Body Corporate and Community Management Act 1997 (Qld) (Act), sections 227(1)(b) and 229(3)(a)

Body Corporate and Community Management (Small Schemes Module) Regulation 2020 (Small Schemes Module)

INTERIM ORDER - whether an interim order stopping the body corporate from collecting special contributions or engaging contractors is warranted.

1. The Body Corporate for The Boat Sheds CTS 31588 must not rely on Motion 7 of the 6 June 2025 extraordinary general meeting as a basis to collect special contributions exceeding $3,333.33 per contribution schedule lot entitlement.
2. This interim order has effect until twelve (12) months have elapsed from the date of this order, a further interim or final order for the application is issued, or until the application is withdrawn or otherwise ended (whichever is earlier).
3. The application for interim orders is otherwise dismissed.

• [1] This is an application for interim orders brought against the body corporate by the co-owners of Lot 1.
• [2] The applicants take issue with several motions passed at a general meeting which raises special contributions in the amount of at least $38,333.33 from each lot. The applicants seek interim orders that the body corporate not act on those resolutions or engage contractors for related works until the matter can be finally determined.
• [3] Having reviewed the preliminary arguments and meeting materials, I hold concerns that there are misunderstandings, held by all parties to some extent, about the meanings of various terms in the legislation. I believe clarifying those potential misunderstandings may help guide the parties to resolving this dispute. To that end, I have attempted to explain, in general terms, the various spending limits under the legislation, how budgeting and spending ideally should be conducted, and what is meant by maintenance, improvement and capital works.
• [4] At this interim stage and based on the applicants' arguments, I am not presently satisfied that a prima facie case has been established for invalidating all of the motions that are the subject of this dispute. Nonetheless, I am satisfied that there is a prima facie case for either invalidating or potentially making orders clarifying the effect of two of the motions on alternative grounds, namely that their meanings and legal effects are unclear or unenforceable.
• [5] I have made an interim order which is quite limited in scope. In doing so, I have found that:

1. In circumstances where one of the potentially invalid motions, Motion 7, is expressed in a confusing way such that it purports to raise two different amounts by way of special contribution, the balance of convenience favours restraining the body corporate from seeking payment of the higher amount only. This is because:

(i) The balance of convenience does not favour intervention where the body corporate asserts it will be unable to pay for its insurance policy renewal, and the motion is clear that at least the lower contribution amount would be payable. > > (ii) The balance of convenience does favour intervention where there is a strong prima facie case that the motion does not authorise the imposition of the higher amount, if it is the body corporate's intent to seek payment of the higher amount.

1. The remaining motion appears to have little relevance to the interim relief sought.

• [6] Notably, the orders to do not preclude the body corporate from considering new motions at another general meeting.

• [7] The survey plans for the scheme show it is a building format plan subdivision (BFP) of 3 lots and common property that was registered in 2003. The building is best described as a row of three, two-storey townhouses.
• [8] The community management statement (CMS) shows the Small Schemes regulation module applies. The CMS also shows that the contribution schedule lot entitlements (CSLE), which is used to calculate amounts of contributions payable by each lot, are even between the 3 lots (with each lot having 1 contribution entitlement).

• [9] The body corporate held an extraordinary general meeting on 6 June 2025 (June 2025 EGM). The applicants take issue with several resolutions made at that meeting, which allegedly increase the committee's ability to approve spending on works without holding a general meeting, and raising special levies to pay for works to the building's roof, the pool and repainting of the building. The applicants say the special levies total $38,333.33 per lot.

• [10] The interim orders the applicants seek, which are being determined in this decision, read as follows:

The Body Corporate for The Boat Sheds CTS 31588 be restrained from issuing, enforcing, or taking any steps to recover the special levies approved at the EGM held on 6 June 2025; > > The Body Corporate be further restrained from entering into any contracts or commencing any works associated with the motions passed at that meeting until the Commissioner has made a final decision on this application.

• [11] The final orders the applicants seek, which are not being decided at this time, read as follows:

Order 1 - That the following motions at the EGM on 6th June 2025 be declared invalid: > > - Motion 3 - Committee Spending (Major) - $3,333.33 per lot ($10,000 total) - was carried > > - Motion 4 - (Amended) Roof Rectification - $30,000 + GST limit; $10,000 per lot special levy (And further, that the Body Corporate approves a Special Sinking Fund Levy at a rate of $10,000.00 per contribution lot entitlement, [totalling] $30,000.00 inclusive of GST to be raised to meet part of the cost of the roof rectification works following approval of this motion and payable 30 days thereafter) - was carried > > - Motion 5 - Painting Works - $50,000 + GST limit; $15,000 per lot special levy. (And further, that the Body Corporate approves a Special Sinking Fund Levy at a rate of $15,000.00 per contribution lot entitlement, [totalling] $45,000 inclusive of GST to be raised to meet part of the cost of the painting works following approval of this motion and payable 30 days thereafter. (Meeting Note: It was agreed by all Owners present at the meeting, that the approved Special levy will be raised immediately after the meeting and payable 30 days thereafter.)- was carried > > - Motion 6 - Pool Renovation - $30,000 + GST limit; $10,000 per lot special levy - (And further, that the Body Corporate approves a Special Sinking Fund Levy at a rate of $10,000.00 per contribution lot entitlement, totalling $30,000 inclusive of GST to be raised to meet part of the cost of the pool renovation works following approval of this motion and payable 30 days thereafter. (Meeting Note: It was agreed by all Owners present at the meeting, that the approved Special levy will be raised immediately after the meeting and payable 30 days thereafter.)- was carried > > - Motion 7 - Special Levy - Admin Fund - $3,333.33 per lot ($10,000 total) - (Meeting Note: It was agreed by all Owners present at the meeting, that the Special levy will be raised immediately after the meeting and payable 30 days thereafter.) - was carried > > - Motion 12 - Reimbursement - Lot 1 (Roof Invoice) - $1,125.00 reimbursement - was 'Lost' > > Order 2 - That the associated special levies [totalling] $38,333.33 per lot be set aside. > > Order 3 - That the Body Corporate be directed to undertake proper financial planning, obtain competitive quotes, and reconvene a compliant general meeting before any major capital works are approved or levies imposed.

• [12] The applicants argue that:
  1. There are vacancies on the committee the applicants say have not been filled.
  2. The ability to increase the committee's relevant limit for spending does not bypass other statutory obligations.
  3. The roof, pool and painting works have been misclassified as 'maintenance' when they are in fact 'capital works', and that the costs of these works should be met from the sinking fund.
  4. Two quotes have not been obtained for these works.
  5. The special levies should not have been struck without an updated sinking fund forecast being obtained.
  6. It is an unreasonable exercise of power for the body corporate to impose such significant levies without 'financial justification'.
  7. The applicants did not participate the June 2025 EGM and therefore says there is a lack of owner consensus.

• [13] I may make interim orders without seeking submissions from the respondent or any affected parties.[1] However, where appropriate, I may seek comment from parties the order may negatively impact. In the circumstances, I found it appropriate to provide an opportunity of response from the body corporate.
• [14] The body corporate argues that:
  1. The scheme has historically been mismanaged, with the body corporate not holding relevant records, obtaining sinking fund valuations, building valuations or safety reports. The new owners of Lots 2 and 3 are taking steps to have the body corporate governed appropriately.
  2. There is an insurance claim on foot for damages caused by a lack of maintenance to the body corporate's roof.
  3. Maintenance works to the roof are urgent, and this is evidenced by a roofing report by an independent third party.
  4. The building requires urgent repainting, due to mould, cracking and waterproofing issues.
  5. Works to the pool and decking are urgently required as there are missing and broken decking palings and other safety issues in the area.
  6. Previous mismanagement has resulted in there being a shortfall in the administration fund, and the body corporate does not have enough funds to meet the cost of its insurance renewal and routine maintenance costs.
  7. The amount of the special contributions were based on similar works by similar schemes in the area over the past 12 months.
  8. Following the June 2025 EGM, the committee has taken steps to obtain multiple quotes for the works.
  9. The committee is open to reassessing the special contribution amount once all relevant quotes are obtained.
• [15] In the time between inviting the body corporate to respond to the interim application and receiving the body corporate's submissions, the applicants provided further material. I reviewed that material and did not consider it necessary to seek further submissions from the body corporate regarding it, as the further material has not had any impact on my interim decision.

• [16] It is apparent that the committee is attempting to have the body corporate operate in accordance with its legislative obligations, where it may not have done so previously. This represents a constructive and commendable development.
• [17] However, upon consideration of the applicants' submissions and the accompanying meeting materials, I am concerned that there may be some degree of misunderstanding regarding the proper interpretation of the relevant legislative provisions by various parties within the scheme. In the interests of promoting effective governance of the body corporate and with a view to minimising the potential for future disputes, I consider it appropriate to offer general guidance on certain legislative matters which may bear directly on the arguments presently before me.
• [18] First, I will outline the general application of spending limits. Second, I will outline the general principles between maintenance, improvement and capital works. Third, I will outline typical budgeting practices and when special contributions may be necessary.
• [19] Once I have outlined those general principles, I will draw on those principles when considering whether there is justification for the interim orders, which will include some consideration of the final orders sought.

3. General principles of relevant limits for spending

• [20] Many of the disputed motions concern spending limits in bodies corporate. There are several relevant limits for spending, all of which are separate and distinct. Based on the body corporate's agenda and motions for the June 2025 EGM, I hold concerns that there may be some confusion around the application of these limits.

• [21] The first limit I will discuss is the 'relevant limit for committee spending'. This is a defined term in Schedule 1 of the Small Schemes Module. It provides that the relevant limit for committee spending is the amount set by ordinary resolution of the body corporate, or where no amount has been set, it is $200 multiplied by the number of lots. For this scheme, the relevant limit for committee spending would be $600, unless the body corporate passes an ordinary resolution to change this.
• [22] Section 91 of the Small Schemes Module then provides that the committee may only give effect to a proposal involving spending above this limit where the spending is specifically authorised by ordinary resolution (with some exceptions).
• [23] The practical effect is that, generally and with some exceptions, the committee cannot pass a motion that would incur spending above the relevant limit for committee spending.

• [24] The next limit I will discuss is the 'relevant limit for major spending'. Again, this is a defined term in Schedule 1 of the Small Schemes Module. It provides that the relevant limit for major spending is the amount set by ordinary resolution, or where no amount has been set, the limit is $1,100 multiplied by the number of lots. For this scheme, the relevant limit for major spending would be $3,300, unless the body corporate passes an ordinary resolution to change this.
• [25] Section 92 applies to motions to be moved at a general meeting.[2] Where the cost of giving effect to the proposal is over the relevant limit for major spending, the owner of each lot should be given copies of at least 2 relevant quotations, unless exceptional circumstances exist.
• [26] Section 93 applies if the relevant limit for committee spending is more than the relevant limit for major spending at the scheme. If a motion is to be moved at a meeting of the committee and the cost of giving effect to it is more than the relevant limit for major spending, the committee must obtain and consider at least 2 quotes.
• [27] The practical effect is that, generally, two quotes should be obtained where there is a proposal for spending above this relevant limit for major spending. This applies to either a proposal at general meeting or at a committee meeting, the latter being applicable if the relevant limit for committee spending is higher than the relevant limit for major spending.

• [28] The next limit I will discuss is the 'basic improvements limit'. This is a defined term at section 105(5) of the Small Schemes Module. It is the amount worked out by multiplying $300 by the number of lots in the scheme. For this scheme, the basic improvements limit would be $900. Notably, this is more than the default relevant limit for committee spending under the legislation.
• [29] Section 105(1)(a) further provides that the body corporate may make improvements to the common property if the cost of the improvements, or if the improvements together with associated improvements form a single project for improvement to common property, the entire project, is not more than the basic improvements limit. Otherwise, subsections 105(1)(b) to (d) require a body corporate resolution or an adjudicator's orders to authorise the works.
• [30] Practically, section 105(1)(a) allows that a proposal for an improvement to common property may be approved by the committee, where the cost of the proposal is below both the basic improvements limit and relevant limit for committee spending.
• [31] Importantly, if the cost of improvement works were below the basic improvements limit, but above the committee spending limit, an ordinary resolution would still be necessary because of section 91.

• [32] The next limit is the 'ordinary resolution improvement range'. This is a defined term at section 105(5) of the Small Schemes Module. It is the amount that is more than the basic improvements limit for the scheme, and not more than the amount worked out by multiplying $2,000 by the number of lots included in the scheme. For this scheme, the ordinary resolution improvement range would be $900 to $6,000.
• [33] Section 105(1)(b) provides that the body corporate may make improvements to common property where the cost of the improvements, or, if the improvements together with associated improvements form a single project for improvement of the common property, the cost of the entire project, is within the ordinary resolution improvement range for the scheme, where the improvements are authorised by ordinary resolution.
• [34] Notably, the basic improvement limit ($300 by the number of lots) is higher than the default relevant limit for committee spending (which is $200 by the number of lots). Again, if the cost of improvement works were below the basic improvements limit, but above the committee spending limit, an ordinary resolution would still be necessary because of section 91.
• [35] Importantly, section 105(2) provides that the body corporate may not pass more than 1 ordinary resolution mentioned in section 105(1)(b) in a financial year for the body corporate.

3.5. Proposals beyond the ordinary resolution improvement range

• [36] Where a proposal is above the ordinary resolution improvement range (which would be $6,000 for this scheme), or where the body corporate has already passed an ordinary resolution for improvement works in the current financial year, section 105(1)(c) applies, which requires the improvement to be authorised by special resolution.
• [37] There are some other exceptions, though. For example, where an adjudicator makes an order and decides that the improvements are reasonably necessary for the heath safety or security of persons who use the common property and authorises the improvements.

• [38] The practical effect of all of the above is that:
  1. Where a proposal would cost more than the relevant limit for major spending, two quotes should be obtained, regardless of whether it is being voted on at a committee meeting or general meeting.[3]
  2. Where the proposal costs less than the relevant limit for committee spending, the proposal may be voted on by the committee (subject to below exceptions, and some others).
  3. Where the proposal costs more than the relevant limit for committee spending, the proposal should be voted on at a general meeting (usually, by ordinary resolution, subject to the below).
  4. Where the proposal is for an improvement to common property, the improvement may be authorised by ordinary resolution if the cost falls within the ordinary resolution improvement range, regardless of whether the proposal is below the relevant limit for committee spending.
  5. Where the proposal is for an improvement to common property, and the cost of the works are more than the ordinary resolution improvement range, or where the body corporate has already passed an ordinary resolution within the financial year to authorise an improvement whose cost falls within the ordinary improvement range, the proposal would need to pass by special resolution.

4. General principles of improvement works, maintenance works and capital works

• [39] Determining which type of resolution may be required for a particular proposal usually involves some assessment as to whether the works are an improvement to, or maintenance of, common property. The line between what is maintenance and what is an improvement is not always immediately clear, and it is not uncommon for works to involve an element of both. Nonetheless, the distinction is important, as the body corporate has a strict obligation to undertake maintenance works it is responsible for under the legislation,[4] but that obligation does not extend to works which are wholly an improvement.

• [40] The statutory duty to maintain is a strict one. It is not enough to take reasonable steps to maintain.[5] There are various sections of the legislation that can impact who is responsible for maintenance. For the body corporate, the most pertinent is section 99 of the Small Schemes Module.
• [41] The District Court in Magog (No.15) Pty Ltd v The Body Corporate for The Moroccan,[6] cited the NSW Supreme Court case of Seiwa Pty Ltd v The Owner's Strata Plan 35042 where it was said that the duty to maintain:
  • involved an obligation to keep the thing in proper order by acts of maintenance before it falls out of condition, in a state which enables it to service the purpose for which it exists;
  • required the body corporate not only to attend to cases where there is a malfunction, but also to take preventative measures to ensure that there not be a malfunction;
  • extended to require remediation of defects in the original construction of the common property; and
  • extended to oblige the body corporate to do things which could not be for the benefit of the proprietors as a whole or even a majority of them.[7]
• [42] The practical outcome of the above is that, where works are maintenance works, and where those works are the responsibility of the body corporate under the legislation, the body corporate must undertake those works. This includes taking proactive steps to ensure the common property remains in working order.

• [43] The implications of works being deemed improvements can not only impact the type of resolution required, but also whether the works are required at all. There is no obligation on the body corporate to undertake improvements to common property - although it may choose to do so.
• [44] The delineation between an improvement and maintenance can become convoluted in circumstances where a like for like replacement of an element of common property is not possible or desirable. In those situations, adjudicators have typically preferred a wide meaning be given to the word 'maintenance'. Generally, where the purpose is maintenance, it may still be considered maintenance even if the work involves some change or replacement with a modern equivalent.[8] On the other hand, where the common property is in good working order and the body corporate seeks to modernise it for aesthetic reasons, that would likely be considered an improvement.[9]
• [45] Ultimately, whether works are maintenance or an improvement is highly dependent on the unique circumstances of each situation, and considerations should be given to the principles discussed above.

• [46] The applicants say that the body corporate has misclassified certain works as maintenance works, when they are instead 'capital works' and therefore can only be funded from the sinking fund, where a sinking fund forecast has been obtained. There were also comments about a special resolution being required. However, works can be both maintenance works and of a capital nature. The terms are not mutually exclusive
• [47] Works or spending of a 'capital or non-recurrent nature' are discussed in the legislation in the context of budgets, at sections 79(3), 86(3) and 88(1) of the Small Schemes Module. The term is usually skirted by terms like 'major'.
• [48] Section 79(3) is concerned with the sinking fund budget, providing that the body corporate must adopt a sinking fund budget, and that budget must allow for raising a reasonable capital amount to meet major expenditure, which includes expenditure of a capital or non-recurrent nature.
• [49] Section 86(3) is concerned with the sinking fund itself, providing that the body corporate must establish and keep a sinking fund, and contributions raised to cover anticipated spending of a capital or non-recurrent nature must be paid into it.
• [50] Section 88 is concerned with the application of the sinking fund. It provides that the sinking fund may be applied towards spending of a capital or non-recurrent nature, the periodic replacement of major items of a capital nature, and other spending that should reasonably be met from capital. It goes on to provide that all other spending must be met from the administrative fund.
• [51] Examples of expenses relevant to those sections above include painting of the common property, or replacement of an air conditioning plant.
• [52] The practical effect of the above is that the body corporate should forecast what major maintenance works may be needed over the forthcoming 10 years (including the current year) and raise contributions to create a fund to cover those future works. Typically, bodies corporate will obtain expert advice on what works may need actioning over the next 10 years (at least), and this advice is usually referred to as a sinking fund forecast. It is not mandatory that the forecast be prepared by an expert, but it may be desirable.

5. General principles of special contributions

• [53] Each year, via ordinary resolution, the body corporate must adopt an administrative budget and a sinking fund budget.[10] Based on those budgets, the body corporate must then fix, by ordinary resolution, the contributions to be levied on each lot for the financial year, which includes fixing the date that those contributions are due.[11] Notice of the contribution to be paid must be given to the owner at least 30 days before it is due.[12]
• [54] While there are some exceptions, the liability for contributions attaching to each lot must be proportionate to the contribution schedule lot entitlements for the lot.[13] The contribution schedule lot entitlements are set out in the scheme's CMS. In this scheme, each lot holds one contribution schedule lot entitlement. Practically, this means the contributions are divided evenly amongst lots in this scheme.
• [55] However, where a liability arises for which there is no or inadequate provision in the budgets, the body corporate must fix a special contribution by ordinary resolution. The resolution must fix the date for which payment is due.[14] Again, the liability attaching to each lot is calculated on the contribution schedule lot entitlements.
• [56] Generally speaking, this means that if the body corporate has a statutory obligation to maintain an item of common property, but has not adequately budgeted for same in either the sinking or administrative fund, it must raise a special contribution to cover the costs of the works.

• [57] When making decisions, including whether or not to undertake works, set budgets, or raise special contributions, the body corporate has a statutory obligation to act reasonably.[15]
• [58] Acting reasonably in decision making involves considering the known facts and circumstances that tend to have a rational bearing on the issue, and disregarding irrelevant ones.[16] Importantly, there may be more than one reasonable decision that could be made on the same set of facts.[17] Where it is argued that the body corporate has acted unreasonably, an adjudicator's role is to firstly assess the decision-making process including whether the body corporate has failed to consider any relevant factors or relied on irrelevant factors.
• [59] The general law also requires that the decision must not be legally unreasonable. A legally unreasonable decision is one that is not conflicted, arbitrary, absurd or plainly unjust.[18] If there is no defect in the decision-making process, then the decision of the body corporate will stand unless the adjudicator finds the outcome of the decision is legally unreasonable.

• [60] While adjudicators generally have exclusive jurisdiction over disputes between owners and a body corporate, there are exceptions. I am conscious that that an adjudicator will not have jurisdiction where the matter is a debt dispute, which is a dispute between the body corporate and the owner of a lot about the recovery by the body corporate form the owner of a debt under the Act.[19] I accept that there may questions regarding jurisdiction in relation to this dispute. However, at this interim stage, I am currently satisfied the dispute does not go beyond jurisdiction, noting a narrow interpretation suggests disputes about the exercise of rights or powers, or the performance of duties under the Act, that may dispute the existence of a debt, may not be a debt dispute.[20]

• [61] The ability for an adjudicator to make an interim order is provided for in the legislation. An adjudicator may make an interim order where satisfied, on reasonable grounds, that the order is necessary due to the nature or urgency of the circumstances.[21] Adjudicators often follow the test applied by courts in interlocutory applications, being whether the applicant has shown that it has a prima facie case, and whether the applicant has shown that the balance of convenience favours the granting of the relief claimed.[22]
• [62] Interim orders are temporary in their effect. Typically, their purpose is to maintain the status quo, preserving a party's rights or interest until the matter can be finally determined, usually by stopping a party from taking certain actions.
• [63] Therefore, to be successful in their application for interim orders, the applicants must satisfy me that:
  1. there is a prima facie case to justify relief, and
  2. the balance of convenience justifies the interim relief.

• [64] While I am not determining the final orders sought, determining whether there is a genuine legal issue at the interim stage requires some level of assessment of the final orders.
• [65] The onus is on the applicants to prove there is a prima facie case to justify the relief they seek. The applicants do not need to show that it is more probable than not that they will succeed. The applicants need to show a sufficient likelihood of success to justify the interim orders pending a final determination of the matter.[23] How strong the possibility of success that is needed depends upon the nature of the rights the applicants assert, and the consequences of the order sought.[24]

• [66] Many of the disputed motions relate to decisions the committee for the scheme are permitted to make, without calling a general meeting. The applicants say that the committee does not appear to be meeting the minimum statutory requirements and that there are technically vacancies on the committee. This may bring into question whether it is reasonable for the body corporate to pass motions that would give the committee extended discretion.
• [67] The Small Schemes Module sets out requirements for committees. Section 8 provides that a body corporate must have a committee, unless the body corporate engages a body corporate manager to carry out the functions of the committee under Part 5 of the Act (this is a different type of contractual arrangement to the usual engagement of a body corporate manager). Based on the information in front of me, it does not appear that the body corporate manager, Team Body Corporate, is engaged under such an agreement.
• [68] In relation to the statutory requirements for committees, section 10 of the Small Schemes Module provides that the committee only consists of the person or persons chosen to be secretary and treasurer of the body corporate. Additionally, one person may hold both the secretary and treasurer roles. This means a committee for a body corporate under the Small Schemes Module may comprise of just 1 member, and at most 2 members. This is significantly different to other regulation modules.
• [69] Pursuant to section 12 of the Small Schemes Module, the secretary and treasurer must be chosen at each annual general meeting.
• [70] If there is an issue with the composition, I accept that this may have some impact on whether it would be reasonable for the body corporate to pass motions to increase a committee spending limit, if there is in fact no committee. However, the applicants have not provided me with the minutes of the most recent annual general meeting, so I cannot currently be satisfied of a prima facie case that there is an issue with the composition of the committee.

• [71] The applicants argue that the body corporate has acted unreasonably as there has not been 'owner consensus' and that the owner of Lot 1 has been excluded from participation. The applicants were, however, given notice and invited to participate in the June 2025 EGM, but did not do so. The applicants were also invited to have a discussion, facilitated via the body corporate manager, with the other owners about their concerns. This appears to not have been taken up.
• [72] It is difficult for the applicants to successfully argue that the body corporate will have acted unreasonably by allowing the committee, which is comprised of two of the three lot owners, the power to decide which contractors are engaged. Currently the applicants' argument is that this creates an imbalance. However, in a 3 lot scheme, this imbalance is likely to continue in a general meeting setting.

• [73] While the applicants do not seek a final order invalidating Motion 2, it is somewhat relevant to Motion 3 which is expressly disputed. Motion 2 reads as follows:

COMMITTEE SPENDING DISCRETION - Ordinary Resolution > > Pursuant to the Body Corporate and Community Management (Small Module) Regulation 2020 as amended, the spending discretion of the Committee is increased to $750 per Lot totalling $3,000.00 plus GST. > > Explanatory > > This Motion seeks Body Corporate approval to increase Committee Spending Discretion to $750.00 per Contribution Lot Entitlement.

• [74] Section 41(2)(e) of the Small Schemes Module does not appear to have been complied with. This section requires the agenda to state, for each motion, whether it was submitted by the committee, or it must state the name and lot number of the person who has submitted it. This appears to be a recurring issue for each motion on the agenda. However, this issue is not disputed by the applicants and the common understanding appears to be these motions were proposed by the committee.
• [75] The motion refers to the 'Body Corporate and Community Management (Small Module) Regulation 2020', which is a misnomer of the Small Schemes Module. Again, this error continues throughout the motions, but appears to be an administrative error of little consequence for the parties.
• [76] I assume this motion attempts to change the relevant limit for committee spending. The motion and explanatory material confusingly refers to lots and then lot entitlements, which are not the same thing, but are equal at this scheme.
• [77] The main issue is that there are 3 lots in the scheme, and $750 per lot does not equate to $3,000, plus GST (being $3,300).

MAJOR COMMITTEE SPENDING DISCRETION - Ordinary Resolution > > Pursuant to the Body Corporate and Community Management (Small Module) Regulation 2020 as amended, the spending discretion of the Committee is increased to $3,333.33 per Lot totalling $10,000.00. > > Explanatory > > This Motion seeks Body Corporate approval to increase Major Committee Spending Discretion to $3,333.33 per Contribution Lot Entitlement.

• [79] Again, the motion and explanatory material refer to lots and then lot entitlements.
• [80] The applicants have not advanced a clear and succinct reason why this motion is invalid. I note, it is not clear what the intended meaning and effect of this motion is, in order to argue against it. There is no such term as a 'major committee spending discretion' under the legislation. The relevant limit for committee spending and the relevant limit for major spending have two separate and distinct connotations. The title to the motion has the word 'major' in it, and yet the motion is worded similarly to Motion 2, referring to 'spending discretion of the committee'. The meaning and effect of this motion appears confused and unclear. At this preliminary stage I consider that there is a prima facie case for either making a declaratory order to ensure the motion is not relied upon for an increase to limits for committee spending or major spending, or invalidating the motion in its entirety as it may be unenforceable.

COMMITTEE SPENDING DISCRETION - ROOF RECTIFICATION WORKS - Ordinary Resolution > > That, in terms of Section 172 of the Body Corporate and Community management (Small Module) Regulation 2020 as amended, the spending limit of the Committee be increased to $60,000 plus GST for the purpose of roof rectification works. > > And further, that the Body Corporate approves a Special Sinking Fund Levy at a rate of $20,000.00 per contribution lot entitlement, totalling $60,000.00 inclusive of GST to be raised to meet part of the cost of the roof rectification works following approval of this motion and payable 30 days thereafter. > > Explanatory > > This Motion seeks Body Corporate approval to increase Committee Spending Discretion to $60,000.00 plus GST for the roof rectification works.

COMMITTEE SPENDING DISCRETION - PAINTING WORKS - Ordinary Resolution > > That, in terms of Section 172 of the Body Corporate and Community management (Small Module) Regulation 2020 as amended, the spending limit of the Committee be increased to $50,000 plus GST for the purpose of painting works. > > And further, that the Body Corporate approves a Special Sinking Fund Levy at a rate of $15,000.00 per contribution lot entitlement, totalling $45,000 inclusive of GST to be raised to meet part of the cost of the painting works following approval of this motion and payable 30 days thereafter. > > Explanatory > > This Motion seeks Body Corporate approval to increase Committee Spending Discretion to $50,000.00 plus GST for the painting works.

COMMITTEE SPENDING DISCRETION - POOL RENOVATION WORKS (INCLUDING DECKING) - Ordinary Resolution > > That, in terms of Section 172 of the Body Corporate and Community management (Small Module) Regulation 2020 as amended, the spending limit of the Committee be increased to $30,000 plus GST for the purpose of pool renovation works. > > And further, that the Body Corporate approves a Special Sinking Fund Levy at a rate of $10,000.00 per contribution lot entitlement, totalling $30,000 inclusive of GST to be raised to meet part of the cost of the pool renovation works following approval of this motion and payable 30 days thereafter. > > Explanatory > > This Motion seeks Body Corporate approval to increase Committee Spending Discretion to $30,000.00 plus GST for the pool renovation works.

• [84] In relation to the first paragraphs of Motions 4, 5 and 6, there is reference section 172 of the Small Schemes Module. I believe this may be in error. Section 91 of the Small Schemes Module is relevant to committee spending. The comparative section in the Body Corporate and Community Management (Standard Module) Regulation 2020, which does not apply to the scheme, is s 172.
• [85] In any event, there appears to be a common understanding that:
  1. The first paragraph of the Motion 4 has the effect of increasing the relevant limit for committee spending to $66,000, where the proposal would relate to roof rectification.
  2. The first paragraph of Motion 5 has the effect of increasing the relevant limit for committee spending to $55,000, where the proposal would relate to painting.
  3. The first paragraph of Motion 6 has the effect of increasing the relevant limit for committee spending to $33,000, where the proposal would relate to pool renovation works.
• [86] The applicants do not advance a clear reason as to why the effect of the first paragraphs of Motions 4, 5 and 6 would be invalid.
• [87] While it is not entirely apparent, the applicants may be of the impression that the effect of Motions 4, 5 and 6 allows the body corporate to engage contractors without obtaining quotes. The applicants say that the increase in the spending limit should not bypass other obligations and that two quotations should be provided. The submissions from the body corporate confirm the committee does not consider Motions 4, 5 and 6 as a basis to engage a particular contractor, and is obtaining at least 2 quotes for each scope of works, which will be considered at a later date. Based on the material in front of me, I am not currently satisfied there is a prima facie case for invalidating first paragraphs of Motions 4, 5 or 6.

8.5.2. Special contribution of Motions 4, 5 & 6

• [88] There appears to be a common understanding that the second paragraphs of Motions 4, 5 and 6 raise special contributions.
• [89] The applicants argue that the body corporate cannot impose special contributions without obtaining a sinking fund forecast or 'independent building assessment'. I am not currently satisfied that this argument raises a prima facie case to invalidate the motions. The ability of the body corporate to raise special contributions is not reliant on the body corporate obtaining a sinking fund forecast. Pursuant to section 81(2) of the Small Schemes Module, the body corporate must raise a special contribution if a liability arises to which there is no or inadequate provision in the budgets.
• [90] The body corporate says that it has statutory obligations, indicating a liability, to undertake:
  1. Maintenance works to the roof and has provided an insurance claim due to a leaking roof, photos and a report from Independent Roof Inspections Pty Ltd dated 10 April 2025 as evidence of the roof requiring maintenance.
  2. Maintenance of the exterior of the building via painting, and has provided photos of rotting wooden beams, dull and mouldy paint and cracks in the exterior of the building.
  3. Maintenance of the decking around the pool area, and has provided with photos of broken planks and rotting timbers in the deck surrounding the pool.
• [91] The applicants, who bear the onus of proof, have not provided any evidence that the roof, building exterior, or deck is in good condition, nor that maintenance of these items falls outside the body corporate's maintenance responsibilities, nor evidence that there is sufficient provision on the body corporate's budgets for the work.
• [92] The applicants further argues that it is unreasonable for the body corporate to impose such significant special contributions without justification, and that the committee has not obtained quotes for the works the special contribution is to fund.
• [93] The body corporate says that it had based the special contribution amounts on similar works undertaken by schemes within the past 12 months. Since the June 2025 EGM, the body corporate has approached multiple contractors for quotes, some having now been received. The body corporate has provided me with a copy of a quote for roof works and the pool area. The pool area quote is in the vicinity of $45,000, which is aligned with the special contribution amount. The roof quote is around $18,000, which is considerably less than the special contribution for those works. However, it is not clear if this particular quote covers all necessary scope of works, or if other quotes may be higher.
• [94] The onus is on the applicants to justify the relief they are seeking. Currently, the applicants do not provide evidence that the body corporate has relied on irrelevant considerations or otherwise acted unreasonably when setting the special contribution amounts.
• [95] Based on the material in front of me, I am not currently satisfied that the applicants have raised a prima facie case to invalidate Motions 4, 5 & 6.

SPECIAL LEVY TO FUND INTERIM ADMIN FUND LEVY - Ordinary Resolution > > That, the Body Corporate approves a Special Admin Fund Levy at a rate of $3,333.33 per Lot totalling $10,000.00 per contribution lot entitlement, to be raised to cover unbudgeted Admin costs and payable 30 days thereafter. > > Explanatory > > This Motion seeks Body Corporate approval to raise a Special Admin Fund Levy at a rate of $3,333.33 per Lot totalling $10,000.00 per contribution lot entitlement, to be raised to cover unbudgeted Admin costs.

• [97] This motion's figures and distinction between lots and lot entitlements appears confused. Lots and contribution schedule lot entitlements are different things, but they are even between lots in this scheme. As a result, the meaning and effect of this motion is unclear and possibly contradictory. I am not certain if this motion intends to raise $3,333.33 from each lot owner once, or on 3 occasions which would then total $10,000 per contribution lot entitlement. Based on the material currently in front of me, I am satisfied there is a prima facie case to invalidate this motion, or otherwise make an order regarding its meaning or enforceability. Although, I note the applicants have not specifically argued this point and the body corporate has not had a chance to clarify same.

REIMBURSEMENT TO OWNER OF LOT 1 (ROOFING INVOICE) - Ordinary Resolution > > That the Body Corporate reimburse the Owner of Lot 1 payment of the enclosed invoice No 11 dated 26.03.2025 as described in that invoice at a cost of $1,125.00 inclusive of GST paid from the Sinking Fund.

• [99] Motion 12 was not resolved, so there appears little utility in making an order that it was invalid. The applicants do not advance clear reasons as to why this order is sought. I am not currently satisfied that there is a prima facie case to invalidate Motion 12.

• [100] As I have not been satisfied there is a prima facie case for invalidating the majority of the motions subject to dispute, I similarly find there is currently no prima facie case to justify the second and third final orders.

• [101] I have been satisfied that there is, based on the material currently in front of me, a prima facie case for invalidating, or making some level of order in relation to, Motion 3 and Motion 7 of the June 2025 EGM. Although, not for the primary arguments the applicants raise.
• [102] Finding that there is a prima facie case does not necessarily mean the applicants are entitled to interim relief. Before granting interim relief, I must balance the inconvenience to the respondent body corporate by granting relief now, in the knowledge that final orders might ultimately be refused, against the inconvenience to the applicant lot owners by not granting relief now, in the knowledge that final orders might ultimately be granted.

• [103] The applicants seek an interim order that would restrain the body corporate from taking steps to recover the special contributions subject of the June 2025 EGM. While I concede that I am unsure of the intended meaning of Motion 3, it does not mention the raising of special contributions or engagement of contactors, so I do not find it relevant to the interim orders sought.

• [104] Motion 7, however, does attempt to raise special contributions. It is not clear to me the amount to be raised from each lot owner. The applicants have provided a copy of a contributions notice seeking an amount of $3,333.33.
• [105] The body corporate asserts that the administrative fund is currently in deficit and that available funds are insufficient to cover the costs associated with insurance and routine maintenance contracts. While the body corporate has not provided documentary evidence to substantiate this claim, the applicants have similarly failed to produce evidence to refute it.
• [106] On the basis that the body corporate may be unable to satisfy these financial obligations, I find that the balance of convenience does not presently favour the granting of the interim order.
• [107] Notwithstanding this, if the body corporate's intention is to raise $10,000 from each lot owner to address the administrative fund deficit, by way of multiple instalments of $3,333.33, there exists a strong prima facie case that Motion 7 does not effectuate this intention. If this is the body corporate's intention, I am satisfied that the balance of convenience favours the making of an order, given the strength of this prima facie case and the substantial increase in the amount sought. Accordingly, I will make an interim order restraining the body corporate from relying on Motion 7 to raise more than $3,333.33 per lot entitlement.

• [108] My preliminary view, based on the material currently in front of me, is that the applicants have not advanced good reason to invalidate the majority of motions complained of in the final orders.
• [109] There is an argument that Motion 3, potentially relating to relevant limits of spending, and Motion 7 relating to special contributions for a deficit in the administrative fund, may be invalid or unenforceable, however, this is largely due to the meaning and effect of the motions being unclear. I note the body corporate was not put on notice of these issues and has not had opportunity to clarify same.
• [110] The interim order concerns the body corporate not taking steps to seek special contributions or engaging contractors, which is not relevant to Motion 3.
• [111] In relation to Motion 7, based on the material in front of me, I have found the balance of convenience does not favour the interim orders where the body corporate may not be able to meet its financial commitments regarding routine maintenance and insurance.
• [112] However, if it is the case that the body corporate intends to rely on Motion 7 to raise more than $3,333.33 per lot entitlement, then the balance of convenience favours an order to be made due to the strong possibility that the motion has not achieved this, and it would be a significant amount. I will therefore make an order that the body corporate may not rely on Motion 7 to collect more than $3,333.33 per lot entitlement.
• [113] It appears that there are misunderstandings regarding several terms under the legislation. I hope that this order has clarified some of those topics and can assist the parties moving forward. I also note that, as a scheme of only 3 lots, constructive communication can resolve many disputes and misunderstandings. I anticipate that the Commissioner will refer this matter to conciliation if this dispute does continue.

[1] Act, s 247.

[2] As discussed, motions whose effect would incur spending over the relevant limit for committee spending would need be considered at a general meeting.

[3] See Small Schemes Module, ss 92-93.

[4] MAGOG (NO. 15) Pty Ltd v The Body Corporate for the Moroccan [2010] QDC 70 at [85].

[5] Seiwa Pty Ltd v The Owner's Strata Plan 35042 [2006] NSWSC 1157 at [21].

[6] MAGOG (NO. 15) Pty Ltd v The Body Corporate for the Moroccan [2010] QDC 70.

[7] Magog (No.15) Pty Ltd v The Body Corporate for The Moroccan [2010] QDC 70, Newton DCJ at [83] citing with approval Seiwa Pty Ltd v The Owner's Strata Plan 35042 [2006] NSWSC 1157 at [4] citing Proprietors Strata Plan No. 6522 v Furney [1976] 1 NSWLR 412, 416 (Needham J) and Ridis v Strata Plan 10308 [2005] NSWCA 246 at [164]- [165].

[8] The Presidents Lodge [2018] QBCCMCmr 226.

[9] Carmel By The Sea [2020] QBCCMCmr 559; Coronation Towers [2006] QBCCMCmr 44.

[10] Small Schemes Module, s 79(1).

[11] Small Schemes Module, s 81(1).

[12] Small Schemes Module, s 82.

[13] Small Schemes Module, s 83(3).

[14] Small Schemes Module, s 81(2).

[15] Act, ss 94(2), 100(5).

[16] Body Corporate For Beaches Surfers Paradise v Backshall [ 2016] QCATA 177 at [42].

[17] Body Corporate For Beaches Surfers Paradise v Backshall [2016] QCATA 177 at [47] citing Woden Valley Glass v Psaila (1993) 122 ALR 378, 391.

[18] Body Corporate For Beaches Surfers Paradise v Backshall [2016] QCATA 177 at [34].

[20] See, for example, Q1 [2010] QBCCMCmr 433, '11 Joseph' CTS 33588 v Desarrollo Pty Ltd ATF The Cove Trust 1 and anor [2022] QCATA 41.

[22] SDW2 Pty. Ltd. V JLF Corporation Pty Ltd [2017] QSC 1 at [21].

[23] Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618 at [622-623].

[24] Australian Broadcasting Corp v O'Neill [2006] HCA 46; (2006) 227 CLR 57, at [65], [19].