Vidal Group Pty Ltd as Trustee for the Rablin Family Trust v the Body Corporate for Saltwater
[2010] QCAT 13
•8 February 2010
CITATION: Vidal Group Pty Ltd as trustee for The Rablin Family Trust v The Body Corporate for Saltwater [2010] QCAT 13
PARTIES: Vidal Group Pty Ltd as trustee for The Rablin Family Trust
v
The Body Corporate for Saltwater CTS 30139
APPLICATION NUMBER: KL056-09
MATTER TYPE:
HEARING DATE: 8 February 2010
HEARD AT: Brisbane
DECISION OF: C Endicott, senior member
DELIVERED ON: 8 February 2010
DELIVERED AT: Brisbane
ORDERS MADE: Adjustment to equal contribution lot entitlements
CATCHWORDS: Body Corporate and Community Management – Adjustment of contribution – Lot entitlement
APPEARANCES and REPRESENTATION (if any):
The hearing took place on the papers in the absence of the parties.
REASONS FOR DECISION
Introduction
The Saltwater complex at Port Douglas comprises 42 separate lots of which 25 lots are commercial lots and 17 lots are residential lots. The original developer of the complex is the owner of all the commercial lots while the residential lots are owned by other persons and for the most part are rented out in a letting pool arrangement.
An owner of one of the residential lots filed an application with the Commercial and Consumer Tribunal seeking an adjustment of the contribution lot entitlement from unequal contributions based primarily on the area of each lot to either equal lot entitlements or to lot entitlements based on actual usage of the common area of the complex.
Issues and legislation
From 1 December 2009 the Queensland Civil and Administrative Tribunal (the Tribunal) has replaced the Commercial and Consumer Tribunal on the commencement of the Queensland Civil and Administrative Tribunal Act 2009 (the Act).
Under section 256 of the Act, a pending proceeding (being a proceeding commenced in one of the Tribunals replaced by the 2009 Act but not heard by the replaced Tribunal prior to 1 December 2009) is taken to be a proceeding before the Queensland Civil and Administrative Tribunal. According to section 271 of the Act, the Tribunal must deal with the matter the subject of the pending proceeding under the Queensland Civil and Administrative Tribunal Act 2009 or an enabling Act.
The enabling Act in this case, the Body Corporate and Community Management Act 1997, provides in section 48:
(1)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.
(6)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.
The Body Corporate and Community Management Act 1997 provides in section 49 matters that the Tribunal must have regard when considering an adjustment of lot entitlements:
(2)This section sets out matters to which the specialist adjudicator or QCAT may, and may not, have regard for deciding—
(a) for a contribution schedule—if it is just and equitable in the circumstances for the respective lot entitlements not to be equal; and
(b) for an interest schedule—if it is just and equitable in the circumstances for the individual lot entitlements to reflect other than the respective market values of the lots.
(3)However, 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.
(5)The specialist adjudicator or QCAT may not have regard to any knowledge or understanding 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.
(6)In this section—
relevant time means the time the applicant entered into a contract to buy the subject lot.
subject lot means the lot owned by the applicant.
Submissions
The applicant provided details of the current lot entitlements for the Saltwater complex. There was no evidence given as to the basis on which the current lot entitlements had been actually calculated but from an analysis of the lot area of each lot compared with the allocated lot entitlements for each lot, an inference was drawn by the applicant that the current lot entitlements were based on lot area alone.
The applicant described the common areas of the Saltwater complex as consisting of a few small gardens, several tiled areas on the ground level and the three upper levels, two concreted car parks, two toilet blocks, several stairways and a swimming pool. The car parks are used by residents and customers of the commercial tenants but the toilet blocks are used only by the commercial tenants and their customers while the pool is only used by the residents.
Submissions were made by the applicant that the use by customers of the commercial tenants of the common areas on the lower levels was very much higher than the use of those same areas by the occupants of the residential lots. The applicant submitted that wear and tear on the common areas occurred as a factor of how many people used the common areas and was not proportional to the area of the various lots in the complex.
There is no lift or common area machinery in the complex and it was submitted that the main maintenance cost of the common areas is tile and toilet cleaning.
The administration costs for the complex in 2008/2009 was $192,000 and the applicant’s submissions detailed the allocation of those costs between specified categories of expenditure. The applicant identified in its submissions what categories of the expenditure were mainly associated with usage by the customers of the commercial tenants and what categories were associated with usage across both commercial and residential occupants.
The Body Corporate of Saltwater did not file any material in response to the application apart from notifying the Tribunal via Body Corporate Services Pty Limited that the majority of the Saltwater Body Corporate committee consents to the application being determined by the Tribunal on the existing papers.
Conclusion
The applicant is the owner of lot 29 in the Saltwater complex. That lot is one of the 17 residential lots in the complex. The current lot entitlements are not equal. The contribution lot entitlements are:
Number of lots
entitlements
10
2
5
3
10
4
8
5
3
6
4
7
2
9
Total 42
Total 179
The position resulting from the current contribution lot entitlements can be exemplified by considering the case of the applicant for the 2008/2009 year. The lot entitlement for lot 29 is 6. The applicant’s contribution to the Body Corporate administration costs would be 6/179 of $192,000 or $6,435.74. The contribution towards those same costs by 33 other lots would be less than $6,435.74 while the contribution by 8 lots would be the same or more than that amount.
Applying the provisions of section 48(6) of the Body Corporate and Community Management Act 1997 the Tribunal is required to adjust the respective lot entitlements so that all lots equally contribute to the costs of the Body Corporate unless it is just and equitable for the entitlements not to be equal. The Supreme Court of Queensland in Fischer v Body Corporate for Centrepoint CTS 7779[1] 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 insofar as some lots can be shown to give rise to particular costs to the Body Corporate which other lots do not.
[1] [2004] QCA214
That case confirmed that the question as to 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 to their contribution to the costs incurred by the Body Corporate. When the starting point is equality, any departure from that position is allowable only where it is just and equitable to recognise inequality.
A determination that adjusts entitlements away from an equal contribution position can only be made by reference to factors that have a financial impact or consequence on the Body Corporate. According to Chesterman J, the Tribunal, when considering an adjustment of lot entitlements away from equality, may have regard to the matters specified in section 49(4) of the Body Corporate and Community Management Act 1997 only to the extent that those matters may affect the cost of operating a community title scheme. [2]
[2] As above at paragraph 33
The Tribunal is satisfied that the starting point in the present case must be to vary the current contribution lot entitlements to reach a position of equality. Then the Tribunal can consider whether a departure from that position is justified on the evidence provided to the Tribunal.
The applicant provided some general submissions as to the inequality of the contribution made by the commercial lots to a large component of the costs incurred by the Body Corporate. However the submissions were not supported by any evidence that could be relied on as the basis for a finding by this Tribunal that it would be just and equitable to depart from equal lot entitlements.
The Tribunal cannot differentiate the actual contributions to costs incurred by the Body Corporate between the respective 42 lots in the Saltwater complex and it would not be just and equitable to make adjustments to the lot entitlements schedule without that evidence. In this case the applicant did not provide any expert evidence that could have analysed the cost contribution by the respective lots owners.
The Tribunal determines that the lot entitlement schedule for Saltwater must be adjusted so that the respective lot entitlements are equal.
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