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Reasonableness Of By-Laws In Queensland – Statutory Obligations And Implications

In previous articles, the issue of the requirement for bodies corporate (as well as committees) to act reasonably and make reasonable decisions has frequently arisen. The concept of reasonableness in the context of Queensland community titles schemes is very much a ‘catch-all’ provision which, in the absence of other specific legislative criteria and obligations, forms a basis for review of all body corporate actions and provides the grounds of review for an owner or other party to challenge such decisions.
 

However, the Body Corporate and Community Management Act 1997 (Act) also applies the concept of reasonableness (and other criteria) to by-laws. Section 180 of the Act sets out the limitations of by-laws, including the following:

180 Limitations for by-laws

 (7) A by-law must not be oppressive or unreasonable, having regard to the interests of all owners and occupiers of lots included in the scheme and the use of the common property for the scheme. (Emphasis added)


It will be worth exploring some of the other restrictions in section 180 in later articles, but the focus of this article is on section 180(7) of the Act where the concept of reasonableness once again arises. The section came under consideration in the recent matter of Body Corporate for Admiralty Towers II v Johnson [2017] QCATA 29 (Johnson Case).

In the Johnson Case, QCAT heard an appeal from a decision of an Adjudicator where the issue arose as to whether a by-law which regulated the installation of hard-flooring was oppressive or unreasonable and therefore invalid under section 180(7) of the Act. The by-law in question provided that the noise impact of the installed flooring must not be greater than 45 LnTw (dB) (being a measurement for the level of noise transmitted through a floor into the room below). The Building Code of Australia requires that the LnTw between residential apartments be no more than 62dB.

A by-law can only regulate and cannot completely prohibit. Although there was evidence that complying with the by-law would be‘extremely difficult’, there was also evidence that such an acoustic rating could be achieved provided certain quality and thickness of underlay was used. Accordingly, compliance with the by-law was difficult but not impossible and the owner’s argument that the by-law was invalid for prohibiting rather than regulating necessarily failed.

Although the Adjudicator at first instance had found the by-law to be oppressive and/or unreasonable, QCAT held that the Adjudicator erred in law on a number of grounds, including relying on evidence without a sufficient basis, overlooking relevant evidence, and misconstruing the interpretation of the by-law. Accordingly, QCAT set the Adjudicator’s original decision aside and referred the matter back to the Adjudicator for further consideration. There seems to be a strong inference in QCAT’s decision that, on the basis of the available evidence, it did not consider the by-law to be unreasonable or fall short of the requirements of section 180(7) of the Act.

Thus a significant principle that can be gleaned from the Johnson Case is that a by-law can go further than other legislative restrictions or generally acceptable norms and standards. In this case, the building code required an LnTw of no greater than 62dB but the by-law specified a higher standard of no greater than 45dB. Accordingly, it seems that, whilst the process in assessing the reasonableness of a by-law under section 180(7) of the Act will inevitably be informed by other laws and standards, these are not a limiting factor in determining how far a by-law can go in regulating the conduct of owners and occupiers.

Hard flooring is a frequent point of contention in community titles schemes. Perhaps the other most frequently disputed by-laws are those that seek to regulate or prohibit the keeping of pets and animals. Applying the restrictions on by-laws set out in the Act as applied in numerous Adjudication decisions, it is clear that a by-law that seeks to prohibit the keeping of animals entirely is void. In addition, arbitrary restrictions on things such as weight (a common restriction in by-laws) are also likely to be void. Such by-laws should provide for the committee to make a reasonable determination (and the committee must act reasonably in making their decision). Approval can be given on reasonable conditions, set out in the by-law and/or applied by the committee on the granting of approval.

 


Liability limited by a scheme approved under Professional Standards Legislation
Disclaimer – This article is provided for information purposes only and should not be regarded as legal advice.

Posted in: Body Corp Blog at 10 April 17

Risks Of A Voluntary Role – Committee Member Liability

Over the past few years practising in the area of strata and community titles, a noticeable trend has been an ever-increasing volume of litigation concerning disputes between individual Committee members and other stakeholders, including owners and managers.
 

Committee members may well feel the need to drive the Body Corporate in a certain direction and if an owner or group of owners have a different view, tensions will often arise as the Committee implement decisions through their executive power. This can often lead to hostile relationships between Committee members and others in the scheme.
In Queensland, a Committee member is not civilly liable for an act done or omission made in good faith and without negligence in performing the person’s role as a Committee member. Additionally, a Committee member is not liable for defamation as a consequence of publishing material which they are required to do so for a general meeting (e.g. a motion or explanatory note submitted by an owner).

It follows that, a Committee member is not protected for acts done without good faith, negligently, or for publishing defamatory material not required as a consequence of their office. Whilst the Body Corporate may have certain insurances to protect Committee members where they fall short of the legislative protections, such insurance policies will usually have appropriate limitations and exclusions, including where the member acts recklessly.

The position is similar in New South Wales, with protection from personal liability for acts done or omitted to be done in good faith and for the purpose of executing the person’s functions as an officeholder. Such liability, instead, attaches to the Owners Corporation.

Accordingly, provided a Committee member acts with due care and diligence, it is unlikely that they will have any risk of personal liability and the Owners Corporation should have appropriate insurance to respond to losses that arise from most innocent accidents and mistakes. Nonetheless, there is always a risk that a member will expose themselves to personal liability where they act recklessly or outside the scope of their duties as an office bearer.

In short, it is very easy for Committee members to make defamatory statements as a consequence of the pressure which may be exerted on them by various interest groups in the scheme and the resulting friction. Legislative and insurance protections are limited and, accordingly, Committee members should take care and not act with haste in retorting to their agitators.
 

Liability limited by a scheme approved under Professional Standards Legislation
Disclaimer – This article is provided for information purposes only and should not be regarded as legal advice.
 

Posted in: Body Corp Blog at 02 April 17

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Author: Jarad Maher

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