Perks v Community Corporation 024302 Inc NO.2
[2014] SADC 215
•19 December 2014
DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
PERKS v COMMUNITY CORPORATION 024302 INC NO.2
[2014] SADC 215
Judgment of His Honour Judge Soulio
19 December 2014
REAL PROPERTY
Plaintiff brought application pursuant to s 142 Community Titles Act 1996 after Extraordinary General Meeting at which lot owners refused to approve proposal by plaintiff to carry out prescribed work – process at EGM flawed – second EGM ordered – proposal again refused – application renewed. Held – application dismissed.
Community Titles Act 1996 (SA) ss 102, 142, referred to.
Perks v Community Corporation 024302 INC [2013] SADC 153; R & R Fazzolari Pty Ltd v Parramatta City Council (2009) 237 CLR 603; PMT Partners Pty Ltd v Australian National Parks and Wildlife Service (1995) 184 CLR 301; Knight v FP Special Assets Ltd (1992) 174 CLR 178; Wotton v State of Queensland (2012) 246 CLR 1; Minister for Immigration & Citizenship v Li [2013] HCA 18; Ainsworth v Criminal Justice Commission (1992) 175 CLR 564; Kouflidis & Jenquin Pty Ltd v Corporation of the City of Salisbury (1982) 29 SASR 321; Kruger v Commonwealth (1997) 190 CLR 1; Gohl v Hender [1930] SASR 158; Kruse v Johnson [1898] 2 QB 91; West v AGC (Advances) Ltd (1986) 5 NSWLR 610; Wayde & Anor v New South Wales Rugby League (1985) 180 CLR 459; Millar v Houghton Table Tennis and Sports Club Inc (2003) 225 LSJS 241; Pettit v South Australian Harness Racing Club Inc (2006) 95 SASR 543; Municipal Officers Association v Lancaster (1981) 54 FLR 129, considered.
PERKS v COMMUNITY CORPORATION 024302 INC NO.2
[2014] SADC 215
The background to this action is set out in the decision in Perks v Community Corporation[1] For ease of reference, and by way of background I paraphrase the introductory paragraphs below.
[1] Perks v Community Corporation 024302 INC [2013] SADC 153, delivered 15 November 2013.
The Initial Dispute
A dispute arose between the plaintiff, a lot owner, and the defendant Community Corporation, in relation to the erection of two pergolas on the terrace of the top floor of the building in which the plaintiff, and occupies a penthouse apartment.
The plaintiff had commenced the erection of the two pergolas without first obtaining the consent of the defendant by special resolution at least 14 days prior to the commencement of the prescribed work as was required by s 102 of the Community Titles Act 1996 (‘the Act’) and Secondary By-laws 58.8 and 16.1 applicable to Community Plan 024302. The plaintiff asserted that she was entitled to do so because she had given detailed consideration to, and entered into negotiations in relation to, the erection of such pergolas prior to taking possession of the apartment in question, and while the development was in the design stage.
Ultimately, an Extraordinary General Meeting of the Community Corporation was held on 19 December 2011 (‘the first EGM’) to consider an application for a special resolution authorising the construction of the pergolas. The management committee of the Community Corporation determined that the result of the vote was such that the resolution was lost, and accordingly permission was not granted to proceed. A direction was given by the Community Corporation that the partially constructed pergolas be removed.
The Relief Initially Sought
The plaintiff brought an application pursuant to s 142 of the Act which relevantly provides:
(1) An application may be made under this section—
…
(d) if a dispute arises—
(i)between a community corporation and a member of the corporation; or
(ii) between two or more members of a corporation, in relation to—
(iii) any aspect of the occupation or use of a lot;
…
(7)A court, in hearing and determining an application under this section, should act according to equity, good conscience and the substantial merits of the case, without regard to technicalities and legal forms, and is not bound by the rules of evidence but may inform itself on any matter in such manner as it thinks fit.
(8) A court may, in respect of an application under this section—
(a) attempt to achieve settlement of the proceedings by agreement between the parties; or
…
(c) order that a party take such action as is, in the opinion of the court, necessary to remedy any default, or to resolve any dispute, and is specified in the order; or
…
(da) make a declaration as to the validity of—
(ii) any decision or purported decision of the corporation; or
(e) by order—
(ii)vary or reverse any decision of the corporation, or of the management committee of the corporation or of a delegate of the corporation; or
…
(h) make orders as to costs; or
(i) make any incidental or ancillary orders
…
(18) This section does not limit or derogate from any civil remedy at law or in equity.
The plaintiff sought a declaration that the outcome of the vote on the motion at the first EGM in fact constituted a special resolution authorising the erection of the plaintiff’s pergolas; a declaration that the erection of the plaintiff’s pergolas may lawfully proceed without further resolution of the defendant; and a declaration that the defendant was not entitled to count proxy votes in determining the outcome of the motion. The plaintiff sought an order directing the defendant to correct the minutes of the first EGM to reflect an order that the outcome of the vote constituted a special resolution authorising the erection of the plaintiff’s pergolas.
In the alternative, the plaintiff alleged by her pleadings that if the motion was not passed, either as a special resolution, or at all, the failure to pass the motion was unreasonable, oppressive and unjust within the meaning of s 142(1)(c) of the Act. Pursuant to that section, the plaintiff sought a declaration that the recorded resolution was unreasonable, oppressive and unjust; a declaration that the recorded resolution was invalid; and an order reversing the recorded resolution and substituting a special resolution granting authorisation pursuant to s 102 of the Act.
Initial Decision
Having heard detailed submissions in opening from counsel for each of the parties, having read the affidavits received into evidence, and having heard the evidence of witnesses, and, consistent with the powers provided to the court by s 142(8) of the Act, I invited the parties to consider their respective positions, and provided my preliminary views as to certain aspects of the evidence.
I was prepared to make findings, by way of preliminary findings, that the plaintiff held the belief that having planned to erect shade structures on the southern and eastern side of the terrace, and having negotiated with the original developers and builders to do so, she was entitled to proceed to erect pergolas.[2] I found however that she was mistaken in that belief and that a special resolution of the Community Corporation was required to approve the construction.
[2] I would also have found however that the pergolas she had contemplated, when negotiating with the developers, were smaller in size, and of different construction, from those she proceeded to erect without consent.
The information provided to lot holders, by both the plaintiff, and by those opposed to the retrospective application to erect the pergolas, contained errors and inaccuracies, which had the potential to influence lot holders in the exercise of their votes.
In those circumstances, I came to the view that the appropriate course was for the plaintiff to make a fresh application, separately in relation to each proposed pergola, for approval by the lot owners, by way of special resolution at a general meeting.
Having found that the initial process to consider what was in effect a retrospective application for approval to erect the pergolas was flawed, I ordered that a fresh general meeting be convened to consider motions from the plaintiff in relation to the southern and eastern structures, and that the plaintiff be given an opportunity to determine the form of the motions to be put, including as to the intended design of the two structures. I further directed that any written submissions that any lot owner, including the plaintiff, wished to make in relation to the motions, be provided to the managing agents at least 10 days prior to the meeting, to enable the managing agents to circulate such submissions to all lot owners, and that any response to such submissions be provided to the managing agents at least five days prior to the meeting, so that such responses could in turn be circulated to all lot owners prior to the meeting set for consideration of the motions.
The Second EGM
An EGM was convened on 11 December 2013 (‘the second EGM’) to consider separate motions in the following terms:
Motion 2 – Notice of Motion (special resolution) – application by Lot 801 for construction of vergola on southern side of apartment.
That authorisation be granted to Ms Perks pursuant to s 102 of the Community Titles Act to carry out prescribed works comprising the construction of a vergola as shown on the proposed plans attached to the agenda and located on the southern side of Apartment 801.
Motion 3 – Notice of Motion (special resolution) – application by Lot 801 for construction of veranda on eastern side of apartment.
That authorisation be granted to Ms Perks pursuant to s 102 of the Community Titles Act to carry out prescribed works comprising the construction of a veranda as shown on the proposed plan attached to the agenda and located on the eastern side of Apartment 801.
In relation to the first EGM, I found that there were matters put before the lot holders, prior to voting, that were incorrect and potentially misleading. As I intimated in the earlier decision, the findings would have been that both “sides” of the proposal engaged in the provision of incorrect information.
The second EGM proceeded in a more robust manner. The plaintiff’s proposals were formulated in conjunction with her solicitors, and a comprehensive letter explaining her position was provided to each of the lot holders. An exchange of information followed. The procedure took on something of the nature of an election campaign, albeit in relation to two specific proposals for the erection of two separate structures. The plaintiff was afforded an opportunity to respond to matters that were put by those opposed to her proposals, and did so, through her solicitors. The fact that some lot holders provided proxies prior to the last word being said, in my view, is not to the point.
I do not consider the second EGM to have proceeded in a way that constituted an irregularity in the decision making process, such that it should be characterised as a situation when no valid decision had been made, or that the decision was tainted by fraud, or undue influence, such that the decision did not represent the freely-made exercise of the decision making process by the Community Corporation through the individual lot holders.
At the second EGM both motions were lost.
The Resumed Hearing of the Application
The plaintiff proceeded with her application. Upon the resumed hearing on 30 July 2014, I admitted into evidence a bundle of materials relating to the second EGM. I also admitted an affidavit of the plaintiff, sworn 16 July 2014, dealing with changes to the external appearance or facade of the building, including the new Optus communications infrastructure on the top of the building. Finally, an affidavit of Ms Riddle was admitted into evidence, in relation to a proposal by the management committee for changes to the facade of the building, by renovation of the entrance area.
Issues for Determination
Ultimately it seems to me that the issues for determination are: whether the plaintiff is entitled to go behind the vote at the second EGM; if so, whether the plaintiff is then entitled to challenge the vote at the first EGM; and if so, whether the Court should substitute a decision which differs from that at the first EGM, having regard to the evidence.
Having taken the course I did in relation to resolutions made at the first EGM, by ordering, with the agreement of the parties, that the plaintiff’s motions be re-put to a new EGM, I am of the view that it is not necessary to consider the merits of the claim in relation to the decision taken on the resolution at the first EGM. In my view the criticisms of the process, and the decision made at the first EGM have been rendered redundant by the holding of the second EGM. The remaining issue therefore is whether the decisions made at the second EGM ought to be set aside, and the plaintiff’s proposals for construction of the two structures considered afresh.
The Plaintiff’s Contentions
Whilst properly conceding that the present application was not an application for judicial review, Mr Henry SC mounted a skilful argument to the effect that the principles applicable upon a judicial review of an administrative decision, were applicable to any consideration of the exercise of the discretion by a Community Corporation pursuant to the Act. The plaintiff relied upon the principles applicable to judicial review, in order to assert that the discretion residing with the Community Corporation, provided for in s 102, is not unbridled, and that the Community Corporation is amenable to the processes of the law to ensure that it does not exceed its power in exercising the discretion.
The plaintiff submitted that such propositions are not displaced by s 142, which simply provides additional, more flexible causes of action, procedures and remedies.
The plaintiff submitted that at common law, if a number of voters of a Community Corporation cast their votes on grounds extraneous to the proper scope of s 102 the Act, and the number of votes so cast leads to an outcome which is challenged, then the decision of the Community Corporation would be liable to be set aside. The plaintiff submitted that the way in which the court’s jurisdiction ought be exercised was primarily informed by the construction of ss 102 and 142.
Section 102 controls certain types of building works in relation to strata lots. Community lots in a multistorey building come within the definition of strata lots. The plaintiff submitted that s 102 is designed to address issues that might arise on the basis that strata lot holders have a common interest in the ownership or occupation of a single pre-existing building, not because they happen to be members of a community corporation with an interest in controlling or influencing what other members can do with their lots.
Section 102 of the Act operates as a derogation of the common law right, of the owner of real property, to build on the land comprising the property. That common law right, as the plaintiff properly conceded, is controlled and qualified by statute and regulation in any event. Counsel for the plaintiff submitted that the construction of s 102 is to be approached with the presumption in mind that “where a statute is capable of more than one construction, that construction will be chosen which interferes least with private property rights.”[3]
[3] R & R Fazzolari Pty Ltd v Parramatta City Council (2009) 237 CLR 603 p 619-620.
A Community Corporation is created by the Act and s 102 confers a power on a Community Corporation to authorise, or refuse to authorise, proposed prescribed works. Counsel for the plaintiff contended that that power was in the nature of a discretion which might be influenced by different considerations in different cases, and would be exercised in a broad range of circumstances. It is necessarily a broad discretion, given the difficulties of identifying in advance, firm rules for the exercise of the power.
The remedies provided by s 142 do not limit or derogate from other civil remedies at law and at equity.[4] The plaintiff submitted that Parliament did not intend s 142 to have a narrow scope, but rather intended that new remedies would be available, having regard to the types of disputes which might arise between participants in a community scheme. Section 142, it was said, operates to provide additional causes of action and more flexible procedures and remedies. It lowers the bar for success and introduces remedies for injustice and oppression, but does not derogate from the fundamental principles applying to the construction of s 102. Counsel for the plaintiff submitted that s 142 involved a conferral of jurisdiction and is to be construed beneficially and broadly,[5] and should be used whenever the proper occasion arises. It is available to give relief against decisions made by a Community Corporation in relation to s 102, where such decisions are in breach of the Act.[6]
[4] See Community Titles Act 1996 s 142(18).
[5] PMT Pty Ltd Partners v Australian National Parks and Wildlife Service (1995) 184 CLR 301 p 313; Knight v FP Special Assets Ltd (1992) 174 CLR 178 p 205, per Gaudron J.
[6] See s 142(1)(a) Community Titles Act 1996.
Counsel for the plaintiff contended that the exercise of power, by the Community Corporation, was not unfettered; that “the notion of “unbridled discretion” has no place in the Australian universe of discourse”,[7] that every statutory discretion, however broad, is constrained by law; and that a statutory discretion is confined “by the subject matter, scope and purpose of the legislation under which it is conferred.”[8]
[7] Wotton v State of Queensland (2012) 246 CLR 1 at [10].
[8] Minister for Immigration & Citizenship v Li [2013] HCA 18 at [23] per French CJ.
Counsel for the plaintiff contended that the principles to which he referred, may be described as administrative law principles, traditionally applied in proceedings for judicial review directed at statutory decision-makers whose jurisdiction is under challenge, but contended that there is a fine distinction between bodies amenable to a judicial review who are bound by administrative law principles, and those who are not.
Counsel relied on the statement of Brennan J in Ainsworth v Criminal Justice Commission:[9]
… Any person who purports to exercise an authority conferred by statute must act within the limits and in the manner which the statute prescribes and it is the duty of the court, so far as it can, to enforce the statutory prescription.
…
… The broad purpose of judicial review is to ensure that statutory authority, which carries with it the weight of state-approved action and the supremacy of the law, is not claimed for or attributed to decisions or acts that lie outside the statute. The conduct of a person or body of persons acting without colour of statutory authority is not amenable to judicial review, but conduct in which a person or body of persons engages in purported exercise of statutory authority must be amenable to judicial review if effect is to be given to the limits of the authority and the manner of its performance.
[9] Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 p 584-5.
Counsel for the plaintiff submitted that whilst it was unclear precisely what factors were taken into consideration by the Community Corporation, or by its voting members, in refusing authorisation under s 102, an administrative decision, even where made for a proper purpose, was open to challenge in the event that irrelevant considerations were taken into account, or that relevant considerations were ignored.[10]
Protection of Owner’s Interests
[10] Minister for Immigration & Citizenship v Li [2013] HCA 18 at [26].
Counsel for the plaintiff submitted that the underlying purpose of s 102 was to ensure that no individual lot owner’s interest in developing a strata lot is exercised in a way unreasonably detrimental to the interests of other lot owners. In the context of the present litigation, the relevant interests were said to include an interest in the protection of the value of each lot, and the scheme as a whole; an interest in the protection of the amenity or ambience of the building and individual lots in which lot owners have an interest; and an interest in ensuring that no lot owner causes detriment to the structural integrity of the building.
That led, it was submitted, to the conclusion that any decision by the Community Corporation on an application for authorisation for the erection of a structure on a strata lot must be exercised for the purpose of promoting these interests or some other proper interest, and a decision to refuse a lot owner’s application in order to achieve some other purpose would not be a proper decision under s 102.
Retrospectivity of Proposal Irrelevant
Counsel for the plaintiff submitted that the real complaint, by those voting against the proposal, was that approval for the construction of the two pergolas was not sought until after construction had started. He submitted that whilst a prior breach of s 102 may enliven the remedial powers in s 102(2)-(6), or s 142 of the Act in the event that an authorisation was not subsequently granted, the commencement of work prior to obtaining authorisation was not of itself relevant to the decision to grant authorisation on a subsequent application.
Counsel for the plaintiff sought to equate the exercise of the discretion under s 102, with the exercise of the decision making power in planning law. He relied on Kouflidis v City of Salisbury,[11] where the applicant had sought planning consent for a use that had commenced unlawfully without approval. On appeal the court held that past unlawful use was not a relevant factor in determining whether consent should be granted, and should be ignored, holding that “an applicant for consent should derive no advantage, direct or indirect, from the unlawful use” but nor should it be an “impediment to the consideration of his application on its planning merits.”[12]
[11] Kouflidis & Jenquin Pty Ltd v Corporation of the City of Salisbury (1982) 29 SASR 321.
[12] Kouflidis & Jenquin Pty Ltd v Corporation of the City of Salisbury (1982) 29 SASR 321 p 323-324.
The plaintiff submitted that the Kouflidis principle applied to any decision under statute where rules precluding consideration of irrelevant factors apply, and that once it is accepted that the purpose of s 102 is to balance the interests of all lot owners, and to give due weight to the interests of lot holders in the preservation of economic and amenity values, and to prevent structural damage, it followed that the timing of the application relative to construction is not a relevant consideration and should be disregarded.
Reasonableness
Counsel for the plaintiff submitted that statutory discretions must be exercised not only according to limits as to subject matter, scope and purpose, but also must be exercised reasonably.[13] What followed from that proposition was that a Community Corporation is not entitled to refuse authorisation under s 102 capriciously, or for reasons extraneous to the purpose for which the statutory discretion was conferred.[14]
[13] Kruger v Commonwealth (1997) 190 CLR 1 p 36; Minister for Immigration & Citizenship v Li [2013]. HCA 18 at [24] per French CJ, and [63] per Haine, Keiffel and Bell JJ.
[14] Minister for Immigration & Citizenship v Li [2013] HCA 18 at [26]-[28].
In Li, the court said, in respect of a review of the exercise of a statutory discretion: [15]
… Unreasonableness is an inference drawn from the facts and from the matters falling for consideration in the exercise of the statutory power … unreasonableness is a conclusion which may be applied to a decision which lacks an evident and intelligible justification …
[15] Minister for Immigration & Citizenship v Li [2013] HCA 18 at [76].
Counsel for the plaintiff submitted that any contention by the defendant that a Community Corporation can lawfully make a decision under s 102 adverse to a lot holder, unreasonably and in the furtherance of any irrelevant purpose that the Community Corporation sees fit, should be rejected. Similarly the contention that individual lot owners have an unfettered right to vote as they see fit, either reasonably or unreasonably, for any purpose and on any ground that takes their fancy, is not supported by the law, and should be rejected.
Unreasonable, Oppressive or Unjust
Section 142(1)(c) provides that an application may be made under the section:
If a member of a Community Corporation claims that a decision of the corporation or a delegate or the management committee of a corporation is unreasonable, oppressive or unjust.
Determining whether the decision of a Community Corporation is unreasonable, oppressive or unjust must be undertaken in the context in which the decision is made, and having regard to the statutory purpose of the provision pursuant to which the decision was made.
The term “oppressive” has an application, although not an exclusive application, in respect of rights. Here it was submitted that where the decision of the Community Corporation involves the plaintiff’s right to build on her property, the question of oppression may be enlivened.
However, in a community title scheme, the nature of the property implies that individual rights are subject to the rights of others to enjoy similar or corresponding rights.[16] Clearly, in the context of a community title scheme, not all infringements upon rights will amount to oppression.
[16] See Gohl v Hender [1930] SASR 158 p 162, in the context of rights of way.
In the present case, the plaintiff submitted that the defendant does not suggest that any limitation of the plaintiff’s rights was necessary in order to preserve the rights of others; or that it was necessary to strike a balance between competing rights within the community. It was further submitted that the plaintiff’s expert evidence showed no adverse valuation impact, and no unreasonable adverse impact on aesthetic appreciation of the building, nor any suggestion of adverse structural impact, or suggestion of interference with any other member’s functional enjoyment of their lot.
That meant, it was put, that it was not necessary to suppress the plaintiff’s right to develop her lot in order to preserve other lot owner’s rights or interests; and no question of balancing competing rights or interests arose. In that circumstance, the plaintiff said, the decisions to refuse authorisation of the prescribed work, were oppressive.
The plaintiff submitted that the concept of unreasonableness, referred to in s 142(1)(c) of the Act, should be interpreted in an administrative law context, again given that the Community Corporation is a statutory corporation exercising power under statute. A similar approach could be derived from the consideration of the approach upon appellate review of an exercise of discretion.[17]
[17] See Minister for Immigration & Citizenship v Li [2013] HCA 18 at [76]; and see Li at [70], citing with approval Kruse v Johnson [1898] 2 QB 91.
The plaintiff’s submission as to the approach to be taken was that where there is an interference with rights, it is necessary to search for justification, and determine whether any postulated justification is sufficient, and further, where no justification is suggested, which is said to be the position in the present case, the interference will necessarily be unreasonable, oppressive and unjust.
The plaintiff sought to rely on the decision in West v AGC,[18] a decision involving legislation providing for relief against unjust contracts, where McHugh J held that a contract may be unjust either in a substantive or a procedural sense. It may be substantively unjust because it imposes an unreasonable burden not required to protect the legitimate interests of the other party.
[18] West v AGC (Advances) Ltd (1986) 5 NSWLR 610.
The plaintiff here contended that justice requires a proper balancing of competing interests, and that where the plaintiff’s rights had been suppressed, the question is whether that suppression has been necessary to protect the legitimate interests of anyone else. The plaintiff contended that here there was no such necessity and it followed that the corporation’s refusal to grant authorisation was unjust, and reviewable in these proceedings.
Conclusion
I consider the approach suggested by the plaintiff to be unduly restrictive and technical. The nature of participation in a community title relationship, of necessity carries with it an element of submission to democratic principles. Examples lend themselves to such interpretation. A lot holder might propose the installation of an item of a particular colour. The majority of the lot holders might consider that such a colour is inappropriate. Expert evidence may demonstrate that it has no impact on the general amenity, on the value of the building, or on the integrity of the structure. Nevertheless, it seems to me, that by the very nature of such arrangements, such a decision would not fall to be overturned pursuant to the provisions of s 142.
The plaintiff does not challenge the procedural regularity of the resolutions made at the second meeting. The challenge mounted by the plaintiff is on the basis of the substantive merits of the resolutions; and on the basis that the resolutions were obtained by, or affected by, misleading conduct on the part of those opposed to the plaintiff’s proposal for prescribed work. For the reasons I have referred to earlier, I do not consider that the resolutions were vitiated by the conduct of those involved in the promotion of the competing viewpoints, nor by the nature of the information provided by each.
While I accept that misleading conduct in the lead up to a meeting at which the decision in relation to a lot holder’s proposal is made, might result in the resolution of a Community Corporation being set aside, I do not find that that is the situation which should apply here.
Whilst it may be that some lot holders may have been influenced by the fact that the plaintiff proceeded to engage in constructing the structures without prior approval, that is that she failed to follow due process, I do not accept that Kouflidis[19] is directly analogous.
[19] Kouflidis & Jenquin Pty Ltd v Corporation of the City of Salisbury (1982) SASR 321.
The evidence shows that the Community Corporation, in its process of decision-making in relation to other matters potentially affecting the facade of the building, attached considerable significance to matters of process. The plaintiff, who had been a member of the management committee, had knowledge of that approach.
I accept the defendant’s proposition that even if the evidence of the plaintiff, as to her assertion that she genuinely believed she had authority to build the structures when she did, was to be accepted, that did not render the failure to follow due process an irrelevant consideration, and did not make that a matter which could not be taken into account by individual lot holders when exercising their individual votes in relation to the proposals. Indeed, as earlier intimated, had I been called upon to do so, I would have found that the plaintiff could not have genuinely believed that she had authority to erect the structures that she erected without obtaining consent, in particular given the disparity between the structures she ultimately erected, and the structures she was contemplating installing during the development phase of the building.
The defendant contended that the individual lot holders were entitled to take the view that if they approved the plaintiff’s proposal, completely ignoring the failure to follow the required process, that might undermine the importance of the requirement that due process be complied with prior to making any proposal to carry out prescribed works. As I have said, I do not consider the Kouflidis principle to be directly applicable. Given the nature of the decision making process, I do not consider that the plaintiff’s failure to follow due process was an irrelevant consideration.
The defendant also contended that the lot holders were entitled to take the view that permitting construction of the structures might have a negative impact on the facade of the building. The fact that an expert might take the view that a particular factor did not materially affect the value or visual amenity of the building does not prevent a lot holder taking a different view.
Whilst I would have come to the view, in acceptance of the evidence of the experts, that the proposed prescribed work did not materially affect the value or visual amenity of the building, I accept the proposition that the lot holders may well have, and were entitled to, come to a different view.
There may be many reasons why individual lot holders came to the view that the plaintiff’s proposal should not succeed. I do not accept the plaintiff’s contention that the decision was one which no reasonable decision-maker could have reached.
As the defendant contended, the decision making process, in these circumstances, will often involve discussion and debate and the expression of competing views. Such expression of views is likely to take place through a combination of means, whether in writing, in public statements in meetings, and in private conversations. In considering the issue a practical approach needs to be taken, having regard to the nature of the decision making process of a Community Corporation.
Here, as I have said, the vote taken at the second EGM was taken after a robust discussion and an opportunity for the opposing sides to comment on matters put forward by the other. The plaintiff was represented through that process. A good deal of carefully constructed material was disseminated on her behalf.
I accept the defendant’s contention that a broad and substantive approach to the issue of misleading conduct is required, rather than an overly technical or detailed analysis. I am not able to find that the statements or submissions made in opposition to the plaintiff’s proposal were so misleading, or of such significance in the decision making process, as to vitiate the decisions.
Decision
In order to succeed in obtaining relief in this matter, the plaintiff must establish that the resolutions made at the second EGM were unreasonable, oppressive or unjust.
I do not consider that it is necessary for the defendant to justify the resolutions made at the second EGM by reference to their objective merits.
The plaintiff, quite properly, does not contend that the resolutions of the defendant corporation were amenable to judicial review. The plaintiff’s claim is properly couched in terms of relief under s 142 of the Act. The plaintiff, as I have said, contended that that relief is wider than the relief which might be available by way of administrative law grounds for review.
It is true to say that in determining the intended breadth of the Court’s power to intervene pursuant to s 142, and in considering the proper construction of the expression “unreasonable, oppressive or unjust” the statutory context in which the power to make the decision must be considered. However it is also necessary to also consider the nature of the Community Corporation as a decision-maker, and the nature of the decision made by that decision-maker.
Contrary to the plaintiff’s contention that the Community Corporation is equivalent to an independent body created by statute for the purpose of making decisions affecting a person’s rights, I accept the defendant’s contention that where the decision-making occurs as an incident of ownership, and where the lot holders are voting as lot holders in a general meeting rather than in a representative or committee capacity, the interested co-owners, in arriving at a decision, by ballot, might be expected to, and should be permitted to, take into account their respective individual self-interest in their own property, and in that of the Community Corporation. Importantly, they might be expected to, and should be permitted to, do so on the basis of their own subjective understanding of what constitutes that self-interest.
It is true to say that the reference to “unreasonable, oppressive or unjust” in s 142 must entail some limitation upon the validity of decisions made by the Community Corporation. However, a close analysis of the reasoning of individual lot holders, as the plaintiff sought to have the Court engage in, is not warranted. Such an exercise would often be impractical, it being difficult to assess what particular aspects of the submissions made, in the lead up to the voting exercise, played upon the minds of any individual lot holder. I accept the proposition the lot holders should, generally, be entitled to vote based upon the information provided to them, as they see fit.
In order to establish a basis for setting aside the decision, pursuant to s 142, the plaintiff would need to establish that no reasonable decision-maker could have made the decision in question.[20] It is not to the point that the Court might consider that a different decision should have been made. That is an insufficient basis to warrant setting aside the decision.
[20] See Wayde & Anor v New South Wales Rugby League Ltd (1985) 180 CLR 459; Millar v Houghton Table Tennis and Sports Club Inc (2003) 225 LSJS 241; Pettit v South Australian Harness Racing Club Inc (2006) 95 SASR 543.; Municipal Officers Association v Lancaster (1981) 54 FLR 129.
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