2.Set aside the order of the Court of Appeal of the Supreme Court of Queensland made on 6 November 2015, except insofar as it orders in paragraph 1 that leave to appeal be granted, and in its place order that the appeal be dismissed with costs.
3.The first respondent pay the appellants' costs of the appeal to this Court.
On appeal from the Supreme Court of Queensland
Representation
S S W Couper QC with K N Wilson QC for the appellants (instructed by Australian Property Lawyers)
D R Gore QC with M J Batty for the first respondent (instructed by Mahoneys Lawyers)
Submitting appearance for the second respondent
Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.
CATCHWORDS
Ainsworth v Albrecht
Real property – Community titles scheme – Use of common property – Body Corporate and Community Management Act1997 (Q) – Dispute between owners of lots in community titles scheme – Where one lot owner sought to use common property airspace to expand balconies – Where proposal put to body corporate for alteration of rights of lot owners to allow lot owner exclusive use of common property – Where proposal required resolution without dissent – Where motion defeated – Where proponent applied for dispute resolution – Where adjudicator concluded that opposition by other lot owners to proposal unreasonable – Whether adjudicator erred in approach to decision – Whether grounds for opposition to motion by individual lot owners unreasonable – Whether necessary to balance competing interests.
Words and phrases – "adjudicator", "body corporate", "common property", "original design intent", "resolution without dissent", "unreasonable in the circumstances".
FRENCH CJ, BELL, KEANE AND GORDON JJ. The Body Corporate and Community Management Act1997 (Q) ("the BCCM Act") regulates the determination of disputes between the owners of lots in a community titles scheme. Here the dispute concerns a proposal for the alteration of the rights of lot owners to the common property of the scheme in order to allow one lot owner the exclusive use of part of the common property. Approval of the proposal required a resolution without dissent of the body corporate. The BCCM Act makes provision for an adjudicator to order that a proposal be approved, notwithstanding dissent by a lot owner, if the opposition to the proposal was unreasonable in the circumstances.
The adjudicator appointed to resolve the dispute between the parties concluded that opposition by lot owners to the proposal was unreasonable and made an order deeming the motion supporting the proposal to be passed. The adjudicator's conclusion was overturned by the Queensland Civil and Administrative Tribunal ("the Tribunal") but upheld by…
Grounds of appeal
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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AGLC
Ainsworth v Albrecht [2016] HCA 40
Case
[2016] HCA 40
Decision Date
CaseChat Overview and Summary
The High Court of Australia heard an appeal concerning a dispute between lot owners within a community titles scheme at the Viridian Noosa Residences. The first respondent, Mr Albrecht, sought to amalgamate and extend the balconies of his lot, which required the exclusive use of common property airspace. This proposal necessitated an amendment to the scheme's by-laws, requiring a resolution passed without dissent by the body corporate. The motion to approve the extension was defeated, leading Mr Albrecht to seek dispute resolution. The adjudicator found the opposition to the proposal unreasonable, a decision that was subsequently overturned by the Queensland Civil and Administrative Tribunal and then reinstated by the Court of Appeal of Queensland.
The central legal issue before the High Court was whether the adjudicator, and subsequently the Court of Appeal, had erred in law in their assessment of the reasonableness of the lot owners' opposition to the proposed alteration of common property rights. Specifically, the court considered whether the adjudicator correctly applied the principles governing "resolution without dissent" under the Body Corporate and Community Management Act 1997 (Qld) and whether the opposition could be characterised as unreasonable in the circumstances. The court also had to determine whether the Court of Appeal correctly identified errors in the Tribunal's reasoning.
The High Court reasoned that both the adjudicator and the Court of Appeal had erred in law. The court held that a lot owner's property interest in common property is a valuable right, and they are entitled to reasonably insist on conserving that interest, even if it is not presently being used to their material advantage. The court clarified that opposition to a proposal is not necessarily unreasonable simply because the common property in question is of no immediate use to the objectors. Opposition can be considered unreasonable only in specific circumstances, such as where it is motivated by spite or ill-will, or where the proposal could not rationally be seen to adversely affect the objector's property rights. In this case, the court found that the proposal had the potential to adversely affect the property rights and enjoyment of the dissenting lot owners, meaning their opposition could not be deemed unreasonable.
The High Court allowed the appeal, setting aside the order of the Court of Appeal of Queensland. The court ordered that the appeal to the Court of Appeal be dismissed with costs, and that the first respondent pay the appellants' costs of the appeal to the High Court.
Orders
Orders of the court
1. Appeal allowed.
2. Set aside the order of the Court of Appeal of the Supreme Court of Queensland made on 6 November 2015, except insofar as it orders in paragraph 1 that leave to appeal be granted, and in its place order that the appeal be dismissed with costs.
3. The first respondent pay the appellants' costs of the appeal to this Court.
Background
Background to the litigation
For the reasons which follow, the adjudicator and the Court of Appeal erred in law, and the appeal to this Court must be allowed.Background The Viridian Noosa Residences is a residential building complex situated at Noosa in the State of Queensland. The complex is an architectural award winning development. The Viridian Noosa Residences Community Titles Scheme 34034 ("the Scheme") regulates the ownership of the complex. The Scheme was established on or about 1 June 2005, and is comprised of 23 lots of which some (including the first respondent's lot) are semi‑detached dwellings in the nature of townhouses located at some distance from each other, although the townhouses are constructed in pairs sharing a common wall. Upon establishment of the Scheme, a body corporate for the Scheme was created ("the Body Corporate")[1]. The members of the Body Corporate are the owners of all lots included in the Scheme[2].[1]BCCM Act, s 30. The Body Corporate was named as the second respondent in the appeal; it filed a submitting appearance.[2]BCCM Act, s 31. Under the BCCM Act, the common property for a scheme is owned by the lot owners as tenants in common, the interest of each lot owner in a lot being inseparable from the lot owner's interest in the common property[3]. The body corporate may enforce rights related to the common property as if it were the owner of the common property[4]. [3]BCCM Act, s 35(1) and (3).[4]BCCM Act, s 36(1). Kjerulf Ainsworth, Lisa Martoo, John Morris, Mark Lang and John Mainwaring ("the appellants") and Martin Albrecht ("the first respondent") are owners of lots in the Scheme. The first respondent owns Lot 11 (Unit 14). He has for some time wished to amalgamate the two balconies forming part of his lot so as to create one deck comprising the area of the two existing balconies and the space in between them and around them. To achieve this end, he requires the exclusive use of the common property airspace that lies between the two existing balconies, estimated to be an area of 5m². Under s 169(1)(b) of the BCCM Act, the by‑laws for a community titles scheme may provide for the regulation of the use of the common property. These by‑laws are included in the community management statement for a community titles scheme[5]. An "exclusive use by‑law" is a by‑law that attaches to a lot and gives the occupier of the lot the exclusive use to the rights and enjoyment of common property[6]. Pursuant to s 171 of the BCCM Act, where the addition of a new exclusive use by‑law to the community management statement is sought, the new by‑law must specifically identify the common property affected and be the subject of a resolution without dissent by the body corporate consenting to the recording of the new community management statement incorporating the new by‑law.[5]BCCM Act, s 66(1)(e).[6]BCCM Act, s 170. After several abortive attempts to procure the necessary approval to the proposed alterations from the Body Corporate, the first respondent moved at an extraordinary general meeting of the Body Corporate held on 10 August 2012 "that the Body Corporate consent to the owners of lot 11 extending the deck on the upper level of lot 11" and that the community management statement for the Scheme be amended by the inclusion of a by‑law which would grant "the exclusive use and enjoyment of the common property airspace into which the extended deck protrudes". The first respondent's motion also proposed that the Body Corporate endorse its consent to, and take steps to record, the new community management statement.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
FRENCH CJ, BELL, KEANE AND GORDON JJ
(dissent)
NETTLE J
It was also an error on the part of the Court of Appeal to proceed on the basis that it was a consideration tending to show that the opposition to the proposed modification was unreasonable that the common property airspace required to give effect to the proposed modification was of no use to anyone but the first respondent[49]. A person with a property interest may reasonably insist on conserving that interest even if it is not presently being employed to that person's material advantage. That is so, if for no other reason than that he or she may reasonably expect to be offered something in return for agreement to part with it to another lot owner.[49]cf Albrecht v Ainsworth (2015) ANZ ConvR ¶15‑041 at 372 [83].Conclusion The power conferred by Item 10 of Sched 5 of the BCCM Act means that a lot owner's exercise of his or her right to vote may, in some cases, be overridden by an adjudicator[50]. Item 10 of Sched 5 is intended to operate in respect of a broad range of resolutions which are required to be passed without dissent. It must, therefore, be understood that it is neither necessary nor desirable to attempt an exhaustive statement of the circumstances in which such an order may be made. That having been said, opposition to a proposal that could not, on any rational view, adversely affect the material enjoyment of an opponent's property rights may be seen to be unreasonable. Opposition prompted by spite, or ill‑will, or a desire for attention, may be seen to be unreasonable in the circumstances of a particular case. But, as is apparent from the foregoing reasons, the adjudicator, the Tribunal and the Court of Appeal all appreciated that this is not such a case. [50]cf Hablethwaite v Andrijevic [2005] QCA 336 at [33]. The proposal in question was apt to create a reasonable apprehension that it would affect adversely the property rights of opponents of the proposal and the enjoyment of those rights. In these circumstances, opposition of the lot owners who dissented from the proposal could not be said to be unreasonable. Orders The appeal should be allowed. The order made by the Court of Appeal on 6 November 2015 should be set aside, except insofar as it orders in paragraph 1 that leave to appeal be granted, and in its place the appeal to that Court should be dismissed with costs. The first respondent should pay the appellants' costs of the appeal to this Court. This is an appeal from a judgment of the Court of Appeal of the Supreme Court of Queensland (McMurdo P, Morrison JA and Martin J agreeing). The Court of Appeal allowed an appeal from a decision of the Queensland Civil and Administrative Tribunal (Member P Roney QC) ("the Tribunal"), which had allowed an appeal from orders made by an adjudicator under s 276 of the Body Corporate and Community Management Act 1997 (Q) ("the BCCM Act"). The facts of the matter and the relevant statutory provisions sufficiently appear from the joint reasons. The adjudicator concluded[51] that she was not satisfied that the second respondent ("the Body Corporate") acted reasonably in deciding not to pass a motion to allow the first respondent ("Albrecht") to combine and extend the decks appurtenant to Lot 11 in the Viridian Noosa Residences at Noosa in Queensland, and, on that expressed basis, the adjudicator declared that the motion was not passed because of opposition that was unreasonable in the circumstances[52]. The Tribunal decided[53] that the adjudicator erred in law in a number of material respects and that, applying the correct legal test, the adjudicator ought to have held that Albrecht had not established that the Body Corporate acted unreasonably. The Court of Appeal held[54] that the Tribunal erred in identifying errors of law in the adjudicator's reasons that were not there. For the reasons which follow, the Tribunal was correct. The adjudicator did err in law in a number of material respects. On the material before the adjudicator, she should have held that it was not established that the opposition to the motion was unreasonable, and that Albrecht's application for an order giving effect to the motion as proposed should be dismissed.[51]Viridian Noosa Residences [2013] QBCCMCmr 351 at [87].[52]BCCM Act, s 276(1), (3); Sched 5, Item 10. [53]Re Body Corporate for Viridian; Ainsworth v Albrecht [2014] QCATA 294 at [146]. [54]Albrecht v Ainsworth (2015) ANZ ConvR ¶15-041 at 376 [98]; [2015] QCA 220.The adjudicator's reasoning