The recent decision of Enderley Gardens [2024] QBCCMCmr 60 provides a reminder of the power of an adjudicator to determine liability in bodies corporate disputes, irrespective of the nature and quantum of the orders claimed. The effect being that parties to such disputes are able to pursue financially friendly options via the Office of the Commissioner for BCCM, thereby (hopefully) circumventing the need to plead a full and proper claim in court, and incur the costs generally associated with litigation.

The Enderly Gardens Decision

Enderly Gardens concerned defects in the construction of a concrete suspended flooring system that formed the first floor of a building at the scheme. The defects came to light after movement in the floor of the applicant’s bathroom caused tiles to crack and waterproofing to fail.[1] Hence, the primary consideration was the liability of the body corporate for contravention of the Act or community management statement (CMS).

Two primary issues arise from the foregoing fact scenario:

1. Jurisdiction of the adjudicator; and
2. Liability of the body corporate to maintain the structural integrity of the floor.

With respect to the first issue, the adjudicator confirmed his own power to determine liability. The legislation delegates the primary responsibility of determining disputes with the Office of the Commissioner for BCCM.[2] In light of this legislative purpose, it was reasoned that the original jurisdiction of the office cannot be circumvented by merely seeking orders beyond which an adjudicator is authorised to make. In the event that the applicant does seek such orders, to recover lost rent or damages in excess of $10,000, the adjudicator will make a determination of liability before dismissing the matter under section 270(1)(b) of the Act and referring the dispute to be dealt with by a tribunal of competent jurisdiction. In practice, it is likely that the determination will support a settlement being reached between the parties so as to avoid the need to litigate.

The second issue thereby forms the primary consideration of the case, effectively underpinning the adjudication of the first issue. On this point, the court held that the Body Corporate for Enderley Gardens was and is responsible for maintaining the floor of its lots in a structurally sound condition. After reviewing various expert materials, the adjudicator reached the conclusion that the body corporate failed to fulfil its maintenance obligations in contravention of section 170 of the Accommodation Module and section 152 of the Act. Accordingly, the body corporate was required to take action to rectify this structural issue.

The adjudicator awarded reimbursement for various costs incurred by the lot owner as a result of the defect in the total sum of $11,620.40.

Relevantly, the adjudicator held that, had claims for lost rental income been included in the application before him, they should be heard in a court of competent jurisdiction and would have been dismissed pursuant to section 270(1)(b) of the Act.

The Impact

The findings in Enderly Gardens underpins this article’s call to action for lot owners and bodies corporate alike. That is, we encourage parties to bodies corporate disputes to utilize this cost-effective and efficient mechanism to achieve timely resolution. Adjudication through BCCM proves to be a cheaper, easier, and more sure-fire forum to achieve an effective resolution.

For further information on this decision, or bodies corporate disputes, contact our specialist body corporate lawyers today.

[1] Enderley Gardens [2024] QBCCMCmr 60 [1].

[2] Body Corporate and Community Management Act 1997 (the Act), Chapter 6.

The content of this publication is intended to provide a summary and commentary only. It is not intended to be comprehensive nor does it constitute legal advice, and has been prepared based on applicable legislation and case authority at the date of publication. You should seek legal advice on specific circumstances before taking any action.