Body Corporate and Community Management Act 1997 (Qld) (Act), sections 227 and 229(3)(a)

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

INTERIM ORDER - whether an interim order is necessary because of the nature or urgency of the circumstances to which the application relates.

ADJUDICATOR POWERS - whether Adjudicator can be satisfied that an application raises a serious legal question and the balance of convenience between the parties justifies injunctive relief.

SDW2 Pty Ltd v JLF Corporation Pty Ltd [2017] QSC 001

Australian Broadcasting Corporation v O'Neill [2006] HCA 46

1. Pending the making of further orders the Body Corporate is not to commence decommissioning the air-conditioning and condenser unit that services Lots 7 and 8.

2. Should the Decommissioning have already commenced, the Air-Conditioning System is to be reinstated.

• [1] Chermside Medical Complex consists of 17 lots on a building format plan and is regulated by the Commercial Module.
• [2] It is a commercial scheme that comprises:

(iii) an air-conditioning and condenser unit that services Lots 7 and 8.

• [3] The applicant is the owner of lots 7 and 8 which are tenanted by Clinical Oncology Network Pty Ltd ACN 151 293 891 (Tenant).
• [4] The applicant says the Air-Conditioning System requires replacement and/or major repairs, and is concerned that the body corporate may decommission the system. It seeks both interim and final orders regarding any actions by the body corporate to decommission the system.
• [5] The interim orders sought are that:

(a) the Body Corporate is restrained from acting upon or implementing any Decommissioning; and

(b) (if necessary) the Air-Conditioning System is reinstated should the Decommissioning

• [6] The Final Orders sought by the applicant are that:

(a) the Body Corporate must carry out the Works in accordance with the Isothermal Quote 42130R dated 1 April 2025 within 3 months of the Final Orders being made;

(c) (if necessary) the Body Corporate call a general meeting to fund the payment of

the Repair Costs, including by way of a special levy;

(d) the Body Corporate be permanently restrained from Decommissioning the Air-

(ii) the replacement Air-Conditioning System is operational; and

(e) such other orders as the Adjudicator deems appropriate.

• [7] The applicant states that Lots 7 and 8 are tenanted by Integrated Clinical Oncology Network Pty Ltd ACN 151 293 891 (Tenant). They say that since May 2024, the Air-Conditioning Unit and Condenser Unit (Air-Conditioning System) which service Lots 7 and 8 have deteriorated and require major repairs and/or replacement (Works).
• [8] On 24 May 2024, the Tenant provided a quote to complete the Works in the amount of

$11,671.44 including GST (Repair Costs). On the same day the Applicant notified the Body Corporate Manager of the Repairs and requested confirmation that the Body Corporate is responsible for the Estimated Repairs Costs.

• [9] Later that day on 24 May 2024 at 12:26pm, the Body Corporate Manager forwarded the Request to the Committee noting "The Body Corporate is responsible for any utility infrastructure that services more than 1 Lot".
• [10] On 18 June 2024, the Committee refused the Request and claimed that the Works and Repair costs were an "Owner expense and not Body Corporate".
• [11] It would seem that the extent of the required repairs was greater than initially thought and on 19 June 2024, the Tenant provided a further quote in the amount of $175,726 inc. GST to complete the Works, involving replacement of numerous components.
• [12] On 1 August 2024, the Applicant responded to the body corporate noting that:

(a) the Authorities largely concern whether the utility infrastructure services one Lot or more; and

(b) the Condenser Unit services more than one Lot;

(c) it is the Body Corporate's responsibility to replace the Condenser Unit, which was confirmed by SSKB in their email of 24 May 2024.

• [13] On 12 August 2024, SSKB responded to the Applicant advising that they had not received further instructions from the Committee that would change the Decision.
• [14] On 16 September 2024, a letter was sent to the Body Corporate on behalf of the Applicant by its solicitors, HWLE, which advised that the Decision was invalid and the Authorities, properly applied, confirm this.
• [15] The applicant says the Air-Conditioning System is vital to the operation of the Tenant's business (Tenant's Business), which:

(a) provides cancer-related care to patients; and

(b) includes maintaining pharmaceutical drugs at correct temperatures (Tenant's Stock).

• [16] They state that if the Works are not completed and/ or the Air-Conditioning System ceases to function property, the Applicant will suffer significant financial loss because the Tenant has indicated that:

(a) Lots 7 and 8 will no longer be fit for the Tenant's Business; and

(b) they will lose about $400,000.000 worth of the Tenant's Stock.

• [17] On 12 November 2024, the Body Corporate threatened to decommission the Air-Conditioning System (Decommissioning) rather than complete the Works.
• [18] The Body Corporate's position was that it bears no obligation with respect to maintenance of the Air- Conditioning Unit and on this basis, is not required to undertake the Works
• [19] On 8 April 2025, the Applicant warned the Body Corporate of the potential Losses and said that if the Body Corporate takes steps to effect any decommissioning, it would file an urgent adjudication application.
• [20] In addition to seeking interim orders, the applicant advised that they would seek final orders that the Body Corporate:

(a) carry out the Works; and

(b) pay for the costs of carrying out the Works (Repair Costs).

• [21] Since 8 April 2025, the parties have engaged in without prejudice correspondence in the hope of resolving this dispute but it would appear that the parties are now at an impasse. The Applicant is concerned that if the Interim Orders are not made:

(a) the Body Corporate will:

(i) commence Decommissioning the Air-Conditioning System; and

(ii) not reinstate the Air-Conditioning System;

(b) the Applicant and/or the Tenants will suffer significant losses.

• [22] The Applicant's Lawyers (HWLE) say they sought an undertaking from the respondent on the same terms as the Interim Orders in relation to decommissioning, on the following terms:

(a) the Undertaking must be provided by 12:00pm on 28 May 2025; and

(b) should the Undertaking not be provided by that time, HWLE had instructions to proceed with the Adjudication Application for Interim Orders without further notice.

• [23] They say that on 29 May 2025, the respondent's lawyers advised HWLE that they had not received instructions from the Body Corporate in relation to the Undertaking.
• [24] The applicant understands that the Body Corporate has decided that it will:

(a) not complete the Works; and/or

(b) decommission the Air-Conditioning System.

• [25] The Applicant submits that the Decision was unreasonable and unlawful because:

(a) the Body Corporate, not the Applicant, must repair and maintain the Air-Conditioning System in a good condition;

(b) the Air-Conditioning System has not been in a good condition for over twelve (12) months; and

(c) rather than carry out the Works, the Body Corporate has threatened to decommission the Air-Conditioning System, despite knowing that doing so will cause significant Loss to the Applicant and/ or their tenants.

• [26] The Applicant believes the authorities relied upon by the Body Corporate when making the Decision have been misapplied. Rather they say that properly applied, the Authorities require the Body Corporate to carry out the Works without delay.

• [27] Since 8 April 2025, the parties have engaged in without prejudice correspondence in the hope of resolving this dispute but it would appear that the parties are now at an impasse. The Applicant is concerned that if the Interim Orders are not made:

(a) the Body Corporate will:

(i) commence Decommissioning the Air-Conditioning System; and

(ii) not reinstate the Air-Conditioning System;

(b) the Applicant and/or the Tenants will suffer the Loss.

• [28] The only issue to decide at this time is whether an interim order is warranted. However, to determine that question, it is necessary to consider the substantive issue in dispute.
• [29] Section 276(1) of the Act provides that:

An adjudicator may make an order that is just and equitable in the circumstances (including a declaratory order) to resolve a dispute, in the context of a community titles scheme, about-

(a) a claimed or anticipated contravention of the Act or the community management statement; or

(b) the exercise of rights or powers, or the performance of duties, under the Act or the community management statement; or

(c) a claimed or anticipated contractual matter about-

(i) the engagement of a person as a body corporate manager or service contractor for a community titles scheme; or

(ii) the authorisation of a person as a letting agent for a community titles scheme.

• [30] An order may require a person to act, or prohibit a person from acting, in a way stated in the order (section 276(2)). An adjudicator's order may contain ancillary and consequential provisions the adjudicator considers necessary or appropriate (section 284(1)).
• [31] Further, section 279 provides that:

(1) The adjudicator may make an interim order if satisfied, on reasonable grounds, that an interim order is necessary because of the nature or urgency of the circumstances to which the application relates.

Examples

1. The adjudicator may stop the body corporate from carrying out work on common property until a dispute about the irregularity of proceedings has been investigated and resolved.

2. The adjudicator may stop a general meeting deciding or acting on a particular issue until it has been investigated and resolved.

(2) An interim order

(a) has effect for a period (not longer than 1 year) stated in the order; and

(b) may be extended, varied, renewed or cancelled by the adjudicator until a final order is made; (c) may be cancelled by a later order made by the adjudicator; and

(d) if it does not lapse or is not cancelled earlier, lapses when

(i) the application is withdrawn; or

(ii) the commissioner gives the person who made the application a written notice under section 241 rejecting the application; or

(iii) a final order is made by an adjudicator to whom the application is referred. ...

• [32] While section 243 of the Act provides that notice of an adjudication application must be given to the respondent and all affected persons, section 247 of the Act provides that where an interim order is sought, the application may be referred even though notice of the application has not been given under section 243 of the Act. Due to the urgency of the matter I have proceeded with this application for interim orders without firstly seeking submissions from the respondent. However submissions will be sought before any further orders are made.
• [33] As outlined above, the applicant is seeking both interim and final orders. The only issue at this time is whether an interim order is warranted. Any order granted must be just and equitable.[1] An interim order will not be granted unless it is necessary due to the nature or urgency of the circumstances.[2] The examples in the Act indicate the usual circumstances where an interim order might be made are in the nature of injunctive relief. An applicant must establish that the circumstances warrant an interim order. An interim order will not be made if the only urgency is a desire to expedite the dispute.
• [34] In order to make an interim order an adjudicator must be satisfied an applicant has established that it has a prima facie case[3] and the balance of convenience between the parties justifies injunctive relief.[4] That is, an adjudicator must balance the inconvenience of granting relief now if final orders are ultimately refused, against the inconvenience of refusing relief now if final orders are ultimately granted. Of particular relevance is evidence an interim order is necessary to prevent serious or irreparable harm.
• [35] The case of SDW2 Pty. Ltd. V JLF Corporation Pty Ltd [2017] QSC 1 provides some guidance as to when it would be appropriate to make an interlocutory injunction at paragraph [21]:

The legal principles governing the disposition of an application for interlocutory injunction were discussed by me in Stacks Managed Investments Ltd v Tolteca Pty Ltd [2015] QSC 234 at 3 to 5 and again in Tribal Health Pty Ltd v Flush Fitness Pty Ltd [2016] QSC 103. In the latter case I summarised relevant principle in these terms (at [23]):

(a) The law in Australia has long regarded it to be necessary to make two main inquiries: (i) whether the applicant has shown that it has a prima facie case; and (ii) whether the applicant has shown that the balance of convenience favours the granting of the relief claimed.

(b) The significance of the requirement that a prima facie case be shown is elaborated upon in Australian Broadcasting Corporation v O'Neill (2006) 227 CLR 572 and Live Earth Resource Management Pty Ltd v Live Earth LLC [2007] FCA 1034 at [11] to [13].

(c) The considerations brought to bear on the balance of convenience requirement were the subject of discussion in Australian Broadcasting Corporation v O'Neill and Bowen Central Coal Pty Ltd v Aquila Coal Pty Ltd [2011] QCA 334, the latter case clarifying that the adequacy of an award of damages and the question of the sufficiency of the usual undertaking were to be considered as part of the totality of the balance of convenience question.

(d) The progression of the two main inquiries is not a mechanical exercise. Whether the relief sought is prohibitory or mandatory, the Court should take whichever course appears to carry the lower risk of injustice if it should turn out to have been "wrong" in the sense of granting an injunction to a party who fails to establish his right at an ultimate trial, or in failing to grant an injunction to a party who succeeds at trial. In making that decision, the Court should weigh in the balance all relevant factors, including matters pertaining to the strength of the case to be tried and the balance of convenience.

(a) there are urgent circumstances;

(b) there is a prima facie case of sufficient merit to justify relief;

(c) the order if granted, would be just and equitable, and

(d) the balance of convenience between the parties justifies the order.

• [37] As mentioned above, Chermside Medical Complex is a commercial scheme that comprises:

(a) 17 lots including Lots 7 and 8;

(b) common property, including the roof; and

(c) an air-conditioning unit (Air-Conditioning Unit) and condenser unit on the Roof that services Lots 7 and 8 (Condenser Unit).

• [38] The applicant is the owner of lots 7 and 8 which is tenanted by Clinical Oncology Network Pty Ltd ACN 151 293 891 (Tenant).
• [39] The applicant says the Air-Conditioning System requires replacement and/or major repairs and is concerned that the body corporate may decommission the system. It says that the system is common property which the body corporate is obliged to maintain it in good condition.
• [40] The applicant says that if the Air-Conditioning System ceases to function property, the Applicant will suffer significant financial loss because the Tenant has indicated that:

(a) Lots 7 and 8 will no longer be fit for the Tenant's Business; and

(b) they will lose about $400,000.000 worth of the Tenant's Stock.

• [41] Subsection 127(1) of the Commercial Module states:

(1) The body corporate must maintain common property in good condition, including, to the extent that common property is structural in nature, in a structurally sound condition.

• [42] An exception to the general rule in Subsection 127(1) is contained in Subsection 127(4) of the Commercial Module states:

(4) Also, despite anything in subsections (1) and (2) -

(c) the owner of the lot is responsible for maintaining, in good order and condition, utility infrastructure, including utility infrastructure situated on common property, to the extent that the utility infrastructure -

(i) relates only to supplying utility services to the owner's lot; and

(ii) is 1 of the following types -

• [43] I note that Utility infrastructure includes "..ducts, plant and equipment by which lots or common property are supplied with utility services."[5] Utility services includes "air conditioning."[6] Accordingly, the applicant says the Air-Conditioning System is utility infrastructure under the BCCM Act.
• [44] The applicant says the Body Corporate has relied upon the QCAT appeal decision of Owltown Pty Ltd v Norwinn Commercial [2018] QCATA 2 to support their decision not to undertake repairs to the air conditioning system.
• [45] That decision involved the interpretation of section 115(3)(b) of the Body Corporate and Community Management (Commercial Module) Regulation 2008 (which is the equivalent to current section 127(4) of the Commercial Module).
• [46] The question for consideration in Owltown was whether the body corporate was required to maintain an elevator which was primarily for the benefit of one lot (lot 8).
• [47] The learned Member of QCAT was of the view that:

[39] If lot 8 did not exist, there would be no need for toilet facilities on the 1st floor of the building (which would then comprise only the internal upstairs areas in lots 4 to 7), nor would there be a need for disabled access to that floor. The elevator is only necessary because of the design of lot 8 and the consequent requirement to have additional toilet facilities.

[40] Alternatively, if only the ground floor of lot 8 existed and the 1st floor did not, the elevator would not be required, which would have allowed space for additional toilet facilities on the ground floor, sufficient to cater for the requirements of the building housing lots 4 to 8.

[41] These facts demonstrate sufficiently to my satisfaction that the elevator does relate only to the supply of utility services to lot 8. That being so, under s 115(3)(b) of the Commercial Module, the owner of lot 8 is responsible for maintaining the elevator.

• [48] However it should be noted that Owltown Pty Ltd v Norwinn Commercial [2018] QCATA 2 was subsequently overturned by the Court of Appeal in JM Family Holdings Pty Ltd & Anor v Owltown Pty Ltd & Anor [2018] QCA 260 where the Court of Appeal found that :

[79] Given the definitions of "utility infrastructure" and "utility services", the text suggests the need for -

(a) an objective identification and understanding of -

(i) the nature and function of the particular utility infrastructure concerned;

(ii) the type of utility services which it supplies;

(iii) the lots or common property to which those services are supplied; and

(b) against that background, a determination of the extent to which the utility infrastructure concerned could be said to relate only to the supply of the services to the particular lot concerned.

[80] In this case, the analysis referred to in the previous paragraph was left to be performed by an examination of plans which identified the physical layout of the relevant areas of Building B; a lay person's understanding of how building users might be expected to use the lift given the physical layout; some expert evidence of the impact of the Building Code of Australia; and, finally, evidence of how the lift was used in fact. There was not, as there might have been, any expert architectural or other design opinion shedding light on the analysis.

[81] In my view, the evident function of the lift was to provide one of two alternative means of access between the common property foyers on the lower and upper levels of Building B between lot 7 and lot 8, the second means being the common property stairs. As an alternative, the lift would be relevant and available to any person wishing to access or depart from the upper level of lot 8. But, critically, it would also be a relevant and available alternative to any person who wished to access or depart from the common property toilet facilities on the upper level or the roof itself. It would be impossible to reach a conclusion that there was a sole or exclusive relationship between the lift and the supply of utility services to lot 8. One could easily reach the conclusion that one function of the lift was to enhance access to lot 8. One might even be persuaded that that was the dominant function. But one could not conclude it was the only function because it would also be true to say that the lift enhanced access in relation to common property (namely by easing the path to and from the common property toilet facilities and the roof) such that it could be regarded as relating to the supply of access to common property.

[82] It was suggested by the appeal tribunal that no regard should be had to evidence of how and for what purposes the lift is used in fact. Whilst it would be correct to seek to exclude subjective statements of the intention some person had in installing a particular type of infrastructure, I think it would be wrong to conclude that evidence of actual usage would in all circumstances be irrelevant to the requisite analysis. In the present circumstances the conclusion I have expressed in the previous paragraph would be reached even if one disregarded the evidence of actual usage. However that evidence of actual usage tended to shed light on (so as to confirm) an objective understanding of how building users might be expected to use the lift.

[83] In my respectful view, the contrary conclusion reached by the appeal tribunal was reached because the learned member misconstrued s 115(3) of the Commercial Module as authorizing the application of a "but for" test. The learned member enquired whether "but for" the existence of lot 8, the lift would have been necessary. He answered the question in the negative and concluded that but for lot 8, the lift would not have been necessary and, accordingly, the infrastructure related only to the supply of services to lot 8. However, for reasons I have identified, the analysis called for by the proper construction of s 115(3) was not one to which the application of a "but for" test was apposite. The application of a "but for" test would, wrongly, operate to treat as irrelevant relationships between infrastructure and the supply of utility services to other lots or common property if those relationships existed, but could not be regarded as so significant that they explained the existence of lot 8. Section 115(3) does not contemplate that course.

[84] The conclusion reached by the adjudicator was correct and the decision of the appeal tribunal (QCAT) to reverse it should be set aside.

• [49] In its interpretation of paragraph 115(3)(b), the Court of Appeal was of the view that for the purposes of s 115(3), the phrasing "relates only", having considered its ordinary dictionary meaning, required:

... a sole or exclusive relationship between the utility infrastructure [the lift] and its supply of utility services to the lot concerned such that, if the utility infrastructure also relates to the supply of relevant services to common property or to lots other than the lot concerned, then it could not be said to "relate only" to supplying utility services to the lot concerned."

• [50] The applicant points out that the Air-Conditioning System does not relate only to the supply of air-conditioning to Lot 7 or Lot 8 but rather to Lot 7 and Lot 8. The Body Corporate does not dispute this fact.

My preliminary view is that it is probable that the air conditioning system is common property utility infrastructure which supplies a utility service to more than one lot. It would appear from the Court of Appeal decision that in such circumstances the body corporate would be obliged to maintain this utility infrastructure in good condition.

• [51] I have therefore made the following Interim Orders:

1. Pending the making of further orders the Body Corporate is not to commence decommissioning the air-conditioning and condenser unit that services Lots 7 and 8.

2. Should the Decommissioning have already commenced, the Air-Conditioning System is to be reinstated.

• [52] The application for final orders remains outstanding. This application will now be administered in accordance with the Act and the normal processes of this office. Submissions will be sought from the Respondent and affected parties before final orders are made.

[3] Also described as a serious question to be tried.

[4] SDW2 Pty Ltd v JLF Corporation Pty Ltd [2017] QSC 001

Australian Broadcasting Corporation v Lenah Game Meats [2001] HCA 63

[5] BCCM Act, Schedule 6, definition of Utility Infrastructure.

[6] BCCM Act, Schedule 6, definition of Utility Service. See also Commercial Module, s127(4)(a)(ii)(E).