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

GENERAL MEETING MOTION - A motion proposed installing water meters to measure the supply of water to a short-term accommodation business. The applicants are concerned the meters will not measure all water consumed by the lot, leaving owners to share the additional expense. They say the body corporate acted unreasonably and misled owners into supporting the motion. They ask that the motion and meeting are deemed void, and a further motion to install a meter to measure all water consumed by the lot is put to owners.

Act, ss 196(1)-(3), 205.

• [1] Mr Cahill and Ms McBurney of lot 27 say a 270 bed backpacker accommodation business is being run from lot 2 at Surfers Plaza Resort. They are concerned that motion 4 of an extraordinary general meeting (EGM) held on 15 January 2025 "could lead to Lot owners paying for operational costs associated with the business residing in Lot 2, by way of increased shared water levies".
• [2] Motion 4 proposed:

Lot improvement Level 2 - Installation of Water Meters Ordinary Resolution

That two (2) separate water meters are installed to separate the water use to the bathrooms on Level 2 which both the installation and water usage will be paid for exclusively for by Level 2.

• [3] It passed resoundingly with 62 votes in favour and 3 against, but Mr Cahill and Ms McBurney suggest owners may have been misled. They say:
  1. the director of the business in lot 2 emailed a group of owners in November 2024 to advise that a water meter had been fitted to a booster tank for fire sprinklers, but that had nothing to do with lot 2's total water consumption
  2. a floor plan for lot 2 that was circulated to owners with the meeting documentation was incomplete, showing only the first floor of the lot, and
  3. motion 4 only mentioned the bathrooms of lot 2, not the showers, commercial kitchen, or laundry.
• [4] Mr Cahill and Ms McBurney argue the body corporate acted unreasonably in relation to the motion. They seek orders in the following terms:

1. That the extraordinary general meeting of the Body Corporate for Surfers Plaza Resort, held on 15 January 2025, and motion 4 passed at the meeting were at all times void.

2. That the Surfers Plaza body corporate committee NOT action motion 4 passed at the EGM on 15 January 2025.

1. That the Surfers Plaza body corporate responds with the correct, informed and complete information regarding Lot Improvement Level 2 - Installation of Water Meters.

4. That the Body Corporate for Surfers Plaza Resort submit a motion for Lot Improvement Lot 2 - Installation of Water Meters to include a separate meter for all water feeding Lot 2, for both Level 1 and Level 2 of Lot 2.

• [5] Several owners made submissions in support of the application because they agreed they should not have to pay for lot 2's water. The body corporate committee also agreed with that sentiment, but said motion 4 would not have that effect:

The installation of the water meters as required by the resolution will ensure that all water used and consumed throughout the whole of Lot 2 will be measured. Thereafter, the volume of water used and consumed can be costed and that cost will be payable by the owner and lessee of Lot 2.

• [6] Motion 4 could have been clearer. If the intention was to measure all water supplied to lot 2, it could have said so in plain terms. The reference to "level 2" paying for the installation and water usage was also unnecessarily confusing. I take it to be a reference to the owner or occupier of lot 2, as lot 2 is the only lot on that floor. I do not know what the committee intended to communicate by providing owners with the floor plan of the lower level of lot 2.
• [7] I do not attach any significance to the email sent by the director of the backpacker on 13 November 2024. It clearly stated: "we have installed a water meter for the tank feeding the fire sprinkler system". It did not suggest that all water consumed by lot 2 was being metered. Even if it had suggested that, I do not see how that could have misled owners into voting in favour of motion 4. Why would owners who mistakenly believed that all water supplied to lot 2 was already being metered vote to install further meters? The director's email was also sent to only around 20 owners (of 146 total lots) some two months before the decision was made on motion 4. It is not clear that it had any bearing on that decision.
• [8] Despite the shortcomings of motion 4, I am not persuaded that it should be deemed void. The central concern expressed by Mr Cahill and Ms McBurney and the owners who supported them is that they may be forced to bear some of the cost of the water consumed by lot 2. But that outcome would be guaranteed in the absence of motion 4.
• [9] The owner of lot 53 advised that "individual water meters are not installed for each apartment". She submitted a copy of her water bill showing that it was calculated according to her lot's contribution schedule lot entitlements as recorded in Surfers Plaza Resort's community management statement.
• [10] The Act says that where "there is no practicable way available to a utility service provider to measure the extent to which the utility service is supplied to each lot included in the scheme" (e.g. there are no water meters), the owner "is liable to the utility service provider for a share of the total amount payable for the provision of the utility service to scheme land", and that share "is proportionate to the contribution schedule lot entitlement for the lot".[1] In other words, if there are no water meters, the cost of all the water used at the scheme is divided amongst lot owners according to their lot's contribution schedule lot entitlements, with no regard to how much water each lot used. That means that if any lot uses more water, such as the 270 bed short-term accommodation business in lot 2, all owners pay more.
• [11] Consequently, if motion 4 is struck down and no meters are installed to measure the supply of water to lot 2, all owners will share the cost of lot 2's water. Even if motion 4 is flawed as Mr Cahill and Ms McBurney fear, and the meters it proposes will not measure all the water supplied to lot 2, that would still be an improvement over the present situation. It would mean at least some of lot 2's water consumption could be measured and charged to lot 2 directly, rather than all of it being shared amongst all owners.
• [12] The reality might be better than that. Despite the clumsy wording of motion 4, the committee says the intention is to "ensure that all water used and consumed throughout the whole of Lot 2 will be measured". Though the motion only mentioned lot 2's bathrooms, the quotations submitted to the EGM also mentioned metering a "kitchen connection" and a "cold water inlet 20mm line".

• [13] I am not satisfied the concerns raised by Mr Cahill and Ms McBurney justify declaring motion 4 void. They hope to avoid liability for lot 2's water consumption, but the order they seek would have the opposite effect.
• [14] No grounds have been advanced in support of an order that the entire EGM should be declared void. Mr Cahill and Ms McBurney have not identified any errors in the calling or conduct of the meeting or suggested that any other decisions made at the meeting were unlawful.
• [15] I do not understand what is meant by an order that the body corporate "responds with the correct, informed and complete information regarding Lot Improvement Level 2". As owners, Mr Cahill and Ms McBurney may request copies of body corporate records.[2] I am not aware they have done so with respect to the information they describe here though.
• [16] I will not order the body corporate to submit a motion to meter all water supplied to lot 2 for two reasons. Firstly, there is no legal imperative to do so. The Act provides a means of dividing water consumption between the lots in the absence of water meters and places no obligation upon the body corporate to install meters. Secondly, the implementation of motion 4 may yet see all of lot 2's water consumption metered as the committee claims.
• [17] It follows that the application is dismissed.