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

COMMITTEE ELIGIBILITY - whether the applicant is eligible to be a voting member of the committee - whether the applicant is an associate of the caretaking service contractor - COSTS - whether the application is frivolous, vexatious, misconceived or without substance - whether costs should be awarded.

Act, ss, 270, 309; Accommodation Module, s 11(2)(b)

1. The application is dismissed.
2. Within 14 days of the date of this order the applicant, Simon Lill, must pay the Body Corporate for Isle of Palms Resort the amount of $2,000 as compensation for its financial losses arising from this application.

• [1] This application is about the applicant's eligibility to be a voting member of the committee.
• [2] In November 2024 the applicant nominated for the committee positions of chairperson, secretary and ordinary member. In January 2025 the body corporate manager said the nomination would not be accepted as the applicant was ineligible. The basis was that the applicant's son is the director and secretary of BCHS Pty Ltd, which is the caretaking service contractor for the scheme.
• [3] The applicant disputes that he is ineligible and says the body corporate erred applying the legislation. He says it is BCHS Pty Ltd, and not his son, who is the caretaking service contactor. He says he is not an officeholder of BCHS Pty Ltd or otherwise associated with it.
• [4] The substantive question to decide is whether the applicant is eligible as a committee member.

• [5] Isle of Palms Resort community titles scheme 20860 (Isle of Palms) is a 174-lot scheme at Elanora. The community management statement (CMS) shows the Accommodation Module applies. The scheme is registered as group title plan and re-subdivisions 1934, 1946, 2020, 2039, 2089, 2097 and 2174.
• [6] The application seeks the following orders:
  1. an order declaring that the Applicant is eligible to be appointed as a voting committee member of the Scheme and to have his name placed on any ballot for the election of ordinary committee members;
  2. an order declaring that the Respondent has erred in refusing to accept the Nomination;
  3. an order declaring that the Nomination is to be circulated alongside the other written notices required under section 23 and section 77 of the BCCMR respectively, ahead of the AGM scheduled for 27 February 2025; or in the alternative
  4. an order declaring that the composition of the committee, as voted on and subsequently resolved during the AGM on 27 February 2025 is void, in circumstances where the Nomination was not accepted and/or circulated by the Respondent prior; and
  5. an order requiring the Respondent to hold an extraordinary general meeting following he AGM on 27 February 2025, for the purposes of holding a subsequent election to determine the composition of the committee, to enable the Nomination to be included within the ballots to be circulated and subsequently voted on, in accordance with procedures provided for by section 17-31 of the BCCMA; and
  6. any other order that the Adjudicator considers appropriate in the circumstances.

• [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.[1] I am satisfied I have jurisdiction to determine this matter under the dispute resolution provisions.[2]

• [8] The application was lodged on 29 January 2025. The Commissioner's delegate sought clarification from the applicant on some aspects of the application.[3] The application was subsequently amended.[4]
• [9] The Commissioner invited submissions from the committee and all owners.[5]
• [10] The body corporate made a submission asserting the matter was simple, and the applicant had misunderstood the legislation. It sought an award of costs.
• [11] Several owner submissions oppose the application and raise other matters about the applicant.
• [12] The applicant obtained a copy of the submissions but did not respond to them.[6]
• [13] The application was referred to department adjudication.[7] I have now investigated the dispute, including reviewing the application and submissions.[8]

• [14] Section 11 of the Accommodation Module sets out the eligibility of persons to be a voting member of the committee. Under section 11(2)(b), a person will not be eligible if they are an associate of a body corporate manager, service contractor or letting agent, other than an owner of a lot who is the associate of a letting agent merely because the letting agent, in conducting the agent's letting agent business, acts for the owner.
• [15] Section 309 of the Act says who will be an 'associate' for the purposes of the legislation:

(1) For this Act, a person is associated with someone else if -

(a) a relationship of a type to which this section applies exists between them; or

(b) a series of relationships of a type to which this section applies can be traced between them through another person or other persons.

(2) This section applies to relationships of the following types -

(a) marriage, de facto relationship or civil partnership;

(b) the relationship of ascendant and descendant (including the relationship of parent and child) or the relationship of persons who have a parent or grandparent in common;

(c) partnership;

(d) the relationship of employer and employee;

(e) a fiduciary relationship;

(f) the relationship of persons, 1 of whom is accustomed, or under an obligation (whether formal or informal), to act in accordance with the directions, instructions or wishes of the other;

(g) the relationship of a corporation and executive officer of the corporation;

(h) the relationship of a corporation and a person who is in a position to control or substantially influence the corporation's conduct.

(3) Despite subsection (2)(e) and (f), the owner of a lot in a community titles scheme and a letting agent for the scheme are not associated merely because of their relationship as owner and letting agent.

(4) In subsection (2) - executive officer, of a corporation, means a person who is concerned with, or takes part in, the corporation's management, whether or not the person is a director or the person's position is given the name of executive officer.

• [16] A person is an associate of another person not merely if there is a single relationship of a type described but also (under section 309(1)(b)) if there is a series of relationships.
• [17] Pursuant to section 309(2)(b) of the Act, the applicant is an associate of his son. Based on the supplied ASIC record, the applicant's son is currently an associate of BCHS Pty Ltd, pursuant to section 309(2)(g) and (h), as its director and secretary. By that series of two relationships, the applicant is clearly an associate of BCHS Pty Ltd.
• [18] It is not disputed that BCHS Pty Ltd is currently the service contractor and letting agent for the scheme. As an associate of that company, through the series of relationships, the applicant is not eligible to be a voting member of the committee.
• [19] Some owner submissions also assert the applicant is the director or associate of other companies associated with BCHS Pty Ltd and the management of Isle of Palms. But given my substantive finding, it is not necessary to investigate or consider those matters further.

• [20] The Act provides that an adjudicator may dismiss an application if satisfied the application is frivolous, vexatious, misconceived or without substance.[9] If an application is dismissed on that basis, the adjudicator can award costs (up to a maximum of $2,000) incurred by the respondent, the body corporate, and or an affected party for loss arising from the application.[10]
• [21] The body corporate has asked that its costs, fixed at $2,000, be awarded. It says the application was always without substance, from a cursory examination of section 309 of the Act. It says the body corporate manager explained why the applicant was not eligible before he lodged this application. It also says the applicant held the caretaking and letting rights at the scheme for many years and so was no stranger to the regime of body corporate regulation.
• [22] While the applicant obtained the submissions, he did not respond to them including this claim.
• [23] I am satisfied the application was always misconceived and without substance. If the applicant had considered the basis for the body corporate's rejection of his nomination and section 309 of the Act, that would have been readily apparent. I understand the applicant has considerable experience within bodies corporate. He was also legally represented in this application. Moreover, the applicant provides no evidence of engaging with the body corporate about this issue until this application was lodged, and then only to provide a copy of the application and ask that a scheduled meeting be deferred pending the determination of the application. Had the applicant made a genuine attempt to resolve his concern directly with the body corporate, it is likely he would have been alerted to his misinterpretation of the legislation.
• [24] The body corporate engaged lawyers to respond to this application, as it was entitled to, and incurred costs in doing so. It did not provide evidence of the costs incurred but I am satisfied the engagement of solicitors along with the cost of distributing this application to owners would have exceeded the amount able to be awarded.
• [25] Given the circumstances, I am satisfied an award of $2,000 costs is appropriate.

• [26] The applicant has misapprehended the operation of section 309 of the Act. For as long as BCHS Pty Ltd is engaged by the body corporate as a service contractor or letting agent and is under the control of his son, the applicant will be ineligible to be a voting member of the committee. It follows that I have dismissed the application. Moreover, given the circumstances, I have awarded costs.

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

[10] Sections 270(3) and (4) of the Act