Indigo Blue Beachside Residences [2006] QBCCMCmr 222 (4 May 2006)

Last Updated: 19 December 2006

Office of the Commissioner for Body Corporate and Community Management SPECIALIST ADJUDICATION (Adjustment of Lot Entitlements) Number: 0015-2006 Applicants: EDWARD MICHAEL EADEH & ANOR Respondents: BODY CORPORATE FOR INDIGO BLUE BEACHSIDE RESIDENCES COMMUNITY TITLES SCHEME 30961

O R D E R
4 May 2006

I ORDER that – 1. The contribution schedule lot entitlements in community titles scheme 30961 be adjusted to conform with the allocations in the table in the Schedule to this order. 2. As regards the costs of the adjudication which total $4,433.00, including GST, these are to be paid by the body corporate from its administrative fund within 60 days of receipt of a tax invoice for those costs. 3. The body corporate is to levy a special contribution to its administrative fund to raise $4,433.00 to pay or reimburse its administrative fund for costs under this order, such levy to be payable by the owners of all lots in community titles scheme 30961, other than the owners of lot 41. 4. That levy is to be imposed on the basis of the new contribution schedule lot entitlements, but with the omission of lot 41 and a corresponding adjustment to the aggregate contribution schedule lot entitlement. 5. The parties are granted leave to apply for further orders or directions if the need arises. The Schedule Lot No Proposed Lot No Proposed Entitlement Entitlement 1 27 23 23 2 24 24 21 3 24 25 23 4 27 26 23 5 23 27 24 6 21 28 23 7 23 29 21 8 23 30 23 9 21 31 23 10 23 32 23 11 23 33 22 12 21 34 22 13 23 35 22 14 23 36 22 15 21 37 22 16 23 38 22 17 23 39 22 18 21 40 22 19 23 41 25 20 23 42 23 21 21 43 23 22 23 44 24 Aggregate 1022

G F Bugden
Specialist Adjudicator
4 May 2006

Office of the Commissioner for Body Corporate and
Community Management

SPECIALIST ADJUDICATION
(Adjustment of Lot Entitlements)

Number: 0015-2006

Applicants: EDWARD MICHAEL EADEH & ANOR

Respondents: BODY CORPORATE FOR INDIGO BLUE BEACHSIDE RESIDENCES COMMUNITY TITLES SCHEME 30961

DETERMINATION
4 May 2006

Application

1. This is an application under section 48 of the Body Corporate and Community Management Act 1997 ("Act") for the adjustment of the contribution schedule lot entitlements in community titles scheme 30961 ("Scheme"). The body corporate for the Scheme is the respondent to the application by virtue of the provisions of section 48(2)(a) of the Act. Individual lot owners within the Scheme may elect under section 48(2)(b) of the Act to be joined as a party to the proceedings, but in the case of this application no such election has been made. Instead, lot owners with an interest in the application have chosen simply to lodge written submissions with the Commissioner.
2. The application seeks an un-equal allocation of contribution schedule lot entitlements among the lots in the Scheme. The exact allocation sought is evident from the appendix to these reasons ("Appendix").

The Scheme

3. The Scheme is based on a high rise residential building containing 44 lots or units and is situated at 186 The Esplanade, Burleigh Heads. The following is a description of the Scheme taken from pages 3 and 4 of an expert report from Leary & Partners Pty Ltd dated 1 November 2005 ("Leary Report") which is in evidence before me –

"The tower contains (reference to levels as shown on SP 138126):

Level A: The basement with on title parking areas for lots 1 to 4 that (except for lot 2’s) include a private stairway; exclusive use car parking spaces for all lots (except lot 1, 3 and 4); exclusive use storage spaces for most lots; a common lift/stair lobby; a refuse room and plant rooms.
Level B (ground level); The lower levels of 4 three bedroom lots (1 to 4), each of which have exclusive use courtyards; the main entry foyer, stairs and lift.

Level C: The upper levels of lots 1 – 4 (with no lobby area).

Level D: 1 two bedroom lot and 2 two bedroom lots; and common lobby, stairs and lift.
Level E - J & L: 2 three bedroom lots and 1 two bedroom lot; and common lobby, stairs and lift.
Level K: 1 standard three bedroom lot and 1 three bedroom lot occupying the space normally taken by a standard three bedroom lot plus a two bedroom lot; and common lobby, stairs and lift.

Levels M – Q: 2 three bedroom lots; and common lobby, stairs and lift.

Levels R – U: 1 three bedroom lot per level; and common stairs and lift (lobby private on title).

Levels V & W: Roof and plant rooms.

The external facilities include:

a) the driveway plus visitors parking area,
b) lap and wading pools, plus pool building and pump room,
c) barbecue shelter,
d) gymnasium with toilet/shower facilities and sauna,
e) tennis court, and
f) perimeter fencing."

4. Clearly, there is considerable diversity among the various lots in the Scheme. There is also considerable diversity in the current allocation of contribution schedule lot entitlements in the Scheme, as will be seen from the Appendix. The application effectively alleges that such allocation is not just and equitable within the meaning of the Act.
5. The Scheme is regulated by the Body Corporate and Community Management (Accommodation Module) Regulation 1997 ("Module").

The law

6. The relevant law has been canvassed in numerous prior applications of this type, but for the benefit of the parties, who may not be familiar with it, I will set it out again. The Scheme was registered under the Act in December 2002, as opposed to having been registered under the earlier legislation (the Building Units and Group Titles Act 1980) and transitioned to the Act in 1997. At the time of registration the Act did not require the contribution schedule lot entitlements to be equal. However, section 46 of the Act (as it then was) provided for a lot owner to apply to the District Court for an adjustment of the contribution schedule lot entitlements. An order of the Court then had to be in accordance with a stated principal, namely, "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." (Section 46(3) and (4) of the Act as it then was.)
7. The Act was subsequently amended by the Body Corporate and Community Management and Other Legislation Amendment Act 2003 ("Amending Act") which commenced on 4 March 2003. The Amending Act inserted the following provisions in section 44 (which was re-numbered as section 46):

"(6) A lot entitlement must be a whole number, but must not be 0.

(7) For the contribution schedule for a scheme for which development approval is given after the commencement of this subsection, 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.

Examples for subsection (7) of circumstances in which it may be just and equitable for lot entitlements not to be equal--
1. A layered arrangement of community titles schemes, the lots of which have
different uses (including, for example, car parking, commercial, hotel and
residential uses) and different requirements for public access, maintenance or
insurance.
2. A commercial community titles scheme in which the owner of 1 lot uses a larger volume of water or conducts a more dangerous or a higher risk industry than the owners of the other lots.

(8) In deciding the contribution schedule lot entitlements and interest schedule lot entitlements for a scheme mentioned in subsection (7), regard must be had to--

(a) how the 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.

(9) A change to a lot entitlement takes effect on the recording of a new community management statement incorporating the change."

8. The Amending Act also made changes to section 46 of the Act (which was re-numbered section 48) to allow applications to be made to a specialist adjudicator as an alternative to the District Court and a new section 46A (re-numbered section 49) was inserted as follows:

"(1) This section applies if an application is made for an order of the District Court or a specialist adjudicator for the adjustment of a lot entitlement schedule.

(2) This section sets out matters to which the court or specialist adjudicator 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 court or specialist adjudicator may have regard to for deciding a matter mentioned in subsection (2) are not limited to the matters stated in this section.

(4) The court or specialist adjudicator 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 court or specialist adjudicator 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."

9. These changes reinforced the legislative intention that in the case of contribution schedule lot entitlements equality was to be preferred unless it is just and equitable in the circumstances for them not to be equal. On first reading of these new provisions it appeared that a whole range of factors could be taken into account when applying the "just and equitable" test.
10. As regards the "nature, features and characteristics" test in section 49(4)(b), in the past the District Court and specialist adjudicators have had regard to a wide range of matters when determining applications in relation to contribution schedule lot entitlements. However, the decision of the Court of Appeal in Fischer & Ors v. Body corporate for Centrepoint community titles scheme 7779 [2004] QCA 214 substantially restricted the range of matters that can be taken into account. In that case Chesterman J (with whom McPherson JA and Atkinson J agreed) said [at paras. 25 and 26]:

"The submission for the applicants is that this Part of the Act is concerned with the just and equitable distribution of body corporate expenses among apartment owners and that in making an adjustment of a lot entitlement schedule the court must pay regard only to the origin and allocation of body corporate expenditure.

Although the Act gives no clear indication one way or the other, the preferable view is that a contribution schedule should provide for equal contributions by apartment owners, except insofar as some apartments can be shown to give rise to particular costs to the body corporate which other apartments do not. 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."

11. The decision in the Centrepoint case does not mean that other factors are irrelevant, but rather, in the absence of other factors, the proper test is the demand the respective lots make on the services and amenities provided by the body corporate.

The evidence

12. I have the following evidence before me –

(a)	various title searches;
(b)	the Leary Report;
(c)	written submission from the body corporate which attaches a report from G K Consulting Engineers Pty Ltd dated 28 January 2005 (sic) [should be 28 January 2006] ("GK Consulting Report");
(d)	written submission from a substantial number of lot owners, including one from the Chairman of the body corporate that attaches a range of historical material relating to the way the body corporate has dealt with the applicants and the engineers in relation to the application;
(e)	a written submission in reply from the applicants which attaches a letter from Leary & Partners Pty Ltd dated 15 March 2006 ("Leary’s Response") responding to the GK Consulting Report;
(f)	SP 138126;
(g)	community management statement 30961; and
(h)	the application, which other attachments include a letter from GK Consulting Engineers Pty Ltd dated 25 November 2005 ("GK Consulting Letter") updating the GK Consulting Report.

The Leary report
13. The Leary Report contains a detailed analysis of the cost impact of the individual lots on the body corporate’s expenditure from both its administrative fund and sinking fund. In relation to the administrative fund, all expenditure items have been listed and analysed. The calculations were primarily based on the proposed budget for the year to 31 November 2005, but to ensure accuracy –

(a)	actual expenditure for the preceding 2 years; and
(b)	actual expenditure for the current year to the date of the report,

were taken into account.
14. In relation to the sinking fund, a future expenditure forecast was established for a range of sinking fund expense items and for each item the expenses were converted to annualized costs by dividing the current cost of carrying out each work item by an allowed "overall replacement life".
15. Individual expense items were then allocated among the respective lots based on one of the following criteria –

(a)	equally;
(b)	window areas;
(c)	a calculated quantity per lot;
(d)	the number of car spaces;
(e)	the area of the unit; and
(f)	the particular lots exclusively benefiting.

16. Following a series of calculations, the individual expense allocations were expressed both in terms of dollar values per lot and percentages per lot. The recommended contribution schedule was extracted from the percentages per lot. The result was the recommendations in the Appendix.
17. It is worth noting that the Leary Report also took account of the following –

(a)	building insurance premiums are not relevant when setting contribution schedule lot entitlements because they are required to be "levied" based on interest schedule lot entitlements;
(b)	other insurance premiums (e.g. public liability, office bearer’s liability and personal accident) should be shared equally; and
(c)	the terms of exclusive use by-laws and the responsibility of owners of car spaces that are on title to clean and/or maintain their car spaces, storage areas and courtyards.

18. The approach in the Leary Report in relation to lift expenses is also worth mentioning. It states that the majority of trip related lift expenses are incurred to stop and start the lift rather than by the distance the lift travels – the main variable in expenses being the number of trips taken. Furthermore, the lift parking arrangements for the lifts in the Scheme are such that they are also a factor in the running costs of the lifts. It also states that the inspecting and testing costs of the lifts are not likely to be substantially affected by lift usage levels. In response to all this the Leary Report apportions lift related expenses equally on the basis that, over all, it is the fairest approach to these expenses.

The GK Consulting Report

19. It appears that, following the Leary Report being made available to the body corporate in November 2005, it instructed GK Consulting Engineering Pty Ltd to review the Leary Report. The GK Consulting Letter sets out the result of that review. In that letter the engineers generally approved of the approach taken in the Leary Report but took issue with it in relation to the following matters:

(a)	the differential cost between repairing glazed balustrades as opposed to aluminium balustrades;
(b)	its failure to take into account the cost of concrete spalling repairs; and
(c)	its failure to allocate certain costs associated with balcony waterproofing.

The GK Consulting Letter recommended an alternate allocation of contribution schedule lot entitlements for the Scheme. These are set out in the Appendix.
20. It also appears that, subsequently, the body corporate instructed the engineers to undertake a more detailed review of the Leary Report and provide a more comprehensive report with revised calculations. This was the CK Consulting Report.
21. The GK Consulting Report identifies areas where lots demand a greater portion of body corporate costs than other lots and seeks to allocate those costs among the lots. The general approach and layout in the Leary Report was retained but some items that were allocated "equally" in the tables in the Leary Report were reallocated differently to achieve, in the opinion of the engineers, a more just and equitable result. The changes made took account of –

(a)	the difference between replacement costs for both standard aluminium balustrades and glazed balustrades;
(b)	the long term maintenance cost of concrete spalling;
(c)	the cost of removing and replacing balcony titles (an owner’s expense) to allow access to waterproof membranes (a body corporate expense), both such expenses being treated as body corporate expenses by the Leary Report;
(d)	the cost of installing an additional lift to overcome current access problems to levels 17 to 20 and the roof for maintenance purposes;
(e)	a weighting against the higher levels of the building (at the rate of 18% over 10 floors) because of the extra costs of lifts in higher buildings compared to those in lower buildings, which was in contrast with the Leary Report which allocated lift related expenses equally; and
(f)	the differential costs in maintaining higher buildings than lower buildings and the need to slightly weight these costs against the higher levels (at an increasing rate of 0.5% per floor).

Leary’s Response
22. The Leary’s Response addresses all of the changes proposed by the GK Consulting Report. It is fair to say that all those changes are rejected (with reasons), although the rejection of the balustrade costs is qualified in that the Leary’s Response concedes that it warrants serious consideration, although it disagreed with the "degree of cost difference" and stated that "Approtioned appropriately these costs might have a very minor impact on our calculations".
Assessing the expert evidence
23. After reading the GK Consulting Letter, the GK Consulting Report and the historical material provided by the body corporate Chairman in his submission to the Commissioner I was concerned about the reliability of those documents as expert evidence. My concern centred around whether those documents were "developed" by the engineers too closely in consultation with the body corporate or, at least, it’s Chairman to achieve a desired outcome, rather than being normal independent expert evidence. I was therefore concerned to test the way in which the Leary Report and the Leary’s Response were developed to determine whether it was any more reliable. For consistency I decided to put both experts to the same test. I exercised my powers under section 271(1)(a) of the Act by seeking certain information from each of the author’s of the expert reports about the way in which they developed their opinions and supporting materials.
24. I asked each expert the following questions:

"1. Were you the person who carried out the research for and prepared the Report?

2. If you were not such person, what is the name and contact details of the person who carried out the research for and prepared the Report?

3. If you were such person –

(a) Were you instructed to produce an impartial report or were you instructed to produce a report that supported your client’s cause?
(b) Did your client influence any of the content of the Report and if so –

i. in what way; and
ii. to what extent?

(c) Are you able to assure me that the Report is independent and that I can rely upon it as an impartial report in the nature of an experts report?"
25. Ms Arkcoll from Leary & Partners Pty Ltd provided a very strong response, partly in the following terms:

"It is a condition of commission for all the contribution entitlement reports I agree to prepare, that I will act as an independent and impartial expert. My clients in Indigo Blue Beachside Residences were aware of and accepted this condition. I prepared the report on this basis."

She then went on to explain the need to receive instructions as to facts from her clients, but concluded in the following terms:

"I confirm without hesitation that having been provided with the same information, I would have made exactly the same recommendation had the body corporate been my client."

26. Mr Kaoustos from GK Consulting Engineers Pty Ltd provided a response, partly in the following terms:

"After considerable discussion members of the Body Corporate raised issues that certain items had been omitted from the [Leary] report and should have been included if the report was to reflect the total running cost of all lots. A draft report produced by myself was submitted for consideration.
A list of items was then put forward (by myself and also members of the Body Corporate) for consideration in relation to the upkeep of the building. The items that I believed were able to be justified by quantity, cost and life cycle I had added to the initial draft, the items I could not justify were omitted from the report."

He also went on to explain the need to consider and include suggestions from his client and concluded in the following terms:

"I do not believe that my client had influenced the report but provided input for me to consider and use my expertise."

27. In themselves, the differences between the two explanations may not be that significant. However, when one examines the communications between the chairman of the body corporate and Mr Kaoustos one cannot help but be alarmed. In an e-mail from Mr John Scutt, the body corporate chairman, to Mr Kaoustos on 4 December 2005 referring to the draft report produced by Mr Kaoustos, Mr Scutt was clearly instructing Mr Kaoustos as to what he expected. The following are some examples of what was said in this lengthy e-mail:

"I (sic) should be noted the report is only a draft as there are a large number of questions we would like to raise concerning the analysis. The committee has not had a chance to review your assumptions and challenge your interpretation on various issues."
"It is clear that the future building upkeep will be impacted by the external dimensions of each lot. It is too simplistic to argue that an equal apportionment of sinking fund expenditure to each lot is fair and equitable. We need to get an expert’s report to give us a realistic level of expenditure for each lot to maintain the building over the next 20 years."

28. In response on 5 December 2005 Mr Kaoustos said:

"Any supporting information for this case is appreciated. Prior to me completing the final report I would like any relevant information I can get."

29. In further response on 9 January 2006 Mr Scutt said:

"Please advise when you believe your report will be updated to take into account my questions." (These being the questions in the original lengthy e-mail.)

30. Later the same day Mr Kaoustos replied:

"I have read the case in relation to Centrepoint in both the District Court and the Supreme Court. I am currently working on making the lot entitlement distribution to agree with the favourable parts of the decision mentioned by each of the judges in both the courts. I believe that this will strengthen our case strongly. The final report should be ready by Friday, please contact me if you have any questions."

31. To my mind, this type of conduct is totally at odds with what a court or tribunal would expect of an expert witness and I do not believe that I have any option but to discount the evidence of Mr Kaoustos. I therefore reject the GJ Consulting Letter and the GJ Consulting Report and rely entirely on the Leary Report. I also draw the Commissioner’s attention to this decision and suggest that a Code of Conduct be formulated and made available for experts preparing reports for proceedings under Chapter 6 of the Act so that they will be required to state that they have read and abide by that Code. Such a Code could be based on the principles in Part 5 of the Uniform Civil Procedure Rules 1999 (Qld) or be similar to the Code of Conduct for Experts in Schedule 11 to the Supreme Court Rules 1970 (NSW).
32. This now brings me to the conduct of the body corporate in this matter generally, because that will be relevant to the question of the costs of the adjudication. The applicants first raised the question of a contribution schedule lot entitlement adjustment with the body corporate in July 2004. The body corporate did not obtain legal advice on this entitlement issue until 17 December 2004. That advice identified 3 options for the body corporate:

"1. Do nothing until such time as Eadeh pursues the matter.

2. Consider this advice and in the light of the advice attempt to determine, with the assistance of an expert whether the CSLE is just and equitable.
3. Appoint an expert to advise whether the current CSLE is just and equitable."

33. The body corporate choose option 1. The applicants allege that their July 2004 letter was acknowledged by the body corporate, but not replied to. Subsequently by a letter in July 2005 to all lot owners the applicants again raised this matter in the context of ever increasing levies, as well as a special levy (or proposal) to heat the pool. The terms of that letter are reasoned and reasonable, seeking a just solution without confrontation. While the objectives sought by the letter were not achieved the attitude of the body corporate chairman is clear from the terms of an e-mail he sent to "Noeline at Indigo Blue" on 18 July 2005. Those terms are confrontational and make no attempt to address the substantive issue.
34. In another e-mail on 8 August 2005 the applicants again sought to progress the matter with the chairman. Again that e-mail is very constrained and was focused on obtaining agreement to a number of matters (including the choice of a specialist adjudicator) relevant to a proposed application to the Commissioner for adjustment of the contribution schedule lot entitlements. The chairman’s response on 9 August 2005 was nominal and delaying. Further exchanges between the applicants and the chairman on 10 and 11 August 2005 are in a similar vane.
35. An exchange of letters and e-mails between the parties continued until November 2005 but their contents do not suggest that there was any genuine attempt on the part of the body corporate to deal with the issue of lot entitlements in a substantive way. Indeed, on one reading of the documents, the effect, intended or not, was to obstruct the applicants in their efforts to have the entitlements adjusted. Even when the body corporate commissioned its own report the objective was not to "seek justice and equity" but rather to contest the applicants.
36. The way the body corporate has handled this matter has put the applicants to considerable expense and inconvenience. No doubt the delay has also resulted in the applicants paying levies for a year or so at a higher rate than they would have paid had this application been made earlier and was successful.
37. Of course, the applicants could have made the application in July 2004 without even telling the body corporate and they may be criticized for not doing so. However, it is clear from the Commissioner’s file that they did not do this because they wanted to involve the body corporate in the process and generally "do the right thing".
38. It is clear to me that the conduct of the body corporate throughout this lengthy and sad process was totally inappropriate and stands in stark contrast to the conduct of the applicants.

Lot owner’s submissions

39. For completeness, I will now consider the lot owners’ submissions on the application. These submissions were similar in many respects and were much along the lines of submissions normally made in response to these types of applications. The main arguments put forward in opposition to the application were –

(a)	all lot owners were aware of their lot entitlements at the time of purchase and it is not fair that they should now be changed;
(b)	financial impact (which variously took the form of increased levies, diminished investment returns and diminished capital value of units);
(c)	units with better outlooks are more valuable and should pay higher levies; and
(d)	insurance costs should have been included in the expert reports.

40. The submission of one lot owner took issue with a number of the calculations and approaches in the Leary Report, but I was not persuaded to depart from the evidence of an expert in favour of an interested lot owner.
41. On the basis of the decision in the Centrepoint case, it is not open for me to consider the arguments in (a), (b) and (c) above. As regards the argument in (d) above, the Act and section 126(4) of the Module make provision for the materially significant insurance premiums to be collected in proportion to the interest schedule lot entitlements which, of course, are prima facie intended to be based on the respective values of the lots.

Findings

42. In this matter I therefore find as follows:

(a)	the applicants are the registered proprietors of lot 41 in the Scheme and, as such, are entitled to bring this application;
(b)	the current contribution schedule lot entitlements in the Scheme are not equal;
(c)	the current contribution schedule lot entitlements in the Scheme are not just and equitable;
(d)	there is nothing about how the Scheme is structured, the nature features and characteristics of the lots or the purposes for they are used, apart from those taken into account in the Leary Report, that is relevant to this application;
(e)	there are no special matters that need to be taken into account in respect of voting rights attaching to lots in the Scheme;
(f)	the GJ Consulting Letter and the GJ Consulting Report are not sufficiently reliable for me to take them into account as expert evidence in the matter and I therefore decline to take them into account; and
(g)	I accept the expert evidence in the Leary Report.

43. Pausing there for the moment, I have thought carefully about whether I should adjust the contribution schedule lot entitlements so that they are equal. This is because the difference between the highest expense allocation percentage and the lowest in the Leary Report is a mere 0.62%. At first glance this difference is so small as to justify adherence to the clear bias of the legislature towards equality. However, when one looks at the difference in dollar terms it will be noted that it is $1,388.69, or close to 20%. In view of that I also find:

(a)	it would not be just and equitable for the contribution schedule lot entitlements in the Scheme to be equal; and
(b)	the new contribution schedule allocations proposed by the applicants and supported by the Leary Report are just and equitable in the relevant circumstances of this particular scheme.

Proposed orders

44. I therefore propose to make an order adjusting the contribution schedule lot entitlements in the Scheme in accordance with the recommendations in the Leary Report.
45. That brings me to the question of costs of the adjudication. The applicants have sought an order that the body corporate pay one half of the costs of the adjudication. Section 280 of the Act provides:

"(1) This section applies to an application dealt with by specialist adjudication mentioned in section 265.
(2) Unless the adjudicator otherwise orders, the applicant is responsible for the costs of the adjudication."

46. In Cartwright [2006] QBCCMCmr 791 (11 April 2006) I canvassed some of the previous decisions in relation to costs of these adjudications. I endorsed the principle that in these applications the rule that "the costs follow the event" has no application and I adopted the approach taken by Specialist Adjudicator, Mr Stephen J English, in Harbour Side Resort [2005] QBCCMCmr 160 (23 March 2005) Mr English said that 3 things must be taken into account when considering whether or not to make an order for costs in favor of the applicant –

• Proven facts connected with or leading up to the adjudication
• Conduct of the parties in relation to the adjudication
• Success or otherwise of each party in attaining the relief sought

47. In this matter the applicants have proven their case and were successful in the relief they sought. Furthermore, the conduct of the body corporate that I have previously outlined was such that it is entirely appropriate in this case that it should bear the burden of the costs. I therefore propose to order the body corporate to pay the costs of the adjudication and to require the imposition of a special levy that relieves the applicants from having to contribute to those costs.

G F Bugden
Specialist Adjudicator

APPENDIX

(Table of existing and proposed allocations)

Leary Report GK Consulting Letter Recommendation
Lot Number Current Entitlement Recommendation Recommendation

1 798 27 27 25

2 854 24 23 22

3 765 24 23 22

4 798 27 27 25

5 517 23 23 21

6 407 21 20 19

7 506 23 23 21

8 517 23 22 20

9 407 21 20 19

10 506 23 22 20

11 528 23 22 20

12 417 21 20 19

13 517 23 22 20

14 539 23 22 20

15 426 21 20 19

16 528 23 22 20

17 550 23 22 20

18 440 21 20 19

19 539 23 22 20

20 561 23 22 20

21 444 21 20 19

22 550 23 22 20

23 572 23 22 20

24 454 21 20 19

25 561 23 22 20

26 583 23 22 22

27 1046 24 23 23

28 583 23 22 20

29 473 21 20 19

30 572 23 22 21

31 754 23 24 23

32 743 23 24 23

33 754 22 21 21

34 743 22 21 21

35 765 22 21 21

36 754 22 21 21

37 776 22 21 21

38 765 22 21 21

39 735 22 21 21

40 776 22 23 23

41 1177 25 34 46

42 1078 23 25 39

43 1078 23 25 39

44 825 24 27 40

Aggregates 28681 1002 998 (sic) 998