General meeting disputes – some points to consider
The BCCM office regularly receives applications for dispute resolution seeking to have a general meeting of a body corporate, or a resolution passed at a general meeting, declared void on procedural grounds.
Consider the application that seeks to void a general meeting because members of a body corporate received only 20 days notice of a general meeting, when the legislation requires at least 21 days. An applicant who challenges the validity of that general meeting through the dispute resolution service may in these circumstances presume that an adjudicator’s order would automatically be made in their favour as the notice times are irrefutable. However, this may not necessarily be the case.
There is a long established history of precedents that address general meeting procedures. In order 0751-1999, the adjudicator held:
“in respect to meetings generally, the courts have consistently held that where there have been procedural errors or omissions in the calling of a meeting, or other lesser irregularities, the meeting and decisions made at the meeting should nevertheless be preserved unless it can be shown that there has been some fundamental disadvantage to voters (owners). For example, where all or a significant number of owners have been given no, or insufficient, notice of a meeting.”
Furthermore, in his dismissal of a District Court appeal of an adjudicator’s order (Chen v Body Corporate for Wishart Village CTS 19482, Appeal 4080/2000, 29 May 2001), Judge Boulton stated: “The very detailed provisions of the standard module regulation … make it almost inevitable that from time to time there will be non-compliance. Equally though the provisions of the act make it clear that non-compliance of an insubstantial nature will not be allowed to imperil the actions of bodies corporate or their committees, particularly in the instance of committees where actions are taken bona fide.”
Earlier this year the adjudicator in Citi Edge Apartments [2014] QBCCMCmr 46 stated that:
“The courts have recognised that the detailed regulations make it almost inevitable that there will be failures to comply with the regulations from time to time and courts have accepted it is unlikely that it was a purpose of the legislation that an act done in breach of a statutory provision should be invalid if public inconvenience would be a result of invalidating the act. A meeting called other than in accordance with its rules will not inevitably be invalid, provided it is conducted substantially fairly.”
More recently, in Carroll and Ors v Body Corporate for Palm Springs Residences CTS 29467 [2013] QCATA 21, at paragraphs 22 and 23, the appeal tribunal stated:
“The BCCMA is a lengthy, technical and complex instrument, with no fewer than six sets of subordinate and similarly complex ‘module regulations’. It cannot be the case that the legislature expected all, or even most committee members of a body corporate, small, large or very large, to be experts in corporate law, or masters of community management. Indeed, the BCCMA implicitly recognises that, if this legislation were at all times, and in all circumstances applied with the utmost rigour and most precious attention to detail, its objects and policies would be retarded by endemic disputation, rather than advanced.”
The direction that a “body corporate must act reasonably” in the performance of its “general functions” does not suggest that every minor irregularity should be pounced on to impede or paralyse the normal conduct of business. The code of conduct for committee members does not demand administrative perfection, but simply directs them to “take reasonable steps” to comply with the BCCMA.
Prior to lodging an application for dispute resolution, a potential applicant should first consider the consequences of any procedural flaws and be able to demonstrate that they were in some way “fundamentally disadvantaged” or denied rights that were afforded to other lot owners.
In the assessment of an application for dispute resolution, an adjudicator would consider whether lot owners had knowledge of the issues addressed at the meeting and the opportunity to participate in the decisions made at the meeting by attending in person, lodging voting papers or by appointing a proxy. A lot owner’s inability to attend a meeting personally may not necessarily be considered a “fundamental disadvantage” (order 0856-2005).
It is also worth noting section 242 of the Body Corporate and Community Management Act 1997 provides “an application for an order declaring void a meeting or a resolution of the body corporate must be made within three months after the meeting at which the resolution was passed”. However, section 242(3) of the act provides that where the three month period is not complied with, an adjudicator to whom the application is referred may, for good reason, waive the non-compliance.
The BCCM Office Information Service is able to provide general information on rights and responsibilities under the act and regulation modules, but is unable to provide rulings on the validity of meetings or motionspassed at meetings.
Robert Walker, Commissioner of Body Corporate and Community Management
