The applicant is the owners corporation of Units Plan 3217. The first respondent, AJ Properties Pty Ltd, is the owner of unit 13. The second respondent, Xbox Projects Pty Ltd, is the owner of units 11, 12 and 14. There was a fire which damaged units 11, 12, 13 and 14. The premises were insured with CHU Underwriting Agencies Pty Ltd and a claim was made for the cost of remediation and loss of rent for affected properties. Other brokers and insurers became involved.
An application was brought by the owners corporation under the UTMA for orders to be made in relation to competing claims by unit owners on the owners corporation for payment of insurance money received by the owners corporation following the fire.
The first respondent had sublet unit 13. Its contents were insured with the Holland Insurance Company. The second respondent moved independently of the process adopted by the insurer and had remedial work done by Olive Tree Construction Pty Ltd (OT). As units 11 and 14 were less affected by the fires, OT quoted $123,538 to undertake rectification work. Of that amount $65,000 was paid to the second respondent’s contents insurer. A month later, OT issued a quote to undertake rectification works on units 12 and 13. The second respondent received $93,564.90 from the OC.
The principal of the second respondent contacted quantity surveyor Mr Still to provide a report. Mr Still reported that the cost of the Sergon Scope of Works was $1,123,500 plus GST. The insurer paid $57,580 to the OC for past works done by OT and another payment of $35,984.80. Later on, a meeting was held at which a quote of $937,862.42 was provided by a Sydney builder. The first respondent was not willing to have the Sydney builder undertake the work. The first respondent engaged another quantity surveyor to prepare costing of the Sergon Scope of Works and quoted $1,120,153.35. An invoice of $250,000 was presented to the second respondent by OT. Further work was needed in order for unit 13 to be used for commercial purposes. The cost of further repairs to unit 13 was subject to assessment by the quantity surveyors in their joint report. Further negotiations between parties failed to settle outstanding issues.
Ultimately, the Tribunal ordered that of the $1,000,000 held in trust by the manager of Units Plan 3217, the sum of $540,192 should be paid to the applicant owners corporation. From those funds, the applicant is to disburse all payments necessary for the rebuilding and reinstatement work on unit 13 in accordance with the scope of works prepared by Mr Still. In the event that any amount of the funds remain unspent after all the payments have been made, the remaining sum should be paid to the second respondent. The manager of Units Plan 3217 should then pay the amount of $459,808 to the second respondent. Payments to the second respondent are made upon production of receipts under the hand of Olive Tree Construction.