//
[2026] QSC 28
General information, not legal advice.
Supreme Court of Queensland
2026-03-06
Freeburn J
Original judgment source is linked above.
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - ENDING PROCEEDINGS EARLY ‑- DEFAULT JUDGMENT - SETTING ASIDE - where the applicant is a body corporate - where the applicant alleges it was under 'adverse control' - where the claim and statement of claim was served on the Chairman of the body corporate - whether the applicant gave a satisfactory explanation for the failure to defend - where the applicant experienced financial difficulties - where time was required to review records - where delay was significant in length and impact - whether the applicant gave a satisfactory explanation of delay in making the application - where the applicant alleges a service agreement was invalid - where the applicant alleges claims advanced by the service providers are contrary to the terms of the deed of company agreement - where the applicant alleges overclaims - where there was a duplication of invoices creating an overstatement in the default judgment - whether the applicant had a prima facie defence on the merits
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - ENDING PROCEEDINGS EARLY ‑- SUMMARY DISPOSAL - SUMMARY JUDGMENT FOR PLAINTIFF OR APPLICANT ‑- where the plaintiff is a body corporate - where the defendants are subsidiaries to the plaintiff body corporate - where the defendants admit the key elements of the plaintiff's claim - where the defendants claim the plaintiff had defences available to it - where the defendants claim the body corporate and its chairperson breached their duties to members - where the defendants make a counterclaim - whether the plaintiff's claim to summary judgment should succeed
Uniform Civil Procedure Rules 1999 (Qld) r 290, 292(2)
Mixed Use Development Act 1993 (Qld) s 177(1)(i), (m), s 194(1)
National Mutual Life Association of Australasia Ltd v Oasis Developments Pty Ltd [1983] 2 Qd R 441, applied
Duffy v Super Centre Development Corporation Ltd [1967] 1 NSWLR 382, followed
(counsel for the plaintiffs in BS 5871/20, BS 2382/21, BS 262/23 and the sole plaintiff in BS 16347/24)
Mr A Duncan was given leave to appear for the sole defendants in BS 5871/20, BS 2382/21, BS 262/23 and the four defendants in BS 16347/24.
[1] There have been a number of proceedings in this court, and in other courts, concerning the failure of the Couran Cove resort. Overviews and summaries of the disputes have been given in previous decisions.
[2] Some urgency is required of this decision because the well-being and living arrangements of a significant number of people are directly affected by the dispute. For that reason, it is necessary for these reasons to be as brief as possible given the complexity of the disputes.
[3] The plaintiffs in each of proceedings BS 5871/2020, BS 2382/21 and BS 262/23 are suppliers of essential services[1] to Couran Cove Community Body Corporate (CBC), the head body corporate. CBC in turn distributes those services to its six subsidiary/member body corporates. Those subsidiary body corporates each have differing voting rights. The six subsidiaries are:
(a) Lot 1 - Resorts (Developments) Pty Ltd, with 50 lot entitlements;
(b) Lot 2 - The Proprietors - Couran Cove Resort - Marine Apartments Group Titles Plan No 106784 (Marine Apartments), with 1152 lot entitlements;
(c) Lot 3 - Couran Cove Holdings Pty Ltd, with 20 lot entitlements;
(d) Lot 4 - The Proprietors - Couran Cove Resort - Lagoon Lodges Group Titles Plan No 106808 (Lagoon Lodges), with 400 lot entitlements;
(e) Lot 5 - The Proprietors - Couran Cove Resort - Broadwater Villas Group Titles Plan No 106807 (Broadwater Villas), with 216 lot entitlements; and
(f) Lot 6 - The Proprietors - Couran Cove Resort - Eco Lodges Group Titles Plan No 106783 (Eco Lodges), with 1400 lot entitlements.
[4] Four of those subsidiary body corporates, Marine Apartments, Lagoon Lodges, Broadwater Villas and Eco Lodges each have residents who live in units in different parts of the resort. Those subsidiary body corporates each levy contributions from their respective residents. The result is that a bill rendered by the providers of essential services to the resort is rendered to CBC who then renders separate bills to the subsidiary body corporates who, in turn, render contribution notices to their respective residents. The payments then must make the return journey. The length and risks of those supply lines has turned out to be a significant problem.
[5] All parties agree that some payments did not make the return journey. Some residents have not paid their contributions. Mr Duncan for CBC submits that those residents who have paid their contributions have been forced to pay more than their fair share to compensate for the recalcitrant residents. That was the case before the service providers obtained orders appointing Mr Karageozis as the receiver to CBC and the problem has continued after the receiver was appointed and has struck contribution notices designed to recoup the service providers' outstanding bills. It is a legitimate and powerful complaint. However, that complaint is something of a side issue on the present applications. For example, none of those residents alleged to be recalcitrant are before the court. In so far as a complaint is made about the conduct of the receiver, Mr Karageozis is not before the court.[2] I will return to this issue.
[6] In any event, the present dispute involves an application by CBC to set aside three default judgments obtained by the plaintiffs/service providers in each case. And, in a further proceeding, BS 16347 of 2024, CBC applies for summary judgment to enforce some contribution notices issued by CBC to the four subsidiary body corporates. I will consider the set aside applications first and then the summary judgment application.
The Applications to Set Aside Default Judgments
[7] In the three different proceedings (BS 5871/20,[3] BS 2382/21 and BS 262/23) the defendant, CBC, brings applications to set aside each of the three default judgments in those proceedings.
[8] The three default judgments sought to be set aside were entered on 4 December 2020, 19 April 2021 and 23 March 2023 respectively. The total of the judgment debts is in the vicinity of $22 million.
[9] The three default judgments are quite dated. On any view, much water has passed under the bridge since the default judgments were entered. That has included some steps taken by the plaintiff/service providers to enforce their judgments. In August 2022 orders were obtained appointing Mr Karageozis as a receiver over CBC and its subsidiary bodies corporate. Various applications have been made extending and clarifying the receivership. Mr Karageozis commenced proceedings against the subsidiary bodies corporate and obtained judgment in CBC's name. In short, setting aside the three default judgments would require some unravelling of the legal rights of many parties, including the receiver and those parties who have dealt with the receiver.
[10] Rule 290 of the Uniform Civil Procedure Rules 1999 (Qld) (UCPR) gives the court power to set aside a default judgment:
The court may set aside or amend a judgment by default under this division, and any enforcement of it, on terms, including terms about costs and the giving of security, the court considers appropriate.
[11] As the default judgments in this case were regularly entered,[4] the principal considerations were explained by McPherson J in National Mutual Life Association of Australasia Ltd v Oasis Developments Pty Ltd:
whether the defendant had given a satisfactory explanation of its failure to appear, any delay in making the application; and whether the applicant defendant had a prima facie defence on the merits.[5]
[12] Of course, prejudice is also a relevant consideration.
[13] A prima facie defence needs to be supported by evidence suggesting that the defence is a plausible one.
[14] It is necessary to consider those four relevant factors, namely: the explanation for the failure to appear and defend, the delay, the prima facie defences and prejudice.
A satisfactory explanation for the failure to defend?
[15] I will deal first with the default judgment obtained in 5817/20.
[16] For CBC Mr Duncan submits that between 2019 and November 2023 CBC was under the effective control of controlling parties which included Mr Napoli and Mr McIntosh and their company, Onterran Ltd. It is alleged that at the time Mr Napoli and Mr McIntosh, or entities controlled by them, owed Eco Lodges and Lagoon Lodges nearly $8 million. That, it is alleged, cut the supply lines to Eco Lodges and Lagoon Lodges, which meant that those two subsidiaries were unable to or did not pay the debts owed to CBC.
[17] It is important to expose the true nature of this submission which Mr Duncan describes as 'adverse control'. The submission really provides a reason why CBC was unable to pay the bills rendered by the service providers, or perhaps why CBC did not pay those bills. The submission is not a submission that the bills rendered by the service providers were false, or that the amounts claimed were not properly payable, or even that the claimed services were not provided.
[18] Another complaint is that Mr Napoli and Mr McIntosh, or entities associated with them, did not take active steps to investigate and/or defend the claim by the service providers against CBC.[6] Mr Duncan emphasises the change in the solicitors acting for CBC from Johanson Lawyers to Conomos Lawyers. He points out that the latter was instructed not to defend. In his words Mr Napoli and Mr McIntosh "took positive steps to ensure that no defence was mounted to the claim".
[19] However, the evidence does not establish that CBC's lawyers at the time, Conomos Lawyers, were instructed not to defend or to, in effect, 'run dead' on the defence of the claims by the plaintiffs/service providers. The evidence of Mr Conomos at the time was that:
(a) he had instructed senior and junior counsel;
(b) "[o]n the basis of the documents supplied to me by the defendant, there does not appear to be a viable defence to the claims made in the statement of claim"; and
(c) in the circumstances, "there is no arguable defence available to the defendant [CBC]"
[20] In considering the discretion, there is an important difference between a situation where a solicitor receives positive instructions not to defend, which is Mr Duncan's contention, and the situation where a solicitor retains counsel, assesses at least some of the relevant documents, and informs the client and the court that there is no viable defence, which is what the evidence establishes.
[21] Mr Duncan emphasises the control held by Mr Napoli and Mr McIntosh over CBC. As I have explained, Mr Duncan's submissions use the concept of 'adverse control'. He says that the controlling parties 'sabotaged' CBC's defence and he focusses on the mechanism by which that was done. The plaintiff/service suppliers complain that Mr Duncan conflates the interests of Mr Napoli and Mr McIntosh. But, even putting aside that controversy, Mr Duncan's submissions do not expose what it is that CBC might have done by way of a defence, even if controlled by an independent, vigilant group of directors. For Mr Duncan to sustain his claim that CBC's defence of proceedings was 'sabotaged', it is necessary for Mr Duncan to point to a reasonably arguable defence that was available to CBC but destroyed by those in control.
[22] With the exception of the discrepancies and accounting issues discussed below, there is no contention that the services supplied by the plaintiff/service providers were not in fact supplied. There is no evidence that suggests that the judgments do not record genuine debts owed by CBC to the plaintiff/service providers. That there was 'adverse control' merely explains who was controlling CBC. The explanation needs to go further and explain that those in control held a viable defence which they did not prosecute. The evidence suggests the opposite - there was no viable defence.
[23] Importantly, it is not sufficient for CBC to argue that the 'adverse control' meant that CBC was deprived of an opportunity to investigate the legitimacy of the service providers' bills. In the circumstances of this case, particularly in light of the relative age of the default judgments, the court would be reluctant to regard the mere loss of an opportunity to investigate as decisive in the exercise of the discretion. As explained CBC has the burden of establishing a prima facie defence, and not simply a desire to investigate.
[24] The same issues of 'adverse control' are raised in proceeding 2382/21. For the reasons explained above, this is not a satisfactory explanation for the failure to defend.
[25] In proceeding 262/2023 CBC also argues that 'adverse control' explains the failure to defend. Again, for the reasons explained above, this is not a satisfactory explanation.
[26] A further point is relied on here. Hickey Lawyers (the solicitors for the plaintiffs/service providers) caused the claim and statement of claim in 262/2023 to be served personally on Mr Cao as the CBC Chairman at the relevant time. It is argued that Mr Cao was part of the 'adverse control' of CBC and that Mr Cao did not alert the subsidiary body corporates or other members of the CBC to the existence of the claim. It is argued that the other members of the CBC only became aware of the existence of the claim sometime after default judgment had been entered, thereby precluding any proper opportunity to investigate and defend the claim.
[27] Again, the problem is that the submission complains about the loss of an opportunity to investigate and defend the claim, without any reference to a substantive or prima facie defence.
[28] CBC says that the claim and statement of claim should have been served on SSKB, the body corporate manager at the time. Importantly, though, the method of service that was deployed is not said to be improper or contrary to the rules. Section 194(1) of the Mixed Use Development Act 1993 (MUD Act) expressly permits service on the chairperson of the body corporate. As explained at the outset, the default judgments were regularly entered and there is no sensible argument to the contrary.
[29] And so, whilst service was effected in accordance with the rules, CBC complains that the method of service "should" have involved service on SSBK. Service effected in accordance with the rules is valid service. There is no secondary set of rules by which a method of service is preferred. It is a matter for each corporation to ensure that documents validly served on that corporation are attended to promptly.
[30] In any event, the argument has little to commend it here. Even when the members of CBC other than Mr Cao became aware of the default judgment, no application was made by CBC to set aside the default judgment - until now.[7] There may have been some force in the argument if, having discovered the default judgment, the 'friendly control' then moved promptly to set aside the default judgment. That was not the case here.
[31] I do not accept that there is a satisfactory explanation for the failure to defend.
[32] CBC argues that the delays associated with the filing of the applications to set aside the default judgments was the result of eight different causes, namely:
(a) the inability for any proper or detailed investigations to be undertaken during the controlled period (i.e. up to November 2023) for the adverse control reasons;
(b) CBC's reliance on the subsidiary body corporates for funding and the inability of the subsidiary body corporates to provide adequate funding due to the non-payment of levies by entities associated with Mr McIntosh and Mr Napoli (totalling, as at 4 November 2024, nearly $29 million);
(c) the appointment of the receiver and his seizure of funds from the CBC's bank accounts and the subsidiary body corporates (which were controlled by the receiver), which effectively precluded the subsidiary body corporates from raising special levies for the purposes of engaging legal representation to agitate the applications;
(d) those financial problems precluded any practical opportunity for the CBC (or the subsidiary body corporates) to appoint solicitors at any earlier time;
(e) the need to seek funding from individual lot owners;
(f) the fact that there were at least 23 different sets of legal proceedings involving the CBC, subsidiary body corporates and various lot owners and suppliers;
(g) the significant time required (mostly from volunteers) to locate, secure and forensically review extensive and voluminous CBC records for the last 10 years; and
(h) the need, on occasion, for the volunteers to prioritise more urgent matters (such as negotiations with, or applications against, the receiver relating to funding for essential services, including insurance).
[33] Those arguments can be dealt with in this way.
[34] First, these submissions are made without any evidence of a prima facie defence to the claims by the plaintiff/service providers. That is important. In National Mutual Life Association of Australasia Ltd v Oasis Developments Pty Ltd, when McPherson J summarised the factors that were relevant to the discretion, His Honour's reference to any delay in bringing the application was a reference to any delay in bringing a worthwhile application to set aside the default judgment. His Honour can hardly be taken to referring to a delay in merely investigating whether there was a defence.
[35] Second, the matters referred to hardly justify the extent of the delay in this case. As I have explained these are old default judgments. Even assuming that CBC was infected by what is described as 'adverse control' that adverse control ceased by January 2024 - which is more than two years ago. And, as the plaintiff/service providers point out, CBC obtained legal advice about setting aside the default judgments as long ago as July 2024.[8] At that time CBC received a costs agreement from SLF Lawyers with a scope that included: "To act swiftly to obtain and review all relevant documents in respect of the judgments obtained against the CBC in the Supreme Court of Queensland proceedings numbered 5771/20, 2382/21 and 262/23" [emphasis added].
[36] Despite that express acknowledgment that there was a need to act 'swiftly' it was more than a year before the application was filed. Certainly, one can appreciate that CBC is not now represented by lawyers and preparation of court documents by non-lawyers takes time. However, even appreciating that difficulty there has been inordinate delay.
[37] Third, one can acknowledge the financial woes being experienced by CBC because of the rupture of its supply lines at the level of residents of the subsidiary body corporates. That explains why the debts owed to CBC and by CBC to the service providers were not paid. It does not establish that those debts were not due and payable. That is the next factor to consider - whether CBC has established that it has prima facie defences to the claims the subject of the default judgments.
[38] CBC contends that the 2019 service agreement between the plaintiffs/service providers and CBC was invalid. The argument is that there were voting irregularities involved with CBC's termination of the 2003 Service Agreement and the implementation of the 2019 Service Agreement. That is an issue that was determined in a previous decision of the court.[9] A failure to strictly comply with voting requirements does not ordinarily render a body corporate resolution invalid. For the reasons stated in that decision, this does not constitute a prima facie defence.
[39] In any event, even if there were a reasonable argument in favour of this defence, it is difficult to see why the court should exercise its discretion to, in effect, re-open a number of factual issues about what happened at a 2019 body corporate meeting and whether those factual issues have the consequence that certain resolutions were invalid.
[40] CBC relies on a deed of company arrangement (DOCA) dated 21 July 2017. CBC contends that the claims advanced by the plaintiffs/service providers are contrary to the terms of the DOCA. Clauses 6.1 to 6.3 provide as follows:
The Parties agree that to the extent the Eco Body Corporate is unable to pay its levies as and when they fall due, solely because of the rights the Company has under this Deed, the Community Body Corporate will credit the Eco Body Corporate with an interest free period on those outstanding levies attributable to the Company, due and owing to it, on and from the Effective Date.
The Parties agree that whichever entity completes the transaction contemplated by clause 3.2(e) (and if not Island Resorts or CCIR, Island Resorts and CCIR must procure the MIR Holder's compliance with this clause) must, whilst the Community Body Corporate continues to provide the Eco Body Corporate with interest free credit in accordance with clause 6.1, provide on identical terms (including quantum), the same credit on an interest free basis to the:
(a) Community Body Corporate for all outstanding amounts due and owing to it as a result of that entity possessing the legal and beneficial interest in the Management and infrastructure Rights; and
(b) Eco Body Corporate in respect of any outstanding caretaking fees it is prevented from paying Island Resorts, CCIR or the MIR Holder (as the case may be).
The Community Body Corporate and the Eco Body Corporate must convene a meeting during each levy period with Island Resorts, CCIR or the MIR Holder (as the case may be), to determine by mutual agreement and acting reasonably at all times, the required credit amount to be granted pursuant to clauses 6.1 and 6.2 above. [emphasis added]
[41] I am unable to see how or why the DOCA provides a defence at all. In any event, as the plaintiffs/service providers explain, the words emphasised above make it clear that the plaintiffs' obligation to provide credits to the CBC under cl 6.2 is coordinate to the CBC's obligation to provide credits to Eco Lodges under cl 6.1. The difficulty for the CBC is that there must be a causal link between the "rights of the Company under this Deed" (where the "Company" is CCCH Developments No.1 Pty Ltd) and "Eco Lodges being unable to pay its levies as and when they fall due".
[42] CBC does not establish that link, or the precondition in clause 5.1.
[43] CBC submits that it has identified a large number of inaccuracies in the claims made in the proceedings 5871/20 and 262/23, including in respect of uncredited payments, partial or uncredited offsets, duplicate invoices, invoices not received and excessive and improper charges. No defects or inaccuracies are identified for the proceeding 2382/21 ($2.8m and $1.7m for the first and second plaintiffs respectively).
[44] Mr Napoli denies the existence of the discrepancies. Mr Napoli has responded to each discrepancy raised by Mr Duncan. Without descending into the detail, some alleged discrepancies are not the subject of a specific complaint. In some cases, the alleged payment postdates the default judgment. In some cases the invoices were acquired by assignment, and in some cases the problem is simply that CBC's ledger does not record the debt.
[45] In 5871/20 ($3.3m and $2m) CBC raises three issues:
(a) an 'overclaim' of $1,836,741.42, comprising unaccounted for EFT payments;
(b) agreed offsets totalling $600,475.33; and
(c) invoices never received totalling $1,236,266.09.
[46] The problem is that CBC's submission is that the "unaccounted payments by the CBC have been verified by entries in the CBC general ledger and corresponding withdrawals shown on the CBC's Bendigo Bank account payments schedule and statements". CBC's general ledger and the underlying documents have not made it into evidence. In any event, it is hard to see how CBC can sustain a complaint of this type by merely saying, in effect, 'our records do not show the amount as due'. Similarly, when CBC contends that invoices were never received, the underlying assertion is that CBC's records do not include those invoices. There could be any number of reasons for that - especially after all this time.
[47] Mr Duncan's submissions state that "CBC has a real prospect of successfully establishing that the claims are overstated". The future tense in that submission shows that CBC is not yet in a position to establish the overstatement. And, when further investigations are undertaken, there will be a contest about the quantum of the amount due. The 'defences' only go to part of the claims and yet CBC seeks to overturn the entirety of the three default judgments.
[48] All of that falls short of establishing a prima facie defence.
[49] As explained, no defects or inaccuracies are identified in the proceeding 2382/21.
[50] In 262/23 ($8.2m and $5.5m) CBC submits that there is an overclaim of $5,025,798, comprising:
(a) unaccounted for EFT payments or agreed offsets totalling $1,479,432;
(b) duplication of invoices (i.e. already included in proceeding 5871/20, being invoices numbered 4, 5, 7 and 8 in proceeding 262/23) to the value of $1,553,938;
(c) with the balance referable to invoices never received by the CBC.
[51] It is necessary to put aside, for the moment, category (b) above. That category is discussed below.
[52] As to categories (a) and (c), CBC submits, again, that the unaccounted for payments by the CBC have been verified by entries in the CBC general ledger and corresponding withdrawals shown on the CBC's Bendigo Bank account payments schedule and statements.
[53] There are a number of problems. First, the discrepancies are sworn to by Mr Duncan but are not supported by evidence. Mr Duncan says the discrepancies are verified by CBC's ledgers, but CBC's ledgers are not in evidence and there are any number of reasons why CBC's ledgers may not show the plaintiffs' debts. One obvious explanation is that the ledgers were not accurate or up to date.
[54] Second, for similar reasons, it is hard to see the basis for the claims of invoices 'not received'. No person with direct knowledge swears to not have received the invoices. This claim is merely that the invoices cannot now be found. In any event, this is not really a defence of substance. The supplies of services are not challenged, merely the receipt of invoices for those services.
[55] Third, as with proceeding 5871/20 the 'defences' only go to part of the claims. CBC seeks to overturn the entirety of the three default judgments.
[56] It is necessary to return to CBC's claim in category (b) above. This is a claim that the service providers duplicated certain invoices because these invoices were already a part of the default judgment obtained by the second plaintiff in proceeding 5871/20. The relevant invoices are invoices numbered 4, 5, 7 and 8 in 262/23 totalling $1,553,938. As counsel for the plaintiffs/service providers described it, there was a 'double-dipping' in the two default judgments.
[57] At the hearing on 20 February 2026, the plaintiffs accepted that there was an overstatement in the default judgment entered for the second plaintiff in proceeding 262/23. The net result is that the judgment for the second plaintiff in proceeding 262/23 ought to be reduced from $5,522,270 (including interest to judgment and costs) to $3,960,196 (including interest to judgment and costs).
[58] The plaintiffs/service providers submit that the court should exercise its power under r 290 of the UCPR to "amend a judgment by default". At the hearing it was contemplated that the plaintiff/service providers would provide to the court, and to Mr Duncan for CBC, a calculation which explained what the plaintiffs/service providers alleged was the correct calculation of the 262/23 default judgment obtained by the second plaintiff. It was contemplated that Mr Duncan could respond on behalf of CBC.
[59] Counsel for the plaintiffs/service providers filed and served its re-calculation on 23 February 2026. On 25 February 2026 Mr Duncan for CBC provided more than 20 pages in response.[10] It is fair to say that Mr Duncan has gone beyond the further submissions that were contemplated. I do not propose to consider that response - except to the extent that it directly addresses the issue of the admitted need to re-calculate the default judgment. Permitting further submissions would permit a re-opening of CBC's case with the difficulty that the service providers would have had no opportunity to respond. The proceedings and this application have been case managed. The parties have already filed and served lengthy submissions.
[60] In so far as Mr Duncan does fairly respond to the service providers' re-calculation, these points are clear. First, Mr Duncan does not quibble with the re-calculation of the principal judgment or the re-calculation of interest.
[61] Second, Mr Duncan says that the admitted need to re-calculate the default judgment in favour of the second plaintiff in proceeding 262/23 is so large, "it can be easily inferred that it occurred with the plaintiff's knowledge". Mr Duncan's submissions continue:
[62] I am not prepared to infer that the discrepancy occurred with the knowledge of the relevant officers of the plaintiffs/service providers. There is no proper factual basis for such an inference.
[63] There are three relevant default judgments. The problem infects one part of one of the three default judgments. The flawed default judgment should be corrected. But, for the reasons explained, there is no basis for more radical orders.
[64] I accept the plaintiffs' submission that the delay in applying to set aside the default judgments has been significant not just in its length, but in its impact on all involved. The plaintiffs and Mr Karageozis have, in reliance on the judgment debts, incurred legal fees in excess of $1.7 million to enforce the judgment debts. Those costs would be thrown away if the default judgments were set aside. Setting aside judgments that are old, and unwinding a receivership commenced in 2022, are drastic steps that are likely to have significant consequences.
Conclusion on the application to set aside the default judgments
[65] It follows that there is no adequate explanation for the failure to defend, the delay has been significant, there is a likelihood of prejudice to the plaintiffs/service providers, and there is no prima facie defence. The exception is the need to recalculate the later of the three default judgments.
[66] Finally, I should return to Mr Duncan's central point - which he raised again in his submissions on 25 February 2026. The fact that there are recalcitrant residents and that the other residents are, in effect, paying more than they should is a concern. But that issue does not arise here. The issue here is whether the court should exercise its discretion to set aside three default judgments that were entered a long time ago. It may be that CBC can explain why those debts came to be outstanding. It may be that those now in control of CBC and its subsidiary body corporates did not have control until early 2024. But the discretion should not be exercised in the circumstances explained, particularly this far down the track and in the absence of a prima facie defence.
[67] In this proceeding the plaintiff, CBC, applies for summary judgment against the four subsidiary body corporates. In their defence, the subsidiaries admit all of the essential elements of CBC's cause of action which arises from the non-payment of contribution notices levied by CBC at the instigation of the receiver appointed over CBC, Mr Karageozis.
[68] As explained by the submissions for the plaintiff in this proceeding, the principal defence raised by the subsidiaries is that CBC had defences available to it in proceeding 262/23, in which default judgment was entered against CBC. Those defences have been considered in the application to set aside the default judgments - discussed above. The question of summary judgment here rises or falls with the application to set aside the default judgments.
[69] Summary judgment is also sought in respect of the subsidiaries' counterclaim, in which they seek declaratory relief.
[70] In November 2024, Mr Karageozis issued contribution notices to the subsidiary body corporates under s 177(1)(i) or alternatively s 177(1)(m) of the MUD Act.[11] Those contribution notices sought recovery of the judgment debt entered against CBC in 262/23 and were in the following amounts:
(a) Eco Lodges (first defendant): $6,883,162;
(b) Broadwater Villas (second defendant): $1,061,973;
(c) Lagoon Lodges (third defendant): $1,999,617; and
(d) Marine Apartments (fourth defendant): $5,663,859.
[71] The contribution notices are based on the 262/23 default judgment debt. Because of the need to re-calculate the judgment debt in proceeding 262/23 (discussed above), the amounts now sought pursuant to the contribution notices are slightly less, namely:
(a) Eco Lodges: $6,103,027;
(b) Broadwater Villas: $941,609;
(c) Lagoon Lodges: $1,743,722; and
(d) Marine Apartments: $5,021,919.
[72] The test for summary judgment is not in dispute. Rule 292(2) of the UCPR requires that the court be satisfied that the defendant has no real prospect of successfully defending all or a part of the plaintiff's claim and that there is no need for a trial of the claim or the part of the claim. As the court explained in Deputy Commissioner of Taxation v Salcedo the court "is essentially called upon to determine whether the respondent to the application has established some real prospect of succeeding at a trial".[12]
[73] As the submissions for CBC explain, the subsidiaries admitted the key elements of CBC's claim, namely that:
(a) the judgment debt was entered in March 2023;
(b) Mr Karageozis was then appointed to recover the judgment debts and had the power under the MUD Act to strike levies on behalf of CBC;
(c) he did so and issued the contribution notices, which required payment by the subsidiaries of their respective amounts by 15 November 2024; and
(d) the subsidiaries have not made payment in accordance with the contribution notices.
[74] The subsidiaries defend on the basis that CBC had defences available to it in the proceedings brought by the service providers. However, for the reasons explained, above, even now there is no discernible defence that was available to CBC. And, the judgment debt is valid unless and until it is set aside. The judgment debt has not been set aside, although it has been amended.
[75] The subsidiaries also defend on the basis that CBC and its chairperson breached their duties to members. However, it is impossible to see how this constitutes a defence to the claim based on the judgment debts. As the submissions for CBC explain, the provisions in the MUD Act for the resolving of disputes regarding the exercise of powers indicate the intention of Parliament is that contributions levied are valid unless and until they are varied by the process laid down by that Act. A referee under the Act has power to vary a contribution if they are first determined to be in an unreasonable amount or excessive. That has not happened.
[76] The subsidiaries raise defences regarding the alleged invalidity of the 2019 Service Agreement and the DOCA. Those possible defences have been discussed above.
[77] There is also an allegation made in relation to both applications that CBC released the debts of some but not all of its members between August 2019 and November 2022 and thereby breached some of its "duties" under the MUD Act. It is difficult to see how that can be a defence to the contribution notices based on a judgment debt entered in 2023.
[78] The subsidiaries make the following counterclaims:
(a) a declaration that the 2019 Service Agreement is void and/or unenforceable;
(b) further and/or alternatively, a declaration that CBC's entry into the 2019 Service Agreement contravened sections 177(1)(a) and/0r 177(1)(n) and/or 167(9) of the MUD Act;
(c) a declaration that the receiver has breached the receiver's duties by pursuing the recovery of the October 2024 contribution notices prior to taking reasonable steps to recover the Napoli/McIntosh Historical Debt.
[79] As to (a) and (b), I have previously considered the claim that the 2019 Service Agreement is invalid. The subsidiaries were not parties to that Agreement in any event and so they have no standing.
[80] As to (c), the complaints about the conduct of Mr Karageozis were a central theme in Mr Duncan's submissions. Since his appointment, contributions have been levied but, because of the historical debts said to be owed by entities associated with Mr Napoli and Mr McIntosh, the residents are paying more than their fair share. The historical debts are said to be more than $28 million, although Mr Napoli contends that his interests owe only $1.5 million of that historical debt.
[81] A receiver must act in accordance with his powers and in good faith.[13] In Duffy v. Super Centre Development Corporation Ltd Street CJ at Eq said:
"The receiver and manager is appointed as an officer of the Court to undertake in that capacity the management of the business of the company as well, of course, as undertaking the care of the company's assets. To the extent to which he makes decisions from time to time, they are in effect made under the authority of the Court itself, and they are subject to review and control by the Court should a proper case be made out requiring such intervention. Whilst this Court does, therefore, have an ultimate control over the day-to-day actions of a receiver and manager, it is a control which is not in my view to be too freely exercised. If, of course, there can be shown to be some defect in the manner in which the receiver and manager is conducting his duties - a defect arising either out of some want of good faith or out of some erroneous approach in law or in principle - then that is clearly a ground on which the Court would entertain an application by one of the interested parties for appropriate directions or some other form of remedial order. Where, however, the challenge made is that there has been an absence of prudence and wisdom in the receiver's decisions, a far heavier onus rests upon the party who seeks to challenge the decision in question. The Court will not concern itself with minor and ordinary decisions that he may have made: it must be shown that there is a decision of real significance in the affairs of the company and as to which there are real and substantial grounds for questioning its correctness before the Court will embark upon an investigation of what, if any, directions ought to be given."[14] [emphasis added]
[82] Appreciating that those are the principles on which the court will intervene, there are a number of problems with this counterclaim. First, allegations are made that Mr Karageozis has breached his duties and yet Mr Karageozis is not a party to these proceedings. The present application for summary judgment requires the court to determine whether there is a real prospect of the subsidiary body corporates succeeding at a trial in defending CBC's cause of action based on the non-payment of contribution notices levied by CBC. The relatively wide counterclaim that Mr Karageozis has breached his duties is not a defence to CBC's claim that the subsidiaries ought to pay their contribution notices.
[83] Second, as explained, the MUD Act provides a regime for the resolving of disputes regarding the exercise of powers to levy contributions. Contributions levied are valid unless and until a referee under the Act has determined the contribution to be in an unreasonable amount or excessive. That has not happened.
[84] Third, whilst Mr Duncan has made strong submissions about the disparity and unfairness of the contribution, no material facts have been alleged which would demonstrate that Mr Karageozis has ventured beyond his powers or has acted without good faith and therefore that the court should intervene. Mr Karageozis is not a receiver with an unlimited brief. He has a limited brief to recover certain judgment debts. And, here the contribution notices were issued to all of the subsidiaries. As CBC's submissions point out, the subsidiaries' real complaint is that Mr Karageozis has not pursued, on behalf of various of the subsidiaries, the historical debts owed by interests associated with Mr Napoli and Mr McIntosh before pursuing the subsidiaries.
[85] Of course, the subsidiaries themselves are free to pursue their recalcitrant lot owners. For present purposes though it is difficult to see how a lack of good faith could be shown against Mr Karageozis.
[86] For those reasons, CBC's claim to summary judgment based on the contribution notices should succeed in the amounts claimed.
[87] The default judgment in proceeding 262/23 will be amended but otherwise the application to set aside the three default judgments will be dismissed. The application for summary judgment will be allowed. I will hear the parties on the form of the orders and on costs.
[1] The essential services are the supply of caretaking, community facilities and infrastructure services (e.g. power utilities and water and sewerage treatment).
[2] Mr Karageozis has caused CBC to issue contribution notices, but he is not properly a party. In other Couran Cove proceedings Mr Karageozis has been separately represented as part of his role as receiver.
[3] A defence was filed in this proceeding in June 2020, but that defence was struck out by Brown J in December 2020 because of a lack of authority on the part of the solicitors who filed the defence. Consequently, the judgment entered can be conveniently described as a default judgment.
[4] This was not contested. See also the discussion below.
[5] [1983] 2 Qd R 441 at 449, citing Kelly J in Aboyne Pty Ltd v Dixon Homes Pty Ltd [1980] Qd R 142.
[6] The plaintiff/service providers contest the idea that Mr Napoli's interests and those of Mr McIntosh were aligned.
[7] The applications were filed in September 2025.
[8] See paragraphs [17]-[19] of the plaintiffs' set aside submissions.
[9] Couran Cove Resort Community Body Corporate v The Proprietors of Couran Cove Resort Broadwater Villas [2023] QSC 133 at [81]- [90].
[10] Some of the pages are blank or partially so.
[11] The Building Units and Group Titles Act 1980 (Qld) contains similar provisions regarding contributions - see s 32 and s 38A of that Act.
[13] Cape v Redarb Pty Ltd [1991] HCA 58; (1992) 107 FLR 362 at 373; Lancet Pty Ltd v Olholm Developments Pty Ltd [2001] 1 Qd R 22 at [78].
[14] [1967] 1 NSWLR 382 at 383; followed in Lancet Pty Ltd v Olholm Developments Pty Ltd [2001] 1 Qd R 22 at [80].
Island Resorts (Facilities and Equipment) Pty Ltd
Couran Cove Resort Community Body Corporate [2026] QSC 28
(1992) 107 FLR 362