Owners Corporations pass resolutions at meetings all the time, often unanimously and without controversy. The recent ACT Civil and Administrative Tribunal (ACAT) case of Green & Ors v The Owners – Units Plan No. 199 (Unit Titles) [2014] ACAT 52 highlights the importance of properly conducting and recording meetings at which motions are voted upon. It also clarifies the method by which an owners corporation may reverse the effect of a previous motion.
The Facts
In 2011, a special resolution was passed allowing a unit owner to extend and renovate their unit. A further special resolution was passed authorising an application to the ACT Planning & Land Authority to enable the schedule of unit entitlements to be amended (this motion passed unopposed) (the 2011 resolution).
For various reasons, the process of registering the amended schedule of unit entitlements was never completed. In 2013, the Owners Corporation was in the position where the as yet unregistered schedule of unit entitlements resulting from the 2011 motion was no longer accurate, as other units had since been renovated. The Owners Corporation in February 2014 passed a special resolution effectively reversing the 2011 resolution. The issue before ACAT was whether or not this special resolution was validly passed. At the February 2014 meeting some lot owners left during the meeting and provided absentee voting papers to the secretary as they left.
ACAT Powers and Legislative Interpretation
Pursuant to section 129(1)(b)(ii) of the Unit Titles (Management) Act 2011 (UTMA), the ACAT has the power to declare that a resolution passed at a general meeting is void for irregularity.
ACAT found that absentee meeting papers that had been provided by unit owners as they left the meeting were in breach of section 3.31 of Schedule 3 of UTMA which required the absentee voting papers to be provided prior to the meeting. Further, as the 2011 resolution was a special resolution then section 3.14(2) of Schedule 3, which superseded the requirements of the Unit Titles Act 2001, required the same type of resolution be made in February 2014 to revoke the 2011 resolution. As such a special resolution was required. On the evidence before it, and discounting the absentee meeting notices providing during the meeting, ACAT determined the special resolution made at the February 2014 meeting was validly passed.
Green v Owners is yet another reminder to Owners Corporations that they must strictly adhere to legislative requirements to ensure the validity of its resolutions.