Schoenbaechler v Body Corporate for Palm Springs Residences CTS 29467
[2012] QCAT 317
•24 July 2012
| CITATION: | Schoenbaechler v Body Corporate for Palm Springs Residences CTS 29467 [2012] QCAT 317 |
| PARTIES: | Christina Louise Schoenbaechler |
| v | |
| Body Corporate for Palm Springs Residences CTS 29467 |
| APPLICATION NUMBER: | OCL009-12 |
| 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 – whether material change after the pre-adjustment order entitlements were decided – whether a significant effect on the contribution schedule lot entitlements Body Corporate and Community Management Act 1997, ss 47(2), 378, 379, 380, 381, 382, 383, 384, Schedule 6 Webb v The Body Corporate for Riverplace Community Titles Scheme [2012] QCAT 189 |
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 the Body Corporate and Community Management Act 1997 (BCCM Act) for adjustment of the contribution schedule lot entitlement (CSLE).
Palm Springs CTS consists of 48 lots. Ms Schoenbaechler is the owner of lot 106.
Ms Schoenbaechler’s application seeks to adjust the CSLE due to a material change that happened after the pre-adjustment order entitlements were decided.
Lot 106 was previously the caretaker’s unit which included the caretaker’s office. In 2010 it became a private residence.
It is not disputed that:
a)The pre-adjustment order entitlements are those contained in the original CSLE.
b)In the original CSLE the contribution lot entitlement for lot 106 was 32 with a total for all lots of 1496.
c)The original CSLE was adjusted by order of this Tribunal so that the contribution lot entitlement for lot 106 was 30 with a total for all lots of 1467.[1]
d)On 14 April 2011 amendments to the BCCM Act commenced[2].
e)The Body Corporate received a motion under section 379 of the BCCM Act proposing that the CSLE be adjusted to reflect the pre-adjustment order entitlements.
f)On 28 November 2011 Ms Schoenbaechler made submissions to the Body Corporate that there had been a material change.
g)On 9 December 2011 the Committee resolved to revert to the pre-adjustment order entitlements.
h)The current lot entitlement is $232.00 per lot entitlement for administrative and sinking fund combined per annum.
[1]James & Carroll v The Body Corporate for Palm Springs Residences [2010] QCAT 231.
[2] Sections 378-384 BCCM Act.
Law and Discussion
The CSLE is generally the basis for calculating the lot owner’s share of the amounts levied by the body corporate and the value of the lot owner’s vote on ordinary resolutions if a poll is conducted.[3]
[3] Section 47(2) 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.
The pre-adjustment order does not specify the deciding principle for the CSLE. In such circumstances the adjusted CSLE must be just and equitable.[4]
[4] Section 384(3)(b) BCCM Act.
Material change
Ms Schoenbaechler submits that:
a)when the pre-adjustment order entitlements were decided:
i) lot 106 was the caretaker’s residence and office; and
ii) the office was connected to electricity used to supply power to the common property and to central air-conditioning.
b)lot 106 is a ground floor 2 bedroom unit but has a contribution lot entitlement of 32 of 1496.
c)all other ground floor 2 bedroom units have contribution lot entitlements of 28 of 1496.
d)lot 106 has the potential to be a 3 bedroom unit.
e)all ground floor 3 bedroom units have contribution lot entitlements of 29 of 1496.
f)the differential in contribution lot entitlements was to account for the common property electricity connected to the office area and the maintenance of the air-conditioning plant which was to be paid by the Body Corporate.
g)when lot 106 was sold in December 2010 the Body Corporate required that the electricity and air-conditioning to the office be disconnected from the common property, including foyer vents being blanked off and the maintenance and ultimate replacement responsibility for the air-conditioning plant for the former office area was transferred to lot 106 from the Body Corporate.
h)it would be just and equitable to adjust the CSLE so that the contribution entitlement for lot 106 was reduced to 29.
i)the disconnection of the electricity results in lower common property electricity charges being paid by the Body Corporate.
j)the transfer of the air-conditioning plant results in a saving by the Body Corporate administrative fund of approximately $400 per year for maintenance and a saving in sinking fund contributions of approximately $350 per year for ultimate replacement of the plant.[5]
[5]Application at [25] and Applicant’s Response to Submissions of the Respondent at [13(b)].
The Tribunal has previously accepted that increases to Body Corporate costs do not satisfy the test of being a ‘material change’[6]. Logically, decreases to Body Corporate costs would also not satisfy the test.
[6]Webb v The Body Corporate for Riverplace Community Titles Scheme [2012] QCAT 189 at [13].
It is not clear from the submissions as to whether Ms Schoenbaechler contends there is to be a corresponding increase to other lot entitlements. In the absence of such an express submission I regard it more likely than not that Ms Schoenbaechler contends for a reduction of 3 from Lot 106’s entitlements and from the total. This appears consistent with the Submissions filed in Response to the Submissions of the Respondent at [6(c)].
The Body Corporate contends that there is insufficient evidence:
a)that when the original CSLE was set it was set to take into account the arrangements in relation to electricity and air-conditioning; and
b)as to the impact of the disconnection on lot 106 and the other lots and none by an independent person.
Ms Schoenbaechler, as applicant bears the onus of establishing that the adjustment for which she contends should be made.
The Tribunal is not bound by the rules of evidence[7].
[7] Section 28 QCAT Act.
The Body Corporate’s position of not admitting, not putting forward any other explanation for the difference in lot entitlements and disclaiming their interest at [28] of their submissions appears somewhat disingenuous.
Where the Tribunal is required to determine what contributions are just and equitable there has been a long-standing practice of parties’ experts analysing the expenses of the body corporate, in order to express opinions about how each expense should be borne eg by the body corporate as a whole or by particular lots.
This is not necessarily appropriate in many cases and has proved in some cases not to be very helpful or relevant to determining the issues before the Tribunal. It adds to the cost and time involved in determining proceedings and may be contrary to the Tribunal’s obligations of determining disputes in a way that is accessible, fair, just, economical, informal and quick.[8]
[8] Section 3(b) QCAT Act.
I am not persuaded that the lack of an independent report in this case should be fatal to the application.
The Body Corporate also submits that the changes do not fall within the definition of material change[9] because the matters relied upon are not a change that has or may have a significant effect on the CSLE.
[9] Schedule 6 BCCM Act.
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.”
The Tribunal has considered the term “significant” in Webb v The Body Corporate for Riverplace Community Titles Scheme[10]. In that case the caretaker’s lot was removed from the CSLE altogether. It appears it was transformed into common property. The removal of the lot had the affect that levies to other lots increased because the caretaker’s lot entitlements were removed from the total. In that case the Tribunal stated:
‘“Significance” is, of course, a matter of judgment and degree, with an unavoidable element of subjectivity, but I am not persuaded that an average increase of 39 cents per week (or even 94.8 cents per week for penthouse owners) is a “significant effect”, within the meaning and intent of the Act.’
[10] [2012] QCAT 189.
There is limited evidence before the Tribunal.
The evidence before the Tribunal is that:
a)all other ground floor and 2nd floor 2 bedroom units have contribution lot entitlements of 28 of 1496.
b)all ground floor and 2nd floor 3 bedroom units have contribution lot entitlements of 29 of 1496.
c)Lot 106 has a contribution lot entitlement of 32 of 1496.
Lot 106 was originally the caretaker’s residence and office. It was therefore used for a commercial as distinct from mere residential purpose and the Body Corporate paid for the electricity used in the office area and the Body Corporate was responsible for maintenance and ultimate replacement of the air-conditioning unit in that area.
Lot 106 is no longer used for a commercial purpose, is required to pay for all of its electricity consumed and the lot owner is responsible for maintenance and ultimate replacement of the air-conditioning unit in the former office area.
In the absence of contrary evidence or explanation that lot 106 is different to any other ground floor or 2nd floor 2 or 3 bedroom lot I accept that it is more likely than not that the matters set out in [24] explain the difference in the contribution lot entitlements.
I also accept that there has been a change. The change is quite different from the examples given in the legislation but examples are not exhaustive.[11] I accept that there are elements of the change that is of a physical nature (the vents were blocked off, power disconnected) since the pre-adjustment order entitlements were decided.
[11] Section 14D Acts Interpretation Act 1954.
The question is whether the change has or may have a significant effect on the CSLE.
The changes relating to the electricity supply and air-conditioning plant did not of themselves have any effect on the CSLE as compared to the consequences of removal or addition of a lot which would result in a change to the CSLE.
I therefore find that there has not been a material change in accordance with the requirements of s 384 of the BCCM Act.
If I am wrong then the evidence is that the current budget is $232 per lot entitlement. For a total contribution lot entitlement of 1496 that equates to $347,072. If the appropriate consequence of the change is to reduce lot 106 and the total by 3 then for a budget of $347,072 and a total contribution lot entitlement of 1493 this results in a $232.47 per lot entitlement. This equates to a difference of $13.16 per year for a lot with a contribution lot entitlement of 28 through to $16.45 per year for a lot with a contribution lot entitlement of 35. To put that in weekly terms it ranges from $0.25 per week to $0.31 per week.
If one has regard to the savings which on the only evidence before the Tribunal is in the order of $750 per year and divides that by 1493 that equates to a $0.50 per lot entitlement per year. This equates to a saving of $14 per year for a lot with a contribution lot entitlement of 28 through to $17.50 per year for a lot with a contribution lot entitlement of 35. To put that in weekly terms it ranges from a saving of $0.27 per week to $0.34 per week.
I find that on this basis the change is not significant and therefore find that there has not been a material change in accordance with the requirements of s 384 of the BCCM Act.
Orders
The application is dismissed.
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