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

APPLICATION FOR INTERIM ORDERS - where an invoice from the body corporate's insurance broker included a premium for renewing the body corporate's insurance alongside various related administrative fees; where the body corporate resolved to raise the entire amount of the invoice from owners according to their interest schedule lot entitlements; whether the resolution should be amended to only raise the premium in that manner.

Where the body corporate resolved to raise sinking fund levies that exceeded those recommended in a sinking fund forecast, contrary to a 2022 resolution; whether the resolution should be amended to only raise the levies recommended in the sinking fund forecast.

Whether the body corporate should be prevented from raising any further contributions pursuant to these disputed resolutions prior to final orders.

Act, s 279(1); Accommodation Module, ss 150(3), 152(5), 153(1), 187, 188, 191(1)(a).

• [1] Mr Halls challenges two resolutions of an annual general meeting held on 28 August 2025:
  1. at motion 6, the body corporate resolved to levy owners $149,169.85 according to their interest schedule lot entitlements to renew an insurance policy for the 2025-26 financial year, and
  2. at motion 7, the body corporate resolved to adopt a sinking fund budget of $141,751.63.
• [2] Mr Halls says that only $106,062.37 of the cost of the insurance renewal should be levied according to interest schedule lot entitlements. The remainder should be levied based on owners' contribution schedule lot entitlements.
• [3] He says the amount to be raised pursuant to motion 7 should be $136,803 as recommended in a 2021 sinking fund forecast. He refers to the resolution in favour of motion 17 at the 2022 annual general meeting:

RESOLVED that the BCs annual Sinking Fund budget items and levies proposed for adoption by BC members at AGMs replicate the items Description and Averaged Levies that are identified in the Levy Calculation section of the current Sinking Fund Forecast.

• [4] Mr Halls seeks final orders in the following terms:
  1. An order that the Respondent's 2025 AGM resolution 6 Adoption of Administrative Insurance Premium Reimbursement and Fixing of Contributions be amended by substituting $149,169.85 with $106,062.37.
  2. An order that the Respondent's 2025 AGM resolution 7 Adoption of Sinking Fund Budget and Fixing of Contributions be amended by substituting $141,751.63 with $136,803.00.
  3. Any other orders, including declaratory orders, that the Adjudicator deems just and equitable.
• [5] Mr Halls says notices of contribution payable for the period 1 December 2025 to 31 May 2026 will be issued on 18 October 2025, imposing excessive costs on owners, particularly those whose lots have high interest schedule lot entitlements. To guard against that risk while his application is being decided, Mr Halls seeks the following interim orders:

Order 1. An interim order that the Respondent's 2nd and final Notice of Contributions for the period 01/12/2025 to 31/05/2026 for INSURANCE LEVY be postponed until Final Orders are made.

Order 2. An Interim Order that the Respondent's 2nd and final Notice of Contributions for the period 01/12/2025 to 31/05/2026 for Sinking Fund be postponed until Final Orders are made.

• [6] I am only concerned with the interim orders at this stage, which may be made if warranted by the nature or urgency or the circumstances.[1] That requires an assessment of whether Mr Halls has raised serious legal questions with prospects of success at final orders, and whether more inconvenience would be caused by granting or refusing the interim orders if the opposite conclusion is ultimately reached at final orders. Interim orders are typically intended to preserve the possibility of the final orders while the application is being decided.

• [7] The body corporate must insure the common property, body corporate assets, and any buildings housing building format plan lots.[2] Owners are liable to pay a share of the premium that is proportionate to the interest schedule lot entitlements for their lot(s).[3]
• [8] In 2024, the insurance broker's invoice sought the following amounts from the body corporate:

• [9] The body corporate resolved at motion 6 of the 2024 AGM to levy owners $93,216 according to their interest schedule lot entitlements, which equated to the insurance premium plus GST. That was presumably because the regulations talk of owners' liability "to pay a contribution levied by the body corporate that is a proportionate amount of the premium...that reflects the interest schedule lot entitlement of the lot".[4] There are no similar provisions for stamp duty and administrative fees, and the general rule in the absence of any specific provision to the contrary is:

The contributions levied on the owner of each lot, other than contributions payable for insurance and any other matter for which, under the Act or this regulation, the liability attaching to each lot is calculated other than on the basis of the lot's contribution schedule lot entitlement, must be proportionate to the contribution schedule lot entitlement of the lot.[5]

• [10] This year the insurance broker sought the following:

• [11] If the same approach had been taken as last year and only the insurance premium and gst levied according to interest schedule lot entitlements, motion 6 would have sought payment of $106,062.37. Instead, it sought $149,169.85. I do not know how this figure was reached, which exceeded not only the premium but the entire value of the invoice. There is a serious legal question to resolve at final orders about whether the body corporate has improperly levied owners some $43,000 based on their interest schedule lot entitlements.
• [12] Mr Halls' concern with motion 7 is its alleged inconsistency with the 2022 resolution cited above. He submitted a table of recommended levies from a sinking fund forecast prepared in June 2021. By taking the "averaged levies" figure for 2025-26 and adding gst he came up with $136,803, which he believes is the level of contributions to the sinking fund demanded by the 2022 resolution.
• [13] The body corporate's obligations when it comes to formulating a sinking fund budget are that it must:

(a) allow for raising a reasonable capital amount both to provide for necessary and reasonable spending from the sinking fund for the financial year, and also to reserve an appropriate proportional share of amounts necessary to be accumulated to meet anticipated major expenditure over at least the next 9 years after the financial year, having regard to -

(i) anticipated expenditure of a capital or non-recurrent nature; and

(ii) the periodic replacement of items of a major capital nature; and

(iii) other expenditure that should reasonably be met from capital; and

(b) fix the amount to be raised by way of contribution to cover the capital amount mentioned in paragraph (a).[6]

• [14] By forecasting likely capital expenses over an extended timeframe (15 years in this case) and calculating the levies that should be raised each year to meet upcoming costs, a sinking fund forecast can be a very helpful aide to meeting these statutory requirements. It is only a forecast though. There is no guarantee it will prove completely accurate. If inconsistencies arise, it is obviously the statutory requirements that must be met.
• [15] I have not yet heard from the body corporate, so I do not know why it disregarded the 2022 resolution nor how it settled on the higher figure of $141,751.63 for the 2025-26 sinking fund budget. It may have become aware of additional capital expenditure that is likely to be necessary within the next ten years but was not included in the 2021 sinking fund forecast. If so, it would have been obliged to make provision for it in the sinking fund budget notwithstanding the inconsistency with the 2022 resolution.
• [16] But if nothing has changed since the forecast was drafted in 2021, there may be a question to answer about whether the body corporate has acted reasonably and in compliance with its statutory obligations by disregarding the 2022 resolution and the 2021 forecast when formulating the sinking fund budget. That is another question to resolve at final orders.
• [17] Despite these questions, I am not persuaded that there is sufficient urgency for the requested interim orders, nor that the balance of convenience favours them. If the interim orders are not made, yet I find in favour of Mr Halls at final orders, the requested relief will still be available. Some owners may have temporarily over- or underpaid their contributions, but ancillary orders can be made to correct matters if motions 6 and 7 are amended as sought.
• [18] The sums involved are not vast. Mr Halls himself looks to be worst affected as his lot has the highest contribution and interest schedule lot entitlements. If the amount to be levied pursuant to motion 6 was reduced by $43,107.48 as he requests, and that amount was instead levied according to contribution schedule lot entitlements, Mr Halls would be $643.79 better off. If the amount to be levied pursuant to motion 7 was reduced by $4,948.63 as sought, Mr Halls would pay $74.58 less. So, we are looking at a temporary impost of some $718 in the worst case. I have no information to indicate that is an unmanageable burden for owners.
• [19] On the other hand, by making the interim orders I would prevent the body corporate from raising $102.562.01 for the period 1 December 2025 to 31 May 2026 pursuant to motion 6, and $75,663.08 for the same period pursuant to motion 7, prior to final orders. Final orders will not be made for some months while all affected parties make their submissions and the application is investigated and decided. Notices of contribution payable must allow at least 30 days for payment,[7] so another month will elapse after the application is decided before the body corporate will receive those contributions. The body corporate certainly would not have the money by 1 December 2025.
• [20] That is a substantial sum to be without, particularly given that most of it is not in dispute. Mr Halls seeks to delay the collection of $178,225.09 but he only seeks final orders in relation to $48,056.11.
• [21] For the most part, there is no suggestion that the body corporate does not need the money. Mr Halls does not argue that the body corporate does not require the additional $43,107.48 pursuant to motion 6. He only asks that it is raised from owners according to their contribution rather than interest schedule lot entitlements.
• [22] In these circumstances, the balance of convenience does not favour the interim orders. The body corporate should not be forced to do without $178,225.09 while the legal questions Mr Halls has raised are answered, especially when there is no challenge to most of those funds and no suggestion that the body corporate does not need them to meet its liabilities. Some owners may temporarily be several hundred dollars worse off pending final orders, but that can be corrected if final orders are made in Mr Halls' favour.

[3] Accommodation Module, ss 187(4) & 191(1)(a).