Rablin v The Body Corporate for River Place Apartments
[2010] QCAT 303
•16 June 2010
| CITATION: | Rablin v The Body Corporate for River Place Apartments [2010] QCAT 303 |
| PARTIES: | Mr Doug Rablin |
| v | |
| The Body Corporate for River Place Apartments CTS 30270 |
| APPLICATION NUMBER: | KL044-09 |
| MATTER TYPE: | Other civil dispute matters |
| HEARING DATE: | On the papers |
| HEARD AT: | BRISBANE |
| DECISION OF: | P McGrath |
| DELIVERED ON: | 16 June 2010 |
| DELIVERED AT: | BRISBANE |
ORDERS MADE: |
|
| CATCHWORDS : | Application to adjust contribution schedule, Body Corporate and Community Management Act 1997 sections 46-49 |
APPEARANCES and REPRESENTATION (if any):
| Decision on the papers by order of her Honour Kingham J made on 29 January 2010. |
REASONS FOR DECISION
Rablin is the owner of Lot 324 on survey plan 128200 being one of the lots contained in the community titles scheme called River Place Apartments CTS 30270 (“River Place”). The application is for a contribution schedule adjustment pursuant to section 48 of the Body Corporate and Community Management Act 1997 (“the BCCM Act”) which was filed with the former Commercial and Consumer Tribunal on 23 July 2009.
The Respondent to this application is the Body Corporate for River Place as required by section 48(2) of the BCCM Act.
The Respondent filed a defence to the application dated 11 August 2009.
Pursuant to section 256 of the Queensland Civil and Administrative Tribunal Act 2009 (“the QCAT Act”) the Queensland Civil and Administrative Tribunal (“the Tribunal”) has jurisdiction to deal with this matter as it was commenced in the former Tribunal, the Commercial and Consumer Tribunal and was pending proceeding before that Tribunal at the commencement of QCAT. In accordance with section 271 of the QCAT Act the Tribunal has the functions of and can only make a decision in relation to the matter in which the Commercial and Consumer Tribunal could have made.
Evidence
In May 2009 the Applicant commissioned Mr Don Pitt of QBM to compile a lot entitlement adjustment report (“the QBM Report”) on the lot entitlement for the body corporate of River Place apartments.
On 8 July 2009 a copy of the QBM report was forwarded to the body corporate manager.
On 20 July 2009 the Applicant informed the body corporate that as he had received no reply from the Body Corporate, he intended to file an application with the CCT. The body corporate manager confirmed receipt of the QBM Report.
The Applicant filed his application with the CCT on 22 July 2009 seeking:
(a)An adjustment to the registered contribution lot entitlement on the basis that they should be equal except to the extent that is just and equitable for them not to be as outlined in the QBM report;
(b) An order that in accordance with the provisions of section 48(10) of the BCCM Act that if the Tribunal orders an adjustment of a lot entitlement schedule, the body corporate must, act as quickly as possible to request to record a new community management statement reflecting the adjustment order;
(c)An order in accordance with section 63(3) of the BCCM Act that the body corporate is responsible for the costs of preparing and recording the new community management statement.
On 15 September 2009 the body corporate (as authorised by its committee) resolved to appoint Leary & Partners to review the QBM Report. Leary & Partners were not available to undertake that review for and on behalf of the body corporate and the body corporate subsequently sought the estimates from Napier & Blakeley and Stuart Silver King & Burns (“SSKB”) to review and analyse the QBM Report.
10. By resolution on 19 January 2010 the body corporate (as authorised by its committee) decided to engage SSKB. A copy of that resolution appointing SSKB was provided to the Tribunal and the Applicant’s solicitors.
11. On 29 January 2010 by the parties experts were required to attend a conclave for the purposes of a joint report and that submissions be filed within 14 days. The joint experts report dated 24 February 2010 was filed with the Tribunal on 4 March 2010.
12. The Body corporate (as authorised by its committee) subsequently identified some manifest errors in the joint experts report specifically concerning the projected calculations for the annual contributions of lots 34 to 326 and brought these errors to the attention of both experts. Both experts have since acknowledged the errors in their joint experts report and have issued an amended joint experts report dated 11 March 2010.
The Law
13. The contribution schedule lot entitlement for a lot in accordance with section 47(2) of the BCCM Act is the basis for calculating
(a) the lot owner’s share of amounts levied by the body corporate, unless the extent of the lot owner’s obligation to contribute to a levy to a particular purpose is specifically otherwise provided for in this Act; and
(b)the value of the lot owner’s vote for voting on an ordinary resolution if a poll is conducted for voting on the resolution
14. There is a separate interest scheduled lot entitlement which in accordance with section 47(3) of the BCCM Act is the basis for calculating:
(a) the lot owner’s share of common property; and
(b) the lot owner’s interest on termination of the scheme, including the lot owner’s share in body corporate assets…; and
(c) the unimproved value of the lot for rating and tax purposes.
15. By section 46(7) of the BCCM Act the respective contribution lot entitlements must be equal, except to the extent to which it is just and equitable in the circumstances for them not to be equal.
16. The owner of a lot in the community titles scheme may apply for an order for an adjustment of the lot entitlement schedule under section 48(1) of the BCCM Act. The order of the Tribunal in relation to the contribution schedule must be in accordance with section 48(5) of the BCCM Act, be consistent with the principle that the respective lot entitlements should be equal, except to the extent of which is it just and equitable in the circumstances for them not to be equal.
17. Section 49 of the BCCM Act sets out the matters which the Tribunal may, and may not have regard to for deciding if it is just and equitable in the circumstances for the respective lot entitlements not to be equal. By section 49(4) of the BCCM Act the Tribunal may have regard to:
(a)How the community titles scheme is structured
(b)The nature, features and characteristics of the lots included in the scheme
(c)The purpose for which the lots are used
18. This is not an exhaustive list, as in accordance with section 49(3) of the BCCM Act matters that the Tribunal may have regard to for deciding a matter are not limited to the matters stated in the section.
19. The matters which the Tribunal may not have regard to are set out in section 49(5) of the BCCM Act and include any knowledge or understanding that the Applicant had, or any lack of knowledge or misunderstanding 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.
20. The leading decision in respect of applications under Section 48 of the BCCM Act is that of Fischer and others v Body Corporate for Centre Point Community Title Scheme 7779 (2004) QCA214. In its judgement Chesterman J with whom Justices McPherson and Atkinson agreed, stated at paragraph 26:
“although the act gives no clear indication one way or another the preferable view is that a contribution schedule should provide for equal contributions by apartment owners, except in so far as some apartments can be shown to give rise to particular costs of the body corporate which other apartments do not. 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. More general considerations of amenity, value or history are to be disregarded. What is an issue is the “equitable” distribution of the costs.”
21. At paragraph 31 of the judgement Chesterman J said:
“Secondly, the nature of a contribution lot entitlement schedule itself suggests that the allocation of lot entitlements is to be made on the basis of the impact that individual apartments make upon the costs of operating and running a community title scheme. Contribution lot entitlements determine the apartment’s share of the outgoings the starting point is that the entitlements should be equal. A departure from that principle is allowable only where it is just, or fair, to recognise inequality. The departure must take as its reference point the proposition, from which it departs, that apartment owners should contribute equally to the costs of the building. The focus of the enquiry is the extent to which an apartment unequally causes costs to the body corporate.
The third consideration is that if this principle not be the applicable one then there is no basis upon which application for adjustment of contribution lot entitlement schedules can consistently be made. As the evidence in this application shows, if the enquiry is limited to the extent to which the apartment creates costs, or consumes services, above or below the average, one can readily determine what the contribution lot entitlement should be. The high degree of similarity in the reports of Mr Sheehan and Mr Linkhorn demonstrates this, if the enquiry be wider and include such nebulous criteria as the structure of the scheme, or the nature, features and characteristics of the apartments in the scheme, and the purposes for which they are used, there is no intelligible basis on which there could be a consistent and coherent determination of applications for adjustment of lot entitlements. Each case would be determined idiosyncratically and a vast variety of circumstances might be relied upon to depart from, and therefore erode, a principle said to be paramount, that there should be an equality of entitlements.”
22. His Honour went on to state in paragraph 33:
“Accordingly I would construe section 49 of the Act, and in particular subsection (4) as meaning that those identified matters to which a court may have regard are to be regarded only to the extent, if any, they effect the cost of operating a community title scheme.”
Discussion of the evidence
23. On 23 February 2010, the Applicant submits that he made an open offer pursuant to section 65 of the QCAT Rules 2009 that the SSKB report be accepted.
24. On 4 March 2010 the Respondent filed the experts’ joint report. The Applicant submits that he agreed with the SSKB report, and now agrees with the joint report as further amended from 12 March 2010.
25. The SSKB report sets out the physical description of the building on the scheme land at paragraph 9.3 of the report it states:
“the building consists of 314 lots over 39 levels, the building is being constructed with concrete and painted exterior and consists of the following:
(a)Levels A – D are basement car parks that include storage areas and internal access to the building
(b)Levels E – G (parts) are basement car parks and includes storage areas and internal access to the building
(c)Level B, C & D contains 7 x 3 story lots that are unique to all other lots in the scheme and accessed by 2 internal elevators and common corridors
(d)Level E = ground level contains –
§ An outdoor swimming pool
§ An indoor gymnasium
§ An outdoor heated spa
§ Sauna
§ BBQ area
§ The main entrance foyer
§ Part of lot 19 in the foyer”
(e)Level F – AS contains lots on each floor that are accessed by 4 elevators and common property corridors that are exclusively allocated to respective lots on each floor.
26. As to whether contribution entitlements should be equal paragraph 10.1 says:
“there are many instances where community title schemes throughout Queensland should, and do, have equal contribution in schedule lot entitlements. These schemes typically, but not necessarily, contain lots –
§ With similar usage possibilities (example all commercial or all residential)
§ Of similar size
§ Equivalent needs and access to common property
§ Of consistent exterior building materials
However, every scheme should be examined with preference to all relevant facts and circumstances to arrive at a schedule that satisfies the principle in section 48(4) of the BCCM Act.
27. Paragraph 10.2 states for this scheme, just and equitable circumstances exist requiring a departure in the contribution schedule from a position of equality for each lot for this scheme the contribution schedule should not be equal for this lot.
28. Paragraph 12 of the report deals with the categorisation of costs. It states that this section of the report is dedicated to the categorisation of body corporate expenditure in a group requiring different treatment of expenditure for a particular lot or group of lots. Paragraph 12.1 deals with costs shared equally. It states there are certain administrative and sinking fund items that should be shared amongst all lots on an equal basis. A common characteristic of these items is that no particular lot places any greater or lessor demand on the underlying expense item.
29. Paragraph 12.2. Method 2 – balcony: the report states that the nature of the construction makes it appropriate to share the balcony costs based on the area of each lots balcony in proportion of the total area. Intuitively, if lot A has twice as much balustrade as lot B then it requires twice the allocation of expenditure.
Paragraph 12.3. Method 3 - support and structure: a purpose of the structure of a building is to provide support and shelter to the lots, a nature of construction makes it appropriate to share the support and shelter costs based on the area of the lot in proportion to the total area of all lots.
Para 12.4 Method 4 - support and structure (basement): the purpose of the structure of a building is to provide support and shelter of the lots. Typical support and shelter costs include the use of the basement. The nature of the construction makes it appropriate to share the support and shelter costs based on the area of exclusive use in proportion to the total use of exclusion areas in the basement. All costs set out in method 2, 3 and 4 are identified in the working paper appendix to the report.
30. After applying the methodology adopted in the report and distributing the burden of body corporate expenditure to each lot the figure arrived at for each lot forms the basis for that lots contribution schedule lot entitlement. Those figures are set out in a table which forms part of the report and is simply a percentage of costs credited to the lot expressed to 2 decimal points multiplied by 10 thousand. For example lot 56, which has a lot entitlement of 31 in this suggested schedule and a lot entitlement of 31% as a percentage of a total lot entitlement would in this suggested change have a percentage change of 114.88% of the new lot entitlement compared to the current schedule. The lot in question, lot 324 has a current lot entitlement of 174 under the suggested schedule this would become 44 being .44% of the total lot entitlement whereas the current schedule has a lot entitlement being .90% of the total lot entitlement.
31. The SSKB report comments on the existing lot entitlement contribution of the scheme and concludes that the contribution schedule should be close to but not equal for each lot because it is just and equitable for the contributions not to be equal for each lot. The authors analysis of the cost of the body corporate found that the current schedule is not just and equitable and it is recommended that the current contribution schedule be adjusted as set out in the report.
32. In the amended joint report dated 11 March 2010 both the authors of the report from SSKB and QBM namely Martin Walsh and Don Pitt agree that lot owners should contribute to the cost of the body corporate in proportion equivalent to the share of the costs that are:
(a) Incurred by the body corporate because of the their particular lot, or
(b)Benefiting the lot
33. The report goes on to say that to comply with the principle of the BCCM Act for the calculation of lot entitlements in a contribution schedule, it is necessary to identify any just and equitable circumstances requiring a departure from the allocation of costs equalling between each lot. The QBM and SSKB reports identify similar items and differ only on the exact amount stated on each item.
34. QBM have revised their initial report back 30 June 2009 and submitted (within this report) a revised recommendation for a new contribution lot entitlement schedule. The result, when compared to the SSKB’s suggested schedule, indicates that both experts are in agreement (a variation of less than 1% as shown in the comparison table).
35. In respect of the subject lot namely lot 324 the proposed SSKB entitlement is 44 and the proposed amended QBM entitlement is 47 as opposed to current lot entitlement of 174.
36. The proposed annual levy based on the SSKB entitlement is $9,261.20 the proposed annual levy based on the amended and proposed QBM entitlement is $9,862.55 as compared to the annual levy based on the current entitlement $18,130.50. This results in a difference of only $601.35 between SSKB and QBM.
37. The amended joint report concludes that a contribution schedule should not be equal for each lot because it is just and equitable for the contributions not to be equal for each lot but minor variations in the resulting schedule from each expert can be attributed to the time lapsed between each reports and different methods of calculations used to determine what the new schedules should be.
Conclusion
38. The evidence produced by both parties established that
§ The present lot entitlement schedule is not equal
§ The present lot entitlement schedule is not just and equitable
§ An equal contribution lot entitlement schedule would be not just and equitable
§A contribution lot entitlement schedule in the terms compiled by the 2 reports would be just and equitable
39. The Applicant indicated that he would be prepared to accept the SSKB report as long as the joint report is amended.
40. In relation to the issue of costs the Tribunal is of the view that the interests of justice in this case does not warrant a cost order to be made against the body corporate as sought by the Applicant and proposed to order that each party to the proceedings bear their own costs in the proceedings.
Order
That the contribution schedule for River Place Apartments CTS 30270 be adjusted so that the respective contribution lot entitlement recorded in the community management statement be in accordance with the lot entitlements set out in the recommended contribution schedule which forms part of this order.
That the body corporate be allowed at least 14 days from its receipt of this order in which to lodge the request to record a new community management statement with the titles office.
That each party to the proceedings bear their own costs of and incidental to the proceedings.
| Lot | Lot Entitlement |
| 1 | 38 |
| 2 | 37 |
| 3 | 37 |
| 4 | 37 |
| 5 | 37 |
| 6 | 37 |
| 7 | 38 |
| 9 | 32 |
| 10 | 32 |
| 11 | 32 |
| 12 | 32 |
| 13 | 32 |
| 14 | 32 |
| 15 | 32 |
| 16 | 32 |
| 17 | 31 |
| 18 | 31 |
| 19 | 33 |
| 20 | 32 |
| 21 | 32 |
| 22 | 32 |
| 23 | 32 |
| 24 | 31 |
| 25 | 31 |
| 26 | 32 |
| 27 | 32 |
| 28 | 32 |
| 29 | 32 |
| 30 | 32 |
| 31 | 32 |
| 32 | 31 |
| 33 | 31 |
| 34 | 32 |
| 35 | 32 |
| 36 | 32 |
| 37 | 32 |
| 38 | 32 |
| 39 | 32 |
| 40 | 31 |
| 41 | 31 |
| 42 | 33 |
| 43 | 33 |
| 44 | 32 |
| 45 | 32 |
| 46 | 32 |
| 47 | 32 |
| 48 | 31 |
| 49 | 31 |
| 50 | 32 |
| 51 | 33 |
| 52 | 32 |
| 53 | 32 |
| 54 | 32 |
| 55 | 32 |
| 56 | 31 |
| 57 | 31 |
| 58 | 32 |
| 59 | 33 |
| 60 | 32 |
| 61 | 32 |
| 62 | 32 |
| 63 | 32 |
| 64 | 31 |
| 65 | 31 |
| 66 | 32 |
| 67 | 33 |
| 68 | 32 |
| 69 | 32 |
| 70 | 32 |
| 71 | 32 |
| 72 | 31 |
| 73 | 31 |
| 74 | 32 |
| 75 | 33 |
| 76 | 32 |
| 77 | 32 |
| 78 | 32 |
| 79 | 32 |
| 80 | 31 |
| 81 | 31 |
| 82 | 32 |
| 83 | 33 |
| 84 | 32 |
| 85 | 32 |
| 86 | 32 |
| 87 | 32 |
| 88 | 31 |
| 89 | 31 |
| 90 | 32 |
| 91 | 33 |
| 92 | 32 |
| 93 | 32 |
| 94 | 31 |
| 95 | 31 |
| 96 | 30 |
| 97 | 31 |
| 98 | 31 |
| 99 | 31 |
| 100 | 31 |
| 101 | 31 |
| 102 | 32 |
| 103 | 32 |
| 104 | 31 |
| 105 | 31 |
| 106 | 30 |
| 107 | 31 |
| 108 | 31 |
| 109 | 31 |
| 110 | 31 |
| 111 | 31 |
| 112 | 32 |
| 113 | 32 |
| 114 | 31 |
| 115 | 31 |
| 116 | 30 |
| 117 | 31 |
| 118 | 31 |
| 119 | 31 |
| 120 | 31 |
| 121 | 31 |
| 122 | 32 |
| 123 | 32 |
| 124 | 31 |
| 125 | 31 |
| 126 | 30 |
| 127 | 31 |
| 128 | 31 |
| 129 | 31 |
| 130 | 31 |
| 131 | 31 |
| 132 | 32 |
| 133 | 32 |
| 134 | 31 |
| 135 | 31 |
| 136 | 30 |
| 137 | 31 |
| 138 | 31 |
| 139 | 31 |
| 140 | 31 |
| 141 | 31 |
| 142 | 32 |
| 143 | 32 |
| 144 | 31 |
| 145 | 31 |
| 146 | 30 |
| 147 | 31 |
| 148 | 31 |
| 149 | 31 |
| 150 | 31 |
| 151 | 31 |
| 152 | 32 |
| 153 | 32 |
| 154 | 31 |
| 155 | 31 |
| 156 | 30 |
| 157 | 31 |
| 158 | 31 |
| 159 | 31 |
| 160 | 31 |
| 161 | 31 |
| 162 | 32 |
| 163 | 32 |
| 164 | 31 |
| 165 | 31 |
| 166 | 30 |
| 167 | 31 |
| 168 | 31 |
| 169 | 31 |
| 170 | 31 |
| 171 | 31 |
| 172 | 32 |
| 173 | 32 |
| 174 | 31 |
| 175 | 31 |
| 176 | 30 |
| 177 | 31 |
| 178 | 31 |
| 179 | 31 |
| 180 | 35 |
| 182 | 32 |
| 183 | 32 |
| 184 | 31 |
| 185 | 31 |
| 186 | 30 |
| 187 | 31 |
| 188 | 31 |
| 189 | 31 |
| 190 | 31 |
| 191 | 31 |
| 192 | 32 |
| 193 | 32 |
| 194 | 31 |
| 195 | 31 |
| 196 | 30 |
| 197 | 31 |
| 198 | 31 |
| 199 | 31 |
| 200 | 31 |
| 201 | 31 |
| 202 | 32 |
| 203 | 32 |
| 204 | 31 |
| 205 | 31 |
| 206 | 30 |
| 207 | 31 |
| 208 | 31 |
| 209 | 31 |
| 210 | 31 |
| 211 | 31 |
| 212 | 32 |
| 213 | 32 |
| 214 | 31 |
| 215 | 31 |
| 216 | 30 |
| 217 | 31 |
| 218 | 31 |
| 219 | 31 |
| 220 | 31 |
| 221 | 31 |
| 222 | 32 |
| 223 | 32 |
| 224 | 31 |
| 225 | 31 |
| 226 | 30 |
| 227 | 31 |
| 228 | 31 |
| 229 | 31 |
| 230 | 31 |
| 231 | 31 |
| 232 | 32 |
| 233 | 32 |
| 234 | 32 |
| 235 | 32 |
| 236 | 31 |
| 237 | 31 |
| 238 | 32 |
| 239 | 32 |
| 240 | 32 |
| 241 | 32 |
| 242 | 32 |
| 243 | 32 |
| 244 | 31 |
| 245 | 31 |
| 246 | 32 |
| 247 | 32 |
| 248 | 32 |
| 249 | 32 |
| 250 | 32 |
| 251 | 32 |
| 252 | 31 |
| 253 | 31 |
| 254 | 32 |
| 255 | 32 |
| 262 | 32 |
| 263 | 32 |
| 264 | 32 |
| 265 | 32 |
| 266 | 31 |
| 267 | 31 |
| 268 | 32 |
| 269 | 32 |
| 270 | 32 |
| 271 | 32 |
| 272 | 32 |
| 273 | 32 |
| 274 | 31 |
| 275 | 31 |
| 276 | 32 |
| 277 | 32 |
| 278 | 32 |
| 279 | 32 |
| 280 | 32 |
| 281 | 32 |
| 282 | 31 |
| 283 | 31 |
| 284 | 32 |
| 285 | 32 |
| 286 | 32 |
| 287 | 32 |
| 288 | 32 |
| 289 | 32 |
| 290 | 31 |
| 291 | 31 |
| 292 | 32 |
| 293 | 32 |
| 294 | 33 |
| 295 | 34 |
| 296 | 34 |
| 297 | 34 |
| 298 | 33 |
| 299 | 33 |
| 302 | 33 |
| 303 | 33 |
| 304 | 34 |
| 305 | 34 |
| 306 | 33 |
| 307 | 33 |
| 310 | 32 |
| 311 | 32 |
| 312 | 32 |
| 313 | 32 |
| 314 | 31 |
| 315 | 31 |
| 316 | 32 |
| 317 | 32 |
| 318 | 40 |
| 319 | 40 |
| 320 | 39 |
| 321 | 40 |
| 322 | 40 |
| 323 | 39 |
| 324 | 44 |
| 325 | 40 |
| 326 | 39 |
| Totals | 10027 |
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