The Owners - Strata Plan No 62022 v Sahade

The proceedings in the Local Court 4The plaintiff filed a document in the Local Court entitled "Plaintiff's Statement of Facts and Issues". It was in the following terms: "FACTS 1. The Plaintiff is an Owners Corporation constituted pursuant to s.11 of the Strata Schemes Management Act 1996 ("SSMA"). 2. The Defendant is the registered owner of lot 3 in Strata Plan 62022. 3. On 17 January 2012, a Notice of an Annual General Meeting was sent to all owners of lots in Strata Plan 62022 by the Plaintiff including to the Defendant's address recorded in the Plaintiff's strata roll being 755 New South Head Road, Rose Bay NSW 2029. 4. At the Annual General Meeting of the Plaintiff on 30 January 2012, the Plaintiff raised contributions in accordance with the SSMA as follows: Date contribution due Date of meeting where contribution raised Amount of contribution 1 March 2012 30 January 2012 $3,569.75 1 March 2012 30 January 2012 $16,000.00 ("Special Levy") TOTAL $19,569.75

5. The Defendant was served with a Notice of Levies Due in March 2012, identifying contributions payable of $19,569.75 and as approved at the Annual General Meeting of the Plaintiff on 30 January 2012. This notice was served on the Defendant at her address recorded in the Plaintiff's strata roll being 755 New South Head Road, Rose Bay NSW 2029. 6. After the commencement of the proceedings, on 3 September 2012 the Defendant paid the Plaintiff the sum of $3,569.75, but the Special Levy for $16,000.00, the subject of this claim, still remains outstanding. 7. The plaintiff has charged, and continues to charge, the Defendant interest on outstanding contributions the subject of this claim, pursuant to s.79 of the SSMA. 8. The plaintiff has charged, and continues to charge, the Defendant expenses it has incurred in recovering the outstanding contributions the subject of this claim, pursuant to s.80 of the SSMA. Issues 9. Whether the Plaintiff has served the Defendant with a Notice of an Annual General Meeting 7 days before the Meeting in accordance with clause 32 of Schedule 2 of the SSMA. 10. Whether the Defendant is liable to pay the Plaintiff the following: (a) $16,000 being the Special Levy. (b) Interest pursuant to s.79 of the SSMA on the sum of $3,569.75 to 3 September 2012. (c) Interest pursuant to s.79 of the SSMA on the sum of $16,000 to 22 April 2013. (d) The costs of the Plaintiff pursuant to s.80 of the SSMA." 5The defendant took no issue below with the facts alleged or the statement of issues. As a consequence, the defendant accepted (or did not dispute) that on 17 January 2012, notice of the Annual General Meeting (AGM) "was sent to all owners of lots ... including to the Defendant's address". 6The notice, which is in evidence (and was in evidence below) gave notice of a general meeting on 30 January 2012. No issue is taken on appeal with the contents of the notice. 7The learned magistrate determined that the plaintiff could not establish that it had provided 7 days' notice of the relevant general meeting and, as a consequence, dismissed its claim.

Issues on appeal 8The issues agitated by the parties on appeal are (or seek to be) wider than those argued below.

Service by post 9First, the defendant seeks, on appeal, it seems for the first time, to agitate whether the plaintiff has proved that notice was sent. 10The defendant correctly submits that, in order to prove that a notice was sent, a party (in this case the plaintiff) has to satisfy the tribunal of fact of certain primary facts: the contents of the document; the placing of the document in an envelope; the addressing of the envelope with the relevant address; the affixing of a stamp (or other tracking/prepaid process); and the physical deposit of the envelope, addressed and stamped, in or at a proper place for postage to be effected (post box or post office): Brown v Bluestone Property Services Pty Limited [2010] NSWSC 869 at [12] per Barrett J; Northumbrian Ice Cream Co Ltd v Breakaway Vending Pty Ltd [2006] NSWSC 1216 at [12] per Brereton J. 11The foregoing sets out the primary facts that are necessary to prove in order to establish that a document "was sent" or "was served by post". Here, however, the plaintiff asserted a conclusion of fact, namely, that the notice of the AGM "was sent" to the defendant's address, from which assertion or pleading the defendant did not dissent. 12There was, on the pleadings before the Local Court, an admission of material facts, being that the notice was sent to the defendant's address on 17 January 2012. In those circumstances, it was unnecessary, and contrary to the provisions of ss 56, 57 and 58 of the Civil Procedure Act 2005, for the plaintiff to seek to prove that which was not a "real issue between the parties" on the pleadings. 13In so far as the learned magistrate required proof of facts that were agreed, the magistrate was in error.

Requisite notice 14Nevertheless, a "real issue" between the parties was whether, on the agreed facts, namely, that notice was sent by post on 17 January 2012 for a meeting called for 30 January 2012, sufficient notice was provided for the general meeting. 15This second aspect requires the recitation of some preliminary matters. The provisions of clause 32(1) of Schedule 2 of the Act is in the following terms: "32 Persons to whom notice of general meeting must be given (1) Notice of a general meeting of an owners corporation must, at least 7 days before the meeting, be served on each owner." 16In the foregoing, it is relevant to note the use of the words "must" and "at least". The manifest purpose of the provision, which applies in the circumstances in dispute here, is to compel an owners' corporation (or those managing it) to give sufficient notice to those with the requisite interest to attend and participate in such general meetings. 17The aforesaid purpose accords with the purpose adopted by the common law in requiring strict adherence to notice provisions for general meetings. In so doing, it distinguished between general meetings and regularly held executive meetings, a summary of which is given by Golderg J in Dargavel v Cameron [2002] FCA 1234, in which his Honour, in relation to an industrial organisation, said: "[77] Notwithstanding that the meeting was not a 'Special' meeting, the question still arises whether notice should have been given prior to the meeting of any proposed resolution to appoint Mr Dargavel as State Secretary. The respondents submitted that the meeting was not able to transact business of which notice had not been given and that the resolution appointing Mr Dargavel was therefore invalid and of no effect. Mr Dargavel submitted that the authorities drew a distinction between prior notice of business to be transacted at general meetings of members of organisations and meetings of executive bodies of organisations. He submitted that in the case of special general meetings of members prior notice of business to be transacted was required whereas such prior notice was not required in the case of special meetings of executive bodies. It was submitted that the distinction was based upon the principle that the function of informative notice is to allow a decision to be made by a member as to whether or not the member ought to attend a meeting where the member is not required to attend the meeting. It was said that in the case of a member of an executive body such as a committee of management, each member is under an obligation to attend, not to protect their own interests (which is the reason why members attend) but to make decisions for the good government of an organisation. Mr Dargavel relied upon Campbell v Crawford (1986) 12 FCR 317 at 340-341; Johnson v Beitseen (1991) 41 IR 395 at 416-417 and Cummings v Macks [2000] FCA 55; (2000) 96 FCR 345. [78] The meeting of State Council was convened for the purpose of dealing with any business that could not be dealt with at the meeting which had been scheduled for 14 August 2002. The agenda attached to the request for the meeting did not refer to the filling of the vacancy in the office of the Victorian State Secretary as that situation had not then arisen. In any event that agenda did not accompany the notice of meeting sent to members of the State Council. At the meeting of State Council the meeting resolved to adopt the agenda set out in [18] above. The resolution to appoint Mr Dargavel only arose as a result of the acceptance by the State Council of Mr Johnston's resignation when correspondence was dealt with. Not all the members of State Council were present at the meeting, there being three apologies. [79] As a matter of principle, notice of the business to be transacted or considered at a meeting of members of an organisation or of a body of the organisation, whatever be the organisation and whatever by the body forming part of the organisation, should be given to the persons entitled to attend the meeting: see generally Magner, Joske's Law and Procedure at Meetings in Australia 8th ed. 1994 Ch 3. The purpose of such notice is two-fold. First, it is to give those entitled to attend but who are not obliged to attend, the opportunity to decide whether they want to attend. Secondly, it is to give those entitled to attend, whether or not they are obliged to attend by virtue of a position or office which they occupy, an opportunity to consider their attitude to the matters proposed to be discussed at the meeting and whether they wish to prepare for the discussion. [80] Of course if all the members of an organisation, or body within it, are present at a meeting of the organisation or body, any business may be transacted within the power of such a meeting even where no notice has been given of that business, if all the persons present consent to that business being brought forward. [81] There have been a number of cases in which resolutions passed at meetings have been held to be invalid because inadequate notice of the business to be transacted or discussed was given to those persons entitled to attend the meeting. Some of those cases involved meetings of members of industrial organisations which were special meetings or meetings called for a particular purpose: Campbell v Higgins (1957) 3 FLR 317; McLure v Mitchell (1974) 24 FLR 115, per Joske J at 139-140. [82] Notwithstanding these decisions, the caselaw generally draws a distinction between meetings of persons who are not required to attend meetings and meetings of persons who are required to attend by virtue of the position which they occupy. This distinction was recognised by Wilcox J in Campbell v Crawford (supra). A meeting had been called of the Federal Council of the Plumbers and Gasfitters Employees' Union of Australia in respect of which an agenda was circulated. A resolution was passed at the meeting to abolish the Geelong Branch of the Union. No notice of this resolution had been given to members of the Federal Council prior to the meeting. Wilcox J held that notice of the proposed resolution did not have to be given to members of the Federal Council prior to the meeting. Wilcox J said at 340: 'There is authority for the proposition that a notice summoning a meeting of members of a branch, in order to be valid, must sufficiently indicate the business intended to be transacted: see Campbell v Higgins (1957) 3 FLR 317 at 327; Winter v McAdam (1957) 1 FLR 210 at 211; McLure v Mitchell (1974) 24 FLR 115 at 134. But these cases are distinguishable from the present. As Evatt J pointed out in Cook v Crawford (1981) 52 FLR at 36, the reason for the rule is `to enable any member receiving it to determine in his own interest whether or not he ought attend the meeting'. This reason has little application to a meeting of a committee whose members are under an obligation to attend a summoned meeting, not to protect their own interests but to make decisions for the good government of the union.' [83] A similar approach was taken by Gray J in Johnson v Beitseen (supra). Gray J said at 417: 'Where a rule such as branch r 11 [which provided for the calling of Branch Management Committee meetings] makes provision for a meeting of a defined body such as the committee of management, it is ordinarily the duty of each member of that body to attend if notified of a meeting, or if a regular meeting specified in the rules is to be held. No specific notice of the business to be discussed at any such meeting is required. A member of the committee of management remains absent from a meeting at his or her peril.' [84] In Cummings v Macks (supra) Drummond J (with whom Sundberg J agreed), in considering whether s 181 of the Bankruptcy Act 1966 (Cth) required notice of a motion to remove a trustee at a creditors' meeting, recognised the distinction between notices convening meetings of members who were not obliged to attend the meeting and notices convening meetings of members of bodies who were duty-bound to attend the meeting: see 347-348. Drummond J cited Campbell v Crawford (supra) with approval, noting that the rule that members of the governing council of a municipal corporation were entitled to an opportunity to consider whether they would attend such meetings because they were duty-bound to attend all of them had been applied to the governing bodies of other organisations such as trade unions." 18Further the aforesaid purpose and policy is not qualified by a mere exercise in arithmetic. The fact that, in these circumstances, a vote at the meeting by the defendant, if she were to have attended, would not have affected the adoption of the resolution does not affect the validity, or otherwise, of the resolution. The principles underpinning the common law approach include the concept that a person participating in the meeting may be able to persuade others. 19Whether the requirement for notice in the Schedule requires strict adherence is ultimately a matter of statutory construction, the modern principles for which were clarified in Project Blue Sky v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355 to make clear that a grammatical or literal meaning may not necessarily be the meaning the legislature is taken to have intended. Rather, the words must be read in context and the provisions of a statute (or other instrument) construed bearing in mind that its provisions were intended to effect harmonious goals. 20The defendant urges a more "literal approach" and emphasises those words already noted above, namely, "must" and "at least". The plaintiff urges a "less rigid" approach and refers to ss 153 and 154 of the Act to evidence an intent to allow practical flexibility and a legislative intent that a breach of the strictures in Clause 32 would not, of itself, render invalid all resolutions at the meeting. 21It is appropriate to recite the relevant parts of ss 153 and 154 of the Act: "153 Order invalidating resolution of owners corporation (1) An Adjudicator may make an order invalidating any resolution of, or election held by, the persons present at a meeting of an owners corporation if the Adjudicator considers that the provisions of this Act have not been complied with in relation to the meeting. (2) An Adjudicator may refuse to make an order under this section but only if the Adjudicator considers: (a) that the failure to comply with the provisions of this Act did not adversely affect any person, and (b) that compliance with the provisions of this Act would not have resulted in a failure to pass the resolution or have affected the result of the election. ... 154 Order where voting rights denied or due notice of item of business not given (1) An Adjudicator may order that a resolution passed at a general meeting of an owners corporation be treated as a nullity on and from the date of the order if satisfied that the resolution would not have been passed but for the fact that the applicant for the order: (a) was improperly denied a vote on the motion for the resolution, or (b) was not given due notice of the item of business in relation to which the resolution was passed..." 22Conduct in breach of a prescribed norm of conduct or process does not necessarily render the result of the conduct void or a nullity: Project Blue Sky; Victoria v Sutton [1998] HCA 56; (1998) 195 CLR 291 at [36]-[38]. The effect will be determined by a proper construction of the Act. 23It is convenient, at this juncture, to discuss the operation of ss 153 and 154 of the Act. First, I deal with s 154 of the Act. 24In my view, s 154 of the Act does not take the plaintiff's submissions as to the construction of Clause 32 very far, if anywhere. It would be a strained reading of s 154(1) of the Act to apply it to a person who was not given notice of the meeting, or given inadequate notice, and, for that reason did not attend. Such a person, on the broadest view, may have been "improperly denied a vote", but the expression more aptly describes a person, entitled to vote, who attends a meeting and is denied a vote. 25Similarly, a person "not given due notice of an item of business" does not readily describe the far more extreme position of a person who is not given notice of the meeting at all and is not in attendance. Rather the terms of s 154 of the Act provide a "ballot inquiry" mechanism for the adjudicator to invalidate a resolution passed at a valid meeting because the note on the resolution is affected by irregularity. 26Turning to the provisions of s 153 of the Act, again, in my view, they do not advance the plaintiff's construction of Clause 32. It is fair to remark that, unlike s 154 of the Act, s 153 does not presume (or operate only in circumstances of) an otherwise valid resolution. This is clear from the use of the words "persons present at a meeting" in s 153, as distinct from the use of the phrase "resolution passed at a general meeting" in s 154. Yet each of s 153 and s 154 of the Act assume a valid (and properly convened) meeting. 27The terms of s 153 of the Act apply to irregularities going significantly beyond the requirements of the calling of the meeting. It would apply to a breach of standing orders or the rules of the conduct of the meeting itself: see Clauses 7-20 of Schedule 2. 28Moreover, it is difficult, if not impossible, to imagine a circumstance where a person was provided no or inadequate notice of the meeting, yet it could be said that the failure "did not adversely affect" that person, except in circumstances where the person attended the meeting notwithstanding and waived the notice provision. I note, at this juncture, that paragraphs (a) and (b) of s 153(2) of the Act must each be satisfied in order for an adjudicator to refuse to make an order invalidating the resolution or the election. Thus, the legislative presumption, with a limited exception, is that non-compliance with any provisions of the Act dealing with the conduct of a meeting will result in an order invalidating any resolution or election held. 29In my view the operation of neither s 153 or s 154 of the Act qualifies the ordinary and grammatical meaning of Clause 32 of the Schedule. Nor does either disclose goals or purposes inconsistent with the ordinary and grammatical construction of Clause 32. Moreover, if the requirement of the Schedule were not, in the intention of the legislature, to be construed strictly, there would be no need for Clause 27(2) of the Schedule, dealing with ordinary general meetings. 30In my view, Clause 32 requires strict compliance as is evidenced by the use of the word "must" which is consistent with the use of the words "at least". 31Once it is held that compliance with Clause 32 is essential, a number of issues become uncontentious. Firstly, the Interpretation Act 1987 operates to render service to have occurred "on the fourth working day after the letter was posted". The evidence established that the notice was posted on 17 January 2012 (a Tuesday) and, therefore, in the absence of sufficient evidence to the contrary that raises doubt, it has been effected on 23 January 2012 (the next Monday): s 76 of the Interpretation Act. 32Further, at least 7 days' notice must be provided. Pursuant to s 36 of the Interpretation Act, the day that the notice was received or effected is excluded from the calculation and, therefore, the first day of the notice period is 24 January 2012 and the first day upon which the AGM could be held (and comply with Clause 32) was 31 January 2012. The meeting was held one day too early to comply with the Act. 33Lastly, it is necessary to deal with the plaintiff's submissions that the learned magistrate reversed the onus of proof. There are three answers to this submission. 34First, if the defendant in asserting the invalidity of the resolution imposing the levy bore the onus, she has satisfied that onus. The uncontroverted evidence was that notice was sent on 17 January 2012. Thereafter, the operation of the law, as described above, establishes the insufficiency of notice and the invalidity of the resolution imposing the levy. 35Secondly, I do not accept that the defendant bore the onus below. The plaintiff sued on a levy notice. It was required to prove that the levy notice was validly served and related to a valid levy. It proved neither. The issue of whether the levy is valid is answered in the same way as the answer to the question whether the AGM (and resolution) was effective. Further, there was no evidence adduced as to the service of a written notice of the contribution payable, in circumstances where the question of service of the levy notice was not agreed. 36Thirdly, [9] of the Statement of Facts and Issues, recited above, makes clear that the validity of the meeting (and the notice thereof) was the issue before the Local Court that would determine liability and the plaintiff ought be bound by the conduct of its case below. 37It is unnecessary to deal with any other issue, except to say that nothing in the judgment of the learned magistrate (or, for that matter, in these reasons) depended (or depends) on the actual receipt of the notice. Receipt of the notice is not essential; it is presumed. Service of the notice is essential. 38The Court makes the following orders: (1)To the extent necessary, leave to appeal granted; (2)Appeal dismissed; (3)The plaintiff shall pay the defendant's costs of and incidental to these proceedings, as agreed or assessed. Such costs shall be paid from contributions levied on all lots other than the defendant's lot. (4)Otherwise, proceedings dismissed.

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