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

FINANCIAL MANAGEMENT - whether the body corporate could recover an unwanted alarm activation call out fee charged by the Queensland Fire and Emergency Service from the responsible lot owner; whether the body corporate must reimburse the owner after he paid the fee under protest to avoid interest and other penalties.

Act, ss 239C(2), 270(1)(e)(ii), 280; Accommodation Module, ss 150(2), 152(1)&(5), 154-156, 200(1)-(2).

1. Within two weeks, the respondent must pay the applicant:

a) the $1,373.95 it collected from him for the Queensland Fire and Emergency Service call out fee, and > > b) any penalty interest, lost discounts for timely payment of contributions, recovery costs, or other costs applied to Mr Koya due to his failure to pay the above fee by the date specified by the body corporate.

• [1] I originally dismissed this application on 24 January 2024.[1] That decision was set aside by the Queensland Civil and Administrative Tribunal (QCAT) on 14 July 2024 and the application has now been returned to the commissioner for reconsideration.[2]
• [2] By way of background, the Queensland Fire and Emergency Service (QFES) attended South Bank Holiday Suites on 6 or 7 February 2022 when a smoke alarm in Mr Koya's lot activated. QFES determined the alarm had been triggered by burning toast and charged the body corporate $1,373.95 for the unnecessary call out. On 3 October 2022, the body corporate invoiced Mr Koya for that amount.
• [3] Mr Koya objected, claiming there was no cooking equipment within his lot, the alarm was more likely activated by his defective air conditioner, and in any event, there was no basis in the community management statement (CMS) for the body corporate to recover the cost from him. Nevertheless, he ultimately paid the body corporate on 10 March 2023 after the amount was added to his levies account and began to attract penalty interest. He says he paid to avoid further penalties and the loss of his voting rights, believing he could recover the amount through adjudication if necessary.
• [4] Conciliation was attempted but no agreement could be reached between Mr Koya and the body corporate. Mr Koya then applied for adjudication, seeking orders to compel the body corporate to pay him:
  1. the $1,373.95
  2. 10% interest, and
  3. his conciliation and adjudication application fees.
• [5] In dismissing the application, I agreed there was nothing in the CMS to empower the body corporate to recover the QFES charge from Mr Koya, but nevertheless I was not satisfied that Mr Koya had established the body corporate's obligation to return it. I relied on QCAT's decision in The Body Corporate for The Grove CTS9356 v Comerford, where the Tribunal found no obligation upon a body corporate to return money it had unlawfully claimed from an owner because the owner had paid voluntarily and not "under a mistake".[3]
• [6] But the Tribunal found I took Comerford too far:

[28] As to whether the Adjudicator reached a wrong conclusion that payment of the QFES charge was voluntary, the Adjudicator's reliance on the Comerford decision is misplaced. The Adjudicator appears to assume that if a payment is made for a reason other than a mistake (in this case to avoid interest charges) then it will be a voluntary payment which negatives any claim for restitution. That reasoning takes the Comerford decision too far. It does not, for example, take into account a payment made under compulsion.

[30] Mr Koya has raised illegality and coercion or duress as grounds the Adjudicator should have considered to justify restitution. I have dealt with the effect of possible illegality (or unlawfulness) of the Body Corporate's conduct by concluding it is a matter which should have been determined by the Adjudicator after calling for submissions on the point.

[31] As to the second ground of coercion or duress, Mr Koya is asserting that because of his exposure to interest and other penalties the payment was made under a compulsion rather than voluntarily. That is an arguable position, but it requires findings of fact including as to whether the coercion or duress is sufficient to influence the conduct of a prudent person.

• [7] I invited further submissions from Mr Koya and the body corporate committee on:
  1. the body corporate's legal right to recover the QFES charge from Mr Koya
  2. whether Mr Koya paid the charge voluntarily, due to a mistake, or under duress
  3. the appeal decision more generally
  4. whether interest and other penalties were applied to the QFES charge
  5. the legal basis for imposing any such penalties, and
  6. any defences the body corporate may wish to raise to an order of restitution.
• [8] In response, Mr Koya maintained that the body corporate had no legal right to recover the charge from him. He said he paid it involuntarily and:
  1. by mistake, in reliance on the adjudicator's refusal in The Esplanade Trilogy - One to order reimbursement of penalty interest and recovery costs arising from an owner's failure to pay an alarm call out fee, because:

... the applicant has failed to mitigate his own loss. The appropriate course of action for any owner who disputes a body corporate charge is to pay the disputed amount (to preserve their voting rights and avoid the imposition of overdue charges and debt recovery costs) and then to challenge the amount first with the body corporate and then through this Office if necessary.[4]

1. under duress, because the body corporate manager warned that failure to pay may mean losing voting rights and incurring interest and other penalties, and penalty interest had in fact begun to be applied.

• [9] The committee said it was entitled to recover the fee from Mr Koya because he caused the mistaken alarm activation. Adjudicators have accepted that bodies corporate can pass those costs on to owners in the past.
• [10] The committee also advised that Mr Koya sold his lot on 8 September 2025, meaning this is no longer a dispute between one of the permissible combinations of parties at section 227(1) of the Act. The application automatically continues when a party's standing changes in that way though.[5] I may dismiss it if satisfied "the outcome sought by the application is no longer relevant or required",[6] but Mr Koya has a continuing interest in the potential return of $1,373.95 notwithstanding that he is no longer an owner at South Bank Holiday Suites.

Was the body corporate legally entitled to recover the QFES charge from Mr Koya?

• [11] There have been several orders on this question.
• [12] In Admiralty Towers,[7] a body corporate invoiced an owner for a QFES call out fee after cooking fumes in the lot activated an alarm. The owner paid under protest and sought reimbursement via adjudication. The adjudicator observed that bodies corporate have no choice but to enter into agreements with QFES to monitor their alarm systems, rendering the body corporate liable for any call out fees for unwanted alarm activations. The adjudicator also noted "there are no specific provisions within the Act or relevant regulation module dealing with the issue". Nevertheless, the adjudicator concluded that the body corporate was entitled to decide how to deal with the charges levied by QFES under the agreement and dismissed the application.
• [13] The adjudicator in Dockside Hotel reached the same conclusion for the same reasons in the same circumstances.[8]
• [14] In The Esplanade Trilogy - One,[9] a body corporate collected a QFES alarm call out fee pursuant to a by-law that authorised recovery from an occupier who caused the alarm. The adjudicator found the owner could not have caused it as the lot was unoccupied at the time and ordered the body corporate to return the amount to the owner.
• [15] An owner in Solarus Residential also paid a QFES call out fee when asked by the body corporate but subsequently sought reimbursement at adjudication.[10] Like in Admiralty Towers and Dockside Hotel, the adjudicator noted that "body corporate legislation makes no provision for how a body corporate should handle QFES unwanted alarm activation charges".[11] She dismissed the application because:
  1. the applicant did not establish why other owners should bear the cost
  2. the applicant did not show that it was unreasonable for the body corporate to pass the cost on to him, and
  3. the applicant paid voluntarily and not under a mistake.
• [16] As noted in several of these orders, the Act and regulations make no provision for the body corporate to recover QFES call out fees from the owners responsible for the unwanted alarms. The body corporate is liable for these charges under its agreement with QFES. In the absence of any specific arrangements for these expenses in the legislation, the body corporate should fund them in the same way as it funds its other recurrent, non-capital expenditure. Namely, by including them in its administrative fund budget.[12] Mr Koya submitted a budget document for 2023-24 showing the body corporate budgeted $5,600 for "Fire Protection Services - QFES alarm activation", which is the correct approach. But the money should be raised by levying all owners in proportion to the contribution schedule lot entitlements for their lots,[13] not by collecting it from the individual owners deemed responsible for the alarm activations.
• [17] The body corporate does have the power to engage a third party to supply a service to lot owners, but it can only charge owners for the service with their agreement.[14] There is no suggestion that the body corporate has an agreement with Mr Koya to charge him for QFES alarm call outs.
• [18] South Bank Holiday Suites has no by-laws that authorise the body corporate to collect QFES call out charges from individual owners. Mr Koya argued that by-law 19 does not cover it:

If the body corporate incurs, or is required to pay, any costs or expenses (including legal costs calculated on a solicitor and own client basis) in respect of any action taken against any Proprietor of a Lot (which expression shall for the purposes of this By-law mean and include any former Proprietor of the relevant Lot) due to default by that Proprietor in the payment of any moneys to the Body Corporate, or to a breach of the By-laws or for any other reason, such Proprietor shall forthwith pay on demand to the Body Corporate, such costs and expenses as a liquidated debt.

• [19] I agree that it does not apply, and the body corporate has not sought to rely on it. The QFES charge did not arise as a consequence of action taken against Mr Koya.
• [20] I conclude that the body corporate had no power to recover the QFES charge from Mr Koya. Unlike previous adjudicators, I do not regard this as a lawful exercise of the body corporate's discretion. Nor is it a question of whether the body corporate acted reasonably. The body corporate is a creature of statute and only has the functions and powers set out in the Act and Accommodation Module, which make no special provision for charges of this nature. These charges should be treated in the same way as the body corporate's other expenses and met with funds raised from all owners in accordance with their contribution schedule lot entitlements. The body corporate cannot choose to disregard these provisions even though it might seem reasonable in the circumstances.
• [21] The body corporate also lacked the power to apply penalty interest or recovery costs in relation to the QFES charge. They are only available with respect to unpaid contributions to the administrative or sinking funds.[15]

• [22] The majority of the High Court said in Equuscorp:

. recovery depends upon enrichment of the defendant by reason of one or more recognised classes of "qualifying or vitiating" factors;

. the category of case must involve a qualifying or vitiating factor such as mistake, duress, illegality or failure of consideration, by reason of which the enrichment of the defendant is treated by the law as unjust;

. unjust enrichment so identified gives rise to a prima facie obligation to make restitution;

. the prima facie liability can be displaced by circumstances which the law recognises would make an order for restitution unjust.[16]

• [23] Mr Koya claims mistake and duress. The two claims are related. The duress arose because Mr Koya feared accruing penalty interest and recovery costs (which he believed he would be unable to recover given the adjudicator's comment in The Esplanade Trilogy - One) and losing voting rights.
• [24] He had good reason for these concerns. The body corporate manager emailed him on 31 January and quoted the passage extracted above from The Esplanade Trilogy - One urging payment "to preserve...voting rights and avoid the imposition of overdue charges and debt recovery costs", then again on 9 February 2023 to warn:

...failure to [pay] will result in loss of discount, the application of penalty interest and a cessation of voting rights (excluding on motions requiring a resolution without dissent), until such time as the payment is received or the invoice reversed.

• [25] The committee advises that the QFES charge was initially entered in the body corporate's financial management software "as an accounts receivable entry specifically so as not to attract loss of discount and/or penalty interest nor affect voting rights", but was subsequently moved to Mr Koya's levies account where it would have those effects. It was only after that change was made, and the charge had begun to incur interest (68 cents in the period to 31 March 2023), that Mr Koya paid.
• [26] He points out that he did not pay voluntarily in the sense described by the majority of the High Court in David Securities. He was not:

...prepared to make the payment irrespective of the validity or invalidity of the obligation, rather than contest the claim for payment.[17]

• [27] He paid under protest while contesting the claim for payment. He had already applied for conciliation a month beforehand, and he followed that process to its conclusion despite paying part way through to protect himself from mounting costs. He then proceeded to adjudication when agreement could not be reached at conciliation.
• [28] Senior Member Fitzpatrick referred me to the High Court's decision in Mason v New South Wales.[18] The plaintiffs in that matter successfully recovered fees they paid the State of New South Wales for interstate truck haulage under State laws that were subsequently found to be unconstitutional. They paid the fees under protest so their truck would not be seized.
• [29] Windeyer J said:

A plaintiff's right to recover in an action for money had and received such as this depends upon proof that the moneys were paid by him involuntarily, that is, as the result of some extortion, coercion or compulsion in the legal sense.[19]

It is enough if there be just and reasonable grounds for apprehending that unless payment be made an unlawful and injurious course will be taken by the defendant in violation of the plaintiffs' actual rights.[20]

• [31] Kitto J acknowledged that the plaintiffs could have refused to pay and resisted any attempted enforcement, but said:

...the critical question is not whether there was an alternative. It is whether the choice made between alternatives was made freely or under pressure.[21]

...proper to infer that the payments by the plaintiffs to the defendant were not made voluntarily. They were necessarily paid in order to obtain permits without which the plaintiffs, with cause, believed that their vehicles would be forced off the roads and that they could not carry on their business. ... Payments of this sort cannot be called voluntary. Furthermore, I am satisfied that the defendant was aware that the payments were made not because the plaintiffs grudgingly accepted liability nor because they preferred to pay rather than to litigate but substantially because they felt they had to pay in order to carry on the business which they were asserting that they were entitled to carry on without payment. They paid knowing that litigation was proceeding to determine whether the Act applied to inter-State trade and asserting the intention to recover the money...

On these facts it seems to me that the case presents no legal difficulty. The payments were not voluntary and the compulsion under which they were made was something other than legal compulsion.[22]

• [33] Like the plaintiffs in Mason, Mr Koya paid involuntarily, under protest, "under pressure", to protect himself from "unlawful and injurious" consequences, while simultaneously attempting to "recover the money". He could have refused to pay, but that alternative promised additional costs and a loss of voting rights that he had no guarantee he could recover even if successful in relation to the QFES charge itself.
• [34] Senior Member Fitzpatrick asked whether the duress suffered by Mr Koya was "sufficient to influence the conduct of a prudent person". It was. He faced penalty interest of up to 2.5% per month, lost discounts for timely payment of up to 20% on future contributions, and recovery costs constrained only by the requirement that they should be "reasonably incurred by the body corporate".[23] At the time that he paid, he had already been waiting for conciliation for a month and had no idea when that process would be concluded. He faced the certainty of mounting costs over an indefinite timeframe with no confidence that he could recover them. It was logical and prudent to limit those risks by paying the QFES charge until the dispute could be resolved.

• [35] The body corporate extracted the QFES charge from Mr Koya under duress. It had no lawful entitlement to recover the money from him, nor to treat it like an unpaid contribution subject to penalty interest or capable of affecting any discounts for timely payment of future contributions. The body corporate has been unjustly enriched by the $1,373.95 paid by Mr Koya and must return it.
• [36] Mr Koya also asks for 10% interest, but restitution for unjust enrichment strips the respondent of their illegitimate gains rather than compensating the applicant for their losses. No evidence has been tendered that the body corporate benefitted by a further 10% (nor that Mr Koya suffered such losses for that matter).
• [37] The body corporate must reverse any penalty interest, recovery costs, or lost discounts it may have applied to Mr Koya's levies account due to his belated payment of the QFES charge though. They are also financial gains unjustly made at Mr Koya's expense. If Mr Koya paid the body corporate for any of these things, the body corporate must return the money.
• [38] Mr Koya also asks for reimbursement of his conciliation and adjudication application fees, but that is only permitted where the respondent failed to participate in conciliation without reasonable excuse.[24] That was not the case here. The body corporate participated in conciliation, though agreement could not be reached.

[1] South Bank Holiday Suites [2024] QBCCMCmr 28.

[2] Koya v The Body Corporate for Southbank Holiday Suites CTS 24606 [2025] QCATA 68.

[3] [2019] QCATA 172.

[4] [2006] QBCCMCmr 407.

[7] [2004] QBCCMCmr 293.

[8] [2006] QBCCMCmr 291.

[10] [2023] QBCCMCmr 487.

[12] Accommodation Module, s 150(2).

[13] Accommodation Module, s 152(1)&(5).

[14] Accommodation Module, s 200(1)-(2).

[15] Accommodation Module, ss 155(1) & 156(1).

[16] Equuscorp Pty Ltd v Haxton; Equuscorp Pty Ltd v Bassat; Equuscorp Pty Ltd v Cunningham's Warehouse Sales Pty Ltd [2012] HCA 7 at [30].

[17] David Securities Pty Ltd v Commonwealth Bank of Australia [1992] HCA 48 at [36].

[18] [1959] HCA 5; (1959) 102 CLR 108.

[23] Accommodation Module, ss 154-156.