Now and then we have to stop and pinch ourselves to make sure what we are seeing is really happening. Strata and Bodies Corporate law is becoming the focus of many Courts and Tribunals across all States and Territories. In this industry update we review two of those interesting cases that create “StrataLand”.
Your not reasonable I am! (or is the Court the reasonable one?)
On 6 November 2015 the Queensland Court of Appeal decided a case on whether opposition to exclusive use grant was reasonable.1 The work was to extend a deck into common property and the airspace was valued at no more than $20,000.
A group of dissenting owners opposed on a number of grounds, including that the extended deck would adversely affect the amenity, privacy and view from other lots, it would be inconsistent with the original architectural design intent for the development, and no compensation was offered for the land being acquired.
An Adjudicator found those grounds to be unreasonable. In an appeal to the Queensland Civil and Administrative Tribunal (QCATA), it decided that those grounds were reasonable.2 Upholding the further appeal, the Court of Appeal reinstated the Adjudicator’s decision on the basis that there was no legal error in it, even though the Court acknowledged that QCATA’s views on the grounds for opposing the exclusive use grant could also be reasonably held. The Court held:
“…the Adjudicator is not limited to determining whether the … opposition to the motion could have been reasonably held. She was required to reach her own conclusion after considering all relevant matters.” 3
The Court then went on to find that:
“As the reasons of both the Adjudicator and QCATA demonstrate, views as to what was reasonable or unreasonable involved value judgments on which there was room for reasonable differences of opinion, with no opinion being uniquely right. Had QCATA’s views as to unreasonableness been the views of the Adjudicator, and had the Adjudicator made no errors of law, that finding would have been unassailable…”
This means that while the views of the Adjudicator and QCATA were different, the Court considered them both to be reasonable. However, an appeal against an Adjudicator’s decision is limited to legal errors. The Court held that an Adjudicator’s views as to unreasonableness are reached by making findings of fact, not law. That means they are generally not open to appeal.
Implications of this decision
The approach taken by the Court may cause concerns for bodies corporate, committees and lot owners across the industry. It permits an Adjudicator to impose their own value judgment on what is reasonable in the circumstances of a particular scheme, as opposed to simply determining whether the grounds for the body corporate’s decision were reasonably held and allowing the stakeholders involved to form their own value judgments on what is appropriate for their scheme. Hypothetically, one group of owners could hold a reasonable view in support of a proposal, another group could hold a reasonable view opposing the proposal, and the Adjudicator may very well hold a different view entirely and impose that view on the community.
WHAT'S THE SMELL? - A MESSY END TO SEWERAGE BLOCKAGE
The Victorian Civil and Administrative Tribunal (VCAT) recently found that an owners corporation was not liable to the damages to a lot owners property because of sewerage entering the lot from common property pipes 4 .
In this case a lot owner noticed stains on the ceiling within the lot and made representations to the owners corporation to repair the problem. On investigation the issue related to the sewerage pipes which were blocked and sewerage leaking out and into the complainant’s lot (and subsequently into their lots). The cause of the blockage was found to be a range of inappropriate articles being placed in the sewerage system and flushed down toilets (read between the lines on what these fun things would have been)
The complainant claimed damages of $9,494 and penalties against the real estate manager, body corporate manager and the manager himself for not taking appropriate or urgent action.
In making its decision to dismiss the application VCAT found the following:
1. That the sewer stack and all piping was common property.
2. That there was no history of problems with the sewer stack.
3. That the owners corporation didn’t fail to maintain the common property. In making this finding VCAT held that the owners corporation was not required to monitor the maintenance and state of repair of the sewerage system (following a NSW case of Ridis v Strata Plan No 10308 [2005] NSWCA 246).
4. That the issue was what was the cause of the problem and not necessarily the failure to maintain the common property (and found that the cause was not the fault of the owners corporation). In making this finding relying on comments made by an expert that:
“routine inspections of the pipes, even if conducted by the owners corporation, would not have avoided the incident from occurring, unless it was within minutes of the culprit or culprits having flushed the foreign object down their toilet….”
5. That the owners corporation didn’t breach their duty of care to the lot owner. VCAT found that there was no reasonable foreseeability that the sewerage stack would be blocked and that to prevent such an incident would require daily inspections and regular flushing of the sewer lines and in his view this would be an unjustifiable expense.
1 Albrecht v Ainsworth & Ors [2015] QCA 220.
2 Re Body Corporate for Viridian; Kjerulf Ainsworth & Ors v Martin Albrecht & Anor [2014] QCATA 294.
3 Albrecht v Ainsworth & Ors [2015] QCA 220 at [82].
4 O’Connor V OC PS3320703 [2015] VCAT 1912 (1 December 2015)