Fairshore [2025] QBCCMCmr 224 (30 June 2025)

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

GENERAL MEETING MOTION - whether a motion to approve the removal of a common property wall was valid - whether the proposal amounted to a disposal of common property that required a resolution without dissent - whether there was an unlawful delegation -whether the decision to pass the motion was unreasonable.

Act, ss 94, 97, 100, 154, 159; Standard Module, ss 184, 187

• [1] This application is about the approval of an improvement to common property by the owner of Lot 5. Lot 5 is owned by Fairshore Holdings Pty Ltd (Fairshore Holdings), which is also the caretaker and letting agent for the scheme.
• [2] At an extraordinary general meeting (EGM) on 11 November 2024 the body corporate passed Motion 2. It authorised the owner of Lot 5 to remove part of a common property wall between Lot 5 and the foyer. The approval was given on 7 conditions, including that it be at the owner's cost, the owner obtain structural fire and building certification approvals, the owner maintain the improvement, and the owner enter into a deed with the body corporate. The work is part of renovations to Lot 5 supported by the committee as an enhancement to the scheme.
• [3] The applicants seek to invalidate EGM Motion 2. They oppose the motion on three grounds:
  1. The demolition of the common property wall is a disposition of common property, which requires a resolution without dissent that Motion 2 did not achieve.
  2. The resolution purports to unlawfully delegate the power to enter into an agreement to the committee and the body corporate's legal advisors.
  3. The decision to pass Motion 2 was unreasonable, having regard to fire safety concerns.

• [4] Fairshore community titles scheme 12368 (Fairshore) is a 40-lot scheme at Noosa Heads. The community management statement (CMS) shows the Standard Module applies. The scheme is registered as building units plan 2777 and survey plan 228967.
• [5] This application was lodged on 15 November 2024 seeking interim orders. I dismissed the application for interim orders on 21 November.[1]
• [6] The application for the following final orders remains:

(a) A declaration that resolution 2, purportedly passed at an Extraordinary General Meeting of the lot owners in the Fairshore Community Titles Scheme 12368 held on 11 November, 2024 is unlawful, void and of no effect;

(b) Such further or other order(s) as may be determined to be just and equitable for the purpose of determining this dispute.

• [7] 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 CMS, or the exercise of rights or powers or performance of duties under the Act or the CMS.[2] I am satisfied I have jurisdiction under the legislative provisions to decide the application.[3]

• [8] The Commissioner initially referred this application to me to consider the interim order.[4] I considered comments from the body corporate and the owner of Lot 5 before deciding it.
• [9] After the interim order was determined, the applicant provided the EGM minutes and the Commissioner invited submissions on the final order from the committee and all owners.[5]
• [10] Six submissions were received in regard to the final order application. The applicants obtained and responded to the submissions.[6]
• [11] The application was referred to department adjudication.[7] I have now investigated the dispute, including reviewing the submitted material.[8]

• [12] I will canvass the detailed arguments from the parties in my analysis of each issue below.
• [13] In general, the body corporate opposes the application and endorses the submissions from Fairshore Holdings. It says the applicants have failed to establish that Motion 2 was unlawful.
• [14] Fairshore Holdings describes the proposed works and says the removal of the wall will create a more open foyer and reception for guests. It says the applicants did not object to Motion 2 before the EGM and a majority of owners supported it. It says the applicants only later raised the issue about the disposal of common property.
• [15] Three submissions from owners support the application. One says the granting of rights to special access for an owner to improve their commercial position should require a special resolution. Two submitters say a resolution without dissent was required, there was an impermissible attempt to delegate the power to enter into an agreement, a fire consultant indicates a fire safety risk, and the body corporate did not consider the consequences of demolishing the wall. They are concerned about whether insurance can be obtained if the wall is removed. One of those submissions goes on to say that if the wall is not reinstated, security remains a problem and there will be a fire hazard.
• [16] Another owner supports the proposal to allow access from Lot 5 into the common foyer if all issues are dealt with including fire safety, building security, building codes and standards, and rectification works, that the lot owner meets all costs, and the proposal is deemed to be legal.
• [17] The applicants' response to the submissions focuses on the first issue in dispute.

• [18] The applicants seek to invalidate EGM Motion 2. In deciding the validity of that motion, I will consider the 3 issues raised by the applicants. Where relevant, I will restate matters outlined in my reasons for dismissing the interim order. I note that it is not my role to consider the merits of the proposal in Motion 2. Rather, I am only considering whether the body corporate validly resolved the motion and acted in accordance with the legislation in doing so.

• [19] EGM Motion 2 was submitted by the committee and characterised as proposing an improvement to common property. The substantive part of the motion proposed:

That the Body Corporate approves the owner of lot 5 removing part of the common property wall between lot 5 and the building's foyer area as better described within the plan attached. These works are approved to enable the better amenity of the foyer area and its integration with the onside based caretaker and an onside based letting agent.

• [20] The motion was listed as requiring an ordinary resolution and recorded as passed with 17 votes for and 10 against.

• [21] The applicants say the wall forms part of the common property and so its demolition is a disposition of common property. They say the body corporate can only sell or dispose of common property if authorised by a resolution without dissent. They say EGM Motion 2 required, but did not achieve, a resolution without dissent. As such, they say the motion was not validly carried. They discuss case law on the issue.
• [22] The body corporate says the removal of the wall cannot be considered to be a disposal of common property as it is not being alienated in some form, for example by sale, lease, licence etc) to any particular owner to the exclusion of all others.
• [23] Rather, it says the common property is being improved by being transformed to different common property (from a wall to airspace). It says as a wall the common property could not be enjoyed by any owner but once removed, the airspace can be enjoyed by all. Moreover, it says the creation of the airspace (and associated works) will have significant benefits to all owners.
• [24] The body corporate further says the circumstances differ from the cited case law. It says the owner of Lot 5 is not acquiring or seeking to acquire exclusive rights to or the sole use of any common property by the improvements and all owners and occupiers will benefit from the improvements. It says the current circumstances do fall within the ambit of the cited provisions. It argues the words 'sell or otherwise dispose of common property' have a specific and limited application to situations where there is alienation of common property in some form. It says the improvement to common property could only constitute a disposition requiring a resolution without dissent if it gives an owner indefinite and exclusive enjoyment of part of the common property. It says there is no demonstrable loss of any owner's interest in the common property.
• [25] Fairshore Holdings similarly argues there is no disposal of common property. Rather, it says the plans allow for unrestricted access by occupiers and guests. It disputes the applicants' interpretation of the case law. It says in the cited case, the enlargement of a window in a boundary between a lot and common property required exclusive use of the windowsill and airspace beyond the boundary of a lot. It says those circumstances are not present here. It submits that the removal of the wall will not give it any exclusive use of common property.
• [26] The affected party canvassed the construction of section 184 of the Standard Module. It says the words 'otherwise dispose of' are to be construed in the context that the section deals more broadly with selling, leasing and licencing common property. It further refers to the provisions regarding improvements to common property and the definition of an improvement to common property. It says if the physical removal of any part of the common property for any reason was a disposal of common property requiring a resolution without dissent, the provisions about improvements to common property would have little or no work to do. It comments that the applicants' interpretation would, for example, require a body corporate to obtain a resolution without dissent to remove an old balustrade to replace it or to remove old plants to upgrade its garden. It says such a construction would be inconsistent with the objects of the Act.
• [27] In response, the applicants say the issue boils down to the propositions that the wall itself is common property (not just the land on which the wall is constructed) and demolishing the wall is a disposal of it. It further discusses the case law. They say Lot 5 does not have any interest in the wall past the centre boundary and that is common property. They dispute that removing a common property wall is making an improvement to common property. They say Motion 2 would result in the removal of the wall on common property and removal is synonymous with disposal in the natural and ordinary meaning of those words. They say the ownership interests of lot owners as tenants in common of the wall would be disposed of if the wall ceased to exist.

• [28] The legislation allows a body corporate to authorise an owner to make an improvement to the common property for the benefit of their lot.[9] The Act defines an 'improvement' as including the erection of a building, a structural change, and a non-structural change.[10] The definition refers to the definition of 'change' in the Acts Interpretation Act 1954 which "includes change by addition, exception, omission or substitution."[11]
• [29] Although a committee can approve some improvements to common property, most require an ordinary resolution at a general meeting. However, where an improvement to common property would also amount to a 'disposition' of common property, it has been accepted that authorisation by way of a resolution without dissent may be required.

• [30] There are legislative restraints on the capacity of a body corporate to deal with and grant rights to common property. A body corporate can only grant exclusive use over common property, if authorised by a resolution without dissent.[12] Under section 184 of the Standard Module, it can only 'sell or otherwise dispose of' common property' if authorised by a resolution without dissent (unless it is provided for in the CMS).[13] The same provision specifies that (unless provided for in the CMS) granting or amending a lease or licence of more than 3 years over all or part of common property requires a resolution without dissent, while a shorter lease or licence requires a special resolution.[14]
• [31] The capacity of a body corporate to approve an improvement to common property was considered by the Queensland Court of Appeal in a dispute in which the body corporate purported to authorise an owner to extend a shop bulkhead such that it occupied common property.[15] The Court noted that the terms dispose, disposition and disposal are broad and, depending on the context, are not restricted to arrangements involving the creation or transfer of proprietary rights. The Court said that where an improvement had the effect of granting the use of part of the common property to a lot owner exclusively and for an unlimited period, it could not be treated separately from the provisions regarding the disposition of common property. The Court found the resolution in dispute was invalid because it amounted to a disposition of common property but was not authorised by a resolution without dissent.
• [32] In another matter the Queensland Civil and Administrative Tribunal considered the approval of owner renovations to their lot which involved the enlargement of an external window, with the resulting removal of part of a masonry windowsill on common property.[16] The Tribunal said it was not contested that the owners needed exclusive use of the area of the windowsill beyond the midpoint of the boundary wall, which was common property, but they had no propriety rights to or interest in it. The Tribunal accepted there was no change to the boundary and that the interest in the space, whether it contain masonry or glass, remained with the body corporate. But it said the changes had to be considered having regard to the rights of all owners. It found that there was a disposition of the common property.
• [33] In regard to an owner's installation of a deck extension onto common property airspace, the High Court said the disposition of common property airspace is a significant matter.[17]
• [34] Adjudicators have noted that the cases above related to improvements affecting unallocated common property. Where improvements to common property involving the removal of something was associated with an area of exclusive use granted for an owner's exclusive use, adjudicators have observed that the body corporate will have already given up its rights to use the common property by allocating those rights via an exclusive use by-law.[18]

• [35] The question on this point is not about the merits of the proposal or what resolution type owners might think is fair or appropriate. It is solely a question of type of resolution the legislation requires for the body corporate to approve the work proposed by EGM Motion 2.
• [36] For as long as it in dispute is in situ, the wall itself forms part of the common property.[19] It is not merely on common property. The question is whether the removal of the wall would 'otherwise dispose' of the common property, such that a resolution without dissent is required.
• [37] It is arguable that the wall is literally being disposed of, by its demolition and removal. But on balance, I do not consider the common property is being disposed of, for the purposes of section 184 of the Standard Module, simply by the removal of the wall.
• [38] It is not in dispute that the owner of Lot 5 will not acquire the sole or exclusive use of any common property by the removal of the wall, or any associated improvements. Owners and occupiers will retain their existing ownership of and rights to the use of the common property. In that respect, the current circumstances differ from the cited cases in which the improved common property (whether airspace or otherwise) was to be solely for the use of one lot, such that there was an accepted need for a grant of exclusive use or other proprietary rights.
• [39] The character of the common property will change in this case, with the replacement of the wall by airspace, but the area remains common property. Fundamentally, there is no acquisition of an interest in the common property in any form by the owner of Lot 5 and no loss or alienation of that common property by anyone else. Accordingly, while the wall is being removed, I do not consider the common property itself, or any rights or interests in the common property, is being disposed of. I am satisfied an ordinary resolution was sufficient to pass Motion 2.

• [40] Condition 7 of the approval in Motion 2 says:

...the owner of lot 5 enters into an appropriate deed of indemnity with the Body Corporate the terms of which may be approved on behalf of the Body Corporate by the Committee and the Body Corporate's legal advisors, whereby the owner of lot 5 provided an indemnity to the Body Corporate for any costs and expenses that arise from any damage to the common property or breaches of the conditions set out above.

• 2.1 Position of the parties
• [41] The applicants say Motion 2 purports to impermissibly and unlawfully delegate from the body corporate to the committee and to the body corporate's legal advisors the power to determine what is 'appropriate' by way of the proposed deed and then bind the body corporate by whatever those arrangements may be.
• [42] The body corporate accepts its lawyers could not 'approve' the terms of the deed. But it argues the wording of condition 7 does not give its lawyers any decision-making role in approving the deed. It was intended, and it says the wording of the condition when read in proper context supports, that the lawyers were merely providing legal advice and a form of the deed to be considered and approved by the committee. It says Motion 2 was discussed in great detail at the EGM. It was noted that Motion 2 allowed for the deed to be amended to address these issues, subject to negotiation. It says ultimately two deeds were prepared and executed which accorded with the terms of Motion 2 and the EGM discussions and provided more protection of the body corporate's interests than initially provided in the draft deed.
• [43] With the benefit of hindsight, the body corporate concedes the wording of Motion 2 could have been better. However, it says the clear intention and understanding was that the committee would approve the terms of the deed only, but that the committee was expected to rely on the advice and drafting of its lawyers. To remove any doubt, it consents to an order amending condition 7 to clarify the lawyer's role as supervisory only.
• [44] The affected party says the issue is misconceived. But if it is decided that Motion 2 requires clarification, it consents to an order clarifying the role of the body corporate's legal adviser.
• [45] The applicants did not provide further argument on this matter following the reasons for the interim order and did not respond to the submissions on this point.

• [46] A body corporate cannot delegate its powers,[20] and cannot contract out of the Act.[21]
• [47] But the decision of a committee is a decision of the body corporate, except for a decision that is a restricted issue for the committee.[22] If a committee makes a decision that is not a restricted issue, it is making the decision as the body corporate and not as a delegate of the body corporate. The regulations set out what are the restricted issues for a committee.[23]

• [48] The applicants claim an impermissible delegation to both the committee and the body corporate's lawyers. I will discuss these separately.
• [49] Prima facie, the committee, acting on behalf of the body corporate, was empowered to decide to enter into an indemnity agreement with Fairshore Holdings about a proposed improvement to common property and determine the terms of that deed. Moreover, a general meeting resolution had approved the improvement and contemplated that an indemnity deed would be entered into. The applicants have not explained how a committee decision to enter into the deed so would be a restricted issue that must be decided at a general meeting. The applicants did not address that point despite it being raised in the reasons for the interim order. Moreover, they have not established that anything in the executed deeds goes beyond what was contemplated by owners in passing EGM Motion 2. The applicants have not established any impermissible delegation to the committee in regard to the deed or that settling the terms of the deed was a restricted issue for the committee.
• [50] The wording in condition 7 to the body corporate's legal advisors is somewhat problematic. It refers to the terms of the deed being approved by the committee and the body corporate's legal advisors. But lawyers have no decision-making role under the legislation and could not 'approve' the terms of any deed.
• [51] Based on the submissions, which the applicants do not refute, it seems the intention was only that the committee approve the terms of the deed acting on the advice of the body corporate's lawyers, rather than that the lawyers would approve the deed. Given that intent, it does appear that the wording of condition 7 was somewhat clumsy in this regard.
• [52] The question then is whether that forms any basis for an order.
• [53] The applicant has not pursued any argument on this point or commented on the offer by the body corporate and Fairshore Holdings for a consent order to clarify condition 7 or the role of the body corporate's legal advisor.
• [54] Two deeds were executed following the EGM. Regardless of the wording of condition 7, the applicants have not established that the body corporate's legal advisers' role in the process of the preparation and execution of the deed actually went beyond simply drafting and providing advice to the committee. In the circumstances, I do not see any utility in an order to vary the condition 7 or otherwise clarify the role of the lawyers. If there is residual concern in that regard, any party could submit a motion to amend Motion 2.

• [55] Third, the applicants say the body corporate failed to act reasonably in passing EGM Motion 2.

• [56] The applicants say the body corporate failed to consider the consequences on the demolition of the wall on the current certification of classification and fire engineering report for the scheme, fire safety risks to the building, and the safety of occupants. They say no reasonable body corporate would permit an owner to demolish part of the common property such that it would compromise the fire safety of the building and increase the risk of loss of life.
• [57] The body corporate discusses the relevant test and principles in regard to the question of unreasonableness. It says the applicants' arguments on this point are misconceived. It disputes that it gave no consideration to the fire safety consequences of demolishing the wall.
• [58] The body corporate discusses its actions prior to the EGM and says the fire safety implications of the proposal were discussed at the EGM. It says this included that Fairshore Holdings had taken advice from fire engineers and would obtain all required fire approvals before proceeding, and that changes would be made to the draft deed to ensure Fairshore Holdings followed all reasonable directions including ensuring adequate fire prevention measures. It says the applicants' fire safety report did not exist at the time of the EGM and could not have been considered at the meeting. But it further says the report does not say the works cannot be carried out; rather can proceed subject to review and approval by a building certifier.
• [59] The affected party disputes that the resolution was unreasonable. It says the applicants' reliance on a fire safety consultant report was misguided where that report did not exist at the time of the EGM. It says it is not a factor that can now be taken into account in determining whether Motion 2 was objectively reasonable. Further, it says the report's recommendations were subject to review and approval by a building certifier, which has been complied with. It says a building certifier has approved the works and part of that approval is an extension of the fire safety system and other fire safety measures.
• [60] Both the body corporate and the affected party say that where the conclusion in the interim order was that the applicants had not established a substantive question to be determined about the reasonableness of the decision, and the applicant provide no further evidence, the argument about reasonableness should be rejected.
• [61] The applicants did not provide further argument or evidence about this issue despite the preliminary views expressed in the reasons for the interim order. Moreover, they did not respond to the submissions on this point.

• [62] A body corporate must act reasonably in undertaking its functions, including in making or not making a decision.[24] The test for whether a decision is reasonable is objective.[25] It is a question of fact, having regard to all the circumstances.[26] Reasonable decision-making "...involves an evaluation of the known facts, circumstances and considerations that tend to have a rational bearing on the issue..." and "...requires that all relevant matters are taken into consideration and irrelevant ones are left out".[27] The person challenging a decision bears the onus of proof that the body corporate failed to act reasonably.

• [63] The fire safety and other impacts of proposed building works are relevant considerations for a body corporate. A reasonable body corporate should have regard to such impacts when deciding to approve a proposal. On its face, the body corporate did so when considering EGM Motion 2 by including a condition of approval that the owner of Lot 5 '...secures all necessary structural, fire and building certifications'.
• [64] The applicants had concerns about the fire safety impacts of the work. They obtained a report from Fire Check Consultants Pty Ltd (Fire Check) after the EGM on 14 November 2024. Fire Check assessed the fire safety implications of the refurbishment of shop 5. The Fire Check assessment was that the proposed refurbishment would expose the building to additional fire safety risks. It said the demolition of the fire wall was a major alteration to the existing fire engineering report and may compromise the fire safety provision of the building. It recommended additional fire safety measures, such as extending the sprinkler protection to the lobby. It said a building certifier would be required to review and approve the proposal and a qualified fire protection system designer would need to provide a sprinkler design. It also recommended a smoke baffle in the location of the demolished fire wall, and that a structural engineer confirm if the removal of the wall would expose any impact to the entire structure.
• [65] It is not apparent that the applicants raised this concern with the body corporate or the owner of Lot 5, or gave them the Fire Check report, before the EGM considered Motion 2 or before the applicants made this application.
• [66] Fairshore Holdings provides a decision notice from a building certifier dated 13 November 2024 and approved plans for the works. It says these are the approvals required by EGM Motion 2. It says the decision notice and approved plans require an extension of the existing sprinkler system to provide full coverage to the non-fire separated areas of the foyer along with other fire safety features. It says the applicants' fire safety concerns were addressed before they received the Fire Check report. It says if the applicants had raised their fire safety concerns with it, it would have provided the decision notice and approved plans.
• [67] The decision notice from a building certifier and approved plans for the works provided by the owner of Lot 5 is prima facie evidence that fire safety considerations have been addressed and that the owner of Lot 5 has met the relevant condition of approval regarding structural, fire and building certification. The applicants have not refuted the evidence provided by the owner of Lot 5 or established that there are ongoing concerns about the safety of the works. Accordingly, the applicants have not established that the body corporate failed to act reasonably in deciding to pass EGM Motion 2.
• [68] I also note that some owners raised security issues as objections to the works. However, the applicants did not raise this issue or argue that EGM Motion 2 was invalid for reasons related to that issue. Accordingly, I have not considered those matters.

• [69] For the reasons outlined, the applicants have not satisfied me that EGM Motion 2 was not passed because it required, but did not achieve, a resolution without dissent. They also have not satisfied me that the motion includes an unlawful delegation of the body corporate powers, or that the body corporate acted unreasonably in deciding to pass the motion. It follows that I have dismissed the application.

[1] Fairshore [2024] QBCCMCmr 430

[3] See sections 227, 228, 276 and Schedule 5 of the Act

[9] Section 187 of the Standard Module and section 159 of the Act

[11] Schedule 1 of the Acts Interpretation Act 1954

[13] Section 184(a)(i) of the Standard Module and section 154 of the Act

[14] Section 184(a)(ii) and (b) of the Standard Module and section 154 of the Act

[15] Katsikalis v Body Corporate for "The Centre" [2009] QCA 77

[16] Dansur v Body Corporate for Cairns Aquarius CTS 1439 & Anor [2022] QCATA 15

[17] Ainsworth & Ors v Albrecht & Anor [2016] HCA 40

[18] Parkwood Villas [2023] QBCCMCmr 201, particularly at para 61, Waves [2022] QBCCMCmr 409, particularly at para 15

[19] I note section 11 of the Act provides for the incorporation of assets into and as part of the common property when installed as fixtures.

[23] Section 52 of the Standard Module

[25] Gold Coast Apartment Management P/L v Price & Ors [2017] QCATA 99

[26] Waters v Public Transport Corporation [1991] HCA 49

[27] Body Corporate for Beaches Surfers Paradise v Backshall [2016] QCATA 177 at 43, citing McKinnon v Department of Treasury [2006] HCA 45; (2006) 228 CLR 423