Amphora [2025] QBCCMCmr 218 (20 June 2025)

EXPENDITURE - whether committee meeting motions approving expenditures on a gift and reimbursement for a social function were invalid.

Act, ss 94(1), 94(2), 100(5); Accommodation Module, ss 157(1), 159(1), 159(2)

1. I hereby order that the resolution passed outside a committee meeting on 13 August 2024 approving the expenditure for a travel voucher as a gift was, at all times, invalid.
2. I also order that Motion 3 resolved at the committee meeting on 15 August 2024 was, at all times, invalid.
3. I further order and declare that the body corporate must not use body corporate funds to pay for gifts or social functions.
4. This application is otherwise dismissed.

• [1] This application is about the body corporate committee's decisions to use body corporate funds to pay for a gift and a farewell function for an outgoing caretaker. The applicant argues body corporate funds are not permitted to be used for gifts and social functions. The body corporate submits its decisions were acceptable, made unanimously and in good faith.
• [2] The applicant seeks the following final orders:

I seek that the Committee be found to have unlawfully spent the owners' funds on gifts and party.

That their original motions to approve expenditures are ruled unlawful.

That the Amphora Body Corporate refrain from carrying out similar expenditures in the future.

That any subsequent orders be required to be published to all owners regardless of findings.

• [3] Amphora community title scheme 32930 (Amphora) is a 111-lot scheme and common property in Palm Cove. The community management statement (CMS) shoes the Accommodation Module applies. The scheme is registered as building format plan 146401.
• [4] The applicant is the owner of Lot 411. The respondent is the body corporate for Amphora.

• [5] On 13 August 2024, the body corporate committee made the decision to gift a $1,000 travel voucher (the Gift) to the outgoing caretaker. The Gift was given to the caretaker at a farewell function held that evening (the Function).
• [6] On 15 August 2024, the committee decided to reimburse the chairperson $1,710 for expenses related to the Function.
• [7] On 5 September 2024, the applicant sent an email to the body corporate stating that while he supported a send-off for the caretaker, neither the Function nor Gift should not have been paid for with body corporate funds. The applicant further referred to two adjudicator's orders stating that body corporate funds could not be used on social functions.
• [8] On 28 September 2024, the applicant requested the committee consider the following motions:

That the motion to spend $1,000 on a gift for the former manager be rescinded and all expended funds are repaid to the Body Corporate.

That the motion to reimburse the Chairman for the party expenses be rescinded and all expended funds are repaid to the Body Corporate.

• [9] The minutes for the committee meeting held on 30 October 2024 recorded that neither of the applicant's motions were carried.
• [10] On 6 January 2025, the parties attempted conciliation but the matter was referred back to the Commissioner as an agreement was not reached.
• [11] On 17 January 2025, the applicant lodged the current application.

• [12] The Commissioner invited the body corporate and all owners to make a submission on the application.[1] The body corporate and the owners of 59 other lots made submissions. The applicant elected to obtain copies of the submissions and replied to them.[2] The Commissioner then referred the application to departmental adjudication.[3]
• [13] I have investigated the application, including reviewing the application, the submissions, the reply and the current CMS.[4]

• [14] The orders sought relate to a dispute between the applicant and body corporate regarding the spending of body corporate funds. As such, I am satisfied the dispute falls within the dispute resolution provisions of the legislation.[5]
• [15] An adjudicator may make an order that is just and equitable in the circumstances to resolve a dispute about a claimed or anticipated contravention of the Act or CMS, or about the exercise of rights or powers or performance of duties under the Act or CMS.[6] An order may require a person to act, or prohibit a person from acting, in a way stated.[7] An order may contain ancillary and consequential provisions the adjudicator considers appropriate.[8]
• [16] Section 227 of the Act provides a list of the combination of parties to an application that can be determined under the dispute resolution provisions. When the owner of a lot is one of the parties in an application, the other party can only be the owner or occupier of another lot, or the body corporate itself.[9] This means owners of a lot, such as the applicant, cannot bring an application against individual committee members, the committee, a body corporate manager or a caretaker. In this matter, the body corporate itself is nominated as the respondent party.

• [17] I have summarised the grounds within this application as follows:
  1. The committee was not permitted to authorise expenditures for gifts or social functions.
  2. The expenses for the Function were only approved after the event.
  3. The committee had sufficient time and evidence to rescind its decision but did not.

• [18] I have summarised the body corporate's submissions as follows:
  1. The caretaker had gone above and beyond for Amphora for 11 years, providing a significant benefit and contribution.
  2. The committee's decisions approving the expenditure for the Gift and Function were unanimous and were made in good faith.
  3. The committee were advised by their strata manager that the Gift and Function were acceptable, were not outside any rules or regulations and "the Act was silent".
  4. The chairperson recalled contacting the BCCM who "threw a different light on the story".
  5. The committee was not happy to pay the costs for the Gift and Function out of their own pockets back to the body corporate.
• [19] 59 other lot owners provided submissions in relation to this application. 7 submissions were in support of the application, while 52 were in support of the body corporate. The majority of submissions provided by lot owners spoke highly of the work undertaken by the caretaker.
• [20] The submissions in support of the application stated that, while they supported a gift and farewell function for the caretaker, these should not and could not be paid for by body corporate funds.
• [21] The submissions in support of the body corporate stated that they approved of the body corporate's decision to spend body corporate funds on the gift and farewell function. I note some owners acknowledged the legislation prohibited body corporate funds being spent on gifts and social functions but supported the decision as a "one off".

• [22] In response to the submissions, the applicant replied that the issue was not about whether the caretaker had done good work or deserved a gift or farewell function, but whether these could be paid for by body corporate funds.

• [23] The issue in question is whether the body corporate was permitted to spend body corporate funds on the Gift and Function for the caretaker.
• [24] I will review the relevant provisions regarding the expenditure of body corporate funds. I will then consider the motions approving the relevant expenditures and determine whether the spending for the Gift and Function contravened these provisions.

• [25] Section 94(1) of the Act states the body corporate must:

(a) administer the common property and body corporate assets for the benefit of the owners of the lots included in the scheme; and

(b) enforce the community management statement (including enforcing any by-laws for the scheme in the way provided under this Act); and

(c) carry out the other functions given to the body corporate under this Act and the community management statement.

• [26] The Act further requires the body corporate to act reasonably when undertaking the above functions.[10]
• [27] Section 157(1) of the Accommodation Module requires the body corporate to establish and keep an administrative fund and a sinking fund. The sinking fund is to be applied towards spending of a capital and non-recurring nature, the periodic replacement of major items of a capital expenditure and other spending that should reasonably be met from the capital.[11] All other spending of body corporate funds must be met from the administrative fund.[12]
• [28] An example of costs to be met from the sinking fund would be the costs to replace or repair a broken portion of fence on the common property. Meanwhile, the costs to pay for body corporate insurance would be met from the administrative fund.

• [29] The minutes for the committee meeting on 15 August 2024 recorded the ratification of the decision to purchase the Gift on 13 August 2024. The minutes also recorded that Motion 3 of the meeting was to reimburse the chairperson for the costs involved for the Function. This motion was also carried.
• [30] It has not been argued, nor is it evident on the material before me, that the motions were invalid for any reason other than that body corporate funds could not be used to pay for the Gift or Function. As such, I will limit my considerations to whether body corporate funds can be used for expenses related to the Gift and Function.
• [31] In the matter of Edgecliffe Apartments, Adjudicator Schmidt stated:[13]

Body corporate funds may only be used for the administration of the body corporate and the maintenance of property pursuant to budgets approved annually by the body corporate. Section 139 of the Standard Module describes the purpose of the administrative fund and the sinking fund and the spending which may be made from each. It has been held that even where the idea is a popular one, that bodies corporate may not, for example, use body corporate funds for a Christmas Party. The same considerations apply here. There is nothing in the body corporate's functions at section 94(1) of the Act, or elsewhere in the legislation, that would make it responsible for donations to a surf life-saving club or sponsorship of any equipment it uses. This expenditure does not relate to the administration of the common property or body corporate assets, the enforcement of the CMS, or any of the items that are to be included in the administrative or sinking fund budgets. Consequently, I am not satisfied that it is a permissible use of body corporate funds.

• [32] I note this position was also taken in the matters of Kensington Gardens Retirement Village[14] and Pivotal Point Residential[15] where the adjudicators confirmed that body corporate funds could not be used to pay for Christmas functions.
• [33] The body corporate submitted the expenditures for the Gift and Function were made in good faith, were unanimous and that the caretaker had provided a significant benefit and contribution to Amphora for 11 years. The majority of the submissions provided by the lot owners in support of the body corporate made similar arguments. However, there is no evidence before me to support that these expenditures fell within the scope of what body corporate funds are permitted to be spent on as prescribed by section 94(1) of the Act.
• [34] Concerningly, several of the submissions provided by other lot owners acknowledged the decision was not permitted by the Act and expressed their approval regardless, with some describing they approved the decision as a "one off". I consider this justification to be thin and misconceived, particularly given such a position carries the potential to result in further disputes where similar invalid decisions are supported by members of the body corporate.
• [35] In the absence of any evidence to support why the expenditures for the Gift and Function could be paid for with body corporate funds, I concur with the previous adjudicator's decisions. As such, I am satisfied the motions approving these expenditures were invalid.

• [36] As I am not satisfied the expenditure of body corporate funds on the Gift and Function was valid, I will consider whether it is warranted to grant the relief sought by the applicant in their requested orders.

• [37] The first order sought is that the committee be found to have unlawfully spent owners' money on gifts and a party. However, I note there are some circumstances as stated below where money may be obtained from lot owners voluntarily by committee members and spent on social functions and gifts.[16] However, as discussed above, any money that comes from, or forms part of, body corporate funds may not be used on social functions or gifts.
• [38] Further, given the second order sought more appropriately relates to the validity of spending body corporate funds on gifts and social functions, I do not consider it necessary to grant the first order sought in these circumstances.

• [39] The second order sought by the applicant is that the motions approving the spending of body corporate funds on the Gift and Function are invalid. While the body corporate is the respondent in this application, the Act states "a decision of the committee is a decision of the body corporate".[17]
• [40] As I am satisfied the motions approving the spending of body corporate funds on the Gift and Function are invalid, I consider it appropriate to make an order accordingly.

• [41] I do not consider it appropriate to grant the third order sought by the applicant that the monies be repaid to the body corporate. The respondent in this matter is the body corporate and to grant the third order sought would amount to ordering the body corporate to pay itself the relevant amount of money. As such, I do not consider it practicable to grant this order in these circumstances.

• [42] In determining whether to grant the fourth order sought by the applicant, I have considered the matter of Daish v Body Corporate for Birchgrove CTS 100 regarding orders about hypothetical future disputes.[18] Member Forbes stated it was not within the adjudicator's jurisdiction to make an order regarding parties not involved in the proceedings to deal with hypothetical future disputes and that their declaration and order had provided all the relief that could be provided in that matter.[19] It has been found that declaratory relief should not be granted if the question is purely hypothetical, if the relief sought related to matters that had not occurred and might never happen, or if the declaration would have no foreseeable consequences for the parties.[20]
• [43] It is not in dispute that body corporate funds were used to reimburse the expenditures for the Gift and Function. The committee submitted that, after receiving the applicant's emails expressing their concerns, they sought clarification from the BCCM. The committee also submitted their strata manager advised the expenditures were appropriate on both occasions.
• [44] The evidence before me indicates there is a foreseeable risk that body corporate funds could be similarly spent inappropriately on gifts and social functions, particularly given the amount of submissions from lot owners approving the expenditures despite knowing it was not permitted under the Act and the conflicting advice received by the committee.
• [45] I am satisfied on the evidence before me that the matter is not purely hypothetical, the relief sought by the order relates to relevant matters that have, in fact, occurred and a declaration prohibiting the use of body corporate funds on expenses related to gifts or social functions would have a foreseeable consequence. As such, I consider it appropriate to order and declare that the body corporate is prohibited from using body corporate funds on expenses related to gifts or social functions.

• [46] I do not consider it appropriate in the circumstances to grant the fifth order sought that any subsequent orders be published to all owners regardless of findings. I consider that "any subsequent orders" to be broad and ambiguous and I am not satisfied that the applicant has established that such an order would be just and equitable in the circumstances.

• [47] I am not satisfied on the evidence before me that the motions approving the spending of body corporate funds on the Gift and Function were valid. Further, the evidence before me indicates there is no likelihood of recovering the funds spent on the Gift and Function, except in the event that the body corporate itself were to lodge an application against the chairperson and outgoing caretaker. I also consider making an order solely finding the motions approving the expenditures to be invalid will have limited effect should similar issues arise in the future, of which the evidence before me suggests is possible. As such, I consider it appropriate and necessary to order and declare that the body corporate is prohibited from using body corporate funds on expenses related to social functions and gifts. This extends to the prohibition of reimbursement with body corporate funds for incurred expenses related to social functions and gifts.
• [48] As stated above, I do not consider it appropriate in the circumstances to grant the orders sought that the committee spending the funds was unlawful, that the monies spent on the Gift and Function be repaid to the body corporate or that all future orders to be distributed are warranted in the circumstances. However, I encourage the body corporate to circulate this decision with the owners of the body corporate, including those who provided submissions in relation to this application with the objective of removing any misconceptions that may be held about spending body corporate funds on gifts and social functions.
• [49] It would be of benefit for the body corporate to be aware that funds for gifts and similar functions can be raised in the future, provided that these funds do not form part of the body corporate funds or assets and are not levied from, or compulsory on, the owners. For example, a member of the body corporate or committee may volunteer to arrange and pay for a social function and gift and provide their financial details to other members who wish to contribute.
• [50] The evidence before me indicates a level of disharmony exists between members of the body corporate, including past and present committee members and a lack of effective communication has complicated the matter. As an adjudicator, it is outside my authority to make an order imposing good will and cooperation between all parties. However, more effective communication would be helpful in avoiding further conflict in the future.

[5] Sections 227, 228, 276 and Schedule 5 of the Act.

[11] Section 159(1) of the Accommodation Module.

[12] Section 159(2) of the Accommodation Module.

[13] [2021] QBCCMCmr 30 at [138].

[14] [2005] QBCCMCmr 269.

[15] [2014] QBCCMCmr 370.

[18] [2013] QCATA 13.

[19] Daish v Body Corporate for Birchgrove CTS 100 [2013] QCATA 13 at [14] and [17].

[20] Benoit De Tarle v The Owners Corporation Strata Plan 576 [2022] NSWCATAP 77 at [56] - [59].