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austlii:qld/QBCCMCmr/2026/12
General information, not legal advice.
QBCCMCmr
2026-01-27
Original judgment source is linked above.
Ceil [2026] QBCCMCmr 12
Clayton and Nicole Hydes, owners of Lot 1148 (applicant)
Body Corporate and Community Management Act 1997 (Qld) (), and (3)(a)
INTERIM ORDER - whether an interim order is warranted.
[1] This application is about financial management and administration of the body corporate.
[2] In late 2023 the applicants owed contributions to the body corporate, and the body corporate brought proceedings in the Magistrates Court in December 2023 about the debt.[1] The applicants say they made written settlement offers in October and November 2023 that the committee did not decide, and they did not agree to a payment plan the body corporate relied on. They seek declarations on those matters.
[3] The applicants made a payment in January 2024 but say it was applied to other charges before all outstanding levy contributions were extinguished. They also say the body corporate incurred expenditure on the Magistrates Court proceeding after their payment was made, without authority. The applicants seek declarations on those matters.
[4] Next the applicants challenge the way the body corporate sets budgets and imposes levies, discounts, and penalty interest. They claim it imposed penalty interest during a period where there was no applicable resolution authorising it. They seek declarations about its practices.
[5] The current community management statement (CMS) was recorded in July 2025. The applicants assert it is invalid and cannot be relied on. They seek various orders as a result.
[6] Finally, the applicants seek orders for the rectification of the account ledgers for all affected lots, including their own, because of the various orders they seek.
[7] In the interim, the applicants seek to restrain the body corporate from applying their levy payments to any category other than levy contributions. At this stage, I will only consider whether interim orders are warranted.
[8] Ceil community titles scheme 32391 (Ceil) is a 137-lot scheme at Coomera Waters. Under the current CMS the Standard Module applies. The scheme is registered as survey plans 159302, 161361, 160370 and 161360. Ceil is part of a layered arrangement, with the principal body corporate (PBC) being Coomera Waters Two community titles scheme 29695.
[9] The application seeks the following interim outcomes:
Pending final determination of the application, the Applicant seeks the following interim orders:
Interim Order A That the Body Corporate for CEIL CTS 32391 be restrained from applying any levy payments made by Lot 1148 to any category other than levy contributions, including any category described as "other", recovery costs, enforcement costs, or similar classifications.
Interim Order B That the Body Corporate be required to apply all levy payments made by Lot 1148 strictly to levy contributions as they fall due.
[10] The application then seeks the following final outcomes:
ORDER 1 - Lot 1148 Unrepresented Settlement Offers
An order declaring that the Body Corporate did not consider or decide the written settlement offers submitted by Lot 1148 dated 31 October 2023 and 3 November 2023, and that no committee decision in relation to those offers was made or recorded by the committee at the time the offers were submitted.
ORDER 2 - Payment Plan Agreement Dated 9 November 2023
An order declaring that the document described as the "Payment Plan Agreement" dated 9 November 2023, relied upon by the Body Corporate in relation Lot 1148 as a basis for enforcement or recovery, did not reflect an offer made by Lot 1148, was not authorised or consented to by Lot 1148, and was not agreed to by Lot 1148.
ORDER 3 - Allocation of the 17 January 2024 Payment
An order declaring that the payment made by Lot 1148 on 17 January 2024 was applied, in part, to amounts recorded as "other" (including recovery or legal costs) before all outstanding levy contributions were extinguished.
ORDER 4 - Expenditure After Clearance of Levy Arrears
An order declaring that following the payment made by Lot 1148 on 17 January 2024 which extinguished the outstanding levy arrears, the Body Corporate incurred or permitted further expenditure in Matter No. M1146/23 without valid authority.
ORDER 5 - Levy, Budgeting and Charging Practices
An order declaring that the Body Corporate as an ongoing practice adopted and applied levy budgeting and charging practices that included:
(a) presenting and adopting annual budgets at general meetings in which the proposed levy income for the administrative and sinking funds was set at levels approximately 25% above the expenditure amounts shown in those budgets; and
(b) structuring those budgets on the basis that the approximately 25% uplift to levy income was necessary to enable the adoption and operation of a 20% early-payment discount mechanism without the Body Corporate operating at a deficit if the discount were applied; and
(c) where payment of a levy was not treated as timely and the 20% early-payment discount was not applied, the uplifted portion of the levy corresponding to the discount was withheld and retained by the Body Corporate as levy income, with the owner required to pay the full gross levy amount, rather than the net levy otherwise required to meet anticipated expenditure, and in additional to any penalty interest applied; and
(d) applying interest and other charges by reference to the gross (uplifted) levy amounts set under those adopted budgets, rather than the net levy amounts otherwise payable if the discount were applied.
ORDER 6 - Application of Penalty Interest
An order declaring that the Body Corporate applied penalty interest at a rate of 2.5% per month to levy amounts during periods when no general-meeting resolution authorising that interest rate was in force for the relevant financial year, including in relation to Lot 1148, and that such interest was applied by reference to the gross levy amounts described in Order 5.
ORDER 7 - Community Management Statement Invalidity and Ledger Rectification
Order 7A - Community Management Statement Recorded 31 July 2025
(a) be validly authorised;
(b) be consistent with the Act and Standard Module; and
(c) where applicable, be consistent with the operative Principal Body Corporate Community Management Statement.
Order 7B - Ledger Rectification and Recalculation
(a) remove or reverse any penalty interest, recovery costs or enforcement-related charges not supported by lawful authority;
(b) reclassify any amounts incorrectly allocated to "recovery costs", "other", or similar categories where such allocation was not authorised; and
(c) be undertaken by reference only to charges authorised by statute, valid general-meeting resolutions, and the Community Management Statement in force immediately prior to 31 July 2025.
[11] 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 the exercise of rights or powers or performance of duties under the Act or CMS.[2] In particular, an adjudicator may make an interim order if satisfied on reasonable grounds it is necessary due to the nature or urgency of the circumstances.[3]
[12] There is a question as to whether I have jurisdiction to decide all elements of this matter. The applicants say the application is confined to matters within an adjudicator's jurisdiction. They say they do not seek to determine or vary the debt that is before the Magistrates Court or a determination of the Magistrates Court proceeding. The body corporate says I do not have jurisdiction because this is a debt dispute or a related dispute.
[13] An adjudicator does not have jurisdiction to determine a debt dispute.[4] A 'debt dispute' is defined as a dispute between a body corporate and an owner about the recovery, by the body corporate from the owner, of a debt under this Act.[5] A debt dispute is not merely the proceedings brought by the body corporate to recover a debt. It has been accepted to include an application by an owner against a body corporate.[6] Prima facie, any dispute about a debt that a body corporate is seeking to recover could be a debt dispute.
[14] It is clear this application has arisen because the body corporate has sought to recover a debt from the applicants. It appears to be related to the ongoing claim in the Magistrates Court. A dispute about the validity of the decision or actions of a body corporate or its committee could potentially be within the jurisdiction of an adjudicator even if the decision or action is about a body corporate debt. But arguably if it was necessary to determine whether a debt existed or the amount owing by the applicants, that would constitute a debt dispute. I will comment in my analysis below on the issues that may amount to a debt dispute.
[15] The legislation also provides for a dispute that is a 'related dispute' to a debt dispute. A dispute will be a related dispute if the subject matter is related to the subject of a debt dispute, and there are proceedings in a court or the Queensland Civil and Administrative Tribunal to recover that debt, and the Commissioner considers the disputes are connected in a way that makes it inappropriate for the dispute to be dealt with in this office.[7] If parts of this application that directly relate to a debt do not amount to a debt dispute, but there are current court proceedings to recover the debt, there may be a question for the Commissioner as to whether this application should be categorised as a related dispute. The dispute resolution processes under the Act do not apply to a related dispute.[8] That means that if the Commissioner determines that this application is a related dispute to a debt dispute, the dispute resolution process for this application would be at an end.
[16] In addition, the body corporate refers to the statutory time limit that applies to some applications.[9] That time limit applies to applications to invalid a committee or general meeting, a committee or general meeting resolution, of a committee election. Such applications must be lodged within 3 months of the relevant meeting or decision unless the time limit is waived by the adjudicator for good reason. However, that time limit would not apply to the failure of a body corporate or committee to make a decision. And although the applicants question the decision-making of the body corporate and the committee in several respects, they do not explicitly seek orders to invalidate any meeting or resolution.
[18] As permitted under the Act, the Commissioner then referred this application to adjudication to decide if the nature or urgency of the circumstances warrant an interim order,[12] notwithstanding that notice of the application had not yet been given.
[19] There is no statutory requirement to obtain comment from a respondent or affected persons before an interim order is decided. However, given the circumstances, the committee was given a limited opportunity to comment. It made a submission.
[20] The body corporate seeks dismissal of the interim order. It says there is no prima facie case established by the applicants and discusses each of the final orders. I will comment on those particular arguments in my analysis below.
[21] The body corporate further says an adjudicator does not have jurisdiction at least in relation to final orders 1, 2, 3, 4, 5, 6 and 7B because they are part of an ongoing debt dispute or a related dispute to a debt dispute. It says the proceedings in the Magistrates Court to recover unpaid contributions and recovery costs from the applicants constitutes a debt dispute. It says any alleged procedural issues with the validity of contributions, budgets, and recovery costs can be raised as a defence in proceedings. It outlines the history of the Magistrates Court proceeding, including that the trial was completed in September 2025 and the Magistrate reserved their decision but that to date a decision has not been handed down. The body corporate says it would be inappropriate for an adjudicator to make a determination on the issues in the application, some of which were introduced into the Magistrates Court by the applicants.
[22] The only issue for me to decide at this time is whether interim orders are warranted. But it is necessary for me to consider the substantive issues in dispute to decide whether to make an interim order.
[24] To warrant an interim order, an adjudicator must first be satisfied the application raises serious legal questions to be decided. They must then consider whether the balance of convenience between the parties justifies injunctive relief. That means an adjudicator must balance the impact on the respondent and others of granting relief now if the final orders sought are ultimately refused, against the impact of refusing relief now if the final orders are ultimately granted. Of particular relevance is evidence an interim order is necessary to prevent serious or irreparable harm.
[25] The applicants raise a range of issues relating to the different final orders sought. I will note some general matters and then comment on the final orders in turn.
[26] The applicants seek a variety of declarations. The justification and need for the specific declarations are a matter for determination in the context of the final orders sought. However, I will make a preliminary general observation.
[27] Adjudicators have broad powers to make orders to resolve the dispute in an application. It is open to an adjudicator to make a declaration about legal rights and responsibilities. However, the case law suggests that a bare declaration that some legal obligation has been contravened may only be appropriate if it would serve to redress the harm brought about by the contravention and would produce some foreseeable consequences.[15] And arguably a bare declaration that a person did something, or did not do something, would similarly only be appropriate if it would have some discernible utility in resolving a current question in dispute between the parties.
[28] A body corporate must adopt an administrative and sinking fund budget for each financial year.[16] The budgets must contain estimates of the necessary and reasonable spending required for the year and, in the case of the sinking fund, reserve a proportionate amount to be accumulated to meet anticipated future expenditure. The body corporate must then set the contributions to be levied on each owner based on the budgets, decide on the instalments in which the contributions are to be paid, and fix due dates for payment.[17]
[29] Budgeting in a body corporate environment is not an exact science. It is just a reasonable estimate. If a body corporate has raised insufficient funds to meet its liabilities, it can raise a special levy to meet the shortfall.[18] And if a body corporate raises more funds than it ultimately needs, the levies needed for the next financial year can be reduced accordingly.
[30] A body corporate can, by ordinary resolution, fix a discount to be given to owners if they pay a contribution or instalment by the due date.[19] The discount cannot be more than 20%. Also, the body corporate can resolve to impose a penalty payable if an owners' contribution or instalment is not received by the due date.[20] The penalty is a simple interest at a stated rate of not more than 2.5% for each month that the contribution or instalment is in arrears.
[31] If a contribution is not paid by the due date, the body corporate can recover as a debt the contribution, any penalty interest, and any costs reasonably incurred in recovering the amount.[21] Although it can proceed earlier, the legislation mandates that a body corporate must start proceedings to recover contributions that have been outstanding for 2 years.[22]
[32] Any amounts paid by an owner must be put first towards any penalty, then towards reducing the outstanding contribution or instalment, and third towards any debt recovery costs.[23]
[33] A body corporate can allow a discount that an owner would not otherwise be entitled to, or waive a penalty or debt recovery costs, if satisfied there are special reasons to do so.[24] But the body corporate cannot alter or waive the substantive contributions owed by an owner.
[34] As with all its functions, a body corporate must act reasonably in administering its finances and in making decisions related to its finances, including contributions and debts.[25]
Settlement negotiations (final orders 1 and 2)
[35] The applicants say they made written settlement offers to the body corporate in late 2023 but there were no recorded committee decisions about the offers. They claim the offers were dealt with by the body corporate's solicitors or its body corporate manager (BCM). They question whether the committee improperly delegated its authority, failed to consider owner correspondence, and failed to comply with its statutory decision-making requirements. The applicants also say that without a record of their offers in the correspondence register or minutes, they could not ascertain the true basis on which enforcement action was pursued.
[36] The applicants then say a payment plan agreement that the body corporate relied on as a basis for recovery action, was not agreed to by them. They say there is no resolution or confirmation that the committee considered or authorised the plan. They again question whether a committee decision exists and whether authority was improperly delegated.
[37] The applicants seek a declaration (order 1) that the body corporate did not consider or decide the settlement offers and made no decision on those offers. They say the order is necessary to clarify the limits of delegation under section 97 of the Act, confirm that settlement related correspondence is a committee function, confirm the requirement for recorded committee decisions, and provide a lawful foundation for subsequent orders.
[38] The applicants then seek a declaration (order 2) that the payment plan document did not reflect the offer made by them, and was not authorised, consented to, or agreed to by them. They say this is necessary to clarify the limits of delegation, confirm the requirement for recorded committee decision-making, and provide a foundation for separate consequences.
[39] The body corporate says final order 1 is not about the operation of the Act but about an alleged failure of the committee to make a decision. It says this is not a declaration an adjudicator can make. It says if the applicants are attempting to allege the committee failed to act reasonably in not making a decision on the settlement offers, it notes the passage of time and there is no reason for an adjudicator to waive the time limit in this case. It then says final order 2 is not about the operation of the Act, but rather about the nature of a document, and is not a declaration an adjudicator can made.
[40] The applicant's email of 31 October 2023 does not appear to be a formal offer. It simply asked the body corporate's solicitors about the 'possibility' of a $50 a week payment plan. The solicitors advised the body corporate was open to discussing a payment plan but that would involve additional costs. When the applicants acknowledged the costs, the solicitors sought confirmation of the proposal. They noted that, in their experience, the body corporate was unlikely to approve a payment plan that would take longer than 6 months to clear the debt, and other requirements. On 3 November the applicants made a formal proposal to pay $111 a week for 38 weeks including scheduled levies. The solicitors forwarded the proposal to the BCM noting it would take approximately 6 months to clear the debt and recommending it be accepted on the basis that all new contributions are paid on time and in full.
[41] On 9 November the solicitors told the applicants a proposal with that condition had been accepted and gave the applicants a formal agreement to sign. The applicants did not agree to the conditions. The solicitors asked the BCM if the body corporate would accept a payment plan without the requirement for new levies to be paid in full and on time. The BCM asked for the solicitor's recommendation to pass on to the committee and the next steps if the committee did not agree. But it seems there was no agreement without that condition.
[42] A committee should only make decisions at a committee meeting or by a vote outside a committee. The legislation sets out the requirements for those decision-making forums.[26] Full and accurate minutes of committee meetings, and a full and accurate record of motions passed outside a committee meeting, must be kept.[27]
[43] There is no general statutory requirement on the body corporate to consider, act on, or respond to correspondence that it receives, other than its obligation to act reasonably. Correspondence is not required to be listed in a register. If a motion is put to the committee, the committee should decide it within 6 weeks (with a potential extension of up to a further 6 weeks), but if it does not do so within that time, it is taken not to have agreed to the motion.[28]
[44] It is not evident that the applicants submitted a committee motion. There seems to be no reason why the body corporate could not require the applicants to communicate with the solicitors it engaged to deal with the debt. The solicitors appear to have responded promptly to the applicants' correspondence. Prima facie, it appears the solicitors simply communicated with the applicants and the BCM about negotiating parameters for a payment plan and made recommendations to the committee. The correspondence in the application suggests the BCM passed the proposals and recommendations onto the committee.
[45] At this stage I have not been given evidence of minuted committee resolutions in late 2023 about any payment plan for the applicants, either in the terms that the applicants offered or with the proposed conditions. But the correspondence lists in the committee meeting minutes of 15 January and 8 April 2024 include a large number of communications about Lot 1148 between the committee, BCM, and solicitors from 26 October to 19 January 2024. That suggests the committee was engaged in the matter. The applicants have not yet evidenced that the committee was not aware of the specifics of their offer, or that it did not make the decision to refuse the offer. And even if the committee was not aware or involved, the applicants have not evidenced that the committee would ever have agreed to their offer.
[46] On its face, it appears it was the committee that refused a payment plan on the terms sought by the applicants. If the committee did not formally make or record its decisions as it should have, that was inappropriate. However, the applicants provide no evidence of any purported delegation of decision-making to the solicitors or the BCM. Moreover, I have been given no evidence that the applicants sought to challenge the refusal to accept their offer (either procedurally or in substance) at the time or for over 2 years afterwards.
[47] And at this time, the applicants have not established the utility of the final orders sought. If the body corporate did not formally decide or minute a decision on the terms of a payment plan that it would accept, making a declaration to that effect or otherwise acknowledging any procedural non-compliance would not result in the payment plan proposed by the applicants being accepted. Even if that might have occurred at the time, events have significantly overtaken the offers contemplated in November 2023.
[48] I also do not understand the suggestion that the applicants could not ascertain the basis for the enforcement action. There is no suggestion their proposal was ever accepted, and the solicitors clearly informed the applicants that debt recovery action would proceed if they did not agree to the body corporate's conditions. I assume the enforcement action proceeded on the basis of the entire debt owing at that time, which the applicants had been notified of.
[49] The purpose of the second order sought is even less clear. It appears to be predicated on the fact that the 9 November solicitors letter contained a proposed agreement that differed from the offer that the applicants made. But the applicants do not explain why that proposal needed to be authorised or agreed to by them. The applicants owed a debt and proposed a payment plan. The letter set out the conditions on which the body corporate was prepared to accept that plan. It essentially was a counteroffer, which the applicants refused.
[50] It seems that debt recovery proceedings ensued, as the applicants had been warned, because the parties did not reach an agreement on a payment plan and the debt remained. The applicants have not evidenced that the body corporate believed there was an agreement in place, or that it otherwise relied on the 9 November proposal. But there would be no reason why the body corporate could not refer in the Magistrates Court proceedings to a counteroffer it made which the applicants did not agree to.
[51] At this stage, the applicants have not established a substantive legal issue that would warrant the first or second orders sought.
[52] On 17 January 2024 the applicant made a payment. It was accompanied by directions that the payment was only be allocated to the outstanding arrears and levies and not be used for three other identified charges. The applicants say the BCM advised the payment was allocated to outstanding 'other' items which were not levies. But the applicants say there was no interest outstanding at that time, and the BCM has not provided invoices or a reconciliation of the 'other' amounts.
[53] The applicants assert non-compliance with the statutory requirements for allocating payments. They say that if the payment had been allocated in accordance with the legislation, no levy arrears would have remained. The applicants seek a declaration (order 3) that the payment was applied to 'other' items before all outstanding contributions. They say this is necessary to ensure accurate financial records and reasonable administration.
[54] The body corporate says the ledgers show the applicants' payment was allocated in accordance with section 166(5) of the Standard Module. It says that section is framed in terms of singular contribution or instalment and the penalty interest and recovery costs incurred in relation to that contribution.
[55] At this stage I am unclear from the voluminous submitted material as to the exact amount that was owed by the applicants before the payment was made, what charges that amount was comprised of, or how the payment was applied. But it seems to me that to be able to determine whether the body corporate applied the payment in accordance with the legislation, I would need investigate and make findings on those three matters. But my preliminary view is that would amount to a debt dispute I have no jurisdiction to determine.
[56] Next, the applicants challenge the body corporate's expenditure on the Magistrates Court proceeding. They say their payment on 17 January 2024 was sufficient to extinguish all levy arrears, but the ledger still showed a recorded levy arrears and the debt recovery action proceeded. The applicants say the continued expenditure on the Magistrates Court proceedings depended on a valid committee or general meeting authority and compliance with the statutory spending limits. The applicants seek order 4 that following their payment, which they say extinguished their outstanding levy arrears, the body corporate incurred further expenditure on the Magistrates Court matter without valid authority.
[57] The body corporate disputes that its expenditure on the Magistrates Court proceedings was not properly authorised. It notes the committee spending limit was increased to $1,000 per lot in May 2023. It says the applicants have not identified any irregularity with the amounts expended. If the applicants allege a committee resolution is void, it says the application was made at least 24 months after the alleged failure to make a proper decision.
[58] A committee resolution is sufficient to commence legal proceedings to recover a liquidated debt against a lot owner.[29] The body corporate would also need to authorise the expenditure on those legal proceedings. The committee could authorise spending up its spending limit,[30] which currently appears to be $137,000.[31] Moreover, legal costs can be notoriously difficult to estimate in advance. If they escalate beyond initial estimates, the body corporate could potentially resolve to authorise or ratify further expenditure.
[59] The application includes minutes of an annual general meeting (AGM) in May 2019 which resolved to authorise the committee to appoint legal representation from one of 3 listed alternatives to act in all debt recovery actions. However, at this stage I am unable to identify from the submitted material if the committee resolved to engage the solicitors to act for it in this matter, or authorised the commencement of the Magistrates Court proceedings, or authorised the expenditure on that action. That may require further investigation.
[60] As best as I can ascertain, the position of the applicants is that a new authority was required after their January 2024 payment. I do not immediately see why that would be the case. If the body corporate validly authorised the engagement of solicitors and the commencement of the legal proceedings, that authority was arguably sufficient for the entire proceeding even if the amount claimed changed or the basis for the claim was disputed by the applicants.
[61] Prima facie, I am satisfied I have jurisdiction to consider if the body corporate validly authorised the debt recovery proceedings against the applicants. But if it did not, the body corporate could potentially retrospectively ratify its actions. And it is not clear what practical utility that question would have now. But if the applicants are seeking a finding that their arrears were extinguished by the payment on 17 January 2024, my preliminary view is that would be a debt dispute that I do not have jurisdiction to decide.
Levy, budgeting and charging practices (final orders 5 and 6)
[62] Next the applicants discuss the body corporate's practices in budgeting, setting levies, applying discounts, and imposing penalty interest. They say they seek a determination on the lawfulness and reasonableness of the practices. Order 5 seeks a declaration as to the body corporate's levy budgeting and charging practices. Then in order 6 the applicants seek a declaration that the body corporate applied penalty interest during periods when there was no general meeting resolution authorising it for the relevant financial year and that the interest was applied to the gross levy amounts.
[63] In regard to order 5, the body corporate says the applicants' do not particularise the budgets and circumstances alleged to be improper. It says all subject budgets were set in accordance with the regulations. It notes that any application to invalidate a budget resolution had to be made within 3 months of the meeting. It also says sections 164 and 165 of the Standard Module work in tandem to incentivise on-time payments. If the discount does not apply, the contribution to be recovered and the amount on which the penalty interest is to be calculated is the full contribution not including any discount. It says it is the workings of the regulations not the body corporate. With final order 6, it disputes that the regulations require an ordinary resolution fixing penalty interest to be resolved each year.
[64] Essentially it seems the applicants contention is that when deciding its budgets and levies, the body corporate sets amounts that are approximately 25% above the estimated expenditure required to enable sufficient funds to be raised after the allowance of a 20% discount if all levies are paid on time. As I understand it, that is common practice in the industry. Prima facie, it is difficult to see how the body corporate could raise sufficient funds to meet its estimated expenditure without doing so, if it has resolved to allow a discount for timely payment.
[65] The applicants suggest this approach obscures the body corporates true cost base and query if the budgets are being prepared in accordance with the regulations. But where the body corporate must set contributions that are sufficient to meet its budgeted expenditure, it is not clear to me how the applicants are asserting the legislation is being contravened.
[66] As best as I can understand the application, the applicants appear to be concerned that if an owner does not pay on time, and so are liable for the undiscounted levy amount, they are then also liable for penalty interest on the full levy. The applicants say the discount operates as an additional penalty and raises more than the net levy required to meet expenditure. They say the regulations only contemplate interest as the penalty for late payment. They question the body corporate's compliance with the regulations and its reasonableness.
[67] The legislation clearly allows the body corporate to allow a discount for on time payments. It also clearly allows the body corporate to impose penalty interest. There is nothing in the legislation that suggests the body corporate cannot resolve to do both. I understand it, it is common in the industry for bodies corporate to do both. If the applicants are suggesting it is not reasonable for the body corporate to do both (and I am unsure if that is their argument), I am unclear as to their grounds for that assertion.
[68] A discount is a financial incentive to pay on time that necessarily has the effect of financially penalising an owner who fails to pay on time. If the discount is not applicable, its loss will operate as a one-off penalty even if payment is only one day late. But interest is an ongoing penalty because it continues to accrue to any unpaid contributions for as long as they remain unpaid. Those two mechanisms combined have the potential to impose a significant financial burden on an owner who is persistently indebted to the body corporate. But that does not mean the mechanisms are not lawful.
[69] The applicants say the body corporate did not pass a resolution at the AGMs in 2019, 2023 and 2025 authorising a penalty interest rate. They say any interest charged without an authorising resolution is unauthorised. But the applicants do not appear to suggest the body corporate has never resolved to authorise a penalty interest to be charged. And they do not point to anything in the legislation that requires a resolution every financial year. They refer to previous adjudications in that regard, but the citations referred to are not of identifiable decisions. Prima facie, once the body corporate has passed an ordinary resolution authorising a penalty interest charge, that will apply until it is rescinded or amended.
[70] It also appears the applicants are suggesting the body corporate should only charge penalty interest on the discounted levy amount that an indebted owner would have been liable for if they had paid on time, rather than the full amount they are actually liable for. On its face, that seems nonsensical to me. Moreover, it seems contrary to the legislation.
[71] The applicants also appear to suggest the body corporate is profiting if it requires owners to pay the full, undiscounted levy and imposes interest on that, when it only requires the discounted levy amount to meet its budgeted expenditure. That seems to miss some relevant considerations. First, a body corporate can only function properly and equitably if all owners contribute financially. The discount and penalty mechanisms operate as incentives to encourage that to occur. Second, if an owner does not pay on time, the body corporate has the loss of the use of those funds until they are paid. And the body corporate may need incur costs and inconvenience (which may not be fully claimable) to recover the arrears.
[72] At this stage, the applicants have not identified a genuine question that the body corporate practices as outlined in the application are contrary to law. Prima facie, the practices as the applicants explain them appear to be consistent with the practices a body corporate can choose to adopt under the regulations. Moreover, even if the practices were deficient (which is not yet established), the applicants have not established the utility of an order that simply baldly states what the practices are.
[74] The minutes of the AGM held on 26 May 2025 show that Motion 12 proposed a new CMS to add, amend, and repeal by-laws as indicated in a table in the motion and as per the full by-laws attached, and then to lodge a request to record a new CMS within 3 months of the meeting. The table listed the by-laws to be consolidated without amendment (with the new and old numbering indicated), the by-laws to be consolidated with amendment (again with the new and old numbering indicated), the new by-laws, and the by-laws to be repealed. Motion 12 passed as a special resolution with 18 votes for, 2 against, and 4 abstentions.
[75] The applicants raise various objections to the CMS:
[76] Substantively, the applicants dispute the validity of the new CMS. They seek orders (order 7A) to invalidate the CMS, require the body corporate to revert to the previous CMS and not rely on the current CMS until a valid CMS is recorded. They also seek an order about any further CMS to be recorded.
[77] The body corporate says the applicants are out of time to challenge the validity of AGM Motion 12. It further says there was no irregularity in the registration of the new CMS.
[78] The legislation gives a body corporate the power to make by-laws for certain purposes, subject to some limitations.[34] The legislation sets out the form of consent to record a new CMS.[35] If the difference between the new CMS and the only CMS is limited to a difference in the by-laws other than exclusive use by-laws, a special resolution at a general meeting is sufficient.[36] Unanimous support is not required.
[79] The regulations provide for the conduct of general meetings, including the requirement to give written notice of the meeting.[37] There is considerable case law about the adequacy of notice for a meeting and the duty to inform owners about the meaning and effect of motions.[38] The Queensland District Court has noted the need for person objecting to the adequacy of notice to 'identify with some precision' what was not disclosed that meant there was a failure to make full and fair disclosure.[39] A complainant would need to establish what was misleading or inaccurate, how, and why that was material. Of particular relevance will be evidence that voters were actually misled by the information.
[80] While the applicants suggest voters did not give 'informed consent' to AGM Motion 12, at this stage they not evidenced that any information given to owners was misleading or inaccurate. They have not clearly identified what further information the body corporate was reasonably required to give voters before the AGM. Moreover, they have not evidenced that any person who voted for the motion did not understand its meaning or effect such that they would have voted differently if they had been given different or further information.
[81] The body corporate must record a new CMS within 3 months after giving consent to a new CMS.[40] Moreover, the committee must give effect to lawful resolutions of the body corporate.[41] Where the body corporate passed a resolution consenting to the new CMS and resolved to record it within 3 months (as required by law), prima facie there was no further authority or decision required.
[82] There is no statutory obligation on the committee to notify owners that a general meeting resolution has been implemented. In any event, the minutes of a committee meeting on 14 July 2025 note that new by-laws were approved at the AGM, that the BCM had given the committee the CMS to sign, and that it would be lodged at the Titles Office by solicitors.
[83] The applicants comment generally on the different approach in the new CMS, and this may not be an approach that they personally agree with. But the applicants do not at this stage identify how any specific by-law contained in the new CMS contravenes the by-law making power of the body corporate or is otherwise invalid.
[84] The CMS for a subsidiary scheme has effect subject to the CMS for the higher scheme.[42] I have previously expressed the view that this means the provisions of a subsidiary scheme CMS cannot conflict with the provisions of the principal scheme's CMS, and that the PBC's CMS will prevail to the extent of any inconsistency, but it does not mean the subsidiary scheme CMS must be the same as the principal scheme's CMS.[43] The applicants' very general remarks about the new Ceil CMS relative to the PBC's CMS do not at this stage identify any inconsistency or other invalidity.
[85] At this stage, the applicants have not satisfied me that there is a substantive legal question to be decided about the validity of the new CMS.
Leger rectification and recalculation (order 7B)
[86] Finally, the applicant seeks orders (order 7B) requiring that the body corporate review and rectify the account ledgers of all affected lots, including Lot 1148, to give effect to the 'findings' in orders 2, 3, 5 and 6. They seek an order that the rectification and recalculation remove or reverse charges not supported by lawful authority, reclassify amounts incorrectly allocated where the allocation was not authorised, and refer only to the previous CMS. They want affected owners to be given corrected account statements within a stated timeframe.
[87] I am unclear how order 2 (for a declaration that a payment plan was not agreed to by the applicants), if warranted, would give rise to any basis to recalculate amounts owing by the applicants. Moreover, as outlined above, the applicants have not yet identified a genuine legal issue that would warrant order 2.
[88] If, by order 3, it was determined that the applicants' January 2024 payment was incorrectly applied to their debt, an order to correctly apply the payment and rectify the consequences of that for the account could be justifiable. But as outlined above, prima facie the dispute on that point appears to be a debt dispute that is beyond my jurisdiction.
[89] It may be that the applicants' intent with orders 5 and 6 is to secure a finding that the body corporate's levying and charging practices are unlawful. However, that would not be the effect of the orders actually sought. In any event, the applicants have not yet established a prima facie case that the body corporate's practices on those matters are unlawful.
[90] Beyond the issues raised in regard to the specific orders above, the applicants have not established that any charges imposed on them or on other 'affected lots' (which are not identified either in general or specific terms) are not supported by lawful authority, or are otherwise unauthorised or invalid.
[91] The applicants seek interim orders that the body corporate be restrained from applying any levy payments they make to any category other than contributions and that all levy payments they make be applied strictly to levy contributions as they fall due, pending final orders.
[92] The applicants claim the interim orders are urgently required because, since the new CMS came into effect, levy payments they made towards the 1 December 2025 levy have been applied to categories other than levies. Accordingly, they say their contributions are recorded as unpaid, putting them in arrears and causing penalty interest to accrue. They say this will continue if their payments are not applied to their levies. They further say that if this continues, the ledger balances will become increasingly distorted, making retrospective correction complex and disputed.
[93] So, the applicants say they seek the interim orders to preserve the status quo pending determination of final orders 3, 5, 6, 7A and 7B. They say they will cause minimum prejudice to the body corporate because it will still receive levy payments but merely must apply those to the levies pending the final determination.
[94] The body corporate says there are no urgency circumstances warranting the interim orders. It says it is required to apply payments in accordance with section 166(5) of the Standard Module. It says if the interim orders are granted, it would be unable to comply with that obligation. It says if the interim orders are refused, the applicants can continue to make payments in the ordinary course and a reconciliation can occur if the applicants are successful and the issues can be determined in the proper jurisdiction.
[95] The applicants appear to be seeking interim orders that would be inconsistent with the way in which the legislation requires the body corporate to apply payments from owners. The regulations set out the way in which payments must be applied, but that is not for payments to only be applied to contributions. I do not consider an adjudicator, even in a temporary order, could require a body corporate to act in a way that is clearly contrary to law.
[96] Also, if the applicants are disputing how their current payments are being applied (albeit that they have not sought final orders about that), arguably that relates to a debt dispute.
[97] Moreover, the applicants have not satisfied me of the urgent need for the order. If the body corporate has been applying levy payments incorrectly, there is potential for a final order requiring the body corporate to correct that (subject to the question of whether it amounts to a debt dispute). That could include reversing incorrect charges or reimbursing the applicants. I acknowledge that could be complicated to do, particularly for transactions over an extended period. But the applicants have not evidenced that the body corporate could not reverse incorrect charges. And if the interim orders were made but the application ultimately failed, the same complexity would arise in trying to reinstate the altered billing arrangements. Particularly where no clear defect has been identified, arguably preserving the status quo means allowing the body corporate to proceed with its current billing practices until a final determination is made that the practices are incorrect and must be remedied.
[98] I acknowledge the applicants may be experiencing significant difficulties as a result of the body corporate's financial management practices and its debt recovery action against them. That is certainly unfortunate. However, prima facie, that is simply a consequence of the ordinary obligations of ownership in a body corporate.
[99] At this preliminary stage, the applicants have not established that there are substantive legal questions about the body corporate's practices generally, or specifically regarding its dispute with the applicants, that are likely to warrant final orders. There may be some questions to investigate about committee decision and actions in late 2023 or early 2024, but if non-compliance was found, it is not clear it now would have any material impact on the current circumstances. Moreover, some of the issues in question may amount to a debt dispute.
[100] In any event, for present purposes, the applicants have not substantiated that the interim orders sought are appropriate or warranted in the circumstances. Accordingly, I have dismissed the application for interim orders.
[101] The application for final orders remains. I will refer the application back to the Commissioner to progress under the Act. The applicants may wish to review the application in light of these reasons. Subject to any further information or amendment of the application by the applicants, the Commissioner may then need to consider questions of whether this application or part of it should be categorised as a related dispute to a debt dispute (if not a debt dispute itself). If the application proceeds, I anticipate the Commissioner will seek submissions from the committee and all owners about the final orders before referring the application for final determination.
[6] Body Corporate for Jargarra Villas CTS 19298 v Odalshire Pty Ltd [2013] QCATA 168
[15] Truth About Motorways v Macquarie [2000] HCA 11, Ainsworth v Criminal Justice Commission [1992] HCA 10
[16] Section 160 of the Standard Module
[17] Section 163 of the Standard Module
[18] Section 162(2) of the Standard Module
[19] Section 164 of the Standard Module
[20] Section 164 of the Standard Module
[21] Section 166(1) of the Standard Module
[22] Section 166(2) of the Standard Module
[23] Section 166(5) of the Standard Module
[24] Section 166(6) of the Standard Module
[25] Section 94(2) and 100(5) of the Act
[26] Part 4 of chapter 3 of the Standard Module
[29] Section 312 of the Act, particularly subsection 4(a)
[30] Section 172 of the Standard Module
[31] See the definition of 'relevant limit for committee spending' in schedule 1 of the Standard Module and noting Motion 11 passed at the AGM in May 2023.
[33] Titles dealing 7152108132, recorded 18 July 2013
[34] Part 5 of chapter 5 of the Act, particularly noting sections 169 and 180
[38] See for example, Body Corporate for Palm Springs Residences CTS 29467 v J Patterson Holdings Pty Ltd [2008] QDC 300, Morat Pharmaceuticals Pty Ltd v Hoft Pty Ltd & Anor [2014] QCA 319, Gold Coast Apartment Management P/L v Price & Ors [2017] QCATA 99, Scholer Pty Ltd as Trustee v Gowland and Anor [2021] QCATA 119
[39] Body Corporate for Palm Springs Residences CTS 29467 v J Patterson Holdings Pty Ltd [2008] QDC 300, para 62, 71-72 and citing Fraser v NRMA Holdings Ltd (1995) 55 FCR 452 at p 468
[43] Valley Terraces Ecohamlets [2011] QBCCMCmr 90
(1995) 55 FCR 452