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Bakir v Body Corporate for Chevron Renaissance[2017] QCATA 12

Bakir v Body Corporate for Chevron Renaissance[2017] QCATA 12

CITATION:

Bakir v Body Corporate for Chevron Renaissance CTS 30946 & Ors [2017] QCATA 12

PARTIES:

Ron Bakir

(Applicant/Appellant)

v

Body Corporate for Chevron Renaissance CTS 30946

(First Respondent)

ACN 068 118 347 Pty Ltd

Teo Tran

(Second Respondent)

APPLICATION NUMBER:

APL076-15

MATTER TYPE:

Appeals

HEARING DATES:

15 August 2016

HEARD AT:

Brisbane

DECISION OF:

Senior Member Brown

Member Howard

DELIVERED ON:

31 January 2017

DELIVERED AT:

Brisbane

ORDERS MADE:

  1. The appeal is allowed;
  1. The decision of the Adjudicator dated 15 January 2015 as far as it relates to motion 18 is set aside;
  1. The application with respect to motion 18 is remitted to the Adjudicator for reconsideration on its merits, with the following directions:
  1. (i)
    The application must be determined according to law following compliance with these directions;
  2. (ii)
    Mr Ron Bakir must serve all lot owners who made a submission to the Adjudicator with a copy of these orders and the Appeal Tribunal’s reasons for decision;
  3. (iii)
    Mr Ron Bakir must give to the Commissioner and serve on the respondents any further evidence and submissions upon which he wishes to rely by 4pm on 24 February 2017;
  4. (iv)
    The first and second respondents must give to the Commissioner and serve on Mr Ron Bakir and the other respondent any further evidence and submissions upon which they wish to rely by 4pm on  24 March 2017;
  5. (v)
    The Adjudicator must further exercise his investigative powers as he considers necessary to determine the application on its merits.

CATCHWORDS:

APPEAL – BODY CORPORATE AND COMMUNITY MANAGEMENT ACT – where appeal in the strict sense – whether error of law in applying the test under Schedule 5 Item 10 – whether facts found were open on the evidence

Body Corporate and Community Management Act 1997 (Qld) s 243, s 274, s 276, s 289, Schedule 5, Schedule 5 Item 10

Albrecht v Ainsworth & Ors [2015] QCA 220

Bakir v Tran & Body Corporate for Chevron Renaissance [2015] QCATA 164

Re Body Corporate for Viridian; Ainsworth & Ors v Albrecht & Anor [2014] QCATA 294

REPRESENTATION:

 

APPLICANT:

Mr J W Peden of Counsel instructed by Russells Lawyers represent Mr Bakir

RESPONDENTS:

Mr A Redburn, Solicitor, Active Lawyers represent the Body Corporate for Chevron Renaissance CTS 30946

Mr Thomas Arthur Royston represented Teo Tran and ACN 068 118 347 Pty Ltd

REASONS FOR DECISION

  1. [1]
    Chevron Renaissance Community Titles Scheme (‘the Scheme’) consists of some 719 lots and common property. The Body Corporate for Chevron Renaissance (‘the Body Corporate’) proposed two motions, motions 17 and 18, at an AGM in 2014. In essence, motions 17 and 18 provided for rescission of some grants of exclusive use and for the imposition of conditions on other grants of exclusive use of some common property allocated to the lots owned by Mr Bakir (or entities which he controls, which for convenience, we will refer to as Mr Bakir’s lots) and to give a grant of exclusive use of another area to him.
  2. [2]
    Both motions required a unanimous vote to pass. Both were defeated by votes against by lot owners, Ms Tran and ACN 068 118 347 Pty Ltd (‘ACN'). They are also referred to as the dissenters or objectors in these reasons.
  3. [3]
    The Body Corporate applied to the Commissioner for Body Corporate and Community Management (‘the Commissioner’) seeking orders that the motions be given effect on the basis that the opposition to them was unreasonable.
  4. [4]
    An Adjudicator appointed by the Commissioner, if satisfied that the opposition is unreasonable, may make orders as may be just and equitable to resolve a dispute pursuant to s 276 and, relevantly in particular, Schedule 5 Item 10 of the Body Corporate and Community Management Act 1997 (Qld) (‘BCCM Act’). Schedule 5 Item 10 provides as follows:

10  If satisfied a motion (other than a motion under section 47A for the adjustment of contribution schedule lot entitlements, or a motion for reinstatement of scheme land or termination or amalgamation of the scheme) considered by a general meeting of the body corporate and requiring a resolution without dissent was not passed because of opposition that in the circumstances is unreasonable—an order giving effect to the motion as proposed, or a variation of the motion as proposed.

  1. [5]
    Submissions on the application were invited pursuant to s 243 of the BCCM Act. In response, some lot owners, including Ms Tran and ACN, made submissions opposing the application. The application was referred for adjudication under the BCCM Act. An Adjudicator subsequently made a decision, which gave effect to motion 17, but did not give effect to motion 18.[1]
  2. [6]
    Mr Bakir appealed the Adjudicator’s decision to the Appeal Tribunal, seeking orders declaring opposition to motion 18 unreasonable and giving effect to it. The Body Corporate is a respondent. The only lot owners who have taken an interest in the appeal proceedings are Ms Tran and ACN.[2]
  3. [7]
    The Body Corporate supports Mr Bakir’s appeal. Ms Tran and ACN oppose it.

The grounds of appeal

  1. [8]
    An appeal under s 289 of the BCCM Act to the Appeal Tribunal of QCAT may raise questions of law only.
  2. [9]
    Six grounds of appeal are raised alleging error of law by the Adjudicator. In essence, the grounds of appeal are as follows:
  1. The Adjudicator applied the wrong test by determining whether the opposition of Ms Tran and ACN was objectively reasonable, rather than whether the motion did not pass because of opposition that in the circumstances was unreasonable as set out in the BCCM, Schedule 5 clause 10;
  2. The Adjudicator failed to identify all of the relevant circumstances as required by the BCCM Act, Schedule 5 clause 10;
  3. The Adjudicator failed to identify all of the grounds of opposition to the motion as required by BCCM Act, Schedule 5 clause 10;
  4. The Adjudicator erred by failing to consider whether opposition to the motion 18 was unreasonable in the circumstances;
  5. The Adjudicator erred in making findings as follows:
  1. that Ms Tran and ACN raised substantial reasons for opposing the motion rather than applying the test in Schedule 5 clause 10;
  2. in finding that there was no benefit to the Body Corporate in the grant of exclusive use of 88.1m3 to the roof top area to Mr Bakir so that he may make improvements;
  3. in finding that the owners of lots in the Body Corporate would be deprived of access to the area proposed by motion 18 to be granted for the exclusive use of Mr Bakir, by depriving them of the ability to access the BBQ and deck area;
  4. in finding that the opposition of Ms Tran and ACN was reasonable because they believed the consideration was inadequate; and
  5. in doing so, failed to consider all of the relevant circumstances including:
  1. the value of Mr Bakir’s exclusive use areas provided to the Body Corporate by motion 17;
  2. that the lot owners other than Mr Bakir could not access the area in respect of which he was proposed to be given exclusive use;
  3. having regard to:
  1. compensation;
  2. that compensation was payable by Mr Bakir for the exclusive use was irrelevant;
  1. in finding matters in (b), (c), and (d) were not unreasonable.
  1. The Adjudicator erred in taking into account the inadequacy of compensation without investigating or calling for evaluation of the area proposed to be allocated to Mr Bakir’s exclusive use.

Motions 17 and 18

  1. [10]
    It is useful to set out the motions in more detail at this stage.
  2. [11]
    Motion 17 related to the proposed rescission of a grant of exclusive use of area M6 on Plan B.
  3. [12]
    Motion 18 related to the proposed:
    • rescission of exclusive use rights to several areas (E208 on Plan L; E212 on Plan K; L201 on Plan I; and S302 on Plan W);
    • imposition of a condition on an exclusive use grant entitling the Body Corporate to construct a steel storage gate in storage area E210 on Plan N (to secure water plant).
    • imposition of a condition on an exclusive use grant providing for the Body Corporate to have clear access through the storage area to the water plant and allowing the Body Corporate access to storage area E211 on Plan K.
    • grant of exclusive use to Mr Bakir of part of the roof top of Tower 3 in the Scheme adjacent to the upper level of a 2 level lot owned by him, as well as authorisation to improve the exclusive use area by constructing a swimming pool at his own cost. The authorisation was subject to a variety of conditions, including that he maintain the roof membrane in the area and indemnify the Body Corporate for loss or damage due to any failure of it.
    • grant of exclusive use to Mr Bakir of the elevator which travels between levels 39 and 40 only. This was abandoned at hearing as an independent survey confirmed that it is not on common property, but is part of Mr Bakir’s lot.[3]
  4. [13]
    In both cases, the motions also provided for amendment to the community management statement (CMS) to give effect to the proposed changes.[4]
  5. [14]
    Although neither the motions (nor the explanatory note[5] about them) disclosed it, they embodied an agreement between the Body Corporate and Mr Bakir.[6]
  6. [15]
    In all, the existing exclusive use areas granted to Mr Bakir affected by the changes (either by way of rescission or the imposition of conditions) total some 247m2,[7] with M6 comprising 63m2. The area proposed to be granted for exclusive use is 88m2.

The Adjudicator’s reasons for decision

  1. [16]
    The Adjudicator’s reasons for decision spend significant time reciting the background and submissions of the parties. The Adjudicator then refers to the test in Schedule 5 clause 10.
  2. [17]
    The Adjudicator went on to say:

[32] Reasonableness is a question of fact and having regard to relevant case law, the test to be applied in determining reasonableness is an objective test. An objective test requires a balancing of factors in all the circumstances according to the ordinary meaning of the term ‘reasonable’. The question is not whether the decision was the ‘correct’ one but whether it is objectively reasonable.[8]

  1. [18]
    Further, the Adjudicator referred to a decision of the Appeal Tribunal of QCAT. In Re Body Corporate for Viridian; Ainsworth & Ors v Albrecht & Anor,[9] the Appeal Tribunal held that where it is possible to ascertain the reasons for opposition to a motion  the expressed basis could be recognised as a reasonable basis. In that instance, the motion authorised a lot owner to extend his balcony into common property airspace. If allowed, the extended balcony would look different to all of the other balconies in the Scheme. In particular, the Appeal Tribunal held:

If any of the known bases can be accepted as reasonable, even if there are a number, or even a majority of reasons which are unreasonable, the conduct of the body corporate reflected in the expression of will, will nevertheless be reasonable. … In other words there is no balancing exercise to decide whether overall, the reasonable explanations outweighed the unreasonable ones.[10]

  1. [19]
    The Adjudicator then went on to set out what he believed was the substance of the Body Corporate’s argument that opposition to motion 17 was unreasonable, (including that access to M6 would benefit the day-to-day operations of the Body Corporate, and was at no cost to the body corporate). The Adjudicator was unable to ‘ascertain any reasonable basis for the respondents to oppose motion 17’.[11] In reaching that conclusion, he accepted that M6 was given up unconditionally and at no cost to the Body Corporate.
  2. [20]
    With respect to motion 18, the Adjudicator said as follows:

[36] On the other hand, the respondents have raised some substantial reasons for their opposition to motion 18 and I believe it was reasonable for them to vote against the motion. The respondents say there is no benefit to the body corporate in granting exclusive use over 88.1 square metres of roof-top area to the owner of lot 3241 so that he can make improvements including a swimming pool and outdoor area. Further, depriving owners of access to the roof-top area will effectively deprive them of the ability to access the existing BBQ and deck area on the rooftop.

[37] While the owner of lot 3241 has agreed to relinquish the rights to exclusive use of various common property areas, these are small areas containing utility infrastructure and are of little practical use to lot 3421. On the other hand, it is proposed that lot 3241 be granted exclusive use of a large rooftop area and to authorise the owner of lot 3241 to make improvements to that area, without any further consideration. While the legislation does not specifically state that the body corporate should receive a benefit in return for a grant of exclusive use, I believe it was reasonable for the respondents to oppose motion 18 because they believe the consideration was inadequate.

  1. [21]
    He then proceeded to make orders declaring motion 17 was not passed because of unreasonable opposition and an order that motion 17 be deemed to have passed and requiring the lodgement of a new CMS. He otherwise dismissed the application.

Did the Adjudicator apply the test under Schedule 5 clause 10?

  1. [22]
    Applying the incorrect legal test is an error of law.
  2. [23]
    Several of the grounds of Mr Bakir’s grounds of appeal, namely 1, 2, 3, 4, 5(a), are directed to the application of whether the test under Schedule 5 clause 10 was properly applied.
  3. [24]
    Before considering whether the correct test was applied, it is appropriate to consider later decisions of the Court of Appeal and High Court of Australia.
  4. [25]
    Subsequent to the Appeal Tribunal’s decision in Re Body Corporate for Viridian; Ainsworth & Ors v Albrecht & Anor (as discussed by the Adjudicator in his reasons for decision), that proceeding was appealed to the Court of Appeal. The Court of Appeal held the Appeal Tribunal was in error. In its decision, Albrecht v Ainsworth & Ors,[12] the Court of Appeal held that under Schedule 5 clause 10 and s 276 of the BCCM Act, the task was to determine whether the Body Corporate did not pass the motion because of opposition that was in the circumstances unreasonable. The Court of Appeal said:

This was a question of fact to be determined by objectively considering all relevant circumstances … What is relevant in determining reasonableness (or unreasonableness) will vary from case to case depending on the issues raised and the relevant material … 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.[13]

  1. [26]
    That said, the High Court of Australia in Ainsworth v Albrecht,[14] subsequently set aside the Court of Appeal’s decision. In its recent decision, the majority of the High Court held that the issue raised in considering Schedule 5 item 10 was ‘whether the votes of dissenting lot owners were unreasonable, not whether the decision of the Body Corporate was reasonable.’[15] It considered that the Adjudicator’s concern pursuant to           s 94(2) of the BCCM Act about whether the Body Corporate had acted reasonably led her into error, and the same error infected the Court of Appeal’s decision.[16] It held that by taking that approach and accepting that reasonable minds may differ as to the answer led to a situation where it was impossible to find unreasonableness of opposition.[17]
  2. [27]
    The High Court said, in considering what may amount to unreasonable opposition, that:

[55]  It is no light thing to conclude that opposition by a lot owner to a resolution is unreasonable where adoption of the resolution will have the effect of: appropriating  part of the common property to the exclusive use of the owner of another lot, for no return to the body corporate or the other lot owners; altering the features of the common property which existed at the time an objecting lot owner acquired his or her lot; and potentially creating a risk of interference with the tranquillity or privacy of an objecting lot owner…the Tribunal was correct to hold that the adjudicator erred in law in reaching that conclusion: and the Court of Appeal erred in concluding otherwise.[18]

  1. [28]
    In particular, it was held that objectors are not unreasonable in not acting with sympathy or altruism towards a lot owner who seeks to diminish the objectors’ property rights.[19] Unreasonableness, the High Court, said is to be determined in a context in which lot owners voting in respect of the proposed resolution are exercising their right to vote as an aspect of their proprietary rights as owners of lots included in the Scheme.’[20] Therefore, unreasonableness for Schedule 5 Item 10 ‘is …unreasonableness on the part of the opposing lot owners having regard to those lot owners interests under the Scheme.’[21] In that case, the adjudicator, as discussed, was asked to override rights of the objecting lot owners to common property airspace.
  2. [29]
    The High Court considered that the objection of lot owners was not unreasonable ‘at least, where enhancement of the proponent’s interest is reasonably viewed as adverse to the interests of the opponent.’[22] It did not matter that the interest (that is, in the common property airspace) was not being used to the objector’s advantage, ‘if for no other reason than that he or she may reasonably be expected to be offered something in return for agreement to part with it to another lot owner.’[23] While declining to make any exhaustive statement about when an order may be made under Item 10 of Schedule 5, the High Court observed that ‘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.’[24]

What test did the Adjudicator apply here?

  1. [30]
    The proper legal test has been clarified by the High Court since the Adjudicator’s decision. However, in light of our conclusions about errors made by the Adjudicator, we do not need to delay in order to receive further submissions from the parties. Having regard to the nature of the appeal (an appeal in the strict sense) and the nature of the errors made, our decision would be unchanged. 
  2. [31]
    As discussed earlier, the Adjudicator in the application subject to appeal under consideration recites tests which include a balancing of factors to determine ‘reasonableness’ and the determination of objective reasonableness, [25] although he then acknowledges the Appeal Tribunal’s comments about examining the expressed or known bases for the Body Corporate’s opposition (as expressed through the vote to dismiss the motion) to determine whether there is any ground/s for opposition to the motion which is/are reasonable. He does not then say which of these approaches is to be applied by him, even though his explanations of them make it apparent that they are not in all respects complementary or compatible. It is not apparent to us from the Adjudicator’s statements of the law what he understood his task to be under the law in determining the application.
  3. [32]
    Having regard to this, we have sought to determine the test he applied from the manner in which he then proceeded to consider the issues before him. This in itself is not a straight-forward exercise.
  4. [33]
    In respect of motion 17, in paragraphs [34-35], the Adjudicator’s reasons for decision suggest that he considered, having regard to the objective facts, that transfer of M6 would benefit the day to day operations of the Body Corporate, and the proposed surrender occurred without disadvantage to either the Body Corporate or the dissenters, and was unconditional and at no cost, that he was ‘unable to ascertain any reasonable basis for the respondents to oppose motion 17.’[26]
  5. [34]
    He said that on the other hand, the dissenters raised some ‘substantial reasons’ for opposing motion 18 and he ‘believe(d) it was reasonable for them to vote against the motion.’[27] In particular, he identifies thereasons as the belief or assertion of the dissenters that, ‘there is no benefit to the body corporate in granting exclusive use over 88.1 square metres of roof-top area to the owner… so that he can make improvements including a swimming pool and outdoor area. Further, depriving owners of access to the roof-top area will effectively deprive them of the ability to access the existing BBQ and deck area on the rooftop.’[28]
  6. [35]
    He went on to say that while Mr Bakir has agreed to relinquish his existing exclusive use grants over some common property areas, the areas concerned ‘are small areas containing utility infrastructure and are of little practical use’[29] to him. He also considered that the grant of the further ‘large’ rooftop area and authority to improve it was proposed ‘without any further consideration.’[30] He concluded that it was reasonable for the dissenters to oppose motion 18 because they believed the consideration was inadequate.[31]
  7. [36]
    Having regard to the High Court’s decision in Ainsworth v Albrecht, the correct approach is to determine whether the opposition of dissenting lot owners was unreasonable, not whether opposition was objectively reasonable or whether the body corporate’s actions  were reasonable. The Adjudicator’s reasons for decision, as our analysis reveals, suggest that he may have variously considered whether opposition was objectively reasonable and whether the opposition was unreasonable (based on beliefs of the dissenters).
  8. [37]
    In relation to motion 17, (which we consider only in order to ascertain the test applied, as Mr Bakir does not appeal in respect of the orders made about motion 17) he appears to apply an objective test of reasonableness.
  9. [38]
    In respect of motion 18, the Adjudicator  believed it was reasonable for the dissenters to vote against the motion, essentially because  they raised some ‘substantial reasons’ for their opposition to it. He says the dissenters say there is no benefit to the Body Corporate in granting the further exclusive use area and giving the authorisations to Mr Bakir to improve it. He says  that  the dissenters would be deprived of access to the existing rooftop and BBQ area. That is, the Adjudicator refers to the manner in which  the dissenters’ property interests would be affected.
  10. [39]
    The reference to the dissenters’ argument that there was no benefit to the Body Corporate in granting exclusive use over 88.1 m2 to Mr Bakir so that he could improve it may go to the objective reasonableness of the opposition. Alternatively, it may  go to the issue of consideration.
  11. [40]
    The Adjudicator then appears to additionally rely upon what he considers the dissenters’ reasonable belief that consideration was inadequate. He did not go on to consider whether the belief about the inadequacy of consideration was unreasonable having regard to the evidence before him from the Body Corporate about actual consideration, although his earlier comments to the effect that the areas to be relinquished had little practical use to Mr Bakir, may go to this issue.
  12. [41]
    As far as we can ascertain, the Adjudicator may have applied different tests in respect of the two motions. In relation to motion 18, he relied upon the objectors’ beliefs that there was no benefit to the Body Corporate in granting exclusive use of the 88.1m2 and about the inadequacy of consideration, without making findings of fact about the matters which underpinned the beliefs. Further, he relied upon the dissenters being deprived of access to the existing rooftop area.
  13. [42]
    On the basis of the High Court’s reasoning, if either the dissenters’ property interests had in fact been affected by depriving them of the benefit of the rooftop area and/or if the Adjudicator had properly found on the evidence that there was no benefit to the Body Corporate and that the consideration was inadequate, the opposition would not appear to have been unreasonable. Unfortunately, neither of those occurred, as discussed in later paragraphs.
  14. [43]
    In any event, we are unable to ascertain whether the Adjudicator applied the correct test. It is not apparent what test he actually applied in determining the application before him. Accordingly, we find that he erred in law.
  15. [44]
    Even if we were wrong about that, the appeal would be allowed because of other errors of law as later discussed. 

Did the Adjudicator err in making factual findings?

  1. [45]
    Making a finding of fact that is not open on the evidence is an error of law.
  2. [46]
    Grounds of appeal 5(b), (c), (d), (e) and 6 require consideration of the Adjudicator’s factual findings and whether any error was made in respect of those.
  3. [47]
    The factual matters relied upon and the findings made by the Adjudicator in respect of motion 18 are set out in [36] and [37] of his reasons, as earlier discussed.

Was there no benefit to the Body Corporate in granting exclusive use of 88.1 metre squared to the rooftop area to Mr Bakir?

  1. [48]
    The Adjudicator recited the argument/assertion/belief of the dissenters that there was no benefit and said he considered this (one of) their substantial reasons for  opposition to the motion. It is not apparent that he made a finding of fact that there was no benefit, notwithstanding that he appears to have relied upon it as part of the basis for his decision. We have concluded that the better view is that he did not make such a finding. If he made a finding, it was  only that the dissenters believed this was the case.
  2. [49]
    However, the dissenters were mistaken, as was the Adjudicator if he did make such a finding. As he later acknowledges in paragraph [37] of his reasons for decision, Mr Bakir had agreed to relinquish his existing exclusive use grants to various areas and to have conditions imposed upon other existing exclusive use grants in his favour, in effect in exchange, for the grant of exclusive use of 88.1m2 and authorisation to develop it.
  3. [50]
    The areas covered by the grants of exclusive use to Mr Bakir to be relinquished by him, held infrastructure and plant belonging to the Body Corporate. The dissenters submitted the Body Corporate was entitled to access to the infrastructure under s 163 of the BCCM Act, irrespective of the relinquishments or the conditions. Irrespective that other mechanisms may exist under the BCCM Act for access to those items upon the giving of the prescribed period of notice, opposition on the basis that there is no benefit to the Body Corporate in granting exclusive use in exchange for obtaining the relinquishments to the exclusive use grants to areas which contain the infrastructure and imposition of conditions on other areas ensuring easy access would be unreasonable. The Body Corporate’s submissions were to the effect that the arrangements for Mr Bakir to relinquish exclusive use rights and grant conditions over others would be advantageous to its day-to-day operations.[32] It would be reasonable to infer that the regularisation and rationalisation of such arrangements would enhance and promote the likelihood of the smooth running of day-to-day operations of the Body Corporate. It has clear potential benefit for lot owners generally. Arguably, opposition to a motion which achieves the relinquishments and conditions in exchange for the granting of another exclusive use area on the basis that the arrangement has no benefit to the Body Corporate does not have a rational basis.
  4. [51]
    If the Adjudicator found that there was no benefit to the Body Corporate in granting the exclusive use area of 88.1 m2 in exchange for the relinquishments and imposition of conditions, he erred in law in finding a fact which is not available on the evidence.  

Were lot owners deprived of access to an existing BBQ and deck area?

  1. [52]
    The Adjudicator states that under motion 18, lot owners would be deprived of access to the existing BBQ and deck area on the rooftop. He appears to find this as a fact.
  2. [53]
    This fact assumes that lot owners, other than Mr Bakir, have access to the existing BBQ and deck area on the rooftop. The issue of denial of access is raised in the material before the Adjudicator in the written submissions of Ms Tran and ACN to the Adjudicator dated 25 September 2014.[33] Putting aside that the assertion appears in a submission in the absence of any supporting evidence, the assertion in the written submissions does not support the finding made. The submission refers to an alleged failure of the Body Corporate to explain that granting exclusive use to the lift would adversely affect lot owners’ ability to access the roof, as well as to events during an inspection conducted as a consequence of the application. They include assertions as to Mr Bakir’s reluctance to allow access to areas which the writers baldly assert are ‘thought to be common property’ or ‘are common property.’ However, although there may be some inference to the contrary, the assertions/submissions do not go so far as to state that lot owners currently have access generally to the existing BBQ and deck area.
  3. [54]
    The Body Corporate submitted that effectively only Mr Bakir’s lot had access to the area of common property which is the subject of the proposed grant of exclusive use,[34] adjacent to the existing rooftop and BBQ area.
  4. [55]
    Further, copies of relevant plans for the Scheme were before the Adjudicator. They suggest that the roof(top) garden area is within Mr Bakir’s lot on level 40.[35] The lift referred to was a lift internal to Mr Bakir’s lot, which is, on the basis of the plans, inaccessible by other lot owners. Accordingly, it was not open to the Adjudicator to find that the lot owners would be deprived of access to the existing BBQ and deck area by the implementation of motion 18, as there was no evidence to support a finding that they were entitled to access it. Indeed, the evidence supports a finding to the contrary.
  5. [56]
    The Adjudicator erred in law in making this finding of fact, which is not open on the available evidence.

Belief that the consideration was inadequate

  1. [57]
    As discussed earlier, the Adjudicator appears to have found that Ms Tran and ACN opposed motion 18 because they held a reasonable belief that the consideration was inadequate. He refers to the areas to be relinquished by Mr Bakir as small areas of little practical use to Mr Bakir. He refers to the area to which exclusive use is to be granted to Mr Bakir, together with authorisation to develop it, as large. If these are findings of fact, the evidence does not support them.
  2. [58]
    Having regard to the plans before the Adjudicator, it is apparent that the areas to be relinquished or in respect of which Mr Bakir was to have conditions on his exclusive use imposed are as follows:
    • E208: 3 m2
    • E210: 139 m2
    • E211: 23 m2
    • E212: 12 m2
    • L201: 1 m2
    • S302: 6 m2
  3. [59]
    Mr Bakir submits that the relinquishment in motion 17 of M6 having an area of 63 m2 is relevant. This is so, under the Homecorp Agreement which records that Mr Bakir will relinquish the rights and agree to the conditions subject to the ‘agreement and clause 4’. Clause 4 records his wish to obtain an exclusive use grant and approvals for development and the Body Corporate’s agreement to support them. However, motions 17 and 18 were not presented for voting as conditional upon one another. The Adjudicator refers to the Body Corporate’s submissions that motion 17 was unconditional at the time of the AGM and prior to the Homecorp Agreement.[36]
  4. [60]
    Putting aside area M6, whereas some of the individual areas to be relinquished or affected by conditions if motion 18 is implemented may properly be described as small, E210, which is affected, is significantly larger than the area proposed to be the subject of the further exclusive use grant to Mr Bakir. The Adjudicator’s characterisations of them as small and large respectively are accordingly in error.
  5. [61]
    While noting the Body Corporate ‘alleged’ that the relinquishments and imposition of conditions was consideration, the dissenters made submissions to the effect that they believed that there was no real consideration.[37] They went on to urge the Adjudicator, if he was minded to overturn their opposition to the motions, to use his investigative powers to obtain an independent valuation. He did not do so. Nor, despite its relevance, did he consider the Body Corporate’s assessment of the significance of the areas and arrangements to it. In keeping with the Body Corporate’s position, as discussed earlier, there was consideration although it had not been valued.
  6. [62]
    Clearly, a belief about inadequacy of consideration may be an unreasonable basis for opposition to the motion, if the consideration is, in fact, not inadequate. However, the Adjudicator found in effect that the mere belief of the dissenters as to the inadequacy of the consideration was a reasonable basis for the opposition.
  7. [63]
    The evidence does not support a finding as to the inadequacy of consideration and nor therefore support the Adjudicator’s finding about the reasonableness of the dissenters’ belief that there was no real consideration.
  8. [64]
    The dissenters themselves contemplated that a valuation may be appropriate. It would have been open to the Adjudicator to properly find that while there was consideration for the transaction, its value and adequacy is unascertainable on the evidence before him. Using the investigative powers available to him, it was open to him to obtain a valuation. We consider that this would have been an appropriate course.
  9. [65]
    The Adjudicator erred in accepting the dissenters’ belief that the consideration was inadequate was not unreasonable. Its value/adequacy was simply unknown.

Conclusions and orders

  1. [66]
    We have found errors of law were made by the Adjudicator. Accordingly, we allow the appeal.
  2. [67]
    The appeal is an appeal in the strict sense.[38] The orders we may make are constrained by s 146 of the QCAT Act. Unless the error of law disposes of the proceeding in its entirety, we must remit it to the Adjudicator for reconsideration.
  3. [68]
    As further findings of fact are necessary before the application can be decided on its merits and according to law, we must remit it. We make orders doing so, together with directions for the provision of further evidence and submissions by the parties to the Adjudicator and one another. We point out that material filed in the Appeal Tribunal is not automatically before the Adjudicator. The other dissenters who did not participate in the appeal proceeding should also be served with our orders and reasons for decision, so that they may, if they wish, further participate in the adjudication.

Observation

  1. [69]
    We make the observation that if the Adjudicator is ultimately satisfied on the evidence then before him that the other lot owners do not have access to the rooftop deck and BBQ area nor the area proposed to be granted to Mr Bakir by way of exclusive use grant; that the proposed construction on/development of the exclusive use area does not adversely affect the complex comprising the lots in the Scheme; and that either the consideration offered by Mr Bakir by way of relinquishments and conditions on other exclusive use areas is adequate (or alternatively, that he is prepared to make up any shortfall in consideration), the opposition to the motion would appear to be unreasonable.  In those circumstances, it would not appear that the objectors’ interests in the Scheme were compromised or their property rights or enjoyment of their property is otherwise adversely affected.

Footnotes

[1] Chevron Renaissance [2014] QBCCMCmr 15.

[2]See Bakir v Tran & Body Corporate for Chevron Renaissance [2015] QCATA 164 and Exhibit 1 in the Appeal proceedings.

[3]Exhibit 1, Volume 2, Attachment CR2 to Applicant’s Reply to Respondent’s Submission, dated 16.10.2014 prepared by Active Lawyers & Consultants.

[4]Exhibit 1, Volume 1, Application, attachment CR3.

[5]Ibid.

[6]Ibid CR5.

[7]Exhibit 1, Volume 1, Application, attachment CR4 and CR6.

[8]Chevron Renaissance [2014] QBCCMCmr 15 at [32].

[9][2014] QCATA 294.

[10]Ibid [85].

[11] Chevron Renaissance [2014] QBCCMCmr 15 at [34]-[35].

[12][2015] QCA 220.

[13]Ibid [82].

[14][2016] HCA 40.

[15]Ibid [27], see also [51].

[16]Ibid [52].

[17]Ibid [53].

[18]Ibid [55].

[19]Ibid [57].

[20]Ibid [58].

[21]Ibid.

[22]Ibid [61].

[23][2016] HCA 40 at [62].

[24]Ibid [63].

[25]Chevron Renaissance [2014] QBCCMCmr 15 at [32].

[26]Ibid [35].

[27]Ibid [36].

[28]Ibid [36].

[29]Ibid [37].

[30]Ibid.

[31]Ibid.

[32]Exhibit 1, Volume 1, Submissions of Body Corporate attached to application.

[33]Exhibit 1, Volume 1, Submissions, Respondents Submissions dated 25 September 2014, para 45, especially 45(c).

[34]Exhibit 1, Volume 1, Submissions of Body Corporate attached to application.

[35]Exhibit 1, Volume 1, Submissions, Respondents Submissions dated 30 October 2014, attachment TT4 at Sheet 16 of 16.

[36] Chevron Renaissance [2014] QBCCMCmr 15 at [21] and [34].

[37]Exhibit 1, Volume 1, Respondent’s Submissions dated 25 September 2014, especially paras 24, 34-35.

[38] Ericson v Queensland Building and Construction Commission [2014] QCA 297 at [3], [13] and [16]. See also Bakir v Tran & Body Corporate for Chevron Renaissance [2015] QCATA 164 at [16].

Close

Editorial Notes

  • Published Case Name:

    Ron Bakir v Body Corporate for Chevron Renaissance CTS 30946, ACN 068 118 347 Pty Ltd and Teo Tran

  • Shortened Case Name:

    Bakir v Body Corporate for Chevron Renaissance

  • MNC:

    [2017] QCATA 12

  • Court:

    QCATA

  • Judge(s):

    Senior Member Brown, Member Howard

  • Date:

    31 Jan 2017

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

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