The Queensland Branch of the Australian Medical Association v Body Corporate for L'Estrange Terrace

[2010] QCAT 333

CITATION: The Queensland Branch of the Australian Medical Association v Body Corporate for L'Estrange Terrace [2010] QCAT 333

PARTIES:	The Queensland Branch of the Australian Medical Association
v
Body Corporate for L'Estrange Terrace CTS 15984

APPLICATION NUMBER:   OCL030-10  

MATTER TYPE: Other civil dispute matters

HEARING DATE:     On the papers

HEARD AT:  Brisbane

DECISION OF: G Quinlivan

DELIVERED ON: 1 July 2010

DELIVERED AT:      Brisbane

ORDERS MADE:

1. I order that the contribution schedule lot entitlement for L’Estrange Terrace CTS 15984 be adjusted such that the entitlements be as follows:

Lot Number	Entitlement
1	308
2	308
3	308
4	311
5	308
6	310
7	308
8	312
9	302
10	309
11	309
12	308
13	311
14	316
15	324
16	318
17	309
18	316
19	313
20	310
21	310
22	316
23	315
24	314
25	317
26	328
27	253
28	253
29	333
30	331
31	352
32	350
AGGREGATE	9,996

2. I make no order as to costs

3. The Respondent, “as quickly as practicable” lodge a request to record a new Community Management Statement reflecting the adjustment ordered.

CATCHWORDS : 

Body Corporate and Community Management –
adjustment of Contribution Schedule Lot

Entitlements

APPEARANCES and REPRESENTATION (if any):

Hearing on the papers

REASONS FOR DECISION

Background

1. The Scheme described as the Body Corporate for L’Estrange Terrace CTS 15984 is located at 88 L’Estrange Terrace, Brisbane in an inner city area comprising residential accommodation and commercial lots including heritage listed commercial lots.

2. There are seven free standing structures in the development consisting of four residential structures amounting to twenty-six lots and three commercial structures amounting to six commercial lots. Two of the commercial lots are heritage listed.

3. The applicant in these proceedings is the Queensland Branch of the Australian Medical Association (AMAQ). The applicant seeks orders for an adjustment of the contribution schedule. The applicant seeks an adjustment of the current lot contributions as set out in the Table below:

Comparative Table of Lot Entitlement
Suggested Schedule			Comparison	Current Schedule
Lot	Lot Entitlement	Lot Entitlement as % of total lot entitlement	% change of new lot entitlement compared to current schedule	Lot Entitlement	Lot Entitlement as % of total lot entitlement
1	308	3.08%	175.18%	10	1.76%
2	308	3.08%	175.18%	10	1.76%
3	308	3.08%	175.18%	10	1.76%
4	311	3.11%	176.40%	10	1.76%
5	308	3.08%	175.18%	10	1.76%
6	310	3.10%	176.16%	10	1.76%
7	308	3.08%	175.18%	10	1.76%
8	312	3.12%	177.38%	10	1.76%
9	308	3.08%	175.18%	10	1.76%
10	309	3.09%	175.43%	10	1.76%
11	309	3.09%	219.59%	8	1.41%
12	308	3.08%	175.18%	10	1.76%
13	311	3.11%	147.00%	12	2.11%
14	316	3.16%	179.58%	10	1.76%
15	324	3.24%	184.22%	10	1.76%
16	318	3.18%	180.80%	10	1.76%
17	309	3.09%	175.43%	10	1.76%
18	316	3.16%	149.65%	12	2.11%
19	313	3.13%	177.63%	10	1.76%
20	310	3.10%	175.92%	10	1.76%
21	310	3.10%	176.16%	10	1.76%
22	316	3.16%	149.65%	12	2.11%
23	315	3.15%	178.85%	10	1.76%
24	314	3.14%	178.60%	10	1.76%
25	317	3.17%	150.26%	12	2.11%
26	328	3.28%	155.34%	12	2.11%
27	253	2.53%	30.57%	47	8.27%
28	253	2.53%	29.94%	48	8.45%
29	333	3.33%	40.25%	47	8.27%
30	331	3.31%	40.85%	46	8.10%
31	352	3.52%	35.11%	57	10.04%
32	350	3.50%	36.10%	55	9.68%
AGGREGATE	9,996	100.00%	0.00%	568	100.00%

4. The AMAQ is the registered owner of lots 27-32 inclusive in L’Estrange Terrace CTS 15984 (“the Scheme”).

5. The applicant submitted by way of evidence a report prepared by Mr Martin Walsh of Stewart Silver King and Burns (SSKB) dated 15 December 2009 that describes the Scheme in terms of legal and physical aspects, lot usage, lot access and contribution entitlements. It examines the historical and budgeted expenditure of the body corporate and recommends that the contributions entitlement be adjusted.

6. The respondent to the application is the Body Corporate for L’Estrange Terrace CTS 15984. The respondent supports the application and seeks the following orders:-

i.That the contribution schedule lot entitlements be adjusted in accordance with the recommended Contribution Schedule set out in the Application.

ii.That the Body Corporate lodge a request to record a new community management statement reflecting the adjusted contribution schedule lot entitlements as quickly  as practicable.

7. The respondent provided a Review Report compiled by Mr Del Linkhorn of Resident Building Services (RBS) dated 28 May 2010. This Report confirms that in his opinion the Report by Mr Martin Walsh regarding the recommended Contribution Schedule Lot Entitlement fully complies with Section 48(6) of the Body Corporate and Community Management Act 1997 (“BCCM Act 1997”). He further states that in his opinion the recommendations “are just and equitable under the present circumstances and should therefore be adopted in place of the existing contribution schedule of lot entitlements for the Scheme”.

8. The relevant legislation is contained in the Body Corporate and Community Management Act 1997, section 48 (1) which states:

“The owner of a lot in a community titles scheme may apply—

(a) under chapter 6, for an order of a specialist adjudicator for the adjustment of a lot entitlement schedule; or

(b) as provided under the QCAT Act, for an order of QCAT exercising the tribunal’s original jurisdiction for the adjustment of a lot entitlement schedule.”

9. Section 48 (6) states:

“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.”

10. In determining the criteria for deciding just and equitable circumstances, section 49 states:

(3) the matters the specialist adjudicator or QCAT may have regard to for deciding a matter mentioned in subsection (2) are not limited to the matters stated in this section.

(4) The specialist adjudicator or QCAT 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.

11. The Supreme Court of Queensland in Fischer v Body Corporate for Centrepoint CTS 7779 [2004] QCA214 has given consideration to the statutory requirement for equality of lot entitlements. In that case Chesterman J noted that the preferable view is that a contribution schedule should provide for equal contributions by lot owners except in so far as some lots can be shown to give rise to particular costs to the body corporate which other lots do not.

12. That case confirmed that 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 lots or their

contribution to the costs incurred by the body corporate. Where the starting point is equality any departure from that position is allowable only where it is just and equitable to recognise any inequality.

13. In this case the applicant has provided evidence in the form of the substantial report from SSKB that details the origin of the lot entitlements and specific information relating to the Scheme under consideration. The Report sets out details of the investigation of the Budgets and Statement of Accounts of the Scheme, the details of Body Corporate expenditure, the categorization of costs in order to assess the different treatment of expenditure for a particular lot or group of lots and a review of the By-laws of the Scheme particularly By-laws 26 &28 dealing with Heritage listing and Exclusive Use - Commercial Lots.

14. Based on their analysis SSKB conclude 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”. This conclusion is confirmed by the Report of RBS which states that in their opinion the SSKB’s Contribution Schedule Lot Entitlement Report “has been correctly prepared and fully complies with the BCCM Act 1997 (as amended)”.

15. I have considered the matters raised in the report by Mr Walsh particularly regarding the categorization of costs and the details of body corporate expenditure and I am satisfied that Mr Walsh has adopted an approach which is consistent with the principles laid down in the decision by Chesterman J in Fischer & Ors v Body Corporate for Centrepoint CTS 7779 [2004] QCA 214

16. Further I am satisfied that  the Review of Mr Walsh’ Report by Mr Linkhorn supports the conclusion that  Mr Walsh’s Report provides a sound basis for adjusting the contribution lot entitlements as proposed by the applicant..

17. Having regard to the conclusions reached above I am of the view that it is

just and equitable in the circumstances of this case, taking into account how the community titles scheme is structured, the nature, features and characteristics of the building and the purpose for which the lots are and have been used, that the contribution lot entitlements should not be equal.

18. I also accept that the level of inequality as between the lots as currently reflected in the contribution schedule is not just and equitable.

19. I find that the apportionment given in Mr Walsh’s report is just and

equitable.

Orders

1. I order that the contribution schedule lot entitlement for L’Estrange Terrace CTS 15984 be adjusted such that the entitlements be as

follows:

Lot Number	Entitlement
1	308
2	308
3	308
4	311
5	308
6	310
7	308
8	312
9	302
10	309
11	309
12	308
13	311
14	316
15	324
16	318
17	309
18	316
19	313
20	310
21	310
22	316
23	315
24	314
25	317
26	328
27	253
28	253
29	333
30	331
31	352
32	350
AGGREGATE	9,996

2. I make no order as to costs

Respondent’s Obligations

3. As required by section 48(1) of the Body Corporate and Community Management Act 1997, 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.