The High Court of Australia was recently asked to consider the age old question of ‘what would a reasonable Body Corporate do?’ The matter of Ainsworth v Albrecht related to a motion proposed by a lot owner to renovate two existing decks at his property at Viridian Noosa Residences, by joining them to create one larger space. This would have required granting the owner exclusive use of the common property airspace between the two existing decks, which under the relevant legislation (the BCCMA) required approval without dissent by special resolution. The owner’s motion was defeated and he applied for dispute resolution under the BCCMA, alleging that opposition by members to the proposal was unreasonable.

After a lengthy progression through the Adjudicator’s office and the higher Queensland Courts, the matter came before the High Court, where the Court had to determine if it was incumbent on members of a body corporate scheme to balance the competing interests of other lot owners when casting their vote, as well as what constitutes ‘unreasonable opposition’ to a motion put before them.

Overturning the finding of the Court of Appeal, the High Court held as a matter of law, that there is no requirement on individual Body Corporate members to balance the competing interests of another lot owner. The Court determined that the standard of reasonableness is objective, and “A proposal could not, on any rational view, adversely affect the material enjoyment of an opponent’s property rights” and opposition would be unreasonable if “it is prompted by spite, or ill-will, or a desire of attention, given the circumstances of the particular case.”

In this instance, the dissenting lot owners held the opinion – supported by independent expert evidence – that the proposed alterations would affect their privacy; impinge on the original architectural intent of the scheme; leave them without remedy for the loss of their enjoyment of the effected common property; and leave open the possibility of a number of future similar works being carried out. The Court therefore held, “The proposal in question was apt to create a reasonable apprehension that it would affect adversely the property rights of opponents of the proposal and the enjoyment of those rights. In these circumstances, opposition of the lot owners who dissented from the proposal could not be said to be unreasonable”. The Court awarded costs against the applicant lot owner.

The case of Ainsworth v Albrecht provides a clear direction to Body Corporate members, that when exercising their individual voting rights on matters of special resolution, they are under no obligation to consider the property interests of the party proposing the motion. For parties putting forward a motion, a helpful tip from the case is that the offer of compensation for effected property rights may assist in demonstrating unreasonableness of opposition to that motion. This is especially so if it assists in avoiding future lengthy, expensive court proceedings.

Rose Litigation Lawyers are specialist litigation lawyers with Body Corporate division. We advise lot owners, body corporates and body corporate managers, and are here to assist you with any issues you may have. Please contact Senior Associate, Melissa Coleman if you have a body corporate dispute or require advice on your legal position in relation to a body corporate matter.

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