Moses v Body Corporate for Rhode Island Community Title Scheme 20573
[2012] QCAT 322
•24 July 2012
| CITATION: | Moses v Body Corporate for Rhode Island Community Title Scheme 20573 [2012] QCAT 322 |
| PARTIES: | Gerald Moses |
| v | |
| Body Corporate for Rhode Island Community Title Scheme 20573 |
| APPLICATION NUMBER: | OCL141-11 |
| 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 dismissed. |
| CATCHWORDS: | Body Corporate – Application for adjustment to contribution schedule lot entitlements – when contribution lot entitlements decided – whether material change since Body Corporate and Community Management Act 1997, ss 47B, 379, 380, 381, 382, 383, 384, 385(8)(b), 387, Schedule 6 Heaton v Body Corporate for "Windsong Apartments" CTS 31804 [2012] QCAT 45 |
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 section 385(8)(b) of the Body Corporate and Community Management Act 1997 (BCCM Act).
An interim order was sought and granted restraining the body corporate from taking any action pursuant to the committee decision of 28 September 2011 until a final determination of this matter.
The final orders sought were that:
a)the decision of the committee dated 28 September 2011 is void and of no effect;
b)an adjustment be made to the contribution schedule for the scheme to reflect the pre-adjustment order entitlements for the scheme, subject to changes under section 384 of the BCCM Act;
c)the Applicant’s costs be paid by the Respondent.
Mr Moses, an owner of a lot in the scheme seeks to rely upon the “material change” principle[1], which came into operation on 14 April 2011.
[1] Section 47B BCCM Act.
Section 384 enables an adjustment to be made by this Tribunal, if an existing scheme is affected by a material change after pre-adjustment order entitlements were decided.
Evidence and Submissions
At the Body Corporate Committee Meeting held on 28 September 2011 the Committee considered motions in relation to the adjustment of lot entitlements. The Applicant had made submissions to the Committee dated 15 August 2011[2] in relation to the material changes he asserted.
[2] Attachment O to Application.
The Committee minutes[3] record two resolutions as follows:
a)Motion 1 – “that the Body Corporate Committee do not believe that there has been any material changes of use since 2005, or that other matters as contemplated from Section 379 to 384 have taken place and therefore the Committee will comply with the Legislation and a new Community Management Statement will be lodged to affect reversion of the pre-order Contribution Lot Entitlement. The motion was Lost 3 Yes 4 No”
b)Motion 2 – “Subject to confirmation by legal advisors that the assertion made by McDonald Balanda and Associates regarding material changes are incorrect within the meaning of the new Legislation then Committee has no decision to make other than to lodge the new CMS with the old entitlements, the motion previously put will be carried. 7 Yes”
[3] Attachment H to Application.
Legal advice was received on 26 October 2011[4] which was couched in terms that the Committee having received the advice ought to make a decision in respect of the pre-adjustment entitlement and notify each owner within 7 days of the decision. The Respondent denies that the advice precludes the Committee from relying upon the 28 September 2011 decision.
[4] Attachment I to Application.
On 3 November 2011 the Body Corporate Manager issued a circular to the owners[5] referring to the resolutions of 28 September 2011 and the legal advice and stated that the Committee decision ‘now stands and a new Community Management Statement will be lodged within 3 months.’
[5] Attachment J to Application.
The Applicant contends that the Committee’s resolutions:
a)are confusing, contradictory and void for uncertainty;
b)are invalid as they do not constitute a decision which the Committee is required to make pursuant to section 385(4) of the BCCM Act.
The Respondent denies these contentions.
The Applicant contends in the alternative that if the resolutions are valid the decision does not properly take account for the material changes which have occurred since the pre-adjustment order entitlements were decided.
The Respondent submits that:
a)The decision of 28 September 2011 was a conditional decision and the condition was fulfilled on 26 October 2011;
b)Alternatively the Committee’s decision pursuant to s 385(4) BCCM Act was made on 3 November 2011 when the Body Corporate Manager gave notice that the condition of the Committee’s decision had been fulfilled.
c)If the Tribunal was inclined to find that the Committee’s decision was void and of no effect that the same decision would be likely to be remade and that therefore the Tribunal ought to determine the substance of the dispute rather than delay its determination.
I accept the Respondent’s submission that if I were to find that the Committee’s decision was void that the Committee is likely to make the same decision and therefore I propose to deal with the substance of the dispute.
It is not disputed that:
a)the adjustment order is the specialist adjudication decision of Mr Bugden dated 21 June 2005. The CSLE as decided by Mr Bugden was registered on 2 August 2005 and although the current Community Management Scheme (CMS) was registered on 24 March 2011 registering a change in by-laws, the current CSLE is as determined by Mr Bugden.
b)the pre-adjustment order entitlements are those that were in effect immediately prior to the decision of 21 June 2005, which were set out in the CMS registered on 10 March 2005[6].
[6] Attachment N to Application.
The Applicant submits that the pre-adjustment order entitlements were decided on 23 March 1990 and that the following material changes have occurred:
a)Between 1993 and 1996 – numerous subdivisions and re-subdivisions resulting in villas being built at different stages and to different standards of construction;
b)1996 – common property increased in size;
c)1997 – the commencement of the BCCM Act which split lot entitlements into contribution entitlements and interest entitlements.
The Respondent denies the pre-adjustment order entitlements were decided on 23 March 1990 and contends:
a)the pre-adjustment order entitlements were decided when the CMS was registered on 10 March 2005 so that it is only necessary to consider material changes since 2005;
b)the 10 March 2005 CSLE reflected the numerous subdivisions and re-subdivisions, which took place in 1993-1996 and relies upon the CMS registered 1 October 1998 which sets out the same CSLE as in the 10 March 2005 CMS.[7]
c)The increase in common property size ought not to be considered a material change because while it may increase the overall costs to the body corporate it does not have any effect on the CSLE.
d)The commencement of the BCCM Act in 1997 is not a material change as it does not alter the CSLE but simply split them into contribution entitlements and interest entitlements.
[7] Attachment E to Response dated 21 March 2012.
The history of this development is set out in the decision of Mr Bugden.[8] Relevantly he sets out the following:
a)The development was originally registered as a Group Titles Plan (GTP) under the Building Units and Group Titles Act 1980 on 28 May 1990.
b)Initially there were 29 lots which were subdivided over a number of years until there were 173 lots (lots 30 to 202) each comprising a residential villa.
c)When the BCCM Act commenced the then GTP became the Community Title Scheme (CTS), the lot entitlements were carried over without change except that 2 schedules were created namely the CSLE and the ISLE.
d)Before the GTP was registered the lot entitlements were supported by valuations.
e)He ordered that the CSLE be adjusted so that the allocation was equal by allocating to each lot an entitlement of one with an aggregate of 173.
f)He ordered that the ISLE be adjusted so that the allocation reflected the valuation evidence of the respective unimproved values of the lots.
[8] Attachment K to Application.
The Applicant contends that the specialist adjudicator considered the changes and determined in his decision of 21 June 2005 that the CSLE for each lot should be 1 and that the Committee and this Tribunal should adopt the findings.
On the evidence before the Tribunal it is not clear to me why the Applicant contends that the CSLE was determined on 23 March 1990 given the GTP was registered on 28 May 1990. It appears it is contended that the relevant decision was that of the original developer prior to registration.
The two issues for determination are:
a)When were the pre-adjustment order entitlements decided?
b)Has there been a material change since then?
When were the pre-adjustment order entitlements decided?
There is little guidance as to the meaning of this phrase.
The evidence in this case is that there is only one adjustment order applying to the scheme. In this case section 378 of the BCCM Act defines pre-adjustment order entitlements as meaning the contribution schedule lot entitlements included in the scheme immediately before the order was made.
I do not accept that merely because a CMS is registered means that the CSLE contained within it was decided at that time. It would be necessary to show more than registration. It is in my view necessary to consider the Body Corporate’s resolution as to why a new CMS is needed eg the by-laws may be changed but not the entitlements requiring registration of a new CMS. In my view that would not necessarily be a decision as to lot entitlements. The only direct evidence of Body Corporate meetings and decisions before the Tribunal relates to the meeting of 28 September 2011.
The CSLE in place immediately before the adjustment order was made was the same as that in place on 1 October 1998. Accordingly the CSLE must have been ‘decided’ prior to 17 September 1998, the date of execution by the Body Corporate. This CSLE provides for lots 30 to 202 and an aggregate lot entitlement of 7971.
Neither party has placed into evidence all of the lot entitlement schedules dating back to registration of the GTP. Mr Bugden indicated in his decision that the GTP entitlements as at commencement of the BCCM Act were carried forward under the BCCM Act but made into 2 schedules. It is therefore more likely than not that the contribution lot entitlements in the CMS registered on 1 October 1998 were the same as in place under the GTP.
Section 384 of the BCCM Act makes it clear that the material change to be considered is one which occurs after the pre-adjustment order entitlements were decided.
Given that the original GTP was registered with 29 lots it appears more likely than not that the October 1998 CMS with 173 lots was decided taking into account the subdivisions and re-subdivisions, which took place in 1993-1996 and accordingly were decided after the subdivisions and re-subdivisions occurred.
If the legislature intended that the necessary material change was to have happened after the first CSLE was decided or after the last CMS was registered before the adjustment order then it could have done so in clearer language.
In these circumstances I find that it is more likely than not the pre-adjustment order entitlements were decided at a time from in or about 31 October 1996 (when the last plan of re-subdivision was lodged for registration)[9] but not later than 17 September 1998.
[9] Attachment D to Response.
Material Change
The Tribunal has previously accepted that a material change must be in the nature of a physical change. In Heaton v Body Corporate for "Windsong Apartments" CTS 31804 [2012] QCAT 45 the Tribunal stated that:
“Section 384 (and the definition of material change) are part of a package” (particularly ss 381-384) inserted by the amending Act. The three sections immediately preceding s 384 deal with changes of a manifestly physical character – subdivisions, amalgamations, and boundary changes; so do the examples attached to the definition of “material change”. Turning to the Explanatory Notes to the amending Act, as I am entitled to do, I see a recitation of the three physical changes just mentioned, and then, without specifics, but also without a hint that something generically different is intended, the term “material change”. Other manifestations of “material change”, perhaps, are irreversible damage to a seaside lot by marine erosion, or storm damage not economically or readily remediable.
All in all, considering the specifics of ss 381-383, and the examples attached to the statutory definition, and the absence of any different indication in the Explanatory Notes, I consider that “material change” is to be read sui generis with the five species of physical change described in the Act. Section 384 appears to be a “dragnet clause” designed to pick up significant physical changes not anticipated in ss 381-383. The definition refers to two more such changes, and I have ventured to suggest other possibilities.”
There are no matters relied upon as material changes that have occurred after the pre-adjustment order entitlements were decided as set out in [30] above.
If I am wrong about when the pre-adjustment order entitlements were decided and if I accept that they were decided in 1990 by the original developer I need to consider if the changes constitute material changes as defined.[10]
[10] Schedule 6 BCCM Act.
I accept the Respondent’s submission that an increase in the size of the common property may increase the overall costs to the body corporate but it does not have any effect on the CSLE and therefore does not satisfy the test as a material change.
The commencement of the BCCM Act in 1997 is not in the nature of a physical change and did not in any event have an effect on the CSLE and therefore does not satisfy the test as a material change.
It seems based on the limited evidence before the Tribunal that the development was intended to be developed progressively. The definition of material change expressly excludes a change arising from such a development, which would include the subdivisions and re-subdivisions sought to be relied upon.
I therefore find no material change has occurred since the pre- adjustment order entitlements were decided even if they were decided in 1990. Alternatively changes to the CSLE were made consequent upon the sub-divisions and re-subdivisions so that such changes have been taken into account in the CSLE and therefore further adjustment on this basis alone is not required.
Orders
The application is dismissed.
2
1
0