The High Court has allowed an appeal against a decision of the Queensland Court of Appeal relating to the alteration of the rights of lot owners to common property in a community titles scheme. The appellants and first respondent are owners of lots in the community title scheme at Viridian Noosa Residences. When the first respondent sought to amalgamate two balconies on his lot, which would require his exclusive use of the common property airspace between the balconies, the body corporate rejected the request. Following a ruling by an adjudicator, which was overturned by QCAT, the QCA restored the adjudicator’s initial ruling, holding that the adjudicator’s role was not limited to asking whether the present appellants’ objections (and those of the architect) were reasonably
held, but also to determining whether those objections were reasonable in all the circumstances: QCAT erred in deciding that the adjudicator reversed the burden of proof and made wrong factual findings, and also erred in considering material that was not put before the adjudicator.
The High Court unanimously allowed the appeal. The plurality (French CJ, Bell, Keane and Gordon JJ) held that the QCA and the adjudicator had erred in their approach to the task of the adjudicator and the question of unreasonable opposition. Determining the dispute under the Body Corporate and Community Management Act 1997 (Qld) required the adjudicator to consider whether the lot owners’ resolution in relation to their rights could be overridden under s 276. Contrary to the focus of both the adjudicator and the QCA, the adjudicator should not have focused on the Body Corporate’s obligations under s 94(2) to achieve a reasonable balance of competing interests, which, was here a question of whether opposition to the motion was reasonable, or whether the Body Corporate acted reasonably in refusing to give approval (at [47]–[48]). This concern with the reasonableness of the Body Corporate’s decision led both the adjudicator and the QCA into an error of law (at [52]). More specifically, the QCA erred in holding that the respondent’s legitimate interest in improving his lot was a consideration that tended to show that opposition would be unreasonable: nothing the Act suggests another lot owner may be required by an adjudicator to assist another owner to enhance that other owner’s interest (at [61]). The QCA also erred in proceeding on the basis that the common property airspace was of no use to anyone but the first respondent, and that this tended towards unreasonableness of opposition: ‘A person with a property interest may reasonably insist on conserving that interest even if it is not presently being employed to that person’s material advantage’: at [62]. Ultimately, the proposal was apt to create a reasonable apprehension that it would adversely affect the property rights of opponents to the proposal, and in those circumstances, that opposition could not be said to be unreasonable (at [64]).
Nettle J agreed with the orders of the plurality, and likewise held that the Tribunal was correct in concluding that the adjudicator had erred in law. Nettle J focused on five errors in the QCA judgment, quoted and analysed passages from the judgment, and concluded that the QCA potentially mis-stated the role of the adjudicator (at [92]–[96]); that it erred in concluding that the adjudicator’s reasons were sufficient and without errors (at [97]–[99]); that it erred in dealing with the factual questions relating to deviation from the design intent (at [100]–[103]) and noise and privacy (at [104]–[105]); and finally, that the QCA erred in considering the ‘floodgate’ argument, that other similar proposals might follow, as being an unreasonable basis for opposing the proposal (at [106]–[107]).
| High Court Judgment | [2016] HCA 40 | 12 October 2016 |
| Result | Appeal allowed | |
| High Court Documents | Ainsworth v Albrecht | |
| Full Court Hearing | [2016] HCATrans 187 | 29 August 2016 |
| Special Leave Hearing | [2016] HCATrans 122 | 25 May 2016 |
| Appeal from QCA | [2015] QCA 220 | 6 November 2015 |
| Tribunal Decision, QCATA | [2014] QCATA 294 | 17 October 2014 |
I may be wrong, Martin, but it occurs to me to me a little odd that the powers of the adjudicator to make specific determinations upon certain states of satisfaction — eg satisfied as to unreasonableness of opposition to a motion which can only be passed without dissent — and to which the court gave prominence — are in a schedule. And that the broader powers given to adjudicators in the main provision in the BCCM Act, s 276, as far as I can see are not to be read down by reference to the schedule: s 276(3): “Without limiting subsections (1) and (2) [**which confer broad powers**], the adjudicator **may** make an order mentioned in schedule 5.” [***] :- bloggers observations and emphasis.
Hi Kevin – thanks for weighing in. Could you say a bit more about what seems odd about it – do you mean the Court should have paid attention to it and didn’t; or that it seems odd that the legislation placed important provisions about the mechanics of decision-making into a schedule to an act? (or something else entirely?)
Hello, Martin and all readers.
Can I try to explain what is vaguely troubling me in this way?
For a resolution without dissent (as required for the exclusive grant of use of airspace) the relevant item in the schedule dealing with adjudicators’ orders speaks specifically of ‘opposition in all the circumstances unreasonable’. The court contrasted item 24: If satisfied a decision to pass or not pass a motion at a general meeting of the body corporate was unreasonable—an order declaring that a motion was invalid or giving effect to the motion as proposed, or a variation of the motion as proposed. The quality of the opposition contrasted with the quality of the group decision — the passing or rejection of a motion.
But subss 276(1) and (2) give a very broad power to make orders simply just and reasonable to resolve disputes. And importantly subs 276(3) provides: ***Without limiting subsections (1) and (2)***, the adjudicator may make an order mentioned in schedule 5 (the relevant schedule about adjudicators’ orders just mentioned.
Construing items in the sch as having limiting pre-conditions to the exercise of power is as far as I can see clearly limiting the otherwise wide operation of subs 276(1) and(2.)
Also, if you are building a bridge across airspace (so to speak), isn’t that altering what is contained in a scheme lot. (In Queensland, balconies and projections must be integral with and form part of a scheme lot.) This was not like a case of painting some lines on a concrete pavement on the ground and saying, ‘This is lot 10’s car space’. If something becomes part of a lot it can’t be common property given exclusive use attached to some specific lot. The whole case is just silly!!
Hi Martin, and tell me if I am wasting paper or the equivalent in your web log thingo.
To explain my issue a bit more fully here’s relevant bits of Body Corp Act s 276 stripped to essentials:
276 Orders of adjudicators
(1) An adjudicator…may make an order that is just and equitable in the circumstances (including a declaratory order) to resolve a dispute, in the
context of a community titles scheme, about—
(a) […]; or
(b) the exercise of rights or powers […] under this Act or the community management
statement; or
(c) […]
(2) An order may require a person to act, or prohibit a person
from acting, in a way stated in the order.
(3) Without limiting subsections (1) and (2), the adjudicator may
make an order mentioned in schedule [about what specific orders can be made in specific types of case].
I would have thought that means that the schedule is intended merely to give examples and not limit the wide powers in subss 276(1) and (2). But even as I type that I suppose it is a little ridiculous when you read the detailed items in the schedule.
By the way it is para (b) of subs 276(1) which the High Court (and no one below) said was engaged; that is, para (b) about rights and powers under the Act. It was not a case about the administration of common property broadly, which must be undertaken reasonably at all times and in all situations under the Act in the most general way.
I think this may be important in relation to decisions on the vexed issue of lot owners keeping pets — that issue is really about rights and powers of lot owners inter se.
Not a problem Kevin, and no waste of paper on the internet of course. I must confess I know very little about the intricacies Queensland planning/body corporate law and don’t really have any strong views on this. I think the Court’s focus is on the adjudicator’s misframing of the section the dispute was brought under (that is s 276), ‘skewed’ the adjudicators inquiry and led to the error of law, namely in looking to the reasonableness of the body corporate’s actions with reference to s 94, whereas the adjudicator should have focused on the vote — this seems to be the views in [26] to [28]. As to the suggestion that the HCA said para (b) was engaged, I think this might be obiter – the plurality said ‘It is convenient to note here that another view is that the dispute concerned the exercise of rights or powers under the Act, so that the dispute was within s 276(1)(b).’ — this strikes me as just an extra note, and not really crucial to the overall contention that the adjudicator’s inquiry was misframed. So I don’t know that any question about limits from the schedule to these broad powers really comes up: the adjudicator erred by focusing on the wrong decision, not because she didn’t have the power to resolve the dispute. But I might be missing the force of your critique so don’t hesitate to come back.
Hi, I did notice that use of the word **SKEWED** very much too!! Isn’t that a real modernism? Bet Sir Owen Dixon wouldn’t have used that word. He might have used the word ‘askew’ or spoken of distortion of reasons but would never have used ‘skew’ as a verb — betcha!! (As my teenage daughter says.)
Clearly on reflection, however, your analysis is sound with respect and brings out the real question, with respect — and there is a clear difference between the reasonableness of a decision versus the reasonableness of opposition especially in a context where the opponents are perfectly entitled NOT to be altruistic! Body corporate law is fraught in Queensland, I will give you the drum. Now I don’t want to be too non-PC, but practising lawyers in Qld who act for lot owners and the bodies corporates for schemes in Qld know the worst are medium to high class and really posh townhouse developments full of…err…retirees who comb the decisions of adjudicators, QCAT and the courts and others with – well – a fine tooth comb and invest many hours in resolving or lovingly nursing their disputes. It is pretty funny stuff if you can stomach it.
The really fascinating discussion in the judgment may be that of Nettle J when he explains that the reasonableness of a decision judged objectively is not something on which minds can or really should differ. There is with respect very learned insight in his Honour’s judgment — it is just somehow a bit intimidating to read I find. And honestly, I am not sure Qld lawyers like McMurdo P being overruled — let’s be frank about it. We’re not reasonable on that issue! Because in Qld we are a bit different.
Will post a blog entry about a scenario in connection with by-laws about dogs and pets soon when I formulate it. But please don’t hesitate to block me when I am getting tedious, of course, or wasting precious blog strata-space-cloud.