Kings Cove [2025] QBCCMCmr 90 (18 March 2025)

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

COMMITTEE PROCEDURES - GENERAL MEETING MOTIONS - whether a committee resolution to incur expenditure above its spending limit was valid - whether the committee validly resolved to call a general meeting - whether general meeting motions were valid - whether consequential orders are warranted.

Act, ss 101A, 242; Standard Module, ss 66, 69, 162, 172

• [1] This application predominantly disputes committee decisions.
• [2] At an extraordinary general meeting agenda (EGM) on 10 November 2023 the body corporate resolved to engage a contractor to install 4 rain heads at a cost of $9,064. However, after installing one rain head, the contractor decided not to proceed. By a vote outside of committee meeting (VOCM) on 13 June 2024, the committee accepted a quote from another contractor for $6,160 to install the 3 remaining rain heads. The applicants object to this decision as being above the committee spending limit.
• [3] The applicants dispute another VOCM on 12 September 2024 which resolved to issue an agenda for an EGM on 11 October 2024. The applicants say that because half the committee members entitled to vote did not agree to the motion, it was defeated. On the basis they also assert that the resolutions at the EGM (which was adjourned and held on 18 October) are void.
• [4] The applicants then object to Motion 3 at the October EGM which resolved to raise a special levy of $15,000 ($1,000 per lot). They say the committee wants to increase the sinking fund balance following significant expenditure on building repairs in recent years, but that does not meet the requirement for a special levy. They dispute that a special levy is needed.
• [5] In addition to the invalidation of those decisions, the applicants want the committee to pay for any committee meeting and EGM that purports to ratify the disputed expenditure, and the October EGM. The applicants also want the committee executive excluded from being on the committee in future, and for their application fees to be reimbursed. I will consider whether the committee have contravened the legislation and whether any orders are warranted.

• [6] Kings Cove community titles scheme 2538 (Kings Cove) is a 15-lot scheme at Caloundra. The community management statement (CMS) shows the Standard Module applies. The scheme is registered as building units plan 13107.
• [7] This adjudication application was lodged on 7 November 2024. It seeks the following orders:
  1. That the resolution of the committee to accept the Quote from Platinum Plumbing Qld Group, at the committee meeting held on Thursday 13 June 2024 (Attachment "A"), yet to be confirmed or ratified, be declared void and thus unable to be ratified.
  2. If the committee proceeds to ratify or confirm the resolution, purportedly passed, to accept the quote from Platinum Plumbing Qld Group by the calling of an EGM, that the adjudicator order the costs of holding the committee meeting and the EGM, be paid by the committee back to the appropriate Body Corporate fund, from which the costs were paid.
  3. That the resolution purportedly passed on 12 September 2024 (Attachment "B") at the Vote Outside Committee Meeting by 3 votes for, No O and abstain 1, to issue the agenda for an EGM to be held on 11 October 2024, be declared void and consequently subsequent motions passed at the EGM on 18 October 2024 (Attachment "C") also be declared void.
  4. It is also sought that the adjudicator order the costs to issue the notices, minutes and hold the EGM on 18 October 2024, be reimbursed by the committee back to the Body Corporate fund from which it was taken.
  5. That the resolution purportedly passed at the EGM on 18 October 2024 to raise a special sinking fund levy also be declared void apart from above, due to the fact that the committee wishes only to raise the balance of the sinking fund, due to a significant amount of monies having been spent on building repairs in the recent years. (Attachment "D") The Notice of Contribution (Attachment "E") has already been issued and it is requested that the adjudicator order this notice to be null and void and that any payments of $1,000 requested, be refunded back to the unit owners who made the payment.
  6. It is also requested that an order be made to exclude the Executive of the Committee, namely the Chairperson, Secretary and Treasurer from serving on this committee in the future, for an appropriate period of time, due to the serious breaches of the Legislation that have constantly occurred.
  7. We also seek an order for the respondent to reimburse our fees for our application for adjudication.

• [8] 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.[2]

• [9] The Commissioner invited submissions from the committee and all owners.[3] A submission was made on behalf of the committee. The applicants responded to the submission.[4]
• [10] The application was referred to department adjudication.[5] I have now investigated the dispute.[6]

• [11] I will consider first the substantive orders sought about the body corporate's decisions (orders 1, 3 and 5) and then the consequential orders (orders 2, 4, 6 and 7).

The applicants seek an order to invalidate the committee's resolution of 13 June 2024 to accept a quote for work totalling $6,160 (GST included).

• [12] The applicants argue the resolution was above the committee's spending limit. They say the spending was not urgent but, if it was, the committee did not apply to an adjudicator to authorise the spending to meet an emergency.[7]
• [13] The committee acknowledges it approved expenditure above its spending limit. But it says it wanted to proceed as soon as possible to prevent damage to the building. It says the resolution was distributed to all owners, with no objections, and was ratified at an EGM on 29 November 2024.[8] It notes the spending was less than the quote accepted at the 2023 EGM, the works have now been completed, and the contractor has been paid. It believes it acted fairly and reasonably in the circumstances.
• [14] In response, the applicants say the ratification was not carried out urgently. They also say if the ratification is accepted, the committee could breach the legislation at will and then ratify their decision at any time later. They argue the spending limit is there to stop the committee exceeding its limit, to protect body corporate's assets, so ratification does not appear to be applicable. They also query how the committee can say it acted fairly and reasonably when it ignored the legislation. They feel the committee has breached their code of conduct.

• [15] The Act provides, in part, that an application to invalidate a committee resolution must be lodged within three months of the date of the relevant meeting.[9] However, an adjudicator may waive the time limit for 'good reason'. The factors to be considered by an adjudicator when deciding whether there is good reason to waive a time limit will include the length of the delay, the reason for the delay, the effect of the delay on others, and whether the applicant would otherwise have been entitled to the relief.[10]
• [16] In this case, an application seeking to invalidate a resolution passed on 13 June 2024 should have been lodged by 13 September. This application was not lodged until 7 November, nearly 2 months out of time. No reason has been given as to why the application was not brought sooner or why the time limit should be waived. It is not apparent the applicants raised their concerns until October, and it appears the application was lodged after the applicants were aware the body corporate was proposing a motion to ratify the expenditure.
• [17] I am not persuaded there is good reason to waive the time limit in the circumstances, but for the information of the parties I will consider the substantive issue.

• [18] A committee cannot incur expenditure above its spending limit except in certain circumstances, including where the spending has been authorised at a general meeting.[11] The relevant limit for committee spending is (if no other amount has been set by ordinary resolution) an amount that is $200 multiplied by the number of lots.[12] As Kings Cove has 15 lots, the committee's spending limit will be $3,000 unless that limit has been altered.[13] It is not in dispute that in the first instance the committee authorised spending well above its spending limit.
• [19] The body corporate, at an EGM in November 2023, authorised spending of $9,064 (including GST) on the installation of rain heads. I have no evidence that anyone disputed the 2023 EGM resolution. It could be argued that the committee spending was specifically authorised by ordinary resolution of the body corporate. However, even if the 2023 EGM resolution did not authorise the subsequent committee spending, there is a question of whether it was subsequently ratified at the EGM on 29 November 2024.
• [20] While the applicants appear to dispute that the committee decision was capable of ratification, it has been widely accepted that committee decisions can be ratified at a generally meeting.[14] The case law indicates the requirements for an effective ratification are:[15]
  1. the agent (ie. the person or entity whose act is being ratified) must have purported to act for the principal (ie. the body corporate or committee)
  2. at the time the agent acted, the principal must have been existing and ascertainable
  3. the principal must have been legally capable of doing the act in question
  4. at the time of the ratification the principal must have full knowledge of all the material facts and circumstances pertaining to the agent's acts, and
  5. ratification must be effected within a reasonable time.
• [21] I am satisfied the November 2024 EGM was effective to ratify the committee's decision. The body corporate existed and was capable of approving the expenditure, and the committee was clearly acting on behalf of the body corporate. I consider wording of the ratification motion was sufficient to explain the material circumstances. I do not consider the 5.5-month timeframe between the VOCM and the EGM was significant or unreasonable in the circumstances, particularly having regard to the statutory requirements to resolve to call and give notice of a general meeting. Owners had the capacity to issue a notice of opposition to the VOCM but did not, and owners were notified in October of the intention to call an EGM to ratify the VOCM.
• [22] It is not apparent that any owner has challenged the validity of the EGM resolution to ratify the VOCM. Moreover, it is not disputed that the works have been completed and the funds spent. The ratification rectifies the defect in the 13 June 2024 decision. Accordingly, there is no basis to make the first order even if the time limit for the application was waived.

Committee resolution of 12 September 2024 (order 3)

• [23] The applicants dispute the VOCM on 12 September 2024 that resolved to issue an agenda for an EGM in October 2024. They then seek to invalidate the resolutions at that EGM.

• [24] The applicant argues that 3 of the 6 committee members entitled to vote on the motion did not agree to the motion because they did not vote, so the motion should be defeated, not passed.
• [25] The committee says it has 6 committee members, so 4 out of 6 votes is a majority. It says a total of 4 committee members voted on the September VOCM, with 3 votes in favour and 1 abstention, and the chairperson abstained from voting due to a conflict of interest.
• [26] In response, the applicants say there is conflicting information from the committee as to what qualifies as a majority, where the chairperson abstained due to a conflict of interest, being 3 out of 5 votes or 4 out of 6 votes.

• [27] The minutes record that the VOCM of 12 September 2024 was carried, with 3 votes for, no votes against, and 1 abstention. It is not disputed that the chairperson abstained from voting on the basis of a conflict of interest.
• [28] For voting on a motion outside a committee meeting, the motion is decided if the majority of all committee members entitled to vote on the motion agree to the motion, or one-half or more of all members entitled to vote on the motion do not agree to the motion.[16] The legislation provides for the membership of a committee.[17] But in some circumstances committee members may not be eligible to vote.[18] Also, if a voting member of the committee has a conflict of interest in an issue being considered by the committee, the member must disclose this interest, and is not entitled to vote on a motion involving the issue.[19]
• [29] There were no votes cast against the disputed motion. As the chairperson declared a conflict of interest, they were not entitled to vote on the motion. It is not disputed that there are 6 voting members of the Kings Cove committee. But, because of the declared conflict of interest, the total number of committee members entitled to vote on the disputed motion was 5 and not 6. The 3 votes in favour of the motion constituted a majority of the 5 members entitled to vote.
• [30] Furthermore, even if the VOCM was not carried by sufficient votes (which I do not accept), I consider that would have been a minor procedural defect. Where the EGM motions were put to all owners to decide and the claimed defect did not affect the ability of all lot owners to be notified of or vote on the EGM motions, any defect in the calling of the EGM would not be a sufficient reason to invalidate the EGM resolutions.
• [31] I do not consider either the VOCM of 12 September or the October EGM were invalid.

• [32] The applicants specifically seek to invalidate Motion 3 from EGM on 18 October 2024, which resolved to raise a special levy, and want the funds raised be reimbursed.

• [33] In addition to asserting the EGM notice was invalid (which I have dealt with), the applicants say the committee is seeking to raise the balance of the sinking fund, due to significant spending in the recent years, when that does not meet the requirements for a special levy. They appear argue the levy was intended to top up the sinking fund, rather than meet an unexpected debt.
• [34] The committee simply says no other owner has objected to the special levy (or other committee decisions). The applicants say the committee has not addressed lack of a financial reason for a special levy.

• [35] The legislation states that, if a liability arises for which no provision, or inadequate provision, has been made in the budget, the body corporate must, by ordinary resolution, fix a special contribution to be levied on the owner of each lot towards the liability.[20]
• [36] I do not agree that a special levy can only be raised if the body corporate owes a debt. Rather, a special levy can be raised when a liability arises which was not adequately budgeted for. This is an important distinction. It does not necessarily matter if the funds raised are to be spent on a cost that has already been incurred, or that is required to be incurred. Also, if an annual budget or a special levy raise more than is ultimately required, that can be addressed with lower contributions set at the next annual general meeting.
• [37] The applicants have not disputed that the body corporate has incurred significant expenses on building works. If the body corporate had not adequately budgeted for any or all of that expenditure, it was entitled to decide to raise a special levy to meet that expenditure before or after spending those funds. However, given the minutes of the EGM on 18 October 2024, it is not necessary for me to consider the body corporate's expenditure closely.
• [38] Two relevant motions passed at the October EGM. The first (Motion 2) authorised $14,495.69 for pool related works, to be paid for from sinking fund monies. The second (the disputed Motion 3) authorised the $15,000 special levy. On its face, the special levy appears to cover the cost of the pool works authorised at the same meeting. The applicants have not provided any information to establish that Motion 3 was proposed other than to fund the liability that would arise by passing the preceding motion. The applicants have not established any contravention with the legislation.

Reimbursement of costs incurred (orders 2 and 4)

• [39] The applicants want the committee to pay back into the body corporate's fund any costs of holding a committee meeting to call an EGM to ratify the 13 June VOCM, and the resulting EGM (order 2). This would appear to be the VOCM of 12 September 2024 and the November 2024 EGM. They also want the committee to reimburse all costs of the October 2024 EGM. The applicants have not detailed or evidenced the costs they want refunded.
• [40] The applicants appear to seek these orders on the basis of the breaches of the legislation that they allege. The committee did not comment on these orders.
• [41] The applicants have not established substantive breaches of the legislation by the committee in regard to the disputed decisions. Accordingly, there is no justification for these orders.
• [42] The applicants also have not explained if they are seeking orders against individual committee members, or the committee as a legal entity. Neither were named as a respondent to the application (and could not be[21]) and it would not accord with the principles of natural justice to make orders against a party who was not named as a respondent.
• [43] Any claim for the committee, as a legal entity, to reimburse the body corporate would be illogical because it could only do so using body corporate funds. Individual committee members, prima facie, have protection from liability.[22] Specifically, a committee member is not civilly liable for an act done or omission made in good faith and without negligence in performing the person's role as a committee member. The applicants have not established that any individual committee member acted negligently or in bad faith.

• [44] The applicants seek to exclude the executive of the committee, namely the chairperson, secretary and treasurer, from serving on the committee in the future, for an unspecified 'appropriate' period of time, due to the serious breaches of the legislation that the applicants claim have constantly occurred. The committee did not comment on this order.
• [45] The applicants have not established that the committee generally or individual committee members have breached the legislation. They have not substantiated that any committee member has breached the code of conduct for committee voting members.[23]
• [46] In any event, the legislation determines who is eligible to be a voting member of the committee.[24] The legislation does not provide for an adjudicator to override those provision or determine that individuals who are eligible for election to the committee under the legislation cannot be elected. Moreover, the order sought would conflict with the principal of self-management as an inherent aspect of community titles schemes.[25] It is for owners to decide who they wish to represent them on their committee.

• [47] Finally, the applicants seek reimbursement of the fee for making this application. Again, the committee did not comment on this order.
• [48] There is no inherent authority of an adjudicator to award costs to any party,[26] and no such authority is provided for in the legislation. The only capacity in the legislation to award costs to an applicant is to reimburse the application fees if a conciliation application for the same dispute was ended because the respondent failed to participate without reasonable excuse.[27]
• [49] In this case, the applicants did not apply for conciliation, and none was held. For this reason, I have no capacity to make this order even if it was warranted.

• [50] The applicants have not substantiated their claims. To the extent that the committee incurred expenditure above its spending limit, I am satisfied the decision was ratified by the body corporate. No other defects have been established. The consequential orders sought by the applicants would not be appropriate even if the substantive orders had been warranted. It follows that I have dismissed the application in its entirety.

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

[7] Section 172(1)(c) of the Standard Module

[8] The supplied minutes of the EGM show the motion passed with 8 votes in favour and nil against.

[10] Kulcsar & Ors v Body Corporate for Larnaca Court CTS 10467 [2016] QCATA 47, Weeks v Commissioner for Body Corporate, (QDC, unreported, Dodds J, 13/99, 20 September 1999)

[11] Section 172 of the Standard Module

[12] See relevant limit for committee spending in schedule 1 of the Standard Module

[13] There is no suggestion in the submitted material that the limit has been altered.

[14] Warren v Body Corporate for Buon Vista Community Titles Scheme 14325 (No 2) [2006] QDC 398, Warren v Buon Vista Community Titles Scheme 14325 [2007] QCA 160, Body Corporate for Calypso Plaza on Coolangatta CTS 24595 v Larraine Pty Ltd [2014] QCATA 004

[15] Carroll and Ors v Body Corporate for Palm Springs Residences CTS 29467 [2013] QCATA 21, Warren v Body Corporate for Buon Vista Community Titles Scheme 14325 (No 2) [2006] QDC 398

[16] Section 69(2) of the Standard Module

[17] Section 9 and the definition of maximum number in schedule 1 of the Standard Module

[20] Section 162 of the Standard Module

[26] See for example: Spicer v Carmody [1948] NSWStRp 25; 48 SR (NSW) 348, p 350; Queensland Fish Board v Bunney (1979) SR Qld 301, p 303