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

INTERIM ORDERS - whether interim orders are warranted in the circumstances.

Act, s 247

1. The Body Corporate for Hanflame Court CTS 19488 must not take any steps to implement any decision (whether by the committee or body corporate) relating to works to the driveway and entrance at the scheme, or any other scheme land over which it has granted an easement. For the avoidance of doubt, the respondent must not take any further steps to implement its decision to pass Motion 11 at the annual general meeting (AGM) held on or about 20 January 2025.
2. The Body Corporate for Hanflame Court CTS 19488 must not take any steps to implement any decisions, whether made at an extraordinary general meeting (EGM) to be held on 21 March 2025 or otherwise, to either (a) terminate its contract with its current body corporate manager (Current BCM) Coastal Realty Strata or (b) enter into a contract with or otherwise appoint a new body corporate manager.
3. The above interim orders have effect until the earlier of, the issue by an adjudicator of a further interim or final order for the application, the application is withdrawn or otherwise ended, or 12 months have elapsed from the date of this order.

• [1] This application for interim orders is about decisions made at the most recent annual general meeting (AGM) for the scheme and motions to be decided at an extraordinary general meeting (EGM) scheduled for 21 March 2025.
• [2] The applicant seeks interim orders restraining the body corporate from implementing certain decisions to seek quotes for, and engage a contractor to commence works on, an area of the scheme land she says is not the body corporate's responsibility to maintain. She also seeks interim orders to stop a scheduled EGM from proceeding and/or to stop it implementing any decisions that are made at that meeting about changing body corporate managers for the scheme.
• [3] For the reasons given below, I have made some but not all of the interim orders requested.

• [4] The scheme known as Hanflame Court CTS 19488 (Hanflame Court) is located in Labrador. It comprises of 4 lots and common property. Hanflame Court is registered as GTP 3773, which is a standard format plan of subdivision. The community management statement (CMS) for Hanflame Court shows the Standard Module applies.
• [5] The applicant is the owner Lot 1.
• [6] The respondent is Hanflame Court.

• [7] The Commissioner referred the application for an interim order to department adjudication under section 247(2)(b) of the Act.
• [8] An adjudicator has jurisdiction generally to make orders that are just and equitable in the circumstances to resolve a dispute between certain parties about a claimed or anticipated contravention of the Act or CMS, or about the exercise of rights or powers, or the performance of duties, under the Act or CMS.[1] The parties to the dispute are the owner of a lot and the body corporate. This is a combination of parties provided for in the Act.[2] This dispute concerns the exercise of rights and performance of duties by the respondent and also potentially includes claims of contraventions of the Act. I am thus satisfied this is a dispute within the dispute resolution provisions of the Act and within the jurisdiction of an adjudicator.[3]
• [9] An adjudicator is expressly given the power to make an interim order "if satisfied, on reasonable grounds, that an interim order is necessary because of the nature or urgency of the circumstances to which the application relates."[4]
• [10] There is no statutory requirement to obtain comment from a respondent or affected party before an interim order is decided. In the circumstances, where the EGM was imminent (scheduled for the following day) I did not seek a submission from the respondent. I was reasonably satisfied I had sufficient material to make a decision on the application for interim orders. However, if there are matters not presently known me which would justify varying or cancelling the interim order, the respondent or an affected party may make such a request.[5]

• [11] The applicant owns 1 of the lots in the 4-lot scheme. She says she was the chairperson of the body corporate until the most recent annual general meeting (AGM), which was held on 20 January 2025.
• [12] The applicant says the body corporate has a contract with a body corporate manager (Current BCM). She considers the body corporate was well-run and that the Current BCM to be professional, ethical, and fair.
• [13] She explains that Lots 3 and 4 were purchased last year.[6] She says this gave the owner of those lots majority voting power in the scheme. At the body corporate's recent AGM, she says the representative of the owner of those lots became the scheme's chairperson. The applicant says prior him becoming chairperson, he had not disclosed to the body corporate that he is a business owner and director of a childcare business that is run from the adjoining premises (1/RP214692) (Childcare Land).
• [14] The applicant says there is an easement over part of the Hanflame Court common property (Easement) that benefits the adjacent property where the respondent's childcare business is located. Notwithstanding the land at issue forms part of the Hanflame Court scheme land, she understands the owner of the Childcare Land is the party responsible for the costs of repairs and maintenance to the Easement.
• [15] The applicant takes issue with the chairperson's behaviour and statements. She also takes issue with several motions passed at the AGM, and claims they are unlawful and should be rescinded. She asserts that the chairperson is providing false information to the BCM, committee, and owners. She says this is in contravention of the chairperson's duties.
• [16] The applicant also says the chairperson has conflicts of interest, has called two EGMs, and has proposed several motions that are not in the best interests of the body corporate. One such motion seeks to terminate the body corporate's contract with the Current BCM (which will incur a termination fee) and to engage a new BCM.
• [17] The applicant is seeking final orders that:
  1. The Adjudicator rescind the motions numbered 11a, 11b, 11c and 11d passed on 20 January 2025.
  2. The Adjudicator appoint Mr Alan Stone, current Body Corporate Manager, as Administrator of the Body Corporate for a period of 17 of months.
  3. The Adjudicator removes Mr Ben Semple as Chair Person of the Body Corporate.
  4. The Adjudicator stay the EGM to be held on 21 March 2025 0900
  5. The Adjudicator directs the current Body Corporate Management, Coastal Realty and Strata, continue with their Contract with the Body Corporate and cannot be terminated before the end of their Term.
  6. The Adjudicator directs the maintenance obligations of Easement A and Easement B are the responsibility of the dominant tenement and not the Body Corporate, despite the easements being situated on common property. To clarify, the maintenance obligations of Easement A are the responsibility of the Lot Owner of 1/RP214692.
  7. The Adjudicator grants to the Administrator power to review, rescind and change as necessary the Body Corporate expenditure, to reverse the changes made that saw the levies suddenly increase substantially at the EGM held on 10 February 2025. have contravened By-law 15 submit a complete application of all works for the purpose of obtaining written approval rectify all damage caused to other lots and common property infrastructure, and pay the expenses incurred by the body corporate for inspection of their lot to ensure fire safety compliance and structural integrity.
• [18] While her application for those final orders is pending, the applicant is seeking interim orders:
  1. To stop imminent work being carried out for the repair and maintenance of the Easements at the expense of the Body Corporate.
  2. To stay the EGM to be held on 21 March 2025 at 0900 until a Final Order is made in order to pause any further motions made to the detriment of the Body Corporate
  3. No AGM's or EGM's to be voted upon until the dispute is resolved.
  4. Motions 11a, 11b, 11c and 11d from the AGM held on 20 January 2025, no further actions can be made to progress these motions and for these motions to be stayed until a Final Order is made.
  5. The current Body Corporate Management, Coastal Realty and Strata, to remain in their role in accordance with their contract. To stay any actions to terminate this Contract until a Final Order is made.
• [19] The applicant says these interim orders are urgently needed to protect the body corporate's finances. She says the expenditure would cause irreparable and serious harm. The applicant says the money will not be recoverable if this EGM is allowed to proceed. She says it is an unlawful use of body corporate funds that is for the sole benefit of another business. Moreover, she says the body corporate will suffer serious and irreparable harm if motions 11a, 11b, 11c, and 11d from the January AGM are implemented. Finally, she says the respondent should be restrained from entering into a chapter 3 agreement with a new BCM as to do so would have the effect of handing management and effective control of the body corporate to someone answering to the owner of Lots 3 and 4.

• [20] The only issue to decide at this time is whether an interim order is warranted.
• [21] I am empowered to issue an interim order if I am satisfied "on reasonable grounds, that an interim order is necessary because of the nature or urgency of the circumstances to which the application relates."[7] If I am satisfied an order is necessary, I may make an interim order that is just and equitable. Adjudicators often make interim orders in the form of a temporary injunction (an order not to do something) to preserve the status quo pending a final determination of an application.
• [22] To determine if it is just and equitable to make an interim order, there must be some reason in law to make an order. For this, I must consider the substantive issue in dispute. The applicant must satisfy me that there are serious legal questions to be answered. At this stage, an applicant does not need to satisfy me on the balance of probabilities that their legal arguments will be successful.[8] Rather, I must be satisfied there is a sufficient likelihood of success to justify making an order.
• [23] I must also consider the practical reasons for and the likely effects of an interim order. This is known as assessing the balance of convenience between the parties. To do this, I must consider the inconvenience or harm to the body corporate if I do not make an interim order but final orders later determine the respondents have contravened the CMS or the Act. I must weigh that against the harm to the respondents if I grant an interim order and the body corporate is later unsuccessful in its application for final orders.
• [24] To determine whether I am satisfied whether one or more of the interim orders is warranted and appropriate, I will consider for each whether a serious legal issue has been presented with sufficient likelihood of success and will also weigh the balance of convenience and potential for harm to the respective parties.

• [25] The applicant seeks an interim order restraining the body corporate from performing works and expending funds on the Easement. A body corporate is only empowered to pay for works it its responsible for. I am satisfied the applicant has raised a serious legal question about whether, for the Easement, the owner of the dominant tenement or the owner of the servant tenement is responsible for maintaining that land.
• [26] It appears the body corporate passed a motion at its January AGM to obtain quotes for, engage a contractor, and authorise the committee to spend up to $15,000 on works involving the Easement. It is now two months since the body corporate approved these motions. I am satisfied there is sufficient urgency for me to consider making an interim order. In terms of balance of harm, I am consider the balance weighs in favour of the applicant. If the interim order is made, even if the application is later dismissed, the body corporate will be inconvenienced by a delay in the commencement of works. Whereas if an order is not made and the applicant prevails on final orders, the body corporate may have difficultly recovering funds it spent on works it potentially is not responsible for.
• [27] I am satisfied this interim order sought is warranted and appropriate.

• [28] The applicant seeks an interim order restraining the body corporate from holding the EGM noticed for 21 March 2025 at 9 am. I do not consider the applicant has raised a serious legal question about the calling or holding of the EGM itself. There is no assertion the meeting was not properly called or that owners were not given notice of meeting in accordance with the legislation.
• [29] Even if there had been a technical error in calling the meeting, I am not persuaded that the balance of convenience favours an interim order staying the meeting. It appears the applicant is not so much concerned with the meeting itself, but with potential decisions that may be made at the meeting. However, it is entirely possible that owners may decide not to vote in favour of the motions presented and they may fail to pass by the requisite votes. I can little harm to the applicant if the EGM proceeds.
• [30] In these circumstances, I am not satisfied this interim order sought is warranted or appropriate.

• [31] The applicant seeks an interim order restraining the body corporate from holding any more EGMs or AGMs while this application is pending. She does not provide a legal basis on which I could make such a broad interim order.
• [32] Without knowing how and why any future EGMs are to be called, or the motions to be considered by the body corporate at such hypothetical meetings, I cannot contemplate making such a broad and restrictive interim order. I decline to do so.

• [33] The applicant also seeks an interim order restraining the body corporate from taking any further steps to implement its decision to approve Motion 11 at the January AGM. This requested order appears to overlap substantially with the first interim order sought about works to the Easement. I consider the first interim order I have made also encompasses this requested order and that it unnecessary to made an additional order.

• [34] The applicant also seeks an interim order restraining the body corporate from taking any steps to terminate its contract with the Current BCM and to engage a new body corporate manager.
• [35] A body corporate has a statutory duty to act reasonably when it is making decisions.[9] In my view, the applicant has raised a serious legal question whether the body corporate would be acting reasonably in the circumstances if it expended funds to terminate the contract of the Current BCM and sought to engage a new BCM with wider powers than the current BCM.
• [36] I consider the balance of harm favours the applicant. If I do not make the interim order sought and the body corporate votes to terminate its contract with the Current BCM and engage a new BCM with wider powers, and it is later determined the body corporate was not acting reasonably when making those decisions, the body corporate would have paid a termination fee and be committed to its new contract. Conversely, if I make an interim order but the applicant does not prevail on her claims about the termination/engagement of BCMs, the only harm suffered by the body corporate is a delay in changing BCMs.
• [37] Accordingly, I am satisfied it is appropriate to make this requested interim order.

• [38] I have made interim orders for the reasons given above.
• [39] If the dispute is not resolved and the applicant does not withdraw the application, the application for final orders will remain to be determined. The application will be referred back to the Commissioner to progress under the Act.[10] The dispute may then be resolved by an adjudicator with the benefit of submissions from all affected parties.

[3] Sections 226, 228 and 276 of the Act

[5] Until a final order is made, an adjudicator has the power to extend, vary, renew, or cancel an interim order. See Section 279(2)(b) of the Act. I note also that the body corporate and all owners will be invited to give their views before final orders are issued. See id. at Section 243

[6] The current owner Lot 3 is Penben Investments Pty Ltd ACN 638 747 010 as Trustee under instrument 723404660 and the owner of Lot 4 is recorded on title as Penben Investments Pty Ltd ACN 638 747 010 Trustee under instrument 723404600.

[8] Although an applicant must identify a genuine legal issue to be decided, the granting of an interim order by itself does not indicate whether or not an applicant will ultimately be successful on their application for final orders.