The Owners Corporation - Units Plan No 107 v Perkins (Unit Titles)

[2016] ACAT 139

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

THE OWNERS CORPORATION - UNITS PLAN NO 107 v PERKINS (Unit Titles) [2016] ACAT 139

UT 18/2016

Catchwords:             UNIT TITLES – water egress into unit below – whether the water egress is coming from the bathroom in the unit above or a consequence of deficiencies in the concrete slab – owners and owners corporations obligations to minimise damage to a concrete slab and common property – whether the owners corporation can recover costs incurred

Legislation cited:      Unit Titles Act 2001 ss 13

Unit Titles Management Act 2011 ss 24, 29, 30, 31, 125, 129

Cases cited:The Owners - Units Plan 1917 v Koundouris [2016] ACTSC 96

The Owners – Units Plan 840 v Richardson [2015] ACAT 77

List of
Texts/Papers cited:   ACAT’s Expert Witness Code of Conduct

Tribunal:                  Senior Member H Robinson

Date of Orders:         8 December 2016

Date of Decision:      8 December 2016

AUSTRALIAN CAPITAL TERRITORY  )

CIVIL & ADMINISTRATIVE TRIBUNAL           )     UT 18/2016

BETWEEN:

THE OWNERS CORPORATION - UNITS PLAN NO 107 Applicant

AND:

JASON PERKINS

Respondent

TRIBUNAL:Senior Member H Robinson

DATE:8 December 2016

ORDER

The Tribunal orders that:

1.The respondent is to ensure that the tiling, grouting and sealing in his bathroom is maintained in a manner that ensures that water egress from the bathroom to the slab is unlikely to cause damage to the slab, neighbouring units or other common areas of the complex.

2.The respondent is to arrange for appropriate work to be undertaken within 90 days of the date of this order.

3.The respondent is to ensure that the work is undertaken to a professional standard by appropriately licenced or qualified tradespeople.

4.The respondent is to provide a report to the Owners Corporation confirming:

(a)That the bathroom is water resistant to an acceptable standard, having regard to the age and construction of the building; and

(b)that any risk of water egress to the slab or damage to the unit below has been minimised; and

(c)how long the remedy is likely to last.

………………………………..

President L Crebbin

Delivered for and on behalf of the Tribunal

REASONS FOR DECISION

1.This is an application by the Owners of Units Plan No 107 (the applicant) for orders against Mr Perkins (the respondent), the owner of a unit in the complex (Unit 35).

2.The orders sought by the applicant are:

(a)an order that the respondent refurbish his bathroom to prevent water egress into Unit 34, using a qualified and licenced contractor; and

(b)recovery by the applicant of costs incurred to date to repair the leaks in Unit 35 and the costs associated with this application.

3.The respondent’s position is, in effect, that the water egress is a consequence of deficiencies in the slab and that it is the applicant’s responsibility to repair the slab and to meet the cost of any repairs to his property occasioned by the necessary repairs to, or sealing of, the slab. This, in his submission, includes the costs of refurbishing his bathroom, if that is necessary.

4.The application is brought under Part 8 of the Unit Titles (Management) Act 2011 (UTM Act), which deals with, amongst other things, disputes within an owners corporation. Section 125 of the UTM Act provides that where there is a dispute relating to an owners corporation between the corporation and an owner, a party to the dispute may apply to the tribunal for an order in relation to the other party. Section 129 of the UTM Act then sets out the sorts of orders that may be made. Section 129(1)(a) provides that the Tribunal may make an order requiring a party to do, or refrain from doing, a stated thing.

5.It is noted that the applicant also raised concerns about the ventilation in Unit 35. The respondent agrees that the ventilation in his unit is not sufficient and that he will remedy that by installing appropriate ventilation.

The hearing

6.The hearing was conducted on 7 September 2016. The applicant was represented by Ms Caroline Mitchell of Civium Strata Management. The respondent represented himself.

7.The applicant called two witnesses, both of whom gave written statements and oral evidence and were cross examined:

(a)Jon McRae, the Chairman of the Executive Committee and building consultant;

(b)Mr Lawrence Miller of Landmark Plumbing.

8.Mr McRae holds a Bachelor of Engineering (Civil), has significant experience as a building consultant and advised the Tribunal that he used to do reports “of this nature ... as a matter of course.” His report and his oral evidence consisted of both factual assertions and of opinion evidence that could broadly be described as ‘expert evidence’. Mr McRae had not been provided with a copy of the ACAT’s Expert Witness Code of Conduct, but when questioned by the Tribunal said that he understood and agreed that his obligation was to the Tribunal. I accept that he understood this. Notwithstanding this, it is undeniable that Mr McRae had a personal interest in these proceedings, and while I do not doubt his personal integrity or qualifications, or the truth of the evidence he gave, I must view it through the prism of his position within the Owners Corporation, and the perception of a conflict of interest that arises from that.  

9.Mr McRae had personally inspected the ceiling in Unit 34. His evidence was that the ceiling was damaged, with ceiling tiles falling off, and that water was leaking through the paintwork in the ceiling and the walls. When he investigated, he found hairline cracks in the concrete slab, and those cracks showed evidence of calcification, which is an indication that the water is seeping through, leaving behind dissolved soaps and residue.

10.Mr McRae stated that the existence of the cracks and residue was clear evidence that water was penetrating into and through the slab. However, Mr McRae’s evidence was that it was not surprising that water would leak through a slab. His evidence was that, at least at the time of the construction of this complex, slabs were rarely watertight. Concrete, he said, is water resistant, but not usually waterproof. Making a concrete slab waterproof requires a special concrete mix (such as that used in dams), and such a mix was not used in residential buildings.

11.Mr McRae’s evidence was that at the time the unit complex was constructed, waterproofing the wet areas of a unit was done through a combination of methods. In this case, the grout between the tiles and the glue that stuck the tiles to the walls and the floor, while not waterproof, were water-resistant. This, combined with the water resistance of the slab, formed the basis for the water-proofing of the units. The water-resisting effectiveness of the glue breaks down over time, and that, he opined, is what has happened here.

12.When questioned as to why the tiles were in such good condition, and still adhered to the wall, Mr McRae said that the sealant could break down even if the glue remained effective.

13.Mr McRae’s evidence was also that water was coming through the floor tiles and possibly the wall tiles. The wall tiles, he said, were stuck over other, older, wall tiles, which are in turn stuck to the walls. He opined that the “...arrangement is very much below good building practice”, because if there are leaks you can’t see where they are.

14.Mr McRae suggested that the bathroom and laundry were being used inappropriately by the tenants, and that this was adding to the problems. 

15.Mr McRae concluded that the only satisfactory means to prevent unreasonable egress of water from Unit 35 to Unit 34 in the future would be a total renovation of the Unit 35 bathroom.

16.Mr Miller is a licenced and experienced plumber with Landmark Plumbing. I understand that Landmark undertakes much of the maintenance of the building on behalf of the respondent. He was familiar with the complex.

17.Mr Miller gave evidence that when he was called to Unit 35 there was a “plethora” of issues, including a number of leaks, which were repaired when identified. Landmark returned at a later date and found a further leak, this time with the toilet. The company replaced a portion of the stack. He recalled that when inspecting the unit on one occasion he found the walls were dripping with water – he recalled about 10 mls of water sitting in the pockets of the window.

18.Mr Miller noted that old tiles had been laid over new tiles on the wall, but agreed the tiles were generally in good condition. He said that the quality of the tiling was not an issue, as most of the water was coming through the walls and through the windowsill. In this respect, his evidence was at some variance with Mr McRae’s, but the variance is not particularly significant for these proceedings. Both were of the view that the waterproofing of the unit was not adequate.

19.Mr Miller also suggested that some of the difficulties with the water egress may be due to misuse of the premises by the tenants.  During his evidence there was an exchange between the parties that indicated that it was possible that the tenants were hosing down the floor, or using buckets of water to clean the bathroom. They had a washer and dryer that were producing very significant amounts of condensation in the unit, and that this was pooling in windows and running down the walls. It is not possible to draw any firm conclusions about this, as the tenants were not called to give evidence, but I accept that the way in which the bathroom was used, or cleaned, may be a contributing factor to the significant amount of condensation that appears to be in the unit.

20.Mr Miller and the respondent were in agreement that a lack of adequate ventilation may be another problem. As noted above, the respondent has agreed to address this issue.

21.Mr Miller suggested that the new vanity had been poorly installed, but there was no direct suggestion that this may have been a significant cause of the water egress.

22.Mr Miller gave frank evidence, made concessions where appropriate and admitted when he could not recall details. The respondent did not seriously challenge his evidence. I accept his views, and particularly his assessment that a significant cause of the water egress was condensation seeping through the walls.

23.The applicant also relied on:

(a)an 2001 report prepared by a Mr Clearly of William Edmund Pty Ltd, Licenced Plumbers; and

(b)a 2002 report by Mr Ian Jones of Canberra Home Consultants.

Neither Mr Clearly nor Mr Jones were called as witnesses, and consequently their evidence could not be tested. The respondent made it clear he did not accept certain parts of their evidence. I take their reports merely as establishing that there has been a problem with water egress for many years.

24.The respondent’s only expert evidence was from Mr Putti of Works Plumbing Services. Mr Putti’s evidence was in the form of a short letter to the respondent. The extent of Mr Putti’s investigations were not clear from the letter, but he noted that “the floor appears to be in good condition, possible solution would be a mega seal treatment.” This appears to imply that Mr Putti accepted that water egress from the unit was a problem, although he suggests an alternative to bathroom renovation as a solution.

What is the Owners Corporation responsible for?

25.Having regard to the above evidence, it is apparent that water is leaking from the respondent’s bathroom, through the slab, and into Unit 34. The leak is causing damage. The question is: who is responsible for stopping the leakage?

26.The UTM Act recognises two types of units – A Class and B Class. The units in this matter are A Class units. Section 24 of the UTM Act sets out the maintenance obligations of owners corporations and provides, relevantly, in relation to Class A units:

24Maintenance obligations

(1)An owners corporation for a units plan must maintain the following:

(a)for a staged development—the common property included in a completed stage of the development;

(b)for a development that is not a staged development—the common property;

(c)other property that it holds;

(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)).

(e)if a utility service mentioned in the Unit Titles Act 2001, section 35 (Easements given by this Act) is provided for the potential benefit of all units—facilities associated with the provision of the utility services including utility conduits;

(f)any building on the common property that encroaches on a unit if the building is the subject of an easement declared under the Unit Titles Act 2001, section 36 (Easements declared by owners corporations);

(g)…

(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.

27.“Maintain” is defined in the Dictionary as:

maintenance, of a building, a facility for a utility service or a utility conduit, means maintenance in good repair and working order, and includes—

(a)repair; and

(b)replacement; and

(c)renewal; and

(d)restoration.

28.‘Common property’ is defined in section 13 of the Unit Titles Act 2001 (ACT) as the parts of the land identified as common property in the registered units plan. I was not provided with a copy of the registered unit plans, but it was not suggested by either party that the slab is common property. Rather, the respondent contended that the slab is a ‘defined part’ of the structure, within the meaning of section 24(2). This is clearly the case.

29.Consequently, the maintenance of the slab is a matter for the Owners Corporation. The bathroom, and the fixtures and fittings within it, being neither common property nor a defined part, are the responsibility of the respondent. The question, therefore, becomes whether the water egress is caused through inadequate tiling, grouting and sealing of the bathroom, or through a problem with the slab.

Consideration

30.Unit 35 is located directly above Unit 34. It is not in dispute that Unit 34 has been damaged by way of water egress through the walls and ceiling. The water is coming from the combined bathroom/laundry area of Unit 35.

31.The units are located in an older complex, built around the mid-1970s. The uncontested evidence before the Tribunal was that the apartments were built before the use of modern ‘wet seal’ and water proofing relied on the combined water resistance of the concrete slab and the tiles and adhesive glue. This was not inappropriate at the time, but may not be consistent with modern building practices.

32.The bathroom has not undergone a comprehensive renovation during its lifetime, although some work had been done, including replacement of the vanity, and some retiling of the walls, apparently by placing new tiles over old tiles, and the replacement of the toilet stack. The floor tiles remain in good condition, as do the replacement wall tiles. The older, hidden wall tiles may be degrading.

33.It was not seriously in dispute that there had been some deterioration to the water resistant properties of the grout and the adhesive glue used to stick the floor tiles to the floor and the original wall tiles to the wall, or that the deterioration and building movements have combined to allow water leakage through the walls and floor and into the slab. In addition to the porous nature of the concrete, there are now cracks in the slab through which the water can leak.

34.On balance, I accept Mr Miller’s evidence that the real problem appears to lie more with the walls than the floor. However, it is possible that the age or deterioration of the sealant on the floor is causing water to egress through that as well. If excessive water reaches the slab, it permeates through to the unit below.

Decision

35.The respondent, as with every other owner in the corporation, has an obligation to comply with the rules of the owners corporation. These include obligations to ensure that the unit is in a state of good repair and to not use the unit, or permit it to be used, in a way that causes a nuisance or substantial annoyance to an owner, occupier or user of another unit.

36.On the evidence before me, I am satisfied the respondent has breached the owners corporation rules by:

(a)failing to maintain the bathroom in a state of good repair, by failing to ensure that the water sealant in his unit is in sufficiently good condition to prevent the unreasonable egress of water into a neighbouring unit; and/or

(b)failing to ensure that the unit is not used in a manner that does not cause a nuisance or annoyance, by failing to ensure that water from the unit does not egress into a neighbouring unit.

37.The respondent has an obligation to repair his bathroom so as to minimise damage to both the slab and the common property. What he must do to fulfil that obligation I consider further below.

38.I note that the only hesitation I had in reaching this decision was the reasoning of Mossop AJ in The Owners - Units Plan 1917 v Koundouris [2016] ACTSC 96 (Koundouris). I sought, and received, further submissions from the parties on this case.

39.Koundouris was a complicated decision, involving a civil claim against the builder and developer for a contribution to the cost of rectifying a water leakage problem within a units complex. Expert evidence in that hearing established that leaks from upper floor units into lower floor units were caused by an area under the bathtub not being properly waterproofed. The question before the ACT Supreme Court was which entity had responsibility for the maintenance of the slab.

40.Relevantly, in this regard, Mossop AJ observed that:

[579]...the only way in which the installation of waterproofing in the bathrooms of these units could be the responsibility of the Owners Corporation is if the waterproofing is part of the slab forming the floor of the unit and is one of the “defined parts” of the building.

[580] As pointed out above, slabs form part of the defined parts of the building. Therefore the question becomes whether or not the waterproofing treatment applied to the slab is part of the slab for the purposes of the maintenance obligations in Unit Titles (Management) Act 2001. In the present case the area to which the waterproofing would be required to be installed (under the bath) is an area where tiles were not to be installed. However, in most bathroom areas there would be a cement topping over the slab providing the base for any tiles or other finishes. While there are arguments both ways, in my view the waterproofing is better treated as a part of the slab because it is a functional rather than decorative treatment to the slab and is practically integrated with it. It is distinct from a finish such as tiling or painting. In most cases it will be quite a distinct from such a finish because it is buried under a cement topping within the bathroom. Therefore it is an area the maintenance of which is the responsibility of the Owners Corporation.

41.Having regard to the facts of this matter, and the submissions of the parties, I am satisfied that the facts of this case are sufficiently different to those in Koundouris that a different result can and should be reached. The waterproofing in the Koundouris case was a “treatment to the slab and ... practically integrated with it.” As the waterproofing was, effectively, part of the slab, it was clearly the owners corporation’s obligation to maintain it.

42.On the evidence before the Tribunal in this case, the ‘water resisting’ elements of the grout and adhesive were separate to the slab, and additional to it.  Moreover, in this case, as distinct from Koundouris the tiles were not merely decorative – the tiling, grout and adhesive formed a part of the waterproof shell. As these are part of the private property of Unit 35, it is responsibility of the owner of Unit 35 to maintain them, and nothing in Koundouris ameliorates that obligation.

43.I note that it is, of course, possible that there may also be some damage or inadequacy relating to the slab, as well as to the bathroom. On Mr McRae’s evidence, the tiling and the slab act in concert to control water egress. The cracks in the slab may be indicative of a problem with the slab that requires maintenance.  Where repairs to the slab are required, this is the obligation of the Owners Corporation. However, there is no evidence before the Tribunal that any such repairs are required, or what those repairs would be if they were required. Accordingly, I cannot make any findings on this point. In any case, it does not affect the respondent’s obligations to maintain the water resistant properties of his bathroom and not cause a nuisance to his neighbours.

Mega Seal

44.The respondent has suggested that, even if required to repair and re-seal his bathroom, he could do so by means other than the full bathroom renovation sought by the applicant.

45.The respondent provided a written statement from a plumber, Mr Putti, which stated that a ‘mega seal treatment’ may work. Although there was minimal evidence about the nature of Megaseal before the Tribunal, I understand from what was submitted that it is a waterproofing and sealing substance that can be added to bathrooms to improve water retention without the need to remove and replace tiles.

46.When questioned about this substance, Mr McRae said that “water proof grout would be a really poor patch” that “might stop [the water] for a short period of time” and a “bandaid” that would last a couple of years. While I do not doubt the accuracy of Mr McRae’s evidence, it is clear that Megaseal was not a solution that was acceptable to the executive committee, and I cannot accept his evidence about this without noting my reservations about it.

47.Mr Miller suggested that Megaseal was unlikely to be a long term solution, and opined that it was probably not the best approach. He did not, however, suggest that it would not be an effective remedy for a short period, at least. I accept Mr Miller’s evidence without reservation.

48.The obligation upon the respondent is to stop unreasonable water egress from his bathroom into the slab. The only evidence before the Tribunal indicates that Megaseal may do this, albeit only temporarily, and perhaps only if the bathroom is more appropriately used.

49.In such circumstances, the Tribunal is not satisfied that it is necessary or appropriate to order that the respondent undertake a complete bathroom renovation. The respondent’s obligation is to ensure that there is no unreasonable egress of water from his unit of his neighbours. He is entitled to try the Megaseal treatment. If it does not work, he is required to try something else.

Application for recovery of costs incurred by the body corporate

50.The applicant made an application under section 30 of the UTM for the “recovery of costs incurred to date by the Body Corporate”, with reference made particularly to the plumbing invoices.

51.Section 30 of the UTM Act provides:

30 Recovery of costs—agreements under s 29

(1) This section applies to an agreement for the maintenance of a unit, or the provision of facilities or services for a unit (or its owner or occupier), if—

(a)       the agreement is authorised under section 29; and

(b)       the owners corporation is not responsible for the maintenance, facilities or services under section 24.

(2) The owners corporation may recover the cost of carrying out the agreement as a debt from the person with whom the agreement was entered.

(3) If the agreement applies to a number of units, the amount recoverable for each unit is (unless the people with whom the agreement was entered agree in writing otherwise) as follows:

(4) In subsection (3):

total cost means the total cost of carrying out the agreement.

total unit entitlement of relevant units means the total unit entitlement of all units that the agreement applies to.

Note         Unit entitlement—see the Unit Titles Act 2001, s 8.

52.As is apparent from its terms, section 30(1)(a) of the UTM Act provides for the recovery of costs only where those costs are, amongst other things, incurred under an “agreement ... authorised under section 29”.

53.Section 29 of the UTM Act in turn, provides that:

29Work on behalf of particular unit owners or occupiers

An owners corporation for a units plan may, if authorised by an ordinary resolution, enter into and carry out an agreement with an owner or occupier of a unit for—

(a)the maintenance of the unit; or

(b)the provision of facilities or services for the unit (or its owner or occupier).

54.The respondent denies that he entered into any agreement with the Owners Corporation for the maintenance of his unit, or for the provision of facilities to the unit. No evidence was produced of any such agreement being reached.

55.As I understand the applicant’s position, I am asked to imply some kind of agreement, based on the respondent’s acquiescence to Landmark undertaking work on his unit. In my view, this is not what is contemplated by section 29.

56.Rather, section 29 contemplates a process whereby an owners corporation is expressly authorised by special resolution to undertake certain work on behalf of unit holders, with the express agreement of the unit holders. Examples may be such things as:

(a)an arrangement where the owners corporation, authorised by ordinary resolution, enters into an arrangement for the general painting of the common areas, and the units of those owners who wish to participate; or

(b)an arrangement where the owners corporation arranges for the installation of pay television cable to units whose owners want access to it.

57.I am not prepared to order costs under section 30 of the UTM Act for costs incurred in relation to the plumbing.

58.I am also not prepared to order legal costs under section 30. Even were it possible to award legal costs under this section, no agreement was reached with the respondent in relation to the incurring of those costs.

59.This does not mean that the Owners Corporation is without a remedy, at least in relation to the plumbing costs. Section 31 of the UTM Act provides that:

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.

60.This section provides that certain expenses incurred by an owners corporation may be recoverable from a unit holder as a debt. Recovery under this section requires that the owners corporation quantify the costs it says are recoverable pursuant to section 31(1), and seek recovery from the respondent either directly or, if that is not successful, through a civil debt recovery proceeding.

61.It would be for the Owners Corporation to consider what, if any, of the plumbing expenses may be recoverable from the respondent under this section.

62.I note that on the weight of current authority, section 31 of the UTM Act likely does not permit the recovery of legal expenses.[1] However, this is not a matter I need to consider in these proceedings.

[1] See The Owners – Units Plan 840 v Richardson [2015] ACAT 77

Orders

63.  The respondent is to ensure that the tiling, grouting and sealing in his bathroom is maintained in a manner that ensures that water egress from the bathroom to the slab is unlikely to cause damage to the slab, neighbouring units or other common areas of the complex.

64.The respondent is to arrange for appropriate work to be undertaken within 90 days of the date of this order.

65.The respondent is to ensure that the work is undertaken to a professional standard by appropriately licenced or qualified tradespeople.

66.The respondent is to provide a report to the Owners Corporation confirming that:

(a)the bathroom is water resistant to an acceptable standard, having regard to the age and construction of the building; and

(b)that any risk of water egress to the slab or damage to the unit below has been minimised; and

(c)how long the remedy is likely to last.

………………………………..

President L Crebbin

Delivered for and on behalf of the Tribunal

HEARING DETAILS

FILE NUMBER:	UT 18/2016
PARTIES, APPLICANT:	The Owners – Units Plan No 107
PARTIES, RESPONDENT:	Jason Perkins
COUNSEL APPEARING, APPLICANT	N/A
COUNSEL APPEARING, RESPONDENT	N/A
SOLICITORS FOR APPLICANT	N/A
SOLICITORS FOR RESPONDENT	N/A
TRIBUNAL MEMBERS:	Senior Member H Robinson
DATES OF HEARING:	7 September 2016