Body Corporate and Community Management (Accommodation Module) Regulation 2020 (Accommodation Module)

GENERAL MEETING PROCEDURES; GENERAL MEETING MOTIONS - whether an AGM and all business conducted at it should be declared void because:

• owners were not given adequate notice
• electronic voting was not properly authorised
• the meeting resolved to partially reimburse owners' costs incurred making improvements to the common property without body corporate approval and in contravention of the by-laws
• the meeting resolved to replace a retaining wall that should have been replaced by the owners with exclusive use of it
• the meeting resolved to raise a special levy to recover unbudgeted sinking fund expenses that were not for the benefit of owners, or
• due to various other procedural irregularities.

Act, ss 62(2)&(3)(a), 94(1)(a), 242; Accommodation Module, ss 72(1), 77(1), 81, 83(1)&(3)(a), 96(1), 103(d), 152(2), 174(2)(a), 176, 177, 206(2)&(4), 208(b); Acts Interpretation Act 1954, ss 38(1), 39A(1)(b).

1. Motion 15 of the annual general meeting held on 6 November 2024 was always void.
2. The application is otherwise dismissed.

• [1] Ms Kim claims insufficient notice was given of an annual general meeting (AGM) held on 6 November 2024, and electronic voting was permitted without ever being properly authorised by ordinary resolution as required.[1] She also says:
  1. her search agent could find no record of when and to whom notices of the meeting were sent and how votes were cast
  2. the meeting lacked a quorum
  3. motion 7 authorised a special levy of $106,800 "for the recovery of unbudgeted sinking fund expenses" that were not for the benefit of lot owners
  4. motions 13, 14 and 16 authorised partial reimbursement of owners who installed concrete parking spaces on common property adjacent to their lots without body corporate approval and in contravention of the by-laws
  5. motion 15.1 authorised spending $28,820 to replace a retaining wall between lots 34 and 35 that should have been replaced by the lot owners
  6. voting papers were not available for inspection at the meeting, and
  7. the agenda and date of the meeting were not resolved at a committee meeting.
• [2] Ms Kim seeks orders in the following terms:

1. No annual general meeting of the body corporate was held on 6 November 2024 as stated in the attached minutes or at all;

2. Alternatively, the meeting of the body corporate held on 6 November 2024 is void for gross irregularities and non-compliance with legislative requirements;

3. In any event, no motions were carried or defeated at the meeting held on 6 November 2024 as stated in the attached minutes or at all; and

4. In any event, no persons were elected by ballot as committee members at the meeting held on 6 November 2024 as stated in the attached minutes or at all.

• [3] A minimum of 21 days' notice of general meetings must be given to each lot owner in person, via their address for service, or as agreed between the body corporate and owner.[2] Ms Kim says she received the notice by post on 30 October 2024, only 7 days before the meeting was held.
• [4] The committee says it sent the notice to Ms Kim by email on 16 October 2024 "consistent with her nominated delivery preference...recorded on the Form 8". A further notice was sent by post on 29 October at Ms Kim's request.
• [5] An address for service can include an email address, and if it does, that is taken to be consent to receiving body corporate documents in that way.[3] However, the Form 8 Information for body corporate roll submitted by Ms Kim when she purchased at Taraville in 2020 stated "PO Box" as her address for service. Ms Kim also submitted copies of letters sent to the body corporate manager on 13 and 22 October 2024 nominating her postal address, expressly "without any email address", as her address for service. Notice of the meeting should have been sent to her there in the first instance, and it should have been sent early enough that it would have arrived "in the ordinary course of post" at least 21 days before the meeting was due to be held.[4]
• [6] Strictly, the notices sent to owners by email should also have been sent a day earlier than they were. A general meeting must be held "at least 21 days after notice of the meeting is given to the owners of lots".[5] Section 38(1) of the Acts Interpretation Act 1954 says:

If a period beginning on a given day, act or event is provided or allowed for a purpose by an Act, the period is to be calculated by excluding the day, or the day of the act or event, and -

(a) if the period is expressed to be a specified number of clear days or at least a specified number of days - by excluding the day on which the purpose is to be fulfilled...

• [7] Excluding the day notice was given and the day of the AGM, notice ought to have been given no later than 15 October 2024 to allow the required minimum of 21 days' notice.
• [8] However, these irregularities are not sufficient reason to declare the AGM or its decisions void. The risk with giving insufficient notice of a meeting is that owners may not have time to vote and the decisions that are made may not genuinely reflect the will of the majority. But the minutes indicate that the owners of 78 lots, of a total of 89 at Taraville, voted at the AGM, including Ms Kim. No owners made submissions to claim they were unable to vote. Even if they had, the 11 lots that did not vote could not have changed any of the decisions made at the AGM. All motions and the committee election were decided by greater margins than 11 votes.

• [9] Most votes at the AGM were cast electronically, which is only permitted if authorised by ordinary resolution.[6] The body corporate relied upon motion 8 of an AGM held on 9 November 2022. It authorised electronic voting "after the date of this general meeting" and passed with 33 votes in favour and 3 against.
• [10] However, 32 votes at the 2022 AGM were cast electronically. At the time they were cast, electronic voting had not been authorised. Motion 8 had not yet been decided. Those votes could not legitimately have been counted toward motion 8. Even if they could, motion 8 only authorised electronic voting after the date of that meeting.
• [11] Ms Kim points out that the 2022 AGM was also inquorate. By default, a quorum requires the participation of at least 25% of voters.[7] If the unauthorised electronic votes were excluded, the minutes indicate only 11 lots (approx. 12%) participated in the AGM.
• [12] Ms Kim is correct that electronic voting has not been properly authorised at Taraville.
• [13] However, I will not overturn the 2024 AGM on that basis either. No genuine doubt has been raised about the authenticity of the electronic votes. No one has suggested that they did not reflect the voting intentions of owners or were not accurately recorded. The validity of motion 8 of 2022 has never been challenged, and it could not be challenged now given the three month time limit on an application to have a resolution declared void.[8] Owners appear to have cast their votes in good faith in accordance with the body corporate's instructions and in reliance on a resolution passed without controversy 2 years previously. I do not see that any useful purpose would be served by retrospectively overturning decisions made with overwhelming majority support in these circumstances, only to have the same decisions made again by some other means.

• [14] The argument that the 2024 AGM lacked a quorum relies on the exclusion of electronic voters. As I am not willing to exclude them, this argument also fails.

• [15] Motions 13, 14 and 16 proposed paying $3,000 per lot to the owners of lots 13, 26, 49, 57 and 88 in partial reimbursement of the cost of installing concrete parking spaces on common property adjacent to their lots. They passed by ordinary resolution.
• [16] Ms Kim objects that the owners did not have body corporate approval to make these changes and the work was done in contravention of by-laws 2-4. Owners require body corporate approval for an improvement to the common property pursuant to section 177(1) of the Accommodation Module. They also require body corporate approval to park on the common property pursuant to by-law 2, and to lay concrete over grass on the common property pursuant to by-law 4. No evidence has been tendered to demonstrate that the new parking spaces or the cars that will be parked there obstruct the lawful use of the common property contrary to by-law 3 though.
• [17] The committee says the motions were intended to seek body corporate approval for the installation of the parking spaces, but they erroneously sought approval for the payments instead. Approval for the payments was already covered by motion 17, which proposed a $3,000 contribution for any owner "in relation to the concreting of approved areas to allow for additional parking spaces". The committee explains that motion 17, which also passed by ordinary resolution, formalised a longstanding policy:

... to reimburse owners $3,000 towards an owner's cost of concreting part of the common area in front of their unit in order to park their cars. The reason was that this benefits all residents as these cars would most likely end up being illegally parked on the complex roadways or in visitor car parks, and also increases the value of the lot.

• [18] Motions 13, 14 and 16 were redundant, given motion 17, but they were not obviously unlawful. The body corporate is responsible for the administration of the common property and body corporate assets.[9] It may make improvements to the common property to the value proposed with the authorisation of an ordinary resolution.[10] The parking spaces appear to be a joint improvement to the common property by owners and the body corporate in the interests of both parties; the owner gains access to an additional parking space, and the body corporate relieves the pressure on parking at Taraville generally.
• [19] Ms Kim is correct that lots 13, 26, 49, 57 and 88 require body corporate approval under the regulations and the by-laws for the changes they made to the common property. They will also require body corporate approval to park on the common property. If they wish to use those areas of common property to the exclusion of other owners, that will require authorisation by resolution without dissent.[11]
• [20] However, those are not reasons to declare motions 13, 14 and 16 void. That would not cure the lack of approval for the installation or use of the new parking spaces. It would only mean that the body corporate would refuse to make a financial contribution to work that clearly has the support of most owners. Motions 13, 14, 16 and 17 all passed with margins of between 44-47 votes in favour and 20-24 against. When owners are asked to approve the improvements, as they should be to ensure strict compliance with statutory requirements, it seems clear that a comfortable majority will agree.

• [21] Motion 15.1 was the successful half of a group of same issue motions that proposed replacing the retaining wall between lots 34 and 35. It passed by ordinary resolution.
• [22] Lots 34 and 35 do not include any outdoor areas and do not have a shared boundary. The retaining wall is presumably on a shared boundary of their exclusive use areas. I sought confirmation of that from the committee and the body corporate manager agreed that was likely to be correct.
• [23] But:

An exclusive use by-law is taken, in the absence of other specific provision in the by-law for maintenance and operating costs, to make the owner of the lot to whom exclusive use or other rights are given responsible for the maintenance of and operating costs for the part of the common property to which the exclusive use by-law applies.[12]

• [24] By-law 20 is the relevant exclusive use by-law and it makes no provision for maintenance and operating costs. It makes no mention of lot 35 either, yet the lot is allocated an exclusive use area at Schedule E of the community management statement and in the attached sketch plans.
• [25] In the absence of contrary provisions in by-law 20, the owners of lots 34 and 35 are responsible for the maintenance and operating costs of their exclusive use areas, including the maintenance of the retaining wall that divides them. They should have shared the cost of its replacement.
• [26] Motion 15 was invalid. I will declare it void.

• [27] Motion 7 proposed raising "a special sinking fund levy contribution of $106,800...for the recovery of unbudgeted Sinking Fund expenses". It passed by ordinary resolution.
• [28] Ms Kim suggests its purpose was to fund the expenditure contemplated by motions 13-17 and "more unbudgeted expenditure...at least some [of which] was not for the benefit of lot owners as required by section 152 of the BCCM Act". No further detail was given.
• [29] There is insufficient evidence to substantiate the purpose of this levy. It is not obvious that it was partially for the expenditure proposed by motions 13-17. I have not accepted that the body corporate was not entitled to contribute $3,000 to the cost of new parking spaces on common property in any event. The fact that it may have related to "unbudgeted expenditure" is not irregular, as that is the purpose of a special levy.
• [30] It was odd to raise a special levy at an AGM where administrative and sinking fund budgets and contributions were to be determined. Special levies are supposed to meet liabilities "for which no provision, or inadequate provision, has been made in the budget".[13] It would have made better sense to include the amount in the sinking fund budget proposed by motion 6 so no such "inadequate provision" arose.
• [31] But that alone is not a reason to declare motion 7 void. It ultimately makes no practical difference whether the amount was raised pursuant to motion 6 or 7. Either way, the amount was raised by levying owners for contributions to the sinking fund.

• [32] The fact that no record could be found of when and to whom notices of the meeting were sent or how votes were cast may mean the body corporate is not keeping proper records. But it is not sufficient reason to declare the AGM void in the absence of any evidence that owners did not receive adequate notice of the meeting or were unable to vote. As noted, most lots voted and none claimed they were unable to.
• [33] If voting papers were not available for inspection at the AGM, that was irregular.[14] But, again, it does not mean the meeting should be overturned without evidence of any irregularities with the votes themselves.
• [34] The AGM should have been called, and the agenda prepared, by the committee.[15] If there are no committee minutes to confirm that occurred, it may mean that a single committee member is improperly purporting to make decisions on behalf of the committee, or that the committee is failing to properly minute its decisions.
• [35] But there is nothing to indicate that the committee was not in favour of the AGM's timing or agenda. No committee members made submissions to that effect. Many of the motions on the agenda were mandatory inclusions anyway.[16] Most importantly, the motions were largely matters that were capable of being decided by a general meeting, and that is what occurred. It would not be just and equitable to disregard decisions validly made at a general meeting by a substantial majority of owners because of a preceding procedural irregularity by the committee.

• [36] For these reasons, motion 15 is void and the remainder of the application is dismissed.

[2] Accommodation Module, ss 77(1), 81 & 208(b).

[4] Acts Interpretation Act 1954, s 39A(1)(b).

[11] Accommodation Module, s 174(2)(a); Act, s 62(2)&(3)(a).

[15] Accommodation Module, ss 72(1) & 83(1).