Munro v Body Corporate for Kingshome

[2010] QCAT 46

CITATION: Munro v Body Corporate for Kingshome [2010] QCAT 46

PARTIES:   Donald James Munro

v

Body Corporate for Kingshome Community Titles Scheme 28492

APPLICATION NUMBER:            KL066-09

MATTER TYPE:   Other Civil Disputes matters

HEARING DATE:   Application determined on the papers

HEARD AT:   Brisbane

DECISION OF:   Catherine Heyworth-Smith

DELIVERED ON:   22 February 2010

DELIVERED AT:   Brisbane

ORDERS MADE:   1.  That the Contribution Lot Entitlement Schedule for the Kingshome Community Titles Scheme 28492 be altered such that it is as follows:

BUP 103050				BUP 106667
Lot	Entitlement	Lot	Entitlement	Lot	Entitlement
1	76	25	71	1	71
2	70	26	75	2	70
3	70	27	70	3	71
4	75	28	70	4	77
5	74	29	76	5	70
6	70	30	74	6	79
7	70	31	70	7	76
8	74	32	70	8	70
9	74	33	74	9	77
10	70	34	74	10	76
11	70	35	70	11	69
12	74	36	70	12	77
13	74	37	74	13	76
14	70	38	76	14	69
15	70	39	71	15	77
16	74	40	75	16	83
17	76	41	76	17	77
18	71	42	71	18	82
19	75	43	75	19	77
20	78	44	76	20	88
21	77	45	71
22	76	46	75
23	71	47	77
24	72	48	76

2.  There are no order as to costs.

CATCHWORDS:  Body Corporate and Community Management – Adjustment of Contribution Lot Entitlement Schedule

APPEARANCES and REPRESENTATION (if any):

The application was determined on the papers.

REASONS FOR DECISION

1. By an application filed on 10 November 2009 the Applicant sought an adjustment to the contribution lot entitlement schedule for the Respondent Body Corporate pursuant to section 48 of the Body Corporate and Community Management Act 1997. The order sought is that the schedule be adjusted so that it reflects the schedule recommended in the report of Ms Kaylene Arckoll of Leary & Partners, Quantity Surveyors, in her report of 7 August 2009.

2. A letter dated 12 November 2009 from Body Corporate Services Pty Limited was received by the Tribunal on 13 November 2009 noting that BCS was the body corporate manager for the Respondent Body Corporate and had been instructed to write to the Tribunal in that capacity.  BCS stated “The committee have advised that they do not wish to lodge an objection to the application that has been submitted for the above mentioned property and wish for a ruling to be made.”

3. Ordinarily, before accepting such correspondence at face value, I would call for correspondence under the hand of the committee be produced either confirming the content of the letter or noting that the managing entity had been authorised or appointed by the body corporate to communicate on its behalf with the Tribunal. In this instance, however, I will accept that BCS has the authority to communicate the Respondent’s attitude towards the application as:

   (a)the minutes of the Annual General Meeting of the Respondent of 17 September 2009 appear to have been prepared by BCS and note that representatives of BCS were present, suggesting that BCS has been appointed the body corporate manager for the Respondent;

   (b)the Community Titles Scheme Search Statement for the Respondent notes BCS’ address as the address for the Respondent;

   (c)the attitude of the Respondent as communicated by BCS accords with the fact that, according to those minutes, the committee of the Respondent moved the motion for the alteration of the contribution lot entitlement schedule in accordance with the report of Ms Arckoll; and

   (d)no objection to proceeding in reliance on the same has been received.

4. Given that there is no opposition by the Respondent or any other lot owner to the application, I will proceed to determine the same on the papers.

Material before the Tribunal

1. The Applicant has filed the following material:

   (a)an Application – Lot Entitlement Adjustment, dated 2 November 2009, attaching a statement of claim and submission;

   (b)a community Titles Scheme Search Statement for the Respondent dated 25 September 2009;

   (c)a Current Title Search for lot 18 on Building Unit Plan 103050 dated 27 October 2009 noting the Applicant and Jacquelyn Dorelle Munro as the owners of the same as joint tenants;

   (d)a document entitled “Lot Entitlements at Kingshome” said by the Applicant to be a circular to lot owners prepared by the committee of the Respondent under the hand of Mr Ian Wilkey; and

   (e)a report entitled “Contribution Lot Entitlement Analysis for Kingshome CTS 28492” dated 7 August 2009 by Ms Kaylene Arkcoll of Leary & Partners, dated 8 August 2009.

2. I will accept these documents as exhibits in the Application and have them marked as a bundle as “Exhibit 1”.

The Legislation

1. Section 47 of the Body Corporate and Community Management Act 1997 establishes the general principles for the application of lot entitlements to a community titles scheme. A contribution schedule lot entitlement is the basis for calculating 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: section 47(2)(a). It is also the basis for calculating the value of the lot owner’s vote for voting on an ordinary resolution if a poll is conducted: section 47(2)(b).

2. Sections 48 and 49 establish the mechanism for the adjustment of a lot entitlement schedule. The body corporate must be the respondent to an application made by an owner of a lot for the adjustment of the contribution lot entitlement schedule: sec. 48(2). By section 48(5) the order that may be made by the Tribunal must be consistent with section 48(6). It is worth setting out that sub-section in full:

   48(6)    For the contribution schedule, 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.

3. 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. Section 49(4) does not limit the matters to which the Tribunal may have regard, but lists in particular:

   (a)how the community titles scheme is structured;

   (b)the nature, features and characteristics of the lots included in the scheme; and

   (c)the purposes for which the lots are used.

4. Sub-section 49(5) provides as follows:

   49(5)    The specialist adjudicator or the [Tribunal] may note 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 or the subject lot or other lots included in the community titles scheme; or

   (b)       the purpose for which a lot entitlement is used.

5. 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.

6. 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.

7. Finally, sec. 46(6) provides that “A lot entitlement must be a whole number, but must not be 0.”

8. It is against this legislative background that one turns to the case at hand.

Background to the Application

1. Ms Arkcoll describes the Kingshome Community Titles Scheme in her report in these terms:

   2.0      Description of The Kingshome

   Kingshome contains 68 lots in three high rise towers.  All of the towers sit above a two level shared basement that contains exclusive use parking and storage areas as well as plant rooms and lift lobbies.

   Tower 1 (Building 1 on BUP 103050) is six levels high and contains a mixture of two and three bedroom lots as well as common lobbies and passages.

   Tower 2 (Building 2 on BUP 103050) is nine levels high and contains a mixture of two and three bedroom lots as well as common lobbies and passages.  It also contains the common gymnasium, sauna and male and female toilet and shower facilities.

   Tower 3 (BUP 106667) is nine levels high and contains a mixture of two, three and five bedroom lots as well as common lobbies and passages.  It also contains the common recreation room facilities including a kitchenette and male and female toilets. 

   The external common property facilities for Kingshome include: external driveways and parking, an outdoor swimming pool area, a barbecue pergola and extensive pathways and landscaping.”

2. Ms Arckoll goes on to explain the history of the Scheme.  She notes that the Building Unit Plan was registered before the commencement of the Body Corporate and Community Management Act 1997 and, as such, only one schedule of entitlements appeared in the plan and it included lot entitlements which represented factors such as size of the lots, number of bedrooms and other factors which may have borne, at the time, on the market value of the lots.

3. Ms Arckoll formed the view that, having considered the allocation of costs associated with administering the body corporate and the allocation of costs associated with the services provided to the lots and factors bearing on the same, there ought be a variation to the contribution lot entitlement schedule in accordance with Part B of Table 5 to her report.

Conclusions in this Case

1. I have considered the points raised in Ms Arckoll’s report concerning the allocations of costs and the factors bearing on the same.  I am of the view that her methodology concords with the decision of Chesterman J. in Fischer & Ors v Body Corporate for Centrepoint CTS 7779 [2004] QCA 214 and with sec. 48 of the Act. Further, I am unable to discern any logical or analytical defects in Ms Arckoll’s report. Accordingly, I am of the view that it should be accepted and that it is just and equitable in the circumstances of this case for the lot entitlements not to be equal.

2. I order that the Contribution Lot Entitlement Schedule for the Kingshome Community Titles Scheme 28492 be altered such that it is as follows:

BUP 103050				BUP 106667
Lot	Entitlement	Lot	Entitlement	Lot	Entitlement
1	76	25	71	1	71
2	70	26	75	2	70
3	70	27	70	3	71
4	75	28	70	4	77
5	74	29	76	5	70
6	70	30	74	6	79
7	70	31	70	7	76
8	74	32	70	8	70
9	74	33	74	9	77
10	70	34	74	10	76
11	70	35	70	11	69
12	74	36	70	12	77
13	74	37	74	13	76
14	70	38	76	14	69
15	70	39	71	15	77
16	74	40	75	16	83
17	76	41	76	17	77
18	71	42	71	18	82
19	75	43	75	19	77
20	78	44	76	20	88
21	77	45	71
22	76	46	75
23	71	47	77
24	72	48	76

1. I make no order as to costs.

Respondent’s Obligations

1. As required by section 48(10), 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.