Harker v the Body Corporate for the Palms No 4 Warana Cts
[2010] QCAT 466
•22 September 2010
CITATION: Harker v The Body Corporate for the Palms No 4 Warana Cts [2010] QCAT 466
PARTIES: | Allan James HARKER & Noela May HARKER |
| v | |
| THE BODY CORPORATE FOR THE PALMS NO 4 WARANA CTS 19842 |
APPLICATION NUMBER: OCL057-10
| MATTER TYPE: | Other civil disputes matters |
| DECISION ON THE PAPERS OF: | Ms Anne Forbes |
DELIVERED ON: 22 September 2010
DELIVERED AT: Brisbane
ORDERS MADE: 1. The contributions schedule lot entitlement for the units in The Palms No 4 Warana CTS 19842 shall be adjusted so that the lot entitlement for each unit is equal and is a whole number.
2. The Body Corporate for The Palms No 4 Warana CTS19842 shall act as quickly as possible in lodging a request to record a new Community Management statement to reflect the adjustments so ordered.
| CATCHWORDS : | Application for adjustment of contribution lot entitlement schedule under the Body Corporate and Community Management Act 1997- residential apartments – presumption of equality not displaced. |
REASONS FOR DECISION
The Applicants Mr and Mrs Harker are the owners of Lot 4, Unit 188 a residential apartment in The Palms No 4 Warana CTS 19842 [“The Palms”]. In their application filed on 9 June 2010 for the adjustment of a contribution lot entitlement schedule they seek orders: “That the 72 units in scheme No 19842 all pay equal body corporate fees”.
The Body Corporate by its Chairperson Mr John Lindley, in its Response filed 13 August 2010 asks that the Application be dismissed and the existing schedule be preserved.
Background
The Palms, a complex of 72 apartments, has been standing for some eighteen years. It was originally a group titles scheme No 2481 under the legislation that preceded the Body Corporate and Community Management Act 1997 [the BCCM”] [1] and is now a community titles scheme.
[1] Group Titles Plan No. 3281 .registered 24 November 1992
The lot entitlements for The Palms are shown in a lot budget summary tendered by the Applicants and dated 30 November 2009 and, according to the Applicants, adopted at the annual general meeting of the Body Corporate held on 24 February 2010. This document evidences an aggregate of 420 lot entitlements and the respective liability of the apartment owners to the administrative fund and the sinking fund. The net budgeted amount for the period covered by the summary is $46,200.00 and the distribution of liability to the Body Corporate is as follows:
28 apartments have a lot entitlement of 7 and a liability of $770.00
6 apartments have a lot entitlement of 6 and a liability of $660.00
36 apartments have a lot entitlement of 5 and a liability of $550.00
2 apartments have a lot entitlement of 4 and a liability of $440.00
Unit/apartment 188 has an entitlement of 7.
The Applicants’ Case
The Palms has roadways, lawns and gardens as common property. Body corporate levies are applied to lawn mowing, gardening, rubbish removal to the kerbside, insurance of the building, maintenance of the divisional fence and complex lighting. The Applicants contend that:
· all 72 apartments have equal opportunity to avail themselves and enjoy the amenities of the complex.
· Mr Lindley conceded at the directions hearing before Senior Member O’Callaghan that Unit 188 has no greater impact upon the budget of the Body Corporate than any other unit; and
· Any differences in apartment size should not affect the allocation of lot entitlements; and
· The only reason for the disparity in lot entitlement is historical and is a hangover from the superseded Group Titles Plan.
The Respondent’s Case
The Respondent Body Corporate’s response is brief and to the point and expressed in its submissions as follows:
“The Body Corporate believes that the nature, features and characteristics of the lots justify the existing lot entitlement schedule. As the value of the waterfront lots increases at a greater rate than any other lots in the scheme, those owners benefit more from the upkeep of the common property.”
The Respondent has filed no material in support of its response.
The Legislation
The BCCM provides principles by which the maintenance costs of a building such as The Palms having a community title scheme are met by contributions of the owners of the lots. Their proportionate contributions are to be set out in a contribution schedule: section 47. Lot owners may apply for an order of QCAT for an adjustment of a lot entitlement schedule: section 48. The informing principle is 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 48(6). Criteria are provided for determining just and equitable circumstances: section 49(4). These include but are not limited to:
o(a) how the community titles scheme is structured; and
o(b) the nature, features and characteristics of the lots included in the scheme; and
oThe purposes for which the lots are used.
Guidance in the interpretation of section 49(4) is afforded by the Court of Appeal in Fischer & Ors v Body Corporate for Centrepoint Community Title Scheme 7779 [2004] QCA 21, namely that:
oThe starting point is that the entitlements should be equal;
oA departure from the principle is allowable where it is just or fair to recognise inequality;
oThe allocation of lot entitlements is to be made on the basis of the impact that individual apartments make upon the cost of operating a community titles scheme;
oThe matters referred to in section 49(4) to which the tribunal may have regard may be considered only to the extent that they affect the cost of operating the community titles scheme and
o“More general questions of amenity, value or history are to be disregarded”.[2]
[2]Fischer & Ors v Body Corporate for Centrepoint Community Title Scheme 7779 [2004]
Consideration
The BCCM, thus interpreted, raises the presumption that contribution lot entitlements for The Palms should be equal, unless evidence justifies a
departure from principle and a recognition of inequality.
In an application in the District Court for an adjustment to a contribution lot entitlement schedule Forde J considered how the principles enunciated in Fischer might be applied:
“[34] The question must be asked to what extent do the nature, feature or characteristic of an apartment affect the costs of operating the community title scheme. That is, what demands are made on the services and amenities provided by the body corporate. Such expenses should be divided equally except to the extent that the apartment in question disproportionately gives rise to those expenses or disproportionately consumes services. Those matters must have a financial impact for the body corporate which can be measured. If an apartment ‘creates costs or consumes services, above or below the average, one can readily determine what the contribution lot entitlement should be’. In the present case, the respondent has failed to produce such figures. It is difficult to make a direct comparison per item in dollar terms because of the different methodology. It was submitted that that approach is not necessary. However, in borderline cases such as the present, it may be necessary in order to decide items or whether the cost is disproportionate. “[3]
[3] Woodley & Anor v the Proprietors of Quay West Community Title Scheme 16610 [2006] QDC 277
A departure from equality might arise if, for example:
“.. there was provision under the scheme for exclusive use, such as of a lift or a pool; or, possibly, where members of the public used common areas seldom used by residents including, for example, accessing a restaurant and using a carpark which was part of a highrise building and which some residents might never use... As for equality, the examples given were: the costs of maintaining common areas surrounded by landscaping or where there is wear and tear on a carpark, road or garden (even though a particular party may get little or no benefit from the condition of such items)…”[4]
[4] Lidster, J. & P. v Body Corporate Parkhaven 3 No. 3 CTS 22556 [2007] QCCTBCCM 3 (16 October 2007) Mr K D Dorney QC (as he then was) citing Battin & Battin v Body Corporate for Amity Community Title Scheme 17543[2006] QDC 278.
The Respondent has not challenged any of the specific assertions of the Applicants not tendered any evidence. I find that the Respondent has failed to displace the presumption of equality of lot entitlements in The Palms. The suggestion, regarding the enhanced value of certain units is irrelevant to this application, and is disregarded.
Consequently I find that the lot entitlements of The Palms should be equal, and I propose to order that the contribution lot entitlements for the scheme be adjusted to reflect equality.
Currently there are 420 entitlements distributed between 72 residential apartments. The former number cannot be divided evenly by the latter. The BCCM requires that a lot entitlement be a whole number.[5] It does not matter what number is allocated to the lot entitlements for the 72 apartments, so long as each apartment has the same lot entitlement as any of others. The practicality of this matter may be left to the Respondent.
[5] Body Corporate and Community Management Act 1997 Section 45(6)
ORDERS MADE:
1.The contributions schedule lot entitlement for the units in The Palms No 4 Warana CTS 19842 shall be adjusted so that the lot entitlement for each unit is equal and is a whole number.
2.The Body Corporate for The Palms No 4 Warana CTS19842 shall act as quickly as possible in lodging a request to record a new Community Management statement to reflect the adjustments so ordered.
QCA21 at paragraph [26].
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