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Noosa Harbour [2008] QBCCMCmr 389 (24 October 2008)

Last Updated: 6 November 2008


BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997


DISPUTE RESOLUTION APPLICATION 0691-07


APPLICANT: PRESSURE DROP PTY LTD


RESPONDENT: BODY CORPORATE FOR NOOSA HARBOUR

COMMUNITY TITLES SCHEME 11159


CO-RESPONDENT: PETER HARRIS


ORDER OF SPECIALIST ADJUDICATOR


Made on 24th day of October 2008


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

(a) that the Contribution Schedule Lot Entitlements for the Body Corporate for Noosa Harbour CTS 11159 be adjusted to the schedule as set out in Attachment A to this Order;

(b) That the Respondent shall within sixty days 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 Water a new Community Management Statement to give effect to the adjusted contribution lot entitlements.

___________________
Bernard McGowan
Specialist Adjudicator



ATTACHMENT "A"


CONTRIBUTION SCHEDULE LOT ENTITLEMENTS
FOR BODY CORPORATE FOR NOOSA HARBOUR CTS 11159


LOT NUMBER NEW CONTRIBUTION
LOT ENTITLEMENT FOR
EACH LOT

1 149

2 140

3 144

4 144

5 144

6 144

7 144

8 144

9 144

10 144

11 144

12 144

13 140

14 149

15 144

16 140

17 140

18 144

19 138

21 144

22 140

23 140

24 144

25 150

26 143

27 146

28 146

29 146

30 146

31 146

32 146

33 146

34 146

35 146

36 146

37 143

38 150

40 148

41 142

42 142

43 148

44 148

45 142

46 142

47 148

48 150

49 142

50 146

51 146

52 146

53 146

54 146

55 146

56 146

57 146

58 146

59 146

60 142

61 150

62 148

63 142

64 142

65 148

66 148

67 142

68 142

69 148

70 140

71 164

TOTALS 10,006



BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997


DISPUTE RESOLUTION APPLICATION 0691-07


APPLICANT: PRESSURE DROP PTY LTD


RESPONDENT: BODY CORPORATE FOR NOOSA HARBOUR

COMMUNITY TITLES SCHEME 11159


CO-RESPONDENT: PETER HARRIS


REASONS FOR DECISION OF SPECIALIST ADJUDICATOR


Background


  1. The Applicant lodged an Adjudication Application on 24 August 2007 (“the Application”) pursuant to the provisions of section 239 of the Body Corporate and Community Management Act 1997 (“the Act”).
  2. The outcome sought by the Applicant is as follows:

"An order that the lot and interest entitlements be varied in favour of the owner of Lot 71.


The Body Corporate record a new community management statement reflecting the change to the lot and interest entitlements within three months of the date of any order".


  1. The Applicant is the owner of Lot 71 in the Noosa Harbour complex.
  2. Noosa Harbour is a three level resort complex containing four separate freestanding structures that comprise a total of 66 residential lots, three commercial lots, basement undercover and open parking facilities and various recreational facilities.
  3. By letter dated 2 September 2008 I was appointed by the Commissioner for Body Corporate and Community Management as the Specialist Adjudicator for the purposes of determining the Application.
  4. Although the Application seeks variation to the lot and interest entitlements, upon my appointment, I have clarified with the Applicant's solicitors that the Applicant in fact is now only seeking a variation to the contribution lot entitlements. The material supporting the Application does not address a variation to the interest entitlement schedule in any event.
  5. Under section 48(1)(a) of the Act, I have power as a Specialist Adjudicator to determine an application for the adjustment of a lot entitlement schedule. Under section 48(2) of the Act, the Respondent to the Application is the Body Corporate. Any other owner who elects to do so, may also be joined as a respondent in the Application.
  6. A copy of the Application has been circulated to all of the lot owners in advance of my appointment. Only one other lot owner has formally sought to be made a respondent to the Application, namely, Peter Harris, as owner of Lot 24. A large number of lot owners have lodged submissions however.
  7. I have been provided with a large volume of material by the Commissioner including copies of:
  8. The Application itself was supported by a report by Mr Tim Sheehan of Stewart Silver King & Burns Strata Consulting dated 15 January 2004. This report submitted relevantly as follows:
  9. Subsequent to the lodgement of the Application, submissions were received from the following:
  10. A reply from the Applicant to the above lot owners submissions was received dated 8 August 2008.
  11. In terms of the costs of this adjudication, agreement has been reached that those costs are to be divided equally between the Applicant and the Respondent.

Statutory Provisions


14. The Act regulates this Application.


15. Section 48(1) of the Act states:


“The owner of a lot in a community titles scheme may apply:


(a) under chapter 6, for an order of specialist adjudicator for the adjustment of a lot entitlement schedule”.

16. Section 48(5) of the Act states:


“The order of the specialist adjudicator or CCT must be consistent with:


(a) if the order is about the contribution schedule, the principle stated in sub section (6)”.

17. The principle stated in sub section 48 (6) is as follows:


“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. Section 49 of the Act provides the criteria for deciding just and equitable circumstances. Those matters which a specialist adjudicator may have regard to are set out in section 49(4) and include:
  2. Other matters may be taken into account (section 49(3)). The matters which a specialist adjudicator may not have regard to are set out in section 49(5).

20. Section 46(7) of the Act which was inserted in 2003 states:


“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”.


  1. The explanatory notes accompanying the introduction of Section 46(7) stated, in effect, that the fundamental concept was that usually all lot owners are equally responsible for the cost of upkeep of common property and for the running costs of the community titles scheme unless it can be demonstrated that it is just and equitable for there to be any inequality. The notes further state that costs should be borne in proportion to the benefit obtained and not in proportion to the unit’s value. An example is provided where a basic scheme has a range of lot sizes. In this case the contribution schedule will be equal despite the differences in lot sizes unless particular lots had features like private lifts or swimming pools.
  2. Section 46(7) relates to schemes where development approval is given after 2003. It is intended to give direction to developers when setting lot entitlements. On the other hand, section 48 deals with alteration of lot entitlements for all schemes regardless of when they are established. The explanatory notes accompanying section 46(7) are, however, helpful extrinsic evidence as to the Parliament's intention in relation to adjudications under section 48 as section 48(6) uses similar wording.

Case Law


  1. The leading authority in relation to section 48 of the Act is Fischer and Ors v Body Corporate for Centrepoint Community Titles Scheme (“Centrepoint”). This decision has been referred to in the report of Messrs Linkhorn and Simpson. The report of Stewart Silver King & Burns was prepared prior to the Court of Appeal handing down its decision in this case although reference is made in the report to the case at first instance.

24. In the Court of Appeal decision in Centrepoint Justice Chesterman stated:


“Although the Act gives no clear indication one way or the other, the preferable view is that a Contribution Schedule should provide for equal contribution by apartment owners, except in so far 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 the Body Corporate to the respective apartments, or their contribution to the costs incurred by the Body Corporate... What is at issue is the “equitable” distribution of the costs”.


  1. In his decision, Justice Chesterman made reference to the explanatory notes which accompanied the amendment to the Act in 2003 and also the second reading speech when the Bill for it was debated. These materials, as his Honour observed, make it clear that the Parliament's intention was that as far as possible the numbers in the contribution schedules are to be equal and that costs should be borne in proportion to the benefit derived and not in proportion to a unit's value.
  2. Centrepoint involved a community titles scheme which incorporated exclusively residential lots.
  3. Centrepoint essentially puts the focus on the impact that the individual lots make upon the costs of operating and running the scheme. This same enquiry, in my opinion, must be made regardless of whether the scheme is one containing residential lots, one containing commercial lots or one containing a combination of both.
  4. None of the decisions which have been handed down in this area have suggested that section 48 of the Act does not apply to non residential or mixed schemes.
  5. In the case of Sandhurst Trustees Limited v Condah Bay Investments Pty Ltd (2003) QDC 438, for example, the District Court considered an application to adjust contribution schedule entitlements in a complex involving 10 commercial lots and 200 residential lots. The 10 commercial lots had contribution entitlements more than twice that which would have applied if the equality principle prevailed.

Robin QC DCJ, in considering section 49 of the Act, stated:


“In my opinion, the new provision (section 49) reinforces what has been the principle all along, that some positive justification must be shown before departing from equality. I think it is inherent that equality is taken to be a 'just and equitable' arrangement, even if, the assumption is difficult to justify”.


  1. Each side in that case engaged experts and largely the experts reached common ground as to the methodology to be adopted. The Respondent in that case agreed that the commercial lot contribution entitlements were excessive but disagreed about the extent of the reduction required. The Applicant was arguing for a greater reduction than the Respondent. Both sides contended for an outcome which was closer to equality of contribution lot entitlements than what appeared in the original plan.
  2. Robin QC DCJ stated that he had seriously considered whether the outcome of the Application should be equal lot entitlements, in accordance with "the strong legislative policy favouring equality". In the end he took the view that it was pointless to embark on any detailed resolution of the differences between the two experts. He preferred a “broad brush approach” rather than one which focused too closely on the last dollar or percentage point. He said that it must be accepted that “the exercise that the Court embarks on is necessarily a rough and ready one. There is much scope for arguments as to which lot owners benefit from particular facilities and services”.
  3. Another case where no differentiation was made between mixed and non mixed schemes is Franklin & Ors v Body Corporate for La Porte D'Or [2004] QDC 154.
  4. The Centrepoint decision has been universally adopted in the large number of adjudications which have followed the decision. It has also been adopted judicially. Most recently this has been in the decision of Woodley & Anor v The Proprietors of Quay West CTS 16610 [2006] QDC 277. In that case, Forde DCJ stated that it was not permissible to calculate expenses by reference to the floor area of a unit unless it could be shown that the unit contributed disproportionately to body corporate expenses. In that case his Honour was dealing with a complex where there was disagreement as to the apportionment of expense items such as cleaning of common areas, common area electricity costs, airconditioning costs, repairs and maintenance of garage doors, fire sprinklers, emergency generator and replacement of floor coverings in common areas. It was contended that these items should be dealt with other than by way of equal contribution. The Judge rejected this treatment, finding that there was insufficient evidence to treat the distribution of these costs other than on an equal basis.

Expert Reports


  1. Two expert reports have been prepared. The first by Stewart Silver King & Burns and dated 15 January 2004 and has been produced in support of the Application. This was prepared for the owners of Lot 71 at the time. The Respondent Body Corporate has engaged Linkhorn & Simpson to prepare a report which is dated 26 November 2007. The reports arrive at conclusions which are not markedly different.

35. Stewart Silver King & Burns state in paragraph 11 that:


"To comply with the principle in the BCCMA for the calculation of lot entitlements in the contribution schedule, it is necessary to identify any just and equitable circumstances requiring a departure from the allocation of costs equally between each lot."


36. Their report then divides costs as follows:


  1. The report accurately observes that the lot referred to as 71A containing an area of 194 square metres is an exclusive use area and that the owner of Lot 71 is required to keep 71A in good and substantial repair with all cleaning, maintenance and repair at its cost.
  2. The report considers that the contribution schedule should be adjusted in the manner contained at paragraph 14.
  3. Linkhorn & Simpson have adopted the methodology suggested in Centrepoint. The report states at paragraph 6.6:

"... it is essential for any proposed change to the building's current contribution schedule of lot entitlements to create an equality of contributions, unless it can be determined for it not to be equal, and to this extent, any inequality must be only to the extent that it is just and equitable in the circumstances for there to be an inequality".


  1. Linkhorn & Simpson have undertaken an analysis of the Body Corporate's annual budgeted expenses. Each of the individual budget lines was analysed and given a percentage value calculated in proportion to the respective administrative or sinking budget tables. A division was then undertaken and costs were allocated as follows:
  2. They have reviewed the report of Stewart Silver King & Burns and consider that this report has used a similar procedure for calculating the proposed schedule of contribution lot entitlements (paragraph 7.15). They have also reviewed this report having regard to the fact that it was prepared in 2004 and that it was possible that the body corporate information used in the report may be out of date. They have accordingly considered the updated budgets and information.
  3. The conclusion has been reached that a new contribution lot entitlement schedule in the terms compiled in the table attached to the report was just and equitable. Subsequently the table contained in the report was shown to contain some calculation errors and a revised table was submitted on 27 February 2008 remedying these errors.

Respondent's Submissions


  1. The Respondent Body Corporate, through the lawyers for the committee, Teys Legal lodged a submission on 1 July 2008. That submission relevantly referred to the decision in Centrepoint and submits that the contribution schedule lot entitlements must be adjusted to comply with the provisions of the Act and the reasoning contained in Centrepoint. To this end, the committee submits that the schedule should be adjusted to that table prepared by Linkhorn & Simpson dated 27 February 2008.

Co Respondent's Submissions


  1. Mr Peter Harris (Unit 24) lodged a detailed initial submission which was supported by Heather Spooner (Unit 69) and A J Wetherell (Unit 22). The submission is summarised by Mr Harris as follows:

"It is largely the relativities between residential and commercial units which is at the crux of this matter. A secondary issue is the relativity between beachfront and roadside units in their upkeep and consuming of common resources affecting the expenditure of the body corporate."


  1. Mr Harris refers to the Centrepoint decision and submits that it is distinguishable because of the differentiation in this complex comprising residential and commercial units. I do not accept that submission for the reasons previously enunciated at paragraphs 27-32. In my opinion the principles espoused in Centrepoint apply equally to mixed schemes.
  2. Mr Harris submits that section 46(7) of the Act does not apply to this scheme. That is accepted by me. Although the scheme was established in 1981, the Body Corporate is now governed by the Act. The transitional sections in Divisions 3 and 5 Chapter 8 Part 1 of the Act makes this clear. This Application is made under section 48 of the Act and section 48(6) is the prevailing section. Section 48(6) applies to schemes in existence prior to the commencement of section 46(7). It does not apply, as is submitted by Mr Harris, only where development approval is given after the commencement of the Act.
  3. Mr Harris, in the alternative, submits that it is just and equitable for the contribution lot entitlements to be different and to take into account different purposes such as residential and commercial. In this regard he submits that in considering what is just and equitable reference must be had to:

The length of time that the present schedule has been in place is not a relevant consideration. The other two points are relevant.


  1. In terms of the impact that the individual lots made upon costs of operating and running the scheme, Mr Harris makes a submission that beachside units should be allocated a rating of 100, second and third floor roadside units a rating of 66 and the ground floor units on the roadside a rating of 33. He sets out several reasons for this:

I do not accept that this factor can be apportioned between units in any meaningful way other than by allocating expenditure for support and shelter purposes according to floor area.


(b) Higher costs in maintaining beachside units due to their exposure to the elements.

Each of the experts have allocated this expenditure based on each lot's percentage of floor area. As the purpose of the buildings is to provide support and shelter to the lots, I do not see any reason to vary this methodology.


(c) Excessive gardening costs for certain units.

Landscaping benefits the whole of the complex and the costs should be equally divided between lot owners in my view.


(d) Unit 71 has a substantial exclusive use area which adds to the body corporate costs of upkeep.

This exclusive use area is governed by a exclusive use by-law. Under that by-law the owner is obliged to maintain this area. Therefore there should not be an impost on body corporate expenditure. To the extent that the body corporate does provide capital repairs this is considered by me to be just and equitable given that the owners of lots have the right at all times to pass over the exclusive use area.


(e) Numbers of occupants in particulars units which thereby impact on body corporate resources.

To the extent that this is a relevant consideration, it is adequately adjusted by apportioning support and shelter expenses on a floor area basis.


(f) There are other considerations which have been submitted which are not permissible considerations for me, such as roadside units being subject to easy theft by passers-by, ground floor roadside units being referred to as "the dungeon" by past onsite management and Unit 70 being the management unit receiving a remuneration for its activities.
  1. Mr Harris also wrote to me on 21st September 2008 stating that his submission was supported by widely different historical expenditures between the different types of units, particularly between the ground floor garden/street units and the river side ground floor units. He pointed to the sliding doors to the river side ground floor units being completely replaced with new doors whereas the doors on the street side ground floor units were simply repainted.
  2. Mr Harris provided supporting detail to this submission under cover of his letter of 6th October 2008. Relevantly it was submitted:

a) expenditures by the Body Corporate on balustrades had been disproportionate amongst different units;

b) there had been greater expenditure for external paving of the riverside ground floor units;

c) front doors of riverside units had been replaced on one occasion due to greater wear and tear due to being adjacent to the river;


d) sliding aluminium doors to the ground floor riverside units had been replaced but on the street side the doors had only been repainted;


e) gardening maintenance was higher in relation to the areas adjacent to the riverside units;


f) roof repairs and structural foundation works had been undertaken in relation to Unit 71 the costs of which were much higher than the other units.


  1. In considering this submission I have noted that both of the experts have looked at the financial records of the complex across a time range. Stewart Silver King and Burns, in paragraph 10.2, have referred to the list of historical and budgeted expenditure for the administrative fund and sinking fund compiled in the working paper appendix. Each expenditure item in that appendix has been allocated a typical yearly expenditure figure and from there the appropriate contribution entitlements have been calculated. This report predates most of the expenditures referred to in Mr Harris' submission.
  2. In the case of Linkhorn and Simpson, they have reviewed the Body Corporate's statements of income and expenditure by line item for the period from 1st May 2004 through to 31st January 2008 (paragraph 3.3) and have undertaken an analysis of the typical administrative fund and annualised sinking expenses to arrive at their recommended schedule (paragraph 8.10). This analysis has considered the expenditures referred to in Mr Harris' submission.
  3. It is an obvious point to state that there will be occasions when Body Corporate expenditures are greater in relation to infrastructure supporting some units as opposed to others. However there can be a variety of reasons why this is so and not all reasons support the proposition that the units in which higher expenditures have occurred are solely because of the call of those units upon the Body Corporate resources. For example, there may be issues of defective construction or manufacture in certain infrastructure. Defective construction does appear to have played a part in the need for structural works for Unit 71.
  4. Special mention needs to be made of the sliding aluminium doors as Mr Harris has referred to a cost of replacement of these doors at $485,056.00. Forty two aluminium doors in all were replaced. However I have confirmed that whilst the Body Corporate paid the total amount of the contract not all of the doors were the responsibility of the Body Corporate. In fact twenty eight doors were the responsibility of the individual owners and the Body Corporate received reimbursement from those twenty eight Lot Owners.
  5. The appropriate way to apportion the expenditures of the nature referred to by Mr Harris such as the balustrades, front doors, aluminium doors and roof repairs and structural foundations is to analyse the historical expenditures to determine whether these are ongoing wear and tear type maintenance expenditures. Once this is determined it is then appropriate to apportion expenditures according to each Lot's area percentage as the expenditures are for support and shelter. Each expert has adopted this approach.
  6. Paving and Gardening Maintenance expenses benefit the whole of the Complex and should be apportioned equally between all Lot Owners.

Lot Owner Submissions


57. There were a large number of lot owner submissions.


58. Dr and Mrs Searle in Unit 58 support the analysis of Stewart Silver King & Burns.


  1. Mr and Mrs Ross submit that there is something inequitable in the current arrangement on body corporate charges. They believe that the lot entitlement schedule should be adjusted having regard to usage possibilities, size and use of common property. They do recognise the fundamental principle that the starting point is that all expenses should be shared equally unless it is just and equitable for the contribution not to be equal. However, they do not make any forceful argument for adjustment one way or the other in relation to the expert reports.
  2. Mr Pryor (Unit 49) has lodged a submission which is supported by several other lot owners, namely, B V Wedge (Unit 16), J C Bruxner (Unit 43), I and L Knights, G D and R Olsson (Units 26 and 27) and William Gair (Unit 21). This objection considers that allowance must be made in respect of the higher usage of common facilities by the medical centre including its carpark allocation. The submission is that due to the larger floor area, the medical centre should have a greater weighting in its contribution level. The submission further refers to the inequity that the proposal would place on the roadside unit owners. As can be seen from the case law and intrinsic materials I have referred to floor area by itself is not indicative of the weight of contribution allocation. To the extent that it is, the approach of the two experts is correct, namely, to allocate costs based on floor area towards support and shelter costs. Other factors referred to by Mr Pryor including lower values for the roadside units, lower occupancy rates and rental returns and the commercial returns generated by the Medical Centre have been ruled out as relevant considerations in the precedent cases that have been decided.
  3. Larkfield Estate Pty Ltd has lodged a submission against the Application but has not provided any reasoning other than that the majority vote at the AGM should stand as final.

62. N R L Little (Unit 7) has opposed the Application on two grounds:


(a) The commercial return generated by the business in Lot 71. I cannot consider this ground under section 48(6).

(b) The size of Lot 71 and the entitlement to the large exclusive use area justifies a larger contribution obligation. The correct approach to this objection is, as each expert has done, namely, to apportion support and shelter costs according to floor area ratio. Ongoing maintenance and repair costs in the exclusive use area are the responsibility of the owner of Lot 71 under the exclusive use by-law and therefore are excluded from any contribution weighting consideration as the Lot 71 owner separately meets such expenses.
  1. Elizabeth Palmer supports the submission of Mr Pryor but adds a submission which is entirely based on the differences in value between certain units. This is not a relevant consideration under section 48(b) of the Act following the reasoning of Chesterman J in Centrepoint.
  2. Mr and Mrs Butler (Unit 29) do not consider that the expert reports provide an equitable, fair and reasonable solution. They recognise that there needs to be some adjustment but object to the significant decrease in the unit entitlement for Lot 71 and the significant increase in the unit entitlement for the roadside unit owners. They refer to the significant advantages which Unit 71 enjoys. They also state that the roadside unit owners do not equally share the benefits of the riverfront owners referring to rental return, property values and amenity issues. The decided cases clearly establish that these factors cannot be regarded by me in this adjudication in terms of what is just and equitable.
  3. Mr and Mrs Sully (Unit 44) and Mr Sully (Unit 70) have submitted that the lot entitlements should reflect usage by occupants according to the size, position and appeal of the units. I have commented on similar submissions to this effect above.
  4. Mr and Mrs Breen (Unit 63) support the submission of Mr Pryor and that of Mr and Mrs Butler and point to the inequity associated with roadside owners and in particular, one bedroom unit owners, having to pay increased fees due to the adjustments suggested in the expert reports.
  5. Mr and Mrs Sargeant (Unit 2) support the submission of Mr Pryor and suggest that a compromise put forward by Robin Garnsworthy should be adopted.
  6. Mr and Mrs Gerrish (Unit 67) also supported the compromise suggested by Robin Garnsworthy. They suggest that maintenance costs should be attributed according to wall or floor area and also refer to the commercial disadvantages that will occur if the contribution lot entitlement schedule is altered in the manner suggested by the experts.
  7. Mr and Mrs Benecke (Unit 19) consider that the two expert reports are still unfair and not just and equitable. They think lot entitlements should reflect the respective market values of the lots and that unit entitlements should be based on facts such as area, size and location. These matters are not relevant to my adjudication except in relation to area where apportionment of some costs such as support and shelter related costs should be based on an area basis. They also mention that there are some incorrect calculations in the floor areas of units 19 and 71. Upon review I agree that the calculation of floor area in the Linkhorn & Simpson report for unit 19 is wrong. The report states the area to be 39 square metres whereas it is in fact 49 square metres. The area for Lot 71 is correct at 202 square metres. Mr and Mrs Benecke further submit that lot entitlements for Lot 71A have not been addressed. As previously stated Lot 71A is an exclusive use area only which does not attract lot entitlements and proper allowance has been made for this.
  8. As a result of the submission of Mr and Mrs Benecke relating to the correct calculation of floor area for Unit 19, I requested Messrs Linkhorn & Simpson to review their schedule.

Adjudication


  1. It is evident from the material that an adjustment to the contribution lot entitlement schedule should be made. This, no doubt, will be perceived to be unfair by the individual lot owners, particularly those owners of ground floor roadside units. However, the Parliament has made it abundantly clear that, as far as possible, lot entitlements should be equal. This principle has been supported by the Court of Appeal in Centrepoint and has been followed in adjudications and case law since.
  2. I have declined to follow the submissions of the lot owners or the Co-Respondent except to the extent detailed above.
  3. The two experts engaged – Stewart Silver King & Burns and Linkhorn & Simpson – have each prepared reports which have followed the principles laid down in the legislation as interpreted by the Court of Appeal. The conclusions which have been reached are largely the same and I cannot dispute the methodology used in either case. There is scope for disagreement between experts over how or whether particular owners benefit from particular facilities and services without it affecting the credibility of the expert's approach.
  4. I accept that the Linkhorn & Simpson report has been prepared almost four years after the Stewart Silver King & Burns report and has specifically addressed the possibility that some of the information used in that report may be out of date. It is therefore appropriate for me to prefer the Linkhorn & Simpson report for that reason principally.
  5. This finding is subject to one qualification as a consequence of the submission of Mr and Mrs Benecke pointing to the incorrect floor area relating to unit 19 in the Linkhorn & Simpson report. I have requested an updated schedule to be prepared. This was done on 10 September 2008.
  6. I find that the present contribution lot entitlement schedule is not equal and is not just and equitable. An equal lot entitlement schedule would not be just and equitable. The extent to which it is just and equitable for the lot entitlements not to be equal is the extent detailed in the revised schedule prepared by Linkhorn and Simpson dated 10 September 2008 at my request.

77. For the reasons expressed above I make the following orders:


(c) that the Contribution Schedule Lot Entitlements for the Body Corporate for Noosa Harbour CTS 11159 be adjusted to the schedule as set out in Attachment A to the accompanying Order;

(d) that the Respondent shall within sixty days 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 Water a new Community Management Statement to give effect to the adjusted contribution lot entitlements.
  1. Mr Harris has submitted that I should disturb the agreement which has been reached between the Applicant and the Respondent regarding equal sharing of the costs of this adjudication. I don’t have power to do this. That agreement has been reached as a prerequisite to referral for specialist adjudication under section 264(i)(c) of the Act.

Dated this 24th day of October 2008


___________________
Bernard McGowan
Specialist Adjudicator


To: Pressure Drop Pty Ltd

C/- McCormick Lawyers

PO Box 880
NOOSA HEADS QLD 4567


And to: Body Corporate for Noosa Harbour
C/- Teys Legal (Attention Ros Janes)
GPO Box 5256
BRISBANE QLD 4001


And to: Peter Harris

PO Box 8033

RIVETT ACT 2611


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