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austlii:qld/QBCCMCmr/2025/470
General information, not legal advice.
QBCCMCmr
2025-12-30
Original judgment source is linked above.
Cova [2025] QBCCMCmr 470
The Body Corporate for Cova Central Residences CTS 52381 (applicant)
The Body Corporate for Cova CTS 37420 (respondent)
All owners including The Body Corporate for Cova Marina CTS 44722, The Body Corporate for Cova South Residences CTS 37431, The Body Corporate for Cova North Residences CTS 45638 (affected persons)
Body Corporate and Community Management Act 1997 (Qld) (Act), sections 227(1)(b) and 229(3)(a)
Body Corporate and Community Management (Accommodation Module) Regulation 2020 (Accommodation Module)
I hereby order that the Body Corporate for Cova CTS 37420 must not:
I hereby declare for the avoidance of doubt that the Body Corporate for Cova CTS 37420 has liberty to apply to vary or cancel the above orders.
[1] This dispute, as complained, is about a principal body corporate attempting to enter into a caretaking service agreement for a period of 25 years for a sum of approximately $1,000,000.00 per annum without requisite authorisation.
[2] This decision concerns interim relief sought by a subsidiary body corporate to preserve the status quo until final determination of the dispute.
[3] Cova CTS 37420, is the principal scheme in a layered arrangement of community titles schemes.
[4] This arrangement contains four subsidiary schemes, namely:
[5] The principal scheme comprises the above subsidiaries, common property and two further lots (i.e., Lots 81 and 82). These two lots are owned by the original co-owners of the scheme, i.e., three corporate entities.
[6] The respondent is the body corporate for the principal scheme i.e., the principal body corporate ('PBC').
[7] The applicant is the Body Corporate for Cova Central Residences CTS 52381.
[8] The bodies corporate for the remaining subsidiary schemes, i.e., the subsidiary bodies corporate ('SBCs') are named as affected persons.
[9] The applicant states that the executive committee members of the respondent's committee are currently as follows:
[10] The contribution schedule lot entitlements for the principal scheme are as follows:
[11] The contribution schedule lot entitlements are pertinent given among other things, in this context, it is the basis for calculating the value of a lot owner's or SBC's vote on an ordinary resolution if a poll is conducted.[1]
[12] The applicant complains that earlier this year, JP and AA requisitioned an extraordinary general meeting ('EGM') to remove, in bad faith and without grounds, a lawfully elected committee member ('RP') - only for him to be later reinstated. The applicant states that in doing so, JP and AA called for a poll for the counting of the votes, which between the two of them resulted in a majority on the basis of 423[2] contribution schedule lot entitlements out of a total of 529.
[13] The applicant adds that during the period between RP's removal and reinstatement, the owners of the 100 lots at Cova Central Residences were unreasonably disenfranchised from proper representation on the respondent's committee.
[14] The applicant states that on an unknown date, JP and AA employed the same mechanism - requisitioning an EGM and calling for a poll - to remove its then body corporate manager, BC Systems, and engage Mercier Body Corporate Services ('Mercier BCS').
[15] The applicant complains that since the engagement of Mercier BCS as body corporate manager, and since the rearranging of committee positions to suit JP and AA, there have been no regular committee meetings, no budgets drafted and no annual general meeting ('AGM') held. Furthermore, the applicant complains that Mercier BCS does not respond to or consult with two out of four members of the respondent's committee (including the representative of the applicant on the said committee).
1.2.2 The prevailing caretaking service agreement
[16] On 5 November 2007, the PBC (represented at the time by the original co-owners of the scheme) entered into a caretaking service agreement with one of the original co-owners of the scheme, Australand Land and Housing No. 5 (Hope Island) Pty Ltd. ('Australand No. 5')[3] for a term of 25 years between 2007 and 2032.
[17] Under this agreement, this original co-owner/caretaker i.e., Australand No. 5 was entitled to remuneration at a sum of $15,000.00 per annum and a collective sum of $1,200.00 per lot in each subsidiary scheme for various types of services (that may be opted out of).[4] The caretaker's remuneration is to be adjusted seemingly for increase every year on the basis of a prescribed formula.[5]
[18] Subsequently, on 27 November 2018, the PBC and Australand No. 5 executed a Deed of Variation. This effectively varies the terms of the aforesaid caretaking service agreement, removing the requirement for payment of the aforesaid $15,000.00 per annum, and amending the collective sum payable per lot to $1,215.00.
[19] However, this Deed of Variation is made dependent on the variation or termination of three other/different agreements between Australand No. 5 on the one hand and Cova Marina CTS 44722, Cova North Residences CTS 45638 and Cova South Residences CTS 37431 individually on the other.
[20] I note that records indicate that in 2022, the caretaker was paid a sum of $752,521.39 (inc. GST).[6]
1.2.3 Review of caretaking duties and remuneration
[21] On 23 November 2025, Mercier BCS issued correspondence seemingly to the committee members of the four SBCs, indicating the following:
[22] On 3 November 2024, MRAS prepared a report stating that the caretaker's remuneration has been assessed at $1,100,277.00[7] inclusive of GST, on an hourly requirement of 298.72 hours weekly, and an hourly rate of $54.90 exclusive of GST.
1.2.4 The newly proposed caretaking service agreement & Mercier BCS
[23] The applicant indicates that the director of Mercier BCS ('MM'), who is a legal professional, drafted a new caretaking service agreement at the behest of and upon payment by the caretaker, Charles Yuan. It states that this has occurred alongside Mercier BCS and/or MM providing advice to the respondent on the same agreement. Accordingly, the applicant expresses concern about what it perceives as a conflict of interest.
[24] The applicant states that there has been no resolution by the respondent or its committee for any of the following:
[25] The applicant states that it sought clarification from MM, JP and AA as to the authority for and the cost of engaging Mercier BCS/MM for drafting the newly proposed caretaking service agreement. The applicant adds that no response in this regard has been forthcoming.
[26] The applicant states that it was informed by the chairperson of the respondent's committee that if it voted against the motion to execute the new caretaking service agreement, it would be sued, supposedly by Charles Yuan. The applicant states that the members of the respondent's committee in representing over 500 lot owners must be able to resist any commercial pressure by a caretaker, and act in the best interests of the members of the bodies corporate concerned.
[27] This newly proposed caretaking service agreement is to be between the PBC and Yuan Property Australia Pty Ltd ('Yuan Property') for a term of 25 years. It seemingly attempts to terminate the prevailing caretaking service agreement with Australand No. 5, despite Australand No. 5 not being a party to the same, and without reference to the termination clause under the prevailing agreement and Deed of Variation. [8]
[28] The figures relating to the remuneration of the caretaker are yet to be inserted in the draft of this new caretaking service agreement. However, the applicant seemingly anticipates that the respondent will refer to the figures recommended by MRAS.
[29] Further, emails sent by the applicant to MM and members of the respondent's committee pursuant to a discussion forum[9] on the matter, indicate a remuneration increase in excess of 10%.
[30] I also note that this newly proposed agreement contains as a schedule, a draft Deed of Guarantee and Indemnity to be entered into by the respondent and Charles Yuan. By way of this deed, the said Charles Yuan essentially guarantees performance of the caretaking duties by Yuan Property.
[31] I note that the supporting documents to the application suggest the involvement of Charles Yuan from Yuan Property in the capacity of a caretaker as at July 2025, despite prevailing agreements noting the caretaker to be Australand No. 5. There is no evidence currently before me that signifies any transfer of the caretaking duties from Australand No. 5 to Yuan Property - whether by assignment or novation etc.
[32] The applicant indicates that currently, Yuan Property is paid approximately $80,000.00 per month for caretaking.
1.2.5 Reasonableness of increasing the caretaker's remuneration
[33] The applicant states that the obligations under the prevailing caretaking agreement are not being met by the caretaker. It notes dying gardens, rubbish being uncollected for weeks and facilities not being maintained.
[34] The applicant states that it conducted an informal poll and survey, presumably within Cova Central Residences, and collected the following data from 34 survey responses:
[35] The applicant notes that it is essentially being asked to approve more money for the caretaker when the services under the current agreement are not being delivered. It states that the respondent's conduct does not pass 'any reasonable governance test'.
1.2.6 Minutes of committee meeting dated 30 July 2025
[36] Concerned by the respondent's governance and decision-making, Brendan Newell, a member of the applicant's committee who is also currently a member of the respondent's committee, evidently requested formal access to the respondent's records. Eventually, he was provided with access through an online records portal.
[37] This portal contained the minutes of a committee meeting dated 30 July 2025, which the applicant states is rather concerning for the reasons noted below.
[38] The minutes of this meeting notes the voting members of the respondent's committee present in person as including the said Brendan Newell. (It also notes in attendance, Charles Yuan representing Yuan Properties as 'Caretaker Manager'.)
[39] Motion 5.4 of the said minutes reads as follows:
Calling of EGM for Variation of Caretaking Agreement
It was noted that the Caretaking Agreement is now aged (20 years old) and requires updates to ensure that it properly reflects the current development of the Cova schemes and associated Common Property.
It was further advised that the Caretaker and the Body Corporate (PBC) would meet the cost of the Consultant's report (Scope of Duties and Remuneration Report) on a 50-50 basis. The Committee resolved as follows:
It was RESOLVED that the Body Corporate accepts one of the following quotations from suitably qualified contractors to undertake a review of the Caretaking Scope of Duties and Remuneration (via separate respective reports) (hereafter, the Works), with such expenditure to be met out of the scheme's Administrative Fund and paid for by the Body Corporate and the Caretaker Manager on a 50-50 basis.
ALTERNATIVE 1
That the Body Corporate Committee accept quotation from MLR in the amount of $11,500.00 including GST (Scope of Duties) plus $6,085.00 including GST (Remuneration).
ALTERNATIVE 2
That the Body Corporate Committee accept quotation from MRAS in the amount of $9,900.00 including GST (Scope of Duties) plus $2,500.00 including GST (Remuneration).
This motion (ALT 1) was CARRIED: YES: 2 NO: NIL ABSTAIN: NIL
[40] In this application, however, Brendan Newell confirms that at the time of this purported meeting, he was not a committee member. He adds that he was elected to the respondent's committee only on 15 August 2025. In other words, the committee meeting predates his election.
[41] The applicant notes that it received no notice of this meeting purportedly held on 30 July 2025 or of any of the issues purportedly dealt with thereat. Further, it states that the content of the minutes were entirely unknown to it until the day it was provided by way of a records portal on 18 December 2025. The applicant further notes that these minutes were only uploaded to the said portal on 15 December 2025, several months after the purported meeting date.
[42] Moreover, the applicant is of the view that this motion has overlooked the Deed of Variation in 2018.
[43] I also note that these minutes indicate that the respondent did not resolve to accept MRAS's quotation. Accordingly, there is a possibility that that may have been achieved at a subsequent meeting.
[44] The applicant seeks the following final orders (to be determined at a later stage):
(a) The body corporate for Cova CTS 37420 has not passed any valid resolution authorising its entry into the proposed new caretaking services contract, or any deed which would amend the caretaking services contract.
(b) That all motions purportedly carried at the purported committee meeting held on 30 July 2025 be declared void, and that those motions may be put to a committee meeting or general meeting properly held.
(c) A declaratory order that the body corporate for Cova has breached section 73 of the Accommodation Module, by failing to call and hold an annual general meeting by 30 November 2025, the date being 3 months after the end of the body corporate's financial year on 31 August 2025.
(d) An order that the body corporate must call and hold an annual general meeting no later than 28 February 2026, which must include administrative and sinking fund budgets.
(e) That a decision binding the body corporate for Cova CTS 37420 may only be made either at:
(i) A properly called and held meeting of the committee for Cova; or
(ii) A properly called and held general meeting for Cova; or
(iii) By passing a proper resolution outside of a committee meeting in which more than half of the members of the committee for Cova, being entitled to vote on the motion, vote in favour of the motion.
(f) That a decision of the committees for the subsidiary schemes Cova North Residences and/or Cova South Residences, or any agreement between the committee representatives of those schemes, is not a decision of Cova.
[45] The applicant seeks the following interim order (that is the subject of this decision):
The body corporate for Cova, and that each member of the committee for the body corporate for Cova, be restrained from executing or attempting to execute any new or amended agreement between Cova CTS 37420 and the caretaking service contractor, until the matters in the substantive application are determined.
[46] 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 the Community Management Statement ('CMS')[10] or about the exercise of rights or powers or performance of duties under the Act or CMS.[11] Further, an order may require a person to act, or prohibit a person from acting in a manner stated.[12] An order may also contain ancillary and consequential provisions the adjudicator considers necessary or appropriate. [13]
[47] I am satisfied that I have jurisdiction to determine the dispute in question by virtue of section 276(1) of the Act (read together with section 227(1)(b) of the Act).
[48] This application for interim orders was lodged during the Christmas and New Year holidays on 28 December 2025.
[49] The Commissioner may refer a matter for adjudication of an interim order application without the respondent and affected persons having an opportunity to make submissions on it. Furthermore, there is no statutory requirement for the department adjudicator to obtain comment from the respondent and any affected persons before such an application is determined.
[50] On 29 December 2025, the Commissioner referred the dispute to department adjudication under section 247 of the Act.
[51] An adjudicator may make an interim order only if satisfied it is necessary due to the nature or urgency of the circumstances.[14] Accordingly, an applicant must satisfy the adjudicator that serious or irreparable damage would be caused without the interim order.
[52] An interim order has effect for a period stated in the order, not to be longer than one year, and may be extended, varied, renewed or cancelled by the adjudicator until a final order is made, and otherwise lapses when an application is finally determined or withdrawn.[15]
[53] An interim order is usually made in the form of a temporary injunction - an order not to do something, pending a final determination of an application.
[54] In deciding whether an interim order is warranted, adjudicators often adopt the approach taken by courts to considering interlocutory injunction applications.[16] The first issue is whether the applicant has made out a 'prima facie case' or raised a 'serious legal question', in the sense that if the evidence remains as it is there is some probability that the applicant will succeed at the final determination stage. The second issue is whether any inconvenience or injury which the applicant would be likely to suffer if an interim order were refused outweighs or is outweighed by any inconvenience or injury which the respondent would suffer if an interim order were granted. Those two issues of serious legal question and balance of convenience are parts of one ultimate question - whether an interim order is warranted - and therefore should not be addressed mechanically or in isolation from one another.
[55] The questions of law and fact raised by the application do not need to be finally decided at the interim order determination stage, and doing so is not appropriate where the evidence is potentially incomplete, or questions of law require opposing arguments and unhurried consideration. That said, if the answer to a question of fact or law is clear on the evidence and issues as presented in the interim application, it may be appropriate and beneficial to decide such questions at the interlocutory stage.[17]
[56] Even if the considerations of urgency or balance of convenience favour the applicant, it is not inappropriate for an interim order application to be dismissed if there is little or no prospect of success on the legal arguments and the uncontroversial facts, at the final determination stage.
[57] Accordingly, the only question for determination at this stage is whether the interim relief sought by the applicant is warranted.
[58] The applicant states that the respondent's committee has been presented with the aforesaid new caretaking service agreement for execution, in the absence of any general meeting to authorise entering into the agreement. The applicant makes this statement given it has a representative on the respondent's committee, i.e., Brendan Newell.
[59] The applicant refers to the seemingly questionable minutes of committee meeting dated 30 July 2025; the purported lack of authorisation for engaging third parties for tasks such as drafting a new caretaking service agreement (or alternatively managing a conflict of interest where the caretaker may have paid MM to draft the same); the purported lack of transparency in its decision-making with minutes not being promptly distributed, and a purported lack of notice of meetings; and the reasonableness of the respondent's governance associated with seeking to increase the caretaker's remuneration when the obligations under the current agreement are purportedly not being fulfilled.
[60] In this regard, the applicant states that there is a significant risk that the members of the respondent's committee will attempt to intentionally or inadvertently execute the agreement without proper authorisation.
[61] The evidence available at this stage, although limited, is consistent with the applicant's narrative of the events that have occurred to date.
[62] Accordingly, I am satisfied that the nature of the circumstances warrants the interim relief sought.
[63] [64] Further, there is a general requirement under section 94 of the Act that a body corporate must act reasonably in among other things, carrying out its functions under the Act and CMS and making or not making any related decision. Similarly, under section 100(5) of the Act, the committee is required to act reasonably in making a decision.
[65] The applicant is also essentially challenging the reasonableness of the respondent's governance and decision-making, in relation to its motivations for seeking to increase the caretaker's remuneration; dealing with a potential conflict of interest etc.
[66] Further, the applicant has also argued procedural irregularities such as lack of notice of meetings, failure to distribute minutes of meetings, and failure to call an annual general meeting. I am satisfied that the applicant has provided sufficient evidence to demonstrate that there is a prima facie case that these irregularities (which in isolation may be minor) may have resulted in substantial injustice (See Carroll and Ors v Body Corporate for Palm Springs Residences CTS 29467[18]).
[67] Moreover, I note that any motion approving the engaging of a caretaking service contractor (i.e., a service contractor for the scheme who is also a letting agent or associate of a letting agent) must be decided by secret ballot in terms of section 125 of the Accommodation Module. In other words, poll voting calculated on the basis of contribution schedule lot entitlements, is not available for such a motion that requires a secret ballot. [19]
[68] The newly proposed caretaking service agreement contains specific provisions on letting, such as clauses 11.10 and 19. While I make no final determination as to whether this has the effect of constituting an authorisation of Yuan Property as the letting agent for the scheme, it would be prudent for the respondent to note the requirements of section 125 of the Accommodation Module if it hasn't already.
[69] I am satisfied that the applicant has raised a serious legal question.
[70] I reiterate that it is unclear to me precisely how the caretaking obligations transferred from Australand No. 5 to Yuan Property.
[71] Regardless, if the interim relief sought is not granted, I note the possibility of the respondent executing the new caretaking service agreement and committing itself to paying increased remuneration to Yuan Property, which in turn commits the SBC's to making substantial contributions.
[72] On the other hand, if interim relief is granted, the prevailing caretaking arrangements with Yuan Property (as submitted) will continue.
[73] Accordingly, I am satisfied that the balance of convenience favours the preservation of the status quo.
[74] I therefore grant the interim relief sought.
3.4 Respondent may apply to cancel or vary the interim order
[75] I appreciate that I have made this order ex parte, i.e., without inviting the respondent or affected persons to make submissions, considering the circumstances of this dispute.
[76] However, the respondent would be well within its rights to make a written request (with reasons) to the Commissioner's Office for a further adjudicator's order to either cancel or vary the interim orders made hereunder.[20]
[77] In the interests of natural justice, I have instructed my delegate to issue a copy of the application for interim orders to the parties along with a copy of this decision.
[78] I am satisfied that interim relief is warranted.
[1] See sections 47(2)(b) and 110 of the Act
[3] A company that co-owns two lots under the principal scheme.
[6] Audit report dated 5 December 2025 prepared by Business Logic Accountants
[10] The CMS includes the scheme's by-laws
[11] Sections 276)(1)(a) and (b) of the Act
[13] See Brighton on Broadwater Breezes [2018] QBCCMCmr 243 at [8]
[16] For general principles see for e.g., Australian Broadcasting Corporation v O'Neill [2006] HCA 46 and SDW2 Pty Ltd v JLF Corporation Pty Ltd & Ors [2017] QSC 1
[17] Cohen v Peko-Wallsend Ltd [1986] HCA 70 at [6]
[18] [2013] QCATA 21 at [22] to [25]
[20] This may be done for e.g., via email to bccm@justice.qld.gov.au citing in the subject line the application reference number, 1412-2025