided that due to the following reasons, they are willing to contribute $6,875.00 to the cost of repairs outlined in the quote by H & D Developments Pty Ltd:
·        Some of the damage has been caused by condensation
·        The price may have increased (materials etc) since the original quote was received from Built Environment Constructions
·        This was the amount that the EC described as willing to contribute in an email to you dated 6^th August 2014
…
[26] Ibid page 236
By email dated 19 November 2014 the applicant requested that the EC, within 48 hours, reconsider their decision to partially fund the works the subject of the HD quotation. The applicant, in a subsequent email dated 27 November 2014, to Link stated:
…please forward this email on to the BC Committee as a last opportunity for the BC Committee to make things right and fund the total cost of repairs to Unit 3 based on the information provided by 3 independent building specialists. The amount that the BC Committee continue to base their argument on is for works that would have been non compliant, would not have fixed the issue and would have been carried out by the wrong specialist. The new quotation and building reports that the BC Committee requested have been provided by the correct specialist i.e. fully qualified building inspector, the works will be compliant and will fix and repair the damage sustained by water damage permanently. There is absolutely no truth in the reasons that the BC Committee have provided to not fully fund the works, nor is it reasonable or fair. We are all unit owners and we all pay a fee for this exact reason amongst other maintenance works. …
As far as the reasoning provided by the BC Committee to not fund the total repair works required to Unit 3 are unfounded. The following email provides the specific reasons as to the non compliance of the report provided by the Engineer. It also confirms that condensation and the list of other unfounded comments are not consistent with any of the building reports provided by fully qualified Building Specialists…[27]
[27] Ibid page 278-279
The applicant attached the following email to her from HD dated 26 November 2014 to this email:[28]
Engineer report from Adrian Lewis asked for the slab edge only to be waterproofed and No treatment to the walls. As determined by the two building inspector reports. The Water is entering the building from the external wall junction and the surface area of the external walls.
Because the construction is solid concrete block the moisture is travelling through the wall and effecting the plasterboard.
The water damage inside has not been caused by condensation on the windows.
Regards
Darren Clarke
H & D Constructions
[28] Ibid page 280
The applicant and Daniel Brooker, Link Strata Manager, spoke about the repairs to the applicant’s unit on 26 November 2014. The applicant emailed the Link Strata Manager on 27 November 2016 requesting that he document the discussion the previous day:
…in relation to you being instructed by the BC Committee to cease all funding for works to be carried out on my unit, including those that were approved by the BC Committee last week. As I will need to advise the Contractors that works will be put on hold until further notice. As it is I have tried to resolve things and provided every opportunity for the BC Committee to abide by their obligations under the Act and allow these works to progress and to fund those works and the contractors that they authorise to provide information etc. …[29]
[29] Ibid page 288
In an email dated 27 November 2014 to the applicant the Link Strata Manager stated:[30]
We spoke yesterday regarding the repairs to your unit.
The Executive Committee at this time have decided that until the situation in regards to payment of the repairs and liability is sorted they will not give approval for the works to proceed.
[30] Ibid page 287
The works did not proceed.
Two years later and on 14 November 2016 the applicant engaged McInnes Wilson, Lawyers, who wrote to the Body Corporate Executive on 16 November 2016.[31] The letter stated:
We are instructed by this letter to provide you with a final opportunity to engage with the Owner in relation to this matter.
…
In our view it is plain from the various reports[32] that the water ingress affecting the Unit is caused by a failure to adequately waterproof that part of the external wall which forms common property (pursuant to section 15 of the Unit Titles Act 2001). It is uncontroversial that the Owners Corporation must maintain the common property and this statutory duty is well established.
[31] Ibid page 327 - 328
[32] The Leary Report, the Lewis Report and the Paul Report, Ibid page 327-328

The works had not been undertaken at the date of the tribunal hearing.

Consideration

The applicant has the burden of proving her case on the balance of probabilities. The Tribunal will consider the evidence and all of the material before it in relation to each of the identified issues.

(a)Who is to undertake the external works?

Section 24 of the UTM Act imposes an obligation on the owners corporation to maintain the common property and the defined parts of the building which includes the balcony.
The AES quotation covered the work the subject of the agreed external scope of works. As both parties agreed, at the hearing, to AES being appointed, the Tribunal is satisfied that AES should be appointed by the respondent to undertake the external works in accordance with their quotation for $12,850 exclusive of GST, being $14,135 inclusive of GST and will make orders accordingly.

(b)Whether the costs of the external works are to be apportioned between the parties, and if so, how?

The applicant seeks an order that the respondent pay the costs for the work the subject of the agreed scope of external works, in accordance with the AES quotation, of $14,135. She relies on section 24 of the UTM Act. She opposes the costs for the external works being apportioned between the parties as sought by the respondent.
The respondent does not deny its liability pursuant to section 24 of the UTM Act. It submits it was ready and willing to carry out the repairs in 2013 and 2014. It further submits that between 2013 and 2017, because of the applicant’s conduct, which it described as her unreasonable obstruction, it did not fail to maintain the common property or defined parts and, accordingly, should not be responsible for the increase in costs to $14,135.
It is obvious from the evidence and the emails and the Tribunal finds that until the adjourned hearing on 26 July 2017 the EC through Link based all of its negotiations with the applicant from 16 April 2014 on the BEC quotation of $6,875 inclusive of GST and insisted that that was the maximum amount it was prepared to contribute towards the cost of repairs to the unit. The Tribunal finds that it was not until the resumed hearing on 26 July 2017 that the respondent returned to and relied upon the 2013 RBS quotation of $8,250 inclusive of GST as the basis for determining what financial contribution it should make to the costs of repairs to the unit. It is the respondent’s position that it should contribute $9,000 towards the cost of the external repairs, based on the RBS quotation of $8,250 with CPI adjustments being $8,891 and rounded up to $9,000, and the applicant should pay the balance of the AES quotation of $5,135. The Tribunal will return to this below.
The respondent submits,[33] that, the Tribunal can draw from the evidence the following inferences of the applicant’s unreasonable obstruction during this period:
(a)The applicant insisted that the works be conducted by external access.[34]
(b)The applicant required that the works be undertaken in a sequence that she agreed with.[35]
(c)The applicant required that the works await further testing.[36]
(d)The applicant required that the works include internal works which had to be completed first[37], contrary to all advice.[38]
(e)The applicant required that she be put up in alternative premises.[39]
(f)The applicant required that the works only be conducted by marshalling all trades at the same time[40] or at least sequentially.
(g)The applicant undertook to do the works then resiled from that position[41] and required the approvals for the works on her property – the balcony being a unit subsidiary – be provided by the owners corporation.[42]
[33] Respondent’s Submissions at [13]
[34] Exhibit R3 page 74-75, 92
[35] Ibid page 98, 131
[36] Ibid page 98, 150
[37] Ibid page 76, 90-91, 256
[38] Ibid page 103
[39] Ibid page 91
[40] Ibid page 132, 347
[41] Ibid page 121
[42] Ibid page 132
The applicant disputed that the examples relied upon by the respondent in the preceding paragraph were her requirements, instead describing some of them as suggestions she had made to have the work carried out as soon as possible given that she had brought the damage to her unit to the EC’s attention in May 2013. She told the Tribunal these suggestions in [64] (a) – (e) followed advice she had had from Peter Leary and from her lawyers. She denied the request alleged in [64](f). She undertook to do the works as alleged in [64](g) but was not in a position to proceed unless the owners corporation provided approval for the works and funded the cost of the works.
In relation to [64](a) the applicant told the Tribunal that there had been a number of builders and tradespeople inspecting the damage to her unit and that she facilitated access for these visits. She had reported the damage to her unit after she noticed water coming in internally in the unit as well as externally where water was pooling on her balcony. She described the damage as:[43]
From the balcony, you know, the water was pooling; and from the inside, it all started to rot and mould started to show and just – it was – it was full on, both sides.
[43] Transcript of proceedings page 15 lines 5-7
She was concerned about getting the damage repaired. Around this time in 2013 she was also concerned as she was expecting to be called into hospital and was looking at options for access if she was unable to be present at the unit. She was asked in examination in chief:
…So you facilitated that access at those occasions? ---Yes. I’ve never prevented access.
…There was – with Peter Leary at that time, I just commented, as an option … and asked if – there was any option that the works that they were going to do on the balcony, if they – if they were going to do those first. If that was the case, was – was there any option for the external works to be done other than coming through the front door, because I was expecting to go to hospital at any time, and I just wanted to see if there was – that’s all.[44]
and
… I had just asked if there was an option for alternative works to be carried on the - externally, because if I was in hosp-, I couldn’t give access. That was all. So – but it didn’t matter in the – I mean, I still would have allowed access, it was just an option I was putting forward.[45]
[44] Ibid page 16 lines 26 - 35
[45] Ibid page 21 lines 5 - 9
The following exchange occurred in cross examination:[46]
[46] Ibid page 36 lines 21 - 33
Q. And you didn’t want to provide key access?
A. No. It was more that I didn’t know that if I was going to be there or not. And if I wasn’t going to be there. Then yeah, obviously they’re things that I would have to had done, you know, I’ve got a pet, I would have organised some things like that.
Q. Well, certainly Mr Dragovich hasn’t said anything about hospital visits or potential hospital visits?
A. No. Well, that’s private, isn’t it?
Q. Well, I don’t know. Did you mention it to them?
A. Yeah. Mentioned it.
Q. And to Mr Leary?
A. Yeah.
Q. He was there at the time?
A. Yeah. He came with the tiler. Yeah.
and[47]
Q. I thought you said you mentioned it to Mr Leary’s tiler?
A. Look, I have mentioned it verbally, yes. Not – not in writing. Yeah. But you know, yeah, I – I was on call, I – that was the issue at the time – was just, okay, well, how do we coordinate this. You know, it was that if I had to go in (to hospital) at short notice, then I needed just to have some advice – some notice. That was all.
[47] Ibid page 40 lines 12-17
Mr Leary was asked about this conversation in examination in chief. Mr Flint put to Mr Leary:
Q. Well the applicant says that all she asked was that other alternatives to be considered. Is that your recollection of the conversation?
A. That is my recollection.[48]
[48] Ibid page 83 lines 7-9
While Mr Leary said in cross examination that to his knowledge the applicant had not asked him for opportunities about access, he then said:
And I’ll say that we, as a building company actively sought for approval for a different method (external access) and from my understanding Link proposed that to the Owners Corporation. I did not get any feedback on that but I will give an opinion that accessing one single balcony by means of scaffold is not a cost-effective solution so I really did not expect to get approval for scaffold or boom lifts or the like.[49]
[49] Ibid page 87 lines 39-44
When asked what happened after he had submitted his report to Link and RBS had submitted their quotation he said:
A. Following on from the initial Peak Consulting report we were asked to reattend in reference to possible access issues. We reattended to try and address those where I gained the understanding from …..
Janelle and Bridget that the preferred access method was definitely on the exterior. So that was second visit number one. Second visit number two was with my estimator, Mr Dragovich who is the drafter of the Reliance quotation where we once again tried to placate a method of internal access and to reassure the parties that – you know - we would execute as promptly as possible. We didn’t receive any feedback following on from that second visit until such time as we learned that the work was not ultimately going to be awarded to us.
Q. So who gave you that advice?
A. Link Strata Management said to close your file.
Q. Did they qualify that in any way?
A. No
Q. It was simply …?
A. You didn’t win the work.[50]
[50] Ibid 88 lines 4-23
Mr Graham was also asked, in cross examination, about the allegation that the applicant denied the builders and tradesmen access:
Q. Do you have evidence of the denial of access? Can you give me a document saying that we turned up on this date, and we had no access? From Reliance?
…
Q. I want to see specific evidence suggesting that we could not attend on this date, or we attended on this day and no-one let us in?
A. I do not have a document that says we attended on date X and they wouldn’t let us in.
Q. So at this moment ---?
A. What I have instead is documentation of a persistent pattern of refusal of access on the part of the applicant.[51]
[51] Ibid 103 lines 34-35, lines 41-44, page 104 lines 1-2
Mr Graham did not identify that documentation.
In cross examination Mr Graham was asked if he could advise when the applicant was provided with the opportunity for her to pay for external access by Peak. He referred the Tribunal to an email from Link to the EC dated 10 December 2013 which included a draft email, for the EC’s approval, to be sent to the applicant[52] but there was no evidence before the Tribunal that the draft email to the applicant had actually been sent to her. It was clear from the applicant’s evidence that she did not know the cost of the external access when she spoke with Mr Leary on 23 December 2013.
[52] Exhibit R3, p.93-95
Mr Lewis was also asked in examination in chief:[53]
Q. Just do you know why Built Environment Construction declined to proceed further with the matter?
A. They, to my knowledge, and it was explained to me although I didn’t take it any further. They just told me they could see that they were going to have access problems so they didn’t want to proceed and withdrew.
[53] Transcript page 69 lines 27 - 31
Whilst I am not obliged to apply the rule against hearsay[54] I found this evidence of no probative value because no-one from BEC was called to give evidence.
[54] ACT Civil and Administrative Tribunal Act 2008 section 8, which provides that the Tribunal need not comply with the rules of evidence
Link did email the applicant on 10 January 2014 requesting:[55]
To expedite this matter, being the balcony repairs as quoted and agreed by the Executive Committee including the internal repairs be conducted shortly thereafter as instructed by the Executive Committee. We request that access be provided so the works can be completed. To facilitate the works Reliance (cc’d) will liaise with you in writing i.e. via email keeping Link cc’d on all correspondence. Reliance have also suggested that works could be schedule from mid-February.
Therefore we request that you contact Reliance to schedule the works keeping Link cc’d in on all the correspondence.
Please Note: we advise that if access is not provided at any time after an agreed date/time has been made any additional costs will be forwarded to you for reimbursement to the owners corporation as allowed under section 31 of the Unit Titles (Management) Act 2011.
[55] Ibid page 98-99
It is clear from the evidence that there were a number of issues relating to the repair works at the unit. Although the applicant did not provide any documentary evidence corroborating her evidence that she was awaiting notification of a hospital admission, on the balance of probabilities, the Tribunal accepts the applicant’s evidence that when initially trying to arrange for the works to be undertaken by Peak and RBS she was awaiting such notification. At this time the EC and Link were endeavouring to have the agreed repairs carried out. By January 2014 it was clear that the applicant wanted the internal repairs to her unit carried out at the same time as or before the balcony repairs as she considered the damaged internal wall was at risk and:[56]
…requires specialist testing to identify just how far gone it is, who’s not to say that the wall will completely collapse with the jack hammering etc. It puts everyone at risk.
[56] Exhibit R3 page 98
Having considered the evidence the Tribunal is not satisfied that the applicant insisted that the RBS works be conducted by external access. The Tribunal is satisfied and finds, given the other issues that were concerning the applicant at that time that she was, at that time, seeking options for access. The Tribunal is not satisfied, from the evidence before it, that the applicant was notified of the cost of external access or given the opportunity to pay for it.
The Tribunal also noted that while RBS included access challenges in their reasons for not continuing with the repairs, access was not the only issue. The relationship between the applicant and Link was the issue for RBS. The Tribunal is satisfied and finds that the reasons given by RBS were as stated in Link’s email to the EC on 20 January 2014:[57]
they have severe reservations that the occupant will not be placated regardless of any future repairs or inspections that are completed. The relationship between the occupant and the strata management is currently compromised and Reliance Building Services does not wish to be involved in such a hostile environment.
[57] Ibid page 97
The evidence in relation to why BEC did not proceed with the repairs was not particularly helpful. The email from Link to the EC dated 5 August 2014 does not attach the advice from BEC; rather it states,[58] in a draft letter to the applicant:
As a second contractor has now advised us they cannot complete the works due to access and other issues, the Executive Committee are not willing to engage any more contractors to complete this work on your behalf.
[58] Ibid page 118
Mr Lewis told the Tribunal that Boris Nedic was the principal and owner of BEC and Tim Androvic was part of BEC. Neither was called to give evidence. The applicant told the Tribunal that BEC, who were proposing to remove two tiles back from the balcony edges, took tiles away from the balcony and couldn’t find a suitable tile to replace them. At this stage, unsurprisingly, the applicant wanted the replacement tiles to match the existing tiles on her balcony. The following exchange took place in cross examination:[59]
Q. Could I suggest to you that the contractor, Built Environment Construction, stood down from the job because they couldn’t be guaranteed access?
A.No. Between Built Environment and Adrian Lewis Engineering, both, the contractors could not get the works done together. They couldn’t get the people there that they need at the same time. And they both – they were exactly the same. They both just picked their things up and left, and that was it. I – it was nothing to do with me.
[59] Transcript of proceedings page 46 lines 10 – 16
Having considered this evidence the Tribunal is not satisfied that access was the main or only reason why BEC withdrew from the repair work. It is clear to the Tribunal that the contractor was having issues about matching the tiles. The Tribunal accepts the applicant’s evidence that the contractors were also having issues organising the tradespeople in a timely manner.
If, as the respondent submits, the applicant was denying access it is difficult to understand why the respondent did not apply to the Tribunal for an order pursuant to section 129 of the UTM Act for access. The respondent could have and should have applied to the Tribunal for an access order instead of allowing the situation to continue for some four years during which time it has had reports and photographic evidence annexed to the Peak Report showing the extent of the damage to the unit.
In relation to [64] (b) and (d) the applicant told the Tribunal, in examination in chief ,that she contacted Peter Leary in December 2013 to talk about the internal work. She said she had the following conversation with him and followed his advice:
I was concerned because it was right near the electricals, and the water was leaking under the carpet, on top of the carpet, there was mould everywhere. And it had developed into a big hole in the wall, exposed hole, and these things had rotted and come away. And Peter said “Look, you need to go back to Links,” he said, “You need to ask them to get that diagnosed, find out where the water leak is coming from. Get it repaired. Once it is repaired” he said, “Contact me within a couple of weeks and I’ll come out and do the balcony.”[60]
[60] Ibid page 17 lines 16-23
In relation to [64](b),(c) and (d) the Tribunal finds that the applicant was acting on the advice of Peter Leary referred to in the previous paragraph.
In relation to [64](e) the applicant was referring to legal advice she said she had obtained:
I have been advised that the onus is on the body corporate to put me up in an alternative residence while the works are being undertaken.
It was not requested by her.
In relation to [64](f) the applicant said that this was not her request, rather it was BEC who:
… were trying to make arrangements to get other tradespeople there to pull the window out and things like that. Everyone there at the same time. And at the end of the day, they couldn’t get everyone there at the same time. And yeah, they had their own conflicts, and they just picked up their things and off they went.[61]
The Tribunal is not satisfied that it was the applicant who required the work be conducted by marshalling all trades at the same time or sequentially.
[61] Ibid page 23 lines 1-5
In relation to [64](g) Link and the EC were aware that the applicant rightly had significant concerns about the Lewis Report and the scope of works in the BEC quotation. Yet, the EC continued to limit their expenditure on the works to the BEC quotation notwithstanding they had received Adrian Lewis’ letter dated 22 April 2104 (see [40] above] stating that the balcony slopes inwards to the step up and recommending retiling the balcony correctly. Link did not, apparently, follow up getting this work requoted as suggested by Adrian Lewis.
Link informed the EC on 20 January 2014 that RBS will not be undertaking the works as they:
have severe reservations that the occupant will not be placated regardless of any future repairs or inspections that ae completed. The relationship between the occupant and strata management is currently compromised and Reliance Building Services does not wish to be involved in such a hostile environment.[62]
[62] Exhibit R3 page 97
The Tribunal noted that BEC, on 5 August 2014, informed Link that they were not going ahead with the works at the applicant’s unit. Link then emailed the EC in which it referred to the advice from the Contractor that they are not going ahead with works on unit 3 and the reasons for doing so and purported to attach a copy of that advice. The advice from the contractor was not included in the material provided to the tribunal. Link included a draft email to be sent to the applicant in this email in which Link stated-
At a meeting between the contractor, tradesperson and yourself on Friday 25 July 2014 the works were agreed upon and timelines were established. Since that date the contractors have not been able to resolve your concerns regarding tile selection and access.[63]
[63] Ibid page 118

Link informed the applicant in this draft email that the EC was not willing to engage any more contractors to complete the work on the applicant’s behalf and
Given the need to have the works completed the Executive Committee has requested that you engage a suitably (sic) contractor to complete the scope of work noted above. The Executive Committee will contribute an amount up to $6,785 incl. GST on receipt of a tax invoice from an appropriately qualified contractor and subject to inspection by Adrian Lewis that the works have been completed to a satisfactory standard.[64]
[64] Ibid page 118
Given that the work was to be carried out to the common property, which the respondent is liable to maintain, the applicant was not lawfully entitled to engage contractors to have the work carried out. She ensured that Link was the contact when the EC requested that she engaged a suitably qualified contractor[65] so that Link could discuss the specifications and requirements for the job with this contractor.
[65] Ibid page 235
The applicant arranged for H & D Developments (HD) to provide Link with a quotation for the work in November 2014. The quote was for $7,900 and included an allowance of $40 per sqm for tiles. This quotation was less than the RBS quotation which the EC had accepted in 2013. However, Link advised the applicant by email dated 18 November 2014[66] that the EC was only willing to contribute $6,875 (being the cost of the BEC quotation) notwithstanding that, as stated above, Adrian Lewis had notified Link on 22 April 2014 that he had reconsidered the state of the balcony tiles and as the balcony slope is inwards to the step up:
… it may be an appropriate time to consider retiling this balcony correctly. Let me know asp if you are in agreement and I will get this work requoted.[67]
[66] Ibid page 236
[67] Ibid page 122
It appears from the evidence before the tribunal that neither Link nor the EC accepted Mr Lewis’ offer to get the work requoted. As this was work additional to that included in the BEC quotation it seems more likely than not the revised quotation would have exceeded the BEC quotation. The EC should have been aware of this. The Tribunal is satisfied from the evidence that the BEC quotation did not address all of the work necessary to repair the damage to the applicant’s unit which was the maintenance responsibility of the EC.
The EC had the opportunity to resolve the matter in November 2014 when the applicant followed their request and obtained the HD quotation for $7,900 which included “retile total balcony area”. This should have caused the EC and Link to look at the earlier quotations and correspondence in relation the applicant’s balcony repair including Peak Consulting’s Scope of works, RBS’s quotation for $8,250 and Mr Lewis’ letter dated 22 April 2014 all of which included supplying and installing new floor tiles and skirting tiles to the whole of the balcony. Further, the HD quotation of $7,900 was less than the RBS quotation of $8,250, which the EC had approved in 2013. A responsible EC, properly carrying out its duties, should have approved the HD quotation and brought this unhappy matter to an end.
In this regard the Tribunal notes and repeats Mr Brennan’s statement towards the end of the first day’s hearing:
I want to understand why it is that the body corporate is insistent upon accepting a half baked scope of work to rectify this damage, when your expert, your very expert that you have called today, has said that anything less than his full scope of works, wouldn’t work. Would not fix the job.[68]
[68] Transcript of proceedings page 103 lines 7 - 10
It appears from a number of emails included in exhibit R3 that there was a difficult relationship between the applicant and some members of the EC during 2013 and 2014 and that this has continued. This may have coloured the EC’s attitude to the resolution of this matter. However, this does not in any way justify the failure of the EC to maintain the common property that is the applicant’s balcony in a timely manner.
The fact is that the EC had the opportunity to finalise this matter in 2014 in accordance with the HD quotation and did not do so. However, on the second day of the hearing, and for the first time, the respondent relied on the 2013 RBS quotation of $8,250, which it did not offer to the applicant in 2014 as the amount which it was prepared to contribute to the repairs, and submitted to the Tribunal that this amount together with CPI increases between 2013 and 2017, which it rounded up to $9,000, should be the extent of the respondent’s liability.
For the reasons set out above, the Tribunal is not satisfied that the applicant should contribute to the AES repair costs for the agreed scope of external works. This work is to be paid for by the respondent.

(c)Whether the applicant is entitled to orders in relation to the internal works?

The applicant’s claim is in negligence against the respondent for failing to act in accordance with its duty of care owed to the applicant.[69] The damage the applicant alleges is to the architraves, plasterboard and carpet inside the unit. The applicant seeks the costs of remediating these internal items.
[69] Exhibit R3 page 329
The applicant did not produce any evidence of these costs at the hearing, instead seeking $35,000 for all of the external and internal damage. She said her solicitors had worked out this figure. This exceeds the Tribunal’s jurisdiction of $25,000.[70] The claim for damages for a specified dollar amount was not seriously pursued at the hearing. The applicant sought orders that the respondent authorise, carry out and pay for both the external work and the internal work needed to repair the unit.
[70] Section 18 of the ACAT Act
The respondent submitted that the claim for the internal damage was to items that were not part of the common property and not ‘defined parts’ or columns and the remediation sought fell outside the owners corporations obligation to maintain and was not amenable to an order by the Tribunal to exercise a function pursuant to section 129(1)(b) UTM Act. Further, the respondent submitted that a breach of statutory duty under the UTM Act does not give rise to a claim for damages.
In support of these submissions the respondent referred the Tribunal to the 2013 NSW Court of Appeal decision in Owners Strata Plan 50276 v Thoo[71](Thoo) which considered the NSW equivalent of section 24 of the UTM Act, namely section 62 of the Strata Schemes Management Act 1996 (SSMA) and submitted that that case resolved conflicting authorities on the issue of whether section 62 of the SSMA could give rise to a tort by following Ridis v Strata Plan 10308[72] to the effect that a breach of section 62 does not give rise to an action in damages.
[71] [2013] NSWCA 270
[72] [2005] NSWCA 246
However, on 20 September 2017 the NSW Court of Appeal held in McElwaine v The Owners – Strata Plan No. 75975[73] (McElwaine) that a lot owner has the right to claim damages against an owners corporation in nuisance. In McElwaine the lot owner brought proceedings for damages alleging water penetration through the common property into his lot due to defective waterproofing. He alleged breach of section 62 of the SSMA and negligence and following the decision in Thoo amended his claim to plead common law nuisance as a cause of action. The owners corporation in McElwaine, as in the present case, argued that the nuisance claim depended on a breach of section 62; that chapter 5 was comprehensive in providing for rights, responsibilities and potential claims and it abrogated the ability of a lot owner to make a common law claim against the Owners Corporation
[73] [2017] NSWCA 2
Justice White JA said at [26]:
It is critical to the respondent’s case that it make good its contention that it owed the appellant only a statutory duty under the SSM Act in relation to its management and repair of the common property. It is only if that premise is made good that the respondent can rely on the holding in Thoo that Ch 5 of the SSM Act provides exclusive remedies for breach of an owners corporation’s statutory duty as an answer to the appellant’s claim in nuisance, and can argue that s 226 is not engaged on the ground that the appellant cannot rely upon a duty arising apart from the SSM Act. For the reasons which follow I do not accept that premise. Rather, an owners corporation, as legal owner of the common property, may owe a general law duty of care or a general law duty not to create or to abate a nuisance, and not merely a statutory duty that can be enforced only through the mechanisms provided in Ch 5 of the SSM Act. Contrary to the view of the primary judge, decisions of this Court do not support the view that such a general law duty is excluded. To the contrary, the decision in Ridis and in Owners – Strata Plan 21702 v Krimbogiannis [2014] NSWCA 411 proceed on the assumption that such general law duties can exist in addition to the statutory duty of repair. Thoo does not decide to the contrary. Neither the SSFD Act[74] nor the SSM Act negate the rights of a lot owner or occupier of a lot to enforce an owners corporation’s duty in respect of the management or repair of the common property that is owed to an owner or occupier of a lot in that capacity. The appellant’s right to sue at common law is preserved by s 226. In my view the appeal should be allowed.
[74] Strata Titles (Freehold Development) Act 1973 (NSW)
The Tribunal drew the McElwaine decision to the parties’ attention on 28 September 2017 and requested that any further submissions be filed by 6 October 2017. The respondent’s solicitors lodged supplementary submissions in relation to the McElwaine decision with the Tribunal. The applicant’s solicitor did not lodge any further submissions with the Tribunal.
In the submissions the respondent contended that its position in the present matter has not been varied by the McElwaine decision; the respondent’s position is that an order for common law damages is not sustainable under the UTM Act. The respondent submitted:
The Court of Appeal found that there was nothing in the SSM Act which indicated a legislative intention to affect a lot owner’s common law rights to sue the owners corporation in common law in relation to its management of the common property. A guiding factor in this reasoning was section 226 of the SSM Act (which is found in Chapter 7) which expressly preserved a lot owner’s right to recover damages at common law for breach by an Owners Corporation of a common law duty.[75]
…
There is no provision in the UTMA that is the equivalent to section 226 of the SSM Act. This section states that there is nothing in the SSM Act that derogates from the rights or remedies that an owner or an owners corporation may have, in relation to any lot or common property, apart from the SSM Act. In McElwaine (at [71]), the Court of Appeal held that section 226 of the SSM Act makes it clear that unless there was something in the SSM Act or the Strata Titles (Freehold Development) Act 1973 (NSW) that excludes a lot owner’s right to sue the owners corporation in nuisance, section 226 of the SSM Act expressly preserves that right. There is no such express preservation of the right to sue or seek a remedy at common law under the UTMA.
In the absence of such a provision, the question is whether the legislative intent in the UTMA is that a unit owner may or may not sue the Owners Corporation and seek a remedy external to the UTMA. If the legislative intent was such, a provision similar to section 226 of the SSM Act would have been enacted in the UTMA.[76]
[75] Respondent’s supplementary submissions lodged 6 October 2017 at [8]
[76] Ibid at [14], [15]
The issue for the Tribunal to determine is whether the applicant as an owner of a strata titled property can bring a claim in tort (nuisance or negligence) in relation to a property that is a creature of statute.
Two recent decisions of the tribunal have referred to this issue of whether an owners corporation may be sued for damages in common law negligence. In Castro v Owners Unit Plan No 246 (Castro)[77] the applicant, a unit holder, sought compensation from the owners corporation to rectify damage to electricity cables leading to his apartment caused by rodents. The tribunal stated at [44]:
… there is no apparent reason why an owners corporation could not be liable for damage caused to an owner’s property under the usual principles of common law negligence.
[77] Castro v Owners Unit Plan No 246 [2016] ACAT 111
Senior Member Robinson further stated that an owners corporation owes unit holders a duty of care:
[46] there is little doubt that an owners corporation has a sufficiently proximate relationship with unit holders that it owes a duty of care to take reasonable care to prevent reasonably foreseeable risk of damage, including damage to personal property.
The Tribunal adopts the following statements of Senior Member Robinson in Castro when considering whether common law negligence was a basis for the applicant’s claim:
45. In order to succeed in his claim for negligence, the applicant had to establish three things:
(a) that the owners corporation owed him a duty of care;
(b) that it breached that duty by failing to reach the standard of care required of a reasonable owners corporation; and
(c) that damage resulted.
46. There could be little doubt that an owners corporation has a sufficiently proximate relationship with unit holders that it owes a duty to take reasonable care to prevent reasonably foreseeable risks of damage, including damage to personal property. Therefore, the owners corporation owed the applicant a duty of care.
47. The difficulty for the applicant is that he had little evidence upon which it could be concluded that the owners corporation breached that duty.
48. Section 42 of the Civil Law (Wrongs) Act 2002 sets out general principles relating to standard of care. It requires the applicant to show that a reasonable owners corporation, in the respondent’s position, in possession of all the information that it either had, or ought reasonably to have had, at the time of the incident, would have done something more that what it did.
49. The ‘time of the incident’ would be the time when the cables were damaged. There is no evidence as to when this was, other than prior to the applicant engaging an electrician. Consequently, the applicant was required to establish either that the owners corporation should have known about the rodents, for example by conducting inspections, or that it should have taken precautions against rodents anyway.
50. In this regard, section 43 of the Civil Law (Wrongs) Act 2002 further provides that:
A person is not negligent in failing to take precautions against a risk of harm unless—
(a) the risk was foreseeable (that is, it is a risk of which the person knew or ought to have known); and
(b) the risk was not insignificant; and
(c) in the circumstances, a reasonable person in the person’s position would have taken those precautions.
(2) In deciding whether a reasonable person would have taken precautions against a risk of harm, the court must consider the following (among other relevant things):
(a) the probability that the harm would happen if precautions were not taken;
(b) the likely seriousness of the harm;
(c) the burden of taking precautions to avoid the risk of harm;
(d) the social utility of the activity creating the risk of harm.
…
53. This does not mean that the owners corporation has no obligations in relation to rodents. Even in the absence of evidence of an actual rodent infestation, had the owners corporation been aware, or should it have been aware, of a foreseeable and not insignificant risk of harm if there were rodents, then it likely would have been required to take some mitigating action. …
In Castro the tribunal found that the owners corporation had not breached its duty of care. The applicant failed to show that the owners corporation should have known about the rodents, or should have taken precautions against the rodents anyway.
In Garcia v The Owners – Units Plan 10 (Garcia)[78] Senior Member Orr QC observed that the relevant terms of the UTM Act do not expressly give rise to liability for negligence.[79] Nevertheless the tribunal stated at [22]:
It is possible that [a claim in negligence] could be made against the owners corporation.
[78] Garcia v The Owners – Units Plan 10 [2017] ACAT 91
[79] Ibid at [4]
In Garcia, the applicant, a unit holder, brought an application seeking compensation from the owners corporation for loss of rent of his unit. He argued that this was caused by the owners corporation’s delay in claiming on their insurance for the repairs of the plumbing damage and then repairing the plumbing damage to the unit. The tribunal did not find the owners corporation were liable for negligence because there was a lack of evidence that it had breached its duty of care.
In Garcia, the tribunal referred to section 129 of the UTM Act and the types of orders the ACAT may make, noting that an order requiring a person to pay to the Territory or someone else an amount of not more than $1,000 is permitted by section 129(d). That tribunal then referred to subsection (2) which provides that “The ACAT may make any other order that it considers reasonably necessary or convenient to resolve a dispute under this part” and subsection (3) states that “This section does not limit the orders the ACAT may make in relation to a dispute under this part.” The tribunal then stated:[80]
This suggests that section 129(1)(d) may not be a limitation on money claims…
[80] Ibid at [7]
Another tribunal decision, Bennett v Owners Units Plan 932 (Unit Titles)[81], concerned an air conditioning system in a unit owned by the applicant, which was not operating. The owners corporation acknowledged that it would usually be responsible for the repair and maintenance of the air conditioning system but in this case believed that the system had been damaged by a tradesman engaged by the unit owner. That tribunal was not satisfied that the owners corporation had established that any work carried out by the applicant or the applicant’s real estate agent had damaged the air conditioning system. The tribunal ordered the owners corporation carry out all repairs necessary to ensure full operation of the system and pay compensation of $3,367 to the applicant.
[81] [2016] ACAT 57
The Tribunal is satisfied that internal damage the subject of this application was identified by the applicant prior to May 2013. In her email to Link dated 20 May 2013 which had as the subject matter – RE: Urgent – Request the repair of blocked balcony pipes and storage of leaking water contained in the internal/external wall of unit in the electrical vicinity, the applicant stated[82]:
…
This issue has been raised so many times over the years. … This was inspected some 15 months to 2 years ago and I continue to verbally ask for the repair of these issues which are now getting beyond compliance and yet no action has been taken.
What does it take to get the basic maintenance rectified in this development? The type of maintenance that is going to cause the wall to collapse and electrical compliance issues to occur without notice.
[82] Exhibit R3 page 43
The internal damage was identified in the various reports obtained by Link. The Peak Report included in the findings:
3.9 The removal of damaged skirting and subsequent electronic moisture encounter tests revealed excessively high moisture levels within the masonry substrate behind the already damaged components.
3.10 The removed linings and skirting revealed the presence of mould which is consistent with long term water ingress.
…
3.12 The direct area of internal damage correlates exactly to the rendered wall which was found to be saturated as a result of pooling water on the subject balcony. It is reasonable to assume that this wall, being devoid of any visible upturn of balcony membrane or skirting tile, combined with the fact that the render was found to be slightly spalling with evidence of failed paintwork, would be allowing water to ingress and rise up into the otherwise unprotected masonry where it then saturates the directly affixed plasterboard linings and skirting.

Mr Leary stated in the Peak Report that a section of the already damaged skirting and plasterboard linings were removed for the purpose of inspecting the substrate behind it. The photographs attached to the Peak Report showed the section of skirting and plasterboard and the internal area from where the skirting and plasterboard linings had been removed. The Link Strata Manager, Janelle Adams, and the applicant were present at this inspection.
The focus of the Tribunal’s inquiry is whether the Owners Corporation was negligent in the sense of failing to take precautions against such risk which a reasonable person in that position would have taken, in the circumstances.
Having considered all of the evidence and the submissions, the Tribunal is satisfied that the internal damage to the unit was caused by the water ingressing the applicant’s unit from the balcony. The Tribunal finds that the respondent was on notice from the applicant’s complaints before 2013 and in 2013 that there was internal damage to her unit. This was confirmed by Mr Leary and communicated to the Owners Corporation in the Peak Report. The Owners Corporation was in possession of all the relevant information. The Tribunal is satisfied that the Owners Corporation is responsible for the maintenance of the balcony and that in failing to maintain the balcony it is liable to the applicant for the internal repairs which have flowed from the unmaintained balcony. The area of the applicant’s unit which suffered damage was sufficiently proximate to the balcony which the Owners Corporation were obliged to maintain such that the damage caused by the water accumulation should have been anticipated.
Having considered all of the matters before the Tribunal, the Tribunal is satisfied that there was a foreseeable risk that if the Owners Corporation failed to take reasonable care and to exercise reasonable skill in carrying out its various functions, which included maintaining the applicant’s balcony, that the applicant may suffer financial loss caused by damage to the inside of her unit, that the risk to the applicant was not insignificant and that a reasonable person in the position of the Owners Corporation would have taken appropriate precautions. Section 102 of the UTM Act mandates the owners corporation take out and maintain public liability insurance in relation to the loss of or damage to the property of anyone happening in relation to the common property.
The Tribunal is satisfied that the owners corporation owed a duty of care to the applicant at common law and for the above reasons that it breached that duty of care.

(d)Whether the applicant is entitled to associated costs claimed for obtaining reports and quotations, namely Lawrie Paul - $450.00, HD - $550.00 and GIO Assessment - $300.00?

The Tribunal is not satisfied that the fees claimed for the Lawrie Paul Report, the HD fees and the GIO fees were fees incurred by the applicant for the purposes of this application. They are not recoverable pursuant to section 48(2)(a)(ii) of the ACAT Act.
The Lawrie Paul report and the HD quotation were obtained by the applicant when informed by the EC that she was now required to organise the works. The EC did not inform the applicant that it would reimburse her for the cost incurred in getting these reports. Instead, it informed her that they were capping the amount which they were prepared to contribute to the works at $6,250. Regrettably, by this stage the relations between the EC and the applicant were strained, which did not lend itself to clarification of whether the EC would pay for the cost of obtaining the report and the quotation.

(e)Whether the applicant is entitled to orders for the respondent to pay her legal fees and disbursements?

The Tribunal is a no cost jurisdiction. Section 48 of the ACT Civil and Administrative Tribunal Act 2008 (ACAT Act) provides:
48. Costs of proceedings
(1) The parties to an application must bear their own costs unless this Act otherwise provides or the tribunal otherwise orders.
(2) However—
(a) if the tribunal decides an application in favour of the applicant, the tribunal may order the other party to pay the applicant––
(i)the filing fee for the application; and
(ii)any other fee incurred by the applicant that the tribunal considers necessary for the application; or
Examples––subpar (ii)
•a fee for a business name or company search
•a filing fee for a subpoena
•hearing fees
Note An example is part of the Act, is not exhaustive and may extend, but does not limit, the meaning of the provision in which it appears (see Legislation Act , s 126 and s 132).
…
Pursuant to section 48(1) of the ACAT Act the Tribunal is not satisfied that there is any basis on which it can order the respondent pay the applicant’s legal costs. However, the applicant is entitled to recover the filing fee of $145 from the respondent pursuant to section 48(2)(i) of the ACAT Act and the Tribunal will so order.

(f) Whether consequential orders should be made that the applicant facilitate access to her unit for the purpose of the external works being carried out?

The Tribunal will make the consequential orders sought.

Conclusion

The Tribunal makes the following orders:
1.Within 42 days of these orders the Owners Corporation procure with AES Homes the remediation of the external works as contained in Annexure A to these orders.
2.The Owners Corporation pay AES for the external works in Annexure A.
3.Within 14 days of these orders the Owners Corporation arrange a builder to inspect and quote on necessary repair work to the interior of unit 3/12 Challis Street, Dickson (the internal works).
4.Within a further 21 days the Owners Corporation provide the quotation referred to in order 2 to the Executive Committee of the Owners Corporation to approve the cost of the internal works.
5.Within a further 42 days the Owners Corporation procure the remediation of the internal works.
6.The Owners Corporation pay for the costs of the internal works.
7.The applicant do all things necessary to provide access to the contractor engaged by the Owners Corporation to undertake the works in Orders 1, 3 and 5.
8.The Owners Corporation pay $145.00, being the filing fee paid by the applicant, to the applicant by close of business 22 December 2017.
9.The respondent has liberty to apply to the Tribunal on three days’ notice in the event of a failure by the applicant to comply with order 7.
10.The applicant has liberty to apply to the Tribunal on three days’ notice in the event of a failure by the respondent to comply with orders 3, 4 and 5.
…………………………..
Presidential Member E Symons

Annexure A

AGREED SCOPE OF WORKS (EXTERNAL)

The parties agree that the following scope of works, as adapted from the Peak Consulting report dated 18 July 2013, is appropriate for external rectification works in Unit 3/12 Challis Street, Dickson:

(a)Strip out all balcony tiles
(b)Strip out cement bedding material
(c)Remove adjacent partitions so as to allow full membrane installation
(d)Prepare the substrate for re bedding
(e)Revise the current waste receptacle and ensure that it has correct control leak flanges and is adequate for the catchment
(f)Install new graded bedding to provide adequate fall away from the building and to the installed waste receptacle
(g)Install approved waterproofing membrane system ensuring all upturns are installed in accordance with relevant standards.
(h)Ensure the waterproofing membrane system has all necessary bond breaking measure and is designed to cater for all differential movements of adjacent elements

Supply and install new floor and skirting tiles ensuring all upturns and corners are sealed in accordance with relevant standards

(j)Undertake an inspection of the sub sill flashings of the window adjacent to the balcony and the sliding door. Rectify any flashings or anti capillary measures that are not properly installed and functioning.

HEARING DETAILS

FILE NUMBER:	UT 6/2017
PARTIES, APPELLANT:	Bridget Yvonne Kirk
PARTIES, RESPONDENT:	The Owners – Units Plan No. 2292
COUNSEL APPEARING, APPLICANT	N/A
COUNSEL APPEARING, RESPONDENT	N/A
SOLICITORS FOR APPLICANT	McInnes Wilson Lawyers (from 20 July 2017)
SOLICITORS FOR RESPONDENT	Mills Oakley
TRIBUNAL MEMBERS:	Presidential Member E Symons
DATES OF HEARING:	29 May 2017, 26 July 2017