Hallden Pty Ltd v Body Corporate for La Promenade CTS 9770

[2012] QCAT 109

CITATION: Hallden Pty Ltd and Ors v Body Corporate For LA Promenade CTS 9770 [2012] QCAT 109

PARTIES:	Hallden Pty Ltd Noel Patrick Christmas Max Christmas (NSW) Pty Ltd Pamela Elizabeth Christmas Players Land Enterprises Pty Ltd AP Bell CW Bell SL Shields-Bell Krysmont Pty Ltd as Trustee Kevin John O'Reilly as Trustee Sue Anne O'Reilly as Trustee
v
Body Corporate For LA Promenade CTS 9770

APPLICATION NUMBER: OCL124-11

MATTER TYPE: Other civil dispute matters

HEARING DATE: On the papers

HEARD AT: Brisbane

DECISION OF: Dr J R Forbes, Member

DELIVERED ON: 15 March 2012

DELIVERED AT: Brisbane

ORDERS MADE:

1.        Application dismissed.

2.        Costs reserved.

CATCHWORDS:

Application for disallowance of adjustment of contribution schedule to reflect pre-adjustment order entitlements – whether previous order is an adjustment order

Body Corporate and Community Management Act1997, ss 378-379

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

1. La Promenade, Surfers Paradise, is a complex of residential and commercial units.

2. The Applicant unit owners are Krysmont Pty Ltd (as trustee) (Unit 57), Halden Pty Ltd (unit 14), Noel Patrick Christmas and Tricap Pty Ltd (Unit 58), Max Christmas (NSW) Pty Ltd (Unit 59), Noel Patrick Christmas and Pamela Elizabeth Christmas (Unit 66), Players Land Enterprises Pty Ltd (Unit 1), AP and CW Bell and SL Shields-Bell (Units 62 and 65), and Kevin John O’Reilly and Sue Anne O’Reilly as trustees ((Unit 60).

3. The Applicants oppose a reversion of La Promenade’s contribution schedule lot entitlements (“CSLE”s) to those that existed immediately before 4 September 2006. The essence of their case is that a court order made on 4 September 2006 is not an “adjustment order” within the meaning of s 378 of the Body Corporate and Community Management Act 1997 (“the Act”), and therefore the Respondent is not entitled to resolve, upon the motion of another owner, that La Promenade’s CLSEs be adjusted to reflect the pre-adjustment order entitlements for the scheme.

4. The right conferred by s 379 is subject to ss 381-384, but that is not an issue here.

5. The realities of the dispute are apparent when one examines Schedule “A” to the Body Corporate’s notice to owners dated 8 June 2011.[1]  The contested reversion, if maintained, would significantly increase the Applicants’ obligations to contribute to the expenses of the Body Corporate.  For example, the Contribution Lot entitlement of Unit 1 would rise from 366 (3.66%) to 4,065 (21.85%); the CLSE of Unit 57 from 519 (5.2%) to 4,065 (21.85%), and the CLSE of Unit 58 from 260 (2.6%) to 2,250 (12.1%).  The reforms of 2011 may harbour some unintended consequences.

   [1]        “Re Reversion of Lot Entitlement Adjustment Order”.

6. The Applicants submit that an order of the District Court, granted on 4 September 2006, was effectively a consent order, not one “made by the court”[2], and therefore not an “adjustment order” upon which a section 379 motion can properly be based.

   [2] BCCM Act, s 378(b).

7. The Applicants say, further, that the disputed order is in the same category as one giving effect to an agreement or terms of a settlement – a type of order, according to the examples appended to s 378(b), that is not an adjustment order for the purposes of the Act.

8. It is the Applicants’ case that, of three orders made with respect to their CSLEs – on 4 September 2006, 1 February 2007 and 21 October 2009 – only the latest of them, made by the former Commercial and Consumer Tribunal, qualifies as an adjustment order.

9. The distinction between an adjustment order and a consent order (in the s 378(b) sense) has been considered in several decisions since the April 2011 amendments to the Act, and most recently and authoritatively in Pearce & Anor v Body Corporate for Riparian Plaza Apartments.[3]

   [3][2012] QCAT 72, a decision of Wilson J, and Members Barlow QC and Hanly, 8 February 2012.

10. In that case the body corporate decided not to contest an adjustment application in the Commercial and Consumer Tribunal. The Tribunal rejected the proposition that, in those circumstances, the subsequent order was consensual, and therefore not an adjustment order within the meaning of s 378(a). The Tribunal held that, for the purposes of that provision, there is a vital distinction between a true consent order, and one that is merely made without opposition, motivated, perhaps, by a desire to save expense.[4]

    [4] [2012] QCAT 72 at [43], [46].

11. The same point has arisen in several cases referred to specialist Adjudicators by the Commissioner for Body Corporate and Community Management.[5]  In McCarthy v Body Corporate for Q 1[6] – a case “very similar”[7] to Pearce – a distinction was drawn between an “active agreement to settle” and acceptance of the other party’s evidence.  In the latter case, as the Adjudicator decided, the order remained a decision of the Tribunal, and a valid adjustment order.

    [5]McCarthy v Body Corporate for Q1 [2011] QBCCMCmr 395 (appeal pending); Forster v Body Corporate for 2^nd Avenue [2011] QBCCMCmr 402 (appeal pending); Magic Mountain Apartments Two [2011] QBCCMCmr 511; Westlake Villas [2011] BCCMCmr 515; Shafston Towers [2011] QBCCMCmr 528.

    [6] [2011] QBCCMCmr 395.

    [7] [2012] QCAT 72 at [37].

12. In Magic Mountain Apartments Two[8] and Westlake Villas[9] there was no contested hearing, nor was there evidence of a settlement agreement, or any decision to present a consent order.  In each case it was held that the order in question was a lawful adjustment order.

    [8] [2011] QBCCMCmr 511.

    [9]        [2011] BCCMCmr 515.

13. In Shafston Towers[10] the order in question was made by this Tribunal.  The respondent body corporate filed a response supporting an order in terms of its own expert’s report, which was not materially different from the applicant’s.  The Adjudicator held that QCAT’s order was indeed an adjustment order, observing (i) that separate unilateral decisions do not amount to a consent order, (ii) that QCAT exercised a “residual discretion”, and (iii) that the response filed by the body corporate was no more than “a passive action of electing not to defend”.

    [10] [2011] QBCCMCmr 528.

14. As Wilson J indicated in Raby v BC for 1 Holman Street[11] s 378(b) is aimed at cases where parties agree “before any determination is made by the Tribunal, and simply seek ... an order giving effect to their agreement”.

    [11] [2011] QCAT 449 at [26].

15. In the present case the Respondent adopted the same attitude as the body corporate in Pearce. On 15 August 2006, about three weeks before the adjustment application came before the District Court, the body corporate of La Promenade unanimously resolved “neither [to] oppose nor to consent to the orders being sought”.[12]  Indeed, considering the inclusion of the phrase “nor to consent”, the evidence of an adjustment order in this case may be somewhat stronger than that in Pearce & Anor v Body Corporate for Riparian Plaza Apartments, above.

    [12]Record of resolution dated 17 August 2006 issued by David Gordon body corporate manager.

16. I respectfully adopt the reasoning and decision in Pearce. I hold that the adjustment order made by the District Court at Southport on 4 September 2006 is an adjustment order, within the meaning of s 378(a) of the Body Corporate and Community Management Act 1997.

17. It follows that the orders and declarations sought by the Applicants should be refused.

18. There is no submission that the pre-adjustment order entitlements as they existed immediately before the order of 4 September 2006 should be amended under sections 381 to 384.

19. The question of costs is reserved, to be brought before the Tribunal on a date to be fixed, upon notice in writing by either party to the other, and to the registrar.

ORDERS

1. The application is dismissed.

2. Application for costs reserved, and may be brought before the Tribunal on a date to be fixed, upon notice in writing by either party to the other, and to the registrar.