Body Corporate Levy increase Magic Mountain owner loses appeal to QCAT

The implications of The Body Corporate and Community Management Amendment Bill 2012, which was passed on March 19th 2013, have started to affect many owners who now face a significant Body Corporate Levy increase.

Owners have had to cope with the changes to legislation and various QCAT challenges over the last 10 years leaving many confused and upset over Body Corporate Levy increases that they cannot afford.

When the recent legislation was passed, some angry owners vowed to fight Body Corporate Levy increases with legal challenges.

It is important to note that the new legislation is not automatically applied. There is a process that owners must follow to ensure that changes to the Lot Entitlements are implemented. The first step is for an owner to ask the Body Corporate Committee to revert the levies in accordance with the legislation.

Some owners have already commenced the process. In one case, former 60 Minutes reporter, Ian Leslie successfully applied to have the levies at Magic Mountain Two reverted in accordance with the new legislation. Although this was a formality, many owners were obviously upset that they faced a Body Corporate Levy increase.

Mr Phillip Williams, another owner at Magic Mountain, challenged the reversion in an application to QCAT. (An interesting aside is that the QCAT judgment refers to the applicant as Phillip Williams in one reference and Paul Williams in another - probably an unfortunate error but it should be corrected!).

In the QCAT decision, Dr J.R.Forbes commented:
"Naturally, the applicant strongly opposes the effective reversal of the restoration of pre-July 2003 contributions that he secured in 2012. Plainly he regards the recently amended law as arbitrary and unfair. No doubt other unit holders felt the same when the former section 379 enabled one owner (perhaps among hundreds) to upset the existing scale of contributions. But these considerations do not entitle the Tribunal to disregard the present law."

The Application from Mr Williams was dismissed and the comments that were made suggested that the Application had little merit...
"The Tribunal has no jurisdiction to entertain the application for leave to appeal filed on 15 May 2013. Furthermore, the Tribunal has no jurisdiction to give advisory opinions or answer hypothetical questions, or to substitute its own policies for those of the legislature, or to anticipate changes that may or may not be made to the Act "later this year"."
"The applicant's case is not advanced by such extravagant rhetoric as "indefensible hypocrisy", "a conflicted ambiguous Act", "Iegislative thuggery" or vague and misconceived allusions to fair trading laws. I note that the Body Corporate does not press for costs on this occasion, but that is a future possibility that the applicant could usefully bear in mind."

There are indeed many owners who are horrified at the Body Corporate Levy increase while a smaller percentage of owners are delighted at the decrease in their levies.

Owners who are aggrieved at the changes to the legislation need to understand that the changes are now Law irrespective of how unfair they are perceived to be. Any challenge in regards to the levies must be in accordance with the Law and on very specific and limited grounds.

However, one owner pointed out that when he purchased his apartment the contract specified the Lot Entitlements. He feels that the new Law has not considered that original contracts may be breached by changing the Lot Entitlements.  Although he does raise an interesting point, I doubt that anyone would be able to use that to challenge the change in the Law.

Those who feel that the levies should revert to the original levies that were set by the Developers would be better off directing their feelings to the Queensland Government rather than QCAT.

There are probably more than enough owners who have been adversly affected by the new legislation and the Body Corporate Levy increase to have a real influence on the Goverment but they will not get anywhere unless they voice their opinions in large numbers.

Adjudicator Decides! ONE CENT UNDERPAYMENT OF Body Corporate LEVIES

Natalie Green unwittingly paid her levies one cent short. As a result, she was denied voting rights at an EGM. A dispute was lodged and an Adjudicator was required to rule on a one cent underpayment of Body Corporate levies.

Yes, it is hard to believe but I suppose that rules are rules. In his findings the BCCM Adjudicator, D.Toohey stated "It seems harsh for someone to be deprived of their vote just because they unwittingly underpaid their levies by a tiny amount. However, there is no discretion for a returning officer or an adjudicator to allow a vote to be counted when a body corporate debt is owing." (see decision here)

Well, I guess that must be right. The Act has to be followed to the letter of the law. The Adjudicator's hands are tied. After all the law is the law and there cannot be any flexibility.

But wait!

Wasn't there a ruling recently that dealt with how the Act should be interpreted? I'm sure I heard something about that. Ah yes, the QCAT decision in the appeal of Application Number APL 157-12 (29th January 2013).

Dr J.R.Forbes said that the Act could be taken "liberally" which means that the Act should not be taken "strictly". In other words, some flexibility should be shown.

He states that “if the legislation were at all times and in all circumstances applied with utmost rigour and most precious attention to detail, its objects and policy would be retarded by endemic disputation, rather than advanced.”

You really could be excused for thinking that D.Toohey, in ruling on this dispute has applied "utmost rigour and most precious attention to detail".  All over a One Cent underpayment of Body Corporate levies!

Well, I guess the Adjudicators will attempt to rationalise all of this. I know all of the arguments that they will use (like whether there was a material loss or gain at stake) but the fact is that one ruling says that the Act should be interpreted liberally while another says that it must be followed to the letter of the law.

Ultimately, I would actually prefer to see that the Act is interpreted to the letter of the Law. That way, everyone knows where they stand.

If you think this is an isolated case of a seemingly contradictory ruling then I'm afraid you are mistaken. I will look at more contradictions in Adjudicator's rulings in future articles.

The opinions expressed in this article are personal commentaries and not intended in to be legal advice in any way. I have spent many years participating on a number of different Body Corporate Committees and provide an owner’s perspective on Body Corporate issues.

If you have any concerns or comments about any of the issues that are raised in these articles please use the form below to contact me.

Body Corporate Levies Merry Go Round

First published Dec 6, 2012

I see that the Queensland Parliament Legal Affairs and Community Safety Committee has recommended yet another major change in the way that Body Corporate levies are set. The Body Corporate Levies Merry go Round continues. 

Rather than go into great detail about how these changes may be achieved, let me sum up the situation as it has unfolded over the years.

Traditionally, the developer has set the levies for Body Corporate buildings. The levies were often based and calculated on factors like floor space and the value of the units.

It is important to understand that owners were aware of the levies at the time of purchase and it follows that they accepted them to be fair and reasonable. After all, if they thought the levies were unfair why would they go ahead and make the purchase?

QCAT DECISION: BCCM Act should be read liberally!

A recent decision from QCAT is yet another indication that the BCCM Act, which regulates Body Corporate Communities, is becoming more irrelevant than ever. The QCAT member who ruled on the matter stated that BCCM Act should be read liberally - ie not taken strictly.

In his decision for the appeal of Application Number APL 157-12 (29th January 2013), Dr J.R.Forbes made a number of comments that only serve to weaken the Act and and the enforcement of regulations.

Dr Forbes describes the BCCM Act as a "lengthy, technical and complex instrument" and goes on to say that committee members cannot be expected to be experts in understanding and determining the rules and regulations. He fails to mention that Committees can rely on Body Corporate Managers to provide advice as required and that the Commissioner for Body Corporate has a help line to assist owners who have questions concerning the Act.

He states that "if the legislation were at all times and in all circumstances applied with utmost rigour and most precious attention to detail, its objects and policy would be retarded by endemic disputation, rather than advanced." 
In other words, a loose interpretation of the Act will result in less disputes.

He continues by comparing the BCCM Act with the Corporation Act 2001 noting that some sections of the Act could be construed "liberally" using the example that the invalid appointment of a director or the failure to assemble a quorum could be excused if there is no substantial injustice.

He argues that the BCCM Act should also be interpreted "liberally" and similar irregulaties or breaches could also be excused.

The reality is that many Bodies Corporate do not take the BCCM Act seriously at all. In fact, many Committees ignore it altogether.

The Commissioner for Body Corporate and the BCCM Act itself are reactionary instruments rather than being proactive. The Commissioner only acts when disputes are lodged. The process of lodging disputes is so time consuming and daunting that the majority of owners will reluctantly just accept breaches of the Act.

There are a huge number of Body Corporate Communites in Queensland. Many have issues that should be addressed but the actual amount of disputes that are lodged is miniscule in relation to the number of Body Corporate Communities.

The fact is that the Office of the Commissioner for Body Corporate is not logistically capable of handling "endemic disputation" irrespective of whether the disputes are justified or not. They do not have the staff to handle huge numbers of disputes.

One way of discouraging disputes is to interpret the legislation "liberally" which would inevitably result in many applications being dismissed.

Dr Forbes also affirmed that it is acceptable for committees to retrospectively resolve and ratify past irregular conduct (see my article on the original Application). This opens up a huge can of worms. It alows committees to bend and manipulate the rules at will secure in the knowledge that a dispute is unlikely anyway.

The BCCM Act is rapidly becoming a dinosaur - close to extinction. Dr Forbes is correct in saying that it is a complex document but there is no point in having legislation if it is rarely enforced and largely ignored by many.
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The opinions expressed in this article are personal commentaries and not intended in to be legal advice in any way. I have spent many years participating on a number of different Body Corporate Committees and provide an owner’s perspective on Body Corporate issues. For more visit my AboutMe page If you have any concerns or comments about any of the issues that are raised in these articles please use the form below to conta