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

APPLICATION FOR INTERIM ORDERS - where the applicant seeks an interim order to postpone levy contributions - whether the final orders sought have sufficient likelihood of success - whether there are urgent circumstances that warrant interim orders being made.

Act, s 279; Accommodation Module, ss 152, 162, 163, 164

1. Pending the final determination of this application, the Body Corporate for Merrimac Heights must not undertake works to replace the front boundary fence in reliance on Motion 9 purportedly passed at the annual general meeting on 23 October 2024.
2. This interim order has effect until 12 months from the date of this order, a further interim or final order for the application is issued, or until the application is withdrawn or otherwise ended, whichever occurs earlier.
3. This application for interim orders is otherwise dismissed.

• [1] On 23 October 2024, the body corporate for Merrimac Heights passed a motion (Motion 9) at an annual general meeting (AGM) confirming a committee recommendation to obtain two quotes to replace the front boundary fence. Motion 9 also purported to authorise the committee to approve the most suitable quote and to authorise expenditure of up to $46,000 including GST plus a 15% contingency fee to be paid for by special sinking funds.
• [2] The body corporate passed another motion (Motion 10) authorising raising a special levy for the purpose of replacing the front boundary fence. This application is about whether Motions 9 and 10 are valid.
• [3] The applicant seeks the following final orders:
  1. Motion 9 (Replacement of Front Boundary Fence) of the AGM, dated 23 October 2024, be made invalid.
  2. Motion 10 (Special Sinking Fund Levy for Boundary Fence Replacement) of the AGM, dated 23 October 2024, made invalid due to the invalidity of Motion 9. Since Motion 9 is central to the justification for Motion 10, the lack of proper procedure regarding Motion 9 renders Motion 10 unenforceable.
  3. Body Corporate to reimburse all owners who have already paid the special levy for the boundary fence replacement, within 7 days of this order. The reimbursement is required due to the invalidity of Motion 10, and the failure to follow proper procedures in its approval.
  4. Body Corporate to conduct an Extraordinary General Meeting in order to recommence discussions surrounding the front boundary fence.
  5. Body Corporate to re-issue Motions related to the boundary fence replacement, with full compliance with Sections 163 and 176 of the Accommodation Module (2020), which includes a special resolution, providing at least two competitive quotations, detailed specifications (materials, height, length, style), and all necessary information to ensure transparency for the owners. These motions must also comply with the requirements of the BCCM Act.
  6. Direct the Body Corporate to fully comply with Section 205 of the BCCM Act, which allows owners to request and access documents related to the management and affairs of the Body Corporate. This includes providing all requested documents in a timely manner, including those concerning the replacement of the boundary front fence.
  7. The shared fence between Merrimac Heights and the Café at 12 Bourton Road be excluded from any work unless properly proposed and approved.
  8. Given the Body Corporate's repeated non-compliance with the legislative requirements that have necessitated this application, writer requests that Body Corporate bear the adjudication costs.
• [4] The applicant argued the situation was urgent and also sought the following interim order:

The writer seeks an Interim Order to immediately halt the committee's actions until the adjudicator has made a final ruling on the validity of the committee's decisions from the October 2024 AGM. Furthermore, the writer urgently requests an Interim Order to prevent the collection of the special levies and the commencement of any work related to these motions, as the special levies are due on 1 April 2025, and work is scheduled to begin shortly after that date. This interim order is critical to prevent any financial or physical actions from taking place while the matter is being adjudicated.

• [5] Merrimac Court community title scheme 19563 (Merrimac Court) is a 150-lot scheme and common property in Merrimac. The community management statement (CMS) shows the Accommodation Module applies. The scheme is registered as Group Titles Plan 3667.
• [6] The applicant is the owner of Lot 37. The respondent is the body corporate for Merrimac Court.

• [7] On 26 February 2025, the applicant made this application to the Office of the Commissioner for Body Corporate and Community Management to challenge the body corporate's decision to undertake the works and impose the special levy on the lot owners.
• [8] On 12 March 2025, the body corporate agreed to the following undertaking:

The Merrimac Heights Committee agree to delay starting work on the front boundary fence works until the adjudicator has made a decision about the interim order sought.

• [9] There is no statutory requirement to obtain submissions from a respondent or affected parties before an interim order is decided. However, in the circumstances, I provided the body corporate an opportunity to provide interim submissions.
• [10] On 27 March 2025, the body corporate provided interim submissions.

• [11] The orders sought relate to a dispute between the applicant and body corporate regarding whether the decision to undertake the Works and impose the Special Levy was reasonable. As such, I am satisfied the dispute falls within the dispute resolution provisions of the legislation.[1]
• [12] 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 CMS, or about the exercise of rights, powers or performance of duties under the Act or CMS.[2] An order may require a person to act, or prohibit a person from acting, in a way stated.[3] An order may contain ancillary and consequential provisions the adjudicator considers appropriate.[4]

• [13] An adjudicator may make an interim order if satisfied, on reasonable grounds, that an interim order is warranted because of the nature or urgency of the circumstances to which the application relates.[5] These circumstances include where an interim order is necessary to prevent serious harm from occurring or to prevent an action that cannot be undone.
• [14] In making this determination, I must consider the substantive issues in dispute and whether there is a legal question to be answered. At this stage, the applicant does not need to satisfy me on the balance of probabilities that their legal position is the correct one. However, to justify the making of an interim order before a full investigation into the matter has concluded, I must be satisfied the applicant's case has a sufficient likelihood of success.
• [15] I must also consider the balance of the inconvenience between granting the relief now if the final orders are refused against the inconvenience of refusing relief now if the final orders are granted.

• [16] On 23 October 2024, the body corporate held an AGM, during which Motions 9 and 10 were carried:

RESOLUTION REQUIRED - ORDINARY RESOLUTION - SUBMITTED BY COMMITTEE

Resolved that the Body Corporate for Merrimac Heights CTS 19563 confirms the Committee's recommendation to proceed with obtaining two (2) quotations from reliable and qualified contractors who are able and willing to complete the necessary works, and authorises the Body Corporate Committee to review and approve the most suitable quotation. Furthermore, that the Body Corporate authorises the expenditure amount of up to $46,000 inc GST plus a 15% contingency for the purpose of replacing the front timber boundary fence and that this be paid by special sinking funds.

10 - Special Sinking Fund Levy for Replacement of Front Boundary Fence

RESOLUTION REQUIRED - ORDINARY RESOLUTION - SUBMITTED BY COMMITTEE

Resolved that Body Corporate confirms the Committee's recommendation to proceed with raising a special Sinking Fund levy for the purpose of replacing the front boundary fence in the sum of $45,008.44 including GST payable in accordance with the following instalment which will allow Owners 6 months to pay the levy.

• [17] Motion 9 was carried with 37 votes in favour, 12 against and 1 abstention.
• [18] Motion 10 was carried with 34 votes in favour, 15 against and 1 abstention.
• [19] I have summarised the grounds within the application as follows:
  1. Spending $46,000 on the fence would deeply affect the owners' financial stability and the special levy was a substantial burden.
  2. Motion 9 was invalid as it was unclear, did not follow legislative procedures, lacked credibility and did not specify the details such as the location, measurements, type of fence or reason for replacement.
  3. Motion 9 was also invalid as at least two quotes were required to ensure the expenditure and section 163 of the Accommodation Module required 2 quotes to be provided for consideration for major spending at general meetings.
  4. Motion 10 was void as it recorded a different amount than the cost in Motion 9. Further, if Motion 9 was invalid then Motion 10 would be void as the purpose was to raise the special levy pursuant to Motion 9.

• [20] I have summarised the interim submissions provided by the body corporate as follows:
  1. The body corporate is legally required to replace the fence.
  2. Motion 9 was not a spending approval motion, but was a motion to authorise an increase to the committee spending limit for a specific project.
  3. Quotes will only be valid for one month so they will be sought after the funds are raised through the special levy.
  4. The committee spending limit is $30,000, however Motion 9 approved spending up to $52,900 for the works only.

• [21] The issue in question at this time is whether the application has a sufficient likelihood of success and whether the nature and urgency of the circumstances warrant an interim order being issued. I will also consider the balance of inconvenience between granting the interim order if the final orders are refused against the inconvenience of refusing the interim order if the final orders are granted.

• [22] In support of the interim order, the applicant argued that Motions 9 and 10 were invalid for the following reasons:
  1. Motion 9 was unclear and did not specify the details of the works,
  2. 2 quotes needed to be provided for consideration of major spending and decisions about common property needed to be made after consulting the owners,
  3. different costs were recorded on Motions 9 and 10, and
  4. if Motion 9 was invalid then Motion 10 was void.
• [23] In determining whether the application has a sufficient likelihood of success, I will consider the arguments as put forward by the applicant at this time.

• [24] The applicant argued Motion 9 was imprecise, unclear and ambiguous in its language and, as such, was invalid.
• [25] Motion 9 states that its purpose was to confirm the committee's recommendation to obtain 2 quotes, permit approval of the most suitable quote and to authorise an expenditure of the costs to undertake the Works.
• [26] I acknowledge Motion 9 did not specify the details of the Works such as the type of fence material, however such details would vary and may depend on the quotes later obtained.
• [27] While I note Motion 9 was titled as 'Replacement of Front Boundary Fence", in the absence of the explanatory notes for the motion, it is unclear whether the owners voting on the motion were on notice whether the proposed works would replace the fence exactly as it was or if it would have a different appearance or use different materials.
• [28] While the body corporate submitted the purpose of Motion 9 was to raise the committee spending limit for the purpose of the works, this was not specifically stated within the motion. It is unclear whether the owners voting on Motion 9 were on notice of this intent.

• [29] The applicant argued 2 quotes for major spending needed to be provided for the consideration of the body corporate.
• [30] The Accommodation Module states the relevant limit for major spending by a body corporate is either an amount set at a general meeting or, when no amount is set, either $10,000 or $1,100 multiplied by the number of lots in the scheme, whichever is lesser.[6] There is no material before me to indicate that a major spending limit has been set at a general meeting. As Merrimac Heights is a 150-lot scheme,[7] the relevant major spending limit is $10,000.
• [31] The relevant limit for committee spending by a body corporate committee is either the amount previously set at a general meeting or, when no amount has been set, $200 multiplied by the number of lots in the scheme. The body corporate submitted the committee spending limit is $30,000.
• [32] When a motion to carry out work is to be considered and the cost is above the major spending limit, the motion must usually be decided at a general meeting. At least two quotes to carry out the work must be obtained and included in the notice of the meeting that considers the motion. If for exceptional reasons it is not possible to obtain two quotes, one must be obtained and circulated.[8] Copies of these quotes or, if voluminous, summaries of the quotes and advice about where the complete documents may be inspected, must accompany the notice of the meeting where the motion is to be considered.[9]
• [33] Where the committee spending limit is higher than the major spending limit, and the cost of the proposed works falls between these limits, the Accommodation Module allows for committees to move these motions at committee meetings.[10] However, in these circumstances at least 2 quotes for carrying out the work must be obtained and considered.[11]
• [34] Further, the Accommodation Module allows for committees to give effect to proposals that involve spending over the committee spending limit if the spending is authorised by ordinary resolution of the body corporate.[12]
• [35] Although the cost approved in Motion 9 were over the major and committee spending limits, the motion did not explicitly propose to raise the committee spending limit for the purpose of the Works.
• [36] In the absence of the quotes, it is unclear as to whether the final cost for the works will exceed either or both of the major and committee spending limits, or whether the quotes would need to be considered at a committee meeting or a general meeting.
• [37] The body corporate submitted the purpose of Motion 9 was to raise the committee spending limit for the purpose of completing the works. However, the wording of Motion 9 does not expressly state that the committee spending limit would be changed for the purpose of the works. It is unclear on the evidence before me whether the owners voting at the AGM understood the intention that the committee spending limit would be raised for the purpose of the works only.

• [38] The applicant argued Motion 10 is invalid as the special levy was a different amount than the cost recorded in Motion 9.
• [39] As discussed above, Motion 9 approved an expenditure of up to $52,900 to be paid from the special sinking levy fund, while Motion 10 approved raising a special sinking fund levy of $45,008.44 for the works.
• [40] At this stage, based on the submitted material, I do not consider the difference in the amounts recorded in Motions 9 and 10 raises a genuine question as to the validity of Motion 10. Should the works cost an amount other than $45,008.44, there is no evidence to indicate that any difference could not be paid from, or added to, the body corporate's sinking fund.

• [41] The applicant argued that if Motion 9 was found invalid, then Motion 10 would be similarly invalid as its purpose is to levy sinking funds to pay for the Works.
• [42] The Accommodation Module states that, if a liability arises for which the budget has no provision, or an inadequate provision, then the body corporate may levy a special contribution on each owner towards the liability.[13]
• [43] I note the committee meeting minutes dated 29 November 2023 the fence was in poor condition as the timber posts were rotting and the rails were deteriorating. The minutes further indicated the fencing was 30 years old and would likely need to keep requiring repairs.
• [44] At this stage, based on the evidence before me, I do not consider there is a genuine question as to the validity of Motion 10. It has not been argued that the body corporate is not entitled in these circumstances to levy special contributions when a liability has arisen, nor that the works are not a liability that the body corporate is required to resolve. Further, it is not apparent on the evidence before me that the body corporate had made a sufficient provision in their budget to undertake the works prior to the AGM.
• [45] In circumstances where the body corporate has agreed to replace the fence, and it appears that voters are supportive of this, I consider that even if there is a defect in Motion 9, any such defect can be readily addressed. If there is no defect, or the defect is rectified, the funds raised by the special levy will then be required.

• [46] The nature of the circumstances in this matter are that the front boundary fence is apparently in need of replacement and special levy contributions are due from all owners of Merrimac Heights, including the applicant. The urgency of the circumstances is that the special levy contributions are due soon on 1 April 2025 and that the body corporate may proceed to incur expenditure if an interim order to stop the works is not made.
• [47] As discussed above, I must consider the balance of inconvenience between granting the relief sought in the interim orders sought and refusing the final order against the inconvenience of refusing the relief sought in the interim orders and granting the final order.

• [48] The applicant argued granting Motion 9 would enable the committee to approve the preferred quote, commence the works and incur expenses in circumstances where the owners have not had the opportunity to examine the quotes, nor provided with the details about what the proposed new fence would look like.
• [49] The evidence before me indicates the fence is in need of repair, however it was not argued by the body corporate that the matter was urgent.
• [50] The inconvenience in granting this interim order if I were to reject the final order is to delay the committee from approving the preferred quote and commencing the works.
• [51] The inconvenience in dismissing this interim order and granting the final order is that the works may be completed before a final order was made. If that occurred, the funds will have been spent and be unable to be recovered even if the expenditure was not validly approved.

• [52] The applicant argued the special levy would impose a significant financial burden. I note the AGM minutes indicated each owner's contribution to the special levy was $22.37 per entitlement. The CMS records the owners' contributions and interests as either 13 or 15. This means each owner's contribution would be either $290.81 or $335.55.
• [53] The body corporate submitted that they have not yet obtained quotes to commence the works as they would only be valid for one month and, as such, quotes would be sought after the funds had been raised by the special levy.
• [54] The inconvenience in granting this interim order if I were to reject the final order is to delay the raising of the special levy to be used for the works.
• [55] The inconvenience in dismissing this interim order and granting the final order is that the special levy contributions may be paid unnecessarily.
• [56] I am mindful that interim orders may be necessary in circumstances to prevent serious or irreparable harm or to prevent actions that cannot be undone. I acknowledge the applicant argued paying the special levy would cause a burden, would have a financial impact, and the repayment of contributions may be impossible if it is spent on the works before the final order is made. There is no evidence before me to indicate the applicant or any of the owners are unable to pay their contributions towards the special levy, however I am mindful that the difficulty in repaying the special levy would be advanced if the special levy, or portions thereof, were spent on the works before the final order was made.

• [57] At this time, I consider there is a genuine legal question to be determined in this dispute, namely whether Motion 9 was sufficient to authorise the committee to incur expenditure on the replacement of the fence. For this reason, and given the circumstances, I will make an order pending the final determination of the application that the body corporate must not proceed with the works in reliance on Motion 9. However, this interim order does not prevent the committee from obtaining quotes as this does not require approval at a general meeting. It also does not prevent the body corporate from putting further motions to another general meeting.
• [58] In relation to Motion 10, I am not satisfied the applicant has established there is a genuine legal question to be determined in this dispute. As such, I have not granted the interim order sought to prevent the body corporate from raising sinking funds to replace the fence by a special levy.
• [59] If the dispute remains unresolved and the applicant does not withdraw or discontinue the application, it will be administered in accordance with the Act and the normal processes of this office.

[1] Sections 227(1) and 227(2) of the Act.

[6] Schedule 1 of the Accommodation Module.

[7] $1,100 multiplied by 150 lots equals $165,000.

[8] Section 163 of the Accommodation Module.

[9] Section 163(5) of the Accommodation Module.

[10] Section 164(1) of the Accommodation Module.

[11] Section 164(3) of the Accommodation Module.

[12] Section 162(1)(a) of the Accommodation Module.

[13] Section 152(2) of the Accommodation Module.