A dispute over how strata insurance premiums are apportioned between a backpacker hostel and apartment owners is headed for court, after an adjudicator ruled it needed settling in another jurisdiction. 

The Queensland Body Corporate and Management Commission has stepped back from the case after the property’s body corporate sued the hostel owners in the District Court over debts relating to contributions. 

Commission adjudicator Ron Miskinis says the apportionment and debt matters are related and has refused to declare void a decision by the apartment owners to charge most of the premium to the hostel. 

He makes no findings on the underlying dispute, which “should be dealt with in a court or tribunal of competent jurisdiction”. 

The dispute over insurance for the Surfers Plaza Resort arose after the premium jumped from $71,708 in 2023-24 to $704,727 in 2024-25, coinciding with the opening of the 270-bed hostel. 

The property has 146 lots, of which 144 are residential and two are commercial – one a shop and the other the hostel. 

An owners’ meeting in 2024 voted to apportion the premium 35% to residential owners, 2% to the shop and 63% ($443,978.57) to the hostel. 

The owner of the hostel lot, Crestden, and lessee Tequila Sunrise Pods said the allocation was unfair and asked the commission for an interim order restraining the body corporate from implementing the charge. 

The adjudicator made the order last year but in November received an urgent application from the body corporate’s lawyers saying their client was in a dire financial position as a result. This led to him cancelling the order. 

This month, the solicitors advised the body corporate was suing Crestden and Tequila Sunrise Pods in the District Court over debts of $465,752 relating to arrears of contributions. 

Noting an adjudicator does not have jurisdiction over debt disputes, Mr Miskin says it would be inappropriate for the adjudication process to proceed when the District Court is involved. 

He says he is effectively limited to considering written submissions and, while he can exercise investigation powers, “in a court, the parties will be able to seek directions and orders for documents and witnesses to be produced”. 

Read the decision here.