Ainsworth & Ors v Albrecht & Anor

[2016] HCATrans 187

[2016] HCATrans 187

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Brisbane  No B37 of 2016

B e t w e e n -

KJERULF AINSWORTH

First Appellant

LISA MARTOO

Second Appellant

JOHN MORRIS

Third Appellant

MARK LANG

Fourth Appellant

JOHN MAINWARING

Fifth Appellant

and

MARTIN ALBRECHT

First Respondent

BODY CORPORATE FOR VIRIDIAN NOOSA RESIDENCES CTS 34034

Second Respondent

FRENCH CJ
BELL J
KEANE J
NETTLE J
GORDON J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON MONDAY, 29 AUGUST 2016, AT 10.45 AM

Copyright in the High Court of Australia

____________________

MR S.S.W. COUPER, QC:   May it please the Court, I appear with my learned friend, MR K.N. WILSON, QC, for the appellants.  (instructed by Australian Property Lawyers)

MR D.R. GORE, QC:   May it please the Court, I appear with my learned friend, MR M.J. BATTY, for the first respondent.  (instructed by Mahoneys Lawyers)

FRENCH CJ:   Thank you, and there is a submitting appearance for the second respondent.  Yes, Mr Couper.

MR COUPER:   Your Honours, the way in which this matter came before the adjudicator was on the basis that there had arguably been a contravention of section 94(2) of the Act and that the body corporate had not acted reasonably in failing to pass the motion.  It was common ground and, in our submission, it is correct to say that in this instance, determining whether the body corporate acted reasonably is dependent upon determining whether, as is said in item 10 of Schedule 5 of the Act, that the resolution without dissent was not passed because of opposition that, in the circumstances, is unreasonable. 

It is unusual to find that pathway in that form but there is no – there is no other apparent way of linking 94(2) with a motion of this type.  The body corporate has no super‑added adjudicative function to determine, for example, if a lot owner says “no” whether that lot owner’s dissent ought to be disregarded because the lot owner is acting unreasonably.

FRENCH CJ:   Ultimately, I think there has been a lot of ink spilt in this matter on the way to this Court.

MR COUPER:   Yes, your Honour.

FRENCH CJ:   More than necessary, it would seem.

MR COUPER:   Yes.

FRENCH CJ:   But, ultimately, we are focused on the function of the adjudicator, are we not?

MR COUPER:   That is so, your Honour.  To come to the point, in our respectful submission, the adjudicator proceeded on the basis that, in determining whether dissent was unreasonable, there was only one right answer, that is, she took her role to be that she had to determine for herself whether she regarded the dissent as unreasonable, rather than considering whether there were a range of views open, including reasonable views which justified a dissent. 

FRENCH CJ:   We have to look at the character of the decision of the body corporate, do we not?  This was a non‑dissent resolution ‑ ‑ ‑

MR COUPER:   Yes, your Honour.

FRENCH CJ:   ‑ ‑ ‑ in relation to an exclusive use by law affecting the common property.

MR COUPER:   Yes.  In our submission, a couple of things flow from the nature ‑ ‑ ‑

FRENCH CJ:   How did reasonableness get into that?

MR COUPER:   Reasonableness, in our submission, gets into that only in this way.  Starting point is that a lot owner who has no rights is seeking exclusive use of part of the common property and needs absence of dissent.  Other lot owners, in our submission, are entitled to say, can I reasonably form the view that this proposal is against my interests?  It will have an adverse effect on me or the body corporate, generally.

FRENCH CJ:   Can they just say, I do not want to give away my bit of common property – or my interest?

MR COUPER:   In one respect, your Honour, they could, with respect, and it has occurred in this case.   The proponent says, I am not going to offer to pay you anything for your common property.  The lot owners say, you are clearly taking a benefit from this.  It is obvious that is your intention.  It is of value to you.  There was valuation evidence which put a monetary figure on it.  The lot owners were entitled to say, if you are not prepared to pay the body corporate for the benefit which you obtain from, in effect, taking part of our rights, then it is reasonable for us to decline to agree to your proposal.

KEANE J:   If that happens, so that there is no alteration to the by‑laws and the management scheme of the body corporate of the complex, there is nothing left for 94(2) to do, is there, because if there is not a choice available to the body corporate insofar as it is required to obey the law, then it cannot be unreasonable because it obeys the law.

MR COUPER:   That is so.

KEANE J:   So it all depends on the exercise under 276(3) and item 10 of Schedule 5.

MR COUPER:   Yes, your Honour.

KEANE J:   That is concerned with the relevant opposition being opposition by a lot owner.

MR COUPER:   Yes.  The question is does any or each individual lot owner have a reasonable ground to oppose the motion.  If they do, then 94(2) cannot have been contravened.  That is the essence of it.  In terms of non‑payment, that is one reasonable ground for opposing.

But, as I say, in our submission, what the adjudicator did was to treat the matter as if there could only be one reasonable answer, and she therefore approached the matter by saying “I will look at all the competing evidence” – in particular, architect’s reports, of which there were many – and say “I prefer these of this architect over all the others”.  Therefore, in my view, opposition cannot have been reasonable based upon the opinions of other architects, and we will come to a little of the detail, if we may; that is, she took there to be a binary choice – reasonable, yes or no.

In our submission, the correct approach was to put herself in the shoes of a lot owner:  “I am a lot owner who has to decide whether my interests are adversely affected.  I know a number of things, including I know that expert architects have said” – and we can crystallise this just by focusing on the owners of Lot 10 – “my privacy will be adversely affected.  People will be able to look straight into my living room”.

If one asks the question could that lot owner reasonably say, “I am not prepared to agree to a proposal which has an impact on me, given that it has a basis in expert evidence which can’t be dismissed as expert view not reasonably held”, then the answer is that dissent was reasonable.  The approach that the adjudicator took can be seen ‑ ‑ ‑

GORDON J:   Does that mean on your submission that it is really a two‑stage process for the adjudicator:  first, to identify what are the grounds of opposition, do they exist, what are they; and then, secondly, to inquire whether or not, having identified them, there is a rational or logic reason for that ground?

MR COUPER:   In this case, your Honour, yes, because there were identified grounds.  There may be circumstances where no ground is known, where the adjudicator might be able to say to dissenters, “I give you a chance to make a submission to me about why you dissented”, and if no submission is forthcoming then the adjudicator might more easily form a view that no grounds were identified, and therefore no ‑ ‑ ‑

GORDON J:   That is why we had the two‑stage process because if you get to the first stage and there are no identified grounds then there is, in a sense, no basis for the opposition.

MR COUPER:   Yes, your Honour.

GORDON J:    Does that mean also in the way you would put it that given the way in which this arrangement was structured you only need one lot owner to have a logical or reasonable basis for opposition to be sufficient?

MR COUPER:   Yes, your Honour, one dissent is enough.  As I say, the starkest focus, in our submission, is on the way in which the adjudicator treated the question of the privacy of the owners of Lot 10.  Could we ask your Honours to go to volume 2 of the appeal book to page 530 and your Honours will see at about line 30 on the page the heading “Privacy and view concerns”.  The adjudicator’s approach was to identify first, in paragraph [71]:

The Owners of Lot 10 say their outward views would be partly compromised . . . and their internal privacy would be diminished due to people on the deck –

and so forth.  One notes at the foot of paragraph [71]:

Several floorplans and titles plans have been submitted with differing interpretations of the current sight lines and impacts of the extension.

Those interpretations came from architects’ reports, including Mr McKerrell’s and Mr Mainwaring’s.  At [72] the adjudicator notes, after talking about what vision currently exists:

This level of vision may be increased by the deck extension.

Then the adjudicator embarks upon an exercise, which we will come back to, if we may.  Paragraph [75] on the next page:

Most of the expert architectural opinions are brief in regard to the impact on privacy –

and then the adjudicator sets them out; and a fair summary, as three architects said, there would be substantial adverse impact on the privacy of Lot 10, and three said there would not.  Then at paragraph [76]:

On balance I prefer the evidence of McKerrell as the most comprehensive and substantiated submission on this issue.

What the adjudicator has done is to choose between the architects’ opinions without saying that any of the architects’ opinions saying there would be an adverse impact on privacy were unsustainable, or unreasonable, or based on false factual premises; chooses one architect’s opinion over the others, and says, therefore, in paragraph [77]:

Given the material presented in the submissions, I conclude that any impact on the privacy of and views from Lot 10 will be minimal.

In our respectful submission, that is an indication where the adjudicator’s approach plainly miscarried.  If she had asked the question, could a lot owner – in this case, the owners of Lot 10 – say “Mr Mainwaring has said there will be a substantial impact on my privacy.  People will be able to look right through into my living room”, that is a ground for me to dissent.  The answer would be yes, of course it is; it is a reasonable ground.

FRENCH CJ:   What is the relevance of the proposition in paragraph [73] about the absence of a common law statutory right to a view, et cetera?

MR COUPER:   That is the point we were coming back to, your Honour.  There is no relevance to it.  Paragraphs [73] and [74] indicate an approach which says unless the lot owner dissenting can assert a common law right to privacy, or establish that the construction of the deck would amount to a statutory nuisance under section 167 of the Act the dissenter is not entitled to complain about any loss of privacy.

That is, in addition to choosing between experts, the adjudicator then applied the wrong test.  Rather than asking – I will put it in colloquial terms – the owners of Lot 10 bought a lot where they knew what they were getting.  They could see what the privacy aspect was, and they could see what their views were, because there was a deck that is then current form. They were entitled to say “This will change.  Will this change adversely affect me?”  They need not say we have to demonstrate that we have some right to restrain the nuisance, or some common law right of privacy, in order to sustain a reasonable objection.  That is the added aspect of the error of the adjudicator, with respect.

FRENCH CJ:   So, as long as a dissenting owner has a rational basis for the dissent, it is not, on your submission, the adjudicator’s job to work out whether that view is correctly held or not?

MR COUPER:   That is so, provided that there are facts which support a rational basis for dissent then the adjudicator does not have the role of saying “I prefer these facts over those facts, and form my own view, which is the only possible view as to reasonableness of dissent”.

FRENCH CJ:   Because you say that in doing that kind of exercise the adjudicator is going beyond the criterion of determining whether the opposition is unreasonable.

MR COUPER:   Yes, your Honour.  The other aspect of this privacy part of the reasons which really demonstrates how far the adjudicator went, the report of Mr McKerrell was not available – did not exist – at the time of the meeting.  It was produced after the event as part of the submissions to the adjudicator.  So, the adjudicator has chosen to take information not available to the lot owners at the time of the meeting and say, on the basis of that information, I find that at the time of the meeting, a dissent was unreasonable.  When item 10 of the schedule speaks of “in the circumstances”, in our submission, it is quite plain they must be the circumstances which were in existence at the time the vote was taken.

GORDON J:   So, does that mean in relation to her powers of investigation, they are investigation into circumstances that existed at the time?  Does that mean, in a sense, looking to see whether or not it is rational or logical rather than the merits of it?

MR COUPER:   In essence, yes, your Honour.  If we can put it in this way; the process a lot owner had to embark on would have included trying to ascertain relevant facts to the extent they could at the time of the meeting.  If there were facts which were reasonably open to them to accept, then it was not the role of the adjudicator to say, after the event, other facts emerged which might have put a different complexion on matters at the time of the meeting.  It is to go beyond the role the adjudicator had.  I speak of facts but in this case it is expert opinions which are the focus of what the adjudicator was dealing with.

FRENCH CJ:   Can I just ask about the relationship – I suspect this not in contest – but the relationship between the general powers of the adjudicator in 276(1) and the orders set out in Schedule 5 which are not exhaustive of those powers as 276(3) makes apparent.

MR COUPER:   Yes, your Honour.

FRENCH CJ:   But, so far as an order in the form of 10 is concerned, do you say that the power to make that kind of order is conditioned on the satisfaction that the circumstances – opposition is, in the circumstances, unreasonable?

MR COUPER:   Yes, your Honour.  And, that is the kind of order which the adjudicator made.

FRENCH CJ:   Yes.

MR COUPER:   As we say, the submission ‑ ‑ ‑

FRENCH CJ:   So, to that extent, 10 confines, or limits, the power – the general power – under 276(1) because it says if you are going to make this sort of an order, it is on the basis that the opposition, in the circumstances, was unreasonable.

MR COUPER:   In our submission, yes, your Honour.  We take it a step further, although it is probably unnecessary to do so, in order for there to be an adjudication at all there must be, in this case, identified a contravention of the Act.  The only contravention said to exist was a breach of section 94(2) that the body corporate had acted unreasonably in failing to pass the motion.  So, the question becomes, in the context of a motion without dissent of this type, what is the criterion by which one can judge whether the body corporate has acted unreasonably in failing to pass the motion.  As I say, although it is in a peculiar place, the logic dictates that the criterion is that spelled out in item 10 of the schedule.

FRENCH CJ:   Item 10 of the schedule is not about so much the body corporate’s obligation under 94(2) as it is about the power of the adjudicator to make an order of that kind in relation to resolutions which require no dissent in order to be passed.

MR COUPER:   Your Honour, we would say in certain respects that is right, but there is also an argument that one, in order to determine whether 94(2) has been contravened in this circumstance, in determining whether the body corporate has acted unreasonably in failing to pass the motion, item 10 provides the specific criterion to determine whether the body corporate has acted unreasonably.  If a dissenter has reasonably dissented then the body corporate has acted reasonably in failing to pass the motion.  If they have not, then 94(2) is enlivened.  That is the other way in which the provisions fit together, in our submission.

BELL J:   It is a curious notion that a body corporate might act unreasonably by acting in compliance with its constitution.  The body corporate in relation to a motion that must be passed without dissent is placed in a difficult circumstance where there is dissent.

MR COUPER:   This is why we say, your Honour, that the two logically have to fit together.  The body corporate has no super‑added role to say you dissenter are acting unreasonably therefore we can somehow, despite the statute, ignore your dissent and pass the motion.  The two are inextricably linked in this type of case.

FRENCH CJ:   So, if you have a single person dissent, which is unreasonable, I suppose 94 can be fitted into that on the basis that the decision thereby – the decision attributed to the body corporate, that is, not passing the resolution, is unreasonable.

MR COUPER:   Yes, your Honour.

FRENCH CJ:   It does not matter about what the collective majority thinks ‑ ‑ ‑

MR COUPER:   No, that is right.  If there is one dissent and it is unreasonable, the consequence flows through to 94(2) that the refusal to pass the motion is unreasonable. 

BELL J:   But in a mechanical sense, what has to happen on this analysis is that there is then a dispute in which it is alleged that there is a contravention of 94(2), is that the way it works?  I mean, the body corporate can hardly at a meeting proceed to pass a motion, notwithstanding dissent, it being a motion that can only validly be passed absent any dissent.

MR COUPER:   With respect, your Honour is right.  The effect of refusing the motion based upon a dissent is that it enlivens the jurisdiction of an adjudicator in due course because there has been arguably a contravention of 94(2).  Your Honours, may we turn then to another illustration of the adjudicator taking the approach that there can only be one view which is reasonable and this appears in the section headed “Noise concerns” which appears at page 530 of volume 2 of the appeal book.

Before we come to the reasons, may we make a submission about the way in which a lot owner would rationally proceed?  The deck was to be enlarged.  The material from Mr Mainwaring, who was the architect who produced the design, made the point that the decks were specifically designed to be small to limit their functionality so that there would not be large numbers of people out on decks because this was in part a holiday letting proposal and in part a residential proposal.

So, the decks were designed to limit the prospect of, as he put it ‑ for your Honours to open the pages of the appeal book in a moment – noisy parties and so forth on these decks.  This proposal was to increase the size of the decks by joining two together which would rationally have the consequence that what the designer had sought to avoid would come to pass.  There would now be a large deck with a greater prospect of a number of people out on decks partying.  Would a rational lot owner think this might lead to noise, more noise than there is now.  With respect, the answer is obviously yes.

Then one turns to the approach that the adjudicator took about this and this appears firstly at paragraph [66]:

No submitter has demonstrated that the expansion of the deck will inherently increase the disturbance to other occupiers or users of common property compared with the potential use of the current deck configurations.

The adjudicator goes on:

I have been given no evidence . . . increase noise transference or . . . automatic acoustic impact.  Rather the concern relates to the potential increased usage of the decks.  However the apprehended disturbance is not quantified or substantiated.

The adjudicator goes on in the same vein in the next paragraph and your Honours see what is said in the first two sentences:

However I do not consider that it can be assumed that any increased use of the larger deck area will cause a disturbance.  There is no demonstrable evidence it will do so.

At [68] she notes the intended restriction of functionality of decks in the design and then at [69] another consideration arises in the reasons and the reasons conclude on this topic:

However the unsubstantiated risk of a potential nuisance is not a reasonable basis to refuse a proposal.

The notion adopted by the adjudicator is that there was not only a persuasive onus on the dissenters but they had to provide some form of evidence concerning a future hypothetical event ‑ that is, unless they could demonstrate by evidence that there would be X more people on the deck generating Y more decibels of noise or something like that, then they could not have a reasonable view that the prospect of increased noise was adverse to their interests such as to justify a dissenting vote.

In our submission, that approach is inconsistent with the approach exemplified in a passage in George v Rockett – that is, the lot owners had to embark on this exercise – “I form an opinion that there is a real risk to me of increased noise from these larger decks - are there reasonable grounds for me to have that opinion when we know (a) the deck is larger, (b) it is designed to displace the limited functionality to limit the chance of parties, (c) as a matter of logic, larger decks in this sort of environment are likely to lead to more people on decks and more noise”.

The relevant passage from Rockett – and we apologise that it was not in our list of authorities – can be found extracted by the Tribunal amendment at page 574 in volume 2 of the appeal book.  At the foot of paragraph [57] ‑ ‑ ‑

FRENCH CJ:   It is really different statutory words, different context.  Transplanting it into this situation is a bit hazardous, is it not?  Your point simply is, as I understand it, the appropriate test is whether there was a rational basis for the position that the dissenters took.

MR COUPER:   Yes.

FRENCH CJ:    That means there is some factual basis for it in this particular setting.

MR COUPER:   Yes.

FRENCH CJ:   You say the adjudicator departed from that because she went into a weighing‑up exercise of the rights and wrongs of all these various considerations.

MR COUPER:   That is the essence of it.  Yes, the George v Rockett point is, in a sense, a subsidiary point in this context.  But, the proposition in George v Rockett, in our submission, is still validly applied in this case.  The lot owners had to form an opinion.  The question really – the sequence is could they form the opinion that there was a real adverse potential for impact on them.  They had to have reasonable grounds to form that opinion.  If they formed that opinion on reasonable grounds, then it was reasonable for them to dissent.

The point made in the passage in George v Rockett is that one can form an opinion on reasonable grounds without having every element in the chain of reasoning proved by evidence.  That is the only point which we seek to draw from George v Rockett.  It was not necessary for them to have a reasonable opinion that they be able to prove what, in quantified terms, was the impact of the future hypothetical event of the construction of this deck and more people being out there creating a noise.  So, to that extent, and perhaps in a subsidiary fashion, the adjudicator applied the wrong test again.

May we turn to the adjudicator’s reasons to deal with what is really a related aspect which appears at page 528 of the appeal book under the heading “Precedent concerns”?  The hypothesis put forward by a number of dissenters was if this deck is allowed, then there is a pretty fair chance others will want to do the same thing because the notion underlying the respondent’s desire to do it was it made the deck more useful and more functional and improve the amenity of his unit.  If it held good for the respondent, logic dictates it held good for others.

So, the dissenters took the view, if this is allowed, then it is likely others will follow and the issues about noise concerns because of larger decks and so forth, they are not confined to one deck, but the real risk is there will be a number of them and the adverse impact will be greater.  The adjudicator in paragraph [49] recognised that:

The Body Corporate must act reasonably in making a decision ‑

would make consistent decisions and made the point that:

If another lot owner proposed an identical alteration with identical impacts on the scheme and adjacent lots, it would be unreasonable to approve one and refuse the other –

That ought then, in our submission, have led to the view that there was, therefore, a risk that if the adjudicator said this ought to be allowed, there is no basis to refuse it, then others would follow.  But instead she embarked on some reasoning which, with respect, is somewhat difficult to follow.  The second half of paragraph [49]:

However if it were to be determined that one deck amalgamation would have no adverse impact on other owners . . . I find it difficult to see how the cumulative effect of multiple identical improvements would generate an adverse impact.

She has formed her own view, if I think that one is not bad then there is no basis to say that more than one can be bad.  Again, it another ‑ ‑ ‑

FRENCH CJ:   Well, that is a different line of country in terms of the argument, is it not?  It is just saying that that is not logical.

MR COUPER:   We cannot complain about the lack of logic in her reasons, but what we do say is it illustrates again she has taken the approach of saying, I need to decide for myself, on my own view, is this basis for dissent reasonable?  There is no room for a range of options; no room for a range of reasonable views.  This is just an illustration of that same approach.

The fact that she got to her own view by a route which makes no sense is in a sense neither here nor there, but the point is that she has again embarked upon her own assessment of, do I think this is reasonable or not, whereas the appropriate approach would have led, in our submission, to this conclusion:  there is a real risk if there is one, there will be more.  There is a real risk there will be much more noise as a consequence, therefore people can say, I properly regard that as being adverse to me and I dissent, particularly against a background of where no payment is offered for the space and no compensation is offered to any lot owner for the adverse consequences.  This is not a case where in a sense you had to weigh up, am I being compensated enough for the risk I run?  There was no compensation at all to be had, it was, with respect, in that sense all one‑way traffic. 

May we then turn to the reasons of the President in the Court of Appeal?  In particular, can we ask the Court to go to page 640 of the appeal book to paragraph [82], and a little above point 30 on that page the learned President, with respect, recognises the approach the adjudicator took and in effect endorses it, where her Honour said:

Contrary to the respondents’ contentions, the adjudicator was not limited to determining whether the respondents’ opposition to the motion could have been reasonably held.  She was required to reach her own conclusion after considering all relevant matters.

That is, the Court of Appeal took the view that the adjudicator could embark on a fact‑finding mission and decide what was the single reasonable decision which a lot owner could come to about whether to dissent or not.

NETTLE J:   That error begins in paragraph [80], does it not?

MR COUPER:   Yes, it does, your Honour.  Yes, it does.  We are simply coming to the summary of where it is set out in its plainest terms, with respect.  The other aspect which emerges from the learned President’s reasons, which is another recognition of what we would submit is an error by the adjudicator, is found in at paragraph [83] at the top of the next page, 641, speaking of what the adjudicator had done:

that the applicant had a legitimate interest in improving his lot –

Part of the process the adjudicator embarked on was to say there was a balancing act between, on the one hand, the interest of the proponent, the respondent here in doing something good for his lot and the interests of the potential dissenting lot owners regarding the consequences of the deck extension. 

In our respectful submission, that involved an error.  There is no basis as a matter of proper construction of the Act, in our submission, to say that a lot owner is required to embark on a balancing act between what is the extent of the impact on me of your proposal and how much will it benefit you.  The lot owner is entitled to say you have a proposal.  I need to assess what its impact on me will be against, particularly, in this background – in this case, the background is you have offered me no compensation for whatever that impact might be. 

GORDON J:   Is it not stronger than that, though, or either be stronger in the sense that these lot owners bought into an environment where their rights are identified and they had purchased those rights and, in a sense, the scheme provides for a veto by one vote. 

MR COUPER:   With respect, your Honour is quite right.  That is a far more succinct way of putting it than I was ‑ ‑ ‑

GORDON J:   I do not know about that.

MR COUPER:   Your Honour is quite right.  People bought lots and paid a lot of money for them where a scheme was in place where if someone wanted to change their lot in this way there was effectively a right of veto.  None of that ‑ ‑ ‑

GORDON J:   On a logical ‑ ‑ ‑

MR COUPER:   On reasonable grounds.  But none of that involves the notion that in forming a view about reasonable grounds what I need to say – I need to think about what is good for you, the proponent, and whether that outweighs what is bad for me.  That was part of the approach the adjudicator plainly took as recognised in the Court of Appeal.

FRENCH CJ:   The first sentence in paragraph [80] to which Justice Nettle referred you was to describe the role of the adjudicator inter alia as:

to decide whether it was appropriate to give effect to [the applicant’s] motion –

I think that comes out of, as the footnote indicates, 269(1) but the concept of “appropriate” must derive its content, I suppose, from the rest of the Act in terms of ‑ ‑ ‑

MR COUPER:   On our submission, plainly so, your Honour, but “appropriate” in this context must mean appropriate given the requirements of the Act about when a motion without dissent is properly failed to be passed.  That was the start of the recognition of the process of reasoning which was, in our submission, in error.  The learned President at paragraph [84] at page 641 merely sets out what would have happened if the proper test had been adopted.  Paragraph [84] involves a plain recognition that the other view that the dissent was reasonable was open, that it involved a value judgment:

on which there was room for reasonable differences of opinion –

Her Honour the learned President recorded that view by reference to the approach the Tribunal member had taken, where he expressed the view that the approach of the adjudicator was wrong and there were reasonable grounds.  But the fact that the court recognised that there were value judgments in which there was room for reasonable differences of opinion demonstrates, in our submission, that if the correct test had been applied, the inevitable outcome would have been that the application at first instance by the respondent, the adjudicator, would have failed because there were a range of reasonable views, and plainly, dissenters held some of them.

NETTLE J:   What does Norbis v Norbis have to do with it?

MR COUPER:   Nothing so far as we can tell, your Honour.  Then, if we may, at paragraph [92] at page 643, although this was a discussion about the question of reversal of the onus of proof, at a little below point 20 on that page, the learned President, speaking of the adjudicator, says:

She made primary findings of fact, after considering the competing material and submissions, that she was not satisfied the specific objections raised by the respondents were made out –

That again highlights how the process completely miscarried:

But she did not reverse the onus on the ultimate question –

which does not matter very much in the scheme of things.  Where the approach is fundamentally wrong, it is, again, in a sense, a subsidiary point to say that in the passages we have identified in the written submissions, the adjudicator’s approach was to say “The dissenters have not persuaded me that their dissent has sufficient substance”.  It is just an element of the application of the wrong test, with respect.  Those are our submissions, if the Court pleases.

FRENCH CJ:   Thank you, Mr Couper.  Yes, Mr Gore.

MR GORE:   Thank you, your Honours.  Have your Honours had the opportunity to read the summary of oral argument?

FRENCH CJ:   Not yet.  Just take a seat for a moment.  We will have a look at it.  Yes, Mr Gore.

MR GORE:   Your Honours, can we begin with what we have described as the test for unreasonableness issue and it is our respectful submission that the error in the approach urged by the appellants is that it is only looking at the matter from the perspective of the lot owner.  A good example of that emerged in the oral argument today when it was submitted that a lot owner is not required to embark on a balancing exercise.

We do not submit that the lot owner is required to do that at all but we do submit that that is the role of the adjudicator.  It is the adjudicator’s function to embark on a balancing exercise to judge the interests of the proponent of the motion on the one hand with the interests of the opponents of that motion on the other hand.  In our submission, that approach is supported by the authorities and may we be granted the indulgence of taking your Honours to some of them.  These are authorities which were referred to by the learned President and they do support the position that we urge.

FRENCH CJ:   Your primary resort must be to the text and context of the legislation, must it not?

MR GORE:   It is, your Honour, and it seems to be common ground now that the role of the adjudicator issue and the test for unreasonableness issue are interrelated.  We do submit that in relation to the role of the adjudicator issue that the adjudicator does have the role of a merits review and there are various sections of the Act that make that good.

The term “merits review” is not used but it is necessarily the notion that is involved with the powers that the adjudicator has and the actions that the adjudicator has to take.  The Act does not confine the adjudicator to the resolution that is the subject of the application.  On the contrary, the Act requires the adjudicator to look at the application. 

The adjudicator’s role is not fixed in point of time to what happened in this case at the extraordinary general meeting in August.  The adjudicator looks at the matter afresh and decides for himself or herself whether the opposition in the circumstances is unreasonable.

When we take your Honours to some of the provisions of the Act that are relevant you will see that the powers of investigation in section 271 specifically refer to the adjudicator asking someone other than the parties for information that may help and an example is given of an engineer in a port.

FRENCH CJ:   The application of those powers covers a range of possible investigations and a whole range of decisions which could arise for adjudication.

MR GORE:   Yes.

FRENCH CJ:   We are dealing here with a particular class of decision, are we not, something affecting the common property, an exclusive use by‑law which requires unanimous resolution by operation of the Act.

MR GORE:   Yes.

FRENCH CJ:   That puts a certain colour on the extent to which these functions of the adjudicator may be deployed in dealing with such a decision.

MR GORE:   Not a colour that should be allowed to confuse, with respect, your Honour.

FRENCH CJ:   A constraint, perhaps.

MR GORE:   Yes.  Your Honour, can I give a simple example.  Perhaps one of the features of this case that makes the appellant’s argument look more attractive than we submit it really is is that there were multiple grounds of opposition and there was a level of opposition in quantitative terms, but just think of a simple case where noise is the only issue and where there is one opponent to the motion and that one opponent objects on the ground of noise in circumstances somewhat similar to the present and the adjudicator exercises the power under section 271 to obtain an acoustic report which demonstrates conventionally that there will be no adverse impact from a noise point of view.

Now, in our respectful submission, the Act contemplates that the adjudicator can act on that information and decide that, even though the opponent to the motion had a rational basis for opposing the motion – it is rational to worry about noise – it is not reasonable in the circumstances because firstly the expert evidence is that there will not be any adverse impact from an acoustic perspective; and secondly, you then have to take into account the interests of the proponent, and the proponent’s interests should not be denied on a basis that is unreasonable in the circumstances.

Let me try to give another example.  One cannot dispose of common property without a resolution by dissent.  That is one of the aspects of the Act that we are concerned with here.  Take a case where the property involved has the tennis court for the particular complex and the single opponent to the motion says, “Well, I’m opposed to the motion by the body corporate to sell this common property to the adjoining landowner because I enjoy using the tennis court and I use it on a regular basis and I don’t want to lose that”. 

Now, that is a rational and understandable ground of opposition.  But if it emerges as a part of the adjudication process that what the body corporate intends to do, or the proponent of the motion intends to do is to develop a tennis court elsewhere on other common property which is currently vacant and to sell the common property which currently accommodates the tennis court for a substantial profit and to use the surplus to create a swimming pool that they do not even have at the time, an adjudicator could rule that that is opposition, whilst logical, is not reasonable in the circumstances of the case.

Take an objection on the ground of light.  Again, to try to make the principle simple - I am trying to keep the facts simple – say it is our case that the only objection is on the ground of light.  Say, Lot 10 objected on the ground that there would be more light coming from the balcony.  If there were expert evidence obtained by the adjudicator that the amount of light would be minimal and that it would not have any adverse impact, there would be no glare, nothing that could concern any reasonable person, then an adjudicator could justly rule that in the circumstances of the case that was unreasonable opposition.

Take another simple example.  Say there was a concern based upon odour, that there was a concern that there would be more barbecues that would be held on the balcony.  Assume that this particular opponent is not concerned about light or noise but only about odour.  Again, if the adjudicator obtained an expert report which established that there would be no odour, you would get no sense of the barbecue cooking at all, then that would be opposition that is unreasonable in the circumstances given that the proponent has said “I do not object on any other ground”. 

So what I am trying to illustrate is that the adjudicator has to look at things like a judicial officer.  As the President pointed out, the word “adjudication”, whilst it is not defined in the Act itself, as a matter of ordinary English it involves adjudging, making a judgment, making an order, resolving rights as between parties. 

Although the Act does not describe the process as being one of an appeal, that is for good reason because it would be sort of a nonsense to speak about an appeal against a resolution that was not passed by a body corporate.  What the Act does is to set up a review process pursuant to which the agreed lot owner, here, our client, makes an application to ask an adjudicator to give effect to the order that the applicant seeks. 

The order the applicant sought here was to give effect to the motion that had been originally proposed and so it really involves starting the motion afresh.  It is not fixed in point of time to what happened at the general meeting.  On the contrary, it is looking prospectively.  It is a fresh motion, as it were, that is being considered by the adjudicator who does, in effect, stand in the shoes of the party entitled to rule on the respective rights. 

The body corporate, as your Honour Justice Bell pointed out, cannot rule on it because it is made up of the individual members and if there is dissent in a case like this that is the end of it as far as that part of the Act is concerned.  But the Act goes on to say well, that is not the end of this statutory process, we must also have a review procedure which enables these motions to be reviewed.

BELL J:   Do you accept, Mr Gore, that in relation to a motion required to be passed without dissent that the powers under 276(1) and (3) are relevantly confined by Schedule 5, item 10?

MR GORE:   Your Honour, they are not confined by Schedule 5, item 10, because of the terms of subsection (3) which begins with the words:

Without limiting subsections (1) and (2) –

BELL J:   Appreciating that, but when one looks at Schedule 5, Schedule 5 non‑exhaustively sets out the sorts of orders that an adjudicator may make and item 10 deals with the sort of order that might be made in relation to a motion that requires resolution – that requires to be passed without dissent.  It makes it rather difficult to think that the adjudicator might notwithstanding the crafting of item 10 approach the task other than in conformity with the dictates of that item, surely.

MR GORE:   Your Honour, we are very content to work within the four corners of item 10.

BELL J:   Well, working within the four corners, where do you get from the terms of item 10 the idea that it is appropriate to take into account the interests of the proponent of a motion that has not been passed without dissent when what one is looking at is whether the opposition to it was unreasonable?

MR GORE:   Your Honour, we get it from, really, two parts of item 10.  The first part is the reference to “in the circumstances”.  What that means is “in all of the circumstances”, not just the circumstances viewed through the eyes of the lot owners who dissented, but all of the circumstances of the case.  The decision of this Court in Waters v Public Transport Corporation is strongly in support of that contention, and I will come to it in a moment.

The second aspect of item 10 that supports our submission is the second word “satisfied”.  It is a word that should be given considerable importance in the context of this case, because other decisions of this Court have recognised that when the power of an authority or body – here, the adjudicator – to make a particular order is conditioned upon the state of satisfaction of that particular body – here, the adjudicator – it requires that person to form an opinion about the subject matter of the relevant provision, to actually form the opinion which cannot be set aside, except on traditional judicial review grounds.

It is a very strong indicator, consistent with other provisions that I will take your Honours to, that what is involved here is a merits review.  At the end of the review process, the adjudicator here had to ask herself, like a judge does, “Am I satisfied in the circumstances of this case, having regard to all of the evidence that is before me, that the opposition in the circumstances is unreasonable?”

Can I point out to your Honour, really, a third aspect of item 10 that is relevant to that, and it is the present tense; the reference to “is unreasonable”.  It does not say “was unreasonable”.  It does not focus on what happened back in August 2012.  It focuses on what the adjudicator must do when he or she makes the adjudicator’s decision after the adjudicator’s investigation.  It is a fresh review of the evidence.

Our learned friends can hardly say to the contrary – they submitted that our engineering reports were only available post the meeting, and that is correct as a matter of fact.  But it is equally correct as a matter of fact that their independent expert reports from Shane Thompson and the husband and wife Clare team – they were only obtained after the meeting as well.  I can give your Honours the reference later.

The third architect on their side, Mr Mainwaring, had certainly expressed his views before the meeting, but as the adjudicator recognised, he was in a terrible situation of conflict.  He had designed the original complex.  Despite that, he acted for our client and designed the very design which is the subject of the motion which is still before this Court ‑ ‑ ‑

NETTLE J:   He disputed that.

MR GORE:   No, he did not, your Honour.  He did not dispute that he designed it, but he wanted to ‑ ‑ ‑

NETTLE J:   Not be involved with it.

MR GORE:   Not be involved any longer, exactly.

NETTLE J:   Because he disagreed with it.

MR GORE:   Your Honour, he is in a situation of conflict.  How one deals with that is a factual issue.  That was for the adjudicator to make a judgment about.  It was for her judgment.  Much of what has been said today by our learned friends, with all respect to our learned friends’ argument, does involve an attempt to re‑agitate the merits.

NETTLE J:   Mainwaring was consistently of the view, since 2005, that to do what was sought to be done by Mr Albrecht would be grossly inimical to the design integrity, was he not?

MR GORE:   Your Honour, that cannot be right when he assisted with the design in this case.

NETTLE J:   Did he not write letters at the time saying just that?

MR GORE:   He did write such letters, your Honour, but these are factual issues which were for the adjudicator to resolve.  So, if I could take your Honours to Waters’ Case.  Have I answered your Honour’s question sufficiently at this stage?

BELL J:   You have answered the question.

FRENCH CJ:   You cannot treat a judge like a cake and stick a knitting needle in and see if they are done.

MR GORE:   No.  I just did not want to be impertinent, that is all, your Honour.  Your Honours, Waters’ Case is case number 13 on our list. 

NETTLE J:   Trams with conductors ‑ ‑ ‑

MR GORE:   Yes.  Although the factual and, in a sense, the statutory circumstances were quite different, the questions of principle ultimately, we submit, are sufficiently the same.  It was a situation where the Public Transport Corporation in Victoria had decided to introduce a system of scratch tickets rather than to use conductors on the trams and the complainants were disadvantaged persons who claimed that they were unable to use the scratch system appropriately.  The Equal Opportunity Board upheld their complaints but by focusing on their particular circumstances and not having regard to the circumstances of the corporation – for example, the financial cost of maintaining a tram system with conductors, the financial costs of any other alternative that was not canvassed in the evidence, and so on.  But, in simple terms, the Opportunity Board had worked expressly on the basis that it was irrelevant to inquire into the circumstances of the alleged discriminator.  The matter ‑ ‑ ‑

FRENCH CJ:   This was to do whether an operationally discriminatory conditional requirement was reasonable.

MR GORE:   Yes.

FRENCH CJ:   Section 17(5)(c).  And then that was construed as reasonable in the circumstances.

MR GORE:   That is correct, with all respect, your Honour, yes.  The relevant provision, as your Honour points out, is 17(5)(c) which we can see in the headnote.  About halfway through the headnote at page 349, section 17(1) is first reproduced and then four lines down, subsection (5) and then about eight lines down, paragraph (c) which speaks about “the requirement or condition is not reasonable”.  There were quite a number of questions of principle in the case, but the only one that is relevant to your Honours today, was the meaning of 17(5)(c) and whether that made relevant all the circumstances of the case, including the interests of the proponent and the majority held that it did.

If your Honours go first to the joint judgment of Justices Dawson and Toohey at page 394, at about point seven on the page, they move on to the point that is relevant:

The Board further found that the requirements or conditions which it identified were not reasonable.  In so doing it disregarded the financial or economic considerations which may have motivated the respondent in imposing those requirements or conditions –

And their Honours went on to deal with that argument and provisions of the Act.  But, if we go to page 395, to point 5:

Reasonableness for the purposes of both s. 17(5)(c) and s. 29(2) is a question of fact for the Board to determine but it can only do so by weighing all the relevant factors.

And we emphasise the use of the expression “weighing all the relevant factors” because that involves an acknowledgement that there are competing interests and ‑ ‑ ‑

BELL J:   But this is a very different context.  Here one is looking at an Act that protects owners in relation to the common property by providing that the common property cannot be the subject of alteration unless the motion is passed without dissent and that, one might think, is a fairly understandable object of the legislation.  To the extent that the adjudicator has a function under 276, the determination of whether the opposition is in the circumstances unreasonable might be thought to raise very different questions to the question that was of concern under the anti‑discrimination legislation considered in Waters.  It is by no means evident why a person who has a property right which they do not wish to see diminished is unreasonable in not having regard to the circumstance that the diminishment of their right will mean an enhancement of the right of someone else.

MR GORE:   And, your Honour, as a factual proposition ‑ but, with respect, I cannot embrace that as a legal proposition – but as a factual proposition that may be true of most cases, but as a factual proposition it is not true in this case because the common property involved was a very small amount of airspace which the adjudicator found as a fact was of no material use to anybody else.  It is suspended in the middle of the air right beside the first respondent’s existing balcony.  It is inconceivable that anybody else would go anywhere near it or would have any interest in it, and the evidence about its value conflicted.  The real estate agent for the first respondent gave evidence to the effect – or his report was to the effect that it had no value and it would not give rise to any increase in value in the sale of the first respondent’s unit, whenever that occurred.  The valuation evidence obtained by the appellants was that there was some added value, but really quite nominal.

BELL J:   The matter I am taking up with you, Mr Gore, is in this statutory scheme in circumstances where the rights of the owners are protected by the requirement for unanimity before one loses some part of the common property, it is perhaps not so evident that the requirement to consider whether the opposition is in the circumstances unreasonable should take in the interests of the proponent who is to be benefited from the change.

MR GORE:   Your Honour, with respect, we submit to the contrary.  As Justice Brennan, as he then was, said in Waters’ Case, a consideration of an issue of this kind cannot be considered in the abstract.  So one rhetorically asks:  unreasonable in the light of what?  The “what” has to take into consideration the motion, what is being proposed.

You cannot make a judgment about opposition being unreasonable unless you look at what is proposed, and if what is proposed is the disposal of common property with no material benefit to lot owners and no material benefit to anybody else – a different case from the present, just an ad hoc sale – you could understand why there would be opposition to such a motion and why an adjudicator might rule that it was reasonable in the circumstances, but that is not this case.

NETTLE J:   You say that the airspace is of no value to the others but it was.  It was certainly of value to the owner of Lot 10 because it gave him separation from 11 in terms of both space and sound or at least the possibility of it.  It was of value to some of the objectors because they liked the aesthetic quality of the building without the airspace being taken up.  It was of value to them.

MR GORE:   But your Honour, again, they are factual matters which the adjudicator had to make a determination about.

NETTLE J:   And she did.  She said that they were of no value to the others.

MR GORE:   She said as far as Lot 10 was concerned – and this is important, your Honour – in the final paragraph of her reasons in volume 2 at page 532 of the record in paragraph 87, she acknowledged in the last sentence that:

The most substantive objection is the potential impact on Lot 10, but based on the evidence submitted, I consider that any impact will be so slight that it does not constitute a reasonable basis to refuse the proposal.

So, if our argument is right about her role, which was to carry out a merits review, and that the test for unreasonableness does involve a balancing exercise, she has made a correct determination on the facts about that balancing exercise.  Your Honour, with all respect, it is not correct to say that the airspace separated Lot 10 from Lot 11.  If I could perhaps show your Honour a plan ‑ ‑ ‑

NETTLE J:   No, I understand what you mean.  It has separated the two nooks. 

MR GORE:   Yes, so – and your Honour is conscious of the sideline diagrams that Mr McKerrell provided and they showed virtually no impact at all.  I can give your Honour the reference if you would like, but these were factual matters which the adjudicator made an adjudication about.  So, if I could come back to the first issue that I was dealing with, it is whether there is a balancing exercise involved.  We were looking at Waters’ Case at page 395.

GORDON J:   What is the proposition we get from this – for your case?  What is the proposition I am to take from 394 and 395 so far as your argument goes?

MR GORE:   That in judging whether there is reasonableness in the circumstances of the case you have to take into account what is being proposed and the interests of the proponent as well as the grounds of opposition. 

GORDON J:   That is right for this statutory context.  To pick up Justice Bell’s point, are we not driven back to the Act to work out whether or not that proposition is applicable?

MR GORE:   We are, and your Honour mentioned the two‑stage process in the appellant’s argument.  There are really four stages, your Honour, we would submit.  There are the first two stages that your Honour mentioned and then the third stage is whether the ground of opposition is, in the circumstances, reasonable, considered in the abstract and the fourth and final stage is to look at all of the circumstances of the case including the interests of the proponent and then to make a determination whether it is reasonable in all of those circumstances. 

To return to my early example, your Honour, to illustrate why there are those other two stages, your Honour’s first stage was what are the grounds?  In my first example, it is noise.  Your Honour’s second stage was does the ground have a logical basis?  The answer is yes because the units are close and it is logical to worry about noise. 

GORDON J:   But that logic may be dictated by facts.

MR GORE:   Of course.  But then the third stage is, is that logical basis reasonable, considering it in isolation, and if you had an expert report which demonstrated that it was not reasonable, that the noise would be inaudible, then without even considering the interests of the proponent, without going to the other side of the ledger, you would determine at the end of the third stage that the ground was not reasonable.  But the fourth stage is still relevant if there is some competing weighing that has to be carried out.

FRENCH CJ:   On that example, the evidence negates the factual basis for the concern, or for the opposition.

MR GORE:   Essentially, your Honour, yes.

NETTLE J:   As you put when you were opening, nothing which could concern any reasonable person would be an example of that.

MR GORE:   Yes.

KEANE J:   When you get to your fourth step, which is taking into account the interests of the proponent, where do we get this standard and what is the irreducible minimum standard of altruism that is required of a lot owner to give up something to the proponent?

MR GORE:   Your Honour, the Act does not give any guidance to either of those questions.  It leaves that judgment for the adjudicator.

KEANE J:   Well, no, it does not, does it?  In the first instance, at least, what item 10 is concerned with is whether the opposition is unreasonable.

MR GORE:   Yes.

KEANE J:   Now, by what standard – and it seems to me that there necessarily is involved in your argument the notion that there is a standard of altruism that is applied here.  Where does that come from?  Where does the notion that someone can be required to give up their rights to someone else for nothing ‑ ‑ ‑

MR GORE:   Your Honour, the Act necessarily contemplates that that can occur, or item 10 would have no role to play.

KEANE J:   No, that is not right.  Item 10 would have a role to play if opposition was just unreasonable in the sense of irrational opposition, that the opposition is not necessary to protect or conserve the proprietary interests of the opponent.

MR GORE:   Your Honour, that would be one class of case but we would respectfully submit that the language is very general and it has not been confined to that class of case.

GORDON J:   It is the point at which you enter the debate, is it not, Mr Gore?  So, if you enter at the point at which you do, you ignore, do you not, in a sense the foundations of the matters that I put to Mr Couper, and that is the whole basis of this Act and scheme is a group of people come together, they enter into an arrangement knowing what the rights and obligations are, and one is, is that they have certain rights which are not to be taken away without dissent.

MR GORE:   That does not give rise, though, your Honour, to any presumption for the purposes of item 10.  It is part of the context.  I will accept it is part of the context, but there is no presumption.  The Act would have been explicit if it was designed to constrain the general power in that way.

KEANE J:   Mr Gore, have you finished with Waters, or do you have some more that you want to show us in Waters?

MR GORE:   I did have more, your Honour.  At page 395 where we had paused, their Honours referred to, at the bottom of the page, the observations by Bowen Chief Justice and Justice Gummow when a member of the Federal Court in Styles’ Case which also, looking at that extract spoke of requiring:

the court to weigh the nature and extent of the discriminatory effect, on the one hand, against the reasons advanced in favour of the requirement or condition on the other.  All the circumstances of the case must be taken into account.”

Then in the judgment of Justice Brennan at page 378, a passage which I had foreshadowed is at about point 3 in line 4 of that paragraph:

It is not possible to determine reasonableness in the abstract; it must be determined by reference to the activity or transaction in which the putative discriminator is engaged.

At 379 his Honour expressed the view at about point 3 that:

“reasonable” in s. 17(5)(c) cannot be narrowly confined.

At about point 4 he spoke of a balance being fairly struck, et cetera, so, again, a weighing of the interests of the opposing parties.  Then if your Honours go page 382 to the judgment of Justice Deane, his Honour really only dealt with the meaning of the word “reasonable” and he referred at 383 at about point 2, and his Honour set out what the board had considered, that it was not open to it to place in the balance against the facts presented by the complainants “any financial or economic considerations which may have” motivated the corporation, and again there is that notion of balance which was rejected by the board but which was upheld by this Court.

His Honour then referred to the decision of Justice Phillips of the Supreme Court of Victoria, which was to the effect that you look at the position of the proponent as well.  His Honour also referred to Styles’ Case at about point 5 and then finally in the judgment of Justice McHugh, if your Honours go to page 408, there is a heading at about point 2 which introduces the topic.  His Honour noted at the end of the first paragraph that:

The Act gives no guidance as to the criteria to be applied in determining reasonableness.

We would submit it is the same with the Act that your Honours are concerned with here.  His Honour set out at point 5 the reasons of Justice Phillips and at page 410, just before point 5:

In a legal instrument, subject to a contrary intention, the term “reasonable” is taken to mean reasonable in all the circumstances of the case.

At 411 at point 2:

In reconsidering whether the imposition of the requirements or conditions was reasonable, the Board must examine all the circumstances of the case.  This inquiry will necessarily include a consideration of evidence viewed from the point of view of the appellants and of the Corporation.

KEANE J:   But this is talking about the decision‑maker and what the decision‑maker must do in the circumstances.  It must balance the interests of proponent and opponent.  Here in the first instance, under item 10, the opponent is not a decision‑maker; the opponent is simply an antagonist.  It is a party.  It is not deciding – I appreciate the adjudicator comes to be but what the adjudicator has to decide is if the opponent’s attitude is unreasonable.  That is different from these cases. 

Waters is talking about the role played by the board in making its decision and the board erred because it did not take into account the interests of one of the parties.  That seems to me to be quite different from the exercise that is involved under item 10 where one is concerned with the attitude of the opponent and whether or not it is unreasonable.

MR GORE:   Your Honour, item 10 is not concerned with anything the opponents have to do.  It is concerned with something the adjudicator has to do.  The adjudicator, as we know from section 276, can make the order set out in item 10 if the adjudicator is satisfied that the opposition was, in the circumstances, unreasonable.  So the real debate between the parties here is does that expression “in the circumstances” in the context of the Act as a whole bring into play the balancing exercise that I have been talking about? 

We would submit, your Honour, that Waters’ Case is a strong support for that in the sense that in Waters’ Case there was no use of the expression “in the circumstances”.  It was just the word “reasonable” and it was this Court that held that that meant reasonable in all the circumstances of the case. 

There is a basis for saying that that being such a clear judgment by this Court - and your Honours will recall that Justice McHugh said that in a legal document that will be the ordinary rule in the absence of a contrary intention - there is a basis for saying that when Parliament enacted item 10 in Schedule 5 it did so in the knowledge that the expression “in the circumstances” means in all of the circumstances of the case. 

So the present case is stronger than Waters’ Case because the expression “in the circumstances” is already there and it must, we respectfully submit, necessarily involve a consideration of what is being proposed as well as the grounds of opposition.  It has to.  You cannot – in all of our learned friend’s arguments in their saying why, as a matter of logic, it was reasonable for a lot owner to object on the ground of privacy, et cetera, they are taking into account the facts of the case.  They are taking into account what is proposed but they are stopping short at looking at the interests of the proponent.  They are looking only through the eyes of the lot owner.  That is the flaw – or one of the flaws in the appellant’s argument.

One other case that is relevant to this which was also referred to by the Court of Appeal is the decision of the Full Court of the Federal Court in Commonwealth Bank of Australia v Human Rights and Equal Opportunity Commission, which is case No 2 in your Honours’ list.  I acknowledge that again we are dealing with an Act that was concerned with discrimination and not with property rights of the kind we are concerned with here but the principles remain relevant. 

The concern here was with section 5(2)(b) which your Honours can see set out in the headnote between letters F and G.  It dealt with indirect discrimination and amongst the conditions for indirect discrimination was:

a requirement or condition is “not reasonable having regard to the circumstances of the case” –

So Parliament had by this stage, I would respectfully submit, acted upon this Court’s decision in Waters and added those words to that relevant provision – and Waters is referred to in the judgments.  The primary judgment is that of Justice Sackville and if your Honours go to page 110, just before letter C his Honour commenced his discussion of the construction of the relevant provision.  He referred to Waters’ Case, just below letter C.  He referred to Styles’ Case at letter E and the passage that we have already seen from the joint judgment of Chief Justice Bowen and Justice Gummow which referred to weighing matters. 

Reference was made to Waters again at letter F.  I would ask your Honours to just note for the moment, the reference below letter F to the Australian Medical Council v Wilson because that is relevant to a point that I am coming to.  Then there is reference to a case of Dopking which was first referred to by his Honour earlier in his reasons at page 103.  Your Honours do not need to go back to it.  But again, Justice Lockhart, in that case, spoke about weighing considerations and Justice Sackville went on:

Since the test if objective, the subjective preferences of the aggrieved persons cannot be determinative of the reasonableness of the impugned condition requirement.

We would, by parity of reasoning, submit that since the test under item 10 is objective, the subjective preferences of the appellants here cannot be determinative of the reasonableness of what has been proposed and of whether their opposition is reasonable in the circumstances, relevant but not determinative.  Sorry, before I leave page 111, at letter E, Justice Sackville himself spoke of:

weighing all relevant factors –

and of the notion that:

What is relevant differs from case to case –

He referred to Waters’ Case a couple of times further on that page.  Then, what I will call a new point really arises at page 112 at letter B where his Honour referred to Justice Heerey’s decision in Wilson, the case that was mentioned at page 110.  He sets out a relevant part of that judgment, and it is what Justice Sackville said just before letter F and to letter G that is relevant to our submissions.  His Honour said:

The fact that a distinction has a “logical and understandable basis” will not always be sufficient to ensure that a condition or requirement is objectively reasonable.  The presence of a logical and understandable basis is a factor – perhaps a very important factor – in determining the reasonableness or otherwise of a particular condition or requirement.  But it is still necessary to take account of both the nature and extent of the discriminatory effect of the condition or requirement . . . and the reasons advanced in its favour.

FRENCH CJ:   Well, this is an Act which is giving an effect to norms against discrimination.  It is not surprising that you would see that there has to be a justification which is reasonable for a condition; then that kind of approach would be taken.  Here, we are dealing with something which involves the compromise or loss of an existing property right, which is why the protection is built in.  I just have difficulty seeing how the normative basis underpinning the concept of reasonableness in that kind of legislation, and in the legislation in place in Waters, transfers across to the normative underpinning in this legislation.

MR GORE:   Your Honour, it is because Parliament has not provided that a disposal of common property cannot happen under any circumstances.  It has provided ‑ ‑ ‑

FRENCH CJ:   It can happen if everybody agrees.

MR GORE:   It can happen if everybody agrees, or it can happen if an adjudicator as part of an independent review determines that it should happen.

FRENCH CJ:   One can understand how that could exclude, for example, a case where opposition is based upon irrelevant considerations like the race of the person putting up the motion, or some extrinsic dispute unrelated to the motion that was being put up by the lot owner.  There is a safeguard there, but is it any more than that?

MR GORE:   Your Honour, forgive me for going back to my simple examples, but why would it not be available, we rhetorically ask, in a simple case where it is demonstrated that there will be no adverse impact in terms of noise or light or odour and the property being taken ‑ ‑ ‑

FRENCH CJ:   If the joint owner of the common property says, “I just don’t want to give it away.

MR GORE:   The Act does not give the joint owner that irrevocable power.  There is an initial right of veto but it is subject to review and then it becomes an evaluative judgment by an adjudicator.  Your Honours will have noted from our submissions that we do make some reference also to this Court’s decision in Li, which is case No 12.

FRENCH CJ:   I am not sure we want to get into that.

GORDON J:   No.

MR GORE:   I am only going to be brief, your Honour.

FRENCH CJ:   I do not think it is possible to be brief.

MR GORE:   If we go first to ‑ ‑ ‑

FRENCH CJ:    This is a judicial review issue going to jurisdictional error.

MR GORE:   It is, but there is again a statement of principle which is transportable to the present context.

FRENCH CJ:   Well, statements of principle often have their roots, as I was trying to put to you before, in particular policy or normative or other settings and one ripping them up and trying to plant them in foreign soil does not always work.

MR GORE:   Your Honour, I understand the colourful analogy but can I be a gentle gardener and do the best I can?  If I could go to your Honour’s judgment at page 352, your Honour said at point 1 of the page:

A distinction may arguably be drawn between rationality and reasonableness on the basis that not ever rational decision is reasonable.

I have tried to give some example of that in the context of this case.  In the judgment of Justices Hayne, Kiefel and Bell, there is a statement to similar effect at page 364 in paragraph 68 where in the fifth line their Honours said:

The legal standard of unreasonableness should not be considered as limited to what is in effect an irrational, if not bizarre, decision -

Your Honours, that approach is consistent with what Justice Sackville said in the Commonwealth Bank Case about a position taken that is logical and understandable does not necessarily mean that it is reasonable. 

Your Honours, to move on to the role of the adjudicator issue as a separate issue, I have touched upon some of the provisions of the Act which are relevant to this but there are some more which I would like to take your Honours to.  If your Honours go to section 269, the terms of subsection (1) I have referred to indirectly earlier, but again I would like to emphasise that what the adjudicator investigates is not so much the motion itself but the application which is made, in this case by the first respondent, to decide whether it would be appropriate to make an order on the application. 

So it is in the nature of a judicial process.  There is a form of pleading, as it were, in the form of an application.  Then subsection (3), your Honours are, of course, well familiar with but the point that we would like to make is that each of those subparagraphs envisages some opportunity for a form of hearing.  There is no hearing prescribed but it plainly contemplates that the adjudicator may embark upon a quasi‑judicial hearing. 

The Act does not deny the adjudicator the opportunity to have a form of hearing with parties present.  It did not occur in this case as your Honours will have seen from the record but it is not denied by any provision of the Act.  Then, section 271 deals with the adjudicator’s investigative powers.  I have referred to subsection (1)(a) which speaks of not only requiring:

a party to the application, an affected person . . . someone else the adjudicator considers may be able to help resolve issues raised by the application –

(i)To obtain, and give to the adjudicator, a report or other information; or

Example‑

an engineering report

(ii)to be present to be interviewed . . . 

(c)invite persons the adjudicator considers may be able to help resolve issues raised by the application to make written submissions to the adjudicator –

And that is the process that occurred here.  All of the submissions that your Honours see in the record were raised as a result of that process, which was conducted in a rather iterative way.  There were rights of reply given, and the Act contemplates that.  So Mr Ainsworth provided more than one submission.  Mr Mainwaring provided more than one submission; the first respondent provided more than one submission.

And, relevantly to the notion that the appellants have hinted at in their reply and touched upon orally in the case as to whether you look at the circumstances at the time the motion was taken, can I point out to your Honours that one of the appellants, Lisa Martoo, was not even a lot owner at the time of the decision.  She only acquired her lot in April 2013, which your Honours will see from her submission – and I do not ask you to go to it now – in volume 2, at page 413.  That is, as I say, not a matter of complaint by us, but it is reinforcing that the adjudicator was concerned with the position at the time the adjudicator was going to make a decision and, at that time, Lisa Martoo was one of the owners, so legitimately she was there ‑ ‑ ‑

BELL J:   Ms Martoo had acquired her ownership of her lot having, if she did so, checked the records of the company and seen that there had been a resolution to diminish the common property by acceding to your client’s motion and that that had failed.  And then, presumably, Ms Martoo, when she learnt of this proceeding before the adjudicator, added her opposition.  Is that what occurred?

MR GORE:   Your Honour, that is a reasonable inference from the circumstance – and, as I say, we are not complaining about her wanting to oppose things – but it is also relevant to take into account the history of this particular motion.  Your Honours will have noted from the reasons of the adjudicator that there had been an earlier motion that was an ordinary motion proposing, in effect, the same work, which was challenged, ultimately successfully by Mr Ainsworth in the Tribunal, on the basis that because the common property was involved, albeit that it was airspace, it engaged section 159 of the module.  But that is relevant context because it is highlighting that we are really not talking about common property of significance to these other owners, as the adjudicator here found.

Your Honours, I have emphasised the use of the word “satisfied” in item 10 and I wanted to take your Honours to some decisions of this Court that have referred to that concept.  Foley v Padley is one of them.  It is case 6 in your Honours’ bundle – on your Honours’ list, I beg your pardon.  The relevant passages are in the judgment of Chief Justice Gibbs at 352 to 353, beginning at the bottom of 352, and his Honour at page 353 referred to the judgment of Chief Justice Latham in the Hetton Bellbird Collieries Case and in the second extract that Sir Harry Gibbs set out, Chief Justice Latham had said from line 4:

What the court does do is to inquire whether the opinion required by the relevant legislative provision has really been formed.

I will come back to that statement in a moment.  Chief Justice Gibbs went on to say that:

A similar view has been expressed in New Zealand where it has been said that when the test is subjective –

and it is interesting that his Honour used that term:

as for example when the legislation confers power on a body “when it is satisfied” –

which is the language of item 10:

of something, if the body in whom the power is reposed was in fact satisfied, its decision cannot be attacked unless it “could . . . on any reasonable basis have reached that decision” -

This is responsive to the submissions that have been made by the appellants that the adjudicator approached the matter on the basis of saying that there was no room for a range of reasonable opinions.  That is an incorrect analysis of the adjudicator’s reasons, in our submission.  She never said anything remotely like that.

When any tribunal is faced with a judgment about whether something was reasonable or unreasonable, there is an evaluative exercise involved.  There can only be one judgment by that tribunal, but what the courts recognise is that there is no single answer in most, if not all, cases of what is reasonable or unreasonable in particular circumstances.  It is a matter of judgment in an individual case, which will stand if it is justifiable and, on the traditional judicial review approach, will only be set aside if it is a decision that no reasonable person could possibly have made.

That explains the observation by the President in paragraph [84] of her reasons in this case that have been seized upon by the appellants.  All that the President was saying was that the decision about unreasonableness was a decision for the adjudicator.  It is necessarily a determination of fact.  It is a determination in respect of which opinions may differ, but that is the judgment that she had to make.  She had to ask herself, am I satisfied that opposition in the circumstances was unreasonable, and having decided in favour of the first respondent, that aspect of her decision is unassailable.  Her decision can only be set aside if there is an error of law.

Your Honour Justice Nettle asked what Norbis had to do with the case.  Norbis is a case where, in the passage that her Honour referred to, that concept is recognised, albeit in another field.  It was a case which involved, as your Honour is aware, an appeal from a decision of the Full Court of the Family Court, where we know there is a large room for discretion.  What their Honours said was that, in those circumstances, there will be room for differences of opinion by reasonable people with no one answer being necessarily right.  Her Honour was simply saying that recognition by courts in comparable circumstances applies here.

The other well‑known example, of course, is House v The King, which was referred to by this Court in Li’s Case.  I will not be the gardener again, your Honour, but House v The King is often referred to in these circumstances by appellate courts as illustrating that it is irrelevant if the appellate court might have come to a different decision where there is scope for differences of opinion in relation to an exercise of discretion.  That is all the President was saying here; that the adjudicator had a statutory obligation to be satisfied or not satisfied as to whether the opposition was, in the circumstances, unreasonable, and her decision on that evaluative factual exercise is unassailable.

NETTLE J:   If the legislation had said that if there is a failure to pass a motion, the adjudicator will decide what, in her opinion, is a fair thing in all the circumstances, I would understand the force of that.  It would be very difficult to set aside a determination unless it were manifest that she had taken the relevant considerations into account, or had not taken relevant in or was grossly unreasonable.  But when the requirement is not that she decide what is a fair thing in all the circumstances but whether the objection was unreasonable, is it not a little different?

MR GORE:   Your Honour, I have a direct response to that and it is the language of section 276 because section 276(1) contains the general power and it speaks of:

an order that is just and equitable in the circumstances –

NETTLE J:   Certainly, but in the specific circumstances we are contemplating, the test is not to decide whether it is just and equitable that the motion be passed but whether it was unreasonable not to pass it and then having made that decision to make an order which is just and equitable.

MR GORE:   I would put it differently with all respect, your Honour.  Your Honour posed an alternative statutory structure which spoke of the adjudicator having power to determine what was fair.

NETTLE J:   Yes.

MR GORE:   I would respectfully submit to your Honour that a power to order what is just and equitable in the circumstances is not greatly different to a ‑ ‑ ‑

NETTLE J:   I wholly agree, if I may say so, but it is not just that she is to do what is just and equitable.  It is that she is first to decide whether the withholding of consent is unreasonable and then if she decides that it was, to make an order which in those circumstance is just and equitable.

MR GORE:   Yes, your Honour, and the extra response I would give is that the reference to justice and equity in subsection (1) does assist with an understanding of what her role is under item 10.  It assists an understanding that she does have a role of trying to determine what is fair as between proponent and opponents in the circumstances of the case.  It is part of the context for item 10, given that item 10 by force of section 276(3) does not limit the generality of subsection (1) and is illustrative of the types of orders that might be made.

BELL J:   Does the power to make any order under 276(1) depend in this instance upon there having been a contravention of the Act?

MR GORE:   No, your Honour, that, with all respect, is not the correct way to approach it.

BELL J:   What is the correct way?  The body corporate determined that the motion proposed by the proponent was not passed because the statute required that it be passed with no dissent.  Now, I understand that it seems to be common ground that there was a dispute generated by the body corporate acting conformably with the requirements of the Act in that respect.  Now, what conferred the power on the adjudicator to resolve this dispute under 276(1)?

MR GORE:   Yes, I will answer that directly, your Honour, and I will take you through a few provisions.

BELL J:   Yes.

MR GORE:   Can I ask your Honour to first go to section 94(2) which has been touched upon in argument already and what needs to be highlighted at this point is the second example with the four examples given:

not passing a motion after a vote at a general meeting or a committee meeting –

So that is an example of the body corporate making a decision which can generate the issue whether the body corporate has acted reasonably.  Can I observe in passing, your Honour, that this was an issue which the Court of Appeal had to consider because the appellants had argued before that court that section 94(2) was not engaged because of an earlier decision of the Court of Appeal but the Court of Appeal in this case ruled that there had been an amendment to the Act, which I have pointed out to your Honour, which changed the law in that regard.  Their Honours’ discussion – or her Honour’s discussion of that issue is in paragraph [97] of her reasons at 644.

BELL J:   Can I just understand?  As I apprehend it, Mr Couper puts that the power to make the order flows from a conclusion under 94(2), namely that there has been a contravention because the adjudicator is satisfied that the opposition to the motion was not reasonable.  Is that common ground between the parties as to the basis of the power to make the order?

MR GORE:   Your Honour, I am just hesitating to embrace the word “contravention”.  It is quite a strong word.

BELL J:   Yes.

MR GORE:   Can I just take your Honour to some of the other relevant provisions and then have a discussion by way of submission with your Honour about the point?

BELL J:   Yes.

MR GORE:   So, if your Honour goes next to section – go to Chapter 6, section 226 – this is the dispute resolution chapter.  Section 227 defines the meaning of “dispute”.  Relevantly, subsection (1)(a) is engaged by the circumstances of this case.  The first thing I wanted to bring to your Honours’ attention is that it is not an element of the definition of “dispute” that there is some contravention of the Act.  It is more generally expressed.  Then, section 228, in dealing with the purpose of this Chapter 6, speaks of contraventions in paragraph (a) but we would submit that the paragraph engaged in this case is paragraph (b) – (1)(b).

BELL J:   You would pick up the same in 276(1)(b), would you, that it is:

the exercise of rights or powers ‑ ‑ ‑

MR GORE:   I do, your Honour.

BELL J:   Right.

MR GORE:   I do.

BELL J:   But we are nonetheless looking at a circumstance where the body corporate has rejected a motion because under the statute it could not pass the motion because there was dissent.  So the question, if one then goes to item 10 in Schedule 5, becomes the question of the reasonableness of the opposition.  I am just raising with you, you seem to be suggesting some more general function of the adjudicator in terms of the making of an order that is just and equitable under subsection (1) as though the moment one notifies a dispute the adjudicator is empowered to search out what the adjudicator considers to be the just and equitable solution to the ‑ ‑ ‑

MR GORE:   Your Honour, that is correct, and it is correct for this reason, that the body corporate is a statutory fiction.  It is made up of the individual lot owners.  It does not really have what for present purposes we could call a separate identity.  It is not some third party body to which you give the motion.  It is made up of the members themselves.  So if one or more of the members that make up the body corporate oppose the motion, there is no capacity for what is fictionally called a body corporate to pass the motion, because the Act says that you need all of the members to pass it.

BELL J:   Yes.

MR GORE:   That is why an adjudicator is appointed.  An adjudicator is a third party.  An adjudicator is there to resolve differences between the lot owners that make up the body corporate, and it reinforces the inquisitorial power and the interventionist power that the adjudicator has, because once you get to an adjudication it is almost irrelevant to talk about a body corporate.  What you are looking at are the competing lot owners, in this case the first respondent on one side of the record, and the appellants on the other side of the record, with the body corporate being, in this particular appeal, submitting to the outcome because it is a statutory fiction.  It has no independent role to play.

It is reinforcing the importance of our submissions that there is a merits review by the adjudicator with the adjudicator being empowered to make the decision that the adjudicator thinks is just and equitable and, if it is a case like the present, to look at under item 10 the opposition, to look at all the circumstances of the case and then to determine if he or she is satisfied that that opposition was unreasonable, and that is precisely what this adjudicator did.

NETTLE J:   Meaning thereby that it ill accords with her view of what is a fair thing in all the circumstances.

MR GORE:   It accords with her view as to what is reasonable or unreasonable in the circumstances.  That is her statutory role, your Honour.

NETTLE J:   And her view of what is reasonable or unreasonable in all the circumstances is what she thinks is a fair thing having regard to the evidence.

MR GORE:   Your Honour, that is putting a gloss, with respect, on both the statute and what she did.  The adjudicator did not, in our respectful submission, put any gloss on her role.

NETTLE J:   I am not suggesting anything about what the adjudicator did; I am just asking you what is the test.  When she comes to decide whether it is unreasonable to withhold consent and she says that it is, is that because the lack of consent ill accords in her view with what is a fair thing in all the circumstances?

MR GORE:    Your Honour, it is no different to a court making a judgment about reasonableness and if that is the way one would describe a court’s role then the answer is yes.  If a judgment has to be made by a court about whether it is reasonable for a plaintiff to undergo particular surgery, opinions on that might differ but the Court has the obligation to make that judgment.

Your Honour, I would put it as highly as saying that an adjudicator would be abrogating his or her responsibility if the adjudicator did not make the judgment that he or she thinks is correct in the circumstances having regard to the statutory test.

FRENCH CJ:   The judgment is about the opposition, is it not?  It is because of opposition that, in the circumstances, is unreasonable.  So, it is a judgment about the approach being taken by those dissenting?

MR GORE:   Yes, but, your Honour, that does not tilt the scales initially in favour of the opponents.  It does not give rise to any presumption in their favour because the adjudication only arises because of that opposition.  It is the trigger.

FRENCH CJ:   I suppose one can go around in a circle and say the Act, in a sense, tilts the scales in favour of the opponents because it says you can only do things to the common property unanimously.  You will then say, well, subject to et cetera, et cetera.

MR GORE:   Yes, yes.

FRENCH CJ:   We cannot overlook that setting that it is, generally speaking, a unanimous resolution requirement if you are going to provide an exclusive use by‑law for the benefit of some lot owner. 

MR GORE:   Yes, and it – there is no suggestion that this adjudicator was not conscious of that framework.  We would respectfully submit that it is a well‑reasoned decision.  In the introductory part of the decision, the adjudicator referred quite carefully to the steps that had been taken that generated the decision that she had to make.  She referred to the various submissions that had been made.  She footnoted references to relevant sections of the Act.  To the extent it is relevant, it presents as a very competent adjudication.  I repeat the reliance upon that last sentence of her concluding paragraph where she focused on Lot 10 which she viewed as having the most substantial objection.  She made a determination in the circumstances that the opposition by the owners of Lot 10 was unreasonable in the circumstances.

Part of the background to that, as she referred to in her reasons, was that the owners of Lot 10 had initially been approached by the first respondent and they had indicated agreement to the proposal and they just changed their mind.  Now, I am not expressing any criticism of anyone, but I am pointing out that these are all factual circumstances that were before the adjudicator.

If someone says initially, “I’m happy with the proposal” and then later changes their mind, it is a lot easier for a third party tribunal to say, “Well, looking at all of the evidence that I’ve got now and that wasn’t really available to you, I conclude that your opposition is, in the circumstances, unreasonable”.  It is part of the forensic process that courts and tribunals go through.  I am conscious of the time, your Honours.  What time did the Court intend to rise?

FRENCH CJ:   Now, you will have a little something to say I think on onus reversal and ‑ ‑ ‑

MR GORE:   Yes, I have a little more to go, your Honour.

FRENCH CJ:   Yes, all right.  We will adjourn until 2.15.

AT 12.45 PM LUNCHEON ADJOURNMENT

UPON RESUMING AT 2.14 PM:

FRENCH CJ:   Yes, Mr Gore.

MR GORE:   Thank you, your Honour.  Your Honours, there are several other submissions we wish to make briefly in relation to the two issues we have been making submissions about thus far.  The first relates to an aspect of item 10 that has not been the subject of submissions to date; if your Honours would just turn to it.  It is the concluding words which speak of:

an order giving effect to the motion as proposed, or a variation of the motion as proposed.

We submit that the fact that the provision contemplates some variation proposed by the adjudicator to the motion proposed by the proponent is an indicator that the adjudicator is involved in a balancing of competing considerations.

If I could use the “no compensation” case here as an example of what we are talking about; if, in this case, the adjudicator had taken the view that it was appropriate that there be some compensation to the body corporate, it would have been open to her to have varied the first respondent’s motion by inserting a condition to the effect, subject to the first respondent paying the body corporate the sum of X dollars, give effect to the motion as proposed.

The reason why in this case she did not do that was because she took the view that the airspace was of no value to the body corporate, to other lot owners, and so that, as a matter of logic, no compensation was payable.  That is the effect of her reasoning – I do not ask your Honours to go to it now – at page 528 of the record, in paragraphs [45] to [47].  The real point that I am trying to make though is that those words do contemplate the balancing of interests consideration that I have mentioned.

The second thing we wanted to say in that regard about the need to take into account the proposal.  Take a case, your Honours, where ‑ again not varying the facts of this case greatly ‑ what was proposed was an additional form of access to the balcony for a disabled child.  Assume that the design of Lot 11 otherwise did not accommodate the particular disability that this particular child has and that the proposal is to provide a form of access which will enable that child to enjoy the benefit of the lot in the same way as other members of the family.  That would be a consideration that an adjudicator would weigh in the balance in determining whether the opposition by the owners of say, Lot 10, was unreasonable in the circumstances of the case.  It could well be quite a compelling consideration that outweighs the interests of the owners of Lot 10.

The third thing we wanted to mention to your Honours involves the range of other circumstances in which the Act or the accommodation module, which is the subsidiary regulation under the Act, contemplates the resolution by the body corporate only without dissent and we have prepared for the Court’s convenience a table which identifies the principal provisions ‑ it is not an exhaustive table but, we would submit, that it identifies the principal provisions.  So these are all circumstances which have the potential to trigger item 10, Schedule 5 as being a relevant provision for an adjudicator and reference to any one of them assists, we submit, in illustrating a number of our points, particularly the balancing of interest points.  For example, take the third item in the first table which deals with:

Adjusting the contribution schedule lot entitlements –

Section 47A of the Act deals with that.  Necessarily, an adjustment to those entitlements will involve a reduction of someone’s entitlements.  There has to be an increase somewhere and a reduction somewhere.

Understandably, a person whose entitlements are being reduced may wish to object on that ground, not necessarily because the like entitlements trigger your contribution to sinking funds and the like.  But if the test was as the appellants propose, that you only look at things through the eyes of the opposing lot owner to see whether the ground of opposition is reasonable, it would be very difficult to overcome such a ground in any adjusting contribution schedule on entitlements case.  It must mean ‑ ‑ ‑

GORDON J:   Is that provision helpful, Mr Gore, because I thought under section 47A(4), in effect it sets out that you had to be either (a) or (b), it has to be one of two types, which in effect require relativity.

MR GORE:   Your Honour, I will just double check the terms of those provisions.  Which subsection did your Honour mention?

GORDON J:    Subsection (4) - for the purposes of making the change they have to be consistent with either, as I understood it, the relativity principle based upon the same particular factors or different factors considered as a whole.  So there is a relativity built into the section.  That may not be the best example.

MR GORE:   It may not be the best example, your Honour, and I will go on to another one which I hope does not attract the same difficulty, but it still illustrates the point because there could still be a lot owner who contends that the relativity principle is not being respected in the individual case.

NETTLE J:   But that would be an objective fact to be discerned, would it not, rather than a question of opinion as to what is reasonable?

MR GORE:   Yes, your Honour.  Another example is, to take an example from the accommodation module, the third item in the table – this is the second table in what we have handed up:

Granting . . . an easement over common property -

You might have a situation where there is common property that provides access – assume we have a property near the beach and they want to provide vehicular or pedestrian access to the beach which will be of benefit to all of the lot owners, indisputably, although those who have their lots closest to the easement area might have a concern about noise with pedestrian traffic, and the like.

In that sort of situation, you can well imagine that the adjudicator’s role would be a real one in balancing the positive attributes of the proposal and the benefits it gives to the lot owners who are supportive of it and the disadvantages raised by the lot owners who are opposed. 

It could also be a case where those concluding words in item 10 have a role to play because the adjudicator might decide that there is some initial substance in the concern about one of the lot owners who is opposed in relation to noise but the adjudicator imposes a condition based upon an engineering report that provided there is a particular acoustic barrier erected between the new easement area and the lot owners’ space, that the lot owners’ objection would, in those circumstances, be unreasonable.  Similar considerations would be triggered by, say, the first case in the first table:

Acquiring contiguous land . . . and incorporating it with common property -

One might think that most examples of that would not generate any opposition, but plainly there would be circumstances where there could be opposition.  It might be because the dissenting lot owners do not want to spend the money.  It might be because the dissenting lot owners have their lots adjacent to the common property which is about to be enlarged by the acquisition and they have concerns about some intrusion arising as a result of the acquisition.  Again, it highlights, in our respectful submission, that there will be circumstances where there needs to be a balancing of competing considerations.

The third matter we wanted to deal with in relation to these issues is a matter we touched upon in our written submissions, your Honours, at page 9 in paragraph 30 where we point out to your Honours that the adjudicator’s approach involving this balancing of interests to the test of reasonableness was consistent with other decisions by adjudicators in relation to item 10, and in footnote 59 we have given you three examples of that, and with the decision of the Appeal Tribunal in relation to section 94(2), and in footnote 60 we have given your Honours the reference to that case as well.

Then we go on to submit that consistency in decision‑making is expected of tribunals, and in footnote 61 we have given your Honours reference to three cases that deal with that notion.  The first is probably the most notable because the court comprised Justice Brennan, as he then was, when he was the President of the Administrative Appeals Tribunal, and he spoke of consistency in decision‑making ‑ ‑ ‑

FRENCH CJ:   They could all be consistently wrong.

MR GORE:   Totally.

FRENCH CJ:   I mean, we are concerned with a question of statutory construction.

MR GORE:   Totally, your Honour, and your Honour, I am not suggesting otherwise.  If they have all been consistently wrong, then obviously it is the place for this Court to say so.  What the submission amounts to, your Honour, is this, that it would give the Court reason to pause before ruling that they were wrong because it means that these sorts of issues that have been the subject of the exchanges we have had today, your Honours may infer have been addressed or considered by adjudicators in the past. 

How strong is the power of veto, as it were, the concerns about altruism that your Honour Justice Keane raised, notions of this kind are not new for this aspect of the legislation.  I repeat, we do not submit that your Honours cannot and would not rule that all those decisions are wrong if that is your determination, but we just invite your Honours to address the issues closely.

Nextly, a couple of matters that arose out of our learned friend’s oral arguments.  The first relates to an observation that your Honour Justice Nettle made about paragraph [80] of the reasons of the President.  Paragraph [80] is in volume 2 at page 639.  Your Honour’s observation, I say with great respect, was that the error that our learned friends were dealing with commenced at paragraph [80].

NETTLE J:   It depends on whether you are right, I suppose.  If you are, there is no error; if you are not, then that where it begins.

MR GORE:   Well, your Honour, I put it more strongly than that, because I would submit that all that her Honour has done is state the language of the provisions that she refers to with one qualification, when at the top of page 26 in the second line her Honour said:

She –

meaning the adjudicator:

had wide investigative powers -

that was certainly going beyond the actual language of the statute.  But otherwise, your Honour, I respectfully submit that her Honour has really just used the language of the provisions.

The second matter relates to a question that your Honour the Chief Justice asked of our learned friends in relation to page 530 in the reasons of the adjudicator, when our learned friends were dealing with the privacy and view concerns.  Reference was made to paragraph [73], to the notion that the adjudicator had said that:

there is no common law or statutory right to a view –

et cetera, and your Honour inquired about the relevance of that.  The relevance is that it is part of the context, your Honour.  If we are right in saying that there is a balancing of considerations that is relevant to item 10, the case against us would be stronger at a factual level before the adjudicator if there was a common law right.  But because there is not a common law right, or any other right to a view in the circumstances of this case, it is relevant background for the adjudicator to take into account in determining whether the opposition from the owners of Lot 10 was unreasonable in the circumstances.

Similar considerations apply to the complaint made about the adjudicator’s reference to section 167 of the community title legislation.  That is, again, just context, your Honours.  It is the provision which imposes an obligation on the occupier of a lot not to use, or to permit the use of, the lot in a way that:

(a)       causes a nuisance or hazard; or

(b)interferes unreasonably with the use or enjoyment of another lot included in the scheme -

It is relevantly part of the context for considering whether there are going to be wild parties and the like, as a result of the extension.  It was not a major part of the adjudicator’s approach, and in any event, it involves reagitating the factual merits, in our respectful submission.

Your Honours, turning to the appellants’ written reply, we wanted to make a few observations about that document.  In paragraph 3 on page 2, our learned friends seek to identify the contest, and in describing the approach which they advocate they use this term “objectively unreasonable”:

whether the opposition to the motion was objectively unreasonable.

It is a term that they use elsewhere in the submissions; for example, in paragraph 12, and then in paragraph 16.  The part of paragraph 16 that we particularly want to make submissions about is in the fifth line, where it is submitted that:

the objective approach advocated by the Appellants permits of one answer.

Your Honours, that has not been explained, and we submit that it is incapable of justification.  It is impossible intellectually to say that any assessment of something that is objectively reasonable is capable of only one answer and I touched upon that in the submissions before the Court rose in the context of paragraph [84] of the reasons of the President and in the context of what two members of this Court had said in Norbis’ Case.

What is reasonable is not something that permits of only one answer.  There will be differing views from reasonable people on the same question.  They will commonly agree but there will often be circumstances where they disagree.  It is for that reason that factual decisions by courts and tribunals of that character are subject to statutory provision to the contrary, not subject to review because otherwise there would be endless appeals with the appellate tribunal substituting their own view of what is reasonable rather than in the interests of finality of litigation the view of the Tribunal at first instance carrying the day.

BELL J:   If one looks here at paragraph [38] on page 527, this is in the reasons of the adjudicator, the adjudicator appears to adopt as an approach that she is to determine:

between the need to protect the genuine interests of owners and their voting entitlements –

while upholding the justifiable position of proponents in the face of what she describes as “unfounded or vexatious opposition”.  Then, one goes to her conclusion at 532, paragraph [87] where she finds that:

Individual owners may have voted against the motion in good faith, and in genuine reliance on architectural and other advice.

But, nonetheless, comes to a conclusion against them.  It might be that that is the matter that is being highlighted by some notion of an objective approach by contrast with this approach since this is an approach that does not, on the face of it, accord with the test earlier stated.  One is not looking to unreasonable opposition being opposition that is unfounded or vexatious.  One is looking at a conclusion based on the balancing of the correct and preferable result sort of approach.

MR GORE:   Your Honour, with respect, I adopt that and I do not seek to defend that particular part of paragraph [38] of the adjudicator’s reasons.  My defence of her reasons as a whole is that if you read them as a whole she did not, in the end result, apply that narrow test.  It is plainly too narrow.  It is not consistent with our submissions but it is not consistent with other aspects of her reasons and we have referred your Honours to the decision of this Court in Lang’s Case, which has constantly been followed, that when you are dealing with decisions of administrative tribunals you do not read them with the same care that you do with the reasons of judges. 

There is a greater degree of leniency adopted in relation to the reasons of administrative tribunals.  To the extent that the adjudicator overstated the test there, your Honour, we would submit that if you read the balance of her reasons it was not a test that she ultimately applied.  But I would agree with your Honour’s summary of what the correct test is.  Your Honour may not be adopting it but your Honour’s summary reflects what we submit is the correct approach.

Turning to the onus reversal issue, we respectfully submit that this issue has really gone away.  In our written submission at page 12, we dealt with the first issue raised by the first respondent in the notice of contention and, without repeating what we have said, the effect of paragraphs 37, 38 and 39 is that there was no legal onus of proof on the first respondent or indeed on any party in this adjudication because it is an administrative adjudication and the view of this Court and other courts is that in those circumstances there is no legal onus of proof.

That seemed to be conceded in the reply by the appellants in paragraph 18 at page 6 where it was accepted that “there is no legal onus of proof on either party to the dispute before the adjudicator”.  What the appellants then went on to agitate was an argument, particularly in paragraph 20, that the adjudicator put a practical onus on the present appellants to satisfy her of the reasonableness of their opposition. 

We submit, your Honours, that that does not involve any error of law, even if it were correct – we submit it is not and I will come to why in a moment.  We would ask your Honours to go to case 7 on our list of authorities, a 2005 decision of the Court of Appeal of Hablethwaite v Andrijevic.  The Court comprised Justices of Appeal Jerrard, Justice Keane, as he then was, and Justice Cullinane and the reasons of Justice of Appeal Keane were agreed with by Justice Cullinane.  Justice Gerrard arrived at the same result and not really by a different route, but just for separate reasons.

We raise this case because it was a case where the District Court, which was the court from which the appeal to the Court of Appeal was taken, had accepted that there had been a practical onus put on the opponents to the motion, like the present appellants here, to substantiate their opposition to the motion.

The opponents to the motion had a majority of the lot entitlements so they had the power to deny the vote and the circumstances were a little bit unusual because they contended that they had provided a submission at the time of the meeting which explained why they were opposed to the motion, and when the application was made by the aggrieved lot owners, the adjudicator invited those in control, like the current appellants here, to make a submission as to why their opposition should be regarded as reasonable.  They in effect declined to do so.  Their complaint before the Court of Appeal was that really what the adjudicator should have done was gone back to their original submission, which they provided at the time of the meeting.

There is some understandable force in that submission.  Justice Jerrard, in particular, in paragraph 19, expressed his sympathy with what they were saying.  But the problem for them was that they could not develop a point of law out of all of this.  To the extent that they were complaining that there had been a denial of natural justice, your Honour Justice Keane took the view that they could not possibly say that when they had been invited to make a submission and they had simply declined.  No member of the court took the view that putting the practical onus on the dissentients to the motion involved any error of law.

If your Honours go to page 7 in the judgment of Justice Jerrard, paragraph [16] refers to the judgment of the learned District Court judge who:

held that the Hablethwaites –

who were the applicants in the Court of Appeal:

were clearly put on notice that the onus was on them to place any relevant submission before the Adjudicator -

If we go now to the reasons of your Honour Justice Keane, your Honour dealt with the natural justice point in paragraph [26] through to paragraph [28].  In terms of what I will call an “onus of proof” point, if we go to paragraph [33], your Honour said that:

The effect of the adjudicator’s conclusion, which was upheld on appeal to the District Court, was that the applicants did not demonstrate that they would be adversely affected in the use and enjoyment of their rights as lot owners –

So, I pause to make the submission, your Honours, that his Honour Justice Keane has used the language of practical onus of proof.  His Honour has accepted that the adjudicator had put a practical onus on the applicants to demonstrate that they would be adversely affected and the fault lay at their feet, as it were, from a factual perspective, that they had chosen not to exercise the opportunity to do that.  Your Honour, in paragraph [34], used similar language.  From about line 6, your Honour said:

As I have already noted, the applicants did not seek to demonstrate to the adjudicator that the enjoyment of their other rights as lot owners would be adversely affected by the nullification of their voting rights.

I appreciate that what your Honour said was obiter in the context of that case.  But it reinforces – or is consistent with, I perhaps should say – our basic submission that once the appellants here concede that there was no legal onus of proof on any party – and certainly not on the first respondent – to prove anything, the scope for any criticism from the point of view of legal principle of what the adjudicator did evaporates.

We also submit that whilst the adjudicator did sometimes use language which might be thought to be consistent with her treating the appellants as having some sort of practical onus on them, as the President herself said when you view her reasons as a whole, that is the adjudicator’s reasons, one can see that overall she was not reversing even a legal onus of proof and she was simply saying with the examples that the appellants point to that forensically what has happened here - and take the architects’ opinions as an example.  Mr Couper submitted, for example, that a lot owner could rely upon Mr Mainwaring’s opinion that the interference with the privacy was substantial and he said, he submitted, in effect, that that should be the end of the matter.  We submit that is not so. 

When you do have these competing expert opinions, be they in architecture or engineering, there might have been competing evidence in my simple example that I gave earlier today about whether there would be some adverse impact from noise, if you have got competing reports of a technical nature of that kind it is the adjudicator’s role to resolve the dispute.  The adjudicator is adjudicating, is acting like a court. 

So what the adjudicator in the circumstances of this case decided was that the parties had gone to quite a deal of trouble in providing, in effect, three competing expert opinions from architects on those issues, particularly in relation to Lot 10 and the integrity of the scheme and she had no choice.  To discharge her function of resolving the dispute, she had to make a ruling like a court would.  She resolved in the circumstances that she preferred the opinion of Mr McKerrell. 

Once she had decided that that positive aspect of the appellant’s case should not be accepted, it was – even if it was a traditional civil case, it would be quite a short step for the Tribunal to then say, well, your positive case I do not accept, I prefer the positive case of the first respondent and in those circumstances it is inevitable that I am finding that the onus of proof, if there is one, has been discharged by the first respondent.  But our primary submission, your Honours, is that there is no error of law possible or demonstrated.  Unless there are some other matters we can assist the Court with, they are our submissions.

NETTLE J:   Just one question I wanted to ask if I may?

MR GORE:   Of course, your Honour.

NETTLE J:   It is pertinent to a question that Justice Keane asked you this morning about the applicability of the reasoning in Waters’ Case to one like this, given that here one is concerned with the reasonability or lack of it of the opposition to the motion as opposed to the reasonableness of a decision being made as was the case under the Opportunity Act. 

If one looks at item 10 in Schedule 5 the words are directed to the adjudicator being satisfied that the opposition to the motion was unreasonable.  That is to be compared with item 24 where the level of satisfaction is to be as to whether the decision was reasonable.  I wonder whether the distinction between those two rather enforced what I took to be his Honour’s suggestion to you that item 10 is focused on the reasonability of the withholding of consent rather than the balancing of considerations that might be taken into account in actually making the decision whether or not to grant approval.

MR GORE:   Your Honour, I would respond by saying, firstly, that item 24 was relied upon at the levels below.  Whilst it has not been the focus in this Court, its terms do remain relevant to the factual circumstances.  If there is a distinction between the circumstances of Waters’ Case and the present case, then the distinction does not exist in relation to item 24.

NETTLE J:   Item 24 is not applicable here, is it, because this is a case which requires unanimity; therefore expressum facit, et cetera, 10 applies and 24 does not.

MR GORE:   They are interrelated, I am submitting, your Honour.

NETTLE J:   Undoubtedly they are, but the distinction between them seems to be to me what is important.  Item 10 is the one which is specifically directed to the sort of case we are concerned with, to be contrasted with 24, which applies in other circumstances.

MR GORE:   I accept that primary point, your Honour.  But the second point I would make is – and I am repeating myself to some extent – that it is difficult to consider whether opposition to a motion is unreasonable without considering the circumstances of the motion itself.

NETTLE J:   Yes, thank you.

MR GORE:   The appellants really acknowledge that, your Honours, in their written submissions.  Unfortunately, the written submissions are not paginated, but it turns out to be page 13 – I have done some hand pagination – paragraph 52:

Reasonableness cannot be decided in the abstract, and must take account of the activity being considered.

That is effectively taken straight from the judgment of Justice Brennan, as he then was, in Waters’ Case.  There is later reference to it, your Honours, at what is page 15, in paragraph 62.  Whilst the submission begins with the submission that:

The statute here under consideration is quite different from that considered in Waters –

nevertheless, in paragraph 63, there is again reference to what Justice Brennan had observed in that case, with the implication that it is relevant here.  In fact, they submit:

Here, it must be considered in the context of seven lot owners objecting to another lot owner having exclusive use over part of their property –

et cetera.  But that is not what Justice Brennan was talking about.  He was talking about looking at it from the point of view of the proponent of a course of action – here, the first respondent.  That confusion continues into paragraph 64, which I just invite your Honours to read to yourselves, and then I will point out the confusion.

Our learned friends are there dealing with those parts of Waters that I have already taking you to, but they have confused the parties.  They say that each of the majority members of the court held that the views of the opponents, in that case the alleged discriminator, and how the decision would affect them ought also to have been taken into account, including their subjective views.  Well, the subjective views that were being referred to in Waters’ Case were the subjective views not of the discriminator, which was the Public Transport Corporation, but of those being discriminated against, who were the complainants.  So, there is a confusion of thinking there.  Thank you, your Honours.

FRENCH CJ:   Thank you, Mr Gore.  Yes, Mr Couper.

MR COUPER:   Your Honours, underpinning our learned friend’s submissions is that the role of the adjudicator was some broad role to resolve a dispute, but what they do not come to grips with, with respect, is what is the dispute which was to be resolved, and the dispute is that identified in item 10 of the schedule, the question was the dissent in the circumstances unreasonable?  It is not some broader dispute about whether the adjudicator thought it was fair as part of some balancing act that the motion should have been passed.

As a matter of construction of the statute, the starting point in our submission is section 228(1), to which your Honour Justice Bell made reference because it indicates the pathway by which one gets to an adjudicator.  The section identifies:

This chapter establishes arrangements for resolving . . . disputes about –

(a)       contraventions of this Act –

In our submission, that is this case.  The notion which was before the adjudicator is section 94(2) of the Act had been contravened.  It might be arguable that the matter would fall under (1)(b), if one regarded the exercise of a right to vote by a dissenter as being the exercise of a right caught up in (1)(b), but whichever route one takes one then has to determine what is the issue which the adjudicator is to resolve.

It is either, if we are right about (1)(a), whether there has been a contravention of the Act by reason of a contravention of section 94(2), which in our submission is the proper approach; the alternative is one asks the question, how can the exercise of a voting right be impugned and the only answer in this context is if the exercise of that voting right as a dissent was unreasonable in the circumstances.  By whichever route one comes to it, the question remains the narrow one and not some broad question of what is fair in the adjudicator’s mind in all the circumstances. 

Our learned friends sought to give the words “in the circumstances” a very broad meaning which seems to, with no disrespect to the argument, come down to this.  One looks at Waters and the Commonwealth Bank Case and although they are in an entirely different context one should take the view that, prima facie, wherever the words “in the circumstances” are used next to the word “reasonable”, the prima facie view is that that imports some form of balancing act into the exercise, regardless of the terms of the statute. 

In our respectful submission, there is no possible warrant for that sort of approach.  One looks at the terms of the particular provision and in item 10, in our submission, “in the circumstances” means no more than in the relevant circumstances.  That is a temporal aspect.  It is in the circumstances at the time the motion was put to a meeting.

NETTLE J:   What is the difference between the “was” and “is”?  Is there anything in that?

MR COUPER:   In our submission, no.  It is probably, arguably, grammatically correct to use “is” in the second place but the fact that the reference is back to the unreasonableness of a dissent – passing a motion in the past.

NETTLE J:   That it can now be seen to have been unreasonable.

MR COUPER:   Unreasonable when the question is asked.  No one asks the question at the time the motion is passed – am I being unreasonable?  The provision directs attention to were you being unreasonable at the time that the motion was put to the meeting and in our submission that is the explanation for the use of “is”.

Our learned friends draw an analogy with House v The King.  To the extent there is an analogy and there may be one to some extent, they stop at the wrong point.  If one asks, who is the relevant decision‑maker for a House v The King analogy in this case, it is the person voting.  They have to make a decision about whether they will dissent and the question is whether their decision is a reasonable one in the circumstances. 

So if one were to say that House v The King had some currency in this case, and to some extent it does, the question is directed to the reasonableness of the decision of the dissenter which is another way of making the same point, that there are a range of decisions which could have been made, each of which is reasonable.  One does not attack the decision of the dissenter by saying, “I myself would have formed a different view” or “I myself have later formed a different view”.

So, it is not to the point to say that one can – I retract that.  It is inaccurate to say that the adjudicator has some broad role to decide for themselves what is reasonable based upon some balancing test and some fairness test, and then the adjudicator’s decision on that broad role cannot be attacked because of House v The King.  It is to, with respect, completely misconstrue the role which the adjudicator is required to embark upon.

Our learned friends drew attention to a number of other provisions of the Act and the regulation where motions without dissent would be required.  It is, in our respectful submission, a distraction to look at different circumstances.  What we are concerned with here is a particular type of motion where common property – rights in common property are to be given to an individual at the expense of lot owners. 

One has to identify in each case the context of the decision by reference to the type of decision being made and determine what are the relevant criteria by which unreasonableness must be judged and the criteria in this case are informed by the situation that lot owners are being asked to cede a right which will permit the construction of a deck which will adversely affect their interests.

That context, in our submission, leads to the view that there is no question in this case of a balancing of the interests of those who are being asked to cede the right and the interests of the person who wants to get a right essentially for nothing. 

One can conceive how, in other circumstances, it might be the case that the easement case my learned friend gives, it might be on close analysis - we have not attempted it ‑ on close analysis that if the choice was between the benefit of the majority or nearly all of the members of a

body corporate against the interests of one dissenter it might be a case of balancing.  We do not concede it is because we have not, as I say, worked through each of the particular provisions to determine what is actually involved in that decision‑making process. 

What we do submit is that one does not cover the approach to this particular fact situation by postulating that in other situations legislation fairly broadly drawn must be read the same way regardless of the circumstances.  The reference to “in the circumstances” has some work to do in this sort of situation because we are looking at the particular motion which is being put and the particular criteria by which one would judge whether a dissenter has acted reasonably or unreasonably, in our submission.

We should perhaps make it clear, given that we are said to have caused confusion in our written submissions, we say that Waters is not a basis for saying that there is some sort of balancing exercise involved in this case.  If we have been read that way, we apologise.  That is not what we intended to say and we do not say it now.  Those are our submissions, if the Court pleases.

FRENCH CJ:   Yes, thank you, Mr Couper.  The Court will reserve its decision.  The Court adjourns to 9.45 tomorrow morning for pronouncement of orders.

AT 3.01 PM THE MATTER WAS ADJOURNED