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

Application for emergency expenditure - whether circumstances constitute an "emergency".

Act, s 20; Standard Module, ss 172(1)(c), 180

1. The committee of the body corporate for The Ecovillage at Currumbin Community Titles Scheme 35580 is authorised to engage Gold Coast Building Maintenance Pty Ltd to undertake rectification and replacement of the expansion joints and PE fusion couplings located suspended beneath the Ridgy Didge Bridge, as per Quotation No. 4987 dated 19 March 2025 in the amount of $56,980 (including GST), plus a contingency of a further $10,000.

• [1] This is an application made on 14 March and amended on 19 March 2025 by the Body Corporate for The Ecovillage at Currumbin Community Titles Scheme 35580, seeking an adjudicator's order to authorise expenditure of up to $66,980 (including GST) to engage Gold Coast Building Maintenance Pty Ltd (GCBM) for plumbing repairs to a recycled water pipe under the emergency expenditure provisions of the legislation.
• [2] The main question is whether the circumstances constitute an emergency, such that the normal legislative procedures required to be followed to authorise major expenditure (which give owners a right to vote on the expenditure) can be circumvented.

• [3] The Ecovillage at Currumbin is a principal body corporate (PBC), established in 2006. It has 4 subsidiary schemes: Creek Ecohamlets CTS 35581 (containing 45 lots), Valley Terraces Ecohamlets CTS 36425 (containing 58 lots), Highlands Ecohamlets CTS 40102 (containing 38 lots) and Village Centre CTS 47334 (containing 6 lots).
• [4] The grounds to the application were scant. On 20 March 2025, I requested the following further information:
  1. Advise the PBC's current relevant limit for committee spending and major spending. If these have been set by ordinary resolution in general meeting, please provide a copy of the minutes of the relevant meeting. If not set by ordinary resolution in general meeting, please advise the number of layered lots for the scheme.
  2. A copy of the 28 February 2025 balance sheet referred to in the application.
  3. A copy of the current sinking and administrative fund budgets.
  4. When were the HDPE fusion couplings discovered to have failed? How many have failed? Please provide any relevant reports as to the condition of the fusion couplings and flexible rubber joiners.
  5. Advise where the "Ridgy Didge" bridge is located, eg on common property or elsewhere. A map would be helpful.
  6. How many and which lots and/or common property are serviced by the recycled water carried in the pipes for which the couplings have failed?
  7. Please provide details (eg minutes of meeting, scope of works, etc) for the $2.4M CWMS upgrade owners have previously approved, that you mention in the application.
  8. Until the new system is connected, can the current arrangement for recycled water being supplied by a bore continue?
  9. Two quotes for the proposed work have been obtained: one from GCBM dated 6 February 2025 and one from Vince & Sons dated 11 February 2025. Why have the quotes not been presented to owners at EGMs in the intervening period?
• [5] An email reply from the body corporate manager (BCM) for the PBC was received this morning to the following effect:
  1. The PBC spending limit is $29,200 (146 layered lots x $200).
  2. The financial information requested at items 2 and 3 was provided.
  3. One of the fusion couplings has failed. This was discovered on 26 December 2024 and the Caretaker sought to arrange for two commercial plumbing companies to inspect the pipe, then requested quotes on the fix. As this was during the Christmas holiday period, most tradespeople were not available to undertake such inspections immediately. The plumbers visually inspected the other couplings and joiners and reported that they were also deteriorating (adding risk to the body corporate) and replacement was recommended whilst the scaffolding was to be in place. There was no formal 'condition report' as it was obvious what had failed (the water spirting out of the joiner was obvious, even visible from the ground under the bridge). However, the plumbers have included the technical details of what is required to be repaired, in their quotes, to resolve the problem and risks. There were also delays because the plumbers had to wait for scaffolding suppliers to provide them with quotes.
  4. The large "Ridgy Didge" bridge is in the middle of the estate across Currumbin Creek. In the Ecovillage's original development approval, it was granted an easement by Council across the creek. A picture and survey plan were provided.
  5. 100 residential lots of the 146 layered lots rely on the recycled water. This includes the community facility buildings. 100 residential lots, community facilities and the commercial lots send wastewater to the CWMS so rely on this hourly, hence the urgency to get the upgraded plant online.
  6. Minutes of the 2023 extraordinary general meeting (EGM) and relevant meeting material, endorsing the $2.4M upgrade to the CWMS was provided.
  7. Drilling an additional bore is not deemed a practical solution. It would take longer to arrange (find a suitable location, find quotes for the bore drilling, add a pump, get quotes to run electricity to the pump, then run a VOCM to approve the works, then complete the works (10 weeks?). It would likely add cost (more than the current plumbing fix) and the bore may only be in use for a few weeks so is likely to be a waste of capital expenditure and therefore not likely to be in the best interest of owners.
  8. Regarding the time it has taken - There have been multiple delays because 1) The ecovillage is a layered scheme and each PBC member (4) wished to consult with their committees on the options. There are 24 committee members to consult across all four subsidiary bodies corporate (SBC) and such discussions take time. It also took several days to draft and agree on the application and prepare and run the PBC vote outside of committee meeting. That is, the quotes were obtained and then discussed by the PBC members, then SBC committee members. An EGM was proposed but then the body corporate was informed of the option to prepare an application for an emergency spending order so that work could be started as it was believed this was in the best interests of owners (to avoid 5 EGMs and get the approval more quickly). All body corporate representatives are volunteers and have other family and work priorities so are not always available to attend to body corporate matters immediately or in a perfectly integrated manner with other committee members. There are also sometimes differences of opinion which take time to work through, like most committees. Per the application: The PBC Committee plans to run an EGM as soon (sic) to list this and five other important motions, however two of those motions require more input before they can be listed: The Caretaker Agreement expired due to an administrative error and needs to be recovered via an EGM per legal advice. Quotes are imminent. The second stage of the CMWS (mainly irrigation) upgrade project needs EGM approval and is awaiting contractor quotes.

Please note costs to run EGMs are not insignificant because the scheme is layered and has multiple body corporate managers. EGMs need to be prepared and schedule at each SBC before the PBC EGM (over 147 lots in total). Each BCM charges for EGMs and their administrative costs alone exceed $7,500. This excludes all the volunteer committee preparation and owner consultation time. As a result, is not in the best interests of owners run 10 EGMs if 5 can be scheduled in a few weeks instead. The PBC will pursue a PBC and SBC EGMs regardless but this emergency expenditure would enable the most urgent plumbing repair to be actioned much more quickly.

• [6] The duties of the body corporate about common property are outlined in section 180 of the Standard Module. An owner's responsibility for maintenance of their lot is outlined in 211(3).
• [7] The PBC says HDPE fusion couplings that connect recycled water pipes under the main "Ridgy Didge" bridge have unexpectedly failed, causing recycled water to leak onto neighbouring property (State Government non-scheme land) in the bridge easement area. This application seeks to approve emergency repairs to rectify the fault. Once the scaffolding is in place, the other deteriorating coupling and flexible rubber joiners at each end for bridge expansion joints will be replaced to avoid similar risks. The recycled water is used by the majority of lot owners in their homes to flush toilets, so is part of an essential utility service.
• [8] Based on the further information provided and my perusal of the community management statement, I am satisfied that the work proposed to be undertaken (rectification and replacement of the expansion joints and PE fusion couplings located suspended beneath the Ridgy Didge Bridge) is the body corporate's responsibility. The WWTP and associated infrastructure service multiple lots and common property and is therefore common property utility infrastructure that the PBC is responsible for maintaining in good condition[1].

• [9] Sections 172 to 174 of the Standard Module provide for the control of spending by a body corporate. A committee is prohibited from authorising spending above the committee spending limit except in certain circumstances, including where an adjudicator is satisfied that the spending is required to meet an emergency and authorises it under an order[2].
• [10] The relevant limit for committee spending is stated to be $29,200 (based on there being 146 layered lots[3] x $200). The major spending limit for the scheme is only $10,000[4].
• [11] This means that, pursuant to sections 172 and 173 of the Standard Module, the spending must normally be approved by an ordinary resolution at a general meeting, at which owners have been given at least two quotes for the work with the notice of meeting.
• [12] In this case, 2 quotes have been obtained for the proposed work (Quotation No.4987 dated 6 February 2025 from Gold Coast Building Maintenance Pty Ltd (GCBM) for $56,980 and 1 dated 11 February 2025 from Vince & Sons Plumbing Contractors for $63,800).
• [13] Instead of calling an EGM to authorise the work in accordance with the legislation, the PBC submitted this application.

• [14] Section 172(1)(c) of the Standard Module provides that an adjudicator may authorise the committee to give effect to a spending proposal above its spending limit if it is required to meet an 'emergency'.
• [15] For an adjudicator to authorise spending under section 172(1)(c), the adjudicator must be satisfied the spending is so urgent that the body corporate has insufficient time to call their own EGM to authorise it. Pursuant to section 91 of the Standard Module, an EGM could be held in as little as 21 days after notice of the meeting is given to all lot owners.
• [16] The BCM says one of the fusion couplings has failed. The leak was detected in December last year. The issue has not arisen suddenly due to any specific event but appears to have occurred over some period because of gradual deterioration or lack of maintenance and has been in its current state for at least 3 months. There is no report from an appropriately qualified professional as to the condition of the couplings and the need to replace them within any particular time frame. Nor does the PBC itself appear to have acted with any great urgency in addressing the matter. The dates on the 2 quotes obtained are 6 and 11 February 2025, around six weeks ago. Further, the quotes are for work beyond rectifying the existing leak. The PBC admits that once started, when the scaffolding is in place, the other deteriorating coupling and flexible rubber joiners at each end of the bridge expansion joints will be replaced to avoid similar risks. The GCBM quote was stated to be valid for 30 days, necessitating this office requesting a current quote before proceeding with the application, which was only lodged on 14 March 2025, and subsequently amended on 19 March 2025 to provide requested information. If an application for emergency expenditure was going to made, it should have been made much sooner. There has now been sufficient time for each subsidiary scheme and the PBC to have convened EGMs to properly authorise the proposed expenditure in accordance with the legislation.
• [17] The body corporate's explanation for not having done so is not compelling. Essentially, it believes it is quicker, easier, and much less expensive to lodge an application with this office under the emergency expenditure provisions, rather than go to the trouble, time, and expense of properly authorising the expenditure in accordance with the legislation. The stated desire to avoid further EGMs in circumstances where an EGM is necessary for other reasons for each subsidiary and the PBC (but not quite ready yet to be held) does not constitute an emergency.
• [18] The PBC says:

The leak could get worse at any time and this adds risk to the body corporate in terms of being able to maintain a viable wastewater collection and recycled water supply service to owners. More importantly, the recycled water is temporarily being supplied by a bore and does not currently contain contaminants that could adversely affect common property or the creek, however, once the Community Wastewater Management System upgrade is ready (imminent) the recycled water will need to contain chlorine (mandated last stage of disinfection) which could impact land or waterways which could add significant EPA legislative (legal) risks to the body corporate and hence significant costs. The body corporate should therefore act urgently to protect the body corporate's rights and obligations, to supply adequate and working essential services including recycled water for toilet flushing and sewage treatment. The Ecovillage is not connected to any Council or government sewer system so has to operate its own system. The urgent $2.4M CWMS upgrade (which owners have previously approved) is only days away from being operational, but it cannot be used until this leak is fixed, holding up the urgent essential service project. The plumbing firms who have quoted are currently available to schedule the works if/when selected, in approximately 2 weeks, if/when they are engaged. The $10,000 contingency has been included to account for unforseeable asset condition or weather events, or if Caretaker (Ecotones) effort/input is required. The PBC has passed a unanimous VOCM already to approve the works subject to it being able to go over its spending limit.

Failure to act immediately may lead to the body corporate incurring substantial additional unexpected costs such as manual removal of all sewerage wastewater (about 50,000L and $6,000 per day) by truck, and legal liability related risks. The plumbing works have been delayed because a) the new upgraded headend of the CWMS is now ready for connection and use, but this was not the case a few weeks ago b) manual trucking of sewage will be needed if the upgraded plant cannot be connected so the plumbing fixes are required to avoid this substantial cost.

• [20] The $2.4M upgrade to the CWMS was approved in December 2023. I have not been advised as to when that work began, but it is evident it has been in progress for some months and is now nearing completion, but according to the PBC, cannot be made operational until the leak detected in December 2024 is fixed. In response to my question as to whether, until the upgraded system is connected, the current arrangement for recycled water being supplied by a bore could continue, the PBC replied that Drilling an additional bore is not deemed a practical solution. It would take longer to arrange (find a suitable location, find quotes for the bore drilling, add a pump, get quotes to run electricity to the pump, then run a VOCM to approve the works, then complete the works (10 weeks?). It would likely add cost (more than the current plumbing fix) and the bore may only be in use for a few weeks so is likely to be a waste of capital expenditure and therefore not likely to be in the best interest of owners.
• [21] I do not understand why an additional bore would be needed to maintain the current arrangements that have existed without the upgraded CWMS being operational. The scheme has been operating historically in this fashion, and for at least 3 months since the leak was detected, and I am not convinced it is not feasible for it to continue to do so in the short term until the expenditure can be properly authorised.
• [22] In this case and on the material before me, I am not persuaded that an 'emergency' has been demonstrated such that owners' rights to vote on the expenditure should be overridden. To the extent that any 'emergency' has been demonstrated, it appears to me to be entirely of the scheme's own making.
• [23] Nonetheless, I am satisfied that the work is necessary and take the body corporate's word that the upgraded CWMS which is (or will imminently be) ready to be connected, cannot be connected until the leak is fixed. I am also mindful that 2 quotes have been obtained and they are within a similar range, differing by less than 12%. The PBC committee has unanimously approved (after consultation with each subsidiary schemes' committees) the lesser of the 2 quotes but seeks authorisation for an additional 10% contingency. The quote itself asks that a contingency for possible additional labour costs to cover the situation where the scaffolding needs to be dismantled and reassembled due to inclement weather, be made.
• [24] I these circumstances I am, somewhat reluctantly, prepared to make an order authorising the expenditure under the emergency expenditure provisions.

• [25] The sinking fund balance sheet provided to me in response to my request for further information showed a balance in the WWTP sinking fund as at 28 February 2025 of $605, 409.12, with $985,958.27 having been spent on the CWMS in the period from 1 July 2024 to 28 February 2025. The PBC says the second stage of the upgrade project (mainly irrigation) is yet to be quoted and put to owners.
• [26] Section 162(2) of the Standard Module provides that if a liability arises for which no provision, or inadequate provision has been made in the budget, the body corporate must, by ordinary resolution, fix a special contribution to be levied on the owner of each lot towards the liability, decide whether the contribution is to be paid in one or more instalments and fix the date on which the instalment/s are due.
• [27] The PBC committee will need to consider whether further special contributions will need to be raised to cover the expenditure authorised by this order.

• [28] The expenditure sought to be authorised by this order exceeds the relevant limit for both committee and major spending. It is significant expenditure that the body corporate could (and should) have authorised in accordance with the legislation such that owners' rights to vote on the expenditure and how it should be funded, need not have been overridden.
• [29] However, I am satisfied that the proposed work is the body corporate's responsibility, that it is necessary and that the upgraded CWMS (the first stage of which is about to be, if not already is, complete) cannot be made operational without the proposed work being undertaken. To the extent, if any, that this constitutes an 'emergency' it is of the body corporate's own making.
• [30] With some reservations, I will authorise the committee to spend the amount requested.

[1] Section 20, Act, section 180, Standard Module

[2] Section 172(1)(c), Standard Module

[3] My search of Titles Office records for each subsidiary scheme resulted in a total of 147 layered lots (see para [3]). The resulting difference of $200 in the relevant limit for committee spending is immaterial.

[4] The definition of the relevant limit for major spending (where no amount has been set by a general meeting) is the lesser of $1,100 x the number of layered lots; or $10,000