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

INTERIM ORDER - whether an interim order is warranted.

1. The application for interim orders is dismissed.

• [1] This application is about caretaking arrangements for the scheme and a forthcoming meeting.
• [2] Scholer Pty Ltd (Scholer) formerly held a caretaking, gardening and letting agreement with the body corporate (the previous agreement). The previous agreement was for an initial term of 5 years expiring in September 2024, with a 5-year option to be exercised before the expiry date. Scholer seemingly wished to exercise the option but apparently the body corporate did not receive notice of that. Accordingly, the body corporate considered the previous agreement had expired. However, after some negotiation and apparently to avoid a legal dispute, the committee agreed to put a new agreement with Scholer to owners.
• [3] The body corporate scheduled an extraordinary general meeting (EGM) for 20 May 2025 to consider group of same-issue motions about the caretaking arrangements. The committee said the EGM is to determine if owners wish to enter into a new agreement with Scholer or not.
• [4] EGM Motion 2A was submitted by the committee. It proposes a new agreement with Scholer for 5 years, with a 5-year option, but Scholer then assigning the agreement to Jismkiki Pty Ltd within 28 days. The motion indicates variations from the previous agreement, but it is apparently for the same remuneration. Information provided separately to owners by the committee details the circumstances and the consequences of voting for or against Motion 2A.
• [5] EGM Motion 2B was submitted by an owner and proposes the body corporate enter into a new agreement with Scholer for 3 years at a lower remuneration. The committee foreshadowed an intention to rule Motion 2B out of order on the basis that it proposes entering into a contract with Scholer that Scholer has not agreed to, and so the motion would be unenforceable.
• [6] The applicant seeks to invalidate the EGM notice and Motion 2. She objects to the proposal in Motion 2A, alleged defects with the EGM notice and information to owners, and says the committee is not acting in the best interests of the body corporate. In the interim, she wants the EGM not to proceed but, if it does, that any decision on Motion 2 not be implemented. At this time, I will consider whether interim orders are warranted.

• [7] Spinnaker Main Beach community titles scheme 9326 (Spinnaker Main Beach) is a 119-lot scheme at Main Beach. The community management statement (CMS) shows the Standard Module applies. The scheme is registered as building units plan 5576.
• [8] The applicant seeks the following interim orders:
  1. THAT the EGM set down for 20th May 2025 NOT proceed and no vote be taken on Motion 2 Same Issue Motion, Caretaking Agreement.
  2. THAT should the EGM of 20 May proceed any decision made on Motion 2 NOT be implemented until a Final Order is determined. (See Attachment E).
• [9] The application then seeks the following final orders:
  1. THAT Motion 2 "Caretaking Agreement", Same Issue Motion contained in the Agenda of the EGM (Attachment E) of 20th May 2025 be declared void.
  2. THAT the Notice advising of the EGM 20th May 2025 be declared invalid.

• [10] An adjudicator may make an order that is just and equitable in the circumstances to resolve a dispute about a claimed or anticipated contravention of the Act or the CMS, or the exercise of rights or powers or performance of duties under the Act or the CMS.[1] Notably, an adjudicator may make an interim order if satisfied on reasonable grounds it is necessary due to the nature or urgency of the circumstances.[2] I am satisfied I have jurisdiction to decide this matter.[3]

• [11] This application was lodged on 12 May 2025. The Commissioner's delegate sought clarification on some aspects of the application,[4] which was subsequently amended.[5]
• [12] As permitted under the Act, the Commissioner referred this application to me to decide whether the nature or urgency of the circumstances warrants an interim order, notwithstanding that notice of the application has not yet been given to the respondent or owners. [6]
• [13] There is no statutory requirement to obtain comment before an interim order is decided. But in the circumstances, I gave the committee a limited opportunity to make a submission. I was advised that the committee elected not to make a submission.

• [14] The only issue at this time is whether an interim order is warranted. However, it is necessary to consider the substantive issues in dispute to decide whether to make an interim order.

• [15] Any order granted must be just and equitable.[7] An interim order will not be granted unless it is necessary due to the nature or urgency of the circumstances.[8] An adjudicator must be satisfied an application raises serious legal questions and that the balance of convenience between the parties justifies injunctive relief. That is, an adjudicator must balance the inconvenience of granting relief now if final orders are ultimately refused against the consequences of refusing that relief if final orders are ultimately granted. Of particular relevance is evidence an interim order is necessary to prevent serious or irreparable harm.

• [16] The applicant raises various issues about the EGM notice, the information given to owners, and the proposal in Motion 2A. I will comment on each.

• [17] The applicant opposes Motion 2A. She variously says the motion is not flexible or contemporary as required by the Act, and that it would be a mistake and an injustice to consider Motion 2. She says the committee is not acting in the interests of owners or in compliance with the legislation. She says the motion seeks to gift the sale value of a 10-year contract to Scholer because it forgot to renew the previous agreement, but the body corporate is not a charity and owners should not be 'handcuffed' to a 10-year agreement. She argues the committee did not provide alternatives to owners.
• [18] On its face, the body corporate is entitled to resolve to enter into a new agreement with Scholer and also to then have Scholer transfer the agreement to a new caretaker.[9] Prima facie, it is a matter for owners to decide whether they want to do so. The relevant considerations for owners in deciding Motion 2A may include (without limitation) the history of Scholer's engagement at the scheme, the circumstances of the option on the previous agreement, the potential for and likely impacts of any legal action by Scholer, the terms of the proposed new agreement, the proposed new caretaker, and the nature of the caretaking arrangements owners would like into the future.
• [19] The applicant says Motion 2A is not 'flexible or contemporary' as required by the Act. She says owners are entitled to a flexible arrangement that is contemporary. However, the applicant appears to misapprehend the section she cites.
• [20] The primary object of the Act is to "...provide for 'flexible and contemporary communally based arrangements for the use of freehold land...".[10] That object is referring to the statutory arrangements for bodies corporate. It does not mean everything a body corporate does must be 'flexible and contemporary'. In any event, the applicant does not explain what is inflexible or outdated (if that is the contention) about a proposal to enter into an agreement in similar terms to the previous agreement that would have been in place if Scholer had exercised the option.
• [21] One of the secondary objects of the Act is to "...balance the rights of individuals with the responsibility for self management as an inherent aspect of community titles schemes..."[11] In light of this objective, an adjudicator should only intervene if a body corporate decision is unlawful. To do otherwise would be an "unwarranted interference in the ability of the body corporate to make its own decisions, and to independently manage its affairs as contemplated in the secondary objects of the Act."[12]
• [22] The body corporate must act reasonably in undertaking its functions, including in making decisions.[13] An unreasonable decision will be invalid. However, any person challenging a body corporate decision on that basis must establish that it failed to act reasonably. It is not enough to disagree with the premise of a motion. An applicant must establish that the body corporate could not rationally decide to pass the motion. While the applicant opposes Motion 2A and believes it has no benefit for the body corporate, at this stage she has not established that owners could not rationally support the proposal given all the circumstances.
• [23] The applicant alleges the committee acted contrary to the code of conduct that binds voting members of the committee.[14] The code obligations include that each committee member must act in the best interests of the body corporate in performing their duties. It is not immediately clear from the application why individual committee members would be failing to act in the interests of the body corporate by agreeing to put a proposal to a general meeting for owners to vote on. That is particularly so where owners have been given information about the context and consequences of the motion and Scholer is paying the costs of conducting the meeting. It is for owners to decide whether the proposal in Motion 2A is one they support or not.
• [24] Also, while the applicant may have preferred the committee put other alternatives to owners, she does not establish that it had a statutory obligation to do so or that Motion 2A would be invalid because there were no alternatives (whether Motion 2B or otherwise).

• [25] The applicant says owners have been 'purposely uninformed' by the committee. She says the committee has refused to provide legal advice it obtained on the basis that it was privileged, and owners are being asked to vote blindly. The applicant also refers to a previous lack of information about the option on the previous agreement, the lack of consultation or advice to owners about negotiations between the committee and Scholer, and the lack of committee motions to permit the negotiations or the basis for the new agreement. She says owners did not know the terms of the new agreement until they received the EGM notice.
• [26] Given the potential for legal action between Scholer and the body corporate about the option on the previous agreement and having regard to the law relating to legal professional privilege,[15] there may well be good reason for the committee to be cautious about disclosing the substance of any advice it has obtained. However, it is not necessary to canvass that matter here. The question raised by the applicant appears to be whether owners were properly on notice of the business of the EGM when the apparent legal advice had not been provided.
• [27] There is considerable case law about the provision of notice to owners about a general meeting and the accuracy and adequacy of information,[16] including a decision involving caretaking agreement at Spinnaker Main Beach.[17] In one matter, the District Court said the onus was on the person disputing the adequacy of a meeting notice to identify what was not disclosed and how the omission meant there was a failure to make full and fair disclosure or rendered the information that was provided misleading.[18]
• [28] While owners may choose to vote against Motion 2A because of the process followed and information provided prior to EGM, the applicant has not explained why that would render Motion 2A invalid. The body corporate is inherently entitled to make this decision at a general meeting and there is no statutory obligation on the body corporate to undertake the sorts of processes referred to by the applicant or before it considers a general meeting motion or provide further information about the proposal before the EGM notice.
• [29] The EGM notice included a detailed explanatory note and a copy of the full agreement. There has been correspondence from the committee, Scholer and others beyond that. While the legal advice obtained and other information may potentially be of value to owners in deciding how to vote, at this stage the applicant has not established that the body corporate could not validly decide the motions without it. If owners do not consider they have sufficient information to understand the meaning and effect of any EGM motions, they can vote against them.

• [30] The applicant says voting on Motion 2B will be influenced by the committee's advice that Motion 2A will be ruled out of order as unenforceable. She says if owners believe no votes will be counted on Motion 2B, they will not vote on it. She says owners would have voted differently without that advice and so any outcome on the motions will be distorted and unreliable. She also says misleading information was provided, apparently because advice that the ruling on Motion 2B could be overturned was withheld.
• [31] The legislation provides that the person chairing a general meeting must rule a motion out of order if the motion, if carried, would conflict with the Act, regulations, by-laws or a motion already voted on at the meeting, or be unlawful or unenforceable for another reason.[19] When ruling a motion out of order, the chairperson must give reasons for the ruling and state how the ruling can be reversed by those present and entitled to vote at the meeting.[20] The regulations specify that if an original motion that is part of a group of same-issue motions is ruled out of order, the other motions in the group may still be considered.[21]
• [32] The applicant says the alternative model in Motion 2B could be offered to Scholer if it passed. But Motion 2B does not merely propose that the body corporate seek to negotiate with Scholer about the proposed alternative arrangement. Rather it specifically seeks a resolution that the body corporate enters into a 3-year agreement with Scholer in the terms circulated with the meeting notice and for the salary referred to in the motion. If Scholer has not been consulted on that proposal and does not agree to it, it certainly appears that Motion 2B would be unenforceable. The body corporate could not force Scholer to enter into an agreement that it did not consent to and so a resolution proposing to do so would be meaningless. Accordingly, on the submitted information, there seem to be strong justification for the person chairing the EGM to rule Motion 2B out of order.

• [33] It is not immediately evident why it would be misleading for the committee to foreshadow the intention to rule Motion 2B out of order. While that ruling cannot occur until the EGM, it seems to be relevant information for voters to consider before the meeting. It also seems relevant for owners to know that Scholer does not agree to the proposal in EGM Motion 2B.
• [34] At this stage I am not convinced that the committee's advice is misleading on the basis that it did not say the ruling could be overturned by those present and entitled to vote at the EGM. The regulations require that information to be given by the chairperson at the meeting when the ruling is made; there is no statutory obligation to do so beforehand. There is a legislative right to reverse the decision to rule a motion out of order. There is no inherent obligation on the committee to notify owners of the legislation, including the right to challenge a variety of decisions, in every communication. Moreover, it is likely that many owners know, as the applicant clearly knows, that the ruling can be reversed at the meeting.
• [35] The applicant also does not substantiate why voting on Motion 2B (or 2A) would be tainted or unreliable as a result of the committee's advice. Owners can take the advice, including the reasons for the proposed ruling, into account when deciding their vote on Motions 2A and 2B. Some owners may choose to vote against Motion 2B or abstain from voting on it in light of the committee's advice. But that does not of itself mean the result of voting on Motion 2B would be unsound if the motion proceeded. Owners' votes may be influenced by information they receive from a multitude of sources. The applicant has not yet established that owners would be misled (rather than simply informed) by knowing of the proposed ruling.
• [36] The applicant appears to believe that Motion 2A could be passed 'by default' if owners do not have the alternative of Motion 2B. However, that misapprehends the voting process.
• [37] The legislation provides that if two or more motions are submitted that propose alternative ways of dealing with the same issue, the motions must be listed as a group of same-issue motions.[22] Owners can vote for any or all of the motions, against any or all of the motions, or abstain from voting on any or all of the motions. Each motion can only pass if it receives enough votes to pass as the required resolution type. If more than one motion receives enough votes, the motion with the most votes will be the body corporate's decision.
• [38] So, regardless of whether Motion 2B is ruled out of order (or that ruling is reversed), owners must decide how to vote on Motion 2A. If a majority of voters do not vote in favour of Motion 2A (regardless of how they vote on Motion 2B) that motion could not pass.

• [39] The applicant says the EGM notice was emailed to owners on 17 April 2025 without voting envelopes or proxy forms. She says a hard copy notice was delivered on 29 April.
• [40] The applicant says the omission of a proxy form means owners are disadvantaged by not having information or paperwork to allow for a valid vote. She says the proposed ruling on Motion 2B can be overturned by those present at the EGM and using proxies, but that will be impossible where no proxy form was included in the EGM notice.
• [41] The regulations specify the required contents of the notice to be given to each owner for a general meeting.[23] These include that the notice be accompanied by a proxy form.[24] For motions to be decided by secret ballot, the notice must also include a secret voting paper envelope either with a particulars tab or with a separate particulars envelope.[25]
• [42] The EGM notice included in the application does not appear to include a proxy form. A proxy form is not mentioned in the document index contained in the notice. That document index does refer to the returning officer envelope for the secretary voting paper and the applicant does not assert that voting envelopes were not included in the notice delivered by post.
• [43] If a proxy form was not provided in the EGM notice, there may be a question as to whether that defect is sufficient to invalidate the EGM notice. There may be questions whether the nature of any non-compliance with the regulations, or the effect of the non-compliance, is substantial.[26]
• [44] Proxies could not be used for voting on Motions 2A and 2B.[27] But they could be used for Motion 1 to confirm previous meeting minutes, any procedural motions at the EGM, and in any vote to reverse a ruling by the chairperson that Motion 2B is out of order.
• [45] However, the applicant does not evidence that any person who wants to appoint a proxy for the EGM has asked for a proxy form and been refused, or otherwise that any voter has or will be disenfranchised for the meeting. Even if some owners have not been able to appoint a proxy, arguably there would need to be enough such owners to change the outcome of any attempt to reverse any chairperson ruling and the outcome on Motion 2 for it to have a substantive effect. And even if it was established that the absence of a proxy form in the EGM notice prevented those at the EGM reversing a decision to rule Motion 2B out of order, that effect might be insubstantial if it was determined that Motion 2B was unenforceable and the ruling was correct.
• [46] At this stage the applicant has not established that any failure to provide a proxy form in the EGM notice is likely to warrant the invalidation of the EGM.

• [47] The applicant says the EGM notice failed to notify owners of the $1.5 million benefit that Scholer will receive if Motion 2A is successful and the management rights are then sold.
• [48] The regulations provide for circumstances where a body corporate is considering entering into a contract for the supply of goods or services from a relevant person (including a caretaking service contractor) and the person is entitled to receive, under that contract or another contract or arrangement, a commission, payment or other benefit (other than from the body corporate) that is associated with the contract with the body corporate.[28] A example would be if a body corporate manager will receive a commission from a bank for using that bank for banking activities undertaken under their contracted services to the body corporate.
• [49] In those circumstances, the person must give the body corporate a written notice disclosing the commission, payment or other benefit and, if it is monetary, the amount.[29] The Commissioner's office provides BCCM Form 35 that can be used to notify a body corporate of associate relationships,[30] and commissions, payments and other benefits. However, it is not a prescribed form. There is no legislative requirement for how the notification must be given, other than it must be given before the body corporate decides to enter into the main contract. Importantly, the onus is on the relevant person, rather than the body corporate, to give the notification.
• [50] If body corporate passes EGM Motion 2A, Scholer has agreed to assign the new agreement to another entity that would then be the caretaking service contractor. In a letter to all owners on 25 April 2025, Scholer said if owners voted yes, they would sell their rights to new onsite managers but, if not, they would lose their ability to sell their business worth about $1.5 million.
• [51] It is not immediately apparent that a benefit must be disclosed in this situation. The 'benefit' referred to would be the consideration for the assignment of the new agreement itself, at which time Scholer would no longer be the caretaking service contractor. It would not be a benefit Scholer would receive while continuing to have rights, including the right to payment, under the new agreement. Any time a body corporate enters into an agreement with a caretaking service contractor or a body corporate manager there is capacity for the balance of the agreement to be transferred with the body corporate's approval.[31] Moreover, even if there was a benefit to be disclosed in this case, it is arguable the letter from Scholer to owners disclosed that benefit.

• [52] The applicant says an interim order is necessary to prevent a flawed decision being made that would bind and adversely affect owners for 10 years. If the interim order is granted, she says a final order should require the committee to undertake consultation with owners and investigate alternative caretaking models, although she does not actually seek a final order to that effect.
• [53] The applicant wants the EGM stopped. But the applicant has not established why the EGM should not proceed despite any question over the validity of the meeting or any motions. When the EGM has already been called, with the attendant costs incurred, and many voters will have made arrangements to attend the meeting or to submit votes, the applicant has not established why the body corporate should be prevented from considering the submitted motions and ascertaining owner views on them. If, for example, Motion 2A fails to pass, the substantive dispute for the applicant may be resolved. There is no justification for the first interim order.
• [54] The applicant alternatively wants Motion 2 not implemented pending a final order if it is decided at the EGM. I have considered whether the second interim order is warranted.
• [55] If Motion 2B were to pass (including if it was ruled out of order and that ruling was reversed), there would appear to be little utility in an interim order to stop its implementation. Scholer apparently does not agree with the proposal and so there seems to be little capacity for the body corporate to enter into the proposed agreement even if owners want to.
• [56] But if Motion 2A was passed, the consequences may be more significant. If implementation of the motion was not stopped and the agreement was entered into, but then the motion or the EGM was ultimately invalidated, there may be legal consequences for the body corporate to extract itself from the agreement. Conversely, if Motion 2A passed but the body corporate was prevented by an interim order from implementing it, there may be different legal consequences for it. Moreover, while I did not invite comment from Scholer at this stage, undoubtedly Scholer would be adversely affected by any such interim order particularly where there is a sale of the management rights pending the passing of the motion.

• [57] While the applicant particularly opposes Motion 2A, at this stage she has not provided sufficient evidence or argument to satisfy me that the final orders sought are likely to be justified such that the interim orders sought are currently warranted. I have dismissed the application for interim orders.
• [58] I note the legislation allows for an adjudicator to vary an interim order.[32] That does not provide for a rehearing on the merits of the application as currently presented. But if the applicant obtains further evidence to substantiate the claims in this application, for example that any lack of proxy forms in the EGM notice had materially affected the outcome of the EGM, there may be a basis to revisit whether the second interim order is warranted.
• [59] I will refer the application back to the Commissioner to progress under the Act.
• [60] The applicant may wish to review the basis for the application. If EGM Motion 2A passes and the application is not otherwise resolved, I anticipate the Commissioner will invite submissions on the final orders from the committee, Scholer and all owners.

[3] Sections 227, 228, 276 and schedule 5 of the Act

[9] Noting sections 135 and 143 of the Standard Module

[12] Adjudicator K Ryan in Massey Lodge [2004] QBCCMCmr 356, paras 13- 14

[14] Section 101B and schedule 1A of the Act

[15] See for example, Carroll and Ors v Body Corporate for Palm Springs Residences CTS 29467 [2013] QCATA 21

[16] See for example, Body Corporate for Palm Springs Residences CTS 29467 v J Patterson Holdings Pty Ltd [2008] QDC 300, Gold Coast Apartment Management P/L v Price & Ors [2017] QCATA 99, Morat Pharmaceuticals Pty Ltd v Hoft Pty Ltd & Anor [2014] QCA 319

[17] Scholer Pty Ltd as Trustee v Gowland and Anor [2021] QCATA 119

[18] Body Corporate for Palm Springs Residences CTS 29467 v J Patterson Holdings Pty Ltd [2008] QDC 300, particularly para 72

[19] Section 88(1)(a) of the Standard Module

[20] Section 88(2) of the Standard Module

[21] Section 88(5)(b) of the Standard Module

[24] Section 87(3)(b)(i) of the Standard Module

[25] Section 87(3)(d)(i) of the Standard Module

[26] See for example Lovel v The Body Corporate for The Reserve (No 2) [2018] QCATA 169

[27] Section 135(2)(a) of the Standard Module

[28] Section 156 of the Standard Module

[29] Section 156(2) of the Standard Module

[30] Pursuant to section 155 of the Standard Module

[31] Section 143 of the Standard Module