New Farm Village [2006] QBCCMCmr 5 (4 January 2006)

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

APPLICANT: GUISEPPE ROBERTIELLO, GLORIA ROBERTIELLO, GILBERTO MAGGIOLO AND ANTONIO BOSSO

RESPONDENT: BODY CORPORATE FOR NEW FARM VILLAGE COMMUNITY TITLES SCHEME 16207

ORDER OF THE SPECIALIST ADJUDICATOR

After reading the application, the submissions made on behalf of the Applicant, the Respondent, various lot owners and the supporting materials, I order as follows:

1. That the Contribution Schedule Lot Entitlements for the Body Corporate for New Farm Village Community Titles Scheme 16207 be adjusted to the recommended schedule as set out in Table 5 of Part B to the report of Leary and Partners Pty Ltd dated 14^th November 2005. A copy of the recommended contribution schedule is attached to this order.
2. That the Respondent shall within three months from the date of receipt of a copy of this order prepare and register with the Queensland Land Registry of the Department of Natural Resources and Mines a new Community Management Statement to give effect to the adjusted contribution lot entitlements.
3. That the Applicant pay the costs of the application and this order as follows:

a) the sum of $4,400.00 to the Adjudicator;
b) reimbursement of the Respondent Body Corporate for the cost of obtaining the report of Leary and Partners Pty Ltd dated 14^th November 2005.

RESPONDENT: BODY CORPORATE FOR THE NEW FARM VILLAGE COMMUNITY TITLES SCHEME 16207

Background

The Applicants lodged a Dispute Resolution Application on 5^th May 2004 ("the Application") pursuant to the provisions of sections 238 and 239 of the Body Corporate and Community Management Act 1997 ("the Act"). On 24^th May 2004 the Application was amended pursuant to the provisions of section 245 of the Act.

"Adoption of a new contribution lot entitlement scheme as contained in the report of Solutions in Engineering".

I was named as the specialist adjudicator in the Application and this was confirmed by the Commission for Body Corporate and Community Management on 31^st August 2004 when the Commissioner referred this Application to me for adjudication.

By interim adjudication dated 12^th April 2005 I advised the parties that I was not in a position to make a final adjudication and that before I could make such an adjudication a final report needed to be prepared by Solutions in Engineering Pty Ltd.

I am instructed that the Respondent Body Corporate subsequently engaged Leary and Partners Pty Ltd to prepare a final report and that Solutions in Engineering Pty Ltd was no longer trading. On 13^th December 2005 I received a copy of the report of Leary and Partners Pty Ltd dated 14^th November 2005.

I have received no further submissions from the Respondent or Applicants or any of the lot owners subsequent to my interim adjudication.

Inspection

I have attended at New Farm Village for an onsite inspection on 16^th May 2005 and in the course have interviewed the body corporate secretary and the cleaning contractor. My particular concern was to ascertain the extent to which the following costs should be weighted towards the commercial lots:

I also wished to ascertain how certain costs involving the car parks and intercom system should be dealt with as far as studio unit owners where concerned as those lots did not have car park usage and no need to access the commercial entrance.

Report of Leary and Partners Pty Ltd

The report of Leary and Partners Pty Ltd is comprehensive. In my opinion it addresses the central issue, namely, that the legislation - section 48(5) of the Act - provides that the respective lot entitlements for the contribution schedule should be equal except to the extent to which it is just and equitable in the circumstances for them not to be equal.

It also addresses the issues which concerned me on inspection relating to cleaning costs, waste removal and Lots 8 to 12.

I note that Leary and Partners Pty Ltd have excluded Lots 9 to 12 from any basement related expenditure and Lots 8, 16 and 17 have been excluded from costs associated with the security shutter and the security enclosure fence.

With respect to waste removal it is obvious to me that the commercial lots produce more rubbish than the residential lots. It appears though that things have been sorted out with Brisbane City Council so that a standard waste collection occurs three times per week. I agree that the cost of waste collection can be apportioned equally so long as the commercial lots are paying for a separate service and are not generating a level of waste for the rest of the complex that results in a need for additional collections at additional cost. This will need to be kept under review.

The report analizes in depth the administrative costs and the sinking fund costs. The analysis is far more detailed than that in the original Solutions in Engineering report. There has been a focus on the areas of concern raised in the submissions by residential owners and this has produced a recommended entitlement schedule which is weighted marginally more towards the commercial lots than the recommended schedule of Solutions in Engineering.

Leary and Partners Pty Ltd conclude that it is just and equitable that the respective lot entitlements not be equal. Further the report concludes that the current contribution schedule for New Farm Village cannot be justified. A recommended contribution schedule is put forward in Part B: Table 5.

In my opinion the report has been prepared consistently with the principles laid down in the case of Fisher and Others v Body Corporate for Centrepoint Community Title Scheme 7779 which is the leading case authority in Queensland. In my opinion the recommendations of Leary and Partners Pty Ltd should be adopted by the Body Corporate.

This will result in an increase in contributions by residential lot owners above present contribution. However the methodology of Leary and Partners Pty Ltd cannot be seriously challenged and the legislature has intended such results by virtue of the clear wording of section 48(5) of the Act.

Submissions based on amenity and valuation

A number of submissions were made by lot owners relating to the impact that any variation of the contribution lot entitlement schedule may have on the value of properties owned by lot owners and the financial impact that may be imposed on lot owners by the change. Unfortunately, the decision in Fishers case makes it clear that these issues are to be disregarded.

Adjudication

I am in agreement with the approach of Leary and Partners Pty Ltd. I find that the extent to which it is just and equitable for the lot entitlements not to be equal is the extent detailed in the report of Leary and Partners Pty Ltd.

In terms of costs of this Application, section 280(2) provides that unless I otherwise order the Applicant is to be responsible for the costs of the adjudication. I see no reason to make any order otherwise and so the Applicant is to meet the costs of my adjudication which will be $4,400.00. I acknowledge receipt of the sum of $4,400.00 from the Applicant as security for these costs.

In my letter of 5^th May 2005 to the Body Corporate Manager I ordered that the cost of obtaining the report of Leary and Partners Pty Ltd should be to the account of the Body Corporate at that point in time. I also left it open for either party to make submissions to me as to whether the Body Corporate should be reimbursed for this cost. I did not receive any submissions on this point. Notwithstanding this I see no reason why the Applicant should not reimburse the Body Corporate for the cost of obtaining the report of Leary and Partners Pty Ltd as this is a cost of the adjudication.

For the reasons expressed above, I make the following orders:

Dated this day of January 2006

___________________
Bernard McGowan
Specialist Adjudicator

To: Body Corporate for New Farm Village Community Title Scheme 16207 C/- Premier Body Corporate Management, PO Box 184, Kedron Q 4031

And To: Guiseppe Robertiello, Gloria Robertiello, Gilberto Maggiolo and Antonio Bosso C/- Café dell Ugo, 693 Brunswick Street, New Farm Q 4005

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a)	That the contribution schedule lot entitlements for the Body Corporate for New Farm Village Community Title Scheme 16207 be adjusted to the recommended schedule set out in the report of Leary and Partners Pty Ltd dated 14^th November 2005. A copy of the schedule is attached to this order.
b)	That the Respondent shall within three months from the date of receipt of a copy of this order prepare and register with the Queensland Land Registry of the Department of Natural Resources and Mines a new community management statement to give effect to the adjusted contribution lot entitlements.
c)	That the Applicant pay the costs of the Application and this order as follows:

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

New Farm Village [2006] QBCCMCmr 5 (4 January 2006)