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

EMERGENCY EXPENDITURE - where the committee has requested authorisation for spending above its spending limit to replace the scheme's two hot water tanks - whether the proposed spending is required to meet an emergency.

Act, ss 20, 243A; Standard Module, ss 91, 172, 180

• [1] This application is brought by the committee for Beach House on Suttons on behalf of the body corporate. The committee is seeking approval for emergency expenditure above its spending limit.[1]
• [2] The committee explains that during a routine inspection, the maintenance contractor identified issues with the scheme's hot water tanks. It says a further inspection was carried out by the manufacturer of the water tanks, Rinnai. It says these inspections found tank 1 is actively leaking and has a damaged impellor. Meanwhile, tank 2 has no active leak but has increased corrosion on the heat transfer unit.
• [3] The committee obtained four quotations for repair works: two quotations from the contractor Manta Plumbing and Gas (Manta) and two from the contractor Optimize Plumbing, Drainage & Gas (Optimize). Option 1 from the contractors is to replace tank 1 (the leaking tank) and swap out tank 1's heat transfer unit into tank 2. Option 2 is to replace both tanks.
• [4] The committee provided the following summary of the prices for the two options:

• [5] The committee wants an order to proceed with the quote from Optimize. It says option 2 is preferred as there are issues with both hot water tanks and it will be more financially efficient to replace both tanks at the same time.
• [6] The committee says taking into account the base quote, plus various required forms, a 20% contingency and including GST, it will require $37,000 to engage Optimize to complete option 2. It seeks an order to approve emergency expenditure and allow it to engage Optimize to complete the works with an expenditure limit of $37,000.
• [7] The key question I need to consider is whether the circumstances constitute an emergency such that the normal legislative procedures to authorise expenditure can be circumvented.

• [8] Beach House on Suttons is situated in Redcliffe, Queensland. The community management statement shows the Standard Module applies to the scheme.

• [9] Section 243A of the Act provides that the commissioner may refer an application for adjudication if the commissioner reasonably considers that the application relates to emergency circumstances and it is not appropriate to deal with it by way of an interim order. In such a case, the commissioner may immediately refer the application without giving written notice to other persons as usually required by section 243 of the Act.
• [10] The committee for Beach House on Suttons lodged this application for adjudication on 27 October 2025 and asserted there are emergency circumstances. The application was referred to me pursuant to section 243A of the Act.

• [11] An adjudicator may make an order that is just and equitable in the circumstances (including a declaratory order) to resolve a dispute, about (relevant to this dispute): the exercise of rights or powers or performance of duties under the Act.[2]
• [12] I am satisfied I have jurisdiction to determine this matter under the legislative dispute resolution provisions.

• [13] Having reviewed the application, I requested further information to assist with my consideration of whether there are emergency circumstances to justify the order being sought by the committee. On 29 October 2025, this office contacted the committee chairperson and requested the following:
  • Confirmation of when the defects in the hot water tanks were first identified;
  • A statement from the preferred contractor which confirms the timeframe for undertaking the repairs and confirms the urgency of the works.[3]
• [14] The committee provided its response on 3 November 2025. It confirmed the defects were first identified in the maintenance service report completed on 4 September 2025.
• [15] The committee confirmed the timeframe details for the preferred contractor are as follows:
  1. Expenditure approved (say Day 0) (allow 4 weeks for a potential EGM if required as not all owners prefer e-voting).
  2. Beach House committee immediately requests invoice for 10% deposit from preferred contractor (Day 0).
  3. Immediate response with invoice from contractor (Day 0) - see additional response / commitment from Optimize at Attachment 2.
  4. Beach House committee immediately submits invoice to Capitol for payment (allow up to 14 Days - ie Day 14) - see email from Capitol at Attachment 1. The contractor is new for Beach House and in addition is not compliant within the Capitol system.
  5. Deposit received in contractor's account (Day 14).
  6. Materials ordered - refer to Contractor email at Attachment 2 (commitment to order of materials immediately - Day 14).
  7. Materials received by Contractor (allow 5 business days for delivery of tanks, and 4-6 weeks for stainless steel tray manufacture and delivery) see Optimize revised quote for these details - now up to 6-8 weeks before materials are ready for work to commence on site. If a potential EGM is required, this becomes potentially 10 - 12 weeks.
  8. Immediate commencement of work on site (Optimize email at Attachment 2 confirms intention to commence immediately).
• [16] The committee says accordingly, if the emergency expenditure application is granted it will be approximately 6 to 8 weeks before the repair works can start while if a general meeting is required, it will be 10 to 12 weeks before repair works can start.
• [17] The committee explains Optimize was asked to provide a quote for repairs based on the assessment made by the maintenance report and the report from Rinnai. It says it is appropriate for Rinnai to respond to the question about the urgency of the works. It provided Rinnai's response which set out the following:
  • Catastrophic failure is about to occur and the hot water plant is in need of urgent replacement.
  • One of the storage tanks has ruptured and is leaking.
  • Due to the age and conditioning of the existing plant it is expected the hot water plant will expire very soon leaving the building without hot water.

• [18] Section 180 of the Standard Module provides that the body corporate has a duty to maintain the scheme's common property in good condition. Section 20 of the Act provides that utility infrastructure[4] is part of the common property unless it is solely related to supplying utility services to one lot; is within the boundary of the lot; and is located other than within a boundary structure for the lot. All three limbs of the test must be met for infrastructure to fall under the exception.
• [19] The materials before me indicate that the hot water system, (of which the hot water tanks form part), services all the lots in the scheme. Accordingly, I am satisfied the water tanks are part of the scheme's utility infrastructure and that they are the body corporate's responsibility to maintain.

• [20] Section 172(1)(c) of the Standard Module provides that an adjudicator may authorise the committee to give effect to a spending proposal above its spending limit if it is required to meet an 'emergency'.
• [21] I note the legislation does not define 'emergency'. However, the Cambridge Dictionary defines it as: "Something dangerous or serious that happens suddenly or unexpectedly and needs fast action in order to avoid harmful results".
• [22] I consider that to authorise spending under section 172(1)(c), I must be satisfied the spending is so urgent that the body corporate does not have sufficient time to call a general meeting to authorise it. Pursuant to section 91 of the Standard Module, a general meeting can be held 21 days after notice of the meeting is given to all lot owners.
• [23] I note the committee bears the onus to establish that emergency circumstances exist.

• [24] I have carefully considered all the submissions and evidence provided by the committee. However, I am not satisfied it has demonstrated that the repair works to the hot water tanks constitute an emergency at this stage.
• [25] As a preliminary point, I note the committee has confirmed it first became aware of the issues with the water tanks on 4 September 2025. This means more than 8 weeks elapsed before it made this application for emergency expenditure. This does not seem consistent with an emergency.
• [26] In any event, the report from the maintenance contractor acknowledges that both hot water tanks are currently "still working at they should". The committee has not indicated there is any change to this position. I have noted Rinnai's response that 'catastrophic failure is about to occur' and that the 'hot water plant is in need of urgent replacement'. However, there is no immediate emergency as both water tanks are currently still working. And, at this stage, there is no indication that a few of extra weeks to hold a general meeting to allow the body corporate to authorise the expenditure will not be possible without the system failing.
• [27] In addition, there is no indication that the active water leak from tank 1 is causing any damage.
• [28] Finally, I note the committee's explanation about the timeline for carrying out the repairs and that parts need to be specially ordered from interstate. It says it cannot place an order for the parts until the spending has been authorised. Having reviewed the materials, I understand that the repairs need to be carried out as soon as possible. However, this does not - in itself - establish there are emergency circumstances.

• [29] For the reasons provided above, I have dismissed the application for emergency expenditure.

[1] The committee says its spending limit is currently set at $15,000.

[3] In particular, the body corporate was asked to explain what consequences might flow from the repair works being delayed (it was asked to address this point for each tank).

[4] Schedule 6 of the Act defines 'utility infrastructure' cables, wires, pipes, sewers, drains, ducts or plant and equipment by which lots or common property are provided with a utility service. Schedule 6 defines 'utility service' as including water reticulation or supply.