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

GENERAL MEETING MOTIONS - where the applicant is seeking

to challenge two motions passed at an extraordinary general meeting -

whether the final orders sought are warranted in the circumstances.

Act, ss 20, 94; Commercial Module, ss 112, 127

• [1] Toowong Centrus CTS 4712 is located in Toowong, Queensland. It is comprised of 12 lots and common property and is governed by the Commercial Module. The applicant, Earlborough Pty Ltd, is the owner of Lot 18 in the scheme. Mr McIntyre, the director of Earlborough Pty Ltd, has brought this application on its behalf.
• [2] On 25 February 2025, the Body Corporate for Toowong Centrus held an extraordinary general meeting (EGM) and considered various motions about replacing the scheme's air-conditioning system. The applicant is seeking to challenge two motions about the air-conditioning system passed at the EGM, motions 2A and 3A. These motions read respectively:

Lannock Strata Finance Loan I Air Conditioning Replacement Works $500,000

1. That the Body Corporate enter into and execute a loan contract with Lannock Capital 2 Pty Limited (ACN153 391 283) to fund the Body Corporate's obligations to meet working capital requirements, fund remediation works and to comply with its obligations under law (Loan Contract).

1. That the Body Corporate's seal be affixed to the loan contract in the presence of (strike out those which do not apply):
   1. Any two members of the executive Committee; or
   2. The Strata Manager and one member of the Committee; or
   3. The Strata Manager alone
2. That the Body Corporate acknowledges the following things:

1. a copy of the proposed Loan Contract, the terms and conditions, the information memorandum and a prescribed notice, was tabled at the meeting; 2. the maximum amount of credit available under the Loan Contract is $500,000.00 or such increased amount as approved by a subsequent General Meeting; 3. the term of the loan be set at a maximum of five (5) years; and 4. Members of the Body Corporate has [sic] the authority to approve the raising of additional levies to ensure the Owners Corporation can perform its obligations in relation to each advance under the Loan Contract; 5. the Body Corporate acknowledges that it has sought such advice (including legal advice) as it believes appropriate prior to entering into the loan contract; and 6. a drawdown instruction may be signed by (strike out those which do not apply): 1. Any two members of the executive Committee; or

1. The Strata Manager and one member of the Committee; or 2. The Strata Manager alone

$500,000 Loan + Sinking Fund + $500,000 Special Levy

THAT subject to the approval of motion 2a, that the Body Corporate resolves to carry out air conditioning replacement to the building by engaging the following contractors:

• 'Coolmaster' to carry out the air conditioning replacement works as per the quote marked 'A' at a cost of $1,013,067.00 incl. GST
• 'Le Luxe' to carry out the associated building works as per the quote marked 'B' at a

• 'Gimpel Electrics' to carry out the required electrical works as per the quote marked

AND THAT the committee be authorised to engage a suitably qualified professional consultant to assist with project management and contract drafting up to an amount of $20,000 incl. GST.

The total costs of the works is to be $1,681,792.02 incl. GST and that a 20% contingency of the total works be allowed for if required.

The funding of these works is to be arranged by $500,000 from the loan as approved in Motion 2a, $681,792.02 be funded from the Sinking Fund, and a special levy of $500,000 levied over two payments as outlined below:

• [3] Both motions 2A and 3A were passed with six votes in favour and three against.[1]
• [4] The applicant is seeking to challenge the above motions asserting they were not properly passed. It seeks the following final orders:
  1. An order that motions #2A and #3A of the EGM held on 25/2/25 be overturned.
  2. An order that the air-conditioning replacement and ongoing servicing of units serving the different lots is the responsibility of the individual owners unless the individual owners have provided a specific approval for the body corporate to administer the works on their particular lots which complies with the requirements of Section 157 of the BCCMA.
  3. An order that the Body Corporate reimburse the extraordinary special levies already imposed upon each lot back to owners so that the owners can arrange for their own replacement and maintenance of air-conditioning to the standard and program of their choice.
• [5] The applicant also sought an interim order to prevent the works and actions as per motions 2A and 3A from proceeding until a decision had been made on the final orders it had sought.
• [6] On 14 May 2025, I dismissed the applicant's application for the interim order as it had failed to persuade me that its case had a sufficient likelihood of success or that there was a 'live' issue to justify the making of the interim order sought.[2]
• [7] In this decision I am considering the applicant's request for final orders. The applicant bears the onus to establish that the final orders it seeks are warranted in the circumstances.

• [8] This application for adjudication was submitted on 25 March 2025. The commissioner sought clarification on some aspects of the final application, and the application was amended.
• [9] The commissioner invited submissions from the body corporate committee and all other owners in the scheme. Only the committee made a submission in response to the final application.
• [10] The applicant inspected the committee's submission and submitted a reply.
• [11] A dispute resolution recommendation was made referring the file to department adjudication.[3]

• [12] An adjudicator may make an order that is just and equitable in the circumstances (including a declaratory order) to resolve a dispute, about (relevant to this dispute): a claimed or anticipated contravention of the Act or the CMS, or about the exercise of rights or powers or performance of duties under the Act or the CMS.[4]
• [13] I am satisfied I have jurisdiction to determine this matter under the legislative dispute resolution provisions.

• [14] The applicant raised a number of grounds in alleging motions 2A and 3A have not been properly passed. It expanded on its reasoning with comments on the interim submissions made by the body corporate and the owner of Lot 14. I have summarised the applicant's points below.
• [15] The applicant says that in April 2022, it confirmed with the scheme's body corporate manager that the air conditioning units in each lot were the responsibility of individual lot owners. It says the body corporate manager confirmed that if the body corporate wanted to remove the individual units and replace them with a central air conditioning system, it would need the approval of lots owners to do so.
• [16] The applicant says that a 'Cost Analysis Report' prepared by 'Risk 8' confirmed that, other than the lots on level 2 which shared an air conditioning unit, all other floors contained their own individual split systems.
• [17] The applicant reiterates that the air conditioning units, (or direct expansion units), which are part of the proposed new system, do not have 'supply air' as part of the design. It says the 'outside air system' is a completely different and independent system to the direct expansion units which serve individual lots. It emphasises that the 'return air' and 'outside air' systems are separate to the direct expansion units which are already in place.
• [18] The applicant clarifies that any minor upgrade to the 'outside air' system is a body corporate responsibility and is not part of its application. It says this application only relates to the air-conditioning direct expansion units and assert these are an owner's responsibility to maintain. It says each lot has its own air-conditioning system and it is not a central, shared system. It says it is misleading to say there is a single, shared air conditioning system.
• [19] The applicant reiterates that the body corporate cannot mandate works to individual lots or fit out components which are not common property. Additionally, it says the cost of the works should be borne by each owner to reflect the works carried out on that owner's lot. The applicant clarifies it is not arguing that some individual air conditioning units do not require replacement. It says it may be that some units do need to be replaced however, the cost of that should be paid by the individual lot owner in question.
• [20] The applicant says the report from 'Risk 8' put forward a budget of $475,000. However, the costs now being put forward by motion 3A amount to $2,167,792. It says this cost is over 400% higher than the estimate put forward by 'Risk 8' and to proceed in this way is completely unacceptable. Additionally, it says the body corporate only has funds of $1,681,792 to cover projected costs of $2,167,792.
• [21] The applicant says the body corporate has provided no information on how and when owners were kept informed of the costs of the project. It says this confirms the point that information provided to owners has been negligible. It says the replacement of the air conditioning was not even an agenda item for the general meeting held on 6 August 2024. It says that item 7 of the agenda was changed during that meeting to increase owner contributions by 10%. It says only three owners were made aware of this change. The applicant says this shows the typical lack of proper disclosure by the body corporate.
• [22] In relation to the EGM notice, the applicant says owners were not provided with design or tender documents. It says it made several direct requests for information (including for the certifications) but was not provided with the information it requested. The applicant says other owners have not been provided with the information either.
• [23] The applicant says the committee did not obtain legal advice on whether the body corporate could force owners to replace their own air conditioning systems despite this being an issue raised at previous meetings. In addition, it raises concerns that the committee did not obtain legal advice about the loan contract. It says the members of the committee do not appear to have construction or body corporate experience. The applicant suggests owners would have been misled by the wording of the motion 2A due to the inference that legal advice was sought.
• [24] The applicant says it presented several compelling reasons why having a central system was not suitable for the scheme, including the inability to share running costs equitably amongst users and the disruption of full building shutdowns for extended periods of time. The applicant says owners were not given the choice of which option to proceed with and the committee chose to proceed with installing a central system without further consultation with owners. It says the committee later changed to pursuing replacement of the existing system with the exception of the second floor now being designed to have separate units for each tenancy.
• [25] The applicant says the design documentation for the project is very poor. It says the project is going forward based on very little design detail and with no formal approvals in place. It says proceeding in this way means owners are exposed to planning approval, final design specifications, soil tests, underground infrastructure and building certification and approval.
• [26] The applicant says owners are heavily exposed to significant delays and cost overruns if the required approvals are not forthcoming. It says the design should have been undertaken and approved before the works were tendered to avoid the risks of cost increases and delays. The applicant says it is negligent to engage a contractor to undertake works without the necessary building certifications and approvals.
• [27] The applicant also takes issue with moving the condensers to a new platform. It says the units are currently on the roof and the new units will be no heavier than the current ones. The applicant says a structural assessment of the roof will be cheaper than having to pay for the structural design, certification and final inspection of the new platform, let alone the cost of building the platform. Furthermore, it says the cost of maintaining the condensers will not change no matter where they are located.
• [28] In relation to being able to install additional solar panels on the roof if the condensers are moved, the applicant says the existing solar panels the body corporate had installed on the roof receive limited sunlight and are not efficient. It says they have been poorly installed.

• [29] The body corporate submitted a response to the applicant's final submissions and I have summarised these below.
• [30] The body corporate says that even if the body corporate manager had confirmed what the applicant asserts, the body corporate manager's view on the matter is irrelevant. It further notes that the 'Cost Analysis Report' done by Risk 8 was not put into evidence by the applicant. It says that in any event, the report could only comment on the prior position, not the works to be done.
• [31] The body corporate says the outside air supply, which supplies the ground level lobby and passageways on the levels above, is not an independent system. It notes that the owner of Lot 1 has installed additional units, at the owner's costs, which solely service Lot 1. It says this was done without body corporate approval.
• [32] The body corporate says that any original budget figure is irrelevant and the cost of the works to replace the air conditioning system and its funding have been resolved by the motions passed at the EGM.
• [33] The body corporate says that agenda items of previous meetings are irrelevant to the determination of this dispute. Furthermore, it says owners were given a complete copy of the notice of EGM. It asserts there is no merit to the claim that owners were not properly informed.
• [34] The body corporate says it was not required to seek legal advice about the applicant's concerns. It says the committee was able to, and did, address those concerns directly with the applicant. In addition, the body corporate says the experience of committee members was irrelevant in relation to considering the loan contract. But, in any event, the chairperson of the body corporate does have professional experience as a quantity surveyor and has dealt with many body corporate matters.
• [35] The body corporate says it will obtain any necessary approvals for the construction. It says it has obtained expert advice on the process and will continue to do so. It says any concerns about delays and overruns are purely hypothetical and are a standard risk of carrying out any construction work. It says that to the extent that the applicant is concerned about approvals not being forthcoming, there is no basis for this assertion.
• [36] The body corporate says the interim submissions made by the owner of Lot 14 outline the reasons why the body corporate considers that moving the condensers to a new platform is the best option. These include that it will be easier to access the equipment, to protect the roof from damage from foot-traffic and reduce future roof surface maintenance and, to increase the available room for other equipment such as solar panels. The body corporate says the benefits of relocating the condensers outweigh the costs.

• [37] The applicant submitted a reply with further comments on the final submissions made by the body corporate.
• [38] The applicant says the body corporate's submissions gave the impression that all lots share a central air-conditioning system. It says this is not the case and each lot has its own air conditioning unit which serves only that lot. It says this is confirmed by the design drawings relied on by the body corporate (in particular drawing HT001).
• [39] The applicant says the report from Coolmaster does not confirm anywhere that the air conditioning system is a shared system for the building. It says the small details within the report regarding other building systems, notably the 'outside return air' system, gives the impression that the direct expansion units in each lot are part of a central system. However, it says this is not the case. It reiterates that the 'outside air' system is a completely different system and says the air from this system is not treated let alone cooled.
• [40] The applicant says the direct expansion units are clearly separate for each lot and they are an owner's responsibility. It says the body corporate has not sought the necessary permission from lot owners to replace their property, being the air conditioning units in their lots.
• [41] The applicant says the original budget figures are important to justify proceeding with the works. It says the difference clearly identifies that the current tender process and costs incurred are not reasonable or justifiable.
• [42] The applicant says the internal works for the new system vary greatly in design, scope and costs between each lot. It infers that some owners are subsidising the more extensive works which will be undertaken on other lots.
• [43] The applicant says the point it was making about previous agenda items is that there has been a complete lack of proper disclosure and transparency on several occasions. It says this in itself shows the lack of necessary information being provided to lot owners. The applicant says at some point the committee decided how to replace the air conditioning system at the scheme and no disclosure about how this decision was reached has been forthcoming from the committee.
• [44] The applicant says the EGM notice provided to owners contained no detailed background information for owners to make a proper assessment on how to vote on the motions. It says owners were not provided with enough information to be able to make an informed decision. In addition, the applicant says motion 2A inferred that legal advice had been provided but this adjudication process has confirmed that no legal advice was sought by the committee. It says this misleading information could have influenced voting.
• [45] The applicant says building approval is required prior to construction and not after it is completed. It says additionally, certain details must be provided on the design documents prior to documents being given building certification. It says accordingly, the designer is required to issue a design certificate to the certifier prior to the certifier issuing approval to commence construction. And, after construction, the works must be further certified as being completed in accordance with the design.
• [46] The applicant says it is negligent to proceed with a contract on any works until all costs and requirements are known. It says construction risks could be avoided or substantially minimised if they are dealt with prior to tendering for the works. It says the committee and body corporate manager have a history of proceeding with poorly managed projects.
• [47] The applicant says the air conditioning replacement contract is considerably larger than any of the other capital works projects undertaken by the body corporate to date and, the level of design, approvals and tendering is inadequate. It says this is an issue in addition to the costs of the project (the replacement of air conditioners in lots), being the sole responsibility of individual lot owners.
• [48] For completeness, I note that in its reply, the applicant raised a number of issues with how the body corporate is implementing the motions. These are new issues and did not form part of the applicant's initial application. Accordingly, I have not dealt with these points in this decision.

• [49] I'll address the arguments made by the applicant in turn. I have grouped these under appropriate headings.

• [50] The applicant argues the air conditioning units the body corporate is proposing to install in lots are in fact fit out works which individual lot owners are responsible for. It argues that the central system being referred to by the body corporate is an 'outside air' system which is completely separate to the air conditioning systems which have been installed in each lot. The body corporate, on the other hand, asserts that the air conditioning system is a shared system which forms part of the scheme's utility infrastructure that it is responsible for maintaining.
• [51] It does not appear in dispute that the body corporate is responsible for maintaining utility infrastructure at the scheme. The question is rather whether the air conditioning system is part of the scheme's utility infrastructure. The definition of utility infrastructure in Schedule 6 of the Act provides:

(a) cables, wires, pipes, sewers, drains, ducts, plant and equipment by which lots or common property are supplied with utility services; and

(b) a device for measuring the reticulation or supply of a utility service.

• [52] And, the meaning of utility service includes air conditioning.
• [53] The 'Asset Condition Report' provided by Coolmaster[5] notes that the scheme building is currently served by ten split-ducted direct expansion units installed in 2000 as part of a retrofit to replace the scheme's original chilled water system.[6] It says each direct expansion unit serves one or multiple tenancies, with refrigerant pipework reticulated to condensers. It says outside air is provided from a central fan located on the roof.
• [54] From the details provided in the Asset Condition Report from Coolmaster, it seems to me that the air-conditioning system is utility infrastructure. The system includes pipes, ducts and plant equipment that provides the utility service of air conditioning to the scheme's building.
• [55] The applicant argues this interpretation is incorrect. It says Coolmaster has confused a completely different system, the 'outside air system', with the air conditioning system. It says the outside air system does not provide cooled air. It says the air conditioning systems in each lot are entirely independent and are not a body corporate responsibility.
• [56] The applicant has provided no evidence or any expert report to substantiate its claim that the air conditioning system is not a central system. I have carefully reviewed all the materials before me and there is nothing to suggest that Coolmaster has provided an incorrect assessment of the system.
• [57] In its tender document,[7] Coolmaster notes under 'Carpark and Platform' that: "Some condensers may be supplementary units owned by tenants that are not part of the new construction or replacement. These condensers will be relocated to accommodate the new construction and reinstalled if they are required on the platform once the platform is built".[8]
• [58] Accordingly, I accept that some lot owners or occupiers have installed their own air conditioning units in their lots. However, these do not form of the replacement project and the evidence before me indicates these will be retained and the condensers relocated to the platform once it is completed.
• [59] There is no evidence before me that the body corporate is attempting to mandate that these supplementary air conditioning units be removed as alleged by the applicant.
• [60] There is nothing in the materials which persuades me that the air conditioning system is not utility infrastructure which the body corporate is responsible for maintaining. Section 20 of the Act provides that all utility infrastructure contained within a scheme, except for specific exceptions, is common property. Section 127(1) of the Commercial Module provides that generally, the body corporate is responsible for maintaining common property.
• [61] In addition, where utility infrastructure requires maintenance, the body corporate has an obligation to upgrade or replace it with an equivalent alternative if that is required. And, based on the Asset Condition Report from Coolmaster, I am satisfied that the system requires replacement.[9] There is no suggestion the decision to upgrade the system was unreasonable and there is no evidence to support such an assertion.

• [62] In relation to the costs of the project, the applicant alleges the costs imposed on individual lot owners do not relate to the scope of works undertaken on individual lots. It suggests some owners are subsidising the cost of works to other lots.
• [63] As noted in the interim order, where a body corporate is responsible for maintenance works, it must pay for the works to be carried out. And, if a liability arises for which there is no provision, or inadequate provision, the body corporate must fix a contribution to be levied on the owner of each lot towards the liability.[10] I further noted that the legislation requires that contributions levied on the owner of each lot, (except for particular exceptions which do not appear to apply here),[11] must be proportionate to the contribution schedule lot entitlement of the lot.[12]
• [64] Nothing in the applicant's further submissions have persuaded me from my initial view that there is no merit to the argument that the costs imposed on individual lots in relation to the air-conditioning works do not relate to the scope of works undertaken on the particular lots. I remain of the view that the extent of works to be undertaken on any particular lot is not a factor in calculating special contributions for maintenance works the body corporate is responsible for carrying out.

• [65] The applicant asserts that owners were not given sufficient information to enable them to make informed decision on the motions. It also says the wording about legal advice included in motion 2A was misleading and could have influenced how owners chose to vote on the motion.
• [66] In the interim order, I expressed that the wording of motions 2A and 3A appeared to be clear. Furthermore, I understand a full copy of the loan contract and loan documents, including the financial warning statements, were provided to owners with the EGM papers, as well as the tenders or 'quotes' from the various contractors.
• [67] Following the interim order, all other owners in the scheme were invited to make submissions on this dispute. No other owners took the opportunity to make a submission on the dispute and there is no evidence before me that any other owners in the scheme have expressed that they were misled by the wording of the motions or that the motions were unclear.
• [68] Having considered all the materials, I am not satisfied owners were provided with insufficient information before voting on the motions or that owners were misled or not properly informed. If owners were unsure about any aspects of the proposed project, it was open to them to request further information and, if this was not provided, they could have voted against the motions.

• [69] The applicant says the project is proceeding on very little design detail and no mitigation of risks. It argues the way the project is being progressed exposes owners to numerous risks. It suggests it is negligent to proceed with a project before it has been properly approved and certified. It alleges the committee and body corporate manager have a history of proceeding with poorly managed projects.
• [70] I note a body corporate is required to act reasonably when carrying out its general functions, including making, or not making a decision.[13] The cases which deal with reasonableness emphasise that what is reasonable is a question of fact for the decision-maker to determine, and what is required is a careful weighing up of all the relevant factors while not taking irrelevant factors into account.[14] Ultimately, the question is not whether a decision was the 'correct' one, or whether a better one could have been made, rather it is about whether the decision was objectively reasonable.[15]
• [71] It is clear the applicant in this case is unhappy with the way the project to replace the air conditioning system is being progressed. It has a different view on the way the project should be approached and the direction the project should go.[16] It does not think the body corporate is making the 'right' or 'best' decisions in carrying out the project. However, this is not a basis for me to invalidate the decision. It is open to a body corporate to make its own assessment on the decisions it wants to make. As long as it acts reasonably in coming to its decision, it is free to do so.
• [72] I have carefully reviewed the materials before me. While it may have been preferably for the body corporate to have obtained the relevant building approvals or certifications before commencing the project, I am not persuaded this was a requirement or that the body corporate has acted unreasonably in making the decision to progress the project in the way which it is. It is still able to obtain the relevant approvals as the project progresses.
• [73] For completeness, I note the applicant has raised issues with the body corporate's decision to build a purpose-built structure for the condensers. It argues it would be much cheaper to get a structural assessment of the roof and for the condensers to remain there. However, my role as an adjudicator is not to assess whether a body corporate has made the 'right' or 'best' decision. The applicant has failed to establish that the body corporate has acted unreasonably in making the decision to build a purpose-built structure for the condensers.

• [74] The applicant says it previously confirmed with the scheme's body corporate manager that the air conditioning units in each lot were the responsibility of individual lots owners. It says the body corporate manager further confirmed that if the body corporate wanted to remove the individual units and replace them with a central system, it would need permission from lots owners. In addition, the applicant says a report from 'Risk 8' also confirmed that other than level two which shared an air conditioning unit, all other floors contained their own individual split systems.
• [75] I note the applicant has provided no evidence from the body corporate manager, nor has it provided the report from 'Risk 8' which it has referred to. In any event, the opinion of a body corporate manger is irrelevant if it is incorrect on the facts. The Asset Condition Report from Coolmaster says the air conditioning system is a central system which services the scheme. Although the applicant disagrees with Coolmaster's assessment, it has failed to provide any evidence to establish that the air conditioning system is not a central, shared system.
• [76] As set out at paragraph [58] above, I accept that some lot owners or occupiers have installed their own air conditioning units in their lots. However, there is no evidence the body corporate is attempting to remove these units and the tender from Coolmaster notes that any supplementary units will be relocated to the new platform.
• [77] The applicant also raises an issue with a budget of $475,000 put forward by Risk 8. It has not provided the report from Risk 8, but I assume it means Risk 8 previously provided some indicative pricing for repairing the air conditioning system. While I understand the applicant's concern with the substantial increase in cost, I can make no further comments on why this might be the case as I have not seen the budget put forward by Risk 8. In any event, the committee obtained various tenders for the works to repair/replace the system and the body corporate approved those proposals. Based on the evidence before me, there is no suggestion that the decision was unreasonable.

• [78] The applicant has failed to establish any basis for invalidating motions 2A or 3A. For the reasons I have set out above, I have dismissed its application.

[1] I understand the first minutes issued for the EGM incorrectly recorded the votes cast on motion 3A. The minutes have since been reissued with the number of votes cast on motion 3A corrected.

[2] Toowong Centrus [2025] QBCCMCmr 158

[4] Section 276(1)(a) and (b) of the Act

[8] See page 8 of the Coolmaster Tender Submission.

[9] Also see North Point Brisbane [2025] QBCCMCmr 355 at paragraph [89].

[10] Section 112(2) of the Commercial Module

[11] Exceptions include contributions payable for insurance, the promotion fund budget and any other matter for which, under the Act, the liability attaching to each lot is calculated other than on the basis of the lot's contribution schedule lot entitlement.

[12] Section 112(5) of the Commercial Module

[13] Section 94(2) of the Act

[14] Luadaka v Body Corporate for The Cover of Emerald Lakes [2013] QCATA 183 applying Commonwealth Bank of Australia v Human Rights and Equal Opportunity Commission [1997] FCA 1311; Secretary, Department of Foreign Affairs and Trade v Styles [1989] FCA 342; Body Corporate for the Reserve v Trojan resorts Pty Ltd [2017] QCATA 53 (2 May 2017).

[15] Commonwealth Bank of Australia v Human Rights and Equal Opportunity Commission [1997] FCA 1311

[16] For example, it considers a separate structure for the condensers is unnecessary.