Prior v Body Corporate for Atlantis West
[2010] QCAT 438
•5 August 2010
| CITATION: | Prior v Body Corporate for Atlantis West [2010] QCAT 438 |
| PARTIES: | Mr Peter Prior Mrs Lorraine Prior |
| v | |
| Body Corporate for Atlantis West CTS 8790 |
| APPLICATION NUMBER: | OCL026-10 |
| MATTER TYPE: | Other civil dispute matters |
| HEARING DATE: | On the papers |
| HEARD AT: | Brisbane |
| DECISION OF: | A Forbes |
| DELIVERED ON: | 5 August 2010 |
| DELIVERED AT: | Brisbane |
ORDERS MADE: | 1. The lot entitlement contribution schedule for Atlantis West CTS 8790 shall be adjusted so that the respective lot entitlements recorded in the community management scheme be as attached. 2. The body Corporate for Atlantis West shall act as quickly as possible in lodging a request to record a new Community Management Statement reflecting the adjustments ordered. |
| CATCHWORDS : | Application for adjustment to contribution schedule lot entitlement – Body Corporate and Community Management Act 1997 – amalgamation of a pair of apartments into one – departure from principle that lot entitlement of each shall be equal. |
APPEARANCES and REPRESENTATION (if any):
| Decision on the papers in the absence of the parties. |
REASONS FOR DECISION
The Applicants own two lots [72 & 73] in a residential apartment building Atlantis West [“Atlantis”] which, with the consent of the Body Corporate, have recently been amalgamated into one lot, now called lot 72 SP227337 [“the Lot”]. Before the amalgamation the sum of the entitlements of lots 72 and 73 in the Community Management Scheme [“the CMS”] was 120 units. On 8 December 2009 the Body Corporate lodged a new CMS reflecting the amalgamation and retaining the Contribution Schedule Lot Entitlement [“the CSLE”] of 120 units for the new Lot.
The Applicants now seek orders that the CSLE be adjusted to apportion 66 units in the CMS to the Lot, and a declaration that the Body Corporate consents to the recording of a new CSLE to reflect the adjustment. The Applicants rely on advice obtained from Messrs Leary & Partners Pty Ltd, quantity surveyors and the new CSLE prepared by Ms Kaylene Arcoll of that firm. The Applicants allege that the Body Corporate does not oppose the application.
However in a letter of 6 July 2010 to QCAT the body corporate manager advises that the Body Corporate, mindful of its duty to act in the interests of all owners, neither supports nor opposes the application. The manager advises that it has received submissions opposing the application from 24 of the owners of apartments in the building. Atlantis was built in 1984 and consisted then of 180 apartments. As a result of amalgamations there are now 165.
Position of the Applicants
The Applicants say that:
They have resided in the single apartment consisting of the two amalgamated lots since they purchased them direct from the developer. There are three other apartments on the same floor, namely Level 13;
The Lot is for all practical purposes configured and treated as one unit;
The Lot is of similar form and size to that of a sub-penthouse lot and its entitlement should be adjusted to be equivalent to the latter;
No fewer than fifteen of the units in the building are amalgamated pairs of lots. Following the most recent amalgamations in 2006 and 2008 the CSLEs were adjusted on each occasion in accordance with the orders of specialist adjudicator, Mr Warren Fischer[1] appointed by the Commissioner for Body Corporate and Community Management.
[1] 24 May 2006 and 5 February 2008: Applicants’ statement 17 March 2010, Annexures E and F
Position of the objectors
Twenty four apartment owners have made submissions opposing the application. Their reasons vary and include the following:
- If the orders are granted the Applicants’ annual levies will be reduced by $6,000 per annum and that amount will be levied on other owners;
- The Applicants have been occupying the same apartment for 25 years. The layout of the Lot is the same as when it was purchased. It has the original plumbing, duplicate kitchens and laundries and can still be used as two separate apartments;
- The market value of apartments which have had their lot entitlement increased in recent years has fallen; those that have amalgamated have made financial gains;
- The recommended CSLE is based on an inconsistent application of apartment sizes throughout the building, namely, that lots of similar size and amenity have been allocated entitlements of between 59 and 62;
- The Leary Report is simply a copy of one prepared in 2006; and
- The decision should be deferred pending an anticipated change to the legislation, heralded by the Minister earlier this year in a press release.
Legislation and Principles
The Body Corporate and Community Management Act 1997 [the BCCM”] provides principles by which the maintenance costs of a building such as Atlantis West 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:
- (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.
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:
The starting point is that the entitlements should be equal;
A departure from that principle is allowable where it is just or fair to recognise inequality;
The 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; and
The 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
- “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] QCA 21 at paragraph [26].
Consideration
The decision in this matter must be guided by the particular unit structure of the scheme as it is today and how the apartment in question uses the administration and maintenance services provided by the body corporate.
Several issues raised by the parties may be quickly disposed of. The fact that there have been in the past amalgamations of pairs of units is irrelevant to the exercise.[3] The Applicants have presented no evidence to support their contention that their amalgamated lot should be treated as if it were a sub-penthouse. A ministerial press statement about a possible future change to the present legislation does not represent the present law, and it may not ever do so.
[3]Meek G and K v Body Corporate for Bridgeport Apartments [2008] CCT KL013-07 per K Dorney SC (as he then was)
10. The default position is for contributions to the common expenses to be equal unless considerations of justice and equity require a departure from that principle. The applicants bear the onus of showing that the apportionment of the expenses in the proposed schedule is equitable.
11. Ms Arcoll, a quantity surveyor, has had previous professional association with Atlantis West; she prepared the Leary and Partners expert report for the lot entitlement adjustment application for Atlantis in 2006. Mr Fischer, the specialist adjudicator for both the 2006 and 2008 applications, noted that:
“…the Arcoll Report consider(s) the cost burden that the nature, features, and characteristics of the lots within the Scheme place on the body corporate expenditure in extensive detail.”[4]
[4]Adjudicator’s Order 23 May 2006 at paragraph 68. I note that Ms Arcoll’s 2006 report was commissioned by the Body Corporate as Respondent to that application.
12. Ms Arcoll’s conclusions form the basis of Mr Fischer’s orders on both applications.
13. The shared facilities in Atlantis West include a tennis court, recreation facilities, extensive lawns, landscaping and paving. The documentary information considered by Ms Arcoll in 2006 include the building unit plans, the administrative fund expenditure for several previous years, the sinking fund forecast, and information gathered during a site inspection. She details her allocation methodology for the administrative fund and sinking fund expense items respectively, together with a table of additional apportionment calculations, a cost impact assessment, and her recommended entitlement schedule.[5]
[5]Adjudicator’s Order 5 February 2008 at Paragraph 4
14. In her updated report of 21 April 2009[6] Ms Arcoll recalculates the CSLE on the basis of the amalgamation of former lots 72 and 73 and presents as a recommended schedule of lot entitlements an adjusted version of the 2006 tables. She takes into account inter alia the cost of maintaining the exterior of the former two lots and allocates this cost to the new Lot.
[6]Statement of the applicants : Annexure G
15. Ms Arcoll’s rationale for her adjusted table is this:
“…as well as changing the entitlements for Lot 72, the recalculation also increases the entitlements for some of the other lots by one entitlement. The total number of entitlements for the scheme has also changed. These changes are correct and appropriate. The number of entitlements allocated to each lot is determined by its percentage of the total expenses being allocated. The amalgamation of lots 72 and 73 only increases each non-amalgamating lot’s proportion of the equally shared expenses by a small amount. For many lots it does not increase the percentage of the total expenses allocated to the lot sufficiently to result in a change of entitlements. The aggregate number of lots for the scheme is not permanently set at a fixed number. It is merely the total of the individual lot’s entitlements.”
16. The average range of entitlements in the recommended schedule is between 57 and 67 with two at 71. The lot entitlements in the existing schedule are not equal. I accept the expertise and calculations of Ms Arcoll, who analyses the impact of each lot expressed as a percentage of the total costs of operating the scheme. The recommended schedule does not make radical adjustments. In my view justice and equity would not be served by adjusting the present contribution schedule to distribute the operating costs equally between the lot holders, but by adjusting the schedule as recommended by Ms Arcoll. The table prepared by her, which I adopt, is appended to this decision as Schedule A.
Orders
17. The lot entitlement contribution schedule for Atlantis West CTS 8790 shall be adjusted so that the respective lot entitlements recorded in the community management scheme be as attached.
18. The body Corporate for Atlantis West shall act as quickly as possible in lodging a request to record a new Community Management Statement reflecting the adjustments ordered.
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