David 2
29 Apr 1991
23 May 1996
03 Feb 2005
B.Com. (Hons), LLM.
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Size matters: body corporate rejects bigger deck

Ainsworth v Albrecht [2016] HCA 40 (12 October 2016)

This week the High Court unanimously reversed a decision of the Queensland Court of Appeal that was itself unanimous. The reversal represents the culmination of a four year campaign waged by a Mr Martin Albrecht of Noosa to convert five extra square metres of body corporate common property into deck space between his two adjoining townhouses. (This article in the Financial Review tells you about the peronalities involved). 

 The saga commenced in 2012. The Body Corporate and Community Management Act 1997 (Q) required a by-law to be passed by the Body Corporate in order to transfer the common property. So Mr Albrecht convened an extraordinary general meeting of the Body Corporate. But the Act stipulated that the by-law could not be created unless the motion was carried unanimously. Maybe Mr Albrecht forgot to put out the communal rubbish bins because 8 other body corporate members voted against his proposal. Rather than achieve a commercial settlement with the dissenters, Mr Albrecht invoked his right under the Act to appoint an adjudicator to investigate the Body Corporate decision. The adjudicator made an order setting aside the Body Corporate’s decision on the grounds that it was unreasonable.

 Maybe Mr Alrecht forgot to put the rubbish bins out quite a lot because the dissenters then took the matter to the QCAT. They argued that the adjudicator incorrectly took it upon herself to decide if the proposal was reasonable instead of deciding whether the dissenters had a reasonable basis for voting no. The QCAT member was Mr P Roney QC and he agreed with the dissenters. Undeterred, Mr Albrecht appealed to the Court of Appeal. Margaret McMurdo P gave the judgement. Morrison JA and Martin J concurred. McMurdo P held that that there were no errors of law by the adjudicator and the Tribunal itself erred in finding to the contrary. Central to her finding was that if the adjudicator found that “the opposition to the motion is in all the circumstances unreasonable, she could give effect to the motion and could make an order that is just and equitable in the circumstances”.

 The High Court found the reasoning of McMurdo P to be flawed. The plurality found that the adjudicator should have focussed on whether the dissenters had any reasonable basis for opposing the motion. This could include the fact that the Body Corporate was being asked to give up some of its property for nothing in return and that they would suffer loss of amenity.  Once a reasonable basis was established, it was not the adjudicator’s role to substitute her own opinion of what was reasonable. Nettle J wrote a separate judgment and was particularly critical of the Court of Appeal’s reasons,  describing their failure to grapple with the Tribunal’s detailed analysis of the adjudicator’s specific errors of law as “remarkable”.  Ouch! 

Post script: Sadly, President of the Queensland Court of Appeal Her Honour Justice Margaret McMurdo AC announced her resignation on 31 October 2016. See here