Plains Junction 1 [2006] QBCCMCmr 489 (31 August 2006)

Last Updated: 19 December 2006

Office of the Commissioner for Body Corporate and Community Management SPECIALIST ADJUDICATION (Adjustment of Lot Entitlements) Number: 0417A-2006 Applicant: HANS HECHT AND ANOTHER Respondent: BODY CORPORATE FOR PLAINS JUNCTION 1 COMMUNITY TITLES SCHEME 23700

O R D E R
31 August 2006

ORDER that the contribution schedule lot entitlements in community titles scheme 23700 be adjusted so that an allocation of one (1) is made to each lot, with an aggregate of 8.

G F Bugden OAM
Specialist Adjudicator

Office of the Commissioner for Body Corporate and
Community Management

SPECIALIST ADJUDICATION
(Adjustment of Lot Entitlements)

Number: 0417A-2006

Applicant: HANS HECHT AND ANOTHER



Respondent: BODY CORPORATE FOR PLAINS JUNCTION 1

COMMUNITY TITLES SCHEME 23700

DETERMINATION
31 August 2006

Application

1. This is an application under Chapter 6 of the Body Corporate and Community Management Act 1997 ("Act") for an order adjusting the contribution schedule lot entitlements in community titles scheme 23700 ("Scheme") in accordance with section 48 of the Act.

2. The applicants are the owners of lot 3 in the Scheme and the body corporate is automatically the respondent by virtue of section 48(2) (a) of the Act. Another owner may also elect to be joined as a respondent to the application (vide section 48(2) (b) of the Act) but no such election has been made for this application.

3.	The body corporate, although officially the sole respondent, has not sought to oppose the application.

The Scheme

4.

The Scheme, which has 8 lots, came into existence on 27 October 1994 when group titles plan 100743 was registered under the Building Units and Group Titles Act 1980. The Scheme and the body corporate were transitioned to the Act when the Act commenced. As was the requirement back in 1974, the lot entitlements were determined with reference to the respective values of the lots, as follows:

Lot 1 213

Lot 2 100

Lot 3 243

Lot 4 50

Lot 5 80

Lot 6 60

Lot 7 50

Lot 8 32

Aggregate 828

5.	When the Scheme was transitioned to the Act the lot entitlement schedule was replicated into 2 new schedules, the contribution lot entitlement schedule and the interest lot entitlement schedule. Both of those schedules are currently the same as each other and the same as the original schedule designated in the group titles plan.
6.	The application seeks to have the contribution schedule lot entitlements adjusted so that they are all equal, with an aggregate of 8. No change is sought to the interest schedule lot entitlements, which are intended to reflect the respective values of the lots. Presumably, they still effectively do that.
7.	The Scheme relates to a commercial development that has been integrated into a much larger commercial precinct. Each lot in the Scheme substantially comprises a warehouse. Six of those warehouses share a common or party wall and 2 are independent buildings. The common property includes:
(a)	extensive driveways and parking areas;
(b)	extensive landscaping and gardens, paving, external fencing and retaining walls;
(c)	communal lighting; and
(d)	retaining walls and fencing to part of the Scheme perimeter.

Legal principles

8.

For the application to succeed the applicants must, in effect, prove that the demand made by each lot on the services and amenities provided to them by the body corporate is substantially equal and that there are no other relevant matters that would make it just and equitable for the contribution schedule lot entitlements to be other than equal.

9.

This arises from sub-sections 48(4)(a) and (5) of the Act which require the contribution schedule lot entitlements to be equal "except to the extent to which it is just and equitable in the circumstances for them not to be equal". In turn, section 49 of the Act sets the criteria for deciding what is just and equitable circumstances. The following matters are specifically referred to in sub-section (4) –

"(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."

10.

However, section 49(2) says that the matters a court or specialist adjudicator may take into account are not limited to the matters in section 49. Despite the apparent scope for discretion in the section, the Queensland Court of Appeal in Fisher & Ors v. Body corporate for Centrepoint community titles scheme 7779 [2004] QCA 214 effectively restricted consideration to the principles I have already enunciated.

Evidence

11.	In support of the application the applicants submitted an expert’s report from Leary & Partners Pty Ltd, a firm of quantity surveyors, dated 24 April 2006 ("Report"). The Report was actually prepared by Leary & Partners Pty Ltd on behalf of the body corporate, which previously tried to get the agreement of lot owners to a voluntary adjustment of the contribution schedule lot entitlements.
12.	The Report analyses the various expenses of the body corporate to determine whether they should be borne equally by the lot owners or otherwise. Although it identified some minor possible variation in usage of common facilities and services among the lots, it concluded that –
(a)	the current contribution schedule, on the relevant principles, cannot be justified; and
(b)	an equal allocation of contribution schedule lot entitlements among the lots can be justified.
13.	In addition to the Report, there are submissions from 2 lot owners. The main points raised in those submissions were:
(a)	the knowledge and understanding that owners had when they purchased their units;
(b)	the use of some areas (particularly car parking), although legally permitted and physically possible, did not occur to any significant extent in practice; and
(c)	the larger warehouses used as showrooms attract a greater need for and use of car parking.
14.	Legally, I cannot take the point made in (a) into account. In relation to (b), entitlement to use is the relevant criteria rather than actual use. The point referred to in (c) is a relevant circumstance. I have taken it into account, but have decided that the potential extent of greater use is not significant enough to warrant a departure from the principle of equality.

Findings

15.	My findings are:
(a)	there is a dispute between the applicants and the respondent;
(b)	the applicants are entitled to bring this application;
(c)	the contribution schedule lot entitlements in the Scheme are not equal;
(d)	the contribution schedule lot entitlements in the Scheme are not just and equitable within the meaning of section 49 of the Act;
(e)	the equal contribution schedule lot entitlements proposed in the application are just and equitable within the meaning of section 49 of the Act;
(f)	there is nothing about the Scheme or the way the lots are used that needs to be taken into account in respect of this application, other than matters relating to demand on services and resources provided by the body corporate, being matters properly taken into account in the Report; and
(g)	there is nothing about voting entitlements that otherwise impact on the equal contribution schedule lot entitlements proposed by the application.
16.	I propose to make an order that the contribution schedule lot entitlements be adjusted so that each lot has an entitlement of 1 and that the aggregate be 8.

G F Bugden OAM

Specialist Adjudicator