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

TIME LIMIT - whether there is good reason to waive non-compliance with the legislative time limit.

SUPPLY OF SERVICES - where the applicants challenge a decision of the committee on the basis that the body corporate was generating income through its supply of service billing arrangements, and the applicants see that income as a body corporate asset, and any changes to that arrangement or reduction in that income would be disposal of a body corporate asset.

Act, s 242; Accommodation Module, s 200.

• [1] This application is connected to another application that is being decided at the same time,[1] and follows a previous decision on this application regarding interim orders.[2] Both applications are brought by the co-owners of Lot 406 against the body corporate.
• [2] The applicants take issue with the body corporate's bulk hot water system and embedded network management arrangements, preferring that the body corporate directly manage and bill for gas and hot water supplied to lots. In this application the applicants seek final orders to invalidate a motion passed by the committee in June 2023 which 'agreed to allocate all income to utilities over to the Principal Body Corporate'.
• [3] The applicants were unsuccessful in their bid for interim orders that would have stopped the body corporate from installing new water meters until the matter was finally determined.
• [4] I have dismissed the application for final orders as the application was lodged outside of the legislative three-month timeframe, and I am not satisfied there is good reason to waive compliance with this requirement where:
  1. The applicants have not provided any reason for the delay, other than simply being unaware of the timeframe.
  2. The motion appears to have limited relevance to the body corporate's current utility service arrangements.

• [5] The respondent Body Corporate for Petrie Point Apartments CTS 28735 is regulated by the Accommodation Module and is subject to a layered arrangement. The principal scheme is Petrie Point CTS 28733 (Principal Body Corporate). There are two subsidiaries, Petrie Point Terraces CTS 28734, comprised of 8 lots, and Petrie Point Apartments CTS 28735, comprised of 175 lots.
• [6] The first applicant, John Knipe, was previously employed by the scheme's caretaking service contractor as the onsite manager.

• [7] It is apparent there is a breakdown in relationship between the applicants and some members of the committee. There have been several applications lodged by the applicants against the body corporate:
  1. In April 2024, the applicants lodged an application for conciliation against the body corporate regarding several issues, with most issues going beyond the issues raised in the current application (Conciliation Application).[3]
  2. In May 2024, the applicants lodged the current application for final and interim orders (Current Application).[4] The application for interim orders was dismissed on 12 June 2024 (Interim Decision).[5]
  3. In July 2024, the applicants lodged a second application for final orders (Connected Application).[6] The application repeated the outcomes sought in the Current Application, and included several additional outcomes that were also raised in the Conciliation Application (but did not include all of the issues raised in the Conciliation Application).
• [8] Many of the submissions received in this Current Application relate to the issues raised in the Connected Application and the Conciliation Application. For example, the final orders sought in the Current Application are also sought in the Connected Application. The body corporate made identical submissions on both the Current Application and the Connected Application. This has resulted in the applicants not filing a formal reply to the submissions made on the Current Application. However, there was a reply filed in the Connected Application which contains information relevant to the Current Application.
• [9] Due to the overlapping nature of the disputes and filing of submissions and replies, I have reviewed all materials filed in the Current Application and Connected Application. However, in this decision, I am only considering whether the final orders in the Current Application are warranted. For the avoidance of any doubt, I have not had regard to submissions made on the issues in the Conciliation Application and Connected Application that are not relevant to the final orders sought in the Current Application,

• [10] In this Current Application, the applicants seek the following final order:

That the body corporate rescind the committee decision as noted in the committee minutes of the meeting dated 7 June 2023 (annexure 13 - item 4.6 of those minutes), namely: > > '4.6 Petrie Principal - Billing > > The Committee agreed to allocate all income from utilities over to the Principal Body Corporate, as they are now paying for utility bills. The Committee also authorised a bill to be raised to the Principal to recover funds for incorrectly paid invoices relating to utilities. > > RESOLVED that the motion be carried Yes 6 No 0 Abstain 0'.;

• [11] The applicants submit that:
  1. The hot water supplied to lots at the scheme is heated in centralised boilers (running on gas) and kept in hot water storage tanks on common property. The hot water is then pumped throughout the building to lots as needed.
  2. The hot water infrastructure was originally funded by an energy provider, who had a contract to supply the plant, gas and provide meter reading and billing services to the body corporate.
  3. Once the agreement with the energy provider was due to expire, one of the applicants, John Knipe, investigated alternative arrangements while employed by the caretaking service contractor.
  4. The body corporate made new arrangements based on John Knipe's investigations, where the body corporate handled all aspects of supply and billing for hot water and gas. The body corporate continued to charge occupiers the same rate that the energy provider was previously charging, despite the cost to the body corporate to supply hot water and gas being considerably less.
  5. The body corporate made a profit of $91,300 in the 2020/2021 financial year, and $58,900 in the 2021/2022 financial year, from the hot water and gas charged to occupiers.
  6. The body corporate used the profits made from the hot water and gas charges to subsidise the cost of upgrading and maintaining the infrastructure, as well as other body corporate expenses.
• [12] In June 2023 the committee passed the following motion (Disputed Motion):

The Committee agreed to allocate all income from utilities over to the Principal Body Corporate, as they are now paying for utility bills. The Committee also authorised a bill to be raised to the Principal to recover funds for incorrectly paid invoices relating to utilities.

• [13] On 29 January 2024 the body corporate held an extraordinary general meeting (January 2024 EGM) where the body corporate passed several motions relating to utility services, including the following motion:

That the body corporate's PBC representative is directed to: > > 1. vote in favour of the motion (Motion) seeking to engage Altogether Group Pty Ltd pursuant to the Embedded Network Management Services Agreement circulated with this agenda. > > 2. call a poll vote on the Motion to ensure it passes.

• [14] The applicants have not disputed any resolutions of the January 2024 EGM in the Current Application.
• [15] The applicants seek a final order that the 'body corporate rescind' the Disputed Motion.
• [16] Ultimately, the applicants' position is that:
  1. The income from selling gas and hot water to occupiers at a profit is the property of the body corporate.
  2. The decision of the committee to allocate income from utilities over to the Principal Body Corporate is a donation of a body corporate's income source.
  3. The committee has not acted reasonably or in the best interests of the scheme when it made the decision.
  4. In the alternative, a special resolution was required to dispose of the right to the income, which should be seen as a body corporate asset.

• [17] Submissions were received from six lot owners and the body corporate across both the Current Application and Connected Application. All submissions opposed the application.
• [18] Submissions generally raise concerns that, pursuant to the legislation, the body corporate should not be making a profit from billing for the supply of gas and hot water and the new supply and billing arrangements of the body corporate are more appropriate. The body corporate submits the application is fatally flawed as it contradicts the legislation. The body corporate further submits that the application has been made outside of the legislative timeframe and should be dismissed on this basis.

• [19] The applicants provided a reply to the body corporate's submissions that covered the Current Application and the Connected Application. In this decision I have only considered the elements of that reply which are relevant to the final orders sought in the Current Application.
• [20] The applicants submit that the application should not be deemed out of time as:
  1. The applicants were not aware of the legislative time frame.

1. The applicants lodged the Conciliation Application within the legislative timeframe as it was within 3 months of the January 2024 EGM.

• [21] The applicants also argue that the additional income from billing users for gas and hot water at a cost higher than the cost of the gas to the body corporate is appropriate, and not should not be deemed a 'profit', as there is substantial cost in maintaining the utility infrastructure that this income goes towards.

• [22] The body corporate provided a further response to the applicant's reply without invitation to do so.
• [23] As an adjudicator, I must observe natural justice.[7] An aspect of affording natural justice is that a person whose interest may be adversely affected by a decision should be given opportunity to respond or comment on the case to be decided.
• [24] Here, the body corporate has provided additional submissions, to which the applicants have not had opportunity to respond. This can raise a natural justice concern where the further submissions may impact my decision. The information in the uninvited submissions by the body corporate have not influenced my decision in the Current Application, but did contain relevant material for the Connected Application. Therefore, I invited the applicants to respond to the uninvited submissions by the body corporate in the Connected Application.

• [25] When I dismissed the applicants' request for interim orders, I raised the issue that the applicants are challenging a resolution of the committee outside of the legislative three-month timeframe.[8] I will consider this issue in more depth, including whether there is good reason to waive non-compliance.

• [26] Section 242 of the Act provides that an application seeking an order declaring a resolution of the committee void must be made within three months of the date of the meeting where the resolution passed.
• [27] The applicants' sought final order does not use the word 'void' that is used in section 242. Rather, they seek an order that the body corporate 'rescind' the disputed motion. Considering the application as a whole and the arguments raised, I find the application is practically seeking to void the committee's motion and section 242 of the Act applies.
• [28] Section 242(3) provides that the timeframe will be complied with if a conciliation application for the same dispute is made within the 3-month timeframe. The applicants argue that the Conciliation Application was made within 3 months of the January 2024 EGM. However, the applicants are not challenging decisions made at the January 2024 EGM. The final orders in the Current Application seek to void the Disputed Motion which was a committee decision made in June 2023. I am not satisfied the application has been made within the timeframe.
• [29] Section 242 of the Act also provides that I may waive non-compliance with the three-month timeframe for good reason. My preliminary view (at the interim stage) was that the application did not provide good reason to waive the requirement. This is particularly the case where the applicants were on notice of the Disputed Motion for nearly a year before they lodged the dispute. The applicants submit that they were not aware of the timeframe. I am not satisfied that this is good reason to waive non-compliance.
• [30] I might find good reason where there the Disputed Motion is affected by a substantive legal issue that has an impact on the operations of the body corporate. It is not disputed that, since the Disputed Motion, the body corporate has passed resolutions at the January 2024 EGM in relation to the scheme and the Principal Body Corporate entering into agreements with third party service providers, with relevant agreements executed. Importantly, those decisions are not disputed in the Current Application, so any challenge to those decisions go beyond the scope of this application.
• [31] Ultimately, the Disputed Motion appears to be superseded and have no bearing on the body corporate's current arrangements. Even if I did make an order to void the motion, there would be no change to the body corporate's circumstances. Therefore, I am again not satisfied there is a good reason to waive non-compliance with section 242 of the Act.

• [32] In the body corporate's uninvited submission, it argues for an order for costs against the applicants. If it appears to me that an application is frivolous, vexatious, misconceived or without substance, I may dismiss the applicant pursuant to section 270(1)(b) of the Act and make an order for costs against the applicant in favour of the respondent to an amount not exceeding $2,000. The applicants have not had opportunity to respond to this request. In any event, I am dismissing the Current Application for being out of time, pursuant to section 242 of the Act, and not 270(1)(b) of the Act.

• [33] This application has been made outside the legislative timeframe for seeking an order to declare void a resolution of the committee. On the material in front of me, I have not been satisfied there is good reason to waive non-compliance with the timeframe.

[1] Petrie Point Apartments [2025] QBCCMCmr 151.

[2] Petrie Point Apartments [2024] QBCCMCmr 215.

[5] Petrie Point Apartments [2024] QBCCMCmr 215.

[6] Application 0725-2024; Petrie Point Apartments [2025] QBCCMCmr 151.

[8] Petrie Point Apartments [2024] QBCCMCmr 215 at [33].