Is Your Owners Corporation making Reasonable Decisions?
By Nicole Wilde
18 October 2016
In Queensland, one of the statutory functions of a Body Corporate for a community titles scheme is to administer the common property for the benefit of the lot owners (s.94 of the Body Corporate and Community Management Act 1997). It has a statutory duty to act reasonably in anything that it does, including making, or not making decisions (s.94(2) of the Body Corporate and Community Management Act 1997). For a lot owner to obtain approval from the Body Corporate to exclusively use a portion of common property, the Body Corporate must obtain an ‘exclusive use by-law’ by passing a resolution without dissent.
The Viridian Noosa Residences is a 23 lot residential development located in Noosa, Queensland. The owner of a lot that had two balconies, wished to amalgamate his two boundaries to make one large balcony (the Proposed Work). The Proposed Work necessarily involved building across approximately 5m² of common property airspace.
The lot owner who wished to perform the Proposed Work put a motion to the Body Corporate for it to pass a resolution without dissent to grant the lot owner an ‘exclusive use by-law’ that would permit the Proposed Works to proceed. Seven lot owners voted against the motion, and accordingly, it failed. In other words, the Body Corporate had made a decision not to grant the lot owner approval for the Proposed Works.
The lot owner challenged the Body Corporate’s decision (on the basis that it was allegedly ‘unreasonable’) through the available legal channels and appeal avenues, a brief summary of the relevant findings by each body are below:
Helpful legal principles from the Ainsworth case about whether a Body Corporate decision is reasonable or not:
- Each decision will still need to be considered in the context of the particular circumstances;
- Opposition (by members of the Body Corporate) to a proposal that “…could not, on any rational view, adversely affect the material enjoyment of an opponent [lot owner’s] property rights may be seen to be unreasonable in the circumstances of a particular case…” (paragraph 63 of the Ainsworth case);
- Opposition (by members of the Body Corporate) “…prompted by spite, or ill-will, or a desire for attention, may be seen to be unreasonable in the circumstances of a particular case…” (paragraph 63 of the Ainsworth case);
- Does the lot owner’s proposal “…create a reasonable apprehension that it would affect adversely the property rights of opponents of the proposal and the enjoyment of those rights…”
Case Reference: Ainsworth v Albrecht  HCA 40 (12 October 2016) (the Ainsworth case)
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