Body Corporate consent to a development application – is a resolution without dissent required?

Oct 24 2016

Publications

The consent of a landowner is generally required for a development application to be valid.  This makes sense – if an application is going to be made that could affect an owner’s rights and the purposes to which the owner’s land may be put, the owner should be required to give their consent.

However, difficulties arise where the land is common property of a community titles scheme (CTS), and the consent required is of the body corporate of the CTS as owner of the common property.

A recent case in the Planning and Environment Court (MTAA Superannuation Fund Pty Ltd v Logan City Council & Anor1) clarified that by giving consent the body corporate does not change the rights of owners of other lots in the CTS.

In that case, a development application for the expansion of a shopping centre included land that was the common property of a CTS. The committee of the body corporate resolved that the body corporate would consent to the lodging of the development application. One of the lot owners in the CTS objected to the granting of the consent.

The application was lodged and approval granted by the Council. Implementation of the approval would necessarily require a change to the Community Management Statement (CMS) to be implemented by way of the recording of a new CMS. The changes to the CMS (and the recording of the new CMS) required the consent of the body corporate to be provided by resolution without dissent.

The dissenting owner appealed against the approval on the basis that:

  • the resolution to grant consent to the lodgement of the development application required a resolution of the body corporate without dissent, so the purported owner’s consent was invalid; and
  • if the consent was valid, any approval would be futile because a change to the CMS to give effect to the approval would require a resolution without dissent, and the lot owner would dissent.
Resolution without dissent
Specific decisions of a body corporate require a resolution without dissent, including a decision that changes rights, privileges or obligations of the owners of lots included in the community titles scheme.If such a resolution fails, there is an avenue of challenge available through the Body Corporate and Community Management Act 1997.Such a case was recently decided by the High Court in Ainsworth v Albrecht3 regarding a failed resolution to connect two balconies across airspace that was common property.  The dispute over the dissent followed a path through adjudication, an appeal to the Tribunal, a further appeal to the Court of Appeal and ultimately to the High Court, which held that the dissent to the proposal to connect the balconies was not unreasonable.

The High Court provided guidance on when a vote against a proposal may be unreasonable and vulnerable to challenge.  It stated that:

‘Nothing in the BCCM Act suggests that a lot owner may be required by an adjudicator to assist another lot owner to enhance that lot owner’s interest, or be regarded as acting unreasonably in declining to do so, at least where the enhancement of the proponent’s interest is reasonably viewed as adverse to the interests of the opponent’.

But stated that:

‘Opposition prompted by spite or ill-will, or a desire for attention, may be seen to be unreasonable in the circumstances of a particular case.

The case now stands as authority for dissent not to be unreasonable if a lot owner is seeking to acquire (or deprive the remaining lot owners of) common property, without any form of compensation.  What is equally clear is that each case will need to be decided on the particular facts and circumstances that give rise to the dissent, and the reasonableness of those circumstances.

Was a resolution without dissent required?

The Court held that a resolution consenting to the lodgement of a development application was not a decision ‘to change rights, privileges or obligations’ of the owners of lots because (following reasoning in the Court of Appeal4) the change could only be effected by a decision of the local authority (i.e. to approve or refuse the development application).  Accordingly, a resolution without dissent was not required in order for the body corporate to make the decision to consent to the development application.

This finding avoids what could have been a complication for local governments assessing development applications, as a contrary finding would have required the Council to ‘look behind’ consent given by a body corporate to ensure that the consent was properly given (i.e. without dissent).  Similarly, developers now have clear guidance on what is required for owner’s consent when the land the subject of a development application includes common property.

Was the development approval a futility?

The Court did not accept that the approval was futile, despite the appellant being adamant that it would never consent to the change to the CMS required to implement the approval.

The Court held that the availability of a dispute resolution process in the Body Corporate and Community Management Act 1997 (the same process that was utilised by the parties in Ainsworth v Albrecht) meant that the P&E Court should not make a finding of futility, at least until those avenues had been exhausted.

In this respect, the decision means that the assessment of a development application can (and should) proceed in accordance with the relevant legislation, notwithstanding that a separate dispute resolution process may be required for a developer to put the development approval into effect.

Key Points

The key points to emerge from these cases are:

  • a body corporate committee may grant consent to the lodgement of a development application. The matter is not required to go to general meeting, nor is a resolution without dissent required at that meeting;
  • the implementation of a development approval may require actions of the body corporate that require a resolution without dissent (e.g. to change the CMS), but this is not a relevant consideration for the assessment of the development application in accordance with the relevant legislation;
  • dissent to a resolution that is required to be without dissent must be reasonable, or it may be challenged; and
  • whether the dissent is reasonable will require a consideration of the facts and circumstances of the particular case.

If you require assistance or further information in relation to the matters raised, please contact Michael Marshall in relation to planning matters, and Chris O’Shea in relation to any body corporate issues that you may have.

Written by:
Michael Marshall | Partner | +61 7 3338 7525 | mmarshall@tglaw.com.au
Matt McDermott | Senior Associate | +61 7 3338 7943 | mmcdermott@tglaw.com.au


(1) [2016] QPEC 34.
(2) Body Corporate and Community Management (Commercial Module) Regulation 2008, section 18(1)(a).
(3) [2016] HCA 40.
(4) Rakaia Pty Ltd v Body Corporate for “Inns Cairns” CTS 16010 [2010] QCA 306.