Clarke v Turner Park Shopping Village Body Corporate [2016] QCATA 105

CITATION: Clarke v Turner Park Shopping Village Body Corporate [2016] QCATA 105 PARTIES: Gerard Clarke Nevenka Golc-Clarke (Appellants) v Turner Park Shopping Village Body Corporate (Respondent) APPLICATION NUMBER: APL202-15 MATTER TYPE: Appeals HEARING DATE: On the papers HEARD AT: Brisbane DECISION OF: Senior Member O’Callaghan Member Gordon DELIVERED ON: 10 May 2016 DELIVERED AT: Brisbane ORDERS MADE: 1. The adjudicator’s order dated 2 April 2015 in application 0949-2014 is set aside. 2. The application is referred back to the Commissioner for Body Corporate and Community Management for reconsideration. 3. It is directed that, if the application is referred by the Commissioner for adjudication, it shall be determined by a different adjudicator. CATCHWORDS: Body corporate and community management - whether body corporate acted reasonably – multiple reasons given for their decision – application to adjudicator – adjudicator found the body corporate’s major reasons were reasonable but made some errors in doing so – no finding as to relative importance of reasons – inevitable that appeal must be allowed and matter referred back to the commissioner -- 1 of 20 -- 2 Body Corporate and Community Management Act 1997 (Qld) ss 35(4), 94, 269, 276, 289(2), sch 5. Albrecht v Ainsworth & Ors [2015] QCA 220 Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321. Commonwealth Bank of Australia v Human Rights & Equal Opportunity Commission (1997) 150 ALR 1. Ainsworth & Ors v Albrecht & Body Corporate for Viridian Noosa Residences [2014] QCATA 294. APPEARANCES: This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (‘QCAT Act’). REPRESENTATION: APPELLANTS: Self-represented RESPONDENT: Michael Timothy de Waard (counsel) instructed by Mills Oakley Lawyers REASONS FOR DECISION [1] This appeal concerns signage at the Appellants’ lot in the Turner Park Shopping Village in Beerwah. [2] The Appellants have been trying in vain for several years to persuade the body corporate of the shopping village to permit them to erect new signs at their lot. [3] After the body corporate’s last refusal on 2 July 2014, the Appellants applied to the adjudicator for body corporate disputes under the Body Corporate and Community Management Act 1997 (Qld) (‘the Act’) seeking approval for their proposed signage. The adjudicator dismissed the application, and the Appellants now appeal to the Appeal Tribunal against the adjudicator’s decision. [4] In order to properly understand the issues arising in this appeal, it is necessary to set out the signage for which approval was sought, and the decisions made about that signage by the body corporate. The signage and the decisions made about them [5] The shopping village is a complex with 14 lots arranged in a U-shape. It therefore has two internal corners. Adjacent to each internal corner are covered sitting out areas with tables. This is common property. The Appellants’ lot is larger than most of the other lots, and was situated in one -- 2 of 20 -- 3 of the internal corners and therefore behind the sitting out area as one enters the complex. [6] In April 2013, the body corporate completed the replacement of the two canopies which covered the sitting out areas. On 17 March 2013, before the work was completed, the Appellants wrote to the secretary of the body corporate seeking approval to erect signs on the canopy outside their lot. They also sought approval to erect signs on common property at the front and rear of their lot. [7] The request was considered by the body corporate’s committee but was rejected on 26 April 2013. [8] The following stated reasons were given by the committee for rejecting the proposed signage on the canopy: 1. The proposed signage is not in the general keeping of other signage in the complex and, in the opinion of the committee, is considered to present a negative impact on the general visual amenity of the complex. 1 2. The shade structures were intended to act as covered areas for seating and not as advertising devices for individuals to benefit from. If signs were to be added to these structures sometime in the future, it is the committee’s opinion that the area would be best served in advertising the name of the complex on these common areas rather than discrete businesses.2 [9] The other signs for which the Appellants sought approval were: (a) a fascia board sign below the awning in front of their shop; and (b) two façade signs just under the guttering on the outside walls at the back of their lot. [10] Approval for these signs was refused for the following stated reason:- The Body Corporate has declined to approve your fascia signage as, together with your approved roof top signage of 5.385 square metres, your proposed fascia signage of 7.032 square metres, is in excess of your allocation of 6 square metres of signing for your three entitlements. [11] The reference here to an allocation of 6 square metres was to a statement in a letter from the Sunshine Coast Regional Council to that effect.3 This is dealt with in ground of appeal (2) below. [12] The Appellants asked the committee to reconsider this decision and made submissions about this in a letter dated 26 April 2013. The committee met on 6 May 2013 and again declined to approve the signage, stating that it was for the same reasons as before. 1 Committee response to Lot 4 application dated 23 April 2013 [1]. 2 Ibid [3]. -- 3 of 20 -- 4 [13] The Appellants instructed solicitors who wrote to the body corporate on 28 May 2013 and then the Appellants asked the body corporate to consider the matter at its annual general meeting to be held on 21 October 2013. The motion was put to the meeting but was lost. [14] The Appellants made a further request for the matter to be reconsidered by the body corporate in July 2014. The committee decided on 14 July 2014 to refuse approval. No reasons were given to the Appellants at that time. [15] A document dated 16 July 2014 explaining the reasons for the decision made on 14 July 2014 was provided to the Appellants during conciliation. This stated the following: (a) The request is inconsistent with the advertising signage as was put in place at the time of the construction of the centre in 1996. The original fascia advertising as shown in the applicant’s original application of 17 March 2013, was of discreet generic signage, e.g. “TV VIDEO REPAIRS” designed to be read within the centre and not specific large advertising aimed at passing road traffic. (b) The fascia and façade signage contemplated by Lot 4, has not been detailed so cannot be compared with other advertising signage of other past and present lot owners and/or their tenants. (c) The owners of Lot 4 do not operate a business at Turner Park Shopping Village, so the corner roof structures have no effect on their ability to advertise any business which they may operate at another site. The Body Corporate will only approve advertising pertaining to businesses operating within Turner Park Shopping Village. (d) The Body Corporate has considered only the construction of the corner roof structures. The concept of signage on the structures has never been considered by the Body Corporate. (e) The committee refers the applicants to the committee’s reasons for not approving the original application, 17 March 2013. Excessive advertising signage applied for, will have an adverse effect on the amenity of the centre. (f) Approval of such signage would disadvantage other lot owners’ or their tenant’s use of or enjoyment of their premises. Lot 4 has roof- top signs of 5,385 m2 approved and erected. Lot 4 signage entitlement is 6 m2. Lot 4 is asking for approval of a further 8.442 m2 of signage, which will be highly visible from Peachester Road or Turner Street, to be approved by the Body Corporate. If approved this would disadvantage by depriving the owner’s or tenant’s of 4 entitlements of their right to advertising within their lot. (g) After repeated requests no signage details were provided by Lot 4.4 4 Appellants’ adjudication application, document 14 entitled “Explanation of Committee’s decision”. -- 4 of 20 -- 5 [16] Paragraph (d) above was in answer to the Appellants’ argument that when the body corporate decided to erect the canopies it was contemplated and agreed at that time that they would carry advertising. [17] In its submissions to the adjudicator, the body corporate provided a different version of its reasons for refusing approval for the signage in April 2013.5 This added an additional reason for refusing the proposed signage on the canopy: Unfortunately the proposed signage will impact on future potential plans to extend or modify the shade structures for which complaints have been received about the effectiveness of the structures to serve their primary purpose. Attachment of signs to these structures could impede potential future work to extend the covered areas to something more usable. Consideration is also being made to enclosing parts of the shade structures in question and as such the area where the signage is proposed would be required for the covering.6 [18] In the submissions to the adjudicator, the body corporate added the following reasons for refusing approval to the reasons already given:- …(after the Annual General Meeting of 21 October 2013 had rejected the application for signage approval) the Committee could not take any further action as the motion in relation to the fascia signage was defeated at a General Meeting of the members of the Body Corporate…7 …the request for fascia signage was not consistent with other advertising found in the centre…8 [19] Overall therefore, the body corporate gave multiple reasons, ten or eleven, for refusing approval for the signage applied for. The adjudication application and response [20] In the adjudication application, the Appellants claimed that the body corporate had not acted reasonably in refusing approval for the signage. One of the grounds put forward was that its decisions about signage and other erections on some of the lots had been inconsistent. The Appellants referred to conditions about engineering certification, building approval and insurance which had been imposed on them but which had not been imposed on others, including those who were officers and members of the committee and that approvals had been given for those officers and members. So they claimed that the committee had been biased against them. 5 Committee response to Applicants dated 23 April 2013 attached as Exhibit 1 to Response of the Body Corporate dated 10 December 2014. 6 Ibid. 7 Response of the body corporate dated 10 December 2014 page 3. 8 A rather wider “consistency” point than was made in the earlier reasons given. -- 5 of 20 -- 6 [21] The Appellants referred to defamation proceedings which they had commenced against the chair of the body corporate following a letter written by the chair to the local government authority. They said that these proceedings had been resolved by the payment of a “substantial amount of money to us” and an unequivocal apology and retraction. Because of this and other matters they said the chair “bears a considerable degree of animosity towards us which adversely affects his ability to act fairly or reasonably in his dealings with us and requests that we make to the body corporate from time to time”. [22] In response, the body corporate disputed many of the points made by the Appellants and denied bias. The adjudication process [23] The governing law is the Body Corporate and Community Management Act 1997 (Qld). This Act contains comprehensive dispute resolution provisions to deal with disputes arising in the context of community titles schemes.9 A party wishing to pursue a dispute within the definitions must use the dispute resolution procedures established by the Act.10 In most cases, a party must first try to resolve the matter informally or by using the community title scheme’s body corporate processes.11 If this fails, then a party may apply to the commissioner of body corporate and community management. This might result in attempted resolution by conciliation or mediation, or resolution by adjudication. In some types of disputes a party may go straight to the Queensland Civil and Administrative Tribunal (‘QCAT’).12 [24] In this matter, the Appellants having tried to deal with the dispute as required by the Act and having also made a conciliation application to the Commissioner, made an adjudication application to the commissioner seeking permission to erect their signage. The commissioner referred the application to be dealt with by a department adjudicator. [25] The adjudicator was obliged by s 269 of the Act to investigate the application to decide whether it would be appropriate to make an order on the application. When investigating the application, the adjudicator as per s 269(3) of the Act: (a) must observe natural justice; and (b) must act as quickly, and with as little formality and technicality, as is consistent with a fair and proper consideration of the application ..; and (c) is not bound by the rules of evidence. 9 See, e.g., s 227 of the Act (definition of ‘dispute’); s 228 of the Act (purpose of dispute resolution provisions). 10 Except for debts which can be claimed in any court or tribunal with jurisdiction – see, e.g., s 229A of the Act. 11 The Act s 238. 12 See, e.g., sch 6 of the Act (definition of ‘complex dispute’). -- 6 of 20 -- 7 [26] By s 276(1) of the Act, the adjudicator may make an order that is just and equitable in the circumstances to resolve the dispute. [27] In addition to this general description of the orders which can be made, in schedule 5 of the Act there is a list of specific orders which can be made. Some of these contain the tests which need to be applied before an order listed in the schedule can be made. The question of reasonableness and burden [28] It is important to note that the adjudicator reached her conclusion on the basis that in order to be able to change the decision made by the body corporate: (a) she had to be satisfied that the body corporate had acted unreasonably; and (b) the Appellants had the burden of showing that this was the case. [29] In this appeal, the Appellants do not question whether the adjudicator applied the correct tests here. As for limb (a) in paragraph 28, reasonableness was mentioned in the by-law which applied to approvals for signage on common property: 13(c) A proprietor or occupier of a lot shall not, except with the consent in writing of the Body Corporate, display any sign, advertisement, placard, banner, pamphlet or like matter in or about the common property provided that such consent shall not be unreasonably withheld to the using or exhibiting of any advertisement or sign customary and/or incidental to the occupier’s type of business. [30] In that by-law, whether or not the body corporate must act reasonably when considering approval depends on whether the sign is customary and/or incidental to the occupier’s type of business. In this matter there was a dispute between the two sides as to whether the Appellants were occupying the lot as a business. Whether or not the “shall not be unreasonably withheld” test applied, depended on resolution of that issue. [31] As the adjudicator pointed out,13 by s 94 of the Act, irrespective of the answer to the occupation issue, the body corporate must act reasonably when performing its obligation to administer the common property and its assets, when enforcing any by-laws and the community management statement, and when carrying out its functions under the Act and under the community management statement. [32] Because of the importance of s 94 of the Act to this appeal, we set it out in full: 94 Body corporate’s general functions 13 Decision of Adjudicator Rosemann dated 2 April 2015 [23] - [30]. -- 7 of 20 -- 8 (1) The body corporate for a community titles scheme must— (a) administer the common property and body corporate assets for the benefit of the owners of the lots included in the scheme; and (b) enforce the community management statement (including enforcing any by-laws for the scheme in the way provided under this Act); and (c) carry out the other functions given to the body corporate under this Act and the community management statement. (2) The body corporate must act reasonably in anything it does under subsection (1) including making, or not making, a decision for the subsection. Examples for subsection (2) of a body corporate making a decision— • passing a motion by resolution at a general meeting or a committee meeting • not passing a motion after a vote at a general meeting or a committee meeting • owners of lots included in a specified two-lot scheme entering into a lot owner agreement for the scheme (see section 111E(2)) • owners of lots included in a specified two-lot scheme failing to enter into a lot owner agreement follow [33] This is therefore a statutory requirement for the body corporate to act reasonably irrespective of what is said in its by-laws. [34] On the question of reasonableness, Justice Margaret McMurdo P in Albrecht v Ainsworth & Ors (with whom the other members of the court agreed) said at [84]:14 .. views as to what was reasonable or unreasonable involved value judgments on which there was room for reasonable differences of opinion, with no opinion being uniquely right. [35] This shows that different body corporates could react in quite different ways to the same circumstances, yet each of the reactions could be reasonable and satisfy the obligation to be reasonable under s 94 of the Act. Effectively therefore, there could be a band of reasonable reactions to any set of circumstances. [36] This brings limb (b) of paragraph 28 – the burden of proof - into sharp focus. It is clear that the correct test for adjudicators in dealing with 14 [2015] QCA 220. -- 8 of 20 -- 9 reasonableness is that the applicant has the burden of showing the adjudicator that the body corporate acted unreasonably.15 [37] The two principles combined therefore mean that for s 94 unreasonableness,16 an application will not succeed unless the applicant can show that the body corporate acted in a way which was outside the band of reasonable reactions to the circumstances. The nature of the available appeal [38] This appeal is against the adjudicator’s decision to dismiss the application for permission to erect the signage. By s 289(2) of the Act, such an appeal can only be on a question of law. This means that the Appeal Tribunal cannot enquire into whether the adjudicator was correct in her findings of fact. If there was no evidence for an important finding of fact, or if a finding of fact had been reached by inference which could not reasonably be drawn, then that would be an error of law.17 [39] Not considering evidence which may be material, applying the wrong legal test, not awarding procedural fairness and inadequacy of reasons are also capable of being errors of law. [40] For the purpose of this appeal, it is important to note that a finding whether a decision is reasonable or unreasonable is a finding of fact.18 Grounds of appeal [41] In his submissions, Mr de Waard, Counsel for the Respondents, has helpfully taken the Appellants submissions and recast them into six grounds of appeal. In their reply, the Appellants appear to have adopted and argued the grounds as recast, so it is convenient for the Appeal Tribunal to regard the appeal as being made on these six grounds. [42] The grounds of appeal as recast and referring to the Act are:- (1) the adjudicator erred in law by not properly interpreting and applying s 94(2) of the Act in respect of the body corporate acting reasonably and not approving our signs; (2) the adjudicator erred in deliberation and determination of the council’s laws; (3) the adjudicator erred in the presentation of the distribution of signage; 15 Albrecht v Ainsworth & Ors [2015] QCA 220 at [92]. 16 That is to say in a case where no other statutory tests must be applied, for example the “no opposition which was unreasonable” test in Item 10 of Schedule 5 of the Act which applies in the case of motion which can only be passed without dissent. 17 Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 356. 18 Albrecht v Ainsworth & Ors [2015] 220 at [82]. -- 9 of 20 -- 10 (4) the adjudicator erred in the interpretation of s 35(4) of the Act; (5) the adjudicator erred in finding that the Respondent did not act unreasonably in regard to the visual amenity; and (6) the adjudicator erred in failing to recognise bias against the Appellants. Appeal ground (1): error of law in interpreting s 94(2) of the Act [42] In paragraphs [31] to [37] of her reasons for decision,19 the adjudicator set out her understanding of the correct test to apply to determine the question of reasonableness. She said: [32] The question of whether the body corporate has acted reasonably is not a simple one and there is no mechanical test or formula to be applied. The question is not whether the decision was ‘correct’ but whether it is objectively reasonable.15 What is reasonable is a question of fact, based upon a consideration of all relevant matters in the circumstances of each case. 15 Commonwealth Bank of Australia v Human Rights & Equal Opportunity Commission (1997) 150 ALR 1 at pp34, 38 [43] There can be no objection to this statement of the test to apply. [44] However, the adjudicator then said:20 [33] In a recent decision16 the Queensland Civil and Administrative Tribunal (QCAT) explored the question of ‘reasonableness’ in detail. Tribunal Member Mr Roney QC reviewed the various approaches to, and applications of, the test of reasonableness in a number of different decisions before setting out what he considered is the correct approach. [34] Mr Roney said that one should examine whether any of the reasons for opposing the motion can be recognised as reasonable, even if there are a number which are unreasonable, the conduct of the body corporate will nevertheless be reasonable. According to Mr Roney QC, “there is no balancing exercise to decide whether overall, the reasonable explanations outweigh the unreasonable ones“.17 16 Ainsworth & Ors v Albrecht & Body Corporate for Viridian Noosa Residences [2014] QCATA 294 17 Ainsworth & Ors v Albrecht & Anor, op cite at para 85 [45] The italics in paragraph [34] are those of the adjudicator. If the adjudicator relied on the excerpt from Ainsworth & Ors v Albrecht21 set out in paragraph [34] above, there is a difficulty. Whilst it is correct to say that the reasonableness test in Ainsworth was ultimately whether the body corporate had complied with its s 94 of the Act obligation to act reasonably, 19 Decision of Adjudicator Rosemann dated 2 April 2015. 20 Decision of Adjudicator Rosemann dated 2 April 2015 [34]. 21 [2014] QCATA 294. -- 10 of 20 -- 11 the manner in which it was required to act reasonably was quite different in that case from this one. Ainsworth was a case where a lot owner wished to combine and extend decks at the front of his lot. This required a general meeting to pass a motion to amend the Community Management Statement. Such a motion had to be passed without dissent. [46] This therefore came within item 10 of schedule 5 of the Act. By s 276(3) of the Act, schedule 5 lists some of the orders which an adjudicator can make. Item 10 schedule 5 of the Act provides: 10 If satisfied a motion (other than a motion under section 47A for the adjustment of contribution schedule lot entitlements, or a motion for reinstatement of scheme land or termination or amalgamation of the scheme) considered by a general meeting of the body corporate and requiring a resolution without dissent was not passed because of opposition that in the circumstances is unreasonable – an order giving effect to the motion as proposed, or a variation of the motion as proposed. [47] Item 10 covers a case where body corporate members have a veto. It provides that if a veto has defeated the motion concerned, the adjudicator can make an order giving effect to the motion if satisfied that the veto was unreasonable. [48] In the excerpt of his decision set out in paragraph [34] of the adjudicator’s decision,22 Mr Roney QC put it the other way round. He said that if any veto was reasonable, then the adjudicator cannot be satisfied under item 10 and the result is that the body corporate has acted reasonably. In other words, the rejection of the motion must stand. Mr Roney QC made it clear in paragraph [85] of his decision that the principles he was setting out applied to deciding whether the body corporate was acting reasonably in rejecting a motion required to be without dissent.23 [49] In our view, if the adjudicator did apply the test set out in paragraph [34] of her decision, then she was wrong to do so because of the influence of item 10 on the test which does not apply to the subject matter in this case. It is incorrect to say in this case that if any known reason of the body corporate was reasonable then overall the body corporate acted reasonably. We are not saying that this will never apply. For example, there could be one overwhelmingly important reason for a decision which outweighed many much less important reasons. In such a case it might be justified to concentrate on the overwhelmingly important reason. The test is whether, overall, taking all the circumstances into account, the body corporate acted reasonably. [50] Did the adjudicator apply the test set out in paragraph [34] of the decision?24 Counsel for the body corporate suggests that she did do so.25 22 Decision of Adjudicator Rosemann dated 2 April 2015. 23 Ainsworth & Ors v Albrecht & Body Corporate for Viridian Noosa Residences [2014] QCATA 294. 24 Decision of Adjudicator Rosemann dated 2 April 2015. 25 Respondent’s submissions filed 24 February 2016 [30], [33]. -- 11 of 20 -- 12 [51] Some parts of the reasons for decision suggest that she did not do so, for example the concluding paragraph at [67].26 And in paragraph [37] she said: [37] A plethora of issues have been raised by the parties. I will not attempt to discuss every point. However I will consider the main reasons for refusing permission for the signage and assess whether the applicants have established that those reasons are not rational or justifiable.27 [52] The adjudicator then went on to consider the main reasons under the following headings:- (a) Local government requirements (this was the signage limit of 6 square metres issue); (b) Distribution of signage allocation (this concerned how the overall signage limit for the whole complex should be shared between lot owners); (c) Signage for occupiers (this concerned whether it was reasonable to for the body corporate to take into account whether or not the Appellants were in occupation of the lot); (d) Visual amenity; and (e) Alleged bias and inconsistency.28 [53] On each of these reasons the adjudicator found that the body corporate had acted reasonably so this suggests that she did not apply the test in paragraph [34]. Had she done so, she could have stopped after dealing with (a). [54] But it is of concern that the adjudicator having set out the test in paragraph [34] did not then say that it did not apply to this particular case. And she did italicise part of that paragraph which suggests she considered that part, at least, to be particularly important. [55] The way the adjudicator dealt with issue (c) suggests that she could have applied the test in paragraph [34], because she decided not to consider whether it was reasonably open to the body corporate to decide that the Appellants were not in occupation. We refer to this in more detail when dealing with appeal ground (4) below. [56] The way the adjudicator dealt with issue (e) seems to confirm that she did apply the test in paragraph [34]. She said at paragraph [62] as one of the reasons for rejecting the bias argument: As outlined above, it seems to me that the Body Corporate has identified rational grounds for refusing the request and the applicants have not substantiated that none of these grounds were reasonable.29 26 Decision of Adjudicator Rosemann dated 2 April 2015. 27 Ibid. 28 Ibid 6–9. 29 Decision of Adjudicator Rosemann dated 2 April 2015. -- 12 of 20 -- 13 [57] This passage suggests that the adjudicator was expecting the Appellants to show that all the grounds relied on by the body corporate were unreasonable. If so, this is not the correct test. [58] We refer to issue (e) in more detail when dealing with appeal ground (6) below. Appeal ground (2): error concerning the council’s laws [59] This concerns a letter written by a technical compliance officer of the Sunshine Coast Council to the body corporate on 9 June 2011, following an audit of the signage in the complex. The letter stated that the maximum sign face area for the whole complex was 60 square metres, that the existing pylon sign was 24 square metres, so that the balance of available sign face area for all the lots was 36 square metres. The letter also stated that each lot (being one twentieth of the whole complex) was entitled to 2 square metres of signage. The letter stated that since this came to 40 square metres of signage the body corporate would need to reduce this entitlement to 36 square metres to avoid going over the amount available for the whole complex after the pylon sign was taken into account. The letter required the removal of some signs or an application for their approval, to avoid show cause and infringement notices being issued. [60] The body corporate had relied on this letter in calculating the maximum signage area to which the Appellants were entitled, which they said was 6 square metres since they owned three lots. [61] Before the adjudicator, the Appellants contended that the body corporate was not entitled to rely on this letter to calculate the maximum signage area to which the Appellants were entitled, because in fact there was nothing in the council laws that limited any particular owner to a particular signage area. Further, they contended that the letter had understated the collective available signage. [62] The adjudicator decided that it was beyond her role to interpret the policies and requirements of the local government authority or to determine the validity of the information provided by the officer who wrote the letter. She noted however, that it was unclear whether the Appellants had challenged the contents of the letter with the council.30 [63] The adjudicator then considered whether it was reasonable for the body corporate to rely on the contents of the letter when making decisions about signage, in particular the decision about the approval for the Appellants’ signage. She found that there was nothing to show that the advice in the letter had been changed or found to be wrong. She decided that is was “entirely appropriate” for the body corporate to rely on it, indeed that it would be unreasonable not to do so. [64] The Appellants challenge the adjudicator’s finding on the basis that the council’s letter was wrong, that the body corporate knew it was wrong and intentionally relied on it in order to refuse the signage approval. 30 Ibid [42]. -- 13 of 20 -- 14 [65] The difficulty with this challenge is that the adjudicator stated that the Appellants had not convinced her that the body corporate had not acted in good faith and in genuine reliance on the letter.31 This finding cannot be challenged in this appeal because such a challenge would be an appeal against a finding of fact, and not an appeal on a question of law. [66] The Appellants also challenge the adjudicator’s finding by saying that she was wrong not to look into the legal basis for the council’s letter and that if there was any information from the Appellants which was missing she should have asked for that information. [67] The difficulty with this challenge is that the question posed by the adjudicator was whether the body corporate acted reasonably in relying on the council’s letter, and she answered this affirmatively. Again this is a finding of fact. The Appellants argued that if the body corporate had investigated the council’s laws it would have found no basis for what was said in the letter about the maximum signage per lot. The body corporate did not carry out that investigation. By implication, the adjudicator decided it was reasonable for the body corporate not to do so, because the body corporate was entitled to rely on the letter. This again, was a finding of fact. [68] As for asking the Appellants for any missing information concerning this issue, we do not think the adjudicator was alerted to any further information which may have been available and which could have changed the decision made. The Appellants’ case on this issue was that there was nothing in the council laws limiting a lot owner to a particular amount of signage. Having decided that the body corporate was reasonable to rely on the letter there was no reason for the adjudicator herself to investigate whether or not the information in the letter was correct. It would have made no difference to the adjudicator’s decision if she had received any further information showing that the letter was incorrect. Appeal ground (3): distribution of signage [69] This relates to the manner in which any totally available signage should be distributed between owners of lots. [70] Before the adjudicator, the Appellants argued that the total signage area used by the complex was less (by 12.2 square metres) than the total available to the complex under council laws (based on the street front boundary length). Therefore because of this spare capacity, it would have been reasonable for the body corporate to give approval to the Appellants’ application. [71] The body corporate submitted to the adjudicator in answer, effectively, that it preferred to share out the available signage between the lot owners and that the Appellants were limited to their 6 square metres on this basis. If they approved the signage requested it would take the Appellants well over this amount. [72] The adjudicator found that the Appellants were seeking a further 8.44 square metres of signage which if approved would give them 13.8 square metres, which would be over 38% of all the signage area available to all 31 Decision of Adjudicator Rosemann dated 2 April 2015 [43]. -- 14 of 20 -- 15 lots, despite the fact that they owned only 3 of the total of 14 lots. The adjudicator considered that it would be unreasonable for the body corporate to grant approval for the signage requested in these circumstances, particularly when there was or could in the future be, competition between the lots for the available signage space. Approval to the Appellants could therefore disadvantage other lots. [73] The Appellants challenge this decision as wrong on the facts. They say that the adjudicator started with the wrong total signage area for the complex street front boundary length. They say this was either calculated incorrectly by the council (in its letter of 8 June 2011) or it was not really a maximum at all but merely an “outcome criterion”. They also disagree with the adjudicator’s finding that they have applied for any more signage area than others. [74] The difficulty with this challenge is that it is an attempt to re-argue what has already been decided as a fact by the adjudicator. The adjudicator’s approach to the figures is not glaringly wrong, since she relied on the total available signage as calculated by the council based on the street front boundary length which was a reasonable thing to do, and the concept (adopted by the adjudicator) that the remainder of the available signage should be kept available and shared between the lots is also reasonable. Appeal ground (4): s 35(4) of the Act [75] Subsection (4) of s 35 of the Act states: (4) If the occupier of a lot is not the lot’s owner, a right the owner has under the Act to the occupation or use of common property is enjoyed by the occupier. [76] The Appellants say that the adjudicator considered that s 35(4) of the Act meant that the owner’s rights to the common property were extinguished if the owner lets the lot to another entity and this was an error of law. [77] Referring to s 35(4) of the Act, the adjudicator said at paragraphs [53] to [57]:32 [52] The applicants assert that the question whether they occupy the premises is not relevant to the question of the allocation of the signage space. However I consider it is very relevant. [53] Where there is a limit on the external signage capacity of the scheme, and particularly where there is dissent as to how the limited capacity should be shared amongst occupiers in the scheme, I see nothing unreasonable about restricting the allocation of signage to businesses that are actually operating from the premises. However there is a more fundamental principle to consider here. [54] I note that section 35(4) of the Act provides that if the occupier of a lot is not the lot’s owner, a right under the Act for an owner to occupy or use common property is enjoyed by the occupier. Prima facie, then, the right to use the common property to display signage only exists for the occupier of the lot. 32 Decision of Adjudicator Rosemann dated 2 April 2015. -- 15 of 20 -- 16 [55] If the applicants have leased their lot to a tenant, it is the tenant who would be entitled to the use of common property for signage. The applicants would arguably have no right to the use or enjoyment of common property, including to place signage. [56] When a business is no longer operated from the scheme, arguably the signage for that business should be removed. If any person, whether a non-occupying owner or any other person wanted to put signage on the common property, I would suggest that this would require a lease over common property between the person and the Body Corporate.19 [57] The applicants provide conflicting and imprecise information as to whether they are currently occupying Lot 4 and operating their business from that lot, variously saying that they do not currently occupy the lot and were leasing it until recently while also refuting that they do not operate their business at TPSV. In the circumstances I do not consider it necessary for me to investigate this point. However I do consider that it is a relevant consideration for the Body Corporate in allowing or deciding any request for approval of signage. 19 section 161 of the Standard Module [78] The adjudicator expressly found that one of the body corporate’s reasons for refusing the permission for signage was it could only approve signage for businesses operating at the scheme.33 In paragraphs [52], [53] and [57] of her decision, the adjudicator found that this was a relevant consideration for the body corporate.34 We agree. [79] The body corporate however, made a decision that the Appellants were not operating a business from the premises. This decision was one of the bases on which the body corporate decided to refuse approval. It was necessary for the adjudicator to consider whether the body corporate’s overall decision here was one that it could reasonably make and the adjudicator expressly did not do so. Instead, in paragraph [57] the adjudicator decided it was not necessary to resolve the issue.35 This is despite having decided in paragraph [52] that the issue was “very relevant”. [80] The “fundamental principle” referred to in paragraph [53] was, it seems, the legal effect of s 35(4) of the Act upon the owner’s rights to common property when not in occupation.36 It appears that the adjudicator decided that the owner’s rights to common property were extinguished if the owner was not occupying the lot. But the adjudicator does not then say, having reached that conclusion, how it affects the reasonableness of the body corporate’s decision. [81] In this appeal, the Appellants say that the adjudicator’s decision about the legal effect of s 35(4) of the Act is wrong. We do not think we need to decide this in order to resolve the appeal because we do not think that the 33 Decision of Adjudicator Rosemann dated 2 April 2015 [5]. 34 Decision of Adjudicator Rosemann dated 2 April 2015. 35 Ibid. 36 Ibid. -- 16 of 20 -- 17 adjudicator’s discussion about the legal effect of s 35(4) of the Act formed any basis of her decision whether it was reasonable for the body corporate to have regard to whether the applicant seeking approval for signage was operating a business from the scheme. [82] However, what is missing here is any consideration by the adjudicator as to whether the body corporate’s decision that the Appellants were not in occupation of the lot, and therefore its decision to refuse approval for signage for that reason, was reasonably open to it to make. [83] We think this was an important step in the reasoning which was omitted, and which therefore amounts to an error of law. Appeal ground (5): visual amenity [84] The Appellants contend that the adjudicator should have found that the body corporate was unreasonable in deciding that the proposed signage was not in keeping with other signage in the complex and would impact negatively on the general visual amenity of the scheme. [85] The adjudicator considered the Appellants’ argument that decisions about visual amenity were subjective, the proposed signage was in fact consistent with previous signage which was there when they purchased, and was in keeping with current signage. Whilst accepting that a decision on this question could be subjective, the adjudicator was not satisfied that the Appellants had shown that the body corporate had raised an irrelevant or baseless consideration.37 [86] In this appeal, the Appellants repeat these contentions. [87] The Appellants also point out, however, that the adjudicator ignored their evidence of past and present consistent signage. They refer to these paragraphs in the reasons for decision:- [59] The applicants argue that the signage proposed is consistent with signage that was previously in existence when the scheme was constructed and when they purchased. The Body Corporate asserts that the original fascia signage was generic and discreet. The applicants have provided no evidence to support their claims but in any event the fact that the proposed signage is consistent with signage in the past does not mean that it will not have a visual impact if it is not in keeping with the other signage in the scheme. [60] The applicants also argue that their proposal is in keeping with other current signage. No evidence is provided by either side in this regard, beyond personal opinions. I accept that visual amenity is a relevant consideration for the Body Corporate, albeit that this can be a subjective consideration. I am not satisfied that the applicants have discharged their onus of providing that the Body Corporate has raised an irrelevant or baseless consideration.38 37 Decision of Adjudicator Rosemann dated 2 April 2015 [60]. 38 Decision of Adjudicator Rosemann dated 2 April 2015. -- 17 of 20 -- 18 [88] The Appellants point out that they provided a photograph of a past sign similar to that which they wanted to place below the awning in front of their lot. This was a photograph taken in 2003 of a sign which was approved in 1996.39 [89] The Appellants also point out that they provided a photograph of a current sign similar to that which they wanted to place below the awning in front of their lot.40 [90] The passages above show that these photographs were missed by the adjudicator. Unfortunately neither of them were specifically referred to in the Appellants’ submissions to the adjudicator which probably explains why they were missed. For the purposes of this appeal we have to decide whether they were of such relevance that the adjudicator’s conclusion on this issue (or other issues) may be flawed or otherwise that the Appellants were denied natural justice to an extent sufficient to allow this appeal. [91] When considering relevance we note that the adjudicator stated that consistent past signage does not mean that the signage would not have a visual impact not in keeping with the other signage in the scheme.41 If the Appellants could show a change of policy towards signage however, the reasonableness of such a change could be relevant. It is much more difficult to say that a photograph of a current sign similar to the one that the Appellants wished to erect has no relevance. Its existence might require the body corporate to explain the reasonableness of what appears to be inconsistency in its decision making. [92] Both these photographs were specifically brought to the attention of the body corporate by the Appellants when they applied for approval for their signs. They were attached to the letter in which they sought approval. The body corporate was obliged to act reasonably when considering whether, if there was inconsistency, there was a good reason for it. [93] There was a further photograph which in this appeal the Appellants say was missed by the adjudicator. This was of lighting on the fascia board and roof of lot 1 which the Appellants said showed that the body corporate was not against signage in those areas.42 The adjudicator was specifically referred to this photograph in the Appellants’ reply to the body corporate’s submissions. It is unclear whether the adjudicator had regard to this photograph. [94] One of the main points made by the Appellants was that the body corporate’s decision had been inconsistent and this demonstrated bias. In our view, the photographs which were missed by the adjudicator were relevant to that issue as well as the issue about visual amenity. Because at least two potentially relevant photographs were missed, the adjudicator was not in the correct position to consider this issue. We also think this was 39 Appellant’s submissions dated 11 October 2014 attachment 3 page 6-6 entitled ‘Pic 2’. 40 Appellants submissions dated 11 October 2014 attachment 3 page 5-6 entitled ‘Pic 1. 41 Decision of Adjudicator Rosemann dated 2 April 2015 [59]. 42 Attachment 17 to the Appellants’ reply to the submissions of the body corporate enclosed in a letter to the Adjudicator dated 23 January 2015. -- 18 of 20 -- 19 a denial of natural justice, albeit an inadvertent one. These were errors of law and we must allow the appeal on this ground. [95] The Appellants also under this ground of appeal seek to challenge an amendment to by-law 13 passed by the body corporate at a general meeting on 26 October 2014. The adjudicator rightly decided that this was not relevant because the application for approval was to be tested under the by-law as it existed at the time the application was made. The change in the by-law however, might be relevant when considering the correct order to make under s 276 of the Act, which requires the order to be “just and equitable in the circumstances”. Appeal ground (6): failing to recognise bias against the Appellants [96] The adjudicator recognised that the Appellants were arguing that the body corporate had been biased and inconsistent, and identified “obvious interpersonal conflict” and a “history of dispute in the scheme”.43 [97] It is probably inevitable that interpersonal conflicts will develop in some cases, and when this does happen, members of the body corporate need to try to put them to one side and try to be objective in the decision making process. [98] Sometimes there may be ways to avoid such interpersonal conflicts from having an impact on decisions made, by for example delegating the decision to an independent sub-committee or assessor for later ratification by the full committee or general meeting as required. [99] And as the adjudicator pointed out, recourse can be had to the office of the commissioner for body corporate and community management if it is thought that the wrong decision was made because of bias.44 [100] The Appellants presented the adjudicator with their evidence and arguments about bias, which included a number of other decisions and actions concerning the common property and evidence which the Appellants said showed inconsistency. [101] One of the allegations of inconsistency was the fact that when in 2010 the members of the body corporate discussed the replacement of the two canopies in the complex, the Appellants at that time proposed a design for the canopies which would enable advertising on the fascia board. These were the designs that were approved for construction by the body corporate in its general meeting. The Appellants’ application for approval for signage upon these canopies followed that design but when refusing approval the body corporate said that the canopies were not intended for advertising at all. The Appellants case was that this change of position demonstrated bias and inconsistency. The adjudicator resolved this issue by finding that if the general meeting had intended to permit advertising on the canopies when passing the motion there was no basis to suggest that the meeting was agreeing to the extent of the signage now proposed by the Appellants.45 43 Decision of Adjudicator Rosemann dated 2 April 2015 [62] - [66]. 44 Ibid [64]. 45 Decision of Adjudicator Rosemann dated 2 April 2015 paragraph [66]. -- 19 of 20 -- 20 This means that the adjudicator did not consider the reasonableness of this change of position which was the real question to be decided. [102] We think also, there is a difficulty with the adjudicator’s reasoning when rejecting the bias allegations. Whilst identifying the potential for bias because of past events and conflicts, the adjudicator decided that this had not affected the body corporate’s decision about the signage. The adjudicator’s reasoning appears to be that the body corporate’s decision was not arbitrary or unfounded but instead was reasonable, and therefore there was nothing to show that the conflicts had resulted in a different decision having been made.46 [103] The difficulty with this is that where there are a range of reasonable decisions which a body corporate could make, there is scope for making a decision adverse to particular applicants yet the decision can still appear to be objectively reasonable. The question should be whether the effect of any bias made the body corporate’s decision unreasonable. This can’t be answered by saying that there was no bias because the decision was reasonable and since there was no bias the decision was reasonable. [104] We think therefore on this ground also, the appeal succeeds. Conclusion [105] The appeal succeeds on grounds (1), (4), (5) and (6). In the absence of any finding by the adjudicator as to the relative importance of the reasons put forward by the body corporate which she dealt with in her decision, we have no means of knowing whether if she had not been in error she would still have reached the same conclusion or reached a different one. So we are not in a position to be able to affirm the decision or substitute a different decision. [106] In the circumstances we have no alternative but to set aside the adjudicator’s order and refer the matter back to the Commissioner for reconsideration. Also we think that if the matter is referred by the Commissioner for adjudication it should be dealt with by a different Adjudicator. 46 Decision of Adjudicator Rosemann dated 2 April 2015 paragraph [62]. -- 20 of 20 --