Body corporate disputes can become very emotional things. This is the story of one of those. If there is one article you read this year from us, make it this one – because it is the most significant strata case in Queensland since the High Court’s decision on building defects.
If you’ve spent any longer than five minutes in strata land, you come to realise that the single most important aspect of any body corporate is its requirement to act reasonably. We have written repeatedly about that, with the most recent newsletter here.
In October last year, you may recall the story of a man who was denied exclusive use of a small area of common property airspace to join his two decks together. On Friday, the Queensland Court of Appeal decided that the owner wasn’t so far off the mark in asking the question in the first place. The Court of Appeal (the highest Court in Queensland) has overturned QCAT’s decision that the Body Corporate was acting reasonably in opposing the amalgamation of the decks.
So what does this mean, and how does it impact body corporate decision making?
A summary of the history of this matter (which is much shorter than those contained in the various judgements) is:
What did the Court of Appeal say?
The lead judgment was given by the President of the Queensland Court of Appeal, Justice Margaret McMurdo. Justice McMurdo, ostensibly recognising the importance of the question of reasonableness of body corporate decision making, gave a very methodical judgment which analysed in great detail the history of the dispute from the start of the adjudication right through to the arguments on appeal.
In short, the two competing arguments were as follows:
One can never accuse the President of leaving any part of her reasoning off the table. Her Honour, in the first 79 paragraphs of the decision, methodically summarised the arguments of the parties in the initial adjudication, on appeal to QCAT, and in the appeal to the Court of Appeal.
Thankfully (for those with a short attention span) there is a succinct summary at the end of the decision. At paragraph 90, President McMurdo found:
“The respondents contended that the adjudicator applied an incorrect test … [t]hat contention is not made out when the adjudicator’s reasons are considered as a whole.
[The adjudicator] rightly … accepted that the question of reasonableness was objective, requiring a consideration of all relevant circumstances; and that determination of whether opposition to the motion was unreasonable required a consideration in an objective and fair manner of all the relevant facts and circumstances.”
Her Honour then applied this reasoning to the actual findings of the adjudicator in paragraph 91:
“The adjudicator’s reasons make clear that she conscientiously considered all of the material and submissions relied upon by the applicant and the respondents, made findings of fact, all of which were open on that material, and was ultimately satisfied as a matter of fact that the applicant’s motion was not passed because of the respondents’ opposition to it that in the circumstances was unreasonable.”
There’s not much ambiguity in that.
What does that mean?
Surprisingly it is all rather simple. The question of whether a body corporate has acted reasonably is:-
What does that mean practically? For us it is:-
Failing to follow those rules is going to leave any body corporate decision open to review.
Bodies corporate should be open, transparent and honest in their decision making. If not, they need to be ready to be able to explain any particular decision to affected lot owners via the Commissioner’s Office.
We are only an email away from helping anyone with guidance around decision making and the processes that should be followed when considering potentially contentious matters.
You can find the Court of Appeal decision here.