The body corporate (and by extension, the committee) has an overriding obligation to act reasonably in everything it does. If a decision is not reasonable, then it is possible that it could be challenged and overturned by an order of an adjudicator. A QCAT decision by former Chief Justice Carmody sets out the basis for reasonableness. This case is Body Corporate for Beaches Surfers Paradise v Backshall [2016] QCATA 177.
The case considered an application to the committee to keep a pet dog. The majority of residents favoured a ‘no pets policy’. However, the committee’s decision to refuse the dog was overturned as it was found to be unreasonable. ‘Reasonable’ means exactly what it says: there is no special meaning to it. ‘Reasonable action is evidence-based and rational.’
Whether a decision is reasonable is an objective test. First, you look at all the facts and circumstances that are relevant to the decision. An example of this is in approving a pet. How will approving the pet affect the scheme? Second, you then weigh those facts and circumstances. How will the body corporate suffer from an owner having a pet, compared to restricting a lot owner from having a pet on their own property? Third, you come to a decision by reasoning your way to that decision. The conclusion must necessarily follow from your reasoning.
Although it is possible for different conclusions to be reasonable, that will often not be the case. For important decisions having regard to managing the body corporate for the benefit of all, it would be difficult for two people to come to opposing conclusions on any set of facts and circumstances.
However, this does not mean that anything can be done if it is reasonable. If a decision is unlawful, it is unlawful, regardless of whether it is reasonable.
An example of this is a committee restricting access to body corporate records. This happened in Dakota at 88 Macquarie Street [2019] QBCCMCmr 530. The committee claimed it was reasonable to restrict access to CCTV footage in the lobby because of ‘privacy concerns’. Although the adjudicator found that the decision was unreasonable, in any event, even if it was reasonable, the committee still acted unlawfully. The adjudicator said ‘The obligation to act reasonably does not, in my view, empower the committee to fail to comply with an express statutory obligation or to deny an owner’s express statutory rights.’
A body corporate (and the committee) must then follow two things: the decision must both be lawful and reasonable. If a decision is lawful, then if it is unreasonable, it will be invalid. If a decision is reasonable, then if it is unlawful, it will be invalid. A lawful decision is not necessarily reasonable, and likewise, a reasonable decision is not necessarily lawful. Ultimately, a body corporate and its committee must act according to body corporate legislation at all times.
This article is intended as general information only and should not be relied upon as legal advice. For specific legal advice please contact us here.