Body Corporate for Metro Quays v Three Islands Pty Ltd & Ors [2023] QCA 186 (2023) 16 QR 204

SUPREME COURT OF QUEENSLAND CITATION: Body Corporate for Metro Quays v Three Islands Pty Ltd & Ors [2023] QCA 186 PARTIES: BODY CORPORATE FOR METRO QUAYS COMMUNITY TITLES SCHEME 28461 (applicant) v THREE ISLANDS PTY LTD ACN 100 111 831 (first respondent) BODY CORPORATE FOR METRO RETAIL COMMUNITY TITLES SCHEME 43555 (second respondent) BODY CORPORATE FOR METRO COMMUNITY TITLES SCHEME 28454 (third respondent) FILE NO/S: Appeal No 5161 of 2023 QCATA No 350 of 2021 DIVISION: Court of Appeal PROCEEDING: Application for Leave Queensland Civil and Administrative Tribunal Act ORIGINATING COURT: Queensland Civil and Administrative Tribunal – [2023] QCATA 20 (Senior Member Brown) DELIVERED ON: 12 September 2023 DELIVERED AT: Brisbane HEARING DATE: 22 August 2023 JUDGES: Morrison and Boddice JJA and North J ORDER: The application for an extension of time in which to seek leave to appeal is refused. CATCHWORDS: REAL PROPERTY – STRATA AND RELATED TITLES – MANAGEMENT AND CONTROL – BODY CORPORATE: POWERS, DUTIES AND LIABILITIES – DUTY TO REPAIR AND MAINTAIN COMMON PROPERTY – where the applicant is the principal scheme of a layered arrangement of community titles scheme with respect to a multi-storeyed high rise building – where the respondents are subsidiary schemes or members to the principal scheme – where the first and second respondents lodged an adjudication application in relation to a dispute regarding the cost of repairing and maintaining the roof of the building – where the adjudicator declared the applicant was responsible for roof maintenance and repair for the building – where the applicant unsuccessfully -- 1 of 9 -- 2 appealed that decision to QCATA – where the appeal to this Court turns on a question of statutory interpretation of the Body Corporate and Community Management Act 1997 (Qld) and its associated regulations – whether the reference to “lots” in s 170 of the Accommodation Module and s 180 of the Standard Module ought to be construed to include a subsidiary community titles scheme in the context of the layered arrangement of community titles schemes – whether, on that construction, the reference to “body corporate” in those reciprocal provisions could be a reference to the body corporate for a principal scheme, such that even though the roofing structure providing protection is not the common property of the body corporate for a principal scheme, it is that body corporate who is legally responsible for the cost to maintain it – whether the Senior Member erred in the interpretation of those provisions Body Corporate and Community Management (Accommodation Module) Regulation 2020 (Qld), s 169, s 170 Body Corporate and Community Management (Standard Module) Regulation 2020 (Qld), s 179, s 180 Body Corporate and Community Management Act 1997 (Qld), s 18, s 19, s 24, s 91, sch 6 Building Units and Group Titles Act 1980 (Qld), s 7 Land Title Act 1994 (Qld), s 48A, s 48C, s 115Y, s 115Z COUNSEL: P J Roney KC, with B P Strangman, for the applicant S Kelly for the respondents SOLICITORS: Grace Lawyers for the applicant Wilson Ryan Grose Lawyers for the respondents [1] MORRISON JA: I agree with the reasons of Boddice JA, and with the order proposed by his Honour. [2] BODDICE JA: The applicant seeks an extension of time to seek leave to appeal a decision of the Queensland Civil and Administrative Tribunal (Appeals) (“QCATA”) that the applicant had responsibility for maintenance of the roof of premises subject to the Body Corporate and Community Management Act 1997 (Qld) (the “BCCM Act”) and its associated regulations, the Body Corporate and Community Management (Accommodation Module) Regulation 2020 (Qld) (“the Accommodation Module”) and the Body Corporate and Community Management (Standard Module) Regulation 2020 (Qld) (“the Standard Module”). [3] Should leave be granted, the applicant submits the Senior Member erred in law: (a) By determining that obligations in s 170(2)(b) of the Accommodation Module, and by analogy s 180(2)(b) of the Standard Module, do not apply to a principal scheme in a layered arrangement of community titles schemes; (b) By finding that the process for the creation of a layered arrangement was provided for by s 91 of the BCCM Act when it had no such application, thereby erring in concluding that the creation and recording of a layered arrangement did not involve the registration of a plan of subdivision; -- 2 of 9 -- 3 (c) By finding that ss 115Y and 115Z of the Land Title Act 1994 (Qld) set out the relevant procedure for recording the creation of a layered arrangement; (d) By finding that the process for the creation of a lot under a building format plan of subdivision and the creation of a layered arrangement of a “group titles scheme” are quite different; and (e) By finding that the reference to “lots” in both s 170(2) of the Accommodation Module and s 180(2) of the Standard Module was not a reference to a subsidiary scheme in a layered arrangement of community titles scheme. [4] The respondents submit that leave to appeal ought to be refused as there was no such error. Alternatively, the respondents submit the decision below should be affirmed on another ground, namely, that the applicant had a primary obligation under s 170(1) of the Accommodation Module, to maintain the roof in good condition as part of the common property of the relevant building. Background [5] On 24 February 2021, an adjudication application was lodged in respect of a dispute regarding the cost of repairing and maintaining the roof of a building known as the Metro Quays apartment building and car park. [6] The building is a multi-storeyed high rise building. It comprises a layered arrangement of community titles schemes. [7] The principal scheme was Metro Community Titles Scheme 28454 (“Metro CTS”). Its members were: (a) Metro Quays Community Titles Scheme 28461 (“Metro Quays CTS”), being the owners of the residential apartments within the scheme, including all of the apartments and some levels of parking for residents; (b) Metro Retail Community Titles Scheme 43555 (“Metro Retail CTS”), the sole member of which was Three Islands Pty Ltd (“Three Islands”). That scheme consisted of three lots comprising retail/office tenancies on the ground floor, including a restaurant tenancy; and (c) Lot 1 on SP 243826 (freehold lot) owned by Three Islands. That was a commercial car park from the ground level to level 7. [8] Between September 2016 and December 2018, Metro CTS arranged and paid for work to be carried out to the roof of the relevant building. It subsequently contended that Metro Quays CTS was responsible for maintaining the whole of the roof of the building, except for the concrete part of the roof covering the stairwell and lift. Metro CTS issued an invoice to Metro Quays CTS seeking repayment of the sum paid for the roof work. Metro Quays CTS denied it had responsibility for the roof. [9] The applicants in the adjudication application were Three Islands as the owner of Lot 1 and Metro Retail CTS. The first respondent was Metro CTS. The second respondent was Metro Quays CTS. [10] The applicants sought orders that Metro Quays CTS was responsible for roof maintenance and repair of the building, as well as an order that Metro Quays CTS pay the outstanding invoice. -- 3 of 9 -- 4 [11] The adjudicator declared that Metro Quays CTS was responsible for roof maintenance and repair for the building, with the exception of that part of the roof covering the stairwell and lift, including that it was responsible for historical roof maintenance and repairs. The adjudicator ordered Metro Quays CTS pay the outstanding invoice. [12] Relevantly, the adjudicator found that: (a) Metro Quays CTS had an obligation pursuant to s 170(2)(b) of the Accommodation Module to maintain the following items of land that are not common property, in a structurally sound condition: (i) foundation structures; (ii) roofing structures providing protection; (iii) essential supporting framework including load bearing walls. (b) Where a roofing structure provides protection of lots in a subsidiary scheme, the lot owner’s rights in respect of the maintenance of the roof lie against the subsidiary body corporate containing the lots, not the principal body corporate. (c) The roof and nearly all of the roof area of the building did not form part of the third respondent’s common property. (d) Metro Quays CTS had responsibility for the roof. (e) The obligations between a lot owner and a body corporate in a layered scheme only relate to the individual lot owner within a subsidiary scheme and the subsidiary body corporate, not the principal body corporate. (f) The obligations of a body corporate for the maintenance of property in a principal scheme that is not principal common property do not apply unless there is some specific wording saying they apply to a principal body corporate. QCATA decision [13] Metro Quays CTS appealed that decision to QCATA. That appeal was dismissed on the basis there was no error by the adjudicator in concluding that the applicant was responsible for the maintenance of the roof of the building. [14] In reaching that conclusion, the Senior Member found that: (a) References to s 170 of the Accommodation Module should be read as also, by analogy, referring to s 180 of the Standard Module; (b) Section 170(2) of the Accommodation Module is only engaged if the lots included in the scheme are created under a building format plan of subdivision; (c) Whilst the term “building format plan of subdivision” is not defined in the BCCM Act or the Accommodation Module, the term “building format” is defined in the Accommodation Module as having the meaning given to it by s 48C of the Land Title Act,1 which provides that a “building format” plan of survey defines land using the structural elements of a building, including, for example, floors, walls and ceilings and that a building format plan is used to subdivide a building into lots and create common property; 1 Accommodation Module sch 1. -- 4 of 9 -- 5 (d) The establishment of a community titles scheme involves two separate and distinct steps. First, the registration of a plan of subdivision identifying the scheme land (which includes the lots in the scheme and the common property). Second, the recording of the first community management statement for the scheme with such a statement having no effect unless it is recorded; (e) A lot created under a building format plan of subdivision falls within the first limb of the definition of “lot” in sch 6 of the BCCM Act, being a “lot under the Land Title Act”; (f) The creation and recording of a layered arrangement does not involve the registration of a plan of subdivision; (g) The processes for the creation of a lot under a building format plan of subdivision and the creation of a layered arrangement of group title schemes are quite different; (h) The words “created under a building format plan of subdivision” in s 170(2) have a qualifying and limiting effect, evincing a clear legislative intent to confine the operation of the section to the relationship between a lot within the first limb of the definition of “lot” under the BCCM Act, and the body corporate of the scheme of which the lot forms part; (i) The reference in s 170(2) to “body corporate” and “lot” is a reference to the body corporate of the scheme and the lots within the scheme, established by the two-step process set out at s 24 of the BCCM Act; and (j) Section 170(2) does not apply to the relationship between a principal scheme and a subsidiary scheme under a layered arrangement of community titles schemes. Applicant’s submissions [15] The applicant submits that although the application for leave to appeal was not made within the 28 day period, there was good reason for the delay, namely the Accommodation Module requires the appellant to authorise the proceedings by way of special resolution at a general meeting, which can only be held 21 days after notice is given to the owners of the lots.2 Further, leave to appeal ought to be granted to correct a substantial injustice and an error of law; and because the appeal raises novel and important issues of law in relation to the proper construction of the relevant regulations, having wider application than the parties themselves. [16] The applicant submits that whilst the question before the Senior Member was one of statutory interpretation, the Senior Member erroneously had regard to s 91 of the BCCM Act, despite not being referred in argument by either party to that section. That error resulted in the Senior Member erroneously referring to ss 115Y and 115Z of the Land Title Act. [17] The applicant submits that a consideration of the legislation, in context, supports a conclusion that the reference to lots in s 180(2) of the Standard Module includes a subsidiary community titles scheme in the context of the layered arrangement of community titles schemes. So understood, the reference to body corporate in the section could be a reference to the body corporate for a principal scheme, such that even though the roofing structure providing protection is not the common property of 2 Accommodation Module s 44(1)(e), s 81. -- 5 of 9 -- 6 the body corporate for a principal scheme, it is that body corporate who is legally responsible for the cost to maintain it. Respondents’ submissions [18] The respondents submit that leave to appeal should not be granted because the decision at first instance was correct. Further, the appeal cannot succeed because the roof area was the common property of the applicant, such that under s 170(1) of the Accommodation Module, the applicant was responsible for its maintenance in a good and structurally sound condition. There was, in such circumstances, no reason to consider s 180(2) of the Standard Module. [19] Further, QCATA was correct in the central finding that “lot” in s 170(2) of the Accommodation Module does not include a subsidiary community titles scheme in a layered arrangement. Consideration [20] Section 170 of the Accommodation Module and s 180 of the Standard Module are in the same terms. Those provisions provide: “(1) The body corporate must maintain common property in good condition, including, to the extent that common property is structural in nature, in a structurally sound condition. Note— For utility infrastructure included in the common property, see section 20 of the Act. (2) To the extent that lots included in the community titles scheme are created under a building format plan of subdivision, the body corporate must— (a) maintain in good condition— (i) railings, parapets and balustrades on, whether precisely, or for all practical purposes, the boundary of a lot and common property; and (ii) doors, windows and associated fittings situated in a boundary wall separating a lot from common property; and (iii) roofing membranes that are not common property but that provide protection for lots or common property; and (b) maintain in a structurally sound condition the following elements of scheme land that are not common property— (i) foundation structures; (ii) roofing structures providing protection; (iii) essential supporting framework, including load- bearing walls.” -- 6 of 9 -- 7 [21] There is no dispute that the building comprised a layered arrangement of community titles schemes for which the Accommodation Module applied to the applicant and the Standard Module applied to the third respondent.3 It is also not contentious that the roof is the common property of the applicant. [22] Whilst the applicant submits that s 180(2) of the Standard Module meant an obligation fell on the third respondent, as a body corporate, to maintain structural elements, including the roof, irrespective of the owner of the common property, a consideration of the legislation as a whole, in context, does not support that conclusion. [23] The purpose of ch 8 of both the Accommodation Module and Standard Module is to prescribe matters “about property management for a community titles scheme, including matters about the rights and obligations of the body corporate”.4 Sections 170 and 180 provide, in similar terms, for two circumstances. First, that the body corporate must maintain common property in good condition “including, to the extent that common property is structural in nature, in a structurally sound condition”.5 Second, to the extent that lots included in the community titles scheme are created under a building format plan of subdivision, the body corporate must maintain in good condition, relevantly, “roofing membranes that are not common property but that provide protection for lots or common property”;6 and maintain in a structurally sound condition elements of the scheme land that are not common property, namely foundation structures, roofing structures providing protection and essential supporting framework, including load-bearing walls.7 [24] In context, these provisions are intended to enshrine the obligation of the body corporate to maintain in good condition, roofing structures that are common property or, if not common property, because the community titles scheme is created under a building format plan of subdivision, roofing membranes that provide protection for lots or common property. [25] There is good reason for that specific requirement in respect of a community titles scheme created under a building format plan of subdivision. [26] Under the Land Title Act, a plan of survey may be “in a standard, building or volumetric format”, with the format to be used in the plan depending on how the plan is to define the land to which it relates.8 [27] Relevantly, s 48C of that Act provides that a building format plan defines land “using the structural elements of a building including, for example floors, walls and ceilings”. Such a definition may result in structural elements of the building, such as a roof, forming part of a lot rather than common property. For that reason, there is a need for a specific obligation to be placed on a body corporate in such circumstances, to maintain the roofing thereof, notwithstanding that it is not common property. [28] The applicant submits that such an interpretation is inconsistent with the definition of a “lot” in the BCCM Act, which defines “lot” to mean “a lot under the Land Title Act, 3 BCCM Act s 18. 4 Accommodation Module s 169; Standard Module s 179. 5 Accommodation Module s 170(1); Standard Module s 180(1). 6 Accommodation Module s 170(2)(a)(iii); Standard Module s 180(2)(a)(iii). 7 Accommodation Module s 170(2)(b); Standard Module s 180(2)(b). 8 Land Title Act 1994 (Qld) s 48A. -- 7 of 9 -- 8 but if the lot is included in a community titles scheme other than a basic scheme, the lot could be another community titles scheme”.9 Whilst lot has that extended definition under the BCCM Act, a consideration of the reciprocal provisions in ss 170 and 180 of the Accommodation Module and Standard Module respectively supports a conclusion that “lot”, when used in those sections, does not have that extended definition. [29] The obligation on the body corporate to maintain in good condition aspects of the building, to the extent that lots included in a community titles scheme are created under a building format plan of subdivision, speaks of “the boundary of a lot and common property”;10 “a boundary wall separating a lot from common property”;11 “roofing membranes that are not common property but that provide protection for lots or common property”;12 “installed by the occupier of a lot”;13 and that “the owner of the lot is responsible for maintaining the tray of a shower that services the lot, whether or not the tray forms part of the lot”.14 Each of those references to “lot” is more consistent with lot as defined under the Land Title Act, not a lot that could be another community titles scheme. [30] To interpret lot as including the extended definition such that another body corporate may have responsibility for maintaining roofing structures that are not common property creates an irreconcilable conflict between the primary obligation on the body corporate to maintain the roof as a structural element in good condition and in a structurally sound condition,15 and the shifting of that obligation to the owner of a lot. Such a conflict is properly to be avoided in the interpretation of legislation unless it is plain that was the legislative intent. There is no such intention evidenced in this legislation. [31] Further, the natural meaning of lot, in the context of a building format plan, having regard to the way lot is to be defined in such a plan, is that it is the lot established under the Land Title Act, not a lot that could be another community titles scheme. [32] The definition of a lot under the Land Title Act supports this interpretation. Under that Act: “lot means a separate, distinct parcel of land created on— (a) the registration of a plan of subdivision; or (b) the recording of particulars of an instrument; and includes a lot under the Building Units and Group Titles Act 1980.” [33] The definition of lot under that latter Act, is “a lot shown as such on a plan”.16 Those provisions support an interpretation of lot under s 170 and s 180 being a lot as defined under the Land Title Act. [34] This conclusion is not altered by a consideration of s 19 of the BCCM Act, which provides that in a community titles scheme including a lot that is another community 9 BCCM Act sch 6. 10 Accommodation Module s 170(2)(a)(i); Standard Module s 180(2)(a)(i). 11 Accommodation Module s 170(2)(a)(ii); Standard Module s 180(2)(a)(ii). 12 Accommodation Module s 170(2)(a)(iii); Standard Module s 180(2)(a)(iii). 13 Accommodation Module s 170(3); Standard Module s 180(3). 14 Accommodation Module s 170(4)(b); Standard Module s 180(4)(b). 15 Accommodation Module s 170(1); Standard Module s 180(1). 16 Building Units and Group Titles Act 1980 (Qld) s 7. -- 8 of 9 -- 9 titles scheme, a reference in the Act to the owner of the lot is a reference to the body corporate for another community titles scheme. The only relevant reference to the owner of the lot in s 170 and s 180 is in relation to a shower tray. The remaining references are to a lot. [35] This conclusion renders it unnecessary to consider whether the Senior Member was in error in referring to s 91 of the BCCM Act and ss 115Y and 115Z of the Land Title Act. In any event, a consideration of the reasons supports a conclusion that those references were in response to a submission that the creation of a lot under a building format plan of subdivision and the creation of a layered arrangement of group titles schemes were synonymous. Neither reference was central to the proper interpretation of s 170 and s 180 of the relevant Modules and neither reference was productive of error in the ultimate production of those sections. Conclusion [36] No error of law has been established giving rise to a substantial injustice. [37] Accordingly, it is unnecessary to consider the alternative ground advanced by the respondents’ Notice of Contention in support of affirming the decision below. Order [38] I would order: 1. The application for an extension of time in which to seek leave to appeal is refused. [39] NORTH J: I agree with Boddice JA. -- 9 of 9 --