This NSW article is about the importance of complying with notice legislative requirements for general meetings.
According to the case of Warren v The Owners – Strata Plan No. 61618, it certainly is. In this case, the applicant sought orders that:
- all resolutions passed at the AGM be set aside pursuant to s.24 or s.232 of the Strata Schemes Management Act 2015 (“SSMA”) due to the notice requirements not being met, or alternatively,
- an order invalidating the resolutions under motion 13 (which was to terminate the current and appoint a new strata managing agent due to non-compliance with the requirements for the use of proxy form).
On 2 April 2019, the owners corporation gave notice that the AGM would be held at 6 pm on 18 April 2019 (the night before the Easter long weekend). The applicant (and other owners) informed the strata managers that this date was not suitable since it did not allow for sufficient preparation and would negatively affect attendance.
90 lot owners (from a total of 212 lots) gave proxies to exercise their votes. The proxy appointment form included an ‘option 3’ allowing the proxy to vote on the termination/appointment of the strata managing agent, in the manner indicated by the owner in each form. In 60 of those 90 proxy forms, ‘option 3’ was left blank, however these votes were counted in favour of electing the new strata managing agent.
The main issues to determine were:
- Did the owners corporation comply with the notice requirements for the AGM set out in Sch. 1, cl.7 of the SSMA? If not, does that non-compliance invalidate the AGM in its entirety?
- Were proxy forms which made no election as to the appointment of a strata manager in the part for “option 3” valid? If not, what implications, if any, arise from this finding?
In respect of the timing of the notice, the Tribunal held that the owners corporation did not comply with the notice requirements, as the notice was one day short for lot owners who received their notices by post. The Tribunal held that non-compliance with the notice requirement under sch 1 cl. 7(2) SSMA allows the Tribunal to make an order invalidating any resolutions or election held at the AGM.
Although s.24(1) of the SSMA states that the Tribunal may make an order invalidating any resolution, the Tribunal may refuse to do so if it finds in the circumstances that the failure to comply did not adversely affect any person, and therefore it would not have resulted in the failure to pass the resolutions or affected the result of elections. In this case it would adversely affect lot owners. As such, the Tribunal could not refuse to make the order under s.24(1) of the SSMA and made the order sought under s.24 SSMA invalidating all the resolutions passed at the AGM of the owners corporation and the election of the strata committee which took place that meeting.
The Tribunal further held that s. 232 of the SSMA was not applicable, since s 24 of the SSMA specially empowered the Tribunal to make the order sought.
In respect of the proxy forms, the Tribunal held that the proxy forms which made no election as to the appointment of a strata manager in “option 3” were not valid, since they were not filled out in accordance with sch. 1 cl 26(2) of the SSMA.
This case highlights the importance of adhering to notice provisions and other provisions concerning owners corporation’s general meetings. Otherwise, the owners corporation runs the risk of having its motions and elections being invalidated.
Paulina Mena & Jasmin H.Singh
Kerin Benson Lawyers
E: [email protected]
P: 02 4032 7990
This is general information and should not be considered to be legal advice. You should obtain legal advice specific to your individual situation.
This post appears in Strata News #666.
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This article has been republished with permission from the author and first appeared on the Kerin Benson Lawyer website.
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On a similar issue, does the advance re-scheduling of a Strata Committee meeting by mutual agreement of all Strata Committee members 3 hours prior to the meeting, to a week later, constitute an adjournment of the meeting under Part 3, Section 16 of the SSM, thereby allowing the new notice period to advise members of the owners corporation, to be reduced to only 24 hours (Schedule 2, Part 3, Section 16)?