Legislation cited: Unit Titles (Management) Act 2011 ss 22, 129

Cases cited: Ainsworth v Albrecht [2016] HCA 40

Owners Units Plan 768 v Lokusooriya [2013] ACAT 80

1. Pursuant to section 129(1)(g) of the Unit Titles (Management) Act 2011 the ACAT gives effect to the motion granting a special privilege to any owner wishing to erect a carport to use of up to 30cm of encroachment over common property to erect two supporting poles and 30cm of roof overhang over the adjoining garden, provided approval is granted from the Owners Corporation Executive.

**1. The applicant, Ms Floro (the Applicant), seeks a review pursuant to section 129 of the Unit Titles (Management) Act 2011 (UTM Act) of a decision of the respondent, the Owners Units Plan No 630 (the Corporation), to decline to grant owners within the complex a 'special privilege' to erect support poles for a carport on an area of common property adjoining their units.

2. The resolution was opposed by one of the twenty six members of the Corporation (the Objector). Neither the Objector nor the Corporation participated in these proceedings. The question for the Tribunal is what approach it should take in matters such as this, where there is an application for review of a motion, but no respondent to that application.**

**3. The Corporation consists of twenty six units. Each unit has a car parking space, although the design and size of each car parking space varies somewhat from unit to unit. By way of a motion passed at the Annual General Meeting in December 2016 (the AGM), lot owners have approval to build carports of an certain style and colour over their parking spaces, subject to approval of the executive committee.

4. A further resolution was put to the AGM to allow owners of units to use an area of common property to erect part of the carport structure. The resolution was in the following terms:**

That the owners corporation of UP630 grants Special Privilege to any owner wishing to erect a carport for use of 30cm of common property, to erect two supporting poles and a 30cm of roof over the adjoining garden area, provided approval is granted from the Owners Corporation Executive. (resolution).

**5. The use of common property in this manner requires the members to grant the applicant a 'special privilege'. Pursuant to section 22 of the UTM Act, the granting of a special privilege requires, amongst other things, the unanimous approval of the members of the corporation.

6. The passage of the resolution was particularly important to the Applicant. The car parking space for her unit is only 2.7m wide. As well as being a parking space, it serves as the entry corridor to the front door. The Applicant contends, and I accept, that the space is not wide enough to provide for the parking of a vehicle, an egress route, and the placement of the support poles for the carport. Several other units have the same issue.

7. Next to the Applicant's car parking space is an area of common property that divides the applicant's unit from that of her neighbour. This area is 2.4m wide and 8m long. It is currently a mulched garden bed, with some shrubby trees growing down the midline. The failed resolution would have allowed for the erection of support poles on the garden, as well as 30cm of roof overhang for the carport. The total area of common property affected by the applicant's development is 1.65sqm.

8. Only the Objector opposed the resolution, but given the requirement for a unanimous approval, the opposition of one person was sufficient to ensure that it was not successful.

9. The Applicant has applied to the Tribunal for, effectively a review of the motion. The application is brought under section 129(1)(g) of UTM Act, which gives ACAT the power to make:**

...(g) an order giving effect to an unsuccessful motion for a resolution of a general meeting (either as originally proposed or as amended by the ACAT) if the ACAT is satisfied after a merits review of the motion that opposition to the motion was unreasonable...

**10. The application was set down for a directions hearing on Tuesday 20 December 2016. On that occasion, the Applicant appeared in person, but there was no appearance by the Corporation or the Objector.

11. In response to queries from the Tribunal as to whether the Objector was aware of the proceedings, the Applicant tendered an email that confirmed that the strata manager had served a copy of the ACAT proceedings on the owner of Unit 1. The email read, in part:**

Please find attached ACAT Tribunal Application in relation to the opposed resolution at the AGM.

The Executive Committee have request[sic] that you be advised of this application. The Executive Committee believed as unit 1 was the only unit to oppose the motion you should have the right to defend the appeal.

In order to try and avoid this issue from going to ACAT, can you please advise of the reasons for you objecting to the Unopposed Resolution?

If this does proceed through ACAT the Executive Committee have advised the cost of legal representation would need to be funded by yourself as you were the only owner who objected to the proposal. Alternatively if the Executive Committee agree you may be able to represent the owners corporation.

**12. On the basis of the above email, I was satisfied that the Objector was aware of the proceedings. Accordingly, I made directions setting the matter down for hearing, including a direction that any application to be joined as a party be filed by 18 January 2017. I also directed the Corporation to ensure that copies of the directions were served on all members of the corporation, including the Objector. The application was set down for hearing on 20 January 2017.

13. On 20 December 2016, the Tribunal received confirmation from the Executive Committee of the Corporation confirming that it did not intend to participate in the proceedings. No application for joinder or any submission or other communication was received from the Objector prior to the hearing.

14. The Applicant was the only party to attend the hearing on 20 January 2017. She confirmed that she had no further material to file, and that she relied on the material already filed. Accordingly, I advised the applicant that I would consider her application in accordance with section 129(1)(g) of the UTM Act. I do so now.**

**15. The first step is to consider what test is to be applied when undertaking a review under section 129(1)(g) of the UTM Act.

16. The nature of the process to be adopted under section 129(1)(g) of the UTM Act was discussed by (now) Presidential Member Daniel in Owners Units Plan 768 v Lokusooriya [2013] ACAT 80 as follows:**

[27] Section 129 (1)(g) marries two legal concepts, that of merits review and that of unreasonableness. I set out some of the implications of this conjunction in Meaney v The Owners Corporation Units Plan 40 (Unit Titles) [2013] ACAT 72 at [31]- [42]:

31. First, the review is essentially de novo and Tribunal is able to consider issues of both fact and law anew.

32. Secondly, the Tribunal considers and determines these issues as at the date of the hearing before the Tribunal, not as at the time of the original decision. That means the Tribunal is able to consider evidence not available before the owners corporation in reaching its decision. ...

33. Thirdly, when conducting merits review there is no threshold question of reasonableness or unreasonableness of the original decision to be determined before the Tribunal may proceed to make an order.

37. Section 129(1)(g) places a significant limitation upon the merits review process, by requiring that the ACAT must be satisfied that opposition to the motion was unreasonable before an order giving effect to the motion may be made.

38. The word unreasonable is not defined in the UTM Act. Its ordinary English meaning, according to the Macquarie Dictionary, is:

Unreasonable: adjective 1. not reasonable, not endowed with reason. 2. not guided by reason or good sense. 3. not agreeable to or willing to listen to reason. 4. not based on or in accordance with reason or sound judgement. 5. exceeding the bounds of reason; immoderate; exorbitant.

39. There is an extensive body of authority outlining when administrative decisions are, or are not, considered to be unreasonable and therefore liable to be set aside.

40. An administrative decision may be unreasonable where it is capricious or irrational, is illogical or perverse, is inconsistent with other decisions on like facts, has simply no evidentiary basis or is based on an error of fact which is fundamental to the decision.

41. In some cases, a defect in the process leading to the making of the administrative decision will render the decision unreasonable . For example, where the process leading to the making of the decision lacked natural justice, this may lead to the decision itself being considered unreasonable .

42. Given that the Tribunal is tasked with conducting merits review of the motion, a process usually made available in relation to decisions of an administrative character, it is appropriate to draw on this body of law as providing some guidance as to whether opposition to the motion was unreasonable.

[28] Further, as noted in The Owners Units Plan No 116 & Nicholson and Ors (Unit Titles) [2012] ACAT 63 at [84]:

The test to determine if the opposition to the motion was unreasonable is not a subjective test of the intentions of the unit owners who voted in opposition. Whether the opposition is in the circumstances unreasonable has to be considered objectively taking into account all relevant circumstances.

**17. In other words, the test is a two stage one. First, the Tribunal conducts a de novo review to determine what is the correct and preferable ('meritorious') decision is. This is the 'merits review'. Second, having conducted the merits review, the Tribunal must consider whether the objections of the objectors are 'unreasonable'.

18. Notwithstanding that another decision may be fairer or more meritorious, the Tribunal may only give effect to an unsuccessful motion where:**

(a) the merits review concludes that the outcome is correct and preferable, and

(b) the objections to that outcome are, objectively, unreasonable.

**19. In conducting a merits review, the Tribunal must consider all the relevant issues of fact and law and determine the correct and preferable decision.

20. The Tribunal's ability to do that in this case is hampered by the fact it only has one side of the story, and even that is fairly minimal. All that is before the Tribunal is a basic application setting out the Applicant's position, a photographic diagram of the units complex, a design of the proposed carport, and the AGM minutes.

21. In terms of the Applicant's position, it is apparent that the failed resolution would have granted a special privilege over a small area of land next to the applicant's unit. The area is a garden, and adds to the ambiance of the complex. The proposal will reduce the size of the garden, but I do not understand that it will have any adverse effect on any greenery. There is no evidence that the area is used for any other purpose, and there is no evidence that the appropriation of this strip of land has any effect on any person's material use or enjoyment of the common property or on the value, presentation or amenity of the complex as a whole.

22. The other residents are agreeable to the proposal, or at least have no objection. The owner of the neighbouring unit, adjoining the garden area, has raised no concerns.

23. That said, the proposal does have broader ramifications. Several units have similar configurations and may be entitled to similar 'special privileges' if they wish to construct carports. One of those units is adjacent to the unit owned by the Objector, but in the case of that unit the relevant common garden area is not adjacent to the Objector's property, but on the other side of the unit.

24. It is possible that if every so-entitled unit holder took advantage of the special privilege, there would be a not-insubstantial reduction in the common property, although I have little evidence of how extensive this would be, or the extent to which this would be considered by unit holders to be a problem.

25. This is not the first grant of a special privilege, and the grant would not be inconsistent with other such grants. Similar proposals from previously been approved over other areas of common property, including:**

(a) Unit 13 - common property totally 22.5sqm for a garden.

(b) Unit 14 - common property totally 35sqm for paving and a Colorbond fence.

(c) Unit 22 - common property totalling 3.12sqm for a raised vegetable garden.

**26. It may perhaps be argued that all these special privileges, cumulatively, are the start of a 'floodgates' arrangement that will result in an excessive amount of the common property being appropriated for private use. If so, I can appreciate that the Objector would be concerned about it. Again, however, I have little evidence or argument in support of this assertion, so it is at best hypothetical and I can advance it no further.

27. In summary, the proposal allows the owners of several units in the complex to put up practical and useful carports. The proposal appears to have a minimal effect on the common property. It is consistent with other, current uses of the common property. No person, including the Objector, has pointed to any evidence that the proposal could have any effect on any person's material enjoyment of their property, or even of the common property. Indeed, no basis for an objection to the motion has been advanced at all. In those circumstances, there appear to be many reasons to approve the motion, and few to reject it. Consequently, I am satisfied that the correct and preferable decision is to approve the motion.

28. Still, the motion failed when put to a vote of the members of the corporation. A corporation's right to govern itself should not be lightly intruded upon. I have taken this principle into account in considering the correct and preferable decision. The same factor is also recognised in the UTM Act, through the imposition of the requirement that a failed motion can only be overturned if the objection to the motion was actually unreasonable. It is to that requirement that I now turn.**

**29. The concept of 'unreasonableness' was recently considered by the High Court in the case of Ainsworth v Albrecht [2016] HCA 40 (Ainsworth). The case concerned a similar application to this one, but brought under the Queensland Body Corporate and Community Management Act 1997 (Qld). While the Queensland and ACT Acts are different in many respects, both impose a requirement that an appropriation of common property be approved by unanimous motion, and both provide for a review of an 'unreasonable' rejection of such a motion.

30. Briefly stated, Ainsworth concerned a proposal by a lot owner to amalgamate two balconies to create a deck. This involved the effective appropriation of about 5sqm of common property airspace between the balconies, which necessitated approval by way of a unanimous resolution. Several lot owners voted against the proposal and it failed. The proponent sought a review. The matter wound its way through an independent adjudicator, the Queensland Civil and Administrative Tribunal and the Court of Appeal of the Supreme Court of Queensland, before reaching the High Court.

31. The reasons cited by the objectors in Ainsworth were varied - they included a potential diminution in the architectural integrity of the building, increased noise from the deck, the 'floodgates' argument, and a suggestion that there should be compensation for any appropriation of common property. There was, however, no suggestion that the motion, if approved, would have a materially detrimental effect on any person.

32. Relevantly for present purposes, their Honours provided some guidance on the concept of 'unreasonableness' in the context of reviews of decisions of owners corporations. The majority opined that unreasonableness of opposition to a proposal can only be determined by considering the circumstances of the proposal and its likely effect on the opponents' property interests. However, they continued, consideration of whether a person is acting unreasonably in protecting their property interest does not require that they act with altruism or sympathy for the interests of the proponent.[1] Lot owners are entitled to take steps in their own self interest to protect their property interests. In this case it was sufficient that the objectors had a reasonable apprehension that the proposal would adversely affect their property rights. In such circumstances, opposition could not be said to be unreasonable,[2] even if the opponent has no immediate material interest in the outcome.[3]

33. Although the Queensland Act is different to the ACT legislation is some respects, the concept of reasonableness is sufficiently common that the reasoning of the High Court should be applied by the Tribunal.

34. The test in Ainsworth sets a high standard for an applicant seeking review of a failed motion on the ground of unreasonableness. The question is whether the objector or objectors are acting unreasonably, having regard to their right to protect their property interest - not whether their interest in protecting their property should be balanced against altruistic or sympathetic considerations.

35. The High Court in Ainsworth accepted that the first step in considering whether the opposition was unreasonable is identification of a ground of opposition, and the second step is an enquiry into whether that ground is a rational basis for opposition.[4] The difficulty in this case is that neither the Corporation nor the Objector have defined the interest they wish to protect, let alone set out how opposition to the motion would achieve that goal. At most, I can surmise that the Objector's interest is in protecting her current right to the common property. That is, as the High Court recognised in Ainsworth, a legitimate interest to protect, and one which is not lightly overridden.[5] However, in the absence of any submissions, I can advance the argument no further than that.

36. The High Court also acknowledged that "...opposition to a proposal that could not, on any rational view, adversely affect the material enjoyment of the opponent's property rights may be ... unreasonable"[6], as may "[o]pposition prompted by spite, or ill-will, or a desire for attention." I have no reason to believe that the Objector acted with spite or ill-will, but in the absence of any evidence or submission from her, I can only conclude that, whatever the basis for her objection, she does not wish the agitate it before the Tribunal.

37. The burden on the Objector is not a high one, but she has made no attempt to meet it. While the Tribunal could theorise various basis upon which an objection may be put, there is no evidence that any of those rationales was the basis for the objection in this case. I have no difficulty concluding, consistent with the comments of the majority in Ainsworth, that objection to a proposal, without any basis, is unreasonable.

1. Pursuant to section 129(1)(g) of the Unit Titles (Management) Act 2011 the ACAT gives effect to the motion granting a special privilege to any owner wishing to erect a carport to use up to 30cm of encroachment over common property to erect two supporting poles and 30cm of roof overhang over the adjoining garden, provided approval is granted from the Owners Corporation Executive.