The respondent is the owners corporation for mixed-use premises of 10 commercial units and 69 residential units. The applicant is the owner of one of the commercial units. At the 2018 general meeting held on 13 June 2018, a resolution was passed by 13 votes in favour and 1 against, the relevant part of which stated that: (b)(3) the commercial retail schedule budget to be contributed by commercial units only in accordance with unit entitlements, and (b)(4) the commercial air conditioning maintenance/repair budget to be contributed by commercial units only in accordance with consumption amount. This resolution was passed in order to deal with the problematic setup of electricity cables in the units plan which resulted in the residential owners paying for their own individually metered electricity and 83% of the energy consumed by the commercial units’ air-conditioning.

By way of this application, the applicant sought, inter alia, to have the relevant parts of the resolution declared void for irregularity by reason of requiring an unopposed resolution pursuant to section 78(2)(b) of the UTMA. The Tribunal started by a brief examination of s78, and held that it requires that general fund contributions be paid by each unit in proportion to their unit, unless an alternative arrangement is agreed by unopposed resolution. Therefore, the differing contributions between residential and commercial owners is only permissible where authorised in accordance with an unopposed resolution, which was not satisfied in this case.

In relation to the alternative argument raised by the respondent (that the differing contribution was authorised by an unopposed resolution passed in 2016 on “consumption charges”), after considering the specific wording of the 2016 resolution itself, the Tribunal was of the view that the it did not authorize sub clause (b)(3) of the 2018 resolution. In relation to the validity of sub clause (b)(4), the Tribunal held that it was inappropriate to apply the doctrine of severance and let it stand alone, as the void clause was a part of the corporation’s annual budget and that budget was put to members as a single package of revenue raising and expenditure. It is impossible to determine whether owners would have voted for the 2018 Resolution without sub clause (b)(4). Therefore, the entirety of the 2018 resolution was declared void for irregularity.

In relation to the respondent’s argument that the 2018 resolution should be given effect following a merits review under section 129(1)(g) of the UTMA on the basis that the applicant’s opposition to it was unreasonable, the Tribunal noted without deciding that section 129(1) (f) is intended to allow meritorious applications to be given effect, not to remedy procedural defects.