Body Corporate and Community Management Act 1997 (Qld) (Act), sections 227(1)(b) and 229(3)(a)

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

GENERAL MEETING MOTION - whether a motion to raise a special levy was valid.

Standard Module, ss 160, 162

[1] This application is about a motion to raise a special levy that was decided at an extraordinary general meeting (EGM) on 30 October 2025. EGM Motion 2 proposed a special sinking fund levy of $10,000 per lot, with two equal instalments payable on 1 December 2025 and 1 March 2026. The applicant asked the chair to rule the motion out of order, but he declined. The motion passed with 4 votes in favour, 1 against and 1 abstention.

[2] The applicant opposes the levy. She notes the body corporate approved budgets at its annual general meeting (AGM) in September 2025 that had been drafted in April. She says the budgets were not updated or the proposed the contributions increased after water ingress issues were reported. She says at the AGM the chairperson suggested increasing the sinking fund, and the EGM was called on that basis. But the applicant argues there are no invoices or budgeted works for which there are insufficient funds, and the levy was not sought in connection with any actual planned and estimated work. She says an insurance claim for the water ingress was yet to be assessed. The applicant says there should be a sinking fund forecast and the levies increased by smaller amounts over a longer period to enable work to be done each year rather than an unexpected levy. She asserts it is unlawful to raise a special levy without an emergency or a budgeted expense that cannot be paid. She also suggests the raising of the levy was linked to the sale of her lot.

[3] The applicant seeks an order to invalidate EGM Motion 2. I will consider whether the applicant has established that the motion was invalid.

[4] Highview Apartments community titles scheme 12465 (Highview Apartments) is a 6-lot scheme in Highgate Hill. The community management statement (CMS) records that the Standard Module applies.[1] The scheme is registered as building units plan 12465.

I seek an order that the motion to raise a special levy for consideration at the EGM on 30 October 2025 is out of order. In the alternative, if the motion is passed at the EGM, I seek an order that the resolution to raise a special levy be declared void.

[6] This application was lodged before the EGM on 23 October 2025. The Commissioner's delegate sought clarification from the applicant on some aspects of the application.[2] The application was subsequently amended.[3]

[7] The Commissioner invited submissions from the committee and all owners.[4] Two submissions were received. The applicant did not avail herself of the opportunity to obtain or respond to the submissions.[5]

[8] The application was then referred to department adjudication.[6]

[9] I have now investigated the dispute, including reviewing the application and submissions.[7]

[10] 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.[8] I am satisfied I have jurisdiction to determine this matter under the dispute resolution provisions.[9]

[11] Titles records show ownership of Lot 4 transferred on 1 December 2025. But the applicant was an owner with standing to bring this application when it was lodged.[10] So, the application could continue notwithstanding that the applicant is no longer an owner.[11]

[12] The Act provides for an adjudicator to dismiss an application if they are satisfied a party to the application is no longer a person mentioned in section 227(1) of the Act for the dispute, and the outcome sought by the application is no longer relevant or required.[12] The applicant may have a continuing interest in the dispute despite no longer being an owner, given the timing of the levy instalments. The applicant did not address this but, given my analysis of the substantive dispute, I did not consider it necessary to seek further information about that.

[13] A submission made on behalf of the committee opposes the application. It includes:

1. Quotes and anticipated works were emailed to all owners a number of times.
2. No existing invoice or contractual liability is required. Section 162(2) of the Standard Module allows for levies for anticipated expenditure the body corporate is or may become liable for.
3. Any of the costs disclosed in the EGM documentation and addressed by Motion 2 constitute anticipated expenditure consistent with section 162(2).
4. The 2023 sinking fund forecast identified multiple lifecycle maintenance items including external painting, façade works, sofit and balustrade painting. The last major repaint was in 2005 and repainting is a predictable expense. The forecast indicated a spend of $98,000 in 2027 for repainting.
5. Water ingress and external sheeting defects were reported in December 2024 and on a number of occasions throughout 2025. This is unplanned expenditure outside predicted lifecycle items.
6. The special contribution prevents the depletion of the sinking fund and maintains the building's long term financial stability.
7. The levy was not influenced by the sale of Lot 4 and applies uniformly to all lots. The need for the work existed before the lot was listed for sale.
8. Owners were given sufficient detail to consider the motion.
9. Motion 2 was properly proposed, notified, and resolved.
10. The special contribution is reasonable, evidence-supported, and directed at necessary building maintenance.

[14] The committee submission includes a sinking fund forecast obtained in 2023, a quote for stormwater repairs from July 2025 (for $105,784.91), a roof repair quote from December 2024 (for $16,764.55), a quote for structural works from July 2025 (for $6,998), exterior building painting quotes from July and August 2025 (for $21,428 and $61,304), and a copy of the insurance claim lodged in August 2025 for water ingress.

[15] An individual owner says having reviewed the material circulated to owners and body corporate records, it was clear the building was facing significant unplanned expenditure from water ingress and external sheeting defects that exceeded the sinking fund balance. They say the defects were identified in 2024-2025 and repair quotes and discussions were underway before the applicant listed her lot for sale. They believe the contribution was proportionate to the documented repair costs, necessary to meet the defects, consistent with the regulations, and fair in application. They say Motion 2 was properly proposed, reasonably considered, and aligned with the maintenance requirements.

[16] The issue is whether EGM Motion 2 and the special contribution it authorised were valid.

[17] A body corporate must adopt budgets each financial year for its administrative and sinking fund and then raise levies based on those budgets.[13] The sinking fund is intended for spending of a capital or non-recurrent nature.[14] The sinking fund budget for each financial year must allow for raising a reasonable capital amount for necessary and reasonable spending for the year and to reserve a proportionate amount necessary to be accumulated to meet anticipated major spending over at least the next 9 years.[15] A body corporate can obtain a sinking fund forecast to assist it in estimating the funds needed to be raised for its sinking fund, but there is no statutory obligation to do so.

[18] The regulations then state that "If a liability arises for which no provision, or inadequate provision, has been made in the budget" the body corporate must fix a special contribution to be levied on each owner to meet the liability.[16]

[19] A liability must have actually arisen from a special contribution to be levied. The wording of the legislation does not refer to a liability that may arise or expenditure the body corporate may become liable for. Anticipated future liabilities are necessarily a basis for setting the sinking fund budget each year but not a special levy. A special levy would not be appropriate, for example, simply to increase the sinking fund reserves because of the possibility of the need for expenditure in future.

[20] But that does not mean there must necessarily be a motion approving work, or an unpaid invoice, or an emergency, for a liability to have arisen. For example, a body corporate has a statutory obligation to maintain common property and other parts of scheme land.[17] If once a body corporate knows something it is responsible for maintaining has fallen into disrepair, prima facie it is already liable for rectifying that and the cost of doing so.[18] So, if a body corporate is planning necessary maintenance works, including obtaining quotes with view to considering motions to approve those works, a financial liability can have arisen even before the scope of the works is finalised, or the works are approved or undertaken.

[21] Also, particularly in the case of significant expenditure that cannot reasonably wait until new budgets and contributions are set at the next AGM, it may be preferable to raise the necessary additional funds well in advance to give owners sufficient time to raise their contribution. If the body corporate were to wait until after the expenditure was approved or invoices received to approve a special levy, there may be insufficient time to raise the funds before they are needed to enable the work to commence or to pay a contactor.[19]

[22] Furthermore, if a body corporate has accumulated sinking fund monies based on budgets anticipating required spending for certain works or types of work, there may be no provision for work that was not contemplated when the budgets were set even if the body corporate holds sufficient funds to pay for the unexpected work.

[23] I note generally that body corporate must act reasonably in undertaking its functions,[20] including in managing its finances.

[24] The special contribution proposed by Motion 2 would raise $60,000, being $30,000 in December 2025 and a further $30,000 in March 2026. The EGM minutes noted the contribution was to fund anticipated expenditure, referencing the water ingress/external sheeting repair quote for $104,000, a roof repair quote of $17,000, a roof replacement quote of $64,000, and $7,000 for previously approved concrete cancer repairs due to commence in November 2025. It noted there was approximately $90,000 in the sinking fund.

[25] The applicant says that aside from the work subject to the insurance claim, the money currently in the sinking fund is sufficient for the work referred to by the body corporate (noting that the roof would only be repaired or replaced).

[26] It seems the special levy proposal arose because of a range of anticipated work rather than particular agreed projects that were not budgeted for. To that extent, EGM Motion 2 had a character of seeking to top up the sinking fund generally rather than meet an unfunded liability. However, on balance the applicant has not satisfied me the levy was not based on or connected with necessary expenditure for maintenance at the scheme.

[27] In a recent dispute an adjudicator considered, in part, the validity of a special levy to fund particular work and provide a reserve in case of further work.[21] The applicant in that dispute wanted the original builder to rectify building defects. Although invalidating motions to approve the works (because they lacked two quotes), the adjudicator was not satisfied the special levy motion should be invalided. He said it was undisputed that there were unmet maintenance needs at the scheme that were a body corporate responsibility. He said the builder might fix them, but that was not yet known. Either way, he said the body corporate's liability for the condition of the common property had been enlivened and it lacked the funds to address that. He said if the builder did some of the work, any funds raised but not required would remain in the sinking fund and owners would be required to contribute less in future. The adjudicator concluded it was reasonably open to the body corporate to anticipate it might need further funds to address the evident defects at the scheme and to raise a special levy for that purpose.

[28] I take a similar view in this matter. The applicant does not dispute that the body corporate has a current obligation to undertake a range of maintenance work at the scheme. I do not accept that the body corporate could only raise a special levy related to that works if it had approved specific expenditure or an unpaid invoice. And the applicant has not established that the possibility the body corporate's insurer might pay for some of the work prevents the body corporate from raising funds to meet the expenditure required if the insurer did not.

[29] Also, the applicant has not established the existing sinking fund reserves were accumulated for the purpose of all the works referred to in relation to the special levy. For example, even if the current sinking fund balance would cover the current expenditure needs, if much of that balance was raised for painting works due in 2027, and not for the works currently required, there would be inadequate provision in the sinking fund for the works currently required.

[30] Having regard to the submitted material, the applicant has not satisfied me that EGM Motion 2 was invalid. I have dismissed the application.

[1] It seems the applicant believed the Small Schemes Module applies, and that the chairperson erroneously relied on the Standard Module, but pursuant to section 21(2) of the Act, the applicable regulation module is the regulation module identified in the CMS.

[9] Sections 227, 228, 276 and schedule 5 of the Act

[13] Sections 160 and 162 of the Standard Module

[14] Section 167 of the Standard Module

[15] Section 160(3) of the Standard Module

[16] Section 162(2) of the Standard Module

[17] Section 180 of the Standard Module

[18] Noting, for example, MAGOG (NO. 15) Pty Ltd v The Body Corporate for the Moroccan [2010] QDC 70, paras 80-85

[19] Noting the requirement for at least 21 days' notice before a general meeting can be held to approve a special levy (section 91 of the Standard Module) and for at least 30 days' notice before a contribution is payable (section 163 of the Standard Module).

[21] Saltaire [2025] QBCCMCmr 447, particularly paras 7 to 12