INTERIM ORDER - whether an interim order is warranted

1. Pending the final determination of this application, the Body Corporate for Park Avenue at South Bank must not take any action to implement Motions 3, 4, 5 and 6 if passed at the extraordinary general meeting of the body corporate on 6 May 2025.

• [1] This application concerns significant proposed works to Park Avenue at South Bank. The question at the centre of the dispute is whether the proposed works constitute maintenance or improvements to common property.
• [2] The applicant objects to 4 motions proposed to an extraordinary general meeting to be held on 6 May 2025 (EGM). His main objection is that some of the works characterised as maintenance are in fact improvements and thus can only be passed by a resolution without dissent. The motions are currently listed as ordinary resolutions.
• [3] The application seeks the following orders:
  1. The Notice of Meeting for the Park Avenue EGM dated 22 April 2025 is invalid.
  2. Motion 3 - Engagement of Contractor for Maintenance works: the scope of works in Proposal Q0363, includes improvements to the property and therefore the motion is required to be passed without dissent and is therefore unlawful.
  3. Motion 4 - Engagement of Project Manager: the project management of the works is part of Proposal Q0363 relating to improvements to the property and is therefore required to be passed without dissent.
  4. Motion 5 - Engagement of Contractor for Improvements to Common Property: the amount for the improvement has been intentionally split in the proposal to fall below the prescribed amount. The works are part of the overall program of work. The motion is required to be passed without dissent.
  5. Motion 6 - Special sinking fund levy: As the levy relates to improvements on the property then this motion is required to be passed without dissent and is therefore unlawful.
• [4] In the interim, the applicant seeks:
  1. That the Park Avenue EGM anticipated in the Notice dated 22 April, to be held on 6 May 2025 at 6:30pm not proceed until this dispute is determined.
  2. That no action be taken by the Body Corporate Committee on the Proposal Q0363 until such time as the dispute is determined and a valid Body Corporate meeting is held.
• [5] The only issue at this time is whether an interim order is warranted.

• [6] Park Avenue at South Bank leasehold building units plan (SBP) 101696 (Park Avenue) is a 56- lot plan in South Brisbane. It forms part of the South Bank development which operates under the South Bank Corporation Act 1989 (SBC Act).
• [7] Schedule 4 of the SBC Act provides a 'Modified Building Units and Group Titles Act' which applies (with some amendments) provisions similar to the Building Units and Group Titles Act 1980 to plans within Southbank. Part 5 of Schedule 4 provides for a referee to determine disputes including the general power to make orders.[1] Under that general power, on application by certain persons in connection with a parcel, a referee can make an order against certain persons to settle a dispute or rectify a complaint about the exercise or performance of, or the failure to exercise or perform, a power or function conferred or imposed by the SBC Act in connection with the parcel.
• [8] The applicant is a lessee at Park Avenue and is applying against the chairperson of the body corporate for Park Avenue. Prima facie, I have jurisdiction to determine a dispute between these parties however I note the orders sought are, in effect, against the body corporate.
• [9] The application was lodged on 1 May 2025 seeking interim and final orders. A referee may make an interim order if requested by the applicant, and if satisfied on reasonable grounds that one should be made because of the urgent circumstances of the case.[2] An interim order is temporary, pending the determination of the application for final orders, if not earlier revoked, and expires after 3 months from the date on which it is made, or, if extended, 3 months from that date.[3]
• [10] An interim order may be made notwithstanding that any power or duty of the referee under section 73(1) has not been exercised or performed with respect to the application. Accordingly, I was empowered to make an interim order before giving written notice of the application to the respondent or to the body corporate and to any other person who, in my opinion, would be affected if the order sought was made. In the circumstances, given the disputed EGM was scheduled to be held on 6 May 2025, I gave the respondent chairperson and the body corporate a brief opportunity to comment on the interim application.
• [11] The body corporate and the chairperson made separate submissions in response to my invitation.

• [12] The only issue at this time is whether the interim order sought should be made. In considering whether the circumstances warrant an interim order, there are generally 2 guiding principles:
  1. Whether the applicant has shown that it has a prima facie case, that is whether the application raises a 'serious legal issue' with some likelihood of success at final determination; and
  2. Whether the applicant has shown that the balance of convenience favours the granting of the relief claimed. This requires balancing the inconvenience of granting relief now if final orders are ultimately refused against the impact of refusing interim relief if final orders are ultimately granted. Of particular significance is whether an interim order is necessary to prevent serious or irreparable harm.

• [13] The motions to be considered at the EGM are as follows:

Motion 3 Engagement of Contractor for Maintenance Works

THAT the Lessees resolve to authorise the Committee to engage Revolve Projects as Contractor pursuant to the attached Proposal Q0363 for maintenance works described as follows:

1 Rear section - from new rear glazing to gym area - $1,165,266.19 ex GST

2 Front Section - From new front glazing to front signage - $229,661.05 ex GST

3 BBQ Area - Sauna & Bathrooms - $100,230.43 ex GST

at a total quoted cost of $1,843,243.63 including GST (subject to any reasonable amendments or adjustments as approved by the Committee).

Motion 4 Engagement of Project Manager for Maintenance Works

THAT the Lessees resolve to authorise the Committee to engage Woodsters as Project Manager pursuant to the attached Project Quote for maintenance works at a quoted cost of $150,419.27 including GST (subject to any reasonable amendments or adjustments as approved by the Committee).

Motion 5 Engagement of Contractor for Improvements to Common Property

THAT the Lessees resolve to authorise the Committee to engage Revolve Projects as Contractor pursuant to the attached Proposal Q0363 for improvement works described as follows:

3 BBQ Area - Sauna & Bathrooms - $100,230.43 ex GST

1 Rear section - from new rear glazing to gym area - $1,165,266.19 ex GST

2 Front Section - From new front glazing to front signage - $229,661.05 ex GST

at a total quoted cost of $110,253.47 including GST (subject to any reasonable amendments or adjustments as approved by the Committee provided the cost remains less than the Prescribed Amount of $112,000).

THAT the body corporate approves an additional Special Sinking Fund Levy in the amount of $1,386,418.00

(including GST) for the purposes of Maintenance Works and that the contributions are hereby determined at a rate of $187.00 (including GST) per lot entitlement to be issued by instalments as follows:

Please note: the 1st levy period 01/08/2025, is in addition to the previously approved special levy of $33.00

Levy Period Amount Per Lot Entitlement Due Date

• [14] Each of the motions are listed as requiring to be passed as ordinary resolutions.
• [15] In relation to Motion 3, the applicant says whilst the motion refers to the proposed works as maintenance, the proposal and plans attached to the EGM notice relate at best to a mixture of maintenance and improvements. The applicant says the plans show the improvements include:
  1. Moving the existing common room wall
  2. Construction of additional sunbeds
  3. Additional bench seats and changes to the line of the glazing across the back of the building
  4. Improvements to the gym including removal of walls and the sauna and re-tiling the entire area
  5. Changes to the entry of the building including upgrades to the mail boxes and signage.
• [16] The applicant has provided photographs comparing the current state of the common property areas with their planned future state. The applicant says the proposal is to remove and improve a number of areas of common property that have not reached the end of their useful life, or require maintenance. As the motion includes improvements to common property, the applicant says the motion requires a resolution without dissent pursuant to section 37 of Schedule 4 of the SBC Act.
• [17] In relation to Motion 4 which seeks a resolution to engage Woodsters as project manager, the applicant says this motion makes no sense in isolation and should be authorised on the same basis, that is a motion without dissent, as Motions 3 and 5.
• [18] In relation to Motion 5, the applicant says no separate quotes have been provided for the work that show the actual cost of the addition of the sauna and bathrooms and the roof structure in the BBQ area to confirm that it is within the committee spending limit. Further, the applicant says the BBQ area where these improvements are proposed is clearly part of the overall program of work as the roof covering is integral in the design. He says the proposal should be treated as one project and that the body corporate cannot split the costs of a project to circumvent the prescribed spending limits. As these improvements are part of the same proposal of works, the applicant argues that Motion 5 therefore also requires a resolution without dissent.
• [19] The applicant does not explain why Motion 6 must also be passed by a resolution without dissent, other than to say it is to approve an additional special sinking fund levy in the amount of $1,386,418.00.

• [20] The respondent chairperson says of the works being proposed, there is one aspect which is considered an improvement for which there is a separate motion (Motion 5). He says that the works have been in discussion with owners for over 18 months, and that the intention is that there be a planned program of maintenance rather than simply carrying out urgent maintenance when a need arises. The chairperson says that as the meeting has been properly constituted there is no basis to defer the meeting and says that if the motions are not allowed to proceed, this will result in delayed contracts and escalated costs.

• [21] The body corporate says the EGM has been validly called and that suggesting certain motions may allegedly be invalid does not justify cancelling or postponing the meeting.
• [22] Substantively, the body corporate submits that:
  1. Any replacements being considered will not create anything "new" but instead will substitute existing things with their modern equivalent. None of the items contemplated as maintenance works are going to materially change the nature or use of the common property nor are they unduly directed at increasing the value of the common property (regardless of whether they will actually have this effect).
  2. The applicant is confusing the legal and non-legal definition of "improvements" to say that any change constitutes an improvement where previous case law does not support this contention and allows for improvements which are peripheral, incidental or otherwise directed to "future-proofing" common property alongside maintenance works. By its very nature, maintenance works are directed at "improving" the condition of the common property and this will necessarily increase the value of the common property.
  3. The committee has separated items considered "maintenance" from items considered "improvements" so they can be approved separately in line with the legislation and previous case law. The relevant contractors have confirmed that the works can proceed independently or concurrently, meaning they ought not be considered the same project for the purposes of determining the cost regardless of whether they are undertaken by the same contractors at the same time.
  4. For schemes governed by the SBC Act, works that are part of a repair and maintenance program must be approved by ordinary resolution - Park Avenue at South Bank [2006] QBCCMCmr 31.
  5. There are key differences between the SBC Act and the Body Corporate and Community Management Act 1997 (BCCM Act) which must be considered in distinguishing "maintenance" and "improvements":
     1. The SBC Act does not define "improvements" and therefore it should not be assumed that the restrictive definition in the BCCM Act applies;
     2. The SBC Act (Schedule 4) does not allow for improvements of the "prescribed amount" to be approved by special resolution, instead requiring a resolution without dissent. It could not have been the intention of the law makers in drafting the legislation to take a narrow view of "maintenance" because the practical reality is that a resolution without dissent is essentially impossible to achieve for a scheme of this size;

1. Section 37(1)(b) of Schedule 4 of the SBC Act provides that the body corporate must "properly maintain and keep in a state of good and serviceable repair (including, where reasonably necessary, renew or replace the whole or part of the common property)" - meaning that maintenance can include replacing the whole or part of the common property.

• [23] Section 37(2)(f) of Schedule 4 provides that a body corporate may make or cause to be made improvements to the common property where -

(i) In any 1 case, the cost of the improvements does not exceed the prescribed amount; or

(ii) The body corporate by resolution without dissent so resolves; or

(iii) The body corporate resolves in general meeting that the improvements are considered to be essential for the health, safety or security of users of the common property and the referee makes an order approving the making of the improvements.

• [24] The prescribed amount for improvements in this body corporate is $112,000.00. As such, any improvements to common property that exceed this amount must be authorised by a resolution without dissent.
• [25] Pursuant to Revolve Projects' Proposal Q0363, the total amount quoted for the proposed works is $1,953,497.11 (including GST). This is broken up into the following proposed areas:

1 Rear section - from new rear glazing to gym area - $ 1,165,266.19 ex GST

2 Front Section - From new front glazing to front signage - $229,661.05 ex GST

3 BBQ Area - Sauna & Bathrooms - $100,230.43 ex GST

• [26] The BBQ Area improvements amounting to $110,253.47 including GST is subject of Motion 5 at the EGM. The remainder of the works (rear section, front section and landscaping/ waterproofing) amounting to $1,843,243.63 including GST are subject of Motion 3 and referred to as "maintenance". The question is whether these works are in fact maintenance.
• [27] I note the body corporate says all of the items contemplated as part of the maintenance works are in need of repair or replacement and that any replacements being considered will not create anything "new" but instead will substitute existing things with their modern equivalent. At this point, the body corporate has not provided any details about why the items included in its 'maintenance' works program are in need of repair or replacement. It is therefore unclear to me which elements of the project necessarily incorporate maintenance. I note the body corporate says there are "ongoing issues" that remain unresolved including water ingress into the basement due to failed waterproofing membranes. The repair of a failed waterproofing membrane would ordinarily be considered maintenance rather than an improvement. However, beyond the waterproofing, it is unclear how any of the proposed works constitute maintenance of common property.
• [28] Rather, on the face of the submitted material, including the applicant's comparison photographs and the extensive refurbishment plans provided with Woodsters' project management quotation, it appears that a significant portion of the project described as maintenance under Motion 3 are more in the nature of improvements, including:
  • the removal of an existing common area wall and replacing it with a repositioned and redesigned wall;
  • upgrading of internal and external tiles;
  • addition of seating to the front gate area;
  • improving the mailbox area;
  • improving the front Park Avenue signage.
• [29] This matter will require further investigation but from the material received to date, my preliminary view is that it is not only the BBQ area (sauna and bathrooms) that constitute an improvement to common property. Rather, the proposed refurbishment of the "rear section" and "front section" of the building also appear, by and large, to be improvements to common property.
• [30] It also appears to me that these works are intended to form a single project, as evidenced by the Revolve Projects' contract and Woodsters' project management proposal. The fact that the works may be able to proceed concurrently or independently seems irrelevant if, for all intents and purposes, these works form part of the same refurbishment project. Taken as one, the improvements will far exceed the prescribed amount of $112,000.00. Prima facie, Motions 3 and 5 both require resolutions without dissent.
• [31] It is unclear to me why the applicant suggests that Motions 4 and 6 must also be passed as resolutions without dissent. However, if Motions 3 and 5 are not to be implemented pending final determination, it follows that Motions 4 and 6 (to engage a project manager and raise a special levy to fund the project), should also not be implemented pending a final order.

• [32] The applicant says should the EGM proceed, and the motions passed as ordinary resolutions, the committee will proceed to executing the agreements with Woodsters and Revolve Projects. He says significant special levies would be required to be paid where the resolutions are potentially unlawful. On this basis, the applicant says an interim order is required to maintain the status quo until the application is determined.
• [33] The body corporate submits that the quotations provided by the contractors will not be honoured in the event of a delay. It says if interim orders are made, this will cause the cost of the proposed works to increase and may result in the contractors becoming unavailable. Conversely, the body corporate says the inconvenience to the applicant if the interim orders are not made is insignificant because despite the substantial cost of the works being contemplated, these works will still be required regardless of whether the application is successful.
• [34] If I determine at final orders that a significant part of the proposed works are in fact improvements to common property rather than maintenance as asserted by the body corporate, it is unclear how the body corporate can maintain that such works are still "required". Owners may want to enhance the building and increase its standard and appeal, but this does not make the works required maintenance.
• [35] The proposed project build will cost $1,953,497.11, in addition to a project management cost of $150,419.27. These are substantial amounts that require the raising of additional owners' levies. There is no suggestion that the proposed works are urgent. The only detriment to the body corporate appears to be the potential for increased costs if there is a delay in executing the contracts. In the circumstances, I consider the balance of convenience favours the granting of interim orders to preserve the status quo until the application for final orders is determined.

• [36] I am satisfied there is a serious legal issue as to whether Motions 3 and 5 proposed to the EGM may be passed as ordinary resolutions. However, I see no reason to order the EGM, which appears to be validly called, not to proceed. Rather, for the reasons above, I am satisfied it is appropriate to order the body corporate not to take any steps to implement the resolutions, including Motions 4 and 6, if passed.
• [37] This interim order will have effect for a period of 3 months. It will not be automatically renewed. It will be up to the applicant to request an extension of the order if this matter is not resolved within 3 months.

[1] Section 77(1) of schedule 4 of the SBC Act

[2] Section 76(2) of schedule 4 of the SBC Act

[3] Section 76(4) of schedule 4 of the SBC Act