Body Corporate of Tradition v Body Corporate of Coomera Waters [2013] QCAT 220

CITATION: Body Corporate of Tradition v Body Corporate of Coomera Waters [2013] QCAT 220 PARTIES: The Body Corporate of Tradition Community Title Scheme 32885 (Applicant) v The Body Corporate of Coomera Waters Community Titles Scheme 29693 (Respondent) APPLICATION NUMBER: OCL110-11 MATTER TYPE: Other civil dispute matters HEARING DATE: 9 April 2013 HEARD AT: Brisbane DECISION OF: Dr J R Forbes, Member DELIVERED ON: 9 April 2013 DELIVERED AT: Brisbane ORDERS MADE: 1. The lot entitlement interest schedule for Coomera Waters Community Titles Scheme 29693 shall be adjusted so that the respective lot entitlements recorded in the Community Management Scheme be as shown in the Schedule to the decision made herein on 9 April 2013. 2. The Body Corporate for Coomera Waters Community Titles Scheme 29693 shall act as quickly as practicable to lodge a request to record a new Community Management Statement incorporating the adjustments ordered. 3. The Applicant’s application for costs is dismissed. 4. The Respondent’s application for costs is dismissed, save and except the costs of its application, filed on 16 August 2012 for liberty to file and serve an amended response. 5. The Respondent’s application for costs of the application filed on 16 August 2012 is adjourned. -- 1 of 6 -- 6. The Applicant is at liberty to file and serve submissions in response to the application mentioned in Order 5, above, by 4 pm on Wednesday 24 April 2013. 7. The said application shall be determined on the papers, not before 25 April 2013. CATCHWORDS: OTHER CIVIL DISPUTE MATTERS - Body Corporate and Community Management Act 1997 – adjustment of interest schedule lot entitlements – application of market value principle – uncontested expert evidence for applicant – order for adjustment accordingly, as per Schedule – costs of interlocutory application – whether indemnity costs should be awarded Queensland Civil and Administrative Tribunal Act 2009, s 32, s 100, s 102 Body Corporate and Community Management Act 1997, s 47A, s 48 Harburg v Body Corporate Management for Riparian Apartments [2010] QCAT 421, cited Higham v The Body Corporate for the Palms 3 Warana [2011] QCAT 21, cited McLennan v Body Corporate for Waterview Terraces [2010] QCAT 458, cited Vyncan Pty Ltd, Hartley v Body Corporate for Nautilus on the Esplanade CTS 683 [2009] QCCTBCCM 30, cited APPEARANCES and REPRESENTATION (if any): This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (QCAT Act). REASONS FOR DECISION [1] This is an application by Ralph Anthony Brunt, on behalf of the Applicant (“Tradition”), under the Body Corporate and Community Management Act 1997 (“BCCMA”) for adjustment of an interest schedule lot entitlement.1 Tradition is a subsidiary of the Respondent (“Coomera”). The application was filed on 10 August 2011, and is governed by the amendments to the BCCMA which came into effect on 14 April 2011. 1 See for examples Harburg v Body Corporate Management for Riparian Apartments [2010] QCAT 421; McLennan v Body Corporate for Waterview Terraces [2010] QCAT 458. -- 2 of 6 -- History [2] This matter first came before me on 23 January 2012, when I found that Tradition had produced no expert evidence in support of its claim. Instead of dismissing the application on that ground2 I adjourned the proceedings to allow proper evidence to be obtained, ordering that - The Applicant is at liberty to file and serve upon the Respondent, within forty two (42) days of service of these orders upon it, a relevant market determination by a duly qualified valuer. [3] On 6 February 2012 the time for Tradition’s compliance with that order was extended from forty two (42) to forty nine (49) days. [4] On 21 February 2012 time was extended, by consent, to 31 July 2012. [5] On or about 20 June 2012 Tradition served upon Coomera, and filed in the Tribunal, copies of a market valuation of the subject lots, dated 24 May 2012, and prepared by Mr Ashley Forbes3 AAPI, certified practising valuer, of the firm LandMark White (Gold Coast) Pty Ltd. [6] On or about 7 August 2012 Coomera requested Tradition to allow an extension of time for delivering Coomera’s response to Mr Forbes’ valuation. [7] On 14 August 2012 Tradition refused that request. [8] On 16 August 2012 Coomera applied for liberty to file and serve a response to the Forbes report by 30 September 2012. [9] On 27 August 2012, as a matter of natural justice, I granted that application. [10] On 18 September 2012 Coomera filed and served submissions by its solicitors, and an affidavit of Peter Anthony Urquhart Hunt, sworn on 14 September 2012. Those documents include an application for indemnity costs.4 Tradition’s originating application also seeks certain costs, which I shall consider in due course. Tradition’s Submissions: the Forbes Report [11] For some unknown reason Tradition’s valuation and Coomera’s response were not referred to me until 5 April 2013. [12] Mr Forbes has produced a current market value assessment5 of the 527 freehold lots comprised in the principal body corporate (Coomera) for the purpose of calculating interest schedule lot entitlements (“ILSEs”). That report 2 As in Vyncan Pty Ltd, Hartley v Body Corporate for Nautilus on the Esplanade CTS 683 [2009] QCCTBCCM 30; Higham v The Body Corporate for the Palms 3 Warana [2011] QCAT 21. 3 I should perhaps record that Mr Forbes is not a relative of mine, and we have never had dealings with each other. 4 Submissions of Coomera dated 17 September 2012 page 3, paragraph 12. 5 As prescribed by BCCMA s 46B. See Forbes report page 4, “Valuation Methodology”. -- 3 of 6 -- appends the valuation of lots 1-527 that is reproduced in the First Schedule to this decision. Tradition comprises 16 of those lots; none has a waterfront aspect. [13] I accept that Mr Forbes is qualified to express the opinions and make the assessments contained in his report. [14] Mr Forbes states that he inspected every lot, researched comparable sales, and examined relevant survey and exclusive use plans, as well as town planning documents. [15] He offers the following “market comments”: The Global Financial Crisis has seen a significant reduction in the availability of credit ... As a result, there has been a reasonably steady decline over the last three to four years in the price points that have been achieved for both vacant lots and houses in the subject estate. ... Due to the large sizes of the vast majority of the subject lots ... combined with the estate’s part waterfront nature and its body corporate structure, the subject estate could not be labelled as providing “affordable” product. As such, it has perhaps suffered more than other residential or integrated estates on the Gold Coast. The developer of the estate’s parent company [was] placed into voluntary administration on 6 May 2009 [resulting] in a significant and immediate reduction in the estate’s marketing and operational budget. In the three years that have elapsed, the estate has essentially been in “caretaker mode”, with only matters that needed urgent attention actioned. 6 Coomera’s Submissions [16] Coomera does not consent to the substantive application. Its reasons for that position are succinct: Section 47A(1) of the [BCCMA] requires a resolution without dissent to change the lot entitlements included in a scheme, and [Coomera] has not passed a resolution without dissent. 7 [17] That submission would be not only succinct, but also pertinent, if Tradition were applying under section 47A of the BCCMA for an adjustment of contribution schedule lot entitlements by resolution without dissent. But in fact this is an application to the Tribunal8 for an adjustment of interest schedule lot entitlements under section 48.9 Interest schedule lot entitlements are used, inter alia, for the purpose of calculating shares of local government rates and charges10, whereas contribution schedule lot entitlements govern, for example, a lot owner’s share of body corporate expenses and the value of his or her vote on ordinary resolutions. [18] It follows that the Forbes report, which I accept, is effectively undisputed. I shall make appropriate orders with respect to the interest schedule lot entitlements for Coomera, as Principal Body Corporate 1, and Tradition. 6 Forbes report page 4. 7 Submissions dated 17 September 2012 page 2, paragraph 8. 8 BCCMA s 48(1)(b). 9 Application filed 10 August 2011 Part C Item 1; Forbes report page 1, paragraph 1, line 2. 10 A matter of immediate concern to the Tradition unit holders: Application filed 10 August 2011 Annexure B paragraph 3(2)ff. -- 4 of 6 -- Tradition’s Application for Costs [19] Tradition applies for its costs of this adjustment, and the costs of the proposals for adjustment prepared by Piper Alderman, solicitors, on 15 July 2011. In the absence of any contrary provision in the BCCMA, the application is governed by the QCAT Act.11 No reason is given for departing from the primary rule, that each party bear its own costs. The application is dismissed. Coomera’s Application for Costs [20] In view of my substantive decision in this case, I need only consider Coomera’s application for costs of the application for leave to file submissions in response to the Forbes report. On that account Coomera seeks indemnity costs in the amount of $688.60.12 Before I decide this particular application it is proper that I give Tradition an opportunity to respond to it. I shall order accordingly. ORDERS: 1. The lot entitlement interest schedule for Coomera Waters Community Titles Scheme 29693 shall be adjusted so that the respective lot entitlements recorded in the Community Management Scheme be as shown in the Schedule to the decision made herein on 9 April 2013. 2. The Body Corporate for Coomera Waters Community Titles Scheme 29693 shall act as quickly as practicable to lodge a request to record a new Community Management Statement incorporating the adjustments ordered. 3. The Applicant’s application for costs is dismissed. 4. The Respondent’s application for costs is dismissed, save and except the costs of its application, filed on 16 August 2012 for liberty to file and serve an amended response. 5. The Respondent’s application for costs of the application filed on 16 August 2012 is adjourned. 6. The Applicant is at liberty to file and serve submissions in response to the application mentioned in Order 5, above, by 4 pm on Wednesday 24 April 2013. 7. The said application shall be determined on the papers, not before 25 April 2013. 11 QCAT Act ss 100, 102. 12 See Coomera’s submissions filed 18 September 2012, paragraph 18. -- 5 of 6 -- -- 6 of 6 --