Albert Lodge [2025] QBCCMCmr 235 (8 July 2025)

Body Corporate and Community Management (Standard Module) Regulation 2020 (Standard Module)

ADMINISTRATOR - whether to appoint an administrator to a scheme that is without a body corporate committee or body corporate manager, unable to comply with an adjudicator's order, and failing to address significant deterioration of the common property.

Act, s 301; Standard Module, ss 162(2), 180(1); Land Title Act 1994, s 49C(4).

1. Mr Michael Kleinschmidt of Bugden Allen Group Legal is appointed administrator of Albert Lodge CTS 9640 for four months to carry out the following tasks:
   1. engage a contractor by 2 September 2025 in compliance with Albert Lodge [2025] QBCCMCmr 186
   2. obtain quotations to remedy the defects that engage the body corporate's statutory maintenance obligations in PASG Projects' Defects Inspection Report of 18 March 2024, and
   3. prepare and conduct a general meeting to elect a body corporate committee and vote on at least the following:
      1. a motion to engage a body corporate manager
      2. motions to select quotations to repair the defects identified by PASG Projects
      3. as required, motions to raise funds by special levy or loan in relation to the repairs to lot 4 and the defects identified by PASG Projects, and
      4. any other motions submitted by owners prior to a date to be advised by Mr Kleinschmidt.

1. Mr Kleinschmidt shall have all powers of the committee and its executive members necessary to carry out these tasks, in addition to powers to:
   1. take out a loan on behalf of the body corporate to engage a contractor to repair the termite damage to lot 4
   2. levy special contributions against owners to meet all costs of the administration, and
   3. waive or cancel any such special levies.
2. Mr Kleinschmidt's appointment shall be in accordance with his letter of consent of 29 May 2025.

• [1] As set out in the interim order,[1] Mr McGrane of lot 8 says the entire body corporate committee at Albert Lodge resigned on 2 April 2025 because their body corporate manager obtained insurance that did not provide office bearer indemnity, which they felt exposed them to unacceptable personal risk. Albert Lodge's body corporate manager subsequently resigned on 2 June.
• [2] Mr McGrane is concerned that this "management gap" risks "operational and financial instability and eventually collapse" and undermines the body corporate's ability to comply with an adjudicator's order of 2 June requiring it to repair termite damage to lot 4.[2] He seeks the appointment of an administrator for three months to:

(1) arrange repairs of defects which are preventing indemnity insurance being acquired,

(2) secure appropriate Office Bearer Indemnity insurance,

(4) carry out the adjudicator's orders in relation to repairs to Lot 4, and

• [3] An administrator is appointed where a body corporate is too dysfunctional to run its own affairs in compliance with statutory requirements.[3] It is typically done on the least intrusive terms possible, consistent with the notion that bodies corporate should generally be self-managing.
• [4] At the interim stage, I accepted that an administrator was likely to be necessary to see a new committee elected and ensure compliance with Adjudicator Archer's order. I pointed out that office bearer indemnity insurance is not a statutory requirement though. Nor is a body corporate manager. No details of the defects that were said to be preventing the body corporate from obtaining officer bearer's indemnity insurance had been given at that stage, so I was unsure whether they were evidence of further dysfunction warranting the appointment of an adjudicator.
• [5] Mr McGrane has now submitted a Defects Inspection Report of 18 March 2024 by PASG Projects that found:

The condition of the building is assessed as being in poor condition, with a large number of the defects being cause due to guttering which does not appear to comply with Australian Standards, rotting cladding and damage to Soffits.[4]

• [6] Albert Lodge was created under a building format plan of subdivision, with the external elements of the buildings common property.[5] That includes the elements mentioned by PASG Projects above. The photographs in the report show substantial deterioration that plainly puts the body corporate in breach of its duty to maintain the common property in good condition.[6]
• [7] Mr McGrane refers to "a staged repair program...rather than getting all defects repaired at once". But the body corporate has "a strict duty to maintain and keep in repair", and "there has been a breach of the...duty as soon as something in the common property is no longer operating effectively or at all, or has fallen into disrepair".[7] The body corporate cannot gradually restore the common property over years. It must raise the funds it requires from owners to meet its liabilities and bring itself back into compliance with the law.[8]
• [8] Mr McGrane proposed the appointment of Michael Kleinschmidt of Bugden Allen Group Legal as administrator on terms set out in a letter of 29 May 2025. Four other lot owners made submissions in response (of a total of nine lots). Three supported the application. The owner of lot four discussed the difficulty they have experienced trying to have the body corporate repair the termite damage to their lot, but did not clearly take a position on the application. No one raised any concerns with the proposed administrator or argued that an administrator was not required.
• [9] I wrote to Mr McGrane to seek Mr Kleinschmidt's consent to a three month appointment with the powers of the committee and its executive members necessary to:
  1. engage a contractor on behalf of the body corporate by 2 September in compliance with Adjudicator Archer's order of 2 June
  2. obtain quotations to remedy the defects to common property, or defects that otherwise engage the body corporate's maintenance obligations, set out in the PASG Projects Defects Inspection Report of 18 March 2024, and
  3. call and conduct a general meeting to appoint a committee and vote on motions to appoint a body corporate manager and repair the above defects.
• [10] I also proposed empowering Mr Kleinschmidt to implement a special levy to raise any funds necessary to engage a contractor to repair lot 4.
• [11] Mr Kleinschmidt replied that he was concerned the appointment would be too short, and he expressed reluctance to attempt to engage a contractor without body corporate funds on hand. He suggested granting a term of at least four months and the power to take out a loan on behalf of the body corporate to pay the contractor.
• [12] I invited the other owners to comment on those proposals. The three owners who had made submissions in support of the application also supported these amendments. Another owner who had not yet commented on the application opposed appointing Mr Kleinschmidt at all due to the expense.
• [13] I accept that three months is a tight timeframe to carry out the required duties. Three months is typically given to call and hold a general meeting only, without the additional maintenance tasks that are required in this case.
• [14] I also accept that a body corporate loan would make it easier to engage a contractor to repair lot 4 by 2 September as required. A special levy introduces delay while the levy is paid, and uncertainty about whether and when it will be.
• [15] I am unmoved by the submission opposing the administrator appointment due to cost, as the owner did not claim there is no need for an administrator and did not propose anyone cheaper. I have accepted that Albert Lodge is dysfunctional and (in the absence of a body corporate committee) unable to save itself. I cannot now refuse to appoint an administrator to correct matters.
• [16] I will appoint Mr Kleinschmidt for four months with the duties and powers discussed.

[1] Albert Lodge [2025] QBCCMCmr 190.

[2] Albert Lodge [2025] QBCCMCmr 186.

[3] Surace V Commisso [2009] CCT KA002-09 at [44].

[5] BUP 5561; Land Title Act 1994, s 49C(4).

[6] Standard Module, s 180(1).

[7] Newton DCJ, MAGOG (NO. 15) Pty Ltd v The Body Corporate for the Moroccan [2010] QDC 70 at [83]- [84].

[8] Standard Module, s 162(2).