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Blue Water Co Pty Ltd v Castillo & Anor[2025] QCATA 82

Blue Water Co Pty Ltd v Castillo & Anor[2025] QCATA 82

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

CITATION:

Blue Water Co Pty Ltd v Castillo & Anor [2025] QCATA 82

PARTIES:

blue water co pty ltd

(applicant/appellant)

v

carlos castillo

(first respondent)

The body corporate for palm cove commercial cts 33113

(second respondent)

APPLICATION NO/S:

APL096-24

ORIGINATING APPLICATION NO/S:

0562/2023

MATTER TYPE:

Appeals

DELIVERED ON:

24 September 2025

HEARING DATE:

12 September 2025

HEARD AT:

Brisbane

DECISION OF:

Senior Member Traves

ORDERS:

  1. The appeal is dismissed.
  2. The time to comply with order 1 made on 26 February 2024 in application 0562-2023 is extended to 3 months from the date of this order.

CATCHWORDS:

APPEAL – GENERAL PRINCIPLES – RIGHT OF APPEAL – WHEN APPEAL LIES – ERROR OF LAW – where s 289(2) of the Body Corporate and Community Management Act 1997 (Qld) allows an appeal from an Adjudicator’s order on a question of law

REAL PROPERTY – STRATA AND RELATED TITLES – MANAGEMENT AND CONTROL – BYLAWS – whether a bylaw prohibiting use of Lot for real estate agency business is valid – consideration of s 169(1)(b) and 180(7) of the Body Corporate and Community Management Act 1997 (Qld) – whether bylaw was valid ‘regulation’ or invalid prohibition – whether finding that bylaw oppressive and unreasonable a finding of fact – whether conciliation agreement a contract – whether estoppel applies given the terms of the conciliation agreement – whether adjudicator erred in making orders that did more than necessary to give effect to the adjudicator’s reasons.

Body Corporate and Community Management Act 1997 (Qld), s 169, s 180, s 289

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

Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 146, s 147

Black v Summer Waters Body Corporate CTS 19297 [2022] QCATA 067

Body Corporate for River City Apartments CTS 31622 v McGarvey [2012] QCATA 47

Crystal Waters Permaculture Village & Ors v Boyle [2020] QCATA 80

Fairway Island GTP v Redman and Murray [2019] QMC 13

Mineralogy Pty Ltd v The Body Corporate for ‘The Lakes Coolum’ [2002] QCA 550

NG Enterprises Ltd v Urban Council [1997] AC 168

Swan Hill Corporation v Bradbury (1937) 56 CLR 746

Swiatek v The Body Corporate for Euro Residential [2019] QCATA 158

APPEARANCES & REPRESENTATION:

This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld)

REASONS FOR DECISION

  1. [1]
    This is an appeal pursuant to s 289 of the Body Corporate and Community Management Act 1997 (Qld) (‘BCCMA’) from an order of an adjudicator concerning a by-law of the Body Corporate for Palm Cove (second respondent). The Body Corporate and Community Management (Small Schemes Module) Regulation 2020 (Qld) applies to the Palm Cove scheme.
  2. [2]
    Palm Cove Commercial is a two lot community titles scheme: Lot One is owned by Blue Water Co Pty Ltd (the applicant), a real estate agent and Lot Two is owned by the Mr Castillo (the first respondent). Mr Castillo, who lodged the original application against the body corporate (naming Blue Water as an affected party), contended that by-law 12.3 was invalid and sought an order that by-laws 12.3 and 12.4 be removed.
  3. [3]
    By-law 12.3 provides:

Lot 2 must not be used for the purpose of a real estate agency, without first obtaining the consent in writing of the owner of lot 1. The owner of lot 1 may grant or refuse consent in its absolute discretion and may grant its consent subject to conditions. The owner of lot 1 may withdraw its consent by notice in writing to the owner of lot 2 at any time. If the consent is withdrawn, the use of lot 2 as a real estate agency must cease immediately.

  1. [4]
    The current by-laws, including by-law 12.3 were the by-laws when the first Community Management statement was lodged on 8 June 2004. Mr Castillo purchased Lot 2 on 18 October 2006 and was aware at that time of the existence of by-laws 12.3 and 12.4.
  2. [5]
    Mr Castillo brought the application because he had had difficulty leasing the property with the restriction imposed by by-law 12.3 and that all reasonable requests to lot 1 for Lot 2 to be used as a real estate agency or letting agency had been refused.
  3. [6]
    Mr Castillo succeeded before the adjudicator who found that by-law 12.3 and associated by-law 12.4 should be removed on the basis they offended s 169 of the BCCMA in that they went beyond regulating the use and enjoyment of lots in the scheme and instead amounted to a prohibition. The adjudicator also found the by-law to be ‘oppressive or unreasonable’ within the meaning of s 180(7) of the BCCMA. Finally, the adjudicator did not consider Mr Castillo was precluded or estopped from bringing the application on the basis of an earlier agreement reached between Mr Castillo and Blue Water at conciliation.
  4. [7]
    Blue Water appeals from that decision.

Grounds of appeal

  1. [8]
    An appeal to the Appeal Tribunal from a decision of an adjudicator may only be brought on a question of law.[1]
  2. [9]
    The application commencing the appeal sets out three grounds of appeal. In brief, the grounds are that the adjudicator:
    1. erred in dismissing the estoppel argument because she placed undue weight on the enforceability of the conciliation agreement under statute and common law, when the submission found basis in equity; placed undue weight on the absence of a consent order in the terms of the conciliation agreement; and did not give any or adequate weight on the submissions about estoppel by erring in her application of equitable principles.

(‘the estoppel ground’)[2]

  1. erred in finding that the following component of by-law 12.3 amounted to an unlawful prohibition: Lot 2 must not be used for the purpose of a real estate agency.

(‘the regulation ground’)[3]

  1. erred in ordering that by-laws 12.3 and 12.4 be removed entirely in circumstances where the unenforceable part was that which gave lot 1 unfettered decision-making authority; did not find the part that said lot 2 must not be used as a real estate agency to be an unlawful prohibition, and ought to have ordered only that the following part of 12.3 be removed:

…without first obtaining the consent in writing of the owner of lot 1. The owner of lot 1 may grant or refuse consent in its absolute discretion and may grant its consent subject to conditions. The owner of lot 1 may withdraw its consent by notice in writing to the owner of lot 2 at any time. If the consent is withdrawn, the use of lot 2 as a real estate agency must cease immediately.

(‘the drafting ground’)[4]

Nature of the appeal

  1. [10]
    The appeal is an appeal in the strict sense, that is that the Appeal Tribunal can only give the decision which should have been given at first instance on the facts and law before the Tribunal at first instance. This is made clear by s 146 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (‘QCAT Act’) which provides that, in an appeal on a question of law, the appeal tribunal must make its decision on the basis of the material that was before the tribunal at first instance and the findings of fact by that tribunal, and, if further evidence is required, the appeal tribunal may set aside the decision and return the matter to the tribunal at first instance for the hearing of additional evidence.
  2. [11]
    In Albrecht v Ainsworth & Ors[5] the Court of Appeal held that:

The appeal to QCATA was limited to a question of law. It was an appeal in the strict sense, not an appeal by way of re-hearing. It had to be determined on the material before the adjudicator. But had QCATA correctly identified an error of law, I do not accept the applicant’s contention that its only course was to remit the matter to the same adjudicator for determination according to law. Once an error of law affecting the adjudicator’s decision was correctly identified, QCATA could exercise the adjudicator’s powers and substitute its own decision based on the material before the adjudicator, consistent with the adjudicator’s undisturbed factual findings. So much is clear from the terms of s 294 BCCM Act and s 146 QCAT Act.[6]

  1. [12]
    It follows that I am empowered to exercise the adjudicator’s powers and substitute my own decision based on the material before the adjudicator, consistent with the adjudicator’s undisturbed factual findings.

The regulation ground 

  1. [13]
    The adjudicator decided that a by-law that prohibited a particular use, in this case use as a real estate agency business, fell outside the power in s 169 of the BCCMA to make by-laws to ‘regulate’ the use and enjoyment of lots included in the scheme.

Was the by-law an invalid prohibition or valid regulation of use and enjoyment

  1. [14]
    The issue is whether a ban on using one lot in a two lot scheme as a real estate agency can properly be considered as providing for ‘regulation’ of the use of a lot within the meaning of s 169. A related issue raised by the submissions on appeal, rather than the grounds of appeal, is whether the by-law is invalid because it is oppressive and unreasonable within the meaning of s 180(7).

The adjudicator’s reasoning 

  1. [15]
    The adjudicator referred to the power to make by-laws in s 169 of the BCCMA and to Mineralogy Pty Ltd v Body Corporate for ‘The Lakes Coolum’[7] and reasoned as follows:
    1. It is settled law that prima facie, a power to make by-laws regulating a subject matter does not extend to prohibiting it altogether. The underlying rationale is that a power to regulate an activity implies that the activity will, despite such regulation, be capable of continuing, which it would not do if it were completely prohibited.[8]
    2. By-law 12.3 prohibits the use of Lot 2 as a real estate business unless consent is obtained from the owner of Lot 1. Prima facie, this is a prohibition that goes beyond the power given under s 169 to regulate the use and enjoyment of a lot. It not only regulates but prohibits the activity of real estate altogether.
    3. In Mineralogy, a by-law that prohibited an occupier carrying out any building works (which was generally accepted as a basic right of a landowner) to their lot without the approval of the body corporate committee went beyond mere regulation. However, the fact the prohibition was qualified by supplying an objective standard by which to judge the character of the proposed works and that approval must not be unreasonably withheld, meant the by-law was not invalid on the ground of its being prohibitory rather than regulatory.[9]
    4. The same reasoning applied to make the by-law prima facie a prohibition because it banned lot 2 from being used as a real estate agency, a normal commercial activity. Prima facie this appears prohibitive in that it does not allow the lot owner to use his lot for a lawful business purpose, which arguably is a basic right of a commercial land owner.[10]
    5. Unlike Mineralogy, there were no objective criteria set out in the by-law and the safeguard in s 94(2) of the BCCMA (the duty to act reasonably) only applied to decisions made by bodies corporate, not individual lot owners. By-law 12.3 is a prohibition of a certain use, subject to the unfettered authority of the other lot owner in the scheme and, on that basis, is invalid.

The parties’ submissions

  1. [16]
    As the community titles scheme consists of only two lots and each lot owner had provided submissions, the body corporate was not directed to provide submissions.
  2. [17]
    The applicant submitted that the adjudicator erred in finding that the by-law amounts to an unlawful prohibition, and not a lawful regulation, of the respondent’s use of his lot. The applicant conceded that the vesting of discretion in lot owner 1 is inconsistent with s 169 of the BCCMA. However, that the restraint of lot 2’s use as a real estate agency was not an unlawful prohibition but rather the regulation of that lot’s commercial use. The applicant submitted that:
    1. a by-law may prohibit a lot owner from acting in a manner that unreasonably interferes with another lot owner’s peaceful enjoyment of the lot owner’s lot or the common property;
    2. what is unreasonable depends on the circumstances;
    3. in some cases what is reasonable may extend to prohibition in some form (referring to Fairway Island GTP v Redman and Murray[11]);
    4. while the adjudicator accepted that commercial use may reasonably be regulated by the prohibition of particular species of commercial use, she erred in her assessment of what may infringe peaceful use and enjoyment by implicitly limiting that category to uses which involved overt sensory infringement (like a nightclub) or an abnormal commercial activity;
    5. peace and enjoyment may be infringed by any number of intangible matters, including where two lot owners in a two lot scheme are in untenable conflict due to their competing commercial uses;
    6. although it is not inherently unreasonable to have two competing businesses in a scheme, it is unreasonable in this case where there are only two lots in the scheme, the two lot owners will be operating in conflict to the detriment of each other and ultimately, to the scheme;
    7. the adjudicator’s perception that the by-law was to the commercial benefit of the applicant was determinative, wrongly, in her finding the by-law unreasonable, and meant she did not properly consider the by-law’s utility as a means of obviating the mutual financial disadvantage of direct competition between lot owners and in doing so, in ensuring the scheme’s practical and financial viability.
  3. [18]
    The respondent submitted that by-law 12.3 unreasonably interferes with his peaceful enjoyment of the lot, that it is absolute and cannot properly be characterised as regulatory. The respondent referred to Swan Hill Corporation v Bradbury,[12] where the High Court held:

Prima facie a power to make by-laws regulating a subject matter does not extend to prohibiting it either altogether or subject to a discretionary licence or consent.  By-laws made under such a power may prescribe time, place, manner and circumstance and they may impose conditions, but under the prima facie meaning of the word they must stop short of preventing or suppressing the thing or course of conduct to be regulated.

  1. [19]
    The respondent also referred to Mineralogy Pty Ltd v The Body Corporate for ‘The Lakes Coolum’[13] where McPherson JA held:

The underlying rationale is that a power to regulate an activity implies that the activity will, despite such regulation, be capable of continuing, which it would not do if it were completely prohibited.

  1. [20]
    The respondent submitted that:
    1. the decision of Fairway can be distinguished because it was made in the context of the Building Units and Group Titles Act 1980 (Qld); dealt with nuisance created by short term letting in residential property; and where the example given in the matter related to a prohibition made in respect of dangerous animals which is not relevant to a prohibition on a type of use in a commercial tenancy building where the issue is not ‘nuisance’ but perceived commercial market competition;
    2. the applicant has failed to establish how its quiet use and enjoyment would be infringed by a real estate agency conducting usual commercial activities from the other lot and did not refer to any case law which supported its assertion;
    3. the conflict referred to is hypothetical and baseless given conflict can arise between lot owners despite the nature of the business being conducted from the lot;
    4. the respondent disagrees that the real estate agency will interfere with the applicant’s quiet enjoyment and have a negative impact on its business. The respondent submitted that this assertion was not substantiated and that the dual real estate agencies may in fact increase foot traffic to the area. Further, that the applicant had opposed a short stay holiday letting business which is not covered by the applicant’s business and had no way of competing with their sales and long term rental market business;
    5. protection of the commercial interests of lot 1 is not a proper basis for upholding an otherwise unreasonable by-law.

Consideration 

  1. [21]
    Section 169 of the BCCMA provides, relevantly:

169Content and extent of by-laws

  1. (1)
    The by-laws for a community titles scheme may only provide for the following—
  1. (a)
    the administration, management and control of common property and body corporate assets;
  1. (b)
    regulation of, including conditions applying to, the use and enjoyment of—
  1. lots included in the scheme; and
  2. common property, including utility infrastructure; and
  3. body corporate assets, including easement areas relevant to common property; and
  4. services and amenities supplied by the body corporate;
  1. (c)
    other matters this Act permits to be included in by-laws.
  1. [22]
    Section 180 sets out various limitations on by-laws, including that a by-law must not be oppressive or unreasonable, having regard to the interests of all owners and occupiers of lots included in the scheme and the use of common property.[14]
  2. [23]
    The issue is whether the adjudicator erred in finding the by-law was invalid on the basis that it prohibited a particular use (as a real estate agency) subject to the unfettered authority of the other lot owner, which went beyond regulating its use.
  3. [24]
    The relevant by-law takes the form of a specific prohibition on the use of lot 2 as a real estate agency without the consent of the owner of lot 1. The question turns on the extent of the authority in s 169 of the BCCMA to make by-laws regulating the use and enjoyment of lots in the scheme.
  4. [25]
    In Mineralogy Pty Ltd v The Body Corporate for ‘The Lakes Coolum’[15] the Queensland Court of Appeal made the following observations:
    1. Prima facie a power to make by-laws regulating a subject matter does not extend to prohibiting it either altogether or subject to a discretionary licence or consent: Swan Hill Corporation v Bradbury [1937] HCA 15; Brunswick Corporation v Stewart [1941] HCA 7. But that proposition cannot be universally applied: Brunswick Corporation v Stewart [1941] HCA 7, per Starke J referring to Slattery v Naylor (1888) 13 AppCas 446.
    2. The underlying rationale is that a power to regulate an activity implies that the activity will, despite such regulation, be capable of continuing, which it would do if it were completely prohibited: City of Toronto v Virgo [1896] AC 88.
    3. Prohibition of an activity in part, in a particular case, or in a particular way, may however in some circumstances be needed in order to achieve effective regulation.
    4. The extent to which such partial prohibition is permissible depends on the terms of the power to regulate and on the context in which the power is to be operated: Ng Enterprises Ltd v Urban Council [1996] UKPC 30. The court should have regard to the body entrusted with the power and the language in which the power is expressed and the subject matter with which the body has to deal: Brunswick.
    5. In Goldberg v Law Institute of Victoria [1972] VR 605, for example, it was held that a prohibition upon exhibiting a sign or nameplate of more than a specified size on solicitor’s premises was authorised by a power to make rules regulating professional duties, practice, conduct and discipline of practitioners. There, it was held that the provision relating to exhibiting signs was no more than a particular prohibition in a solicitor’s practice, and was valid as a form of regulation.
  5. [26]
    In the Tribunal, in Crystal Waters Permaculture Village & Ors v Boyle,[16] it was said by Member Roney QC:

[35] There is now a body of jurisprudence that has accepted that a by‐law prohibiting an activity without the written consent of the body corporate, which sets out an objective standard by which to judge the request and which provides (directly or indirectly) that consent cannot be unreasonably withheld, would not necessarily go beyond regulation. This has as its foundation the River City decision (Body Corporate for River City Apartments CTS 31622 v McGarvey [2012] QCATA 47), at [38] which in turn applied Mineralogy Pty Ltd v The Body Corporate for “The Lakes Coolum” [2003] 2 Qd R 381.

[36] For this reason, by‐laws allowing pets or companion animals other than assistance dogs or other assistance animals for persons with a disability subject to written approval of the body corporate and conditions (such as limits on the height or weight of the animal) are likely to be enforceable and not open to serious challenge.

  1. [27]
    In Crystal Waters the issue was whether an absolute prohibition on keeping particular pets (namely cats and dogs or any other predatory animal) was valid regulation.
  2. [28]
    In construing s 169, Member Barlow SC (as he then was) in Body Corporate for River City Apartments CTS 31622 v McGarvey[17] held that the particular circumstances of a scheme are not relevant to the general construction of a section of an Act. Such circumstances would only be relevant to whether the by-law was reasonable or oppressive in the sense provided for in s 180(7), or in considering whether the body corporate had acted unreasonably in giving or refusing its consent under a by-law.[18]
  3. [29]
    There it was held that the relevant context (in the Ng Enterprises sense) was simply ‘that there may be a number of types of scheme, in which owners and occupiers may have a number of different objectives and uses for their lots, and the very nature of any community titles scheme requires that relationships between owners and occupiers must be regulated in some discernible fashion, and by reference to reasonable criteria unless specifically provided.’[19] In McGarvey, Member Barlow SC determined, applying Mineralogy, that in the case of a vacant lot, a basic right of a landowner is to build a dwelling on the land and that such a basic right could not be prohibited under a provision such as s 169.
  4. [30]
    In Swiatek v The Body Corporate for Euro Residential[20] a by-law which required a lot owner to get the approval of the body corporate for any changes to the external appearance of the lot was held to be valid regulation as opposed to invalid prohibition. There, the fact the objective standard (to act reasonably) was found in the Act rather than the by-law was not fatal.[21]
  5. [31]
    I consider, consistently with the above authorities, that the prohibition of a specific use of a range of potential uses by a particular lot may, in some circumstances, amount to regulation of the use or enjoyment of lots rather than prohibition. In this context, that of commercial premises comprising two lots, the power to make by-laws to regulate use would be nugatory unless it involved a power to prohibit a particular use.
  6. [32]
    In my view, a by-law which regulates use by excluding one use, does not amount to a general prohibition on using and enjoying. The lot owner subject to the specific prohibition can still use the lot for any other use. For those reasons, I do not find by-law 12.3 invalid. It was within the power given by s 169 to make by-laws to exclude a use that conflicted with the use of the only other lot in the scheme.

Was the by-law oppressive or unreasonable

  1. [33]
    The finding that the by-law is oppressive and unreasonable is, in my view, a finding of fact. It is, perhaps, a finding of mixed fact and law, although that is not my preferred view. In either circumstance, the appeal ground does not raise a question of law. Accordingly, I have no jurisdiction to consider it.
  2. [34]
    In the event I am wrong in that regard, I find as follows. Whether the by-law was reasonable was relevant to the limitations set out in s 180, in particular s 180(7) which provides that a by-law must not be ‘oppressive or unreasonable’. The adjudicator found, for the same reasons she found the by-law to be an invalid prohibition, that it was also oppressive and unreasonable.[22] The adjudicator determined that the ordinary meaning of the words ‘oppressive’ and ‘unreasonable’ was to be applied and that in considering whether a by-law was either of these things, regard must be had to the facts and circumstances of the particular scheme.[23]
  3. [35]
    The adjudicator made the following relevant findings:
    1. as there are only 2 lots in the scheme, it seems to make commercial sense not to have a competing business in close proximity;
    2. however, a real estate agency may conceivably operate from lot 2 without adverse consequences for lot 1;
    3. the by-law gives the owner of lot 1 unqualified and unlimited discretion with no requirement to act reasonably or to consider any objective criteria;
    4. the decision to consent to the use rests on a single lot owner from which there is no recourse for review rather than being a reviewable decision made by the body corporate;
    5. the discretion given to the owner of lot 1 is so wide that it could give consent for lot 2 to be used as a real estate agency only to withdraw it the next day whether for its own commercial interests or for any reason at all;
    6. the effect of the by-law is to give one party excessive exercise of power with the potential to result in unjustly harsh consequences on the other, who is supposed to be an equal lot owner in the scheme;
    7. that lot 2 can be used for a variety of business purposes does not make the by-law any less oppressive. Palm Cove is a travel destination known for its luxurious accommodation. It seems oppressive and unreasonable in this tourism setting, having regard to the interests of both owners in the scheme, that the by-law should prohibit one lot from being used for any real estate purpose, which pursuant to by-law 12.4, includes the activity of selling, letting, advertising, or managing real estate;
    8. there may be instances where two real estate agencies may co-exist without materially impacting each other’s business viability. For a scheme situated in a tourism setting like Palm Cove, the by-law should at least allow for such considerations;
    9. the material submitted evidences that the by-law has had at least some impact on the owner of lot 2 in that he has lost potential tenants due to the restrictions. However, I do not place a great deal of weight on the leaseability or saleability of the property as I do not consider these arguments determinative of the by-law’s validity.
  4. [36]
    The applicant submitted that the by-law was reasonable and did not contravene s 180(7). The applicant contended that the adjudicator erred, in effect, in finding that because the by-law was to the commercial benefit of lot 1 that it was necessarily unreasonable; that she placed too much weight on the perceived commercial benefit to lot 1 and failed to consider the implications of the impact of direct competition between the only two lot owners in the scheme; and the benefit to both, and to the financial viability of the scheme, in avoiding this.
  5. [37]
    The respondent submitted that the applicant had failed to establish how its use and enjoyment would be ‘infringed’ by a real estate agency being conducted from lot 2. That ‘conflict’ may arise between the lot owners if the by-law is removed is not a valid reason for imposing it. The assertion that the commercial interests of the lot owners, and ultimately of the scheme, would suffer was not substantiated and, in fact, dual real estate agencies may ‘increase foot traffic’. The by-law had been used to oppose short stay holiday letting (on the basis the proposed lessee held a real estate agents’ licence) which was an area of real estate not covered by the applicant’s business and did not compete with the applicant’s sales and long term market focus.
  6. [38]
    The adjudicator, in my view, has not erred in considering the interests of the two lot owners. This is a requirement of s 180(7). The adjudicator considered that lot 1 would benefit from the by-law and lot 2 would not. She was entitled to take that into account if that was the view she had reasonably formed on the evidence before her. Whether she placed too much weight on the perceived benefit to lot 1 is not a question of law.
  7. [39]
    I do not accept that the adjudicator failed to consider the implications of direct competition between the lot owners. The adjudicator acknowledged that, generally, it ‘seems to make commercial sense not to have a competing business in close proximity.’[24] However, the adjudicator ultimately found, considering that Palm Cove was a travel destination known for its luxurious accommodation, that it was oppressive and unreasonable for the by-law to prohibit one lot from being used for any real estate purpose.[25] The adjudicator concluded that the applicant had demonstrated that ‘there may be instances where 2 real estate agencies may co-exist without materially impacting each other’s business viability.’[26] The adjudicator has not erred in law in this respect.
  8. [40]
    There is also no error, in my view, in having regard to the absence of any ‘safeguards’ in the by-law in the form of objective criteria to be applied by the owner of lot 1 in deciding whether to consent to the otherwise prohibited use nor a requirement to act reasonably in doing so.
  9. [41]
    In conclusion, I do not consider the adjudicator erred in considering whether it was unreasonable in the context of the location and size of the scheme, for use as a real estate agency to be prohibited. Nor did she err in arriving at the conclusion that the by-law was too wide in that it prohibited categories of real estate business that would not compete with the business run by the owner of lot 1.
  10. [42]
    Insofar as this ground raises errors of law, it is refused. The ground that the adjudicator failed to consider the impact to the lot owners and to the scheme of running two real estate businesses side-by-side is an error of mixed law or fact and cannot be determined in this appeal, being confined, as it is, to questions of law only.[27]
  11. [43]
    For completeness I would add that I am satisfied that by-laws regulating the ‘use of lots’ can extend to a by-law that applies to a single lot by precluding the owner or occupier of that lot from carrying on a real estate agency business there. In this regard, when considering s 58(2) of the now repealed Strata Titles Act 1973 (NSW) the Court of Appeal of the Supreme Court of New South Wales in Sydney Diagnostic Services Pty Ltd v Hamlena Pty Ltd[28] concluded that:

Parliament must have intended bodies corporate to have power to pass by‐laws regulating ‘the use’ of each lot in a strata plan and … [that this power] extended to regulating what trades, avocations and activities could and could not be conducted on each lot.[29]

  1. [44]
    In one sense a by-law which restricts the user of a lot restricts the right of the lot owner to deal with the lot. Such a restriction prima facie offends s 180(4) of the BCCMA which provides that a by-law can not prevent or restrict a transmission, transfer, mortgage or other dealing with a lot. However most by-laws include restrictions on the use of a lot, for example, those which restrict pets without the approval of the body corporate. This by-law restricts the right of a lot owner to grant a lease permitting the lessee to carry on a real estate agency business. This does not make it, on that account, invalid. In my view, a mere restriction on use of a lot which might limit the number of potential transferees or lessees of a lot (as argued by the respondent has resulted from the by-law) does not amount to a restriction on dealing in contravention of s 180(4).[30]

The estoppel ground

  1. [45]
    The applicant submitted that the adjudicator erred in her consideration of their estoppel argument by referring to matters that were immaterial to a finding of estoppel in equity.
  2. [46]
    The applicant argued before the adjudicator that the respondent was estopped from resiling from their earlier agreement reached at conciliation in 2015 (conciliation agreement 0317-2015) whereby it was agreed that:
    1. the respondent would cease trying to change by-law 12 and would withdraw his motion to remove paragraphs and 12.4 of the by-laws;
    2. that the applicant, as proprietor of lot 2, would vote in favour of the applicant undertaking certain works for the benefit of the respondent at the cost of the body corporate.
  3. [47]
    The applicant submitted to the adjudicator that it had, in reliance on the respondent’s promises, voted in favour of the body corporate undertaking the works addressed in the agreement and effectively funded 60% of the costs involved through contributions it made in accordance with the Contribution Schedule entitlement; and the body corporate undertook the works and did so to its detriment by incurring the costs for the works and exposing itself to liability for payment of those costs.

The adjudicator’s findings in relation to estoppel

  1. [48]
    The adjudicator made the following relevant findings:
    1. Conciliation agreements are commonly understood to be good will agreements. Unlike an adjudicator’s order, there is no specific provision in the legislation regarding the enforceability of a conciliation agreement. Where the parties agree, the agreement may be referred to an adjudicator for a consent order.
    2. The relevant conciliation agreement was not the subject of a consent order. In any event, the ‘promise’ made by the respondent to cease trying to change the by-law was not enforceable and could not have been the subject of a consent order.
    3. An agreement made in conciliation does not preclude the owner of lot 2 from bringing the application.
    4. The claimed estoppel has not been established and there is nothing in force (for example a consent order) restraining the owner of lot 2 from bringing the application and, as such, nothing to preclude the adjudicator from determining the application.
    5. Whatever equitable remedy the owner of lot 1 may have arising out of the claimed estoppel is a separate matter for determination in the appropriate jurisdiction.
    6. In any event, I am unable to see what ‘detriment’ the owner of lot 1 has suffered as there is no evidence that the owner of lot 1 or the body corporate contributed to the works. From a reading of the conciliation agreement, it was the owner of lot 2 who bore all the costs associated with the improvements agreed to his exclusive area.

The parties’ submissions

  1. [49]
    The applicant submitted that:
    1. the adjudicator erred by placing weight on the absence of a statutory or court ordered restraint, which is not relevant to a finding of estoppel;
    2. not only was the respondent estopped in equity from trying to change the by-law, he was precluded by the contract from doing so;
    3. owing to the applicant entering into and performing its obligations under the agreement to its detriment, the respondent is estopped from engaging in conduct that disregards its corresponding obligations under the agreement.
  2. [50]
    The respondent submitted that:
    1. the agreement, relevantly, provided that ‘the [owner of lot 1] will vote in favour of the motion …to approve the improvements to common property within [the owner of lot 2’s] exclusive use area subject to conditions that the [owner of lot 2] bears all costs associated with the improvements and [the owner of lot 2] will at his own cost install a water meter …before lot 2 commences as a café.’
    2. the applicant did not act to its detriment because the respondent bore all costs associated with the works and the applicant made no financial contribution to any of the works.
    3. if estoppel is found to exist, that the respondent acted under duress in that he had a tenant ready subject to getting Council approval to run a café. The works were to satisfy Council requirements.

Consideration

  1. [51]
    The conciliation agreement entered into on 16 June 2015 and certified by a Conciliator with the Office of the Commissioner for Body Corporate and Community Management provided, relevantly:

Application reference no: 0317-2015

Scheme: Palm Cove Commercial CTS 33113

Address of scheme: …

Applicant: Carlos Castillo

Respondent: Bluewater Co Pty Ltd

In the matter of the dispute resolution application made under the Body Corporate and Community Management Act 1997 (the Act) made by the applicant against the respondent, it has been agreed between the parties that:

  1. The applicant will cease trying to change by-law 12 and will withdraw his motion to remove paragraphs 12.3 and 12.4 from the by-laws.
  2. The respondent will vote in favour of a motion at the forthcoming general meeting to approve the following improvements to common property within the applicant’s exclusive use area, subject to conditions that the applicant bears all costs associated with the improvements, maintains the improvements in good condition, and promptly remedies any adverse impacts upon lot 1 or the common property that result from the works:
  1. a.
    Installation of 3 gravel car parks;
  1. b.
    Landscaping;
  1. c.
    Installation of a new grease trap just outside the Eastern boundary of the applicant’s lot; and
  1. d.
    Installation of a small slab with a woof over it for storing lot 2’s bins just outside the Eastern boundary of the applicant’s lot.
    1. The applicant will, at his own cost, install a water meter to separately measure lot 2’s water consumption before lot 2 commences operation as a café.
    2. The applicant will restore the grease trap in lot 1’s exclusive use area to the condition it was in prior to the recent inspection by a plumber.
    1. [52]
      Section 252I(1) of the BCCMA provides that an agreement reached at the department conciliation session must be written and signed by each party to the application and the department conciliator. Section 252I(4) provides, relevantly, that if each party consents, the department conciliator must refer the agreement to the commissioner for referral to an adjudicator for a consent order. The conciliation agreement entered into between the parties on 16 June 2015 was referred back to the commissioner by the conciliator because an agreement was reached,[31] but no consent orders were made. Section 252I(5) provides that if an agreement is referred to the commissioner, the commissioner must refer it to an adjudicator for a consent order under s 276(5). It is not clear why no orders were made.
    2. [53]
      There is an issue as to whether an agreement such as that reached by the parties is capable of being enforced in the absence of consent orders. The legislation does not expressly deal with the question. That said, s 252I(4) is not mandatory in its effect. In my view, an agreement otherwise binding is not deprived of being so if consent orders are not made.
    3. [54]
      It is necessary to construe the agreement. In my opinion, its effect is that the ‘applicant’ promises to cease trying to change by-law 12 by withdrawing his motion to remove paragraphs 12.3 and 12.4 from the by-laws. That is the extent of the promise. The ‘respondent’ agrees to vote in favour of a motion to approve a number of improvements to common property. The ‘applicant’ agrees to pay for all costs associated with the improvements.
    4. [55]
      The adjudicator found that there was no evidence that the owner of Lot 1 or the body corporate contributed to the cost of the works. That finding is not challenged and is consistent with the proper construction of the agreement.
    5. [56]
      The applicant in this appeal submits that the agreement reached amounted to a contract. I agree. Both parties agreed to forbear from pursuing their legal rights in order to compromise a dispute. That is consideration sufficient to support the contract.
    6. [57]
      However, the respondent here did not agree by the contract forever to abandon his right to argue that the by-law was contrary to law. The contract was more confined in its effect.
    7. [58]
      The argument that there arose a promissory estoppel is relevant only insofar as there is no contract. Here, I have found there is a contract. But in any event, the effect of the promise sought to be enforced by the estoppel argument falls short of preventing the respondent from seeking to have the by-law set aside for invalidity. Accordingly, even if an estoppel were established, it could not succeed in the appeal.
    8. [59]
      For the sake of completeness, and although the point is irrelevant in light of my finding as to the effect of the promise, when considering promissory estoppel, the relevant detriment is that which would be suffered by the promissee if the promisor was permitted to depart from his promise. The only potential ‘detriment’ established on the evidence is the applicant voting in favour of the motion. In my view, that is not relevant detriment and, in any event, would not be sufficient to render it unconscionable for the respondent to seek to have the by-law determined as invalid.
    9. [60]
      For the above reasons, the estoppel ground of appeal is dismissed.

    The drafting ground

    1. [61]
      By this ground, the applicant submits that the adjudicator erred in making orders that did more than was necessary to give effect to her reasons, that is, by deleting by-laws 12.3 and 12.4 in their entirety rather than merely deleting the following component of by-law 12 .3:

    …without first obtaining the consent in writing of the owner of lot 1. The owner of lot 1 may grant or refuse consent in its absolute discretion and may grant its consent subject to conditions. The owner of lot 1 may withdraw its consent by notice in writing to the owner of lot 2 at any time. If the consent is withdrawn, the use of lot 2 as a real estate agency must cease immediately.

    1. [62]
      The applicant submitted that this was the component of the by-law that the adjudicator found unenforceable because it gave the applicant ‘unfettered decision-making authority’.
    2. [63]
      The respondent submits that the proposed amended by-law (without the component requiring the consent of lot 1) ‘fits squarely within the bounds of being a prohibition’.

    Consideration

    1. [64]
      The adjudicator determined that the first sentence of by-law 12.3 ‘appear[ed] prima facie prohibitive’. The component which added that the owner of lot 1 had absolute discretion meant that, in the adjudicator’s view, the by-law could not be saved in the same way it had been in Mineralogy by the inclusion of objective criteria and a reasonableness overlay.
    2. [65]
      I do not consider it sufficiently certain that the determinative factor for the adjudicator was the component which gave lot 1 absolute discretion. In other words that the by-law would otherwise have been held to be valid.
    3. [66]
      In my view, it is not reflective of the adjudicator’s reasons to simply remove that component dealing with consent by the owner of lot 1, particularly given the adjudicator’s comments regarding the inapplicability of the s 94 protection to the decision by a lot owner.
    4. [67]
      This appeal ground is not made out.

    Conclusion

    1. [68]
      Ground one has been made out. The by-law is not an invalid prohibition under s 169 of the BCCMA.
    2. [69]
      Ground two has not been made out. The errors sought to be appealed are not errors of law. Accordingly, the finding that the by-law is oppressive and unreasonable within the meaning of s 180(7) of the BCCMA stands. I note, in that respect, that an assessment of whether a by-law is oppressive or unreasonable extends beyond the terms of the by-law on its face.
    3. [70]
      Ground three is not made out. Accordingly, the respondent is not prevented from arguing that the by-law is invalid.
    4. [71]
      Finally, ground four is not made out, so the terms of the order of the adjudicator remain. In the event there has been non-compliance with the adjudicator’s order, the time for compliance is extended to three months from the date of this order.
    5. [72]
      Accordingly, the appeal is dismissed.

Footnotes

[1]  BCCMA, s 289(2).

[2]  Described this way by the applicant in the Appeal Submissions filed on 10 September 2024.

[3]  Ibid.

[4]  Ibid.

[5]  [2015] QCA 220.

[6]  Ibid, [94].

[7]  [2002] QCA 55.

[8]  Reasons, [21].

[9]  Reasons, [24], [25], [29], [30].

[10]  Reasons, [25].

[11]  [2019] QMC 13, [126].

[12]  [1937] HCA 15, [760].

[13]  [2002] QCA 550.

[14]  BCCMA, s 180(7).

[15]  [2002] QCA 550, [6] to [8].

[16]  [2020] QCATA 80.

[17]  [2012] QCATA 47.

[18]  Ibid,[43].

[19]  Ibid, [44].

[20]  [2019] QCATA 158.

[21]  Ibid, [73].

[22]  Reasons, [33].

[23]  Reasons, [34].

[24]  Reasons, [35].

[25]  Reasons, [40].

[26]  Ibid.

[27]Taubert v Body Corporate for Grenache CTS 29711 [2025] QCATA 61, [26] to [28].

[28]  (1991) 5 BPR 11, 432. See also Casuarina Rec Club Pty Limited v The Owners‐Strata Plan 77971 [2011] NSWCA 159, [43], Bapson Pty Ltd v Puyeti Pty Ltd (unreported) NSWSC 24 May 1990, BC900245 at [8] and Salerno v Proprietors of Strata Plan No 42724 (1997) 8 BPR 15,457 15,458–15,459.

[29]  Ibid 11, 434.

[30]  See cases on similar provisions Bapson Pty Ltd v Puyeti Pty Ltd (1990) NSW Title Cases 60,054; Sydney Diagnostic Services Pty Ltd v Hamlena Pty Ltd; Salerno v Proprietors of Strata Plan 42724 (1997) 8 BPR 15, 457 15,458–15,459; Regis Towers Real Estate Pty Ltd v Kin Fung (2001) NSW Conv R 55–960, [22], and compare Regis Towers Real Estate Pty Ltd v CSS Holdings Pty Ltd [2001] NSWSC 139, [21].

[31]  BCCMA, s 262(1)(c).

Close

Editorial Notes

  • Published Case Name:

    Blue Water Co Pty Ltd v Castillo & Anor

  • Shortened Case Name:

    Blue Water Co Pty Ltd v Castillo & Anor

  • MNC:

    [2025] QCATA 82

  • Court:

    QCATA

  • Judge(s):

    Senior Member Traves

  • Date:

    24 Sep 2025

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

Cases Cited

Case NameFull CitationFrequency
Albrecht v Ainsworth [2015] QCA 220
1 citation
Jump To
Cite 1 - [2015] QCA 220
Black v Summer Waters Body Corporate CTS 19297 [2022] QCATA 67
1 citation
Jump To
Cite 1 - [2022] QCATA 67
Body Corporate for River City Apartments CTS 31622 v McGarvey [2012] QCATA 47
3 citations
Jump To
Cite 1 - [2012] QCATA 47
Cite 2 - [2012] QCATA 47
Cite 3 - [2012] QCATA 47
Brunswick Corporation v Stewart [1941] HCA 7
2 citations
Jump To
Cite 1 - [1941] HCA 7
Cite 2 - [1941] HCA 7
Casuarina Rec Club Pty Limited v The Owners - Strata Plan [2011] NSWCA 159
1 citation
Jump To
Cite 1 - [2011] NSWCA 159
Crystal Waters Permaculture Village v Boyle [2020] QCATA 80
2 citations
Jump To
Cite 1 - [2020] QCATA 80
Cite 2 - [2020] QCATA 80
Enterprises Ld v Urban Council [1997] AC 168
1 citation
Jump To
Cite 1 - [1997] AC 168
Fairway Island GTP v Redman and Murray [2019] QMC 13
2 citations
Jump To
Cite 1 - [2019] QMC 13
Cite 2 - [2019] QMC 13
Goldberg v Law Institute of Victoria [1972] VR 605
1 citation
Jump To
Cite 1 - [1972] VR 605
Long Leys Co Pty Ltd v Silkdale Pty Ltd (1991) 5 BPR 11
1 citation
Jump To
Cite 1 - (1991) 5 BPR 11
Mineralogy Pty Ltd v The Body Corporate for "The Lakes Coolum"[2003] 2 Qd R 381; [2002] QCA 550
4 citations
Jump To
Cite 1 - [2002] QCA 550
Cite 2 - [2002] QCA 550
Cite 3 - [2002] QCA 550
Cite 4 - [2003] 2 Qd R 381
Ng Enterprises Ld v Urban Council [1996] UKPC 30
1 citation
Jump To
Cite 1 - [1996] UKPC 30
R v Harms [2002] QCA 55
1 citation
Jump To
Cite 1 - [2002] QCA 55
Regis Towers Real Estate Pty Ltd v Fung (2001) NSW Conv R 55
1 citation
Jump To
Cite 1 - (2001) NSW Conv R 55
Slattery v Naylor (1888) 13 App Cas 446
1 citation
Jump To
Cite 1 - (1888) 13 App Cas 446
Swan Hill Corporation v Bradbury (1937) 56 C.LR. 746
1 citation
Jump To
Cite 1 - (1937) 56 C.LR. 746
Swan Hill Corporation v Bradbury [1937] HCA 15
2 citations
Jump To
Cite 1 - [1937] HCA 15
Cite 2 - [1937] HCA 15
Swiatek v The Body Corporate for Euro Residential [2019] QCATA 158
2 citations
Jump To
Cite 1 - [2019] QCATA 158
Cite 2 - [2019] QCATA 158
Taubert v Body Corporate for Grenache CTS 29711 [2025] QCATA 61
1 citation
Jump To
Cite 1 - [2025] QCATA 61
Toronto v Virgo (1896) AC 88
1 citation
Jump To
Cite 1 - (1896) AC 88
Tregoyd Gardens Pty Ltd v Jarvis & Anor (1997) 8 BPR 15
2 citations
Jump To
Cite 1 - (1997) 8 BPR 15
Cite 2 - (1997) 8 BPR 15

Cases Citing

No judgments on Queensland Judgments cite this judgment.

1

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