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Brown v Dawson QCATA 74
QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL
Brown & Ors v Dawson & Anor  QCATA 74
ROBERT BROWN, LEONA BROWN AND ANDREWS CLOSE PTY LTD
WARWICK DAWSON AND THE BODY CORPORATE FOR FRANGIPANI CTS 35652
5 June 2019
On the papers
Member Roney QC
The appeal is dismissed.
APPEAL AND NEW TRIAL – APPEAL – GENERAL PRINCIPLES – RIGHT OF APPEAL – WHEN APPEAL LIES – ERROR OF LAW – where s 289(2) of the Body Corporate and Community Management Act 1997 (Qld) allows a person aggrieved by an Adjudicator’s order to appeal on a question of law to the Queensland Civil and Administrative Tribunal – what is error of law – whether there was an error of law
REAL PROPERTY – STRATA AND RELATED TITLES – MANAGEMENT AND CONTROL – BYLAWS – whether Body Corporate in General meeting acted reasonably in passing motions put forward by a lot owner to reimburse an owner or agent of an owner for the cost of pool fencing installed on common property
Body Corporate and Community Management Act 1997 (Qld), s 276, s 289, s 290
Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 146
Ainsworth & Ors v Albrecht & Anor (2016) 261 CLR 167;  HCA 40
This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld).
REASONS FOR DECISION
- The matter concerns an appeal from a decision upon a relatively limited point, determined by an Adjudicator appointed by the Queensland Body Corporate and Community Management Commissioner in reasons handed down on 1 February 2018.
- The application which was heard by the Adjudicator concerned an application made by Mr Dawson, who is one of the Respondents to this appeal, seeking orders that five of six motions which came on before an Extraordinary General Meeting (‘EGM’) of the Body Corporate for Frangipani, the Second Respondent held on 22 June 2017 be declared to be invalid.
- After hearing the parties, the Adjudicator made orders that motions 3 and 4, which had come before that meeting, were invalid. In other respects, the Adjudicator rejected the application and effectively ruled that the other motions which had come before the EGM were not invalid. What is referred to in the reasons as motion 4 at the EGM was held by the Adjudicator to be invalid on the basis that, whilst the Body Corporate had power to adopt and pass the relevant resolution, in doing so it acted unreasonably, and in contravention of its statutory duty to act reasonably. The application for leave to appeal relates to that finding.
- The Body Corporate for Frangipani administers the common property in and associated with what are only three lots in Frangipani. The Second Respondent, Mr Dawson and another person own Lot 1, Erin Lowery and Andrew Maslowski are the owners of Lot 2, and the Third Appellant, Andrews Close Pty Ltd was the owner of Lot 3. The Appellants commenced the appeal in their own name, thus giving the appearance that in some way they were either owners of Lot 3, or had some authority to conduct an appeal on behalf of the owner of Lot 3. The appeal was also initially commenced in a way which purported to make the Commissioner of the Body Corporate and Community Management to be a Respondent to the appeal. That was clearly inappropriate, and orders were made by the Tribunal removing the Commissioner as a party to the proceeding. Also, after contentious submissions were filed by a number of the parties, in due course the Tribunal ordered that Andrews Close Pty Ltd, the owner of Lot 3, be joined as an Appellant.
- The appeal is of narrow scope and is limited to the issue of whether the Adjudicator made an error of law in concluding that the Body Corporate acted unreasonably in adopting and giving effect to motion 4 which came before the EGM.
- Insofar as the application for leave to appeal identifies grounds of appeal, it is abbreviated in the extreme and contends in short form that the appeal was against the decision to invalidate motion 4, on the basis that the Body Corporate acted unreasonably and that ‘the problem would not [have] existed had members of the Body Corporate attended the meeting rather than complaining afterward’. The Appellants contended in that context that the Adjudicator erred by not considering ‘all the facts’.
- Despite numerous orders made by the Tribunal directing the Appellants to file appropriate written submissions in support of the grounds of appeal, including a specific order of 12 December 2018 that they file in the Tribunal and serve submissions identifying the alleged error of law including any cases relied upon in support of the application, they did not do so. The Tribunal is therefore left in the position where it must seek to identify for itself how it is that it could be contended that an error of law has occurred and how it is that some different result ought to have been arrived at by the Adjudicator had that error not been made. In that regard, the Tribunal is largely left with a three page summary of argument lodged as part of the Appeal Book on behalf of the Appellants Robert and Leona Brown, which sets out arguments that are apparently sought to be advanced to support that conclusion.
- The decision of the Adjudicator was given under s 276 of the Body Corporate and Community Management Act 1997 (Qld) (‘the Act’). Section 276 provides as follows:
276 Orders of adjudicators
(1) An adjudicator to whom the application is referred may make an order that is just and equitable in the circumstances (including a declaratory order) to resolve a dispute, in the context of a community titles scheme, about—
(a) a claimed or anticipated contravention of this Act or the community management statement; or
(b) the exercise of rights or powers, or the performance of duties, under this Act or the community management statement; or
(c) a claimed or anticipated contractual matter about—
(i) the engagement of a person as a body corporate manager or service contractor for a community titles scheme; or
(ii) the authorisation of a person as a letting agent for a community titles scheme.
(2) An order may require a person to act, or prohibit a person from acting, in a way stated in the order.
(3) Without limiting subsections (1) and (2), the adjudicator may make an order mentioned in schedule 5.
(4) An order appointing an administrator—
(a) may be the only order the adjudicator makes for an application; or
(b) may be made to assist the enforcement of another order made for the application.
(5) If the adjudicator makes a consent order, the order—
(a) may include only matters that may be dealt with under this Act; and
(b) must not include matters that are inconsistent with this Act or another Act.
- The appeal to this Tribunal is governed by s 289 of the Act, which provides:
289 Right to appeal to appeal tribunal
(1) This section applies if—
(a) an application is made under this chapter; and
(b) an adjudicator makes an order for the application (other than a consent order); and
(c) a person (the aggrieved person) is aggrieved by the order; and
(d) the aggrieved person is—
(i) for an order that is a decision mentioned in section 288A, definition order—an applicant; or
(ii) for another order—
(A) an applicant; or
(B) a respondent to the application; or
(C) the body corporate for the community titles scheme; or
(D) a person who, on an invitation under section 243 or 271(1)(c), made a submission about the application; or
(E) an affected person for an application mentioned in section 243A; or
(F) a person not otherwise mentioned in this subparagraph against whom the order is made.
(2) The aggrieved person may appeal to the appeal tribunal, but only on a question of law.
- Section 290 of the Act provides:
(1) An appeal to the appeal tribunal must be started within 6 weeks after the aggrieved person receives a copy of the order appealed against.
(2) If requested by the principal registrar, the commissioner must send to the principal registrar copies of each of the following—
(a) the application for which the adjudicator's order was made;
(b) the adjudicator's order;
(c) the adjudicator's reasons;
(d) other materials in the adjudicator's possession relevant to the order.
(3) When the appeal is finished, the principal registrar must send to the commissioner a copy of any decision or order of the appeal tribunal.
(4) The commissioner must forward to the adjudicator all material the adjudicator needs to take any further action for the application, having regard to the decision or order of the appeal tribunal.
- Section 146 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (‘QCAT Act’) provides:
146 Deciding appeal on question of law only
In deciding an appeal against a decision on a question of law only, the appeal tribunal may—
(a) confirm or amend the decision; or
(b) set aside the decision and substitute its own decision; or
(c) set aside the decision and return the matter to the tribunal or other entity who made the decision for reconsideration—
(i) with or without the hearing of additional evidence as directed by the appeal tribunal; and
(ii) with the other directions the appeal tribunal considers appropriate; or
(d) make any other order it considers appropriate, whether or not in combination with an order made under paragraph (a), (b) or (c).
- Hence, pursuant to s 146, in deciding an appeal against a decision on a question of law, the Appeal Tribunal is not engaged in a rehearing of the matter.
- The background to the contest concerning motion 4 is about whether the Appellant Mr Brown ought to have been reimbursed the sum of $4,005.00 for the cost of a pool fence, and whether reimbursement of that to him ought to occur by the Body Corporate. Motion 4, which came before the EGM on the proposal of by Appellant Mr Brown, asked that the Body Corporate reimburse him that sum as the cost of a pool fence. The minutes recorded that the motion was passed by a poll vote, and which, because Lots 1 and 2 each had one contribution schedule lot entitlement, and Lot 3 had three contribution schedule lot entitlements, was able to be achieved on the vote of the Browns on behalf of the owner of Lot 3. At the time the motion was put, Mrs Brown held the position of the Body Corporate as the Body Corporate Secretary and its Treasurer.
- As the Adjudicator identified, each of the lots had historically been allocated an area within common property in which pools were constructed and to which each of them individually had exclusive use. The Adjudicator found as a fact that at the time of the passing of the resolution on motion 4, there was a pool barrier surrounding the pool to which exclusive use had been granted to Lot 1. The pool barrier was manufactured using aluminium or steel fencing, made with vertical tube bars joined by upper and lower rails. On the other hand, the fence surround for the Lot 2 pool was glass panelling.
- On 28 November 2016, the Douglas Shire Council, which was the relevant local authority, issued the Body Corporate with an enforcement notice in relation to the barrier, which was around the pool to which exclusive use had been granted in favour of Lot 3. The enforcement notice asserted that at the time of an inspection by the Council in October 2016, there was no appropriate barrier for the pool allocated to Lot 3, and that this was a contravention of the requirements of the Building Act 1975 (Qld).
- Apparently in response to this notice from the Council, in November 2016, an independent contractor called SG Pool Fencing constructed what purported to be a Building Act 1975 (Qld) compliant pool barrier around the Lot 3 pool. SG Pool Fencing was engaged by the Appellants, Bob and Leona Brown and the cost of $4,005.00 was a cost incurred by them to SG Pool Fencing to install a frameless glass fence, and ancillary works.
- As the Adjudicator held, the area affected by the non-compliant pool was common property, but to which exclusive use had been allocated to Lot 3. The Adjudicator properly concluded that the 28 November 2016, Douglas Shire Council notice obliged the Body Corporate to install a compliant pool barrier. The Adjudicator also properly concluded that there was nothing under the relevant by-law, which allocated exclusive use of the pool to Lot 3, that passed onto the owner of Lot 3 the obligation of the Body Corporate to have a compliant pool barrier around the pool. Hence, the Adjudicator also properly concluded, the Body Corporate had power to decide to install a compliant barrier. In December 2016, (that is at an earlier time) there had been a motion passed by the Body Corporate to spend $4,000.00 on a new pool fence but a later Adjudicator’s order invalidated that decision because inadequate notice had been given to the owners of the lots. The Adjudicator in the present Appeal found that there was no evidence of any relevant Body Corporate decision subsequent to the invalid December 2016 resolution concerning a new pool fence.
- The Adjudicator in the present Appeal held that in January 2017, the Browns engaged SG Pool Fencing to construct a pool barrier around the Lot 3 exclusive use pool and that this was paid for by Mrs Brown herself. The Adjudicator held that it was not legally impossible for the Body Corporate to have retrospectively ratified the cost of work for the barrier, notwithstanding that there had been no resolution which predated the performance of the work. Having arrived at the conclusion, the Adjudicator then went on to consider whether the decision in effect to reimburse for the cost of the pool fence, which the motion recorded amounted to unreasonable conduct on the part of the Body Corporate.
- The Adjudicator found that in October 2016 a concern was expressed by one of the owners that Lot 3 was not on the Pool Safety Register to which the Appellant Ms Brown responded suggesting that, Lot 3 fell into a different category from ordinary residences.
- After the Council had inspected the site in October 2016 and a letter emanating from them about Lot 3 not complying with the Building Act 1975 (Qld), lawyers acting for the owner of Lot 3 wrote to the Council seeking an exemption from pool safety standards. In response the Council issued the notice referred to earlier. To that, lawyers acting for the Body Corporate, who also purported to act for the owner on Lot 3 in earlier correspondence, wrote asserting that the Body Corporate wanted an extension to comply with the notice because the Body Corporate’s contractor could not install the barrier until January 2017.
- These facts led the Adjudicator, in my view quite properly, to the conclusion that this indicated that the Appellants believed the owner of Lot 3 was responsible for the pool barrier and that Mrs Brown, despite being an officeholder on the committee, did not engage with the other owners in relation to, or as a result of, the Council’s correspondence.
- The Adjudicator concluded that, on the evidence, the Browns had clearly managed the barrier installation process themselves and that Mrs Brown as an officeholder of the committee was not authorised by herself to authorise any of that spending purportedly on behalf of the committee, or of the Body Corporate itself, because she had a direct interest in the issue due to her relationship with the owner of Lot 3. The Adjudicator held that since the installation was an improvement to the common property by the Body Corporate, to incur a cost on its behalf in excess of $4,000.00 required an ordinary resolution in the general meeting by the Body Corporate, and none had been passed. The Adjudicator concluded that Ms Brown’s conduct in effect was to bypass the Body Corporate, and not to properly inform the Body Corporate of what was going on in relation to the issue despite there being ample time for her to have done so.
- The Adjudicator held that, whilst the Body Corporate had a legal duty to construct the barrier, its construction had a direct benefit to the owner of Lot 3. However, on the facts only Mrs Brown on the committee had any role in considering what should be built and deciding on the location of it.
- The Adjudicator held that there was no evidence that the Council had required the Body Corporate to install a glass pool barrier. On the contrary, it was held that the Council in a report in November 2006 had referred to a barrier of the kind at Lot 1 which was not a glass barrier. The Adjudicator held that there was nothing to suggest the barrier made of fencing or rails such as those which surrounded the pool for the benefit of Lot 1 could not have been installed to comply with the notice. Nor had the Council specified where the barrier had to be located, and the decision about that was made by the Appellants, not the Body Corporate.
- Ultimately, the Adjudicator held that the Body Corporate had been in effect compelled on the votes of the Browns, for the benefit of the owner of Lot 3, to decide that Mrs Brown would be reimbursed for the cost of a new barrier, which was in effect a barrier she preferred. The Adjudicator held that this process did not, in practical terms, involve any consultation with the Body Corporate. The Adjudicator held that Mrs Brown, purporting to act as the committee, and indeed the only committee member, acted unreasonably by not communicating with the other owners about the issue and not calling a Body Corporate meeting to consider it or to consider in what location it should be erected.
- For practical purposes, the Adjudicator has held that a representative of Lot 3 effectively used her power in that she solely comprised the committee of the Body Corporate to incur expenditure that was substantially to the benefit of the owner of Lot 3, over the interests of the Body Corporate generally. The representative procured the sanction of the Body Corporate in the general meeting to reimburse the cost of those works by exercising the powers allocated to Lot 3 in a poll vote to achieve that outcome.
- There is no discussion in the reasons of the Adjudicator which identify why it is that an owner, or an owner’s representative with a majority of voting power, acts unreasonably if they procure a Body Corporate to pass a resolution which brings some benefit to: an individual lot owner; that lot owner’s representative on the committee; or a lot owner’s representative generally.
- In their argument in this Tribunal the Appellants seek to introduce evidence which in part aims either to supplement, contradict or add a different “flavour” to the conclusions of the Body Corporate. They contend that Villa 3 has been operated as a Bed & Breakfast and as such, the Council checks the swimming pool associated with it. In previous inspections the Council had not queried the lack of a pool fence. They argue that there are examples of exemption for a pool fence where a particular villa is not shared.
- They point to the fact that the Council gave the owners of Villa 3 the notice to construct a pool fence and required it to occur within 18 days, and that this did not allow for the 21 days for the calling of a general meeting. In my view, whether it did or did not does not bear upon the question of whether the passing of this resolution was unreasonable, because there were other ways in which the matter could be dealt with, including abridging time, seeking an extension with the Council, or otherwise informing the small group of owners in these premises of what was going on.
- They complain that there was meant to be a meeting scheduled on 1 December 2016, where they invite the conclusion that the other owners would have assumed that the question of compliance with the Council’s notice would be an item for discussion, but that no one attended that meeting so that it was adjourned to 8 December 2016. They seek to invite the inference that no one actually had any concerns about the issue of whether the Body Corporate should comply with the notice, or whether the owner of Villa 3 should. There is no evidence to support that conclusion.
- The submission is made that the other owners were not in any way consulted about the issue because they did not attend the 1 or 8 December 2016 meetings. The Appellants accept that they nominated the barrier type and the preferred location, and complained that ultimately, the failure of other members to attend meetings meant they were in effect deemed to have accepted any decisions made as a result of their ignorance or lack of participation. The submissions then go on to detail amounts which were quoted for other types of barriers around the Villa 3 pool in 2006 and 2007, when there were previous owners of the lot. In short, the submission is made that the Adjudicator did not fully consider all the facts and that the Body Corporate members had an opportunity to have input but chose not to have it and that the Adjudicator had failed to have regard to the fact that the other lot owners did not attend an important meeting on the issue.
- In relation to this issue, the Adjudicator held that a Body Corporate must act reasonably in fulfilling its functions under the Act. In that context the Adjudicator noted that Carmody J in Body Corporate For Beaches Surfers Paradise v Backshall said that ‘reasonableness involves an evaluation of the known facts, circumstances and considerations that tend to have a rational bearing on the issue and requires that all relevant matters are taken into consideration’.
- In my view, the decision in Body Corporate for Beaches Surfers Paradise v Backshall, to which the Adjudicator made reference, does not assist or add anything to what the High Court said in Ainsworth & Ors v Albrecht & Anor. Indeed, the decision in Body Corporate for Beaches Surfers Paradise v Backshall (at -) appears to involve an analysis and adoption of principles derived from administrative review of decisions and the legal standard of reasonableness for a statutory discretion in Australia. As the High Court made clear in Ainsworth & Ors v Albrecht, those tests do not apply in this context.
- To the Adjudicator’s analysis it may be added what the majority of the High Court in Ainsworth & Ors v Albrecht & Anor said:
 … The reliance by the Court of Appeal and by the first respondent in this Court upon the judgments in Waters v Public Transport Corporation was misplaced. That case was concerned with the duty of a decision-making body to reach a reasonable decision taking into account competing considerations. A lot owner voting his or her opposition to a motion is not a decision-maker of this kind. The adjudicator's task under Item 10 of Sched 5 is not to determine whether the outcome of the vote of the general meeting of the Body Corporate was a reasonable balancing of competing considerations, but whether the opposition of lot owners to the proposal was unreasonable.
 Given that the adjudicator's concern with s 94(2) led her to address the wrong question, namely whether the Body Corporate's decision was reasonable, her ultimate conclusion was inevitably affected by an error of law. The same error infected the approach of the Court of Appeal.
 Once the Court of Appeal accepted, as it did, that the grounds of opposition to the proposal considered by the adjudicator raised questions in respect of which reasonable minds may differ as to the answer, it is impossible to see how opposition to the first respondent's proposal based on those grounds could be found to be unreasonable.
- That conclusion by the High Court serves to emphasise that the test for unreasonableness is not whether someone objectively considered all relevant circumstances, except perhaps in the context of there being a duty on a decision-making body to reach a reasonable decision, taking into account competing considerations. Moreover, body corporates generally have their own interests to consider and that informs the way in which their decisions are to be viewed in terms of their reasonableness. It is timely to note that, as the High Court has said, the question is whether conduct of a body corporate is objectively unreasonable, and not whether an Adjudicator is satisfied it is reasonable.
- Hence, as the majority the High Court said in Ainsworth & Ors v Albrecht & Anor:
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 it exhibited 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. In the circumstances of the case, 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.
- As the High Court held in Ainsworth, the Adjudicator's task was not to determine whether the outcome of the vote of the general meeting of the Body Corporate was a reasonable balancing of competing considerations, but whether the support of a lot owner, in this case for its own motion, was unreasonable.
- In my view, similar minds might well differ as to whether, on the facts of this case, it was unreasonable for the Body Corporate to be asked to reimburse the owner of the representative of the owner of Lot 3, for expense incurred in constructing a compliant pool fence on what was after all common property. In my view, there has been no demonstrated error of law on the part of the Adjudicator in arriving at the conclusion which has been reached.
- The objective facts support the conclusions reached by the Adjudicator, namely that there was no material engagement by the representative of Lot 3 with any other lot owners in relation to the nature, type and location of the fence which was erected. The objective facts also support the conclusions reached by the Adjudicator that ultimately, if this was the way in which the owner of Lot 3 or its representatives determined to proceed, it was unreasonable for it to then seek to force the cost of their decisions in that regard on the other members of the Body Corporate.
- I reject the contention that the Adjudicator did not fully or properly consider the relevant evidence. Even if it were correct to say that the Body Corporate members had an opportunity to have input into the decision to install a new fence but chose not to exercise it, and no finding was made that this was the case, the Adjudicator did not fail to have regard to history of other owners’ attendances at earlier meetings. In the end, whether the other lot owners did not attend an important meeting on the issue at some other time is scarcely a matter that would have been likely or reasonably led the Adjudicator to a different conclusion to that arrived at about whether a representative of Lot 3 effectively abused her power; in that she alone comprised the committee of the Body Corporate, and in that capacity caused it to incur expenditure that was substantially to the benefit of the owner of Lot 3 over the interests of the Body Corporate generally, and without real consultation with it in any material respect.
- In my view there has been no demonstrated error of law on the part of the Adjudicator in relation to this issue and this ground must fail. Accordingly, the appeal is dismissed.
- Published Case Name:
Robert Brown, Leona Brown and Andrews Close Pty Ltd v Warwick Dawson and The Body Corporate for Frangipani CTS 35652
- Shortened Case Name:
Brown v Dawson
 QCATA 74
05 Jun 2019