Body Corporate For Beaches Surfers Paradise v Backshall [2016] QCATA 177

CITATION: Body Corporate For Beaches Surfers Paradise v Backshall [2016] QCATA 177 PARTIES Body Corporate For Beaches Surfers Paradise (Applicant/Appellant) v Brian Backshall (Respondent) APPLICATION NUMBER: APL490-15 MATTER TYPE: Appeals HEARING DATE: On the papers HEARD AT: Brisbane DECISION OF: Justice Carmody DELIVERED ON: 14 November 2016 DELIVERED AT: Brisbane ORDERS MADE: IT IS THE DECISION OF THE APPEAL TRIBUNAL THAT: 1. Leave to appeal is granted. 2. The appeal is allowed. 3. The matter is returned to the body corporate committee for Beaches Surfers Paradise for reconsideration of whether the dog should be permitted to visit the respondent’s lot, giving genuine and adequate consideration to whether the dog could be permitted on the CTS on reasonable odour minimisation and any other conditions. CATCHWORDS: REAL PROPERTY – COMMUNITY TITLES SCHEME – USE OF COMMON PROPERTY – Body Corporate and Community Management Act 1997 (Qld) – where dispute between owners of lots in community titles scheme – where one lot owner requested permission to bring a dog onto his lot – where proposal put to body corporate committee – where committee must act reasonably – where motion defeated – where -- 1 of 23 -- 2 lot owner applied for dispute resolution – where adjudicator concluded the committee decision was unreasonable – whether adjudicator erred in approach to decision – whether committee decision made reasonably Acts Interpretation Act 1954 (Qld) s 32 Body Corporate and Community Management Act 1997 ss 2, 3, 4, 35, 94, 95, 98, 100, 167, 168, 180, 182, 228, 276, 294; Sch 4, Sch 5 Queensland Civil and Administrative Tribunal Act 2009 (Qld) s 3 Ainsworth v Albrecht [2016] HCA 40 Albrecht v Ainsworth & Ors [2015] QCA 220 Allesch v Maunz (2000) 203 CLR 172 Alltrans Express Ltd v CVA Holdings Ltd [1984] 1 All ER 685 Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223 Attorney-General (NSW) v Quin (1990) 170 CLR 1 Azzopardi v Tasman UEB Industries Ltd [1985] 4 NSWLR 139 Bayview Shores [2014] QBCCMCmr 294 Beaches Surfers Paradise [2015] QBCCMCmr 497 Re Body Corporate for Viridian; Kjerulf Ainsworth & Ors v Martin Albrecht & Anor [2014] QCATA 294 Bromley London Borough Council v Greater London Council [1983] 1 AC 768 Charles Osenton and Co v Johnston [1942] AC 13 Ericson v Queensland Building Services Authority [2013] QCA 391 Federal Commissioner of Land Tax v Jowett (1930) 45 CLR 115 Flegg v Crime and Misconduct Commission and Anor [2013] QCA 376 Francis v Crime and Corruption Commission & Anor [2015] QCA 218 -- 2 of 23 -- 3 The Goodwin [2013] QBCCMCmr 369 HIA Insurance Services Pty Ltd v Kostas (2009) NSWCA 292 House v The King (1936) 55 CLR 499 Khan v Minister for Immigration and Ethnic Affairs (1987) 14 ALD 291 Liberty [2014] QBCCMCmr 343 McKenzie v Body Corporate for Kings Row Centre CTS 11632 [2010] QCATA 57 McKinnon v Secretary, Department of Treasury (2006) 228 CLR 423 Minister for Immigration and Citizenship v Li (2013) 249 CLR 332 Minister for Immigration and Citizenship v SZJSS (2010) 243 CLR 164 Minister for Immigration and Citizenship v SZMDS (2010) 240 CLR 611 Re Minister for Immigration and Multicultural Affairs; ex parte Applicant S20/2002 (2003) 198 ALR 59 Minister of State for Immigration and Ethnic Affairs v Teoh (1995) 183 CLR 273 Norbis v Norbis (1986) 161 CLR 513 Nottinghamshire County Council v Secretary of State for Environment [1986] AC 240 Ocean Plaza Apartments [2015] QBCCMCmr 276 Pacific Vistas [2014] QBCCMCmr 433 Parker de Gabba [2016] QBCCCmr 399 Parramatta City Council v Pestell (1972) 128 CLR 305 Payne v Deer [2000] 1 Qd R 535 Prasad v Minister for Immigration and Ethnic Affairs (1985) 65 ALR 549 Rhode Island [2012] QBCCMCmr 410 Sanderson v Blyth Theatre Co [1903] 2 KB 533 Secretary, Department of Foreign Affairs and Trade v Sykes (1989) 23 FCR 251 Short v Poole Corporation [1926] Ch 66 -- 3 of 23 -- 4 Storie v Storie (1945) 80 CLR 597 SZLGP v Minister for Immigration & Citizenship [2008] FCA 1198 Tahlia Court [2012] QBCCMCmr 209 TCN Channel 9 Pty Ltd v Australian Broadcasting Tribunal (1992) 28 ALD 829 Tutton v Body Corporate for Pivotal Point CTS 33550 [2008] QCCTBCCM 12 Waterford v The Commonwealth (1987) 163 CLR 54 Waters v Public Transport Corporation (1991) 173 CLR 349 Woden Valley Glass v Psaila (1993) 122 ALR 378 APPEARANCES and REPRESENTATION (if any): This matter was heard and determined on the papers without the attendance of either party in accordance with s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act). REASONS FOR DECISION [1] This is a body corporate appeal limited to a question of law under the Body Corporate and Community Management Act 1997 (Qld) (the BCCM). The context [2] The BCCM regulates community living in a way that achieves a balance between competing individual rights and the collective responsibility of lot owners. The policy goal is flexible self-determination.1 [3] The body corporate of a community titles scheme (CTS) controls and administers its assets including, of course, the lifts and common property2 for the benefit and on behalf of lot owners;3 including by imposing conditions of use that do not unduly interfere with ownership entitlements or unduly encroach on the quiet enjoyment of residents.4 [4] Beaches Surfers Paradise (Beaches) performs its statutory body corporate functions and enforces the standard by-laws5 through an executive 1 BCCM ss 2-4. 2 Ibid s 35. 3 Ibid s 94(1)(a). 4 Ibid s 95. 5 Ibid s 168; Sch 4. -- 4 of 23 -- 5 committee6 in line with the arrangements in the community management statement (CMS) as provided by the BCCM.7 [5] Lot owners must abide by the BCCM and any rules (or by-laws) regulating what can and cannot be done on the CTS. The Beaches by-laws require occupiers to obtain the body corporate’s written approval before bringing or permitting an invitee to bring an animal onto a lot or the common property.8 [6] The respondent applied to the Beaches committee for permission to allow his grandchildren to “occasionally” bring their pet Cocker Spaniel named Marley to Beaches when they visited. The Beaches Committee is bound by the BCCM to act reasonably in making decisions about such matters.9 [7] All seven committee members voted against the motion to approve Marley’s future visits to Beaches at a meeting held on 30 April 2015 based solely on “the unsuitability of the lifts for transporting (such) a (malodorous) dog”. In the committee’s “best judgment”, it was just “too smelly” to ride the lifts from the carpark to the respondent’s unit without unduly interfering with someone else’s use and enjoyment of another lot or common property. [8] The matter was referred to arbitration via the BCCM dispute resolution framework10 so the respondent could challenge the reasonableness of the committee’s decision making. [9] A key function of BCCM adjudicators is to ensure that by-laws are made and enforced consistently with body corporate duties.11 They have power to make orders if it is ‘just and equitable’ in the circumstances to do so to resolve body corporate disputes.12 [10] The adjudicator to whom the dispute was assigned struck down the Beaches resolution on the ground that the potential inconvenience of having to put up with a smelly dog on hot days was not a reasonable basis for excluding Marley from the site. He voided the committee’s resolution and substituted conditional approval. [11] Beaches challenges the legality of the arbitration order and wants it set aside on appeal. [12] The ‘right’ of residents to keep pets is one of the most common and contentious disagreements between the body corporate and lot owners or occupiers. However, some past decisions about keeping pets on a CTS have been inconsistent and even gone in opposite directions on similar facts. 6 BCCM ss 98, 100(1). 7 Ibid s 94(1)(b). 8 Ibid Sch 4 Item 11.2. 9 Ibid ss 94(2); 100(5). 10 Ibid Ch 6. 11 Ibid ss 180, 228(1)(a). 12 Ibid s 276(1). -- 5 of 23 -- 6 [13] In Pacific Vistas,13 for example, the body corporate denied approval for keeping Diesel, a 20kg well-groomed five-year-old desexed male cross- breed dog. Genuine but “hypothetical” odour concerns were dismissed as unsustainable in light of proposed preventative conditions but the impact on the health of a neighbour with a medically confirmed allergic reaction to dog hair was held to justify refusal. [14] In Ocean Plaza Apartments,14 by contrast, the Commissioner made orders authorising the keeping of of a King Charles Cavalier Spaniel named Ally in comparable circumstances. [15] More recently, a body corporate ruling against a lot owner’s request to keep an oversized, overweight (18.9kg) Staffordshire Terrier called Romeo, was overturned on the grounds that it was unreasonably based on perceived but unproven nuisance and disturbance risks.15 [16] QCAT’s objects include promoting and enhancing the quality and consistency of decisions by the tribunal and decision makers.16 The appeal tribunal hopes that this decision will lead to a better understanding of the correct test and of how to apply it in future CTS pet disputes. The CTS [17] Beaches is an exclusively owner-occupied beachfront residential tower consisting of 35 lots spread over 26 levels. Nine owners live there full-time with another 14, including the respondent, occupying it on a regular periodic basis. Levels 10 to 26 have one apartment with private foyers per floor. [18] The respondent and his wife co-own and regularly occupy unit 2503. The scheme is serviced by two lifts. One is licensed to carry 17 passengers at a time; the other is limited to a maximum of 13. One of the lifts parks on level 13 when not in use. The respondent’s 25th floor lot is accessible only by lift. The average travel time from the basement carpark to level 25 is about 36 seconds. [19] Lot owners have proprietary rights and interests in the common property and, therefore, are entitled to a say in who is allowed to use it and on what conditions. The overwhelming majority of Beaches residents are said to favour a ‘no pets policy’. No animals (except fish) have been allowed to stay at the complex throughout its 19 years. The standard by-laws [20] Schedule 4 BCCM provides: 1. Noise 13 [2014] QBCCCmr 433. 14 [2015] QBCCMCmr 276. 15 Parker de Gabba [2016] QBCCCmr 399. 16 QCAT Act s 3(c)-(d). -- 6 of 23 -- 7 The occupier of a lot must not create noise likely to interfere with the peaceful enjoyment of a person lawfully on another lot or the common property. … 6. Behaviour of invitees The occupier of a lot must take reasonable steps to ensure the occupiers invitees do not behave in a way likely to interfere with the peaceful enjoyment of another lot or someone else’s peaceful enjoyment of the common property. 11. Keeping animals 1. The occupier of a lot must not, without the body corporate’s written approval – (a) Bring or keep an animal on the lot or the common property; or (b) Permit an invitee to bring or keep an animal on the lot or the common property. 2. The occupier must obtain the body corporate’s written approval before bringing, or permitting an invitee to bring, an animal onto the lot or the common property. [21] Also, s 167 BCCM states: “The occupier of a lot included in a community titles scheme must not use, or permit the use of, the lot or the common property in a way that- (a) causes a nuisance or hazard; or (b) interferes unreasonably with the use or enjoyment of another lot included in the scheme; or (c) interferes unreasonably with the use or enjoyment of the common property by a person who is lawfully on the common property.” [22] The person in charge of a permitted animal causing a nuisance or a hazard or unduly interfering with someone else’s peaceful use and enjoyment of another lot or common property can be ordered by the body corporate to take immediate and effective remedial action. Failure to comply is punishable by a court-imposed fine.17 The onus to act reasonably [23] Under the BCCM, the Beaches body corporate and committee must ‘act reasonably’ including in making by-law decisions and not passing a motion after a vote at a committee meeting.18 The word “reasonably” is used in its 17 BCCM s 182(4)(e),(5). 18 Ibid ss 94(2); 100(5). -- 7 of 23 -- 8 ordinary sense and “act reasonably” has a corresponding meaning.19 Reasonable action is evidence-based and rational.20 [24] Whether an action is contaminated by unreasonableness is a finding or inference of fact.21 Reasonableness is an uncertain and unruly (but familiar) normative determinant used by the law for objectively evaluating the quality of human conduct. The legal standard of reasonableness to be applied to a decision or discretion is determined by the text, scope, purpose and subject matter of the conferring enactment; but it is not characterised by what it is not. A finding that a decision or action in issue is “not irrational, absurd or ridiculous” does not necessarily mean it is a reasonable one.22 [25] Similarly, being reasonable in making decisions and voting at meetings is not the same as making reasonable decisions or resolutions. This distinction between assessing the reasonableness of conduct as opposed to its consequences in the fulfilment of a duty is a vital one. It determines the nature of the questions to be asked and the task to be performed in any external inquiry into the issue. [26] In Waters v Public Transport Corporation,23 the Equal Opportunity Board found that the Victorian Public Transport Corporation had imposed an unreasonable condition requiring persons with a disability to use tram tickets from a new system that they could not use. There, McHugh J said24 that ordinarily, the term “reasonable” in a legal instrument, subject to contrary intention, is taken to mean reasonable in all the circumstances, including legitimate policy objectives. [27] Likewise, in Secretary, Department of Foreign Affairs and Trade v Sykes,25 the Federal Court observed that: “…the test of reasonableness is less demanding than one of necessity, but more demanding than a test of convenience… The criterion is an objective one, which requires the court to weigh the nature and extent of the… effect, on the one hand, against the reasons advanced in favour of the requirement or condition on the other. All the circumstances of the case must be taken into account.” [28] While acting reasonably in the CTS context within the BCCM does not always imply even-handedness, a conciliatory approach to a dispute or a recognition of the rights or wishes of others,26 a body corporate committee is still expected to weigh up competing personal rights with community 19 Acts Interpretation Act 1954 (Qld) s 32. 20 SZLGP v Minister for Immigration & Citizenship [2008] FCA 1198 [15]-[16]. 21 See, for example, Albrecht v Ainsworth & Ors [2015] QCA 220 [62]. 22 McKinnon v Secretary, Department of Treasury (2006) 228 CLR 423 [60] (Hayne J). 23 (1991) 173 CLR 349. 24 Ibid, 410. 25 (1989) 23 FCR 251, 263. 26 Re Body Corporate for Viridian; Kjerulf Ainsworth & Ors v Martin Albrecht & Anor [2014] QCATA 294 [105]. -- 8 of 23 -- 9 interests. It is not a simple case of majority rule: the attitude of the majority of other residents is relevant but not decisive. [29] The test of body corporate reasonableness was most recently explained by Nettle J in Ainsworth v Albrecht (Viridian Residences, Noosa)27 (although in a slightly different context). His Honour said: “…reasonableness (is not) something about which informed views are likely to, or should, differ. Reasonableness does not mean whatever the adjudicator considers to be just and equitable and it does not involve the application of discretionary considerations of the kind that were essayed in Norbis v Norbis. The standard of reasonableness is objective and it is to be applied in this case at the time of rejection of (the defeated) motion taking into account all relevant factors including factors which were extant but which the parties may not have identified or appreciated at the time, as is implied by the words "in the circumstances…"” (citations omitted) [30] In Viridian Residences, Noosa, the issue for the adjudicator was whether she was satisfied that a proposal was defeated by unreasonable opposition.28 In contrast with this case, she did not have to decide whether the body corporate acted reasonably in making a decision (or made a reasonable decision). In fact, she found that the dissenting votes were “without substance” because though genuine, they were based on conjectural and therefore unreasonable concerns. [31] An appeal to QCAT (QCATA)29 was upheld on a question of law applying general principles derived from McKinnon v Secretary, Department of Treasury30 where the question was whether there were “reasonable grounds for a claim”. [32] The arbitrator’s decision was reinstated by the Queensland Court of Appeal (QCA).31 In wrongly approving a misstatement and misapplication of the correct test, McMurdo P clearly misunderstood the adjudicator’s statutory role and the procedures for assessing the reasonableness of the dissent and erroneously concluded that the onus of proof had not been reversed when it had been. [33] In allowing an appeal from the QCA, the High Court unanimously held that the adjudicator and QCA had both adopted the wrong approach in resolving the dispute to the proposed transfer by weighing up and balancing competing interests against each other and, in so doing, conducted an impermissible rehearing. Discretionary decision making duties 27 [2016] HCA 40 [101]. 28 per Nettle J [71]. 29 Re Body Corporate for Viridian; Kjerulf Ainsworth & Ors v Martin Albrecht & Anor [2014] QCATA 294. 30 (2006) 228 CLR 423. 31 Albrecht v Ainsworth & Ors [2015] QCA 220 (McMurdo P, Morrison JA and Martin J). -- 9 of 23 -- 10 [34] As bodies with power to administratively affect the rights, interests and reasonable expectations of CTS lot owners and occupiers, by the choices they make the body corporate and committee are subject to mandatory general law duties in addition to the BCCM obligation to act reasonably. These include the duty to act in good faith, to make fully considered, rational and reasonable decisions that are not conflicted, arbitrary, patently absurd or plainly unjust. [35] In common with the requirement to act reasonably, the central concern of the relevancy and irrationality grounds is on the decision making process; whereas the unreasonableness and injustice grounds represent a ‘safety net’ of sorts for cases where the standard grounds of review such as relevancy do not apply32 and focus solely on the end product. [36] Legal unreasonableness also shares parallels and often overlaps with the grounds for appellate review of discretionary decisions recognised by the High Court in House v The King33 in connection with the judicial sentencing discretion. It encompasses the specific decision making errors such as bad faith, mistake, irrelevancy, failure to consider et cetera and in the absence of a satisfactory statement of reasons, imply (or ‘bespeak’) non-specific error in need of correction. [37] Thus, as Gibbs J made clear in Parramatta City Council v Pestell,34 the same decision can be invalid on either or both relevancy or unreasonableness grounds. [38] However, as Geoffrey Airo-Farulla has pointed out, unreasonableness and irrationality are different legal concepts. An irrational decision can be reasonable and vice versa. It can also be both rational and reasonable but have an unjust (and, therefore, invalidating) practical effect. [39] Failure to consider significant, logically relevant factors goes to the rationality of a tribunal decision. In Payne v Deer,35 for example, a former Chief Justice of the Supreme Court of Queensland held that the failure of the Chief Magistrate to consider a newly appointed Magistrate’s maternal responsibilities as an overriding consideration against transferring her away from her family support system in Brisbane early in her judicial career made his decision to do so objectively unreasonable (even though it was not an improper exercise of the transfer power) because it was “so devoid of any plausible justification that no reasonable (person) could have reached it”.36 32 Geoffrey Airo-Farulla, ‘Rationality and Judicial Review of Administrative Action’ (2000) 24 Melbourne University Law Review 543, 573; cited in Mark Aronson & Matthew Groves, Judicial Review of Administrative Action (Thomson Reuters, 5th ed, 2013) [5.20]. 33 (1936) 55 CLR 499. 34 (1972) 128 CLR 305, 327. 35 [2000] 1 Qd R 535 (de Jersey CJ). 36 Ibid, 541; citing Bromley London Borough Council v Greater London Council [1983] 1 AC 768, 821, Prasad v Minister for Immigration and Ethnic Affairs (1985) 65 ALR 549, 561. -- 10 of 23 -- 11 Relevancy [40] What is relevant in decision making varies from case to case. Statutory demands aside, what considerations, conditions and circumstances are relevant and how much weight each deserves is usually for the decision maker to decide on the basis of the subject matter, scope and purpose of the inquiry at hand. 37 [41] The BCCM provides no specific criteria or guidance for deciding by-law issues or how it is to be concluded that a committee acted in breach of ss 94(2) or 100(5). Generally speaking, though, whether a CTS-related decision (or resolution) was made reasonably and regularly does not merely depend on whether the body corporate or committee believes it acted reasonably or not in the decision making process.38 [42] Rather, it “involves an evaluation of the known facts, circumstances and considerations” that tend to have a rational bearing on the issue at hand including predictable future possibilities and risks. In practice, this requires that all relevant matters to be taken into consideration and irrelevant ones left out.39 It is a question to be determined when the decision in issue was made. [43] A decision will offend the relevancy doctrine where it was made without considering something that the decision maker was bound by the law to take account of or, conversely, acting on a factor that had no logical role to play in resolving the issues. [44] Normally, the significance or weight of any consideration is for the committee, not an external reviewer, unless the inadequate consideration amounts to Wednesbury unreasonableness, serious irrationality or is tantamount to a failure of discretion.40 [45] However, there is authority for the proposition that undervaluing a materially relevant consideration or not giving it ‘proper, genuine and realistic’ consideration will sustain an inference of failure to consider at all.41 [46] Conversely, a discretionary decision made within power and not affected by irrelevancy or failure to consider is not vulnerable to review unless it is legally unreasonable. Unreasonableness [47] A legally reasonable decision is not a uniquely right one. It involves matters of degree about which contrary – even opposite – conclusions can be reasonably reached on the same body of evidence by different lines of 37 Waters v Public Transport Corporation (1991) 173 CLR 349, 379, 383-384. 38 McKinnon v Department of Treasury (2006) 228 CLR 423, 429. 39 Ibid, 430. 40 Minister for Immigration and Citizenship v SZJSS (2010) 243 CLR 164, 174-176. 41 Khan v Minister for Immigration and Ethnic Affairs (1987) 14 ALD 291, 292 (Gummow J). -- 11 of 23 -- 12 reasoning or by reference to other determinants42 without either being demonstrably right or manifestly wrong. [48] Legal unreasonableness first emerged as a potential ground of administrative review by Short v Poole Corporation (Short),43 where the English Court of Appeal upheld the decision of a local education authority to dismiss all married women teachers in its employment because there was an oversupply of teachers at the time and it had elected to favour those ‘devoting their lives and energies entirely to the business of teaching without assuming the privilege and the burden of domestic ties’. The Court of Appeal held that the policy decision was not made for an improper purpose or by taking into account relevant considerations. [49] Short was followed and entrenched by Lord Greene MR in Associated Provincial Picture Houses Ltd v Wednesbury Corporation (Wednesbury).44 Wednesbury concerned the validity of a condition imposed on a cinema license by a local council not to admit children under 15 on a Sunday whether accompanied by an adult or not. The condition was challenged as unreasonable and, therefore, beyond statutory power. [50] The court, which was not sitting on appeal, had no power to act unless the authority had contravened the law in some way and could not “substitute itself for that authority”. The authority’s discretion to impose conditions on operating licences was absolute and unquestionable unless the legal principles governing its exercise had been breached, including failing to consider ‘germane’ matters which the council ‘ought to have regard to’ in exercising the discretion under the express or implied provisions of the authorising statute or marred by absurdity or unreasonableness in the sense “that no reasonable authority could have ever come to it”. [51] In Attorney-General (NSW) v Quin,45 Brennan J noted that: “Wednesbury unreasonableness leaves the merits of a decision or action unaffected unless the decision or action is such as to amount to an abuse of power”.46 In other words, a decision is not unreasonable in the Wednesbury sense if it is a matter about which reasonable minds can honestly disagree. Nor will an allegation of unreasonableness be sufficiently established just because a decision’s underlying reasoning is unsound or questionable.47 [52] Nowadays, the legal standard of reasonableness for a statutory discretion in Australia is not as strict as the Wednesbury test for absurd discretionary decisions48 or those devoid of plausible justification.49 So much is clear from what the QCA said in the following passage when reviewing a QCAT police 42 Woden Valley Glass v Psaila (1993) 122 ALR 378, 391. 43 [1926] Ch 66. 44 [1948] 1 KB 223,228. 45 (1990) 170 CLR 1. 46 at 36, citing Nottinghamshire County Council v Secretary of State for Environment [1986] AC 240, 249. 47 Minister for Immigration and Citizenship v SZMDS (2010) 240 CLR 611. 48 See for example Attorney-General (NSW) v Quin (1990) 170 CLR 1, 36. 49 Minister of State for Immigration and Ethnic Affairs v Teoh (1995) 183 CLR 273, 290. -- 12 of 23 -- 13 disciplinary decision on penalty in Francis v Crime and Corruption Commission & Anor (Francis):50 “The ground of appeal that no reasonable tribunal would have suspended the dismissal involved a stringent test. It is rarely established. It does not sanction a review on the merits. It is not made out merely if an appeal court disagrees with an evaluative decision or with the weight attributed to a factor taken into account in the decision. The appeal tribunal nevertheless concluded that the ground was established in this case. The appeal tribunal accurately observed that in Flegg v Crime and Misconduct Commission the President expressed the test, with reference to Minister for Immigration and Citizenship v Li, as being “whether the … decision was so unreasonable that it lacked an evident and intelligible justification when all relevant matters were considered” and Gotterson JA (Margaret Wilson J agreeing) noted that the Wednesbury principles did not allow a challenge to a decision “on the basis that the decision-maker has given insufficient or excessive consideration to some matters or has made an evaluative judgment with which the [appellate tribunal] disagrees”. As the appeal tribunal also observed, the case on appeal must be “overwhelming”. The appeal tribunal correctly stated its task as being “to examine the learned member’s reasoning to determine whether it was a decision that can be justified even though ‘…reasonable minds could reasonably differ’ or whether the decision was so unreasonable that it lacked an evident and intelligible justification”. (citations omitted) Irrationality [53] Rationality is a pervasive requirement for exercising statutory powers and making administrative decisions based on findings of fact and the applying of legal rules, discretions or principles to them.51 [54] As noted in Francis, an irrational (as distinct from a legally unreasonable) decision lacks an intelligible justification or can only be explained on the basis of some misconception, bias or defective reasoning and is not within the permissible range of rational decisions open to a reasonable person. [55] The High Court (French CJ; Hayne, Kiefel and Bell JJ; and Gageler J) established in the form of ‘serious irrationality’ as a distinct ground of judicial review akin to legal unreasonableness in Minister for Immigration and Citizenship v Li (Li).52 The majority confirmed that even when it does not explicitly say so, the legislature generally intends discretions derived from an enactment to be exercised reasonably unless that presumption is necessarily rebutted or displaced. [56] The Court unanimously (but in three separate judgments) held that procedural fairness was denied when the Migration Tribunal unreasonably 50 [2015] QCA 218 [33]. 51 TCN Channel 9 Pty Ltd v Australian Broadcasting Tribunal (1992) 28 ALD 829, 861 (French J). 52 (2013) 249 CLR 332. -- 13 of 23 -- 14 refused (almost arbitrarily) to adjourn the hearing of the applicant’s application in excess of its jurisdiction. [57] The plurality (Hayne, Kiefel and Bell JJ) took a definite rationality-based approach and found that irrespective of the matters it considered in exercising the adjournment discretion and regardless of the Migration Act’s exhaustive statement of the practical content of the hearing rule for its purposes, the tribunal must have misdirected itself and, therefore, failed to discharge its function according to law53 because, in effect, its decision lacked an evident and intelligible justification.54 [58] French CJ concluded that the orthodox grounds of judicial review were embraced by the degree of rationality required by the ‘rules of reason’ and essential to lawful administrative (as well as judicial) decision making. [59] In His Honour’s view, Wednesbury unreasonableness was an integral part of an overarching framework of rationality and legality which was activated in relation to decisions where, despite all other rules of regular decision making being obeyed, the discretion miscarried due to arbitrariness, capriciousness or was nonsensical rendering it ‘unreasonable’ by Lord Greene MR’s standard. [60] Gageler J applied a narrower concept of Wednesbury unreasonableness and inferred that “no reasonable tribunal, seeking to act in a way that is fair and just, and according to substantial justice and the merits of the case, would have refused the adjournment”.55 [61] The upshot of Li is that appellate bodies now give close consideration to both the reasoning process and its end result when assessing even the widest statutory discretions but will not conduct a full merits review or substitute their own view for the decision makers.56 The committee meeting [62] The primary issue for a body corporate or committee in considering how to exercise its discretion to approve or request an application under its standard by-laws to keep a pet is “… the likelihood and acceptability of an adverse impact on common property or a person”57 in the future. Relevant factors include the breed, size, characteristics and proven behaviours of the pet, as well as the proposed frequency and type of use of common property. [63] Marley is reputedly an alert, cheerful, active, docile, attentive, intelligent and affectionate Cocker Spaniel 40cm in height and weighing about 14kg when fully grown. 53 Minister for Immigration and Citizenship v Li (2013) 249 CLR 332 [76]. 54 Ibid [98]. 55 Ibid [124]. 56 Justice Michael Barker, ‘Legal unreasonableness: Life after Li’ [2014] Fed J Schol 15, [18]. 57 cf Tahlia Court [2012] QBCCMCmr 209. -- 14 of 23 -- 15 [64] While it had no hesitation in accepting that, in principle, some domestic species of dogs were suitable to be kept in high-rise buildings under strict conditions, the committee noted that Marley belonged to “one of the most odorous species” and with disapproval that the respondent had allowed it to be brought onto the scheme a number of times without permission. [65] The minutes of the meeting confirm that the committee members instructed themselves in accordance with previous CTS dog disputes applying some and distinguishing other decisions QCAT adjudicators and appeal tribunals on the facts.58 [66] The committee informed itself about the nature, extent and sources of body odour in animals including dog breeds from online sources. Naturally oily dog skins, like a Cocker Spaniel’s, apparently have a stronger odour than others. Also, there was specific evidence the chairman and his wife had personal experience of it “sweating behind the ears and certainly malodourous” one hot summer’s afternoon. [67] Detailed consideration was evidently given to of a wide range of factors including phobias, waste disposal, spillage, barking, odours, allergies, hygiene, animal welfare and safety issues. All concerns were dismissed as insufficient reason for rejecting the application except for the residents’ compromised amenity due to the likelihood of lasting smells in the lifts; especially on hot days or often vigorous exercise. [68] The major features against allowing Marley onto the scheme are identified as:  access to the respondent’s apartment, which was on one of the highest levels, was only via one of the lifts;  Beaches is a home, not just a holiday place, for two of the older residents aged 92 and 82;  Other high level owners would be confronted with the odours and possibly the dog itself in the lift when calling a lift;  the lifts open directly onto the living space of the apartments on levels 10 – 26; and  the lift doors are not airtight and odours would drift into the living area of the occupant on level 13. [69] Other factors adding to the unsuitability of the lifts as ‘dog transporters’ were identified as their fitted carpets and hardwood panel walls, lack of ventilation, the risk of a spillage and clean-up costs. The adjudication [70] Under s 276(1) BCCM, an adjudicator to whom an application for dispute resolution is referred: 58 See for example The Goodwin [2013] QBCCMCmr 369, Liberty [2014] QBCCMCmr 343, Pacific Vistas [2014] QBCCMCmr 433 and Re Body Corporate for Viridian; Kjerulf Ainsworth & Ors v Martin Albrecht & Anor [2014] QCATA 294. -- 15 of 23 -- 16 (1) …may make an order that is just and equitable in the circumstances (including a declaratory order) to resolve a dispute, in the context of a community titles scheme, about— (a) a claimed or anticipated contravention of this Act or the community management statement; or (b) the exercise of rights or powers, or the performance of duties, under this Act or the community management statement; or … (3) Without limiting subsections (1) and (2), the adjudicator may make an order mentioned in schedule 5. [71] Schedule 5 BCCM includes Item 8, which provides: An order declaring that a resolution purportedly passed at a meeting of the committee for the body corporate, or a general meeting of the body corporate was, at all times, void. [72] This provision aids the enforcement of ss 94(2) and 100(5) BCCM via s 276 (3) if it is just and equitable to invoke it in the circumstances. But the corrective power is not at large. It is contingent on a finding that the committee acted contrary to s 100(5) in exercising its power or is otherwise legally defective. Expressed in terms of s 276(1), the dispute the respondent referred to arbitration for resolution was either about a claimed or anticipated contravention of s 100(5) by the Beaches committee under s 276(1)(a) or, alternatively, its exercise of powers or performance of duties under s 276(1)(b). [73] The adjudicator directed himself that the respondent bore the onus of proving unreasonableness to the civil standard of probability and that the test was an objective one. He also instructed himself that he had no authority to conduct a rehearing or merits review while standing in the committee’s shoes with the aim of arriving at the ‘correct and preferable’ result. [74] Despite some murmurings in the respondent’s written submissions about the covert implementation of a no-pets policy, there is no evidence of bad faith, collateral purpose, predetermination, discrimination, collusion, arbitrariness or bias on the committee’s part and the arbitrator made no finding of irrationality or Wednesbury unreasonableness in the sense that the ban was so unreasonable no reasonable committee could have ever come to it. Nor did he conclude that the decision was patently absurd or plainly unjust.59 [75] It could, therefore, only be legitimately disturbed on the failure to consider (or relevancy) ground. 59 See the High Court decision in House v The King (1936) 55 CLR 499 and the seminal judgment of Lord Greene MR in Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223. -- 16 of 23 -- 17 [76] However, starting from the premise that having a dog was an ‘ordinary and accustomed use of premises’, the adjudicator said he was satisfied by the applicant it was unreasonable to reject the application based on odour concerns because dog smells in lifts even on hot days created was an “inconvenience” rather than a nuisance or substantial degree disturbance. [77] His rationale is stated at [14]-[16] of the published reasons:60 [14] The fact that a dog can be smelt in a lift on a hot day does not mean it is creating a nuisance contrary to section 167. Rather, having a dog is an “ordinary and accustomed use of premises”. Any smell that may be present in the lift in the event that the dog visits the scheme during hot weather is likely best characterised as “inconvenience” rather than “a substantial degree of interference according to what are considered reasonable standards for the enjoyment of those premises”. [15] There is nothing in the committee’s minutes or submissions to establish why the smell of dog on a hot day in the lift rises beyond the inconvenience owners routinely endure when the lift smells of shoes, food, paint, or body odour. In the applicant’s words, “there is no reason to suggest that any potential odour from the dog would be any more bothersome or that the lifts are less suitable for the odour than any other odour”. [16] … I do not accept that the committee’s concerns about dog odour provide a reasonable basis for denying the applicant’s request for a dog, I similarly do not accept that concern about any such smell lingering due to air being recirculated within the lift is a reasonable basis for such a decision. Nor do I accept speculative concern that any such smell will travel from the lift to the lot on floor 13 … no evidence … support(s)… these hypotheses. [78] The adjudicator went on to hold that non-odour related reasons for refusal including the speculative fear of waste spillage could be addressed by imposing suitable conditions and the prospect that an owner may be “confronted” with the smell of the dog or even the dog itself in the lift “does not justify a decision to deny permission for the dog.” [79] Accordingly, he deemed that conditional approval should be given but none of the constraints really addressed the committees odour related concerns. [80] Beaches claims that, although he correctly stated the legal test, the adjudicator’s statement of reasons reveals 4 specific legal errors identified as:  reversing the onus of proof (ground 1);  failing to consider the reasonableness of the committee’s stance independently of anticipated nuisance including its potential for interfering with the overall amenity and use or enjoyment of the common property by others (grounds 2-3); and  wrongly assuming that keeping pet dogs is an “ordinary and accustomed use” in a CTS (ground 4). 60 Beaches Surfers Paradise [2015] QBCCMCmr 497. -- 17 of 23 -- 18 [81] Beaches contends, in effect, that the inquiry conducted by the adjudicator proceeded on the basis of the assumption that having a dog is an “ordinary and accustomed” use of a CTS61 (when it isn’t) and compounded the error by proceeding from there to find that excluding Marley from Beaches is unreasonable unless its ‘smelliness’ was (or likely to be) a nuisance or unreasonably interfere with the use or enjoyment of the common property (lifts etc.) by the residents and lawful entrants. The appeal tribunal’s role [82] The appeal tribunal’s corrective power has been held to lie dormant unless and until roused by illegality.62 Thus, demonstrated legal error is an “indispensable condition” of a successful appeal against an arbitration order.63 The issue is whether the adjudicator’s decision was right on the material before him and as the law stood at the time. [83] The integrity of his decision is assessed against his own facts64 because unless it is unsupported by any evidence, irrational or illogical65 or contrary to compelling opposite inferences there is generally no error of law in finding the wrong facts.66 [84] On this basis, the highest risk Marley posed to the residents of Beaches even on a hot day was one of inconvenience rather than undue disruption or of nuisance. [85] The question of whether the committee acted reasonably or not is an ultimate fact in the nature of a contestable opinion about which reasonable minds might differ or reach the same conclusion by different lines of reasoning or by reference to different determinants67 to be decided by way of ultimate inference from primary facts. [86] Unlike a point of law or a legal expression, not even perverse ultimate facts or end results (such as whether a body corporate committee acted reasonably in making a decision) are vulnerable to appellate review or intervention unless the intermediate facts are necessarily outside a statutory description but the contrary is concluded. That is, if certain action was characterised as unreasonable when it wasn’t, a legal error would have been made. 61 See McKenzie v Body Corporate for Kings Row Centre CTS 11632 [2010] QCATA 57. 62 Allesch v Maunz (2000) 203 CLR 172, 180-181. 63 cf Norbis v Norbis (1986) 161 CLR 513, 519. 64 Flegg v Crime and Misconduct Commission and Anor [2013] QCA 376 [28]-[31] (Gotterson J). 65 Re Minister for Immigration and Multicultural Affairs; ex parte Applicant S20/2002 (2003) 198 ALR 59 [78] per Kirby J cited in Mark Aronson & Matthew Groves, Judicial Review of Administrative Action (Thomson Reuters, 5th ed, 2013) [4.190]. 66 Waterford v The Commonwealth (1987) 163 CLR 54, 77-78 (Brennan J). 67 Woden Valley Glass v Psaila (1993) 122 ALR 378, 391. -- 18 of 23 -- 19 [87] Thus, to preserve “a certain realm of decision making autonomy”68 the law allows a generous leeway or ‘either way’ margin when reviewing the validity of decisions about matters of degree, including ultimate inferences of fact involving a conclusion in the nature of an evaluative judgment, except where no other application is reasonably open as a matter of law.69 [88] As Viscount Simon LC explained in Charles Osenton and Co v Johnston:70 “To take the case out of the ordinary situation in which, wherever a discretion is to be exercised, minds may differ on the result, the appellate court must discover some error of principle in the exercise of the trial judge’s discretion, a consideration of irrelevant matters or some other manifest mistake. Examples of circumstances where this may be so include where the trial judge lacked the jurisdiction to make an award of costs, took the mistaken view that he or she had no discretion as to costs, made an order contrary to an established rule of law or practice without justification, applied a rule of law or practice without giving proper consideration to the exercise of the discretion, took into account a matter unrelated to the institution or conduct of the suit, or made the order as a result of a misapprehension of the facts or the [appellate] court is forced to the conclusion that the various factors have not been balanced fairly in the scale.”71 (citations omitted) [89] Other vitiating legal errors that a non-judicial tribunal making decisions affecting the statutory rights and duties of others include identifying the wrong issue, asking itself the wrong question and thus reaching a mistaken conclusion about the legal consequences of the situation. [90] Where an applicant demonstrates “some good reason, over and above differing opinions about what would have been the best costs order in the particular circumstances”72 the appeal tribunal has “both the power and duty” to intervene.73 Merits of the appeal [91] Contrary to grounds 2-3, the adjudicator expressly considered the lack of threat Marley posed to the quiet enjoyment rights of residents independently of nuisance issue at [14] and rejected both. [92] The finding at [14] that “having a dog is an ordinary and accustomed use” in the context of the Beaches CTS is unsupported by any evidence and contrary to rational decision making. Pets are clearly not an ‘as of right’ proposition at Beaches nor an incident of lot ownership or occupation. The 68 Justice Michael Barker, ‘Legal unreasonableness: Life after Li’ [2014] Fed J Schol 15, 16. 69 Azzopardi v Tasman UEB Industries Ltd [1985] 4 NSWLR 139, 157. 70 [1942] AC 130, 138. 71 Alltrans Express Ltd v CVA Holdings Ltd [1984] 1 All ER 685. 72 Gino Dal Pont, Law of Costs (Lexis Nexis Butterworths Australia, 3rd ed, 2013) [20.44]; citing Sanderson v Blyth Theatre Co [1903] 2 KB 533, 534-5. 73 Dal Pont ibid [20.31] citing Federal Commissioner of Land Tax v Jowett (1930) 45 CLR 115, 121. -- 19 of 23 -- 20 question whether and on what terms residents will be permitted to keep pets is entrusted by law to the body corporate. [93] Moreover, a plain reading of by-law 11.2 together with s 100(5) BCCM makes it clear that the only expectation a lot owner can reasonably have is that the body corporate will not unreasonably refuse permission to keep an animal on the CTS or impose overly onerous approval conditions. [94] While it is obvious that the adjudicator appreciated that it was for the respondent to demonstrate unreasonableness by the committee (and not the other way around)74 he nevertheless criticised the committee75 for not establishing that the dog smell was worse than body odour and rejected the proposition that concerns about the smell provided a reasonable basis for denying Marley access to Beaches.76 In doing so, he implicitly reversed the onus of proof. [95] Neither the reasonableness of the committee’s resolution nor the merits of its reasons was in issue; only whether it acted reasonably in reaching it was. In other words, the question was: what might a reasonable body corporate committee have done in the same situation? [96] A discretion is not legally wrong just because the arbitrator considers it to be unreasonable; that would make him, not the committee, the arbiter of what is (and isn’t) reasonable in the circumstances. Merely because he was not satisfied that the dog odour concerns were substantial does not make them so. The question was whether their bona fide, evidence-based concerns were nonetheless objectively unreasonable even if in the adjudicator’s view, they were exaggerated or specious. [97] The question for the adjudicator was not whether the dog is likely to cause an (actual or potential) nuisance, unduly interfere with the quiet enjoyment rights or merely pose an inconvenience to other residents but whether in making the decision to ban Marley altogether the committee acted reasonably in the circumstances.77 [98] The adjudicator was entitled to investigate the committee’s actions with a view to seeing whether it had failed to consider or acted on irrelevant collateral matters; but once that question was answered in favour of the committee its decision is unimpeachable unless “although (it) has acted within the four corners which (it) ought to consider (it) has nevertheless come to a conclusion so unreasonable that no reasonable (committee) could ever have come to it”,78 in which case it may be overridden for exceeding the statutory powers confided in it. 74 Beaches Surfers Paradise [2015] QBCCMCmr 497 [19]. 75 Ibid [15]. 76 Ibid [16]. 77 Tutton v Body Corporate for Pivotal Point CTS 33550 [2008] QCCTBCCM 12; cf Rhode Island [2012] QBCCMCmr 410 [36]. 78 Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223, 229. -- 20 of 23 -- 21 [99] The committee acted reasonably in the BCCM sense if a notionally reasonable committee faced with the same issue could (not would) have honestly and rationally reached the same conclusion on a proper consideration of all the available material.79 [100] A reasonable committee, in my opinion, would consider:  its proper legal requirements and its functions;  the source, purposes and limits of its discretion;  all the relevant circumstantial considerations;  arguments for and against permitting Marley as distinct from dogs or pets in general;  the likely future consequences or gravity of refusing or granting permission on both the applicant and the CTS including any precedent value of its decision either way;  the nature and extent of any infringement on the applicant’s rights, interests and reasonable expectations of the other pet loving residents;  the majority view;  the assessed magnitude and frequency of the risk that dog smells would adversely impact on the enjoyment rights of others;  whether the objections could be ameliorated (e.g. whether the perceived risks to rights and reasonable expectations of other CTS users could be reduced to the level of acceptability by affordable practical measures via imposition of conditions); and  practical ways of resolving the tension between the rival positions rather than reasons not to do so. [101] The committee appears to have gone out of its way to be transparent and accountable to residents. It acted on apparently reliable information from respectable sources and drew rational inferences both for and against the respondent. [102] There is nothing objectively unreasonable about the committee’s finding that the dog was too smelly to ride in the lifts with residents on hot days. There was a sufficiently cogent body of evidence supporting that opinion and there was direct evidence of past (and a distinct possibility of future) smelliness on a hot day. This gave rise to a genuine, logical and rational body corporate concern. [103] It is hardly unreasonable to give odour-based objections the most weight, irrespective of the degree of nuisance or disruptions they were likely to 79 Re Body Corporate for Viridian; Kjerulf Ainsworth & Ors v Martin Albrecht & Anor [2014] QCATA 294. -- 21 of 23 -- 22 cause. Nor was it irrational or unreasonable to prefer the majority over a minority in resolving the tension between rival rights and interests. [104] In its representative capacity, the committee was entitled to favour the status quo over change where opinions within the CTS were divided about its relative benefits. Merely that another committee might have reached the opposite view on exactly the same information does not make the view taken unreasonable. Nor does the fact that it happens to coincide with the body corporate’s preferred ‘no pets’ policy mean that it is arbitrary or in bad faith. [105] This case is an example of where honest disagreement about a contestable matter of fact or opinion was mistaken by the adjudicator for legal unreasonableness. Though correctly stated, the test was misapplied. It was not the arbitrator’s role to decide whether the resolution was reasonable by his standards. He did not have the prerogative of replacing his own opinion, standards, judgment or discretion for the committee’s,80 nor balancing the pros and cons. His process of reasoning is, therefore, marred by specific legal error and reveals that he impermissibly re-exercised the discretion the BCCM entrusted to the committee and not him. [106] If it is not a nullity because it was beyond power, the adjudicator’s determination has to be set aside for legal error. For these reasons, leave to appeal is granted and the appeal allowed. [107] That said, however, the committee could not properly exercise its discretion in line with BCCM demands without, at least, genuinely looking for ways of granting, as well as reasons for denying, permission. It was incumbent on the committee to adequately consider whether Marley’s visitations could be permitted on terms that reduced her smelliness on hot days to the level of acceptability rather than default to outright refusal.81 [108] Although the committee said it “can see no way in which a condition for the approval of a dog on level 25 could be devised to ensure (Marley’s) presence did not interfere unreasonably with the use and enjoyment of their lot for owners on levels 10 to 24 (and particularly) the owners on level 13”, treatment of the question was perfunctory at best and overly reliant on the dubious assumption that the respondent would probably not comply with reasonable conditions anyway. [109] The committee’s failure to adequately consider the question of reasonable odour-related conditions amounts to a failure to exercise its discretion82 and vitiates the resolution. Orders to be made [110] Once an error of law affecting the adjudicator’s decision is identified, the appeal tribunal may exercise the adjudicator’s powers and substitute its own 80 McKinnon v Secretary, Department of Treasury (2006) 228 CLR 423 [54], [131]. 81 cf Tahlia Court [2012] QBCCMCmr 209 [45]. 82 See Storie v Storie (1945) 80 CLR 597 (Latham CJ). -- 22 of 23 -- 23 decision based on the material before the adjudicator, consistent with the adjudicator’s undisputed findings of fact,83 but only where the resolution of the question of law decides the matter as a whole in the appellant’s favour and no other order could have been legally made by the arbitrator if the right question had been correctly answered in the first place. [111] Otherwise, the matter has to be remitted for reconsideration by either the adjudicator or the committee with the benefit of its decision on the question of law.84 [112] Given the BCCM’s emphasis on self-regulation and the nature of the discretionary error, I think the best course is for the matter to be remitted to the committee (as the repository of power) for reconsideration with the direction that it give genuine and adequate consideration to whether Marley could be permitted on the CTS on reasonable odour minimisation conditions rather than banned altogether.85 [113] Mandatory by-laws requiring an approved pet carrier to be used in lifts have been struck down by arbitrators as oppressive contrary to s 180(7) BCCM86 and potentially discriminatory. In this case, however (depending on the dog’s size and weight as well as the owner’s carrying capacity) a carrier requirement may nonetheless be the least worst, if not only viable, option. ORDERS 1. Leave to appeal is granted. 2. The appeal is allowed. 3. The matter is returned to the body corporate committee for Beaches Surfers Paradise for reconsideration of whether the dog should be permitted to visit the respondent’s lot, giving genuine and adequate consideration to whether the dog could be permitted on the CTS on reasonable odour minimisation and any other appropriate conditions. 83 Albrecht v Ainsworth & Ors [2015] QCA 220 [94]. 84 Ericson v Queensland Building Services Authority [2013] QCA 391 [22]; Albrecht v Ainsworth & Ors [2015] QCA 220 [94]; see HIA Insurance Services Pty Ltd v Kostas (2009) NSWCA 292 [19]. 85 Pursuant to s 294(1) BCCM, the appeal tribunal may make any order that could have been made by an adjudicator. Under s 276, an adjudicator may make an order that is ‘just and equitable’ in the circumstances. 86 Bayview Shores [2014] QBCCMCmr 294; Rhode Island [2012] QBCCMCmr 410. -- 23 of 23 --