Isle of Palms Resort [2000] QBCCMCmr 542 (24 October 2000)

PJ HanlyREFERENCE: 0244-2000

ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	20860
Name of Scheme:	Isle of Palms Resort
Address of Scheme:	C/- Body Corporate Services Seabank Building 12 Marine Parade SOUTHPORT QLD 4221

TAKE NOTICE that pursuant to an application made under the abovementioned Act by

Nenad DIMITRIJEVIC as trustee, the owner of Lot 175



I hereby order that the application by Nenad DIMITRIJEVIC as trustee, the owner of Lot 175 for an order that the contributions levied on lot owners are excessive, is dismissed.1n


STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0244-2000

“Isle of Palms Resort” CTS 20860

The applicant, Nenad Dimitrijevic, has sought an order of an adjudicator under the Body Corporate and Community Management Act 1997 (“the Act”) that the contributions levied by the body corporate are excessive.

Section 223(1) of the Act provides that an adjudicator may make an order that is just and equitable in the circumstances (including a declaratory order) to resolve a dispute, in the context of a community titles scheme, about –

a) a claimed or anticipated contravention of the Act or the community management statement; or

b) the exercise of rights or powers, or the performance of duties, under this Act or the community management statement; or

c) a claimed or anticipated contravention of the terms, or the termination of, or the exercise of rights or powers under the terms of, or the performance of duties under the terms of an engagement contract or an authorisation contract.

An order may require a person to act, or prohibit a person from acting, in a way stated in the order (section 223(2)). An adjudicator’s order may contain ancillary or consequential provisions the adjudicator considers necessary or appropriate (section 230(1)).

In the supporting grounds, the applicant states that as the owner of Lot 175, he pays a quarterly contribution of $649.00. He adds that the body corporate now wants each lot owner to pay the sum of $3500.00 for painting. The applicant also complains about the lack of income derived from leasing Lot 175.

A copy of the application was forwarded to the secretary for distribution to all members of the committee, to the Body Corporate Manager, and to the onsite manager. In her response to the application, Kim Elliott from Complete Body Corporate Services submits that the current gross annual contributions payable for Lot 175 are $2855.63. She states that the applicant has not been asked to pay $3500.00 to paint Lot 175, and that if he wishes, the cost of painting this unit would be $1480.00.

This office contacted the body corporate manager and requested copies of certain body corporate records. These documents have been supplied by the body corporate manager and provide the following information.

The statements of income and expenditure for the financial years from 1996 to 1999 indicate that the net income received from contributions levied on lot owners and expenditure over these periods have been:

FINANCIAL YEAR	ADMINISTRATIVE FUND		SINKING FUND
	Income ($)	Expenditure ($)	Income ($)	Expenditure ($)
1996 to 1997	328,725.60	305,431.97	35.911.20	29,773.42
1997 to 1998	410,907.00	391,106.41	56,399.00	64,538.22
1998 to 1999	357,961.00	326,100.09	52,485.60	13,248.19

The approved budget for the financial year 1 December 1999 to 30 November 2000 shows that gross administrative fund contributions total $380,000.00 (discounted to $342,000.00), and gross sinking fund contributions total $52,485.60 (discounted to $47,237.04). The minutes of the Annual General Meeting held on 4 February 2000 indicates that the administrative fund budget and related contributions were accepted by a vote of 72 to 15. The budgeted sinking fund contributions were accepted by a vote of 72 to 16.

The applicant has sought an order of an adjudicator that the current contributions levied by the body corporate are excessive. Section 223(3)(d) of the Act provides that an adjudicator may make an order reducing a contribution if satisfied that a contribution levied on lot owners is unreasonable.

The above overview of the financial position of the body corporate for the last four years suggests that the contributions levied on lot owners for both the administrative fund and the sinking fund have been relatively stable. The noteworthy increase in net income for the year 1997 to 1998 relates to amounts accounted for as “Other Levies” which could be the result of special contributions fixed to meet a liability for which no provision, or inadequate provision, had been made in the budgets. The contributions to the administrative fund and the sinking fund for the financial year 1999 to 2000 do not represent a significant increase over the previous financial year. Given the degree of support to the proposed contributions at the last annual general meeting, I have no reason to consider that the contributions levied on lot owners are unreasonable.

Certainly, the applicant has not demonstrated any reason to support his claim that the current contributions are unreasonable. Specifically, the applicant has not identified expenditure items which are unreasonable or unnecessary. The applicant has complained about the expenses associated with leasing his unit. I would assume that these are issues he should have contemplated before making a property investment. Complaints relating to the personal costs of leasing a unit are not matters which an adjudicator considers when determining an application of this nature.

For these reasons, I have dismissed the application.