Property developers and body corporate managers need to be aware
of the recent High Court decision concerning the test of
"reasonableness" in relation to body corporate
The recent High Court decision in Ainsworth & Ors v
Albrecht & Anor  HCA 40, otherwise known as the
"Viridian Case", has finally
settled a lengthy series of litigation surrounding the expansion of
one man's balcony in a complex of high end coastal
The High Court judgement has had significant implications for
bodies corporate by providing clarity on the meaning of their
obligations to "act reasonably".
In March 2011, a lot owner at the Viridian Noosa Residences, Mr
Albrecht, decided he wanted to combine the balconies of two
adjoining units to create one, larger balcony. To do this, the Body
Corporate for the complex was required to approve it at a general
meeting by way of resolution without dissent.
The Body Corporate put forward the motion to approve the balcony
in August 2012, but several lot owners voted against it.
In September 2013, Mr Albrecht complained to an adjudicator for
the Commissioner for Body Corporate and Community Management, who
found that the Body Corporate had been unreasonable in their
decision and Mr Albrecht should be allowed to build his
An appeal was then brought by several lot owners to the
Queensland Civil and Administrative Appeals Tribunal, and in
October 2014, the decision was overturned once more as it was found
to "override the will of a substantial majority of owners at
A further appeal by Mr Albrecht to the Queensland Court of
Appeal in November 2016 reversed the Appeals Tribunal on the basis
that the Adjudicator's decision was not wrong in law.
The matter was finally brought to a head by the High Court
following a subsequent appeal by the lot owners, where the decision
was once again overturned, affirming the original decision by the
Body Corporate to deny the approval for the balcony.
The Viridian Case lays down the test for "acting
In reaching a determination of whether a body corporate
opposition to a motion requiring resolution without dissent is
unreasonable, it is neither necessary nor desirable to attempt a
complete consideration of all the relevant circumstances.
Courts will be likely to identify unreasonable opposition to a
motion if it is evident that:
the opposition could not, from any rational perspective, have
an adverse impact on an opponent's material rights; or
the opposition is borne out of spite, ill will or desire for
The above is not an exhaustive list however.
The High Court broadened the parameters of
"reasonableness" by suggesting that if grounds of
opposition resulted in a difference of opinion among reasonable
minds, then it will be near impossible to view those differences as
WHAT DOES IT MEAN?
Bodies corporate will benefit significantly from the decision in
the Viridian Case as it strengthens their ability to
regulate the schemes they are operating under.
In addition, it provides a clearer foundation from which to
justify objections to any proposals that may affect owner's
enjoyment of their lots.
Put simply, bodies corporate can now more easily assess whether
a future decision will be a "reasonable one" in the eyes
of the law.
In a practical sense, if a body corporate can establish one
rational ground for opposition to a lot owner's proposal on the
basis that it will affect the enjoyment of a lot, then they can
rest assured that the adjudicator will be unlikely to interfere
with their decision.
Committee members must familiarise themselves with these recent
developments to the test of reasonableness. Despite the finding
being favourable to bodies corporate, if any grounds for objection
to controversial proposals are uncertain, bodies corporate may
still be liable to challenges by unsatisfied lot owner.
IF YOUR BODY CORPORATE IS FACING A POTENTIALLY CONTROVERSIAL
DECISION, OUR CK STRATA TEAM CAN ASSIST AND PROVIDE GENERAL ADVICE
ON ALL YOUR STRATA MATTERS.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
If an owner wants to remove a caveat, issuing a lapsing notice is a quick and easy way to shift the problem to the caveator.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).