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

INTERIM ORDER - whether an interim order is warranted in the circumstances

• [1] Hampton Industrial Court is a small community titles scheme comprised of 4 lots. The applicant, Northxtwo Nominees Pty Ltd is the owner of Lot 1.
• [2] On 21 March 2025, the applicant was served with proceedings issued out of the Brisbane Magistrates Court (proceeding number M3889/25) alleging that it, as the owner of Lot 1, owed a body corporate debt.
• [3] The applicant has brought this interim application claiming that there was no authority for the body corporate to commence the debt recovery proceedings. The applicant asserts that there is no valid committee for the body corporate and nothing to evidence that any valid decisions have been made to issue levies or to appoint lawyers and issue court proceedings.
• [4] The application seeks final orders, to the effect as follows:

(ii) There was no valid annual general meeting of the body corporate held for the 2024-2025 financial year;

(iii) There are no valid contributions levied on owners for the 2024-2025 financial year;

(iv) There was no valid decision of the body corporate to issue Magistrate Court Proceedings M3889/25; and

(v) There was no valid decision of the body corporate to engage Grace Lawyers to act for the respondent.

(b) In the event that it is declared that there is no valid committee, that Christine Kolenc be appointed as administrator for the scheme with specific duties, until a committee is elected or appointed for the scheme.

(c) That Travis West hand over all books, records and property of the body corporate including body corporate funds in his control or possession to the appointed administrator.

• [5] The applicant seeks interim orders that pending final determination of this application, the body corporate takes no further steps in the Magistrates Court proceedings, or to instruct Grace Lawyers in that matter, or in relation to the separate roof dispute, or any other matter.[1]
• [6] The only issue at this time is whether an interim order is warranted.

• [7] The application was lodged on 22 April 2025 seeking interim and final orders as outlined above.
• [8] Prima facie, this matter falls within the legislative dispute resolution provisions.[2] An adjudicator may make an order to resolve a dispute in the context of a community title scheme between a lot owner and the body corporate about a claimed or anticipated contravention of the Act or the community management statement (CMS); or the exercise of rights or powers, or the performance of duties, under the Act or CMS.[3] There are however further jurisdictional questions which I will consider in the analysis below.
• [9] The commissioner has referred the application to me to decide whether an interim order is warranted. There is no statutory requirement to obtain comment from a respondent or affected party before an interim order is decided.[4] In the circumstances, I gave the respondent body corporate a brief period to comment on the interim application.

• [10] The only issue at this time is whether an interim order is warranted. An adjudicator may make an interim order if satisfied, on reasonable grounds, that an interim order is necessary because of the nature or urgency of the circumstances.[5] To determine whether it is just and equitable to grant interim relief, it is necessary to consider:
  1. whether the application raises a 'serious legal issue' with some likelihood of success at final determination, that is, whether there is any merit to the application; and
  2. whether the balance of convenience favours the interim order being granted. This requires balancing the inconvenience of granting relief now if final orders are ultimately refused against the impact of refusing interim relief if final orders are ultimately granted. Of particular significance is whether an interim order is necessary to prevent serious or irreparable harm.

• [11] In summary, the applicant submits that:
  1. There is no validly constituted committee. There has been no election of any committee members and, in particular, there has been no appointment of Mr Travis West as the chairperson. There is no secretary or treasurer for the body corporate and there are no other committee members. The applicant has never been afforded the opportunity to be elected to the committee by way of receipt of any notice seeking nominations.
  2. There are no annual general meetings. The applicant has never received a formal notice of any general meetings, nor has there been any annual general meetings held since the applicant has been an owner at the scheme.
  3. There are no budgets and no fixed contributions. There have never been any resolutions to adopt an administration fund and sinking fund budget nor to fix contributions to be levied on owners.
• [12] The applicant says an administrator is required as the body corporate is so dysfunctional that it cannot operate properly within the statutory framework.
• [13] The respondent made a submission which includes the following:
  1. The proceeding commenced by the body corporate in the Magistrates Court seeks to recover unpaid contributions, penalties for late payment, and recovery costs levied against the applicant in accordance with the Act.
  2. Section 229A(7) of the Act defines a "debt dispute" as a dispute between a body corporate and an owner of a lot about the recovery, by the body corporate, of a debt under the Act. Pursuant to section 166 of the Standard Module, contributions, penalties for late payment, and recovery costs reasonably incurred by the body corporate are amounts recoverable as a debt due to the body corporate. As the Magistrates Court proceeding concerns the recovery of such debts, it constitutes a "debt dispute" within the meaning of section 229A(7).
  3. Section 229A(3) of the Act declares, to remove doubt, that an adjudicator does not have jurisdiction over debt disputes.
  4. Further, pursuant to section 229A(4), once the proceeding was commenced, any dispute resolution process under the Act concerning the debt or any related dispute came to an end.
  5. The arguments raised by the applicant concerning the validity of the appointment of solicitors, the issuing of levy notices, and the authorisation to commence the debt recovery proceedings, even if arguable, are matters that are properly ventilated in the Magistrates Court. Procedural issues relating to the validity of contributions can properly be raised as a defence in those proceedings: Body Corporate of the Lang Business v Green [2008] QSC 318 at [38]- [41]
  6. Accordingly, the applicant has not raised any serious legal question capable of being determined within the jurisdiction of an adjudicator. No prima facie case warranting intervention has been established.
• [14] The application contains a copy of the Statement of Claim filed against the applicant in the Magistrates Court. It alleges that the applicant was served with written notices of contributions levied against the body corporate's administrative and sinking fund budgets, and that the applicant has failed to pay these contributions by their due date. The body corporate claims $4,606.09 in contributions and recovery costs. Prima facie, the claim appears to constitute a debt dispute as it concerns the recovery of unpaid contributions and costs incurred by the body corporate in recovering that amount. However, the fact that a debt dispute has been filed in the Magistrates Court does not mean the current application is beyond the jurisdiction of an adjudicator to consider.
• [15] The application before me appears to raise serious legal questions including whether there have been any resolutions passed to fix levy contributions, whether a committee has been validly elected and whether there was any proper authorisation to engage lawyers and commence court proceedings. These are all matters that, prima facie, are within my jurisdiction to determine under the Act. However, the presence of a serious legal issue does not immediately justify the granting of interim relief. It is also necessary to consider where the balance of convenience lies and whether it is just and equitable to grant the requested interim relief.

• [16] The applicant submits that unless an interim order is granted, it is at risk of the body corporate proceeding entering judgement against it in the Magistrates Court or the applicant will be forced to incur substantial legal fees to defend the court proceedings. The applicant says it has filed a conditional defence protesting jurisdiction of the court for the reasons ventilated in this application and it will be forced to incur the substantial cost of making an application to strike out the Magistrates Court proceedings in circumstances where an award of costs will not fully compensate the applicant for the costs incurred during these proceedings. Further, the applicant says in the absence of an interim order, it will also be forced to incur substantial legal fees to defend the threatened action taken by Mr West purporting to represent the body corporate in the separate matter concerning the roof dispute.
• [17] The applicant says there is no inconvenience or prejudice to the body corporate if the interim orders are made as the status quo will be maintained and the body corporate will not be incurring any costs if the Magistrates Court matter or the roof matter are adjourned pending the final determination of this dispute.
• [18] The respondent argues that the interim orders sought are extremely wide as the applicant not only seeks orders to restrain the body corporate from taking any further steps in the debt recovery proceedings but from instructing solicitors in relation to those proceedings and any other matter pending final determination of this application. The respondent says it would suffer real prejudice by being prevented from prosecuting its lawful debt recovery claim, including potential limitation risks, increased costs, and potential prejudice to its position in the litigation. By contrast the respondent says the applicant faces no real injustice if the proceedings continue as the applicant retains all procedural rights to defend the Magistrates Court proceeding. The respondent says any improper debt recovery could be remedied through orders within that proceeding, and any financial harm would be compensable by an award of costs or damages and is not irreparable.
• [19] I acknowledge that there may be some cost and inconvenience to the applicant in having to defend the debt recovery proceedings. However, in circumstances where the proceedings have already commenced, and the applicant can raise its procedural arguments in its defence and seek an award of costs to minimise any financial damage, I am not satisfied that the balance of convenience favours the granting of interim relief. I note that Grace Lawyers in representing the body corporate are instructed by 3 of the 4 lot owners in the scheme. Therefore, it seems to me that even if the levy contributions were not validly struck at an AGM, or the debt recovery proceedings have not been properly authorised, the majority of owners appear to be in agreement and could retrospectively pass the necessary resolutions. To order that the body corporate put the debt recovery action on hold in these circumstances does not seem to serve any real purpose other than to delay those proceedings.

• [20] Ultimately, I am not satisfied that the nature of the circumstances justifies interim relief.
• [21] The respondent says it is not just and equitable to grant the interim orders sought as it would amount to an unwarranted interference in court proceedings. The respondent says it is simply exercising its lawful right under section 229A(2) of the Act to pursue the recovery of a debt in the Magistrates Court and that the just and equitable outcome is to allow the court to determine the debt dispute according to law. I agree with this position and have thus declined to make the interim orders sought.
• [22] I note the interim order sought also extends to restraining the body corporate from instructing Grace Lawyers in relation to the roof dispute, or any other matter. I am not aware of any court proceedings that have commenced regarding the roof matter but note the applicant says there is a threat of such action commencing. In this instance, while I have declined to grant the interim order, I would caution the body corporate against commencing any further court action against the applicant in the absence of proper body corporate authorisation.
• [23] The application for final orders will now be referred back to the Commissioner to progress under the Act.

[1] Since about February 2025, the applicant has been in dispute with the body corporate regarding responsibility for a leak in the roof.