Rosebank [2025] QBCCMCmr 129 | Case summary

Validity of by-law that deems recovery costs to be a liquidated debt payable to the body corporate by the relevant proprietor on demand; validity of AGM motions; eligibility for committee membership

By-law 13.4 is invalid.
The debt recovery policy adopted by resolution 9 of the Annual General Meeting on 24 August 2024 is invalid to the extent that it purports to authorise imposing costs for steps taken in the recovery of outstanding contributions directly on a proprietor.
In all other respects, the application is dismissed.

[1] Jeremy Locke, co-owner of lot 54 since December 2006, brings this application against the body corporate, challenging the validity of a by-law, and 2 motions and the committee election at the 23 August 2024 annual general meeting (AGM).

[2] Rosebank GTP 3033 was established on 13 May 1992. It is a subsidiary body corporate in the residential precinct of the Hope Island Resort, an integrated resort developed under the Integrated Resort Development Act 1987. It is governed by the Building Units and Group Titles Act 1980 (Qld) (BUGT Act).
[3] A referee may make final orders under the Act pursuant to one or more of sections 77 to 94C, depending on the application and the circumstances. Sections 78 to 94C are for orders on specific issues and section 77 is the general power to make an order 'for the settlement of a dispute, or the rectification of a complaint, with respect to the exercise or performance of, or the failure to exercise or perform, a power, authority, duty or function conferred or imposed by this Act in connection with that parcel'. This application is stated to have been brought under section 77.
[4] Submissions in response to the application were sought from the committee, all owners (excluding the applicant) and the body corporate manager. Numerous submissions were received from individual owners, (some after the closing date for submissions, apparently in response to an invitation from the chairperson), and from lawyers, on behalf of the committee. With only 1 exception, all submissions opposed the making of any orders in the applicant's favour. Some requested that costs be awarded against Mr Locke. Mr Locke was provided with copies of the submissions[1] and he provided a written reply to the committee's and the chairperson's.
[5] Many submissions noted Mr Locke's failure to pay his water bills and body corporate levies over an extended period and commented that the ongoing non-payment places an unfair financial burden on the rest of the residents. They say unpaid fees and bills ultimately affect the maintenance of shared facilities, the provision of essential services, and the financial stability of the body corporate. The situation is both unsustainable and inequitable for those who are fulfilling their obligations. It is vital that all members of the community contribute fairly to the upkeep and maintenance of their shared property.
[6] Mr Locke is described by one submitter as a habitual litigator whose actions create significant disruption and distress for everyone in the estate. They say action should be taken to recover compensation for the distress, legal expenses, and disruption caused by his actions, in addition to recovering the substantial unpaid levies.
[7] Another says it appears that Mr Locke is simply harassing all the residents to delay paying levies that he genuinely owes. It was suggested that if Mr Locke is unable to pay the levies that are necessary to contribute to the collective good of the community, perhaps he should sell his lot and move to a non-gated community not involved with a body corporate. It was further suggested that action be taken against Mr Locke to recover compensation from him for the harassing nature of his false claims (should they be proven such) and the impact it has had on everyone in having to address these issues.
[8] Another owner says to observe a fellow owner behave in such a manner is quite frankly deeply disconcerting. They do not understand how Mr Locke has been able to avoid paying for so long, how the legal system apparently enables him to obfuscate his responsibilities and how the costs being racked up will ultimately be borne by other owners. They say this case is eating away at the fabric of their community, and they just can't see why it is being prolonged by the legal system. If the man owes money, he should pay the money, simple as that. Secondly, on a general note, they say they drive past Mr Locke's residence every day and see it in a horrible state of repair. It again is an affront to the broader community that the high standards of presentation imposed on the others are not being followed by him. It seems he has no regard for the community that he lives in and quite frankly is making a mockery of the norms they all live by. It seems that the protracted nature of this legal battle has emboldened him to behave as he wishes, and that is to the detriment of the community that they all live in. The entire situation is deeply regrettable, they say.
[9] Many making submissions opposing the application lay the blame for this 'chaotic/never-ending situation' (referring to Mr Locke's refusal to pay levies and charges for water and garbage services) with this Office, for not providing practical solutions while allowing the owners of lot 54 to continue to play games with both this Office and other owners in Rosebank.
[10] Mr Locke replies that the tone and content of some submissions reflects personal bias rather than addressing the legal merits of the case. The repeated references to his financial history and previous involvement in the community distract from the legal issues. He says personal animosity should not be allowed to overshadow the legal concerns at hand.

All costs and expenses (including solicitor and own client costs incurred by the Body Corporate whether or not court proceedings were undertaken) in the recovery of monies payable are to be a liquidated debt due to the Body Corporate by the Proprietor or mortgagee in possession and which is payable on demand.

[12] Mr Locke argues the by-law is invalid on the following grounds:

The by-law conflicts with sections 32 and 37(2)(a). Section 32 outlines duties of proprietors, occupiers, and mortgagees in possession but does not authorise imposing additional financial obligations as stipulated in the by-law.

The by-law imposes financial liabilities on proprietors beyond what is authorised under the BUGT Act. It attempts to create powers of debt recovery exceeding those provided in the legislation, surpassing the general lawmaking power granted under section 30(2) and limited by section 30(6).

Section 37(2) allows for agreements related to services between the body corporate and proprietors. However, this by-law unilaterally imposes costs without prior mutual agreement, contradicting the contractual nature intended under this section.

4. Unreasonable and potentially oppressive nature

The broad imposition of costs, including legal fees, without limitations or dispute mechanisms, could be deemed unreasonable and potentially oppressive. This conflicts with principles of reasonableness established in case law interpreting the BUGT Act, such as the Fairway Island case.

The by-law unreasonably interferes with an owner's right to deal freely with their property, which exceeds the intended scope of by-law making powers under the BUGT Act.

The by-law creates new financial obligations not contemplated in the BUGT Act, going beyond the scope of by-law making powers under the BUGT Act.

[13] The following orders are sought:
1. That by-law 13.4 is invalid.
2. That the body corporate remove the by-law to ensure compliance with the BUGT Act provisions.
3. That the body corporate be reminded of their obligations to create fair, reasonable, and transparent by-laws that align with legislative requirements.
[14] The body corporate submits[2]:
1. The applicant claims that there is a conflict between by-law 13.4 and section 32 or 37(2)(a) of the BUGT Act.
2. The threshold requirement for the term 'conflict' involves a clear identification and legal determination of variance or disagreement between the by-law and the legislative provision, considering the context and the specific provisions involved.[3]

Section 32 of the BUGT Act details the levy process and therefore supports the provision made in by-law 13.4 for the recovery of costs, including solicitor's fees. While section 37(2)(a) of the BUGT Act deals with agreements for services - its relationship with by-law 13.4 is discussed below at paragraphs 9-11.
The body corporate submits that sections 32 and 37(2)(a) of the BUGT Act do not conflict with the focus on enforcing payment of levies provided for in by-law 13.4 because there is no clear variance or disagreement between by-law 13.4 and sections 32 or 37(2)(a) of the BUGT Act.
Further, the applicant claims that the BUGT Act does not authorise imposing additional financial obligations. The body corporate submits that the BUGT Act does not preclude the body corporate from exercising the power provided in by-law 13.4.
Further the body corporate submits that by-law 13.4 is compliant with all relevant legislation.
The following outlines the legal basis for by-law 13.4 and demonstrates its compliance with all relevant legislation:

a) Section 30(2) of the BUGT Act empowers the body corporate to create and modify by-laws as necessary; > > b) Section 32A of the BUGT Act provides the body corporate with the statutory right to recover unpaid contributions as a debt. If the debt remains unpaid for over two years, the body corporate is required to initiate legal action within two months; > > c) While section 32A establishes a statutory framework for recovering unpaid contributions, including a specific time frame for commencing legal proceedings, by-law 13.4 differs by extending the recovery process to include legal and associated costs and deeming the debt immediately payable as a liquidated amount upon demand; > > d) Section 27(3) of the BUGT Act requires the body corporate to exercise its powers and perform its duties under the BUGT Act and by-laws, including enforcement of by-laws and the management, control, and administration of common property; > > e) Section 30(5) of the BUGT Act reinforces that by-laws are binding on the body corporate, proprietors, mortgagees in possession, lessees, and occupiers as though they had mutually agreed in writing to observe and perform all their provisions; and > > f) Accordingly, the body corporate contends that by-law 13.4 and section 32A of the BUGT Act serve distinct purposes. By-law 13.4 facilitates the immediate recovery of debts, including legal costs, as a liquidated amount, while section 32A imposes a statutory timeframe for initiating legal proceedings to recover unpaid contributions.

Further, the power vested in the body corporate by virtue of by-law 13.4 is lawful because of the reasons given below.
The applicant claims that by-law 13.4 contravenes the contractual intent of section 37(2) by unilaterally imposing costs without prior mutual agreement.
Section 37(2) of the BUGT Act grants a body corporate discretionary authority to enter into agreements for the provision of amenities or services to a lot or its proprietor or occupier. This provision does not impose an obligation on a body corporate to contract with a proprietor before entering into such agreements; rather, it allows the body corporate to do so at its discretion.
The body corporate submits that it is under no obligation to enter into an agreement with proprietors prior to doing so, by virtue of the term 'may'.
The applicant claims that the imposition of costs, including legal fees, without limitations or dispute mechanisms, is unreasonable and potentially oppressive.
The body corporate disagrees with the applicant's claim, and characterisation of by-law 13.4, and submits that if the applicant contends that the costs and expenses incurred under by-law 13.4 are unreasonable, the applicant may commence proceedings in a Court or Tribunal of competent jurisdiction seeking orders to that effect.
For the benefit of the Referee, the body corporate notes the following with respect to the concept of reasonableness in the "Fairway Island case" - Redman v The Proprietors - Fairway Island GTP 107328 - BC202040233. Therein the tribunal considered that a by-law must not be so capricious and irrational that no reasonable person exercising the power could have devised it. It must be within the scope of what Parliament intended when enacting the statute that gave the power to the body corporate. The tribunal found that the by-law was not unreasonable because it was directed towards the control, management, administration, use, or enjoyment of the lots and common property, which are legitimate purposes under the BUGT Act.
The body corporate submits that by-law 13.4 is a reasonable response to regulating the recovery of unpaid levies so that the body corporate is not financially disadvantaged.
The applicant claims that the by-law unreasonably interferes with an owner's right to deal freely with their property, exceeding the intended scope of by-law-making powers under BUGT Act.
The body corporate submits that an owner only has the right to deal freely with their property in accordance with law.
The body corporate further submits that any interference by-law 13.4 may have on a lot owners' ability to deal with their property is not unreasonable because it is consistent with the BUGT Act, in particular, section 32A.

[15] One owner submitted that by-law 13.4 is a vital tool for maintaining financial accountability and fairness within Rosebank. It protects compliant owners from shouldering the financial consequences of other's actions. Mr Locke and Ms Hutchins (the other proprietor of lot 54) have repeatedly refused to meet their obligations, causing unnecessary costs and stress for the community.
[16] Another owner submitted that an existing by-law is valid until such time as it is declared invalid by a referee's order. By-law 13.4 has been in force since the inception of Rosebank, 24+ years. The by-law has been utilised on occasion during this period and no owner, including Mr Locke, has ever challenged its veracity.
[17] Mr Locke replies that the body corporate's claim that by-law 13.4 does not conflict with sections 32 or 37(2)(a) is incorrect and requires further scrutiny. He says by-law 13.4 exceeds the scope of levy recovery outlined in section 32 by imposing additional financial obligations not explicitly authorised by the BUGT Act.
[18] Mr Locke says Tte body corporate's reliance on section 30(2) to empower the creation of by-law 13.4 overlooks the broader principle that by-laws must not contravene or exceed the powers granted by the Act. By-law 13.4 imposes financial obligations not authorised under the BUGT Act, particularly regarding the automatic recovery of costs and legal fees without mutual agreement or appropriate dispute resolution processes.
[19] The imposition of legal fees and associated costs as a liquidated amount, he argues, creates a financial burden on owners, which goes beyond the legislative intent of the BUGT Act.
[20] Mr Locke says he disagrees with the body corporate's interpretation of section 37(2)(a) and the discretionary authority it confers. By-law 13.4's provisions for costs, including legal fees, represent a unilateral imposition on proprietors, bypassing mutual consent or a clear dispute resolution process. This undermines fairness and transparency in financial matters.
[21] Section 32A of the BUGT Act permits the recovery of unpaid contributions but does not support the automatic imposition of legal fees and associated costs as a liquidated amount, argues Mr Locke. By-law 13.4 extends beyond the scope of recovery allowed by the BUGT Act, creating an undue financial burden on owners that is inconsistent with the legislative framework.
[22] Mr Locke says the body corporate's assertion that by-law 13.4 is reasonable fails to address the absence of limitations or dispute resolution mechanisms regarding the imposition of costs and legal fees. Without clear safeguards, he says by-law 13.4 may be considered oppressive to owners and inconsistent with the principles of fairness under the BUGT Act.
[23] The reference to the Fairway Island case does not adequately justify the reasonableness of by-law 13.4, Mr Locke contends. He says the absence of clear limitations and safeguards, along with the potential for abuse, renders the blanket imposition of costs unjustifiable. The body corporate's reliance on this case fails to acknowledge the importance of a transparent process for challenging costs, which by-law 13.4 lacks.
[24] Mr Locke reiterates that by-law 13.4 unreasonably interferes with the proprietary rights of owners by imposing financial obligations that exceed what is necessary for the management and administration of the property. The by-law exceeds the scope of by-law-making powers under the BUGT Act and impinges on owners' financial autonomy.
[25] Mr Locke also notes, in response to statements that by-law 13.4 has been in force for over 20 years without challenge, that the passage of time does not equate to legality. The fact that the by-law has remained unchallenged does not absolve it from legal scrutiny. The core issue is whether by-law 13.4 complies with the requirements of the BUGT Act, not merely its historical existence.

[26] Some submissions queried whether Mr Locke had standing to bring the application, noting that he was not entitled to vote because of his unfinancial status.
[27] Although this application is stated to have been brought under section 77(1) of the BUGT Act, seeking an order that a by-law is invalid is in fact, an application under section 90, which provides that Where, pursuant to an application by any person entitled to vote at a meeting of the body corporate for an order under this section, a referee considers that a body corporate did not have the power to make a by-law purporting to have been made by it, the referee may make an order declaring the by-law to be invalid (bolding my emphasis).
[28] It is argued that pursuant to clause 2(6) of part 2 of schedule 2 of the BUGT Act, Mr Locke is not entitled to vote at a meeting of the body corporate; he lost that entitlement because he has failed to pay contributions levied on lot 54 and other moneys recoverable under the Act.
[29] Mr Locke replied to these submissions saying that financial status is not a prerequisite for challenging the validity of a by-law. The primary issue is whether by-law 13.4 is consistent with the powers granted to the body corporate under the BUGT Act, which he is fully entitled to contest. Being unfinancial does not prevent an individual from raising legitimate concerns about the application of by-laws or the governance of the body corporate.
[30] Referee Sutherland has previously said that he did not consider the intended effect of sections 88[4] and 90 of the BUGT Act was to preclude applications from persons who are simply not up to date with their contributions, but otherwise are entitled to vote. He said it would be a perverse result if a person had to pay a contribution just so they could apply for an order to invalidate a by-law that they said unlawfully raised the contribution against them.[5]
[31] I am not satisfied that Mr Locke being deemed 'unfinancial' by the body corporate precludes him from bringing an application concerning the validity of a by-law.

[32] The default by-laws applicable to each body corporate are those in Schedule 3 of the BUGT Act. For the purpose of the control, management, administration, use or enjoyment of the lots and common property the subject of the plan, the body corporate may make by-laws amending, adding to or repealing the Schedule 3 by-laws, or other by-laws made. An amendment of, addition to, or repeal of the by-laws has no force or effect until the registrar of titles has recorded the notification on the registered plan. The by-laws for the time being in force bind the body corporate and the proprietors and any mortgagee in possession, lessee or occupier, of a lot to the same extent as if the by-laws had been signed and sealed by the body corporate and each proprietor, and each mortgagee, lessee and occupier respectively and as if they contained mutual covenants to observe and perform all the provisions of the by-laws.[6]
[33] The body corporate has changed its by-laws some 18 times since the scheme's inception in May 1992. By-law 13.4 was first added as new by-law 28.1, but in the same words, on 5 December 1994, when Dealing no. 700268405 was registered.
[34] Contrary to the views expressed by some submitters, a plan's by-laws are not 'approved' by any government agency and the fact that a by-law has been recorded on the registered plan does not mean it is valid.
[35] By-law 13.4 appears under a section of the by-laws titled "13 Interest". The by-law, in its entirety, is:

13.1 If a contribution levied under Section 32 of the Building Units and Group Titles Act is unpaid 30 days after it falls due for payment then the amount of the unpaid contributions will attract penalty interest at a monthly rate of 2.5% or at a rate as determined by the Committee of the Body Corporate from time to time unless otherwise determined by Ordinary Resolution at a general meeting.

13.2 If at the time a person becomes the proprietor of a lot, another person is liable in respect of the lot to pay interest on a contribution, the proprietor is jointly and severally liable with the other person for the payment of the interest.

13.3 The amount of any interest is recoverable by the Body Corporate as a liquidated debt.

13.4 All costs and expenses (including solicitor and own client costs incurred by the Body Corporate whether or not court proceedings were undertaken) in the recovery of monies payable are to be a liquidated debt due to the Body Corporate by the Proprietor or mortgagee in possession and which is payable on demand.

[36] Whilst, at face value, the power to make by-laws is very broad, being for the purpose of the control, management, administration, use or enjoyment of the lots and common property the subject of the plan[7] it has been held that[8]

...the s 30(2) by-law making power does not authorise a bylaw that is inconsistent with the Act in that it contradicts a provision in the Act or extends the ambit of a power whose parameters are specifically addressed by the Act.

[37] In determining a previous dispute for this scheme, I held:[9]

I agree with the committee that the body corporate draws its powers, authorities, duties and functions from the BUGTA or the by-laws. Accordingly, it is not limited by what is in the BUGTA - it can make by-laws to expand upon and complement the powers, authorities, duties and functions in the BUGTA. However, I don't agree that just because there is no provision like section 180 of the BCCMA, there is nothing in the BUGTA that limits by-laws from being inconsistent with the BUGTA. I concede that there is nothing in BUGTA that prevents a by-law from imposing a monetary liability and the fact that a by-law under BUGTA can do this now appears to be well settled and BUGTA itself contemplates it[10]. However, I do not agree that a by-law can directly conflict with its enabling legislation. It has been held that the power to make by-laws is a delegated or subsidiary power given the body corporate by the legislation, and therefore by-laws are subordinate to the legislation, and as such, may only complement, and not be inconsistent with, the legislation.[11] Further, section 27(3) of the BUGTA specifically states "Subject to this Act the body corporate shall have all the powers, authorities, duties, and functions conferred or imposed on it by or under this Act or the by-laws ....." (bolding my emphasis).

[38] The question then to be determined is whether by-law 13.4 conflicts with the BUGT Act, or merely complements it.
[39] When considering, under the BUGT Act, how a body corporate may raise contributions and recover costs in another previous dispute for this scheme, Referee Sutherland held:

The Act contemplates a body corporate raising funds and recovering its costs from proprietors and occupiers only in two ways: either by agreement with a proprietor or occupier under section 37(2)(a); or by a levy in respect of each lot in shares proportional to the lot entitlements for amounts determined in accordance with section 38A. If it is not done in accordance with the latter, then it must necessarily be done in accordance with the former.[12]

[40] Referee Sutherland held that neither the garbage levy, nor the water levy, could be determined in accordance with section 38A, so the cost of those services could be recovered from a proprietor (or occupier) of a lot only if the body corporate had entered into an agreement with the proprietor or occupier of the lot pursuant to section 37(2)(a), for the provision of amenities or services by it to the lot or to the proprietor or occupier.[13]
[41] It was held in Royal Pines South Shields[14], that passing a by-law does not provide a sufficient basis, for the purposes of section 37(2)(a), for the body corporate to recover costs from individual lots. I came to the same conclusion in a previous dispute concerning this scheme.[15]
[42] However, recovery costs can be recovered under section 38A. Referee Sutherland held in a previous dispute concerning this scheme[16]:

[26] I do not agree with the applicant that such costs cannot be recovered under section 38A. Section 38A(1) in summary requires a body corporate to determine amounts to be raised by contribution for the actual or expected cost of carrying out its various functions and meeting its liabilities, for specific things like maintenance and also "other liabilities incurred in carrying out body corporate powers, authorities, duties and functions under this Act". Given that raising contributions is clearly within a body corporates duties and functions, I consider that recovering outstanding contributions is also squarely within a body corporate's functions, and accordingly the cost of doing so is naturally a part of that.

[27] I agree to some extent with the applicant: especially given the words "the associated costs be on charged to the respective Lot", the cost recovery scheme proposed by motion 13 clearly is at odds with section 38A, because it is not cost recovery through proportionate contributions. However, I am not satisfied that it could be recouped under section 37(2)(a), either. That subsection provides that a body corporate may enter into an agreement with a proprietor or occupier of a lot "for the provision of amenities or services by it to the lot or to the proprietor or occupier". I would not characterise a debt recovery process as a service provided to the lot, proprietor or occupier against whom the action is being taken - rather, it is a service provided to the body corporate, ie proprietors as a whole. Therefore, I do not agree that these costs can only be recovered if facilitated by individual agreements under section 37(2)(a).

[28] Unless provided for in a Magistrates Court order for recovery of a particular debt, I consider that the cost of debt recovery has to be recovered through the proportionate contributions to the general administrative fund. I appreciate that the Body Corporate might wish to pass on debt recovery costs to the late-paying proprietors in a more directed way, but I cannot see that this could be achieved in this way.

[29] The applicant does not object to the procedure outlined in the motion being adopted. I will declare motion 13 invalid insofar as it purports to be the basis for the recovery of costs for the recovery of outstanding contributions.

[43] Further, it has been held that until legal fees incurred in recovering unpaid contributions have been determined by a court of competent jurisdiction, they remain an unliquidated sum and cannot be claimed as a minor debt.[17] When considering the validity of a similar by-law under the BCCM Act, an adjudicator commented that I am concerned that these by-laws purport to make any owner in dispute with the body corporate liable for all the body corporate's expenses, whatever they may be. This is contrary to the usual position in litigation where a court considers whether costs should be payable and any costs are usually awarded with reference to the court scale of costs.[18]
[44] As Referee Sutherland has previously said, unless provided for in a Magistrates Court order for recovery of a particular debt, debt recovery costs must be recovered through proportionate contributions to the general administrative fund.
[45] In summary, I consider that by-law 13.4 purports to enable the body corporate to recoup recovery costs directly from individual proprietors as a liquidated debt, whereas the BUGT Act only empowers the body corporate to initially recover such costs through proportionate contributions from all proprietors. As a result, in my view, by-law 13.4 is inconsistent with the BUGT Act and purports to 'extend the ambit of a power whose parameters are specifically addressed by the Act'[19] and is therefore invalid.
[46] There was opportunity for the BUGT Act to be altered to be more consistent with the position under the BCCM Act (which makes specific provision for recouping reasonably incurred recovery costs as a debt from the owner of the relevant lot)[20] when extensive amendments were made to the BUGT Act by the Building Units and Group Titles and Other Legislation Amendment Act 2022. The fact that no amendments were made to this position (whilst other amendments such as the insertion of section 32A Recovery of body corporate debts, were made) suggests that the existing position under the BUGT Act was intentionally left as is.
[47] I will make an order pursuant to section 90 of the BUGT Act that by-law 13.4 is invalid. It is unnecessary to order the body corporate to remove the by-law as sought by Mr Locke, as section 112 of the BUGT Act compels the body corporate to lodge a copy of this order with the Registrar of Titles, which will have the same effect.
[48] Whilst I appreciate there is an understandable sense of frustration in such a conclusion, the practical considerations noted by many submitters cannot overshadow the operation of the legislation. However, the fact that recovery costs are to be initially funded by the body corporate does not, in my view, preclude the body corporate from later seeking an order from a Magistrates Court that a proprietor is liable to pay both a particular debt and the body corporate's costs of recovering that particular debt.

[49] Mr Locke challenges the validity of a motion considered at the AGM on 23 August 2024 and alleges the minutes of that meeting were falsified.
[50] He says at the AGM, the committee presented motion 4 to approve the sinking fund budget for the year ending 31 May 2023, when it was intended to be for 2025.
[51] Mr Locke says the sequence of events was as follows:

The motion as presented explicitly stated it was for the financial year ending 31 May 2023.
He informed the committee of this error prior to the meeting by email.
The committee claimed the error did not matter and proceeded to vote on the motion as if it was for 2025, which was not as written and presented to the residents.
The minutes were subsequently written to claim the motion was for the 2025 budget.
- [52] Mr Locke argues that under the BUGT Act, accurate record-keeping and proper procedures for passing motions are essential for the proper functioning of a body corporate. The deliberate falsification of minutes is a serious matter that undermines the integrity of the body corporate's decision-making processes and the role of the manager in the production of the minutes.
- [53] The following declarations are sought:
Motion 4, as presented and voted on, is invalid, as it does not accurately reflect the intended year for the budget.
The minutes are invalid and false, as they misrepresent the actual motion presented and voted upon at the meeting.
The committee does not currently have an approved budget for 2024, as no valid motion has been passed to this effect.
- [54] In addition, Mr Locke seeks orders directing the committee to hold a new meeting with a correctly worded motion to approve the 2024 budget and reminding them of their legal obligations regarding accurate minute-taking and the serious nature of falsifying official records.
- [55] Michael Kowalczyk's (body corporate manager) email response of 23 August 2024 to Mr Locke's email of 22 August 2024, regarding motion 4 was as follows:
  - Motion 4 paragraph (a) refers to the adoption of a sinking fund budget for the FY ending 31 May 2023. The wording in this part of the motion should have said 31 May 2025.
  - However, the following paragraphs in the motion refer to the dates which the levy will cover as well as their due dates (which include the correct dates and demonstrate that the levies will be for the FY ending 2025) - see motion 4, paragraphs (c) and (d).
  - All documentation supporting the adoption of the sinking fund budget was clearly identified as applying to the FY 2024-2025 and the index of documents correctly recorded the Rosebank budget being for 2024/2025.
  - It ought to have been apparent to any reasonable owner reading the agenda in full that this motion was for the sinking fund budget for the FY 2024-2025.
  - No other owner has raised any issues or concerns with this motion or indicated to our office that they are confused or misled by the application of this motion neither before or during the meeting. On this basis, we consider it was obvious to owners on the face of the motion, that there was simply a typographical error in one section of the motion.
  - Even you, Mr Locke, admit that the error was a mistake. So, I can't see why any owner would want to challenge this, other than out of ill will.
- [56] The body corporate submits[21]:
  1. The applicant alleges that the body corporate deliberately falsified the minutes of the AGM held on 23 August 2024.
  2. Motion 4 of the agenda contained a typographical error in paragraph (a), which referred to the adoption of a sinking fund budget for the financial year ending 31 May 2023, instead of the correct date, 31 May 2025. However, paragraphs (c) and (d) of the motion accurately referenced the correct dates, specifying the levy periods and due dates for the financial year ending 2025, as reflected in the minutes.
  3. Additionally, all supporting documentation, including the index of documents, clearly identified the sinking fund budget as applying to the 2024/2025 financial year.
  4. The body corporate submits that a defect in the notice of a meeting, such as a typographical error, does not necessarily invalidate the proceedings of the meeting unless it causes substantial injustice that cannot be remedied by a court order.
- [57] One owner submits that Mr Locke claims he was aware the minutes should have read 2025, as were the community. They say when the vote was put forward, those who were valid financial voters were aware that they were voting for the 2025 budget, and not the 2023 budget (2 years previous). Mr Lockes declares "The minutes were subsequently written to claim the motion was for the 2025 budget. A copy of the minutes has been provided." Whilst there was clearly a typographical error, it was clear the vote was for 2025, and the minutes reflected that. They acknowledge that it is important to have accurate and precise records, even for a voluntary body corporate team, however this is typical of the trifle bickering that the community faces regularly from this one owner on a continuous basis. If the motion is to be deemed invalid, then every body corporate motion with a typographical error is deemed invalid. They request that the motion is deemed valid as per the minutes as quoted by Mr Locke in point 4.
- [58] Mr Locke replies that the explanation for the typographical error in motion 4 is insufficient. Such errors, particularly in financial matters, can cause confusion and potentially invalidate proceedings. He says a more thorough correction and clarification of the minutes are necessary to ensure transparency.
- [59] Mr Locke points out a typographical error. It appears in paragraph (a) of motion 4 in the voting paper in the Notice of Meeting.
- [60] Nonetheless, it is clear that the sinking fund budget totalling $102,240 excluding GST for the period 1 June 2024 to 31 May 2025 and included with the meeting material was what was being referred to.
- [61] The minutes refer to the correct dates and indicate that motion 4 was carried by ordinary resolution, with 42 votes in favour, 1 against and 2 abstentions.
- [62] I agree with the body corporate that a defect in the notice of a meeting, such as a typographical error, does not necessarily invalidate the proceedings of the meeting unless it causes substantial injustice. It has been held that minor errors in meeting procedure, such as a typographical error in a date, have no effect on the validity of the motion.[22]
- [63] I dismiss this part of the application as frivolous and vexatious.
- [64] New section 94C of the BUGT Act[23] provides that if a referee dismisses an application for an order because it appears that the application is frivolous, vexatious, misconceived or without substance, the referee may order costs of up to $2,000 against the applicant to compensate for loss resulting from the application.
- [65] Had this issue been the only one raised by Mr Locke in this application, I would have had no hesitation in dismissing the application as frivolous and vexatious and ordering him to pay the body corporate the cost of its legal expenses in responding to the application.

[66] Mr Locke asserts that the election of the committee at the AGM was invalid. Specifically, the owner of lot 89 should have been elected to the committee.
[67] At the AGM, Mr Locke says, according to the minutes, that 'the nomination from the owner of lot 89 had to be withdrawn due to the owner being non-financial at the time of the General Meeting'. Mr Locke says this is factually incorrect and without legal basis.
[68] Mr Locke says this office has ordered[24] that the body corporate must not charge for water fees unless the resident/owner has agreed to be supplied on notified terms and conditions. He says the committee has refused to comply with this order since 2020.
[69] The committee, argues Mr Locke, incorrectly declared that lot 89 had a debt relating to a water account. Given the existing order, the body corporate has no legal right to charge for water fees without the owner's agreement to specific terms and conditions. By deeming the owner of lot 89 unfinancial based on an invalid debt, the committee unlawfully excluded an eligible candidate from the election process. The improper exclusion of the owner of lot 89 from the election process violates principles of procedural fairness and potentially impacts the governance of the body corporate.
[70] Mr Locke seeks the following orders:

A declaration that the decision regarding the election of committee members at the AGM of 23 August 2024 was invalid.
That the owner of lot 89 be rightfully elected to the committee.
That the body corporate hold a new election for committee members if necessary, ensuring all eligible owners, including lot 89, are permitted to participate.
- [71] The body corporate submits[25]:
  1. The applicant claims that the nomination for election to the committee by the owner of lot 89 was improperly withdrawn on the grounds that the owner was not financial. The applicant contends that the owner of Lot 89 is not financial due to outstanding charges that were improperly or invalidly levied.
  2. The owner of lot 89 was encouraged, up until the day of the AGM, to complete the Claim for Monies Owed - Form 23 to formally request that her debt be absorbed by the body corporate or to apply for a payment plan. Despite these efforts and opportunities for resolution, the owner of lot 89 refused to take any action in this respect. As such, the outstanding debt remained unresolved, and no formal steps were taken by the owner of lot 89 to rectify her financial status with the body corporate.
- [72] One owner submits that lot 89 was also in default for water usage and was deemed unfinancial. They say Mr Locke continues to push the tone that water and garbage services are free, which has clearly spread to lot 89. If lot 89 is deemed by this review to be financial, the ramifications to the community will be immense. In a small close-knit community, word travels, and a decision to deem that an owner that has not paid its bills is financial will open the doors for ALL owners to withhold payments. It will also set a precedent that members of the body corporate committee do not need to follow the rules and laws they are elected to enforce.
- [73] Dr Jan Howes, owner of lot 89, made a late submission in response to the application (the only one supporting Mr Locke), stating relevantly, that payment of administrative and sinking fund levies dictates if an owner is considered financial. Water and waste payments are separate. Dr Howes says it is unclear as to which of these separate matters are being referred to. She goes on to say that she has lived there for 24 years and has never been unfinancial and still is not. However, she claims to have a dispute about a water account that she says has not been addressed by the body corporate. She says that she is well known and would more than likely have been voted for.
- [74] Mr Locke replies to the body corporate's submission saying its response does not adequately address the validity of the outstanding charges, wrongfully imposed due to the body corporate's failure to comply with the referee's order, that led to the owner being deemed unfinancial.
- [75] Regarding water and rubbish collection, Michael Kowalczyk's email response of 23 August 2024 to Mr Locke's email of 22 August 2024 stated 'We are taking steps to ensure we conform to the commissioner's decision and therefore we will be addressing this matter in the near future.'
- [76] As has previously been stated by Referee Sutherland, 'If the 2020 orders are not being complied with, the appropriate step is for the concerned persons - which seems to comprise only the applicant - to take action about that in the Magistrates Court. I cannot presume to decide whether my own orders have been complied with.'[26]
- [77] I am not aware of any enforcement proceedings in relation to the 2020 orders having been instituted.
- [78] In circumstances where neither party to the dispute, nor Dr Howes (the person most directly affected by the orders sought in relation to committee composition), has given me any financial information as to any alleged outstanding (or fully paid) administrative or sinking fund contributions, or other payments, I am in no position to determine whether Dr Howes was correctly or incorrectly declared unfinancial and therefore, ineligible for election to the 2024 committee.
- [79] Further, I have not received any submissions to the effect that if Dr Howes had not been withdrawn from the election, owners would have voted for her (excepting Dr Howes' own assertion of that), or that any decisions made by the current committee are disputed. On the contrary, with only 1 exception, all submissions made were fully supportive of the body corporate.
- [80] Where the scheme's financial year ends on 31 May 2025 and the next AGM is due to be held within 2 months of the anniversary of the first AGM (at which a new election for committee membership for the following financial year will be conducted), I consider the orders sought in this regard are now otiose and I dismiss the application so far as it concerns the composition of the committee for the 2024 financial year.
- [81] For the purposes of committee composition for the next financial year, and for the benefit of all parties, I have set out below the current law[27] relating to eligibility for committee membership.
- [82] Section 42(6) of the BUGT Act provides that a person is eligible for committee membership only if the person is an electable person at the time of the meeting of the body corporate at which the person's election is proposed.
- [83] A person is not electable if they owe a relevant body corporate debt[28]. Relevant body corporate debt is defined in section 41A of the BUGT Act to mean a contribution or other amount associated with the ownership of a lot[29] that is unpaid and has been due for payment for at least 30 days. Contrary to the submission of Dr Howes, it is not only the payment of administrative and sinking fund levies that dictates whether an owner is considered financial. The definition of relevant body corporate debt is broader than that.

[84] Motion 9 is recorded as follows in the Notice of meeting and minutes:

THAT the Rosebank Body Corporate adopts the BC-25 Debt Recovery Policy as attached to this Meeting Notice.

That the Proprietors of Rosebank GTP 3033, FURTHER RESOLVED pursuant to the Building Units and Group Titles Act 1980 for the purpose of collecting levy contributions to authorise the Body Corporate Manager (pursuant to section 50 of the Act) and/or the Committee to do any one or more of the following:

to issue arrears notices, reminder notices and/or letters to seek recovery of levy contributions and the recovery of other debts, water including penalties, interest, legal and other costs;
to retain legal representation of Grace Lawyers Pty Ltd on behalf of the Proprietors - Rosebank Group Titles Plan 3033;
to issue demands, commence, pursue, continue, maintain or defend any court, tribunal or any other proceedings on behalf of the Body Corporate against any lot owner, mortgagee in possession and/or former lot owner in relation to all matters arising out of the recovery of levy contributions and the recovery of other debts, including penalties, interest, legal and other costs;
enter and enforce any judgment obtained in the collection of levy contributions including issuing enforcement warrants for seizure and sale of real or personal property, enforcement warrants for redirection of debts or earnings, enforcement warrant for enforcement hearing and commencing and maintaining bankruptcy proceedings or winding up proceedings;
filing an appeal or defending an appeal against any judgment concerning the collection of levy contributions; and
1. liaise, instruct and prepare all matters with the Body Corporate's debt collection agents, lawyers and experts in relation to any levy recovery proceedings.

[85] The minutes indicate motion 9 was carried by ordinary resolution, with 44 votes in favour, nil against and 1 abstention.
[86] Mr Locke argues that motion 9 is void and the debt recovery policy invalid. He seeks orders to this effect and that any implementation or action based on the motion or policy be suspended pending the outcome of this application. He also requests that the body corporate be directed to review and revise its debt recovery procedures to ensure full compliance with current BUGT Act requirements.
[87] His grounds are as follows:

Motion 9 referred to a policy document BC-25, which was not included in the AGM agenda or provided to owners for review. The agenda contained a debt recovery document numbered DP400027, which does not correspond to the BC-25 document mentioned in the motion. Owners were asked to vote on a motion referencing an unavailable document, compromising informed decision-making.

Conflicts between debt recovery policy and the BUGT Act

The policy assumes authority to recover costs not explicitly granted under the BUGT Act. It implements a 'scale of debt recovery charges' not provided for in the BUGT Act. The policy's dispute resolution process conflicts with the BUGT Act's provisions for handling outstanding levies. The blanket approach to charging costs may conflict with the BUGT Act's requirement for bodies corporate to act reasonably in decision-making. The policy appears more aligned with the BCCM Act practices rather than the BUGT Act requirements.

The debt recovery document provided was for Body Corporate Services rather than Rosebank, creating confusion about its applicability.

The policy attempts to implement practices that are currently under review by the community titles legislation working group, potentially overstepping current legislative boundaries.

[88] The meeting material included a document titled 'Body Corporate Services Body Corporate Debt Recovery Policy DP400027 Version 1 January 2024'.
[89] Michael Kowalczyk's email response of 23 August 2024 to Mr Locke's email of 22 August 2024, regarding motion 9 was as follows:

Please note the policy for the Body Corporate in 2025 (BC-25) was annexed to the Agenda - pages 76-80.

[90] Mr Kowalczyk also highlighted under 'Policy Purpose' the reference to 'Resort Body Corporate Services Pty Ltd' having been given authority by the body corporate to administer the financial position of the body corporate, including the recovery of outstanding amounts due to the body corporate.
[91] The body corporate submits[30]:
1. The applicant claims that the debt recovery policy (the 'Policy') did not form part of the AGM agenda. Further, the applicant claims that the Policy is invalid as it conflicts with the BUGT Act by exceeding its authority, implementing charges not provided for, and failing to align with the BUGT Act's dispute resolution and reasonableness requirements. Additionally, the applicant highlights a lack of transparency regarding the Policy's application and asserts that it overreaches by adopting practices under review or aligned with other legislation.
2. In response the body corporate submits:
  1. The Policy formed part of the agenda (pages 76-80). The Policy exists at pages 90-96 of the applicant's application;
  2. Section 32A of the BUGT Act provides the power to recover unpaid levies. The applicant's submission that the policy assumes authority to recover costs (associated with the recovery of levies), which are not explicitly granted by the BUGT Act, fails because the policy details best practice for the debt recovery process which is available to anyone who wishes to recover a debt. Further, the Policy safeguards against costs and expenses being incurred unreasonably because it details the appropriate course to be taken.
  3. The applicant's submission that the Policy provides a scale not provided for in the BUGT Act fails because the body corporate's power to recover costs and expenses is provided for in by-law 13.4. The scale of costs illustrates costs and expenses which are reasonably incurred in best practice debt recovery.
  4. The body corporate submits that the applicant's remaining submissions on 'conflict', 'lack of transparency', and 'potential overreach of authority', are embarrassing because they rely on speculation.
[92] Mr Locke replies that while the body corporate claims the policy was part of the agenda, its alignment with the BUGT Act remains in question. He says the policy appears to introduce measures not explicitly provided for in the Act, particularly concerning the recovery of legal fees and other charges not outlined in the legislative framework.
[93] Mr Locke continues, the body corporate's dismissal of concerns about transparency and potential overreach as 'embarrassing' fails to address the legitimate issues raised regarding the policy's scope and application. He says this dismissive response does not adequately engage with the substance of his concerns.
[94] Mr Locke maintains that the debt recovery policy exceeds the body corporate's authority under the BUGT Act. The policy introduces charges and practices not supported by the legislation and lacks sufficient transparency in its application. The provisions for recovery costs are not properly aligned with the requirements of the BUGT Act for reasonableness and dispute resolution.
[95] My perusal of the Body Corporate Debt Recovery Policy which was attached to the Notice of Meeting for the AGM of 23 August 2024 reveals that the cost of all external debt collection procedures (including recovery costs and the cost of issuing a Claim and Statement of Claim or alternate legal instrument within a competent jurisdiction) will be on-charged to the lot owner.
[96] The body corporate has previously attempted to pass a motion (Motion 13 of the 2022 AGM) to establish a process and a schedule of charges for the recovery of outstanding contributions. In a previous dispute, motion 13 was declared invalid insofar as it purported to authorise directly imposing on a proprietor a cost for steps taken in the recovery of outstanding contributions.[31] That part of the decision was affirmed on appeal in the Southport Magistrates Court on 17 December 2024.[32]
[97] The cost recovery scheme proposed by motion 13 was said to be clearly at odds with section 38A, because it was not cost recovery through proportionate contributions. Nor was Referee Sutherland satisfied recovery costs could be recouped under section 37(2)(a) either, because he would not characterise a debt recovery process as a service provided to the lot, proprietor or occupier against whom the action was being taken - rather, it was a service provided to the body corporate, ie proprietors as a whole.[33]
[98] Referee Sutherland concluded that 'Unless provided for in a Magistrates Court order for recovery of a particular debt, I consider that the cost of debt recovery has to be recovered through the proportionate contributions to the general administrative fund. I appreciate that the Body Corporate might wish to pass on debt recovery costs to the late-paying proprietors in a more directed way, but I cannot see that this could be achieved in this way.'[34]
[99] For the same reasons, I find that the debt recovery policy purportedly adopted by the resolution pursuant to motion 9 of the AGM, is invalid to the extent it purports to authorise directly imposing on a proprietor a cost for steps taken in the recovery of outstanding contributions.
[100] As to the actual procedure embodied in the policy, Mr Locke argues generally, it assumes authority to recover costs not explicitly granted under BUGTA. It implements a 'scale of debt recovery charges' not provided for in BUGTA. The policy's dispute resolution process conflicts with BUGTA's provisions for handling outstanding levies. The blanket approach to charging costs may conflict with BUGTA's requirement for bodies corporate to act reasonably in decision-making. The policy appears more aligned with BCCM Act practices rather than BUGTA requirements.
[101] Mr Locke does not elaborate further and fails to persuade me of any of the allegations he loosely makes, save for the invalidity to the extent it purports to authorise directly imposing on a proprietor costs for steps taken in the recovery of outstanding contributions. I will limit my order to declaring the debt recovery policy invalid to this extent. I do not consider that motion 9 itself, or other aspects of the debt recovery policy are invalid, on the basis of the material before me.

[102] Based on the material before me, I am satisfied that by-law 13.4 is invalid. So too is the debt recovery policy adopted by resolution 9 of the 24 August 2024 AGM, to the extent it purports to authorise imposing directly on a proprietor, costs for steps taken in the recovery of outstanding contributions. Regarding the composition of the 2024 committee, the application is dismissed. Regarding the typographical error in motion 4 as presented to the 24 August 2024 AGM, and the minutes of the 24 August 2024 AGM, the application is dismissed as frivolous and vexatious.

[1] Those received on or before 5 January 2025

[2] Paragraph numbering correlates to the body corporate's submission

[3] Wattlevilla Pty Ltd v Western Downs Regional Council [2014] QPEC 47; [2015] QPELR 21 at [26] referring to the decision in Woolworths Ltd v Maryborough City Council (No 2) [2006] 1 QdR 273; [2006] QPELR 63; [2005] QCA 262 at [23].

[4] Under which an order revoking an amendment of a by-law or reviving a repealed by-law is sought.

[5] Rosebank [2020] QBCCMCmr 450 @ [34]

[6] See sections 30(1), (2), (3) and (5) of the BUGT Act

[8] The Palladian [2024] QBCCMCmr 185, citing Philippides JA, The Proprietors - Rosebank GTP 3033 v Locke & Anor [2016] QCA 192 @ [69].

[9] Rosebank [2016] QBCCMCmr 61 @ [27]

[10] See, for example, sections 30(9A) and (10)

[12] Rosebank [2020] QBCCMCmr 450 @ [27]

[13] See also Rosebank [2016] QBCCMCmr 61 at [27]- [4] (or [27]-[32]). A formatting error caused the paragraph numbering to restart at [1] after paragraph [28]

[16] Rosebank [2020] QBCCMCmr 450 @ [26] - [29]

[17] Bridgewater Gardens v Ireland [2022] QCAT 330 @ [49]

[18] Chiara Sands [2005] QBCCMCmr 683

[19] The Proprietors - Rosebank GTP 3033 v Locke & Anor [2016] QCA 192 @ [69]

[21] Paragraph numbering correlates to the body corporate's submission

[22] Hatlowe Heights [2020] QBCCMCmr 325 @ [31], citing Carroll and Ors v. Body Corporate for Palm Springs Residences CTS 29467 [2013] QCATA 21 and Wei-Xin Chen v. Body Corporate for Wishart Village CTS 19482 (Unreported, District Court of Queensland, Appeal 4080/2000)

[25] Paragraph numbering correlates to the body corporate's submission

[26] Rosebank [2023] QBCCMCmr 463 @ [16]

[27] Which changed on 1 December 2022 because of amendments to the BUGT Act made by the Building Units and Group Titles and Other Legislation Amendment Act 2022.

[29] An example of which, given in the legislation, is an amount for lawn mowing services arranged by a body corporate on behalf of an owner of a lot.

[30] Paragraph numbering correlates to the body corporate's submission

[32] See Verdict and Judgment Record Case File MAG-00018328/24(1) SOUT_MAG-00001832/24

Units and Group Titles Act 1980

Resort Development Act 1987

Units and Group Titles and Other Legislation Amendment Act 2022

Corporate and Community Management (Standard Module) Regulation 2020

Rosebank [2025] QBCCMCmr 129 (23 April 2025)

At a glance

Court

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Catchwords

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Catchwords

Judgment (87 paragraphs)

Legislation Cited (4)