Artique [2025] QBCCMCmr 261 (28 July 2025)

INTERIM ORDERS - whether interim orders are warranted in the circumstances

1. From the date of this order, The Body Corporate for Artique CTS 34902 must not take, nor authorise others to take on its behalf, any action (or, if applicable any further actions) to implement or enforce any of the resolutions for Motions 2, 3, 4, 5 or 6 that are passed or purportedly passed at an extraordinary general meeting of the body corporate to be held on 28 July 2025.
2. The above interim order has effect until the earlier of: the issue by an adjudicator of a further interim or final order for the application, the application is withdrawn or otherwise ended, or 12 months have elapsed from the date of this order.

• [1] This application for interim orders is about an extraordinary general meeting (EGM) of the body corporate noticed for 9am on Monday 28 July 2025 and the validity of the motions to be considered by the body corporate at that EGM.
• [2] The applicants claim the notice of the EGM does not comply with the legislation for several reasons and that some of the defects will affect the rights of owners to vote on the motions presented. For this reason, they seek an interim order that the notice be declared void, with the effect that the meeting cannot proceed.
• [3] The applicants also claim that 5 of the 6 motions to be considered at the EGM are defective in several ways. If the EGM is allowed to proceed, in the alternative, they seek an interim order restraining the body corporate from implementing any motions purportedly carried at the meeting until their application for final orders is determined.
• [4] For the reasons that follow, I have declined to make the first interim order but have made the alternate interim order sought.

• [5] The scheme known as Artique CTS 34902 (Artique) is registered as a building format plan of subdivision on SP170410, is located in Surfers Paradise and consists of 176 lots and common property. The community management statement (CMS) for Artique shows the Accomodation Module applies.
• [6] The applicants are the owners of Lot 506.
• [7] The respondent is the Body Corporate for Artique.
• [8] The caretaker is an affected person.

• [9] An adjudicator has jurisdiction generally to make orders that are just and equitable in the circumstances to resolve a dispute between certain parties about a claimed or anticipated contravention of the Act or CMS, or about the exercise of rights or powers, or the performance of duties, under the Act or CMS.[1] The parties to the dispute are the owners of a lot and the body corporate. This is a combination of parties provided for in the Act.[2] This application concerns disputes about claimed and anticipated contraventions of the Act. I am satisfied it falls within the dispute resolution provisions of the Act and within adjudicator jurisdiction.[3]
• [10] The Commissioner referred the application for interim orders to department adjudication under section 247(2)(b) of the Act. An adjudicator has the power to make an interim order "if satisfied, on reasonable grounds, that an interim order is necessary because of the nature or urgency of the circumstances to which the application relates."[4]
• [11] There is no statutory requirement to obtain comment from a respondent or affected party before an interim order is decided. Where the EGM at issue is scheduled to be held on the next business day, I did not seek a submission from the respondent or the affected person because I was reasonably satisfied that I had sufficient material to make a decision on the application for interim orders. However, if there are matters not presently known me which would justify varying or cancelling the interim order, the respondent or an affected party may make such a request.[5]

• [12] The applicants say owners received a notice at 9.59am on Monday 7 July 2025 that an EGM for the body corporate was to be held at 9am on Monday 28 July 2025. They say the notice was defective because:
  1. the legislation requires owners receive at least 21 days' notice of an EGM, but owners were given less than 21 days' notice
  2. the notice incorrectly describes the scheme as regulated by the Standard Module when it is regulated by the Accommodation Module, and
  3. the EGM includes a motion to be determined by secret ballot and, where the notice and ballot papers were mailed on 7 July, owners receiving the notice by post will need to return those votes by 23 July, giving those owners only 10 days' notice of the vote.
• [13] The applicants also claim that, apart from Motion 1 (confirmation of minutes), there are issues with each of the motions proposed for body corporate consideration at the EGM.
• [14] Motion 2 proposes the body corporate enter into a $3 million loan facility. The applicant says the motion is invalid and unreasonable because:
  1. there is no identified need for such a loan, especially where there is planned to be a significant sinking fund surplus by year end even after expenditure on waterproofing projects
  2. there is no benefit to owners
  3. there is no provision in the budget for servicing the loan
  4. the notes suggest the body corporate has sought legal advice about the loan but no such advice has been provided
  5. the motion proposes that drawdown instructions may be signed by any two executive members of the committee without any reference to authorisation by owners at a general meeting, and
  6. certain disclosures of interests relating to the loan have not been made as required by section 143 of the regulations.
• [15] Motions 3-5 each relate to remediation works for water ingress for various lots in the scheme. The applicants say these motions are invalid because:
  1. There is no basis for separating the works into three motions. In their view, the works are either necessary maintenance works or they are not. By separating the works into 3 motions, some motions may be approved while another may not.
  2. The motions are defective because they involve spending above the major spending limit but do not include 2 quotes presented as a group of same-issue motions as required. Further, it is implausible to suggest that additional quotes could not be sourced for these works.
  3. Where only one quote is included, it is impossible for owners to determine whether the quote is inflated or comparable with quotes from other contractors.
• [16] Motion 6 proposes that the body corporate extend the caretaking and letting rights agreements for a further period of 5 years. The applicants say there are issues with this motion because:
  1. it fails to include a disclosure required by section 146 of the regulations
  2. the prescribed Form 20 required to be included with the motion is illegible in part due to fine text, and
  3. the current version of the Form 20 - which contains links to the applicable legislation has not been used.
• [17] The applicants say generally that the EGM notice is defective and it fails to provide owners with sufficient information, sufficient disclosure, sufficient reasons, sufficient detail and sufficient time to allow owners to make reasonable and informed decision.
• [18] The applicants seek an interim order that the notice be declared void (and the EGM not proceed) or, in the alternative, if the EGM is to proceed, that the body corporate be temporarily restrained from implementing any decisions made at the meeting.

• [19] The only issue to decide at this time is whether an interim order is warranted.
• [20] Adjudicators are empowered to issue an interim order if satisfied "on reasonable grounds, that an interim order is necessary because of the nature or urgency of the circumstances to which the application relates."[6] If satisfied an order is necessary, adjudicators may make an interim order that is just and equitable. Adjudicators often make interim orders in the form of a temporary injunction (an order not to do something) to preserve the status quo pending a final determination of an application.
• [21] To determine if it is just and equitable to make an interim order, there must be some reason in law to make an order. For this, I must consider the substantive issues in dispute. The applicant must satisfy me that there are serious legal questions to be answered. At this stage, an applicant does not need to satisfy me on the balance of probabilities that their arguments will be ultimately successful.[7] Rather, I must be satisfied there is a sufficient likelihood of success on the legal issues presented to warrant making an interim order.
• [22] I must also consider the nature of the circumstances, and the practical reasons for and likely effects of an interim order. This is known as assessing the balance of convenience between the parties. To do this, I must consider the inconvenience or harm to the applicant if I do not make an interim order but it is later determined that the body corporate has contravened the Act. I must weigh that against the harm to the body corporate if I make an interim order and the applicant is later unsuccessful in the application for final orders.
• [23] Accordingly, to determine whether I am satisfied an interim order is warranted and appropriate, I will proceed to consider whether serious legal issues have been raised with sufficient likelihood of success. If so, I will consider the nature of the circumstances presented and weigh the balance of convenience and potential for harm to the respective parties.

• [24] Regarding the notice of the EGM itself, owners must be given at least 21 days' notice of a general meeting.[8] There is a serious question raised whether that requirement was complied with in this case. The notice also incorrectly referred to the applicable regulations.
• [25] Although I am satisfied for the purposes of an application for interim orders that the applicants do raise legal questions to be answered that have sufficient chance of success, I am not persuaded at this time that the nature of the circumstances or the balance of convenience weighs in favour of an interim order precluding the EGM from proceeding. Where the meeting has yet to occur, it is not clear whether any owner has been impacted by any defects in the notice. Moreover, there is a chance that one or more of the disputed motions may fail to pass.
• [26] In my preliminary view, it would cause greater harm to the body corporate if I was to grant an interim order that the meeting could not proceed and it was later determined that the notices were not defective. For this reason, I decline to make the first order sought.

• [27] There are several legal principles that may be relevant to one or more of the challenged motions at issue:
  1. Section 79 of the Accommodation Module prescribes how and when motions concerning the same issue may be presented for consideration to owners.
  2. Where the body corporate is considering entering into certain contracts for the supply of goods or service from a provider, section 143 of the Accommodation Module requires that relevant persons, which includes body corporate managers and caretaking service contractors, give written notice disclosing associate relationships between the relevant person and the provider.
  3. Section 146 of the Accommodation Module also provides that a relevant person must give notice to the body corporate disclosing commissions, payments, or other benefit it will be entitled to receive if the body corporate enters into a contract with another for the supply of goods or services.
  4. Section 163 of the Accommodation Module imposes certain procedural requirements for motions at a general meeting that are proposing major spending by the body corporate. The practical implications are that, where a motion is proposing works that cost more than the relevant limit for major spending for the scheme,[9] unless there are exceptional reasons why it is not practicable to do so, the committee must provide at least two quotations. Relevantly here, where a series of proposals forms a single project, the cost of carrying out any one of the proposals is taken to be more than the relevant limit if the cost of the project as a whole is more that the major spending limit.
• [28] Motion 2 proposes the body corporate enter into a $3 million loan facility. The applicant contends that Motion 2 is flawed for several reasons. I am satisfied at this preliminary stage that the applicant has raised serious legal questions about the validity of Motion 2, including whether a relevant person was required to include certain disclosures pursuant to section 143 of the Accommodation Module about a provider, and whether the motion met the other legislative requirements for motions about body corporate spending.
• [29] Moreover, in my preliminary view there are serious questions raised whether Motion 2 was proposing in part that committee members could authorise future borrowing by issuing drawdown instructions at a later date for unspecified amounts (for the purposes of unspecified repainting and/or unspecified utility infrastructure works). There are serious questions raised whether Motion 2 was sufficient to authorise committee members to take such actions or whether future drawdowns would require additional resolutions. There are also questions raised about whether the body corporate had in fact obtained legal advice about the loan, and if so, whether the advice should be shared with owners
• [30] In terms of the balance of harm between the parties if I was to make the requested order, the proposed loan is a facility and Motion 2 does not on its face propose any initial drawdown of a sum certain and the loan facility is not expressly linked to one specific project. However, Motions 3-5 suggest the facility may be used somehow to fund the quotes for waterproofing works but do not specify in what proportion or amount. There is some potential for harm to the body corporate if it needs the loan funds to complete the works contemplated in Motions 3-5. However, my present view is that any potential for harm if the interim order is made is limited because the body corporate has the power to raise funds for necessary maintenance works by other means (e.g., special levies approved at a general meeting).
• [31] Conversely, if the interim order is not made, there is conceivable financial harm to the applicants and owners if Motion 2 is passed and the body corporate proceeds to enter into a contract for a significant loan facility where it is ultimately determined that Motion 2 was invalid.
• [32] For these reasons, I consider the balance of harm weighs in favour of making an interim order for Motion 2.
• [33] For Motions 3-5, the applicants say the body corporate has recently held its 2025 EGM which contained motions like Motions 3-5 without any need for borrowing. In their view, Motions3-5 all relate to the same issue/project and propose the same works by a single contractor. They say the only reason for separating the works into 3 motions is to allow the works for some lots to be approved and others to be declined.
• [34] I am satisfied for the purposes of an interim order that the applicants have raised serious questions about whether the motions satisfied the legislative requirements regarding major spending and group of same-issue motions. It is not evident from the motions or the explanatory notes why the works have been split into 3 separate motions, and whether some works are to be prioritised over others. It is also unclear specifically how the committee is proposing the works described in each of the motions are to be financed.
• [35] In terms of the balance of harm and nature of the circumstances, it is not clear from the motions or the explanatory notes whether there is any urgency to the works. Where owners have not yet voted on the motions, there is also the possibility that one or more the motions may fail to pass. If the motions pass, but an interim order precludes the works from proceeding, there may be some harm to the body corporate from delays in maintaining the building. However, even if an interim order is made, it remains open to the committee to propose and the body corporate to pass a new motion for the works.
• [36] Alternatively, if the motions pass and binding contracts for the works are entered into and the works proceed, but it is later determined the motions were invalid, the applicants would be potentially prejudiced. For these reasons, I am satisfied the balance of harm weighs in favour of making an interim order that the body corporate is restrained from implementing any resolutions passed for Motions 3-5.
• [37] Finally, Motion 6 proposes that the body corporate authorise a 5 year extension of the caretaker agreement. I am satisfied the applicants raises serious legal issues with a sufficient chance of success about Motion 6. The applicants suggest a form required to be included with the motion was illegible and that required disclosures were not made. In addition, this particular motion is to be determined by secret ballot. The applicants suggest owners may be prejudiced and not able to vote in time because the notice of EGM was not sent in the time frame required by the legislation.
• [38] For Motion 6, I am satisfied the balance of convenience weighs in favour of the applicants. If the motion passes and an interim order is not made, the body corporate will bind itself to a significant contract for a further 5 years. Conversely, I can see no harm to the body corporate or the caretaker if the question of extending the agreement is delayed while an application for final orders is pending. The motion proposes to extend an existing contract that is not due to expire until June 2041.

• [39] I have made one of the interim orders requested by the applicants for the reasons given above.
• [40] As I noted in the Preliminaries section above, if there are matters not presently known me which would justify varying or cancelling the interim order, the respondent or an affected party may make a request that I do so.[10]
• [41] If the dispute is not resolved and the applicant does not withdraw the application, the application for final orders will remain to be determined. The application for final orders will be referred back to the Commissioner to progress under the Act.[11] The dispute may then be resolved by an adjudicator with the benefit of submissions from the respondent, owners, and other affected persons.

[2] Section 227(1)(b) of the Act

[3] Sections 226, 228 and 276 of the Act

[5] Until a final order is made, an adjudicator has the power to extend, vary, renew, or cancel an interim order. See Section 279(2)(b) of the Act.

[7] Although an applicant must identify a genuine legal issue to be decided, the granting of an interim order by itself does not indicate whether or not an applicant will ultimately be successful on their application for final orders.

[9] Where the scheme has not set a limit, the major spending limit is the number of lots multiplied by $1,100. See Schedule 1 of the Accommodation Module. It is not clear whether Artique has set a higher limit.

[10] Until a final order is made, an adjudicator has the power to extend, vary, renew, or cancel an interim order. See Section 279(2)(b) of the Act