Jones v Body Corporate of Mornington Quays
[2010] QCAT 439
•4 August 2010
CITATION: Jones & Ors v Body Corporate of Mornington Quays [2010] QCAT 439
PARTIES: Mrs Iris Elizabeth Jones & Ors
v
The Body Corporate of Mornington Quays CTS
23056
APPLICATION NUMBER: OCL019-10
MATTER TYPE: Other civil dispute matters
HEARING DATE: On the papers
HEARD AT: Brisbane
DECISION OF: Mr Barry Cotterell
DELIVERED ON: 4 August 2010
DELIVERED AT: Brisbane
ORDERS MADE: 1. That the contribution schedule lot entitlements for Mornington Quays CTS 23056 be adjusted such that the entitlements be as follows:
Lot number Unit number New LE 8 1 1 9 2 1 10 3 1 11 4 1 12 5 1 13 6 1 14 7 1 16 8 1 17 9 1 18 18 1 19 19 1 20 20 1 21 21 1 22 14 1 23 15 1 24 16 1 25 17 1 30 22 1 31 23 1 32 24 1 33 25 1 34 26 1 35 27 1 36 28 1 37 29 1 38 30 1 39 31 1 40 32 1 41 33 1 42 34 1 43 35 1 44 10 1 45 11 1 46 12 1 47 13 1
2. There are no orders as to costs.
CATCHWORDS : Body Corporate and Community Management –
adjustment of Contribution Schedule Lot Entitlements
APPEARANCES and REPRESENTATION (if any):
The application was determined on the papers.
REASONS FOR DECISION
Introduction
1. Mornington Quays CTS 23056 consists of 35 two storey waterfront villas. It is a gated residential complex. The scheme was created apparently 13 years ago by registration of a building format plan and community management statement pursuant to the Body Corporate and Community Management Act 1997.
2. By an application filed on 26 February 2010 the Applicants sought an adjustment to the contribution schedule lot entitlements for the Respondent Body Corporate pursuant to section 48 of the Body Corporate and Community Management Act 1997.
3. The Applicants are the following owners of lots at Mornington Quays and dispute that the current contribution schedule lot entitlements for the scheme are just and equitable.
| Applicant | Villa Number | Lot Number |
| Mrs Iris Jones | 14 | 22 |
| Mr John Clark | 15 | 23 |
| Mr John MacDonald | 16 | 24 |
| Mr Jeffrey Clarkin | 17 | 25 |
| Ms Mary Kehoe | 35 | 43 |
| Mr Bernard Goodman | 1 | 8 |
4. The Body Corporate advised the Tribunal that it did not intend to file a response.
5. An order was made on 12 May 2010 by the Tribunal that the Application be determined on the papers.
Legislation
6. Section 47 of the Body Corporate and Community Management Act 1997 (“the Act”) provides the general principles for the application of lot entitlements to a community titles scheme. According to s 47(2) the contribution schedule lot entitlement is the basis for calculating
a. the lot owner’s share of amounts levied by the Body Corporate unless the extent of the lot owners’ obligation to contribute to a levy for a particular purpose is specifically otherwise provided for in the Act; and
b. the value of the lot owner’s vote for voting on an ordinary resolution if a poll is conducted.
7. According to section 47(3), the interest schedule lot entitlement is the basis for calculating the lot owner’s share of common property, the lot owner’s interest on termination of the scheme including the lot owner’s share of body corporate assets on termination of the scheme, and the unimproved value of the lot for the purposes of a charge, levy, rate or tax that is payable directly to a local government, the commissioner of land tax or other authority and that is calculated and imposed on the basis of unimproved value.
8. Neither schedule is used to calculate liability of the owner for the supply of a utility service to the lot if the amount of the utility service is capable of separate measurement and the owner is billed directly: section 47(4).
9. Sections 48 and 49 provide for adjustment of a lot entitlement schedule by application to the Tribunal under the Queensland Civil and Administrative Tribunal Act.
10. An application may be made by an owner of a lot to the Tribunal. By section 48(2) of the Body Corporate and Community Management Act 1997, the Body Corporate must be the Respondent to the application.
11. By section 48(5) an order for adjustment of the contribution schedule lot
entitlement must be consistent with section 48(6), which provides:
“48(6) For the contribution schedule, the respective lot entitlements should be equal, except the extent to which it is just and equitable in the circumstances for them not to be equal.”
12. Section 49 provides guidance in terms of the criteria to be used by the Tribunal for deciding what is just and equitable in the circumstances of each case. Without limiting the matters to which the Tribunal may have regard sections 49(4) and (5) provide:
“49(4) The specialist adjudicator or the CCT (now QCAT) 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 purposes for which the lots are used.
(5) The specialist adjudicator or the CCT (now QCAT) may not have regard to any knowledge or understanding the Applicant had, or any lack of knowledge or understanding on the part of the Applicant, at the relevant time, about –
a. the lot entitlement for the subject lot or other lots included in the community titles scheme; or
b. the purpose for which a lot entitlement is used.”
13. By section 49(6) the “relevant time” means the time the Applicant entered into a contract to buy the subject lot.
14. These provisions where considered by the Court of Appeal in Fischer & Ors v Body Corporate for Centrepoint CTS 7779 [2004] QCA 214.
Chesterman J said, at [26]:
“That question, whether a schedule should be adjusted, is to be answered with regard to the demand made on the services and amenities provided by a body corporate to the respective apartments or their contribution to the costs incurred by the body corporate. A more general consideration of amenities, value or history are to be disregarded. What is at issue is the “equitable” distribution of the costs.”
15. After considering the explanatory notes to the legislation and to the second reading speech, his Honour continued, at [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 amenities.”
Evidence
16. The Tribunal has been provided with a copy of the current lot entitlements for each of the 35 Lots which are as follows:
Lot number Unit number Current LE 8 1 9 9 2 8 10 3 8 11 4 7 12 5 7 13 6 7 14 7 7 16 8 7 17 9 7 18 18 8 19 19 7 20 20 7 21 21 8 22 14 9 23 15 9 24 16 9 25 17 9 30 22 8 31 23 7 32 24 8 33 25 8 34 26 8 35 27 8 36 28 8 37 29 8 38 30 7 39 31 8 40 32 8 41 33 8 42 34 8 43 35 9 44 10 7 45 11 7 46 12 7 47 13 7
17. The current lot entitlements range from 7 to 9 and as a result the levies vary from $3,858.75 to $4,961.25.
18. The applicants state that present apportionment of costs appertaining to the Sinking and Administrative Funds are inequitable and dependent on the number of Entitlements allotted to each Lot. This varies from villa to villa and was based on the developer’s original sale price. This suggests that the current lot entitlements were developed on the basis of the villas’ value.
19. The applicants state that effectively twenty-one (21) owners are subsidising the other fourteen (14) owners and have been doing so for thirteen (13) years.
20. The applicants seek to have the lot entitlements varied to make them equal as follows:
Lot number Unit number New LE 8 1 1 9 2 1 10 3 1 11 4 1 12 5 1 13 6 1 14 7 1 16 8 1 17 9 1 18 18 1 19 19 1 20 20 1 21 21 1 22 14 1 23 15 1 24 16 1 25 17 1 30 22 1 31 23 1 32 24 1 33 25 1 34 26 1 35 27 1 36 28 1 37 29 1 38 30 1 39 31 1 40 32 1 41 33 1 42 34 1 43 35 1 44 10 1 45 11 1 46 12 1 47 13 1
21. The Respondent did not file a response and, therefore, the applicants’ contentions are uncontested. This includes the applicants’ contention that the current lot entitlements were developed on the basis of the villas’ original value.
Findings
22. The Tribunal finds that the current contribution schedule lot entitlements for the scheme are not equal. There was no evidence before the Tribunal to suggest that it is just and equitable in the circumstances for the lot entitlements not to be equal.
23. The Tribunal has considered the points raised in the application concerning the allocations of costs and how the current lot entitlements, ranging from 7 to 9, apparently arose from the original selling price of the villas.
24. The Tribunal is of the view that the applicants’ proposed adjustment of the lot entitlements accords with the decision of Chesterman J in Fischer & Ors v Body Corporate for Centrepoint CTS 7779 [2004] QCA 214 and with section 48 of the Act.
25. Having regard to the conclusions reached above, the Tribunal is of the view that it is just and equitable in the circumstances of this case and taking into account how the community titles scheme is structured, the nature, features and characteristics of the lots included in the scheme and the purpose for which the lots are and have been used, that the contribution lot entitlements should be equal.
26. The Tribunal also accepts that the level of inequality as between the lots as currently reflected in the contribution schedule is not just and equitable.
27. The Tribunal finds that the apportionment proposed by the applicants is just and equitable.
Orders
28. The Tribunal orders that the contribution schedule lot entitlement for Mornington Quays CTS 23056 be adjusted such that the entitlements are as follows:
Lot number Unit number New LE 8 1 1 9 2 1 10 3 1 11 4 1 12 5 1 13 6 1 14 7 1 16 8 1 17 9 1 18 18 1 19 19 1 20 20 1 21 21 1 22 14 1 23 15 1 24 16 1 25 17 1 30 22 1 31 23 1 32 24 1 33 25 1 34 26 1 35 27 1 36 28 1 37 29 1 38 30 1 39 31 1 40 32 1 41 33 1 42 34 1 43 35 1 44 10 1 45 11 1 46 12 1 47 13 1
29. The Tribunal makes no order as to costs.
Respondent’s Obligations
30. As required by section 48(1) of the Body Corporate and Community Management Act 1997, once the Tribunal orders an adjustment of a lot entitlement schedule the Respondent, as the relevant Body Corporate must “as quickly as practicable” lodge a request to record a new Community Management Statement reflecting the adjustment ordered
0
1
0