A number of owners signed a petition to the strata manager of an owners corporation requesting the executive committee call a general meeting to consider a motion to remove all the existing executive committee members and appoint new members.
The strata manager sent a copy of the petition to the executive committee and called a general meeting, setting the date, arranging a venue and sending out notices and proxies even though the members of the executive committee had not asked the strata manager to do so and indeed, had specifically instructed the strata manager not to do so.
An application was filed with ACAT on 31 January 2012 by the executive committee (ie prior to the commencement of the Unit Titles (Management) Act 2011 (ACT) (UTMA) on 30 March 2012) asking the Tribunal to make declarations or orders about several things including about whether the petition met the requirements of section 96(2) of the Unit Titles Act 2001 (ACT) (the UT Act) and whether the proposed motion was valid. The UT Act (as it then was) applied at the times relevant to this matter.
In summary, the applicants said that they were not satisfied that the petition was a written request that triggered the need to call a general meeting under section 96(2) because it was not clear that the signatories were people who were entitled to vote on all motions for units whose combined unit entitlement was at least 1/4 of the total unit entitlement in the units plan. Further, the applicants said that the proposed motion was not one that could be put and dealt with by a single resolution. It required a separate motion in relation to each committee member.
A second application was then filed requesting a number of orders or declarations including an urgent injunction to stop the general meeting called by the strata manager. Other orders sought included orders requiring the strata manager to give the executive committee a copy of the corporate register in electronic form and an order requiring the strata manager to give the executive committee a report on the status of the payment of levies. Apart from this being information that one would expect an executive committee to have access to in order to discharge its functions, it was information sought by the applicant so that it could confirm whether the signatories to the petition were people who were entitled to vote.
ACAT held an urgent hearing on the question of whether an interim order should be made about the general meeting scheduled and was satisfied that the members of the executive committee, and indeed all owners, would be disadvantaged or suffer harm if an interim order was not made. Consequently, orders were made to stay the holding of the general meeting and to facilitate the holding of a general meeting on a later date. ACAT formed the view that the members of the executive committee would be prejudiced if the meeting went ahead and motions were passed that resulted in their removal from office before the question of whether the petition met the requirements of section 96(2) was resolved. Further, the owners corporation as a whole would be prejudiced if the meeting proceeded and new executive committee members were appointed in the face of a doubt about whether the meeting was validly called. It had the potential to taint any new appointments and contribute to on-going tension between owners.
ACAT acknowledged that, on the other hand, the petitioners would be prejudiced if the proposed meeting was stayed because this would delay the airing and resolution of their grievances. However, ACAT was satisfied that the prejudice would be ameliorated by the presentation of a fresh petition. The impact of delay could be minimised by making orders to facilitate the calling of another general meeting as soon as practicable. Any potential prejudice that might flow from the implementation of decisions by the executive committee in the period before the anticipated general meeting could be addressed by seeking undertakings from the executive committee.
On balance, ACAT was satisfied that an interim order should be made and made no specific finding about the validity of the petition. It was not necessary to do so because ultimately, the original petition was not pursued once the fresh petition was presented.
ACAT observed that the unit entitlement of people who were not entitled to vote because they had not paid all amounts payable to the owners corporation at the time that they signed the petition, should not be counted. Section 96(2) requires that people who make a written request for a meeting be entitled to vote as at the date they make the written request. It is not sufficient that they may become entitled to vote by paying outstanding amounts at some time before the general meeting that is called as a result of their request. It is, of course, open to an executive committee to decide, as a matter of discretion, that a general meeting will be called in any event, but they have no obligation to do so if the requirements of section 96(2) are not met.