Talty v Body Corporate for Maroochy Sands
[2010] QCAT 47
•22 February 2010
CITATION: Talty v Body Corporate for Maroochy Sands [2010] QCAT 47
PARTIES: Ms Joan Talty
v
Body Corporate for Maroochy Sands CTS 14483
APPLICATION NUMBER: KL060-09
MATTER TYPE: Other civil dispute matters
HEARING DATE: On the papers
HEARD AT: Brisbane
DECISION OF: Ms C Heyworth-Smith
DELIVERED ON: 22 February 2010
DELIVERED AT: Brisbane
ORDERS MADE: 1. That the contribution schedule lot entitlements for the Maroochy Sands CTS 14483 be adjusted such that the entitlements be as follows:
Unit No.
Entitlement
88
87
87
87
88
96
87
87
87
88
87
87
189
180
180
180
180
189
180
180
180
180
189
180
180
180
180
189
180
180
180
180
189
180
180
180
180
189
180
180
180
180
189
180
180
180
180
189
180
180
180
180
189
180
180
180
180
210
180
180
180
9987
2. There are no orders as to costs.
CATCHWORDS: Body Corporate and Community Management - Adjustment of Contribution Schedule Lot Entitlements
APPEARANCES and REPRESENTATION (if any):
The application was determined on the papers.
REASONS FOR DECISION
Introduction
By an application filed on 11 September 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 Applicant, who is the owner of lot 58 at the Maroochy Sands apartment complex, disputes that the current contribution schedule, whereby her lot entitlement is two and a half times that of most of the other lots, is “just and equitable” within the meaning of section 48(6) of the Act.
By correspondence dated 14 October 2009 directed to the Commercial and Consumer Tribunal and copied to the Applicant, the Respondent, via its agent, AAA Certified Body Corporate Management, advised that it did not intend to file a defence to the Application. Accordingly, on 19 October 2009 an order was made by the Chairperson of the Tribunal that the application be determined on the papers.
Legislation
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).
By section 47(3), the interest schedule lot entitlement is the basis for calculating the lot owner’s share of common property, the lot owner’s interest on termination of the scheme including the lot owner’s share of body corporate assets on termination of the scheme, and the unimproved value of the lot for the purposes of a charge, levy, rate or tax that is payable directly to a local government, the commissioner of land tax or other authority and that is calculated and imposed on the basis of unimproved value.
Neither schedule is used to calculate liability of the owner for the supply of a utility service to the lot if the amount of the utility service is capable of separate measurement and the owner is billed directly: section 47(4).
Sections 48 and 49 establish the mechanism for the adjustment of a lot entitlement schedule. An application may be made by an owner of a lot pursuant to the Commercial and Consumer Tribunal Act 2003. By section 48(2) of the Body Corporate and Community Management Act 1997, the Body Corporate must be the Respondent to the application. By section 48(5) the order that may be made by the Tribunal must be consistent with section 48(6) if the order is about the contribution schedule or section 48(7) if the order is about the interest schedule. It is worth setting out those sub-sections in full:
“48(6) For the contribution schedule, the respective lot entitlements should be equal, except the extent to which it is just and equitable in the circumstances for them not to be equal.
(7) For the interest schedule, the respective lot entitlements should reflect the respective market values of the lots included in the scheme when the specialist adjudicator or the CCT makes the order, except to the extent to which it is just and equitable in the circumstances for the individual lot entitlements to reflect other than the respective market values of the lots.”
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. Without limiting the matters to which the Tribunal may have regard[1] sections 49(4) and (5) provide as follows:
[1] Section 49(3).
“49(4) The specialist adjudicator or the CCT may have regard 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.
(5) The specialist adjudicator or the CCT may not 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 for the subject lot or other lots included in the community titles scheme; or
b.the purpose for which a lot entitlement is used.”
By section 49(6) the “relevant time” means the time the Applicant entered into a contract to by the subject lot.
These provisions where considered by the Court of Appeal 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.”
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.”
Evidence
The Respondent is the Body Corporate for “Maroochy Sands” CTS 12925. It is a multi-storey mixed-use commercial and residential apartment complex at the corner of Sixth Avenue and Aerodrome Road, Maroochydore.
The Tribunal has been provided with a copy of a report dated 25 March 2009 from Mr Del Linkhorn and Mr Scott Simpson commissioned by Greenhalg Pickard at the instance of the Applicant. The report is not described as being an expert report, nor has any particular expertise been claimed within the report by either Mr Linkhorn or Mr Simpson. In section 4, the authors describe their observations from an on-site inspection of the complex and, elsewhere within the report, they have summarised the content of documents relating to the Respondent and the complex. In the absence of any material to the contrary, I will accept the factual contents of the report as true. Large tracts of sections 6 and 7 of the report comprise submissions rather than factual data which might ordinarily be included in a true expert report. Again, as there is no contradictor, there is no need for me to consider the admissibility of these parts of the report.
I have considered the methodology adopted by Mr Linkhorn and Mr Simpson and am of the view that it is appropriate to the exercise. I have also considered their calculations on the basis of that methodology and can find no flaw in them.
The methodology and the calculations accord with the approach mandated by the legislation as interpreted and considered by Chesterman J. in Fischer v. Body Corporate for Centrepoint CTS 7779 [2004] QCA 214. I am of the view that it is just and equitable in the circumstances of this case, and taking into account how the community titles scheme is structured, the nature, features and characteristics of the building and the purposes for which the lots are and have been used, that the contribution lot entitlements should not be equal. I also, however, accept that the level of inequality as between the lots as currently reflected in the contribution schedule is not appropriate and is not just and equitable. I find that the apportionment given in Mr Linkhorn and Mr Simpson’s report is just and equitable.
Orders
Given the conclusions I have reached above, I order that the contribution schedule lot entitlements for the Maroochy Sands CTS 14483 be adjusted such that the entitlements be as follows:
Unit No. Entitlement 88 87 87 87 88 96 87 87 87 88 87 87 189 180 180 180 180 189 180 180 180 180 189 180 180 180 180 189 180 180 180 180 189 180 180 180 180 189 180 180 180 180 189 180 180 180 180 189 180 180 180 180 189 180 180 180 180 210 180 180 180 9987
Costs
I make no order as to costs.
Respondent’s Obligations
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.
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