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  4. UI International Pty Ltd v Body Corporate for Raby Bay Harbour Community Titles Scheme 30942 - [2005] QDC 244

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UI International Pty Ltd v Body Corporate for Raby Bay Harbour Community Titles Scheme 30942[2005] QDC 244

UI International Pty Ltd v Body Corporate for Raby Bay Harbour Community Titles Scheme 30942[2005] QDC 244

DISTRICT COURT OF QUEENSLAND

CITATION:

UI International Pty Ltd v Body Corporate for Raby Bay Harbour Community Titles Scheme 30942 [2005] QDC 244

PARTIES:

UI International Pty Ltd

(Applicant)

V

Body Corporate for Raby Bay Harbour Community Titles Scheme 30942

(Respondent)

FILE NO/S:

BD563/05

DIVISION:

Civil

PROCEEDING:

Chamber application

ORIGINATING COURT:

District Court

DELIVERED ON:

16 August 2005

DELIVERED AT:

Brisbane

HEARING DATE:

15 April 2005

JUDGE:

Tutt DCJ

ORDER:

  1. That the lot entitlement contribution for Lot 4 on SP 147266 be adjusted to a figure of three (3) instead of seven (7) as contained in the registered community management statement for the Raby Bay Harbour Community Titles Scheme No 30942; and
  2. No order as to costs.

CATCHWORDS:

Adjustment by court order of the contribution lot entitlement under a registered community management scheme – penthouse apartments contribution on basis of volumetric apportionment – reduction in contribution lot entitlement – where penthouses unfinished and not operating to optimum capacity –  “just and equitable” circumstances.

Body Corporate and Community Management Act 1997 (Qld) ss. 46, 47, 48, 49.

Body Corporate and Community Management and Other Legislation Amendment Act 2003 (Qld) s 10.

Fischer & Ors v Body Corporate for Centrepoint Community Title Scheme 779 [2004] QCA 214.

COUNSEL:

Ms C Heyworth-Smith for the applicant.

Ms S Moody for the respondent.

SOLICITORS:

Creswicks Lawyers for the applicant.

McCarthy Durie Ryan Neil Solicitors for the respondent.

Introduction

  1. [1]
    This is an application under s 48 of the Body Corporate and Community Management Act 1997 (“the Act”) by the owner of four (4) unfinished penthouse apartments contained in the Raby Bay Harbour Community Titles Scheme 30942 to have the lot entitlement schedule adjusted so that the applicant’s contribution to that scheme is less than that currently allocated to the lot in the contribution schedule which is seven (7).[1]
  1. [2]
    The applicant is the registered owner of Lot 4 on SP 147266 in respect of which the first community management statement dated 16 December 2002 allocates a contribution lot entitlement to the Lot of seven (7) with the other three community titles schemes comprising this part of the Raby Bay Harbour development being allotted respective entitlements to make an aggregate contribution lot entitlement of one hundred (100).
  1. [3]
    Lot 4 is part of building number 3 (“Building 3”) referred to in Exhibit “KMB4” to the affidavit of Kent Milton Beal filed on behalf of the applicant on 27 February 2005 and which also comprises predominantly commercial offices and a function room. The remainder of Building 3 together with Buildings 1 and 2 which comprise apartments and commercial businesses have been allocated an aggregate contribution lot entitlement of seventy-seven (77) while Building 4 comprising the villa-style apartments has been allocated a contribution lot entitlement of sixteen (16).
  1. [4]
    The Act was amended in respect of that part relevant to lot entitlements with effect from 4 March 2003 by the Body Corporate and Community Management and Other Legislation Amendment Act 2003 (Qld) in that s 46(1) of the former Act stated that “it is not a requirement for a community management statement for a community titles scheme that the contribution schedule be equal for each lot ……” with provision under s 46(2) thereof for an owner to apply “….. for an order for the adjustment of a lot entitlement schedule” and further under s 46(4) that “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”. Under the Act as amended s 46(7) specifically provides that the contribution schedule for the respective lots “…..must be equal except to the extent to which it is just and equitable in the circumstances for them not to be equal”. The amending Act therefore reversed the emphasis in respect of a lot entitlement contribution schedule and spells out clearly in s 49 the “criteria for deciding just and equitable circumstances” if adjustment is to be made.
  1. [5]
    The evidence in this matter is that the lot entitlement contribution for this community titles scheme was originally calculated or assessed by reference to the respective lot areas (“volumetric apportionment”)[2]by which a figure of 7.15% was reached for Lot 4 which was reduced to the whole number 7 out of 100 being the aggregate for the building as a whole.
  1. [6]
    It is upon this basis that the contribution lot entitlement for Lot 4 has been levied by the body corporate to date.
  1. [7]
    The applicant therefore comes to this court seeking an adjustment in contribution which is lower than that which currently applies, but with the added dimension that the basis for any such adjustment must now be under the “new” rules, as it were, even though the original lot contribution was determined on a different basis.[3]

Legislation

  1. [8]
    Part 5 of the Act defines “lot entitlements” as follows:

“46  Lot entitlements

  1. (1)
    A lot entitlement, for a lot included in a community titles scheme, means the number allocated to the lot in the contribution schedule or interest schedule in the community management statement.”
  1. [9]
    The term “contribution schedule” is also defined as follows:
  1. “(2)
    The contribution schedule is the schedule in a community management statement containing each lot’s contribution schedule lot entitlement.”
  1. [10]
    Section 46(6) of the Act provides that “a lot entitlement must be a whole number, but must not be 0” and as stated in paragraph [4] above s 46(7) provides that “…the respective 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”.
  1. [11]
    Section 47(2) of the Act provides:
  1. “(2)
    The contribution schedule lot entitlement for a lot is the basis for calculating—
  1. (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 for a particular purpose is specifically otherwise provided for in this Act; and
  1. (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.”
  1. [12]
    Section 48 of the Act provides the mechanism for a lot owner to apply to the court “…….for an order for the adjustment of a lot entitlement schedule”. It is also repeated in s 48(5) that “…….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.”
  1. [13]
    Section 49 “……sets out matters to which the court…… may, and may not, have regard for deciding—
  1. (a)
    for a contribution schedule — if it is just and equitable in the circumstances for the respective lot entitlements not to be equal –

-and they include:

  1. “(a)
    how the community titles scheme is structured; and
  1. (b)
    the nature, features and characteristics of the lots included in the scheme; and
  1. (c)
    the purposes for which the lots are used”.[4]
  1. [14]
    The purpose of having a contribution schedule in a community management statement containing each lot’s contribution to the body corporate is that the body corporate must administer, manage and control the common property and body corporate assets reasonably and for the benefit of all lot owners. The body corporate has specific responsibilities and obligations under the Act in respect of the building to which the community titles scheme relates some of which are referred to in the affidavit of Donald Alexander Saunders filed on behalf of the respondent on 4 April 2005.[5]

Applicant’s Submissions

  1. [15]
    The applicant’s basic submission is that because the four penthouse apartments (Lot 4) are unoccupied, unfinished and are likely to remain in such a condition in the near future if not indefinitely, the applicant should not be obliged to pay a contribution factor of seven one-hundredths (7/100) of the body corporate levies to cover the expenditure for which it is responsible in respect of Building 3 as Lot 4 makes no demand on the services and amenities for which the body corporate is responsible in respect of that building. Therefore by applying the “just and equitable” principle the contribution factor should be reduced to somewhere between 1 and 7 to reflect the lack of demand by Lot 4 on the services and amenities provided.

Respondent’s Submissions

  1. [16]
    The respondent’s submission is essentially that “the applicant has failed to adduce any evidence about what the contribution schedule lot entitlements for the scheme should be …” and therefore the application should be dismissed.
  1. [17]
    It is submitted the starting point is that under s 48(5) of the Act the contributions by each lot “…….should be equal except to the extent to which it is just and equitable in the circumstances for them not to be equal”. There is no evidence before the court for it to be able to make a decision that the respective lot contribution schedules under the scheme should be unequal and therefore the applicant has failed to discharge its onus to receive the benefit of the order sought. The respondent sets out the background of the “scheme”; the relevant lot entitlements schedule; the body corporate expenses and responsibilities for the scheme and the respective suggested methods by which a body corporate lot contribution should be assessed.

Contribution Lot Entitlements

  1. [18]
    The evidence is that at the time of registration of the community management statement for the Raby Bay Harbour Community Titles Scheme 30942 on 16 December 2002 the lot entitlement contribution allocation for the respective buildings contained in the statement was as follows[6]:

SCHEDULE OF LOT ENTITLEMENTS

Lot on Plan

Contribution

Interest

Raby Bay Harbour Villas Community Titles Scheme

16

16

 

Raby Bay Harbour Apartments Community Titles Scheme

28

28

Raby Bay Harbour Commercial Centre Community Titles Scheme

49

49

Lot 4 on SP 147266

7

7

TOTALS

100

100

  1. [19]
    Obviously the respective contribution lot entitlements are not “equal” because when they were calculated by Landmark White in the manner set out in that company’s letter of 22 May 2002[7]and attachments, it was considered that the above assessments were the “most appropriate” and by implication the “just and equitable” determinations to be made for each of the lot entitlements for the reasons set out in the Landmark White letter commensurate with their respective demands on the services and amenities to be provided by the body corporate to the buildings and enterprises contained therein. While the former Act was silent in respect of the “criteria” upon which lot contributions should be assessed, common sense would dictate that some enterprises or uses to be conducted on a lot would place a heavier demand for services and amenities on a body corporate than others and therefore should bear a higher or lower, as the case may be, proportion of contribution for those demands or services. This would seem to be the view adopted by the Court of Appeal in Fischer & Ors v Body Corporate for Centrepoint Community Titles Scheme 7779 [2004] QCA 214 where Chesterman J, with whom McPherson JA and Atkinson J agreed, stated:

“…..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 at issue is the ‘equitable’ distribution of the costs”.[8]

  1. [20]
    Again it would seem reasonable and logical that the respective contribution lot entitlement would reflect the demand for the body corporate’s expenses for those services and amenities when those buildings within the scheme were functional and capable of being used and/or operated to their optimum capacity as this would reflect the optimum demand on those services and amenities for which the body corporate is responsible.
  1. [21]
    It follows therefore that if those demands on services and amenities are less than what might be described as the functioning optimum then logically and reasonably the body corporate’s expenditure for the those services and amenities would be correspondingly less.
  1. [22]
    It must be accepted however that even where a particular building is not operating to its optimum capacity because it is unfinished certain expenditure by the body corporate cannot be avoided so that it would be quite reasonable for there to be levied some lot entitlement contribution to cover its demand on some services and amenities, for example, administration services, fire protection equipment, general insurances, maintenance of external walls and/or building facade, roof maintenance and the like.
  1. [23]
    The court has had the benefit of a view in respect of this application and the decrepit nature of the unfinished penthouses is obvious. They are clearly unfinished and access to them in a practical sense is sealed off as there is no purpose in their being accessible.
  1. [24]
    Notwithstanding their dysfunctional state they would place some demand on body corporate expenditure for some services and amenities referred to in paragraph [22] above but considerably less demand than if they were capable of being used and/or operating to optimum capacity.
  1. [25]
    I am not persuaded that it is necessary for the applicant to adduce expert evidence before the court can decide this application for the reason that the empirical evidence speaks for itself. If it was considered “just and equitable” to have a lot entitlement contribution assessed at 7 as being the “most appropriate” when the penthouses were to be fully functional then it seems reasonable to me that the lot entitlement contribution for them now should be less than that figure.
  1. [26]
    In all the circumstances I find that the lot entitlement contribution for Lot 4 on SP 147266 should be adjusted to a figure of three (3) instead of seven (7) as contained in the registered community management statement for Raby Bay Harbour Community Titles Scheme No 30942 to represent three one-hundredths (3/100) of the aggregate contribution on the basis that for the reasons set out above it is just and equitable to do so.
  1. [27]
    In accordance with s 48(2)(c) of the Act I make no order as to costs.

Order

  1. [28]
    The court’s order will therefore be as follows:
  1. That the lot entitlement contribution for Lot 4 on SP 147266 be adjusted to a figure of three (3) instead of seven (7) as contained in the registered community management statement for the Raby Bay Harbour Community Titles Scheme No 30942; and
  1. No order as to costs.

Footnotes

[1]  In practical terms this figure represents 7/100 of the total contribution to the community titles scheme.

[2]  Exhibit “DAS28” to the affidavit of Donald Alexander Saunders filed 4 April 2005.

[3]  See reference in transcript page 71 lines 1-20.

[4]  Section 49(4) of the Act. It should be noted that under the former act there was no statutory prescription as to the criteria which the court may have regard in deciding whether and to what extent any adjustment should be made.

[5]  See paragraphs [78] and [82] of the affidavit of Donald A Saunders filed 4 April 2005.

[6]  Exhibit “KMB4” to the affidavit of Kent Milton Beal filed on 27 February 2005.

[7]  Exhibit “DAS28” as referred to above.

[8]  At paragraph [26] on page 8 of the judgment.

Close

Editorial Notes

  • Published Case Name:

    UI International Pty Ltd v Body Corporate for Raby Bay Harbour Community Titles Scheme 30942

  • Shortened Case Name:

    UI International Pty Ltd v Body Corporate for Raby Bay Harbour Community Titles Scheme 30942

  • MNC:

    [2005] QDC 244

  • Court:

    QDC

  • Judge(s):

    Tutt DCJ

  • Date:

    16 Aug 2005

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

Cases Cited

Case NameFull CitationFrequency
Fischer v Body Corporate for Centrepoint Community Title Scheme 7779[2004] 2 Qd R 638; [2004] QCA 214
2 citations
Jump To
Cite 1 - [2004] QCA 214
Cite 2 - [2004] QCA 214

Cases Citing

Case NameFull CitationFrequency
Battin v Body Corporate for Amity Community Titles Scheme 17543 [2006] QDC 2782 citations
1

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