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 –). This concern with the reasonableness of the Body Corporate’s decision led both the adjudicator and the QCA into an error of law (at ). 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 ). 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 . 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 ).
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 –); that it erred in concluding that the adjudicator’s reasons were sufficient and without errors (at –); that it erred in dealing with the factual questions relating to deviation from the design intent (at –) and noise and privacy (at –); 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 –).
|High Court Judgment|| HCA 40||12 October 2016|
|High Court Documents||Ainsworth v Albrecht|
|Full Court Hearing|| HCATrans 187||29 August 2016|
|Special Leave Hearing|| HCATrans 122||25 May 2016|
|Appeal from QCA|| QCA 220||6 November 2015|
|Tribunal Decision, QCATA|| QCATA 294||17 October 2014|