Glynn v Body Corporate for Expansion Court CTS 28031
[2012] QCAT 321
•24 July 2012
| CITATION: | Glynn v Body Corporate for Expansion Court CTS 28031 [2012] QCAT 321 |
| PARTIES: | Eileen Glynn |
| v | |
| Body Corporate for Expansion Court CTS 28031 |
| APPLICATION NUMBER: | OCL145-11 |
| MATTER TYPE: | Other civil dispute matters |
| HEARING DATE: | On the papers |
| HEARD AT: | Brisbane |
| DECISION OF: | Sandra G Deane, Member |
| DELIVERED ON: | 24 July 2012 |
| DELIVERED AT: | Brisbane |
ORDERS MADE: | 1. The application is allowed in part. 2. There be an adjustment of the interest schedule for the scheme so that the respective interest schedule lot entitlements recorded in the community management statement for the scheme reflect the market value principle and are in accordance with the schedule to this order. 3. The body corporate, within 30 days of this order, lodge a new community management statement incorporating changes to interest schedule lot entitlements for the lots included in the scheme in accordance with these orders. |
| CATCHWORDS: | Body Corporate – Application for adjustment to contribution schedule lot entitlements and interest schedule lot entitlements where scheme commenced before 14 April 2011 –no material change – market value principle – limited expert evidence Body Corporate and Community Management Act 1997, ss 46, 46A, 46B, 47(2), 47(3), 47A, 47B, 48, 49, 378, 379, 380, 381, 382. 383, 384, 358, 386, 387, 388, 389, 390, 391 |
APPEARANCES and REPRESENTATION (if any):
This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (QCAT Act).
REASONS FOR DECISION
Background
This is an application under the Body Corporate and Community Management Act 1997 (BCCM Act) for adjustment of the contribution schedule lot entitlement (CSLE) and the interest schedule lot entitlement (ISLE).
Expansion Court CTS consists of 3 lots. Mrs Glynn is the owner of lot 2 and Chairman of the Body Corporate.
Mrs Glynn’s application seeks to adjust the CSLE and the ISLE so that they reflect the size of the lots.
Lots 1 and 3 are approximately the same size at 296 m2 and 297m2 respectively whilst Lot 2 is relatively somewhat smaller at 199m2.
The First Community Management Statement was signed on 27 April 2000 and was lodged for registration on 10 May 2000. It provides that the CSLE and ISLE for each lot is 1 and that the total in each case is 3.
Mrs Glynn contends that the CSLE and ISLE for Lot 1 and 3 ought to be 3 in each case and for Lot 2 ought to be 2 in each case and therefore that the total ought to be 8 in each case.
The Tribunal is satisfied that the owners of Lot 1 and 3 have been notified of these proceedings. The owner of Lot 1 has submitted that independent valuation evidence should be relied upon but otherwise makes no submissions. There has been no response from the owner of Lot 3.
Law and Discussion
The CSLE is generally the basis for calculating the lot owner’s share of the amounts levied by the body corporate and the value of the lot owner’s vote on ordinary resolutions if a poll is conducted.[1]
[1] Section 47(2) BCCM Act.
The ISLE is the basis for calculating the lot owner’s share of common property, interest on termination of the scheme and the value of the lot for the purpose of local government rates and charges imposed on the basis of value.[2]
[2] Section 47(3) BCCM Act.
The Body Corporate and Community Management Act 1997[3] sets out that in a CTS established after the commencement of section 46(7) and 46(8) of the BCCM Act[4]:
a)CSLE must be consistent with either the equality or the relativity principle.
b)ISLE must be consistent with the market value principle.
[3] Section 46 BCCM Act.
[4] 14 April 2011.
The CTS was established before the commencement of section 46(7) and 46(8) of the BCCM Act.
The equality principle[5] is the principle that lot entitlements must be equal except to the extent to which it is just and equitable for them not to be equal.
[5] Section 46A(1) BCCM Act.
The relativity principle[6] is the principle that the lot entitlements must clearly demonstrate the relationship between the lots by reference to relevant factors being:
a)how the CTS is structured;
b)the nature, features and characteristics of the lots;
c)the purposes for which the lots are used;
d)the impact the lots may have on the costs of maintaining the common property;
e)the market value of the lots.
[6] Section 46A(2) BCCM Act.
The market value principle[7] is the principle that lot entitlements must reflect the respective market values of the lots except to the extent to which it is just and equitable for them not to reflect respective market values.
[7] Section 46B(1) BCCM Act.
Buildings and improvements on a lot are to be disregarded when establishing the market value created under a standard format plan of subdivision or volumetric format plan.[8]
[8] Section 46B(2) BCCM Act.
It is necessary to consider the adjustment provisions.
Section 47B of the BCCM Act provides that an owner of a lot can apply to the Tribunal for an adjustment to the CSLE:
a)where the CTS is affected by a material change since the last time the CSLE for the lots were decided; or
b)where the CTS is established after the commencement of section 47B and the owner of a lot believes the CSLE are not consistent with the deciding principle for the lot entitlements.
Section 48 of the BCCM Act provides that an owner of a lot may apply for an adjustment of an interest schedule and that the order must be consistent with the market value principle.
Section 391 BCCM Act provides that sections 47A to 48 also apply to a CTS established before commencement ie before 14 April 2011.
This appears at odds with section 47B(2) which expressly refers to a CTS established after the commencement of the section.
I have had regard to the explanatory notes as I am permitted to do.[9] The objectives are expressed to permit a limited ability to adjust contribution entitlements for schemes established before the commencement of the amendment Act.
[9] Section 14B Acts Interpretation Act 1954.
Other than the express reference in section 47B(2) there is no reference to when the CTS was established in sections 47A to 48.
If section 391 was to override section 47B(2) this would give an extensive rather than limited right to adjust contribution entitlements.
In my view the preferable construction is that section 391 does not override the express limitation in section 47B(2) but was to clarify that the other provisions in section 47A to 48 which did not refer to when the CTS commenced were to apply generally.
CSLE
In addition to section 47B of the BCCM Act, division 4 of the BCCM Act[10] sets out provisions in relation to adjustment of CSLE for existing schemes where there has been an adjustment order.
[10] Sections 378-390 BCCM Act.
There is no evidence before the Tribunal:
a)in relation to a material change since the last time the CSLE for the lots were decided.
b)which suggests there has been an adjustment order.
There is no evidence that the size of the lots has changed since the CSLE was originally decided.
I therefore find that there is no basis upon which this Tribunal may order an adjustment to the CSLE.
If I am wrong and there is a more general right to apply for an adjustment order then the current CSLE does not specify the deciding principle. In such circumstances the adjusted CSLEs must be just and equitable[11].
[11] Section 47B(7)(b) BCCM Act.
The criteria for deciding what is just and equitable are set out in s 49 of the BCCM Act.
The Tribunal may have regard to:
a)how the CTS is structured;
b)the nature, features and characteristics of the lots;
c)the purposes for which the lots are used.
The explanatory notes give some examples of circumstances where it may be just and equitable for lot entitlements not to be equal eg the lots have different uses and different requirements for public access or maintenance or where one lot owner uses a larger volume of water or conducts a more dangerous activity than the other lot owners.
These are factors which reflect the demand the lot makes on the services and amenities provided by the Body Corporate.
There is no evidence before the Tribunal which suggests that such factors are applicable.
There is limited evidence before the Tribunal. The evidence before the Tribunal is that all of the lots are used for similar purposes. There is also evidence as to relative size and market value of the lots.
Market value is not a matter provided for in section 49 of the BCCM Act.
I am not satisfied that relative size alone would warrant a finding that it is just and equitable for the contribution lot entitlements to be other than based on the equality principle.
I therefore find that there is no basis upon which this Tribunal may order an adjustment to the CSLE and dismiss that part of the application.
ISLE
The ISLE is not currently consistent with the market value principle.
Some apparently independent market value evidence has been provided by Nick Baxter, Commercial and Industrial Leasing and Sales Executive, Ray White Commercial, Runaway Bay.[12] No information as to Mr Baxter’s qualifications, expertise or independence other than his position has been provided. This evidence is that in current market conditions a price of $1,500-$1,600 per square metre would be achievable. No supporting information is provided to support this opinion.
[12] Email dated 16 May 2012.
In view of the difference in size of the lots this evidence supports an interest lot entitlement of 3 for each of Lots 1 and 3 given that they are approximately the same size and an interest lot entitlement of 2 for Lot 2 given it is relatively smaller in size (approximately 2 thirds the size of each of the other lots).
In the absence of contrary evidence I accept this evidence of market value.
I find that the ISLE ought to be adjusted to reflect the market value principle in accordance with section 48 of the BCCM Act.
Orders
The application is allowed in part.
There be an adjustment of the interest schedule for the scheme so that the respective interest schedule lot entitlements recorded in the community management statement for the scheme reflect the market value principle and are in accordance with the schedule to this order.
The body corporate, within 30 days of this order, lodge a new community management statement incorporating changes to the interest schedule lot entitlements for the lots included in the scheme in accordance with these orders.
Schedule of Lot Entitlements
| Lot on Plan | Contribution | Interest |
| Lot 1 | 1 | 3 |
| Lot 2 | 1 | 2 |
| Lot 3 | 1 | 3 |
| Total | 3 | 8 |
2
0
2