Couran Cove Resort Community Body Corporate v The Proprietors – Couran Cove Resort – Eco Lodges Group Plan No 106783 [2024] QSC 172

SUPREME COURT OF QUEENSLAND CITATION: Couran Cove Resort Community Body Corporate v The Proprietors – Couran Cove Resort – Eco Lodges Group Plan No 106783 [2024] QSC 172 PARTIES: COURAN COVE RESORT COMMUNITY BODY CORPORATE (plaintiff) v THE PROPRIETORS – COURAN COVE RESORT – ECO LODGES GROUP TITLES PLAN NO. 106783 (first defendant) AND THE PROPRIETORS – COURAN COVE RESORT – BROADWATER VILLAS GROUP TITLES PLAN NO. 106807 (second defendant) AND THE PROPRIETORS – COURAN COVE RESORT – LAGOON LODGES GROUP TITLES PLAN NO. 106808 (third defendant) AND THE PROPRIETORS – COURAN COVE RESORT – MARINE APARTMENTS GROUP TITLES PLAN NO. 106784 (fourth defendant) FILE NO/S: BS 2382/21 DIVISION: Trial PROCEEDING: Application; Cross Application ORIGINATING COURT: Supreme Court at Brisbane DELIVERED ON: 9 August 2024 DELIVERED AT: Brisbane HEARING DATE: 1 August 2024 JUDGE: Freeburn J ORDER: 1. The defendants’ application (filed on 28 June 2024) for a stay or adjournment of the proceedings is dismissed. 2. Summary judgment be entered for the plaintiff against the defendants for the claims made by the plaintiff in the claim and statement of claim filed on 15 March 2024. 3. I will hear the parties on costs. CATCHWORDS: PROCEDURE – CIVIL PROCEEDINGS IN STATE AND -- 1 of 20 -- 2 TERRITORY COURTS – ENDING PROCEEDINGS EARLY – SUMMARY DISPOSAL – SUMMARY JUDGMENT FOR DEFENDANT OR RESPONDENT: STAY OR DISMISSAL OF PROCEEDINGS – where the plaintiff, a community body corporate, provides services to subsidiary body corporates who then provide services to individual unit holders – where at each stage of this tiered process, levies are issued to pay for the services – where the plaintiff commenced two proceedings against the defendants, being the subsidiary body corporates – where the proceedings were based on two sets of levies issued to pay judgment debts – where an adjudicator found that the resolutions to issue the former set of levies was invalid – where that decision is currently under appeal – where in this proceeding, the plaintiff seeks payment of levies in relation to the latter levies, issued by a separate set of resolutions – where separately, the defendants speculate that legal advice will be obtained to set aside the judgment debts – whether the proceedings should be stayed pending the outcome of the other proceedings PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – ENDING PROCEEDINGS EARLY – SUMMARY DISPOSAL – SUMMARY JUDGMENT FOR PLAINTIFF OR APPLICANT – where the court made orders that extended a court appointed receiver’s powers – whether the receivers were within powers as per the court orders to issue the levies – whether the court should order summary judgment for the plaintiff Mixed Use and Development Act 1993 s 177 Uniform Civil Procedure Rules 1999 r 5, r 292 Collins v Marinovich [2023] QSC 175 Couran Cove Resort Community Body Corporate v The Proprietors of Couran Cove Resort Broadwater Villas [2023] QSC 133, explained Deputy Commissioner of Taxation v Salcedo [2005] 1 Qd R 232; [2005] QCA 227, applied Filmana Pty Ltd v Tynan [2013] QCA 256, cited UBS v Tyne (2018) 265 CLR 77; [2018] HCA 45, cited Tomlinson v Ramsey Food Processing Pty Ltd (2015) 256 CLR 507; [2015] HCA 28, cited Yammine v Liemant [2022] FCA 1480, cited COUNSEL: D P O’Brien KC, with G Yates for the plaintiff J P Hastie, with L E T Henry for the defendants SOLICITORS: Hickey Lawyers for the plaintiff Coves & Co for the defendants Background -- 2 of 20 -- 3 [1] Couran Cove, on South Stradbroke Island, is a self-contained ‘off-grid’ community. It is not connected to ‘town’ utilities such as electrical power, gas, water and sewerage services. Instead, those services are supplied by private utility companies.1 [2] Two of the suppliers of those basic services have not been paid. Island Resorts (Facilities and Equipment) Pty Ltd and Island Resorts (Infrastructure) Pty Ltd are two of those utility companies. The two utility suppliers have obtained judgments against the plaintiff, CBC, the community body corporate for Couran Cove. Pursuant to a judgment of Brown J made on 4 December 2020 CBC owes those two utility suppliers $3,294,022 and $1,976,758 respectively. Four months later, on 19 April 2021 default judgment was given against CBC for $2,800,715 and $1,710,306 respectively. [3] Further, Mr Napoli, a representative of the utility suppliers, deposes to a further default judgment entered in favour of the two utility suppliers and against CBC for $13,759,052. The total of the judgment debts owed by CBC to those two utility suppliers is $23,540,853. Mr Napoli also says that the utility suppliers do not have the financial capacity to continue to supply services to CBC without the payment, at least, of the 2020 and 2021 default judgments.2 [4] A feature of community body corporate schemes like Couran Cove is that the services are supplied down, and the debts are paid up. What that means is that: (a) the utility suppliers provide their services to CBC as the community body corporate for the resort; (b) CBC then provides those services, or portions of those services, to its member subsidiary bodies corporate, including the four defendants; (c) those subsidiary body corporates then provide services to individual unitholders; (d) the subsidiary body corporates levy individual unitholders for the services provided to that unitholder; (e) the individual unitholders then pay their levies to their subsidiary body corporate; (f) the subsidiary body corporates then pay contributions to CBC, the community body corporate; and (g) CBC is then in a position to pay the utility suppliers. [5] Of course, that is overly simplistic. For example, s 177 of the Mixed Use Development Act 1993 (MUD Act) empowers a body corporate to determine the amounts necessary to be raised, in its opinion, by way of contributions for insurance premiums, rates or any other liability of the body corporate. By that means the body corporate can pre-emptively raise levies for anticipated expenses. [6] Where the body corporate becomes liable to pay an amount that it is unable to pay immediately then the body corporate must levy contributions to raise the amount. 1 Defendants’ Submissions at [13]. 2 The levies discussed below pursue only the 2020 and 2021 judgment debts. -- 3 of 20 -- 4 [7] Nevertheless, the problem with the ‘services down, payments up’ scheme is obvious. It creates, in effect, long supply lines. This case illustrates the problems that arise when the supply lines or, more accurately, the payment lines are broken. [8] The judgment debts owed to the two utility suppliers have remained unpaid for more than three years. CBC is unable to pay the judgment debts. Its only ability to pay the judgment debts is by means of the levy of contributions from the subsidiary body corporates – the four defendants. CBC made attempts to have these judgment debts paid. On 14 December 2021 resolutions were passed by CBC at its annual general meeting raising special levies to meet the judgment debts owed to the utility suppliers. On 27 May 2022 CBC issued notices to the defendants requiring them to pay these levies by 3 June 2022. They did not pay. [9] The utility suppliers brought proceedings against CBC. In that proceeding, on 25 October 2022 Jackson J made an order appointing an accountant, Mr Karageozis, as the receiver of any amounts already paid, or any amounts currently owing, pursuant to the special levies struck in December 2021. [10] About six weeks later the receiver commenced proceedings (number 15128 of 2022) in the name of CBC against each of the defendants seeking to recover the 2022 levies. The defendants filed and served defences. [11] On 29 March 2023 I made orders extending the receiver’s powers which had been given by the order of Jackson J. The proper interpretation of the orders is a matter of controversy (discussed below). [12] On 5 June 2023 I delivered judgment in Couran Cove Resort Community Body Corporate v The Proprietors of Couran Cove Resort Broadwater Villas GTP 106807 (also discussed below).3 [13] On 23 January 2024 Adjudicator Miskinis of the Office of the Commissioner for the Body Corporate and Community Management made orders that the first levy resolutions were invalid. The parties agree that that order took effect from 23 January 2024 – in other words the invalidity was not retrospective. [14] On 22 March 2024 the receiver commenced an appeal against the adjudicator’s decision. That appeal has not yet been heard or determined. In fact, there is a preliminary question that was heard on 18 June 2024. The question was whether the receiver had power to institute the appeal. That decision on the preliminary question is reserved. The resolution of the substantive appeal is not on the horizon. The resolution of the proceeding to recover the 2022 levies are also not close to resolution. Those proceedings are ‘on foot’ and have not been expedited or stayed. [15] On 26 February 2024 the receiver acting through CBC, struck new levies which were sent to the defendants. The 2024 levies, as with the 2022 levies, were for the purpose of requiring CBC to pay the 2020 and 2021 judgment debts. Again, the defendants have not paid the levies. [16] This proceeding has been commenced by the receiver, in the name of CBC, seeking recovery of the 2024 levies. 3 [2023] QSC 133. -- 4 of 20 -- 5 The Issues [17] Three issues arise for determination: (a) Whether this proceeding is an abuse of process and should be stayed pending the outcome of the earlier 2022 proceedings. The defendants say that this proceeding should be stayed. They say they ought not be vexed with having to deal, simultaneously, with two sets of proceedings. (b) Whether the CBC should have summary judgment on its claim in this proceeding. If the proceeding is stayed, then it will be unnecessary for the court to proceed to decide the application for summary judgment. The defendants submit that, if it becomes necessary to decide the summary judgment application then it should be dismissed because: (i) the only property of the CBC to which the receiver has ever been appointed were the debts the subject of the levies which have been now held to be invalid; (ii) the receiver has never been appointed to any property comprised by the debts which arise from the 2024 levies he has purported to strike; and (iii) the receiver does not have the power to strike levies under the MUD Act. (c) Whether the summary judgment application should be adjourned to a date to be fixed to enable the CBC to investigate taking steps to set aside the default judgments which it owes to the utility suppliers. [18] Ordinarily the court should consider the stay application first.4 I will adopt that standard practice, although the issues are closely inter-connected. Issue 1: Should the Proceeding be Stayed? [19] It is necessary to, first of all, discuss the legal principles that apply where a party contends that proceedings against are an abuse of process. The Principles [20] As the defendants’ submissions make clear, the doctrine of abuse of process is a flexible one which does not lend itself to any exhaustive statement, or any closed categories. In Tomlinson v Ramsey Food Processing Pty Ltd the majority said this: “The doctrine of abuse of process is informed in part by similar considerations of finality and fairness. Applied to the assertion of rights or obligations, or to the raising of issues in successive proceedings, it overlaps with the doctrine of estoppel. Thus, the assertion of a right or obligation, or the raising of an issue of fact or law, in a subsequent proceeding can be simultaneously: (1) the subject of an estoppel which has resulted from a final judgment in an earlier proceeding; and (2) conduct which constitutes an abuse of process in the subsequent proceeding. Abuse of process, which may be invoked in areas in which estoppels also apply, is inherently broader and more flexible than estoppel. 4 Palmer v Magistrates Court [2024] QCA 8 at [20]. -- 5 of 20 -- 6 Although insusceptible of a formulation which comprises closed categories, abuse of process is capable of application in any circumstances in which the use of a court's procedures would be unjustifiably oppressive to a party or would bring the administration of justice into disrepute. It can for that reason be available to relieve against injustice to a party or impairment to the system of administration of justice which might otherwise be occasioned in circumstances where a party to a subsequent proceeding is not bound by an estoppel.”5 [emphasis added] [21] Another case relied on by the defendants is UBS v Tyne.6 There the plurality said this: “The varied circumstances in which the use of the court’s processes will amount to an abuse, notwithstanding that the use is consistent with the literal application of its rules, do not lend themselves to exhaustive statement. Either of two conditions enlivens the power: where the use of the court’s procedures occasions unjustifiable oppression to a party, or where the use serves to bring the administration of justice into disrepute. The issue in this appeal is whether one or both of those conditions is met in circumstances in which the factual merits of the underlying claim have not been determined and any delay in prosecuting the claim has not made its fair trial impossible.” [emphasis added] [22] Counsel for the defendants also usefully summarised the following principles as emerging from UBS v Tyne: 42. First, a determination of whether conduct rises to the level of an abuse of process ‘… is a determination that requires consideration of all of the circumstances’: at [7]. 43. Secondly, the question falls to be determined in light of modern attitudes to case management and the need to ensure the timely, cost effective and efficient conduct of civil litigation. The relevant interests are not just those of the parties, but the broader interest in the administration of justice at [37] to [38]. 44. Thirdly, abuse of process principles may be invoked to ‘…prevent attempts to litigate a claim that should have been litigated in earlier proceedings as well as attempts to litigate a claim which has been determined’: at [39]. Thus, the doctrine is broader than the similar doctrines of issue estoppel or res judicata. 45. Fourthly, the fact that the earlier proceeding ‘… has not been heard on its merits, and that a fair trial may still be had, cannot be determinative …’ of the question: at [45]. That is because it is necessary to protect litigants and the system or justice itself from abuse of process. 46. Fifthly, the doctrine of abuse of process is enlivened where (at [46]): ‘Serial proceedings discontinued prior to judgment would be an obvious example of abuse of process. The pursuant 5 (2015) 256 CLR 507 at [24]. 6 (2018) 265 CLR 77 at [1]. -- 6 of 20 -- 7 of substantially the same claim by serial proceedings conduct by different entities under common control is no less obviously an abuse of process’. [23] And, a proceeding may still be an abuse of process even where there is not a complete identity between the claims advanced in both the earlier and later proceedings.7 The objective of the principle is to protect private interests, ensuring that litigation is not used as an instrument of oppression, and the public interest in not unnecessarily impacting the court’s finite resources. [24] Those principles raise these considerations in this case: the interrelationship between the earlier proceedings and this litigation, case management issues and the circumstances or context. The Interrelationship of the Proceedings [25] The defendants submit that there is a significant interrelationship between: (a) the receiver’s prosecution8 of the Supreme Court proceedings (number 15128 of 2022) to recover the 2022 levies; (b) the receiver’s appeal against the adjudicator’s decision to declare the 2022 levies invalid; and (c) these proceedings to recover the 2024 levies. [26] The defendants submit that all three proceedings concern levies purportedly struck for the same purpose – the recovery of the 2020 and 2021 judgments. The vice, according to the defendants, is that they are vexed by having to simultaneously defend the 2022 proceeding, the appeal, and this proceeding. [27] However, in practical terms there are really only two sets of proceedings. The 2022 proceedings and the appeal can be grouped together. The 2022 proceedings are alive, but only just, in the sense that no order has been made to dismiss or stay those proceedings, but neither party is seeking the determination of that proceeding. That is because the second defendant (Broadwater) successfully applied to the Office of the Commissioner for Body Corporate and Community Management seeking an order declaring the 2022 levy as invalid. An adjudicator has declared the 2022 levies to be invalid. The receiver has appealed that decision but, quite sensibly, the receiver does not seek to prosecute the 2022 proceedings that have, at their heart, the validity of the 2022 levies. The present status of those levies is that they are invalid. Quite sensibly also, Broadwater does not seek dismissal of the 2022 proceeding because there is an appeal to be resolved. [28] It is also artificial to portray the receiver or CBC as the protagonist in the two branches of proceedings concerning the 2022 levies. It is true that the receiver, through CBC, now appeals the adjudicator’s decision. But that decision was made by the adjudicator on the application of Broadwater. It was Broadwater, one of the 7 Yamine v Liemont [2022] FCA 1480 (a case also relied on by the defendants). 8 Of course, the proceedings are brought by the receiver in the name of CBC, but it is convenient for present purposes to refer to the proceedings as the receiver’s proceedings. -- 7 of 20 -- 8 defendants, who instigated that challenge to the 2022 levies.9 At least the 2022 levies part of the litigation is a case of attack and counterattack. [29] The defendants submit that the receiver is having “a bet each way”. The argument is that: (a) by instituting the appeal and keeping the 2022 proceedings alive the receiver is propounding the contention that the 2022 levies are valid and the 2022 levies should be paid by the defendants; and (on the other hand) (b) by purporting to strike the 2024 levies, and progressing the 2024 proceeding, the receiver is implicitly accepting that the 2022 levies are invalid and are not payable by the defendants. [30] The defendant contends that inconsistency between the two positions adopted by the receiver is sufficient to demonstrate that the continuation of the 2024 proceeding is an abuse of process. The essence of the submission is that it is illegitimate for the receiver to seek two inconsistent remedies. [31] I reject the submission. The commencement of the 2024 proceedings, which are based on a different levies, is not a tacit admission that the 2022 levies are invalid. And, even if there was an inconsistency it is commonplace for parties to pursue alternative and inconsistent allegations, as long as it is done separately and distinctly.10 As CBC points out, it could have simply sought leave to amend the 2022 Supreme Court proceedings (number 15128 of 2022) so as to add a ‘further or alternative’ claim for the 2024 levies. Such a step could hardly be opposed. And, in my view, it does not make a significant difference that there are separate proceedings. A consolidation or joinder order may be made as part of case management. [32] There is a further important point to be made here. The validity of the 2022 levies and the validity of the 2024 levies are likely to turn on different issues. The validity of the 2022 levies turns on the events that occurred at an annual general meeting of CBC on 14 December 2021. The validity of the 2024 levies is likely to turn on the proper interpretation of some orders of the court which gave and then extended the receiver’s powers. The core issues are different. [33] All of that demonstrates that there is no “significant interrelationship”, to use the language of Stewart J in Yammine v Liemant, involving the receiver’s pursuit of the 2022 levies and his pursuit of the 2024 levies. Yes, it is true that both seek payment of the judgment debts but the defendants’ challenge to the 2022 levies is likely to depend on the disqualification and the material facts, evidence and issues canvassed in the 2023 decision. On the other hand, the validity of the 2024 levies will depend on the extent of the receiver’s powers under the order of Jackson J as extended by the order of 29 March 2024. To again use the language of Yammine v Liemont, there is no “significant overlap” in material facts, evidence, witnesses and issues. [34] Before leaving this topic of the interrelationship of the proceedings, it should be noted that: 9 The circumstances in which Broadwater came to challenge the 2022 levies will be discussed below. 10 See, for example, the discussion of alternative and inconsistent pleadings in J Jacob & I Goldrein, Pleadings: Principles and Practice (Sweet & Maxwell, 1990) at 55, 56. -- 8 of 20 -- 9 (a) This is not a case where the receiver or CBC has brought ‘serial proceedings’; (b) This is not an attempt by the receiver or CBC to litigate something that should reasonably have been litigated earlier; (c) This is not an attempt to litigate a claim that has already been determined; and (d) There has been no prior determination of the merits of the claim for the 2024 levies.11 Case Management [35] It will be recalled that in UBS v Tyne the court explained that the question of whether a proceeding constitutes an abuse of process falls to be determined in light of modern attitudes to case management and the need to ensure the timely, cost effective and efficient conduct of civil litigation. The relevant interests are not just those of the parties, but the broader interest in the administration of justice.12 [36] Rule 5(1) of the Uniform Civil Procedure Rules 1999 provides for the just and expeditious resolution of the real issues in civil proceedings at a minimum of expense, and rule 5(2) requires that the rules are to be applied by the courts with the objective of avoiding undue delay, expense and technicality. [37] Ordering a stay of the 2024 proceedings would hardly serve those purposes. The end result of such an order would be that the receiver will be deprived of a substantive hearing of his claim for the 2024 levies, and at the same time his claim for the 2022 levies would require him to overcome at least two barricades. To proceed with the 2022 proceedings the receiver will need to overcome an objection to his capacity to appeal, and then succeed on the substantive appeal against the adjudicator’s decision. None of that will enable the receiver to, in a timely, cost effective and efficient way, have a determination of the merits of his claim for the 2022 levies or the 2024 levies. [38] The stay of the 2024 proceedings will restrict the receiver to the stalled 2022 proceedings. Certainly, the receiver could then apply to join his 2024 levy claims to the 2022 proceeding but doing so would anchor the fate of the 2024 levies to a proceeding that has stalled. [39] From a case management point of view, there is every reason to facilitate the just and expeditious resolution of the receiver’s claim to the 2024 levies, irrespective of the uncertain fate of the 2022 levies. After all, as explained, the core issues are different for the two sets of levies. Consideration of all of the Circumstances [40] The context is important. First, CBC’s only apparent source of funds is to levy its members. It can do that prospectively, that is, on the basis of liabilities it expects to incur. Or it can do it retrospectively, that is, it can seek to recover from its members 11 As will be explained, in so far as there has been determinations on the merits of the 2022 levies, the decision I made in June 2023 found for the validity of the resolutions on which the 2022 levies were based. The adjudicator has decided that the two relevant resolutions were invalid. This aspect is discussed further below. 12 (2018) 265 CLR 77 at [37], [38]. -- 9 of 20 -- 10 amounts that it is liable to pay but is unable to pay immediately. Here, the receiver, through CBC, seeks to recover judgment debts that it is unable to pay. [41] And, as CBC points out, s 177 of the MUD Act contains a mandatory element to it. CBC “must” levy contributions from its members prospectively and if the liability is not recovered prospectively, then it “must” do so retrospectively. That scheme of the Act is significant. In a practical sense CBC did not choose to strike the 2022 levy. It was required by the Act to pursue recovery from its members under s 177 of the MUD Act. [42] Second, the liability that CBC seeks contribution for, via both the 2022 and 2024 levies, comprises long outstanding judgment debts. They are judgment debts for basic utility services. There is little doubt about CBC’s liability to pay those judgment debts.13 [43] In those rather special circumstances, there is no logical reason why it is unreasonable for the receiver to pursue the 2022 levies, and when that claim becomes bogged down, to issue the 2024 levies. There is roughly two years separating the striking of the two sets of levies. The 2022 levies are based on resolutions passed at an annual general meeting held on 14 December 2021. The 2024 levies are based on the receiver’s actions in striking the resolutions on 26 February 2024. [44] The 2022 levies may prove to be valid or invalid. The 2024 levies may also prove to be valid or invalid. Given the importance to CBC in recovering its liabilities, including its liability for judgment debts, there is no reason thinking that CBC’s conduct in making two different attempts to secure the judgment debts pursuant to s 177 is oppressive. [45] Third, it is important to bear in mind all the facts and circumstances, namely: (a) what I have described as the long supply line; (b) the fact that the defendants have refused to pay any part of either the 2022 or the 2024 levies; (c) the judgment debts which are for basic utility services. [46] Those facts and circumstances raise a doubt that it is the receiver who is oppressing the defendants. It is necessary to explain the background to that doubt. Is the Receiver’s Conduct Oppressive? [47] The first and second defendants, Broadwater and Eco, have actively challenged the validity of the 2022 levies. As I have mentioned, those levies were struck at an annual general meeting on 14 December 2021. The circumstances of the meeting were explained in the 2023 decision Couran Cove Resort Community Body 13 See the discussion of the third issue below. The highest it can be put is that an investigation of the debt is proposed. -- 10 of 20 -- 11 Corporate v The Proprietors of Couran Cove Resort Broadwater Villas.14 Essentially, Broadwater and Eco contended that they were wrongly refused an entitlement to vote at the meeting on the basis that Eco and Broadwater were “unfinancial”.15 [48] The 2023 decision held: (a) the chairperson was right to exclude Eco from voting – that subsidiary was ‘unfinancial’; (b) Broadwater was in fact ‘financial’ and the chairperson wrongly excluded Broadwater from voting at the 14 December 2021 meeting; (c) but that voting disqualification did not invalidate the resolutions passed at the meeting – those resolutions were valid; (d) Broadwater was ‘unfinancial’ by the time of the next annual general meeting on 11 November 2022. [49] Two months after that 2023 decision, on 30 August 2023, Broadwater applied to the Office of the Commissioner for Body Corporate and Community Management seeking orders that had been refused in the 2023 decision – namely that the 2022 levies were invalid. It was a bold decision to make that application. The 2023 decision was to the effect that the resolutions passed were valid. Broadwater’s persistence paid off. As explained, that application was successful. On 23 January 2024 Referee Miskins decided the resolutions striking the 2022 levies were invalid.16 [50] The result is that, because of Broadwater’s diligent resistance, all four defendants have been able to resist making any contribution to the judgment debts owed by CBC to the utility suppliers. But the defendants’ resistance has had a price. As I have mentioned, the judgment debts are owed to the utility suppliers for basic services. Those basic services comprise caretaking, supply of community facilities and infrastructure services including power, water and sewerage.17 The utility suppliers did not have the financial capacity to continue to supply services to CBC without payment of the judgment debts.18 The result has been that the utility suppliers have suspended their full suite of services to CBC. That suspension occurred on 17 April 2023 – 16 months ago. [51] That means that the power plant, gas supply, water plant and sewer plant were shut down. Since April 2023 the utility suppliers have supplied services to CBC in “caretaker mode”. In “caretaker mode” the private suppliers have continued to supply essential staff, including an operations manager, a diesel mechanic and a general tradesman/handyman and associated administrative staff. Firefighting capabilities have been maintained.19 The utility suppliers continue to monitor and 14 [2023] QSC 133. This decision is referred to in Mr Lowe’s affidavit of 29 July 2024 at [44]. 15 There was no context that the other defendant disqualified from voting, Eco Lodges, was in fact “unfinancial” and owed $8.2 million to CBC. 16 They were declared to be invalid from that date. 17 Mr Napoli’s affidavit of 17 July 2024 at [11]. 18 See Mr Napoli’s affidavit of 17 July 2024 at [15]. The judgment debts here refer to the 2020 and 2021 judgment debts totalling $9,781,800. 19 These factors are deposed to in Mr Napoli’s affidavit of 17 July 2024 at [15-[26]. -- 11 of 20 -- 12 maintain the sewer plant for compliance with the Environmental Protection Act 1994 but it is not operating. The utility suppliers have installed a rainwater tank for staff to use as their water supply. The utility suppliers are outlaying between $40,000 and $60,000 per month in caretaker mode.20 The amounts owed to the utility suppliers is approximately $23 million. [52] The legal costs of the battle are likely to be significant. For example, one of the resolutions passed at the contested annual general meeting of CBC on 14 December 2021 was that an administrative fund special levy be raised for $454,545 and $500,000 for legal fees for defending one of the proceedings between CBC and Eco Lodges. Many lawyers’ fee notes are likely to have been rendered since then. [53] And so, the defendants’ failure to contribute to the judgment debts has had a serious impact on the utility suppliers, and on CBC, which is in receivership, as well as on the basic services provided to resort residents. Those facts mean there are very good reasons from the point of view of the utility suppliers, as well as CBC and the unitholders, for the debts to be paid. In that context the receiver’s pursuit of the levies under s 177 of the MUD Act appears reasonable. It is open to serious doubt that it is the receiver’s pursuit of judgment debts by two sets of proceedings, two years apart, that is oppressing the defendants. The converse, that is the non-payment of the utilities is capable of inflicting damage. [54] And, all of this is because at the AGM on 14 December 2021, one of the defendants was deprived of a vote. And it is in a context where there is no suggestion at all that the judgment debts – which now total $23 million - are not properly owed. [55] In all of the circumstances, I am not satisfied that the 2024 proceedings pursuing the 2024 levies is oppressive or an abuse of process. [56] The principles discussed above, include the concept that the court should consider whether the use of the court’s process serves to bring the administration of justice into disrepute. That consideration does not directly arise here, although, as discussed in relation to case management, staying the 2024 proceeding and leaving the parties with the languishing 2022 proceedings, would hardly serve the purposes of rule 5. [57] In the circumstances, I refuse a stay. Issue 2: Summary Judgment [58] CBC’s application for summary judgment depends on three issues: (a) Whether the receiver had the power to strike the 2024 levies; (b) Whether the receiver was in fact appointed to get in and recover the debts created by the 2024 levies; (c) Whether the receivership came to an end when the levies were found, by the adjudicator to be invalid. 20 Mr Napoli’s affidavit of 17 July 2024 at [25]. -- 12 of 20 -- 13 [59] Those three issues all depend on a proper interpretation of two orders of the court – a legal question. The Principles for Summary Judgment [60] As the submissions for the defendants make clear: 65. The requirements of rule 292 of the UCPR are familiar, and the applicable principles well-settled. If a real, as opposed to fanciful, prospect of success is shown then that is enough. The discretion to order summary judgment must be exercised with ‘great care’ so as to ensure that, under the guise of achieving expeditious finality, a party is not improperly deprived of its opportunity for trial of its case. [61] And, as Williams JA emphasised in Deputy Commissioner of Taxation v Salcedo21 the discretion to order summary judgment should only be exercised in clear cases. However, given that summary judgment issues were fully argued by both parties, and the issues largely turn on the proper interpretation of the court’s orders, that is legal issues, it is important to bear in mind the remarks of Muir JA (with whom McMurdo P and Holmes JA agreed) in Filmana Pty Ltd v Tynan:22 [71] For the reasons discussed above, the primary judge was entitled to conclude that the appellants had ‘no real prospect of successfully defending’ the issues of liability raised for his determination and that there was no need for a trial of those issues. The primary judge’s approach gave rise to no injustice [72] Even if it were to be accepted the summary judgment application raised one or more matters of legal complexity, that would not have prohibited the primary judge from entertaining the application and giving summary judgment. Where a summary judgment application raises complex issues of law, the judge hearing the application may be ill-advised to determine the application forthwith and give ex tempore reasons; but, it will normally be open to the judge to reserve his or her decision so that due consideration can be given to the issues. That was the course taken by the primary judge. [footnotes deleted] [62] Counsel for the defendants accepted that given the question of law involved and the benefit of lengthy submissions on the topic, it was appropriate to use the vehicle of summary judgment.23 The legal issues raised are not particularly complex and so this is an appropriate case for the court to decide the legal issues on a summary judgment. The Principles applying to Interpretation of Court Orders [63] The parties were agreed about the principles that apply when the court is interpreting court orders. Those principles were recently summarised by Muir J in Collins v Marinovich: 21 [2005] 1 Qd R 232 at 235. 22 [2013] QCA 256 at [70], [71]. The case often relied on is Theseus Exploration NL v Foyster (1972) 126 CLR 507 at 515. 23 Transcript of the hearing (1 August 2024), T1-63 at line 34. -- 13 of 20 -- 14 The principles applicable to interpreting court orders are similar to those which apply to the construction of a contract and include the following two guiding principles: (a) First: If the true meaning of an order is “immediately plain, the terms of the order will speak for themselves”; and (b) Secondly: If that is not the case, the task of ascertaining meaning is to be approached having regard to the “ordinary rules of construction”. The question of whether it is permissible to look at extrinsic material, including published reasons for the orders to ascertain their meaning “may” depend upon whether the terms of the order are ambiguous. I use “may” because the authorities appear to leave open the question of whether it is necessary for orders to be ambiguous or susceptible to more than one meaning before resort can be had to extrinsic material, including reasons for judgment. Irrespective of whether there is need to show ambiguity, the initial task is to construe the objective meaning of the words used in the order. To that end, the following observations of the Court of Appeal of Victoria in Laming v Jennings [2018] VSCA are apposite: ‘The meaning of a court order is to be derived from the language used, read fairly. The exercise is objective and does not involve delving into the subjective thought processes of the judge who made the order. At least in the case of ambiguity or where the language is susceptible of more than one meaning, it is open to have recourse to extrinsic material, including the reasons for judgment. Of course, the exercise remains one of interpretation and not reconstruction, and where recourse to such material is permitted, it is not admissible to contradict the plain meaning of the order’.24 The Order of 25 October 2022 [64] The first of the orders appointing a receiver was an order of Jackson J made on 25 October 2022. The precise orders, made by consent of the utility supplies and CBC, were as follows: 1. Mr Bill Karageozis of McLeod Partners be appointed as receiver of the defendant’s interest in: (a) Any amounts previously paid to the defendant under the special levies struck by resolutions 12 and 13 passed at the defendant’s annual general meeting on 14 December 2021. (b) The debts currently owing to the defendant under the special levies struck by resolutions 12 and 13 passed at the defendant’s annual general meeting on 14 December 2021. For the purposes of getting in, collecting and receiving for the plaintiffs any amounts owing under the default judgment entered by the Registrar on 19 April 2021. 2. Mr Karageozis has leave to sue or take all other necessary steps in the name of the defendant to get in, collect and receive for the plaintiffs any amounts owing to the defendant referred to in orders 1(a) and 1(b). 24 [2023] QSC 175 at [28]-[30]. -- 14 of 20 -- 15 3. Mr Karageozis shall pay all money realised from his receipt of the defendant’s assets referred to in order 1: (a) Firstly, to meet his costs of the receivership of the defendant. (b) Secondly, to the plaintiffs to satisfy, as far as possible, their judgment against the defendant, plus interest and costs of this application. 4. Mr Karageozis has liberty to apply to vary these orders on 3 days’ notice. [65] That order appoints Mr Karageozis to be the receiver of property, that is CBC’s interest in the 2022 levies. To that extent, the order is consistent with the requirement that an order appointing a receiver must identify the property which the receiver is to take into the receiver’s possession.25 [66] However, the property so identified is not confined to solid, tangible property. Mr Karageozis was appointed as receiver of: (a) the defendant’s interest in; (b) amounts previously paid under the 2022 levies; and (c) debts currently owing to CBC under the 2022 levies; and (d) was to take possession of that property for the purposes of satisfying the judgment debts. [67] Of course, if the objectives were merely to secure amounts actually paid for the 2022 levies, then the receivership would be more confined. Depending on the evidence, such a confined receivership might merely direct the payment of specified sums from CBC’s bank accounts. But here the receiver’s rights extended to debts then owing to CBC. Thus, the order permitted Mr Karageozis to sue, in CBC’s name, to recover those debts. [68] The receiver then, in CBC’s name, commenced the proceedings to recover the 2022 levies. As explained, the defendants refused to pay and the parties became embroiled in litigation which eventually stalled when the adjudicator ruled that the 2022 levies were invalid in January 2024. [69] That litigation meant that for the whole of the period from October 2022, when Jackson J made the orders appointing the receiver, until March 2023, when further orders were made, the receiver was unable to secure any property pursuant to His Honour’s order. The orders proved to be ineffective to achieve the purposes of satisfying the judgement debts. That state of play got worse when the adjudicator made his decision in January 2024. The Order of 29 March 2023 [70] However, in March 2023 an application was brought to extend the receiver’s powers. Representatives of the receiver, the utility suppliers, and CBC, all attended the hearing of the application before me on 29 March 2023. Mr Peter Mills, a solicitor acting for two of the four defendants in this proceeding,26 sent an email to 25 Re GDK Financial Solutions Pty Ltd (2006) 236 ALR 699. See the rationale for the requirement in H Picarda, The Law Relating to Receivers, Managers and Administrators (Butterworths) at 428. 26 Eco and Broadwater. -- 15 of 20 -- 16 my associate saying that his clients “(D)o not object per se to the orders sought in each application …”.27 [71] By consent of the parties, that is the private suppliers and CBC, and in circumstances where two of the four defendants in the present proceeding did not object, I made orders as follows: 1. In addition to the powers conferred on Mr Karageozis by order of the Honourable Justice Jackson made on 25 October 2022 (the 25 October Order) Mr Karageozis: (a) has power to do, in Australia and elsewhere, all things necessary or convenient to be done for or in connection with, or as incidental to, the attainment of the objectives for which the receiver was appointed in paragraph 1 of the 25 October Order; (b) has power to bring, maintain, defend and take all steps therein, proceedings in the name of the defendant for the purposes in paragraph 1 of the 25 October Order; (c) has power to engage solicitors, counsel and any other agents for the purposes of those proceedings; (d) has power to compromise any such court proceedings; (e) has power to take any steps to enforce any judgment or compromised claim; (f) has power to take all other reasonable steps necessary or associated with the proceedings associated with 1(b) above; (g) for the avoidance of doubt, has power to bring, maintain and defend the proceedings described as BS15128/22; (h) is authorised to exercise all and any of its statutory or other powers for the purposes of getting in, collecting and receiving the debt owing under the judgments entered against the defendant: (i) in proceeding BS 5871/20 on 4 December 2020; (ii) in proceeding BS 2382/21 on 19 April 2021. (i) is authorised to take all steps necessary to ensure the realisation of property of the defendant and of all and any right, title and interest of the defendant in and to any property, including but not limited to: (i) providing instructions to solicitors, valuers, estate agents or other consultants as are necessary to negotiate and/or finalise the sale or other disposition of any property of the defendant; (ii) dealing with any creditors with security over the property of the defendant including in order to obtain releases of security as is necessary to ensure the completion of the sale or other disposition of property of the defendant; 27 The email and attached letter made some other comments or submissions but they are not relevant for present purposes. -- 16 of 20 -- 17 (iii) executing contracts, transfer, releases, or any such other documents as are necessary or convenient to carry this order and the 25 October Order into effect; and (j) have access to and be entitled to inspect and take copies of the books and records of the defendant in relation to: (i) the payment of levies by all sub-bodies corporate (including Eco Lodges Body Corporate, Broadwater Villas Body Corporate, Lagoon Lodges Body Corporate, Marine Apartments Body Corporate (and other entities that are the owners of certain lots in the scheme land located at and known as ‘Couran Cove Resort’ including Couran Cove Holdings Pty Ltd and Island Resorts (Developments) Pty Ltd) (the Sub-Bodies Corporate)); (ii) resolutions passed by the defendant in relation to the payment of levies by Sub-Bodies Corporate; and (iii) any dispute between the defendant and the Sub-Bodies Corporate relating to the payment of levies by the Sub-Bodies Corporate. (k) be entitled to claim remuneration in respect of the time spent by him and his employer who perform work in carrying out the appointment under the 25 October Order at and in the sums from time to time approved by the Court. [emphasis added] [72] The focus of argument is paragraph 1(i). Simplifying that paragraph, Mr Karageozis is given the authority to realise the “property of (CBC)” and any interest of CBC “in any property”. The steps the receiver was authorised to take included giving instructions to professionals, dealing with secured creditors, and executing formal documents. [73] Read fairly, and applying an objective meaning to the words used, the 29 March 2024 order extended Mr Karageozis’ powers beyond the 2022 levies to the “property of CBC” and to CBC’s interest “in any property”. The latter expression must be referring to any of CBC’s property. [74] In my view, the ordinary literal meaning of the words of paragraph 1(i) of the order make it is plain that Mr Karageozis’ powers as receiver were extended to any further property of CBC. [75] The defendants argue that the chapeau to the order of 29 March 2024 makes clear that the intention of that order was merely to extend the receiver’s powers and that the intention was not to extend the receiver’s powers to other or further property of CBC. [76] Certainly, subparagraphs 1(a) to (g) seem designed to extend the receiver’s powers in the sense of his power to take different steps in aid of recovering the judgment debts. But the express terms of subparagraphs 1(h) and (i) are not so confined. Subparagraph 1(h) explicitly broadens the receiver’s power to recover the judgment debts. The focus of subparagraph 1(h) is on the purpose of the exercise – to pay the judgment debt. And then subparagraph 1(i), in express terms, extends the receiver’s reach to CBC’s property. -- 17 of 20 -- 18 [77] None of that is particularly dramatic. The context of this order, in March 2023, was that the receiver’s pursuit of the 2022 levies had been blocked or at least delayed. The receiver went back to court to seek an extension of his powers. If context or extrinsic evidence were needed, it points to the need for an order that had a wider reach. [78] The defendants argued that the order of 29 March 2023 served only to extend the receiver’s “powers”, that is, his mechanical powers. I do not accept that submission. By its terms the order of 29 March 2023 expressly authorised the receiver to: (a) exercise all and any of his statutory or other powers for the purpose of getting in, collecting and receiving the judgment debts; and (b) take all steps necessary to ensure the realisation of: (i) property of CBC; and (ii) all and any right, title and interest of CBC in and to any property (including instructions to estate agents etc)28 [79] The only way one can arrive at the defendants’ narrow interpretation of the order is to start with the preconceived notion that the intention of the order was merely to extend the mechanical tools available to the receiver. Adopting that approach would, in my view, inflict some violence on the plain words of subparagraph 1(i). The plain words of paragraph 1 extend the tools available to the receiver (subparagraph 1(a) to (g)), and broadly authorise the receiver to exercise all of his powers to secure the judgment debts (subparagraph 1(h)), and expressly authorise the receiver to take all steps necessary to ensure the realisation of CBC’s property and CBC’s interest in and to any property. [80] It follows that I reject the defendants’ narrow interpretation of the order of 29 March 2023. Power to Strike Levies [81] The defendants argue that, in any event, the receiver had no power to strike the 2024 levies. They point out that Mr Karageozis was not appointed as the receiver and manager of CBC. [82] The 2024 levies were struck in February 2024. At that point the receiver had the benefit of the extended powers of the order made on 29 March 2023. That order has two relevant aspects. First, it authorised the receiver to exercise all and any of its statutory or other powers for the purposes of getting in, collecting and receiving the judgment debts. Second, it authorised the receiving to “take all steps necessary” to ensure realisation of property of CBC and of “all and any right, title and interest of CBC in and to any property”. Those quoted words are capable of empowering the receiver to take steps to strike a levy. [83] The concept of the receiver taking all steps necessary to ensure the “realisation of property” can include a right to strike a levy – that is to seek payment from members pursuant to the MUD Act. Similarly, CBC’s pursuit of its rights under 28 See paragraphs 1(h) and (i) of the order of 29 March 2023 – quoted above. -- 18 of 20 -- 19 sections 174 and 177 of the MUD Act qualifies as taking steps necessary to realise CBC’s rights and interests in any property. [84] The concept of property must include the right to future property such as rent due in the future, or a right of recovery of a judgment debt pursuant to the MUD Act. After all, CBC’s only practical means of paying any of its debts was to strike a levy from its members. The context is that, without any capacity to strike a levy seeking a contribution from its members, CBC would be financially paralysed. None of that ignores the management of the body corporate to through its general meeting and its democratically appointed committee. [85] Thus, the ordinary words of the 29 March order enabled the receiver to, in the name of CBC, strike a levy pursuant to s 174 or 177 of the MUD Act. Answers to the Defendants’ Summary Judgment Points [86] That discussion answers the first two points raised by the defendants, namely, whether the receiver had power to strike the 2024 levies, and the whether the reach of the orders extended to the debts created by the 2024 levies. [87] The third issue raised by the defendants was whether the receivership came to an end when the levies were found by the adjudicator to be invalid. The premise of that issue is that the orders of 29 March did not extend the reach of the receivership. For the reasons explained above, in my view the receivership extended over property wider that the 2022 levies. [88] It follows that CBC is entitled to summary judgment. Issue 3: A Further Reasons to Stay or Adjourn? [89] The defendants proposed a further reason to stay or adjourn the present proceeding. [90] The submission is expressed in this way: “116. A meeting of the CBC is due to occur on 5 August 2024. The meeting will consider resolution to: (a) appoint solicitors to act for the CBC in the proceedings in which the Supplier Judgment Debts were entered against it; and (b) investigate, and provide advice to the CBC, about whether it has a basis for applying to set aside the Supplier Judgment Debts. 117. It appears likely that those resolutions will pass. That is because the member of the CBC (the first defendant, Eco) which will have a majority of eligible votes at that meeting intends to vote in favour of those resolutions. 118. Those resolutions, if passed, may lead to applications being brought to set aside the Supplier Judgment Debts. The concerns which exist about those judgment debts, and the circumstances in which they were entered, have been set out by Mr Bowden in his affidavit.” -- 19 of 20 -- 20 [91] Counsel for the defendants rightly conceded that there was a degree of speculation involved in all of that. The idea seems to be that the court should exercise a discretion to stay or adjourn to the proceedings because: (a) the resolutions proposed for the meeting on 5 August 2024 would pass; (b) by that resolution new solicitors would be engaged – presumably independent of the receiver; (c) those new solicitors would be able to be funded – in circumstances where CBC has receivers appointed and has outstanding judgment debts; (d) those new solicitors would investigate judgment debts entered in December 2020 and April 2021 (and possibly also the further judgment debt of $13,759,052 entered on 23 March 2023); (e) the new solicitors would find a basis for setting aside those judgments after all this time; (f) CBC would proceed with and succeed in such an application to set aside the default judgments – in spite of the significant cost incurred by the receiver and the utility suppliers in the 3½ years since the first of the default judgments were entered. [92] I decline to exercise the discretion to stay or adjourn based entirely on that speculation. Conclusions [93] It follows that the applications for a stay or an adjournment should be dismissed and the application for summary judgment should be allowed. -- 20 of 20 --