An OC needs to be more than dysfunctional, it needs to be seriously dysfunctional.
“but the tribunal must makes its determination based on objective considerations and there must be objective evidence that the management of the owners corporation is seriously dysfunctional before the tribunal would be disposed to make such an order under section 162.“
JUDGMENT OF: Associate Justice Harrison
Mortlock and Anor v Owners of Strata Plan No 55434 [2006] NSWSC 363 (3 May 2006)
And you will find several CTTT cases that use the term seriously dysfunctional and refer to this case.