Barlow v Body Corporate for Hi Surf
[2010] QCAT 55
•23 February 2010
CITATION: Barlow v Body Corporate for Hi Surf [2010] QCAT 55
PARTIES: GEOFFERY ARTHUR BARLOW
v
BODY CORPROATE FOR HI SURF CTS 11533
APPLICATION NUMBER: KL054-09
MATTER TYPE: Other civil disputes matters
HEARING DATE: 23 February 2010
HEARD AT: Brisbane
DECISION OF: Mr J Allen
DELIVERED ON: 23 February 2010
DELIVERED AT: Brisbane
ORDERS MADE: The contribution schedule for the community titles scheme known as “Hi Surf CTS 11533” be adjusted such that the contribution schedule lot entitlement for each and every lot be the number allocated to the lot in the following table.
Lot Number in BUP3632 Contribution schedule lot entitlement 1 98 2 95 3 85 4 91 5 101 6 95 7 85 8 95 9 102 10 95 11 85 12 95 13 102 14 95 15 85 16 95 17 102 18 95 19 85 20 95 21 102 22 95 23 85 24 95 25 102 26 95 27 85 28 95 29 102 30 95 31 85 32 95 33 102 34 95 35 85 36 95 37 102 38 95 39 85 40 95 41 102 42 95 43 85 44 95 45 102 46 95 47 85 48 95 49 102 50 95 51 85 52 95 53 102 54 95 55 85 56 95 57 102 58 95 59 85 60 95 61 102 62 95 63 85 64 95 65 102 66 95 67 85 68 95 69 102 70 95 71 85 72 95 73 102 74 95 75 85 76 95 77 102 78 95 79 85 80 95 81 102 82 95 83 85 84 95 85 102 86 95 87 85 88 95 89 102 90 95 91 85 92 95 93 102 94 95 95 85 96 95 97 102 98 95 99 85 100 95 101 102 102 95 103 85 104 95 105 103 106 100
CATCHWORDS: Application to adjust contribution schedule; Body Corporate and Community Management Act 1997 sections 46 to 49
APPEARANCES and REPRESENTATION (if any):
This matter was heard on the papers by agreement of the parties in accordance with section 32 of the Queensland Civil and Administrative Tribunal Act 2009
REASONS FOR DECISION
The applicant, Mr Geoffrey Arthur Barlow is one of the owners of Lot 106 on BUP 3632, being one of the lots contained in the Community Titles Scheme called Hi Surf Community Titles Scheme 11533 (“Hi Surf”). The application is for a Contribution Schedule adjustment pursuant to section 48 of the Body Corporate and Community Management Act 1997 (“the BCCM Act”) which was filed with the former Commercial and Consumer Tribunal on 28 August 2009.
The respondent to this application is the Body Corporate for Hi Surf as required by section 48(2) of the BCCM Act.
The respondent filed a defence to the application dated 18 September 2009.
Pursuant to section 256 of the Queensland Civil and Administrative Tribunal Act 2009 (“QCAT Act”) the Queensland Civil and Administrative Tribunal (“Tribunal ”) has jurisdiction to deal with this matter as it was commenced in a former tribunal, the Commercial and Consumer Tribunal and was a pending proceeding before that tribunal, at the commencement of the Tribunal. In accordance with section 271 of the QCAT Act, the Tribunal has the functions of and can only make a decision in relation to the matter which the Commercial and Consumer Tribunal could have made.
EVIDENCE
The applicant provided a report dated 25 August 2009 by Ms Kaylene Arkcoll of Leary & Partners Pty Ltd described as Contribution Lot Entitlement Analysis for Hi Surf CTS 11533 (“L & P Report”).
The respondent advised the Commercial and Consumer Tribunal by letter dated 20 November 2009 that it did not intend to engage an independent expert to prepare a report (or otherwise give evidence) in respect of the current contribution schedule.
The Tribunal received a submission by e-mail dated 29 October 2009 from Ms Juanita Walls.
THE LAW
The contribution schedule lot entitlement for a lot is in accordance with section 47(2) of the BCCM Act the basis for calculating the lot owner’s share of amounts levied by the body corporate, unless …otherwise provided in the Act and the value of the lot owner’s vote on an ordinary resolution if a poll is conducted. There is a separate interest schedule lot entitlement which in accordance with section 47(3) of the BCCM Act is the basis for calculating the lot owners share of the common property, the lot owners interest on termination of the scheme including the lot owner’s share in body corporate assets and the unimproved value of the lot for rating and tax purposes.
By section 46 (7) of the BCCM Act the respective contribution lot entitlements must be equal, except to the extent to which it is just and equitable in the circumstances for them not to be equal. This section on its face applies to schemes for which development approval is given after the commencement of the section which was on 4 March 2003.
The owner of a lot in a community title scheme may apply for an order for adjustment of a lot entitlement schedule under section 48(1) of the BCCM Act. The order of the Tribunal in regard to the contribution schedule must in accordance with section 48(5) of the BCCM Act be consistent with the principle that the respective lot entitlements should be equal, except to the extent to which it is just and equitable in the circumstances for them not to be equal.
Section 49 of the BCCM Act sets out the matters which the Tribunal may and may not have regard to for deciding if it is just and equitable in the circumstances for the respective lot entitlements not to be equal. By section 49(4) of the BCCM Act the Tribunal may have regard to
a.How the community titles scheme is structured; and
b.The nature, features and characteristics of the lots included in the scheme; and
c.The purpose for which the lots are used.
This is not an exhaustive list as in accordance with section 49(3) of the BCCM Act the matters the Tribunal may have regard to for deciding a matter are not limited to the matters stated in this section.
The matters which the Tribunal may not have regard to are set out in section 49 (5) of the BCCM Act and are any knowledge or understanding the applicant had, or any lack of knowledge or misunderstanding on the part of the applicant, at the time they entered into a contract to buy the lot about the lot entitlement for the lot owned by the applicant or other lots included in the community titles scheme; or the purpose for which a lot entitlement is used.
The leading decision in respect of applications under section 48 of the BCCM Act is that of Chesterman J with whom the two other Court of Appeal judges agreed in Fischer & Ors v Body Corporate for Centrepoint Community Title Scheme 7779 [2004] QCA 214. In his judgment Chesterman J distilled the following principles:
a.At para [26], a contribution schedule should provide for equal contributions by apartment owners, except insofar as some apartments can be shown to give rise to particular costs to the body corporate which other apartments do not.
b.At para [26], That question, whether a schedule should be adjusted, is to be answered with regard to the demand on the services and amenities provided by the body corporate to the respective apartments, or their contribution to the costs incurred by the body corporate. More general considerations of amenity, value or history are to be disregarded. What is at issue is the ‘equitable’ distribution of the costs.
Chesterman J stated that there were a number of reasons for that conclusion. The first being the Explanatory Notes which accompanied the Act which inserted section 46(7) of the BCCM Act and the content of the Second Reading speech when the bill for it was debated. He had already noted at para [10] that it was the act as amended which contained the relevant law. This is important as under the Act before amendment it was not a requirement under section 46(1) of the BCCM Act that that contribution schedule lot entitlements be equal.
At para [28] Chesterman J quoted from the explanatory note as follows:
The change is intended to reinforce the concept that usually all lot owners are equally responsible for the cost of upkeep of common property. However, it is recognised that there are many valid instances where the contribution schedules do not have to be equal. The amendment provides that usually the numbers in this schedule are equal, unless it can be demonstrated that it is just and equitable for there to be inequality.
The need for differences is best shown by examples.
….
Example 3 - in a basic scheme, if all the lots are residential lots ranging in size from a small lot to a penthouse, the contribution schedule lot entitlement would generally be equal. However, the contribution schedule may be different if the penthouse has its own swimming pool and private lift. The contribution schedule should recognise this type of difference. The other lots in the scheme despite being of differing size or aspect would be expected to have equal contribution schedule lot entitlements.
At para [29] Chesterman J quoted from the second reading speech as follows
The issue of the nature of the contributions schedule for a body corporate scheme has created some discussion. The guiding principle for both setting and adjusting the contribution schedule is that it involves the equitable sharing of the costs of operating and maintaining the common property. These costs should be borne in proportion to the benefit, not in proportion to the unit’s value. It is not a contribution linked to an ability to pay, but as a payment for services… There is not an argument..against the fact that, in terms of costs related to a property’s value – costs such as rates and insurance – owners whose properties are worth more should pay more. But when we are talking about those parts of a property where the benefits are shared more or less equally, we cannot apply the same formula.
In referring to the effect of the insertion of section 46(7) of the BCCM Act in 2003 having regard to the Explanatory Notes and Second reading speech in respect of the amendments Chesterman J said at para [30], These materials make it tolerably plain that the Act is intended to produce a contribution lot entitlement schedule which divides body corporate expenses equally except to the extent that the apartments disproportionately give rise to those expenses, or disproportionately consume services. That determination can only be made by reference to factors which have a financial impact or consequence on the body corporate. It cannot be affected by factors which go to an apartment’s value or amenity.
Secondly, in support of his conclusion in para [26] Chesterman j stated at para [31] that, the nature of a contribution lot entitlement schedule itself suggests that the allocation of lot entitlements is to be made on the basis of the impact that individual apartments make upon the costs of operating and running a community titles scheme. Contribution lot entitlements determine the apartment’s share of the outgoings. The starting point is that the entitlement should be equal. A departure from that principle is allowable only where it is just, or fair, to recognise inequality. The departure must take as its reference point the proposition, from which it departs, that apartment owners should contribute equally to the costs of the building. The focus of the inquiry is the extent to which an apartment unequally causes costs to the body corporate.
At para [32] Chesterman J sets out a third consideration that if this principle not be the applicable one then there is no basis on which applications for adjustment of contribution lot entitlements can consistently be made. As the evidence in this application shows, if the inquiry is limited to the extent to which an apartment creates costs, or consumes services, above or below the average, one can readily determine what the contribution lot entitlement should be.
At para [33], Chesterman J stated, I would construe section 49 of the Act, and in particular subsection (4), as meaning those identified matters to which a court may have regard are to be regarded only to the extent, if any, that they affect the cost of operating a community titles scheme.
DISCUSSION OF THE EVIDENCE
The tribunal notes from her curriculum vitae that the author of the L & P Report, Ms Kaylene Arkcoll has qualifications in quantity surveying and applied law and has 18 years experience in this area. The Tribunal accepts that Ms Arkcoll has appropriate qualifications and experience in regard to the matters addressed in the report.
The L & P report sets out the details of the structure of Hi Surf noting that there are 106 lots in the scheme including a management lot. The scheme includes a basement - level A which contain exclusive use car spaces for each of the lots, lift landings, a refuse room store rooms and plant rooms. There is a ground level - level B which includes the main foyer with attached porte cochere, lift lobbies and an indoor pool area and includes a spa, saunas and male and female toilet/changing rooms. It also contains the lot 1 (the manager’s lot) which includes an on-title reception office and lots 2 to 4. Level C contains a common lift lobby as well as 3 lots. Lots 2 to 73 are located on these levels (this is incorrect in accordance with the plans, Level C contains lots 5 to 8). Levels D - AA each contain a common lift lobby as well as 4 lots. Lots 9 to 104 are located on these levels. Level BB contains lot 105 and 106, which is the applicant’s lot. Levels CC and DD contain the roof and rooftop plant rooms. The external common property facilities for Hi Surf include an external driveway, paving, an outdoor swimming pool and spa area, a children’s playground area, a BBQ and billiards table shelter adjacent to the pool and play ground areas, a gymnasium building, a tennis court area, water features and extensive pathways and landscaping.
Ms Arkcoll at section 3 of the L & P report notes that, “His Surf was registered as BUP 3632 on 21 March 1980. Under the strata legislation of the time, the manner in which lot entitlements for a Building Unit Plan were allocated was completely at the discretion of the registering developer. As a result, it was common to find that the entitlement allocations were influenced by market value factors such as the area of the unit, the number of bedrooms in the lot, or the height of the lot up a unit tower. The schedule for Hi Surf appears to have been influenced at least partly by floor area and the height of the lot up the tower. For example, lot 5 has 90 entitlements while the identically designed lot 101 which is located 24 levels higher up the tower has 118 entitlements.”
Ms Arkcoll then in section 4 states that “when a contribution schedule has been automatically created using a pre BCCM Act entitlement schedule, it may not be consistent with the current “cost impact” principle of section 46(7)” She then goes on to give her analysis of the relevant provisions of the BCCM Act and a discussion of the decision in Fischer & Ors v Body Corporate for Centrepoint Community title Scheme 7779 [2004] QCA 214.
Ms Arkcoll then states “Our analysis takes into account only those lot related factors that have the potential to directly affect the cost to the body corporate of providing the services itemised in the administrative budget and sinking fund. In our analysis of expense items we have used the legislative default position of ‘all costs shared equally’ unless compelling evidence is present to prove that for a specific cost item a more just and equitable allocation can be calculated and should be applied. This requires proof that a significant variation in cost impact exists and that there is an appropriate method to establish its monetary value over a reasonable future time period. Having analysed each of the expense items, we will recommend the default ‘all contributions entitlements equal’ unless, in our opinion, the total costs allocated to each lot varies sufficiently for justice and equity to demand an unequal entitlement schedule.”
The L & P Report then discusses the approach to particular items of body corporate expenditure as follows:
a.At 5, it is unusual for most purely administrative costs to be apportioned other than equally.
b.At 5.1, The costs of insurance are limited to public liability, office bearers liability and personal accidents) as the costs of other building related insurance are shared in accordance with the interest schedule
c.At 6, If all lot owners have an equal right to access and use the common areas and facilities we will by default treat them as equally responsible for the expenses of running and maintaining these facilities. We only consider departing from the principle of equal responsibility if (relevantly):
i. Special usage rights (such as exclusive use agreements) restrict a lot’s ability to use a common area or facility;
ii. Particular common property areas or infrastructure are directly designed to provide an additional benefit to particular lots;
iii. Something about the lot’s use directly increases or decreases the costs associated with the common (communal) areas and facilities; or
iv. Something about the physical design of the lot directly increases or decreases the cost to maintain that lot’s structure.
d.At 6, In our opinion, when people elect to purchase a lot in a particular development they do not have the right to automatically reduce their contribution merely because they choose not to use certain communal facilities or are not forced to do so by the scheme’s design (eg contributions to emergency stair maintenance by an owner on the ground floor).
e.The body corporate for Hi Surf provides a wide range of services to the lot owners. If:
i. The same service is provided to all the lots or all the lots obtain the same benefit from a service to the common property (for example pest control or power for lighting of the common areas), and
ii. The design or use of the individual lot is unlikely to predictably affect the cost of providing the service
We have apportioned the cost of the equally between the lots.
f.We have also allocated a number of repair and maintenance items equally because they are of an unpredictable nature and it is not possible to forecast with any degree of long-term certainty if or how, they may be affected by lot specific factors.
In regard to exclusive use areas consideration was given to the exclusive use car parks in the basement and an exclusive use roof top area which was granted to lot 106. Each lot has an exclusive use car park and while there several which may be large enough for two cars the basement was considered a low maintenance area the major item of maintenance being the garage door opener which had an annual cost of $1.67 per lot. In regard to the roof top area, it was stated that by-law 30 requires the owner of lot 106 to maintain and keep in good condition the said area. The report states that the body corporate is responsible for external painting to the slab edges and a small amount of wall, perimeter balustrade and roof membrane in regard to the roof top area. Painting and balustrading are dealt with further below.
At 6.2, the L& P report considers the impact of variations in lot design on body corporate expenditure and concludes that external painting, maintenance and replacement of the balustrades and window replacement should be treated unequally. Whereas the roof, lifts and fire protection system should be treated equally. Specific mention is made of lot 106 in respect of the roof and windows. In the case of the roof while it is treated as an equal expense it is noted that if an owner or occupier of lot 106 damages the roof membrane the body corporate has the right to charge the owner directly for repairs.
In regard to windows the replacement area of body corporate glazing on the exterior of each lot was measured and the costs apportioned accordingly. Glazing to the common property building areas has been shared equally between the lots. It was noted that the body corporate is responsible for replacement of windows situated in a lot boundary wall. This means that windows and doors inside the lot balconies are the private responsibility of the lot owners. So Lot 3 and other lots of the same design had no window cost allocation. Lot 106 had only a small number of windows which are situated in the lot boundary wall and it has only a $171.48 annual window allocation. By comparison lot 105 has a cost allocation of $1,130.49 and lots of the same size as lot 5 have a cost allocation of $1,130.49.
The area of external painting and concrete spalling for each lot was measured and the cost of the lot related painting and concrete spalling was apportioned accordingly. Painting to the exterior of the common property building areas and external common property has been shared equally between all the lots. It was noted that the painting of the fire ledges around the perimeter of the building is included in the common property as BUP 3632 shows these ledges are common property. It was also noted that because the external lot walls are extensively glazed the size of the lots has less impact on the cost of lot painting than many owners may expect The quantity of equally shared painting to common areas (particularly because of the fire ledges and external retaining walls and fences) also comprises a higher than typical proportion of the total painting in this scheme.
The length of balustrade on each lot was measured and the cost of maintaining and replacing the lot balustrade was apportioned accordingly. The balustrade quantity for lot 106 included that around its exclusive use area. It was noted that even though Lot 106 is paying 4.56 times the balustrade allocation of lot 105 and 2.37 times the painting allocation of lot 105, its total external maintenance cost is lower as a result of the window allocation, which translates into a lower contribution entitlement.
In regard to the lifts and fire protection systems it was stated that all of the lots in Hi Surf have reason to use the lifts to access either their lot or the basement, Consequently we have shared the administrative and sinking fund costs equally.
At 6.3, the L& P report discusses the impact of variations in usage on body corporate expenditure. The L & P Report noted that the majority of items in the administrative and sinking fund forecast are not affected by lot occupant numbers or usage levels and that lot related usage variation are a valid consideration only if the usage variations will directly alter the cost of body corporate expense and that if we can reliably predict and quantify a lot use pattern that substantially affects the cost of maintaining these items, we considered apportioning these expenses accordingly.
The L & P Report noted that Hi Surf contains 106 units with a mix of 1, 2 and 3 bedrooms. Having considered the typical residential lot usage for Hi Surf and similar developments, the report recommends an equal allocation of the usage level affected expense items between the lots as:
a.There appears to be at most a 2 bedroom difference in the design of the lots,
b.In this style of development, the number of bedrooms does not predetermine the exact number of people who will occupy a lot (a one bedroom lot may typically be occupied by between 1 and 2 people while a three bedroom unit is likely to be occupied by between 2 and 4 people, the Australian Bureau of statistics’ 2006 Census shows that on the Gold Coast the difference in average occupancy between 1 and 3 bedroom units is 0.96 people.
c.The ‘days per year’ occupancy rate of long term residency lots and short term residency lots is likely to be different, as will the usage patterns of the occupants in these lots,
d.None of the use affected items except the lift power comprise a large enough percentage of the total budget for a minor variation in apportionment to potentially affect our scheduled recommendation and the deterioration of many of these items will also be due substantially to other factors such as age and exposure to the elements; an
e.The cost impact on these items of a 1 or 2 person difference in usage would be minor and difficult to calculate authoritatively, leaving the result open to ongoing challenge.
The report then states, it is our opinion that using the default legislative apportionment of “all lots equally” is unlikely to be any more unequal or inequitable than the results that would be achieved by attempting to apply an unequal allocation.
The conclusion to the L & P report states that based on our inspection of the site and the information provided to us; it is our opinion that the current contribution schedule for Hi Surf is not just or equitable. And that based on the information currently available, we believe that the contribution schedule recommended in Part B: Table 5 is a just and equitable reflection of the cost impact of each of the lots on the body corporate. There is a variation of $766.42 between the highest and lowest cost allocations in our analysis. In our opinion, this is too large to allow us to reasonably recommend an equal entitlement schedule. It is noted that upon checking Table 5 the variation between the highest and lowest contribution is $1,196.17. It is noted that the contribution schedule also determines
Table 1 of the L & P Report sets out the administrative budget expense inclusions. This is based on the actual expenses of the body corporate for the years ended 30 April 2007 to 30 April 2009 and the budget for the year ended 30 April 2010, with some adjustments where average historical costs are used. These items have been extracted from copies of income and expenditure and expenditure statements and proposed annual budgets annexed to the report. Table 2 of the L & P Report then sets out the allocation methodology for administrative fund expenses items. In accordance with the body of the report these are all allocated equally. The contribution for each lot is stated to be $6,072.83. When the figures are checked this statement is incorrect and the correct amount per lot is $4,354.11. This is not consequential as the error is not carried through to the calculation of the recommended entitlement schedule.
Table 3 of the L & P report sets out the allocation methodology for sinking fund expenses. The sinking fund expense items have been taken from a GK Consulting Sinking Fund forecast for the body corporate dated 23 May 2008, which is annexed to the report. In accordance with the body of the report these items are allocated equally except fro the painting of the building façade, allowance for future concrete spalling, window replacement, replace balustrade to building. The equal items comprised $92,751.17 which is an amount of $875.04 per lot. The items based on quantity per lot are $110,136.67 and they are dealt with in table 4 of the report. Some items were excluded being the final payment of a painting contract and a future faced refurbishment.
Table 4 of the L & P Report sets out the quantity per lot for those items of sinking fund expenditure which are allocated unequally. These calculations were based on measurements taken by Ms Arkcoll in respect of such things as the length of balustrade per lot, areas of windows per lot, area of painting per lot. Included here is an amount for the share of common window glazing and painting of exterior common areas. This table highlights the matters raised in the report about the characteristics of the lot design affecting the amount for window replacement in respect of various lots. There is a clear pattern where on most floors the lowest amount to be allocated is $436.96 and the highest $1,534.27. It is noted that while the total amount considered for unequal allocation was $110,136.67 the total amount allocated was $109,984.28 this is mentioned in the report as being due to rounding errors.
Table 5 of the L & P Report sets out the cost impact assessments and recommended entitlement schedule. The lowest contribution is $5,648.56 in respect of lots with fewer than average windows to be replaced with the highest being for lot 105 at $6,844.73. The variation is then $1,196.17 and if allocated equally the body corporate fees would be $6,266.70 which is $618.14 greater than the lowest amount under the recommended contribution schedule.
The Respondent provided a defence dated 18 September 2009 to the application admitting that the L & P Report finds that the current contribution schedule for Hi Surf is not just and equitable. The Respondent did not accept the findings or recommendations of the L & P report and did not admit the current contribution schedule is not just and equitable. The respondent reserved its right to commission an expert to publish a report in respect of the validity or otherwise of the methodology adopted in the L & P Report in respect of the recommended new contribution schedule, the validity or otherwise of the L & P Report generally and whether or not the current contribution schedule for Hi Surf is just or equitable.
As mentioned above the Respondent’s solicitor advised by letter dated 20 November 2009 that the Respondent neither supports nor opposes the orders sought by the applicant and does not intend to engage an independent expert to prepare a report (or otherwise give evidence) in respect of the current contribution schedule.
There was one submission from a lot owner, though they only identified that they were the owners of a ground floor lot. The matters they raised were the increase in their levies by 49.9% and the decrease in Mr Barlow’s levies by 51.3% describing this as discriminatory and preposterous. Stating that it seemed unjust that their small one bedroom apartment incurs such an enormous increase in levies, whilst the penthouse enjoys such an enormous decrease in levies, while all other units are minimally affected. They further state that they are not able to use the elevator as each floor is key locked and most times we walk from the car park because the two elevators are busy with the constant use from the higher floors. They also mentioned that their privacy has become less since purchase with pool boundary fence and barbecue tables moving closer to our balcony and during recent renovations and large arrivals to the foyer lifts, our access was regularly blocked and very noisy.
CONCLUSION
The community management statement for Hi Surf, a copy of which is found in Part F of the L & P Report sets out the contribution and interest schedule lot entitlement for the body corporate. The contribution and interest entitlements for each lot are the same, which is in accordance with the comments made in the L & P Report and are not equal. It is noted that the body corporate was registered on 21 March 1980 and at that time there was no requirement that the contribution schedule be equal unless it is just and equitable in the circumstances for them not to be equal in accordance with section 46(7) of the BCCM Act. In fact at that time there was only one schedule for both contribution and interest purposes. Following the introduction of the BCCM Act separate contribution and interest schedules were created but the individual lot entitlements were duplicated in both schedules. In accordance with section 48 of the BCCM Act a lot owner may make application for the contribution schedule to be adjusted. In accordance with section 48(6) of the BCCM Act the Tribunals order must be consistent with the principle that the respective lot entitlements should be equal, except to the extent to which it is just and equitable in the circumstances for them not to be equal. Mr Barlow as owner of Lot 106 in Hi Surf has made such an application and he has requested that the contribution schedule be adjusted in accordance with the L & P Report.
The L & P Report has analysed the body corporate of Hi Surf in terms of both its administrative and sinking fund expenses and the physical characteristics of the lots and lot usage for the body corporate, The report has been framed on the basis that the expenses should be allocated equally unless it can be shown that there is a measurable variation of cost to the body corporate based on lot specific characteristics. The Tribunal is satisfied that the methodology used in the L & P Report is in accordance with the BCCM Act as interpreted by Chesterman J in Fischer & Ors v Body Corporate for Centrepoint Community title Scheme 7779 [2004] QCA 214. The Respondent did not provide any material to refute the methodology of the report or the figures used in calculating the recommended contribution schedule. The L & P Report as required starts on the basis that expenses should be allocated equally and does so for the majority of expenses. Where though differences in the impact of unit design affect the cost to the body corporate in respect of lots these have been measured and allocated unequally. This applies to external painting and concrete spalling, window replacement, balustrade replacement in all of these cases the differences could be physically measured and variations calculated with some precision.
The issues raised by the owner of the ground floor lot do not take account of the requirement in the BCCM Act that lot entitlements for the contribution schedule should be equal is the starting point for consideration and then it is where differences can be measured that the question of whether it is just and equitable for them to be unequal is answered. The fact that some lot owners do not use certain body corporate facilities is not something which can be taken into account unless they are excluded from the use of that facility. Clearly with the lift its use from the basement to the ground floor is available and if an owner on the ground chooses to use the stairs then that is not a matter going to whether the lot owner should contribute to the lifts. Questions of privacy would tend to go to amenity and while these are matters which could be taken up with the body corporate are not matters in accordance with the decision of Chesterman J which can be considered in regard to the contribution schedule.
The contribution schedule for Hi Surf is currently unequal and possible justifications for this inequality are set out in the L & P Report as reflecting such things as floor area and the position of lots in the building. While floor area of a lot may be reflected in such things as the external area to be painted and the costs for windows the height of a lot in a building should not affect the amount of body corporate levies which a particular lot owner pays. The Tribunal accepts that the L & P Report has properly identified the expenses of the body corporate and where they should be allocated equally and where they should be allocated on an unequal basis in accordance with the requirement that they be allocated equal unless it is just and equitable to allocate them unequally. The tribunal is satisfied that:
a.The present contribution schedule is not equal;
b.The present contribution schedule is not just and equitable;
c.A contribution schedule in terms of the recommended contribution schedule set out in Table 5 of the L & P Report would be just and equitable.
ORDER
The tribunal will make an order that the contribution schedule for Hi Surf be adjusted so that the respective contribution lot entitlements recorded in the Community Management Statement be in accordance with the lot entitlements set out in the recommended contribution schedule column of Table 5- Cost impact Assessment & Recommended Entitlement Schedule of the L & P Report.
The Tribunal notes that the body corporate for Hi Surf must in accordance with section 48(10) of the BCCM Act as quickly as possible following the making of this order lodge a request to record a new Community Management Statement reflecting the adjustments ordered.
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