Executive Committee Units Plan 930 & Capital Strata Management Services; and; Executive Committee Units Plan 930 and Miliano & Ors; (Civil Dispute)

[2012] ACAT 46

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

EXECUTIVE COMMITTEE UNITS PLAN 930 & CAPITAL STRATA MANAGEMENT SERVICES
and
EXECUTIVE COMMITTEE UNITS PLAN 930 AND MILIANO & ORS

(Civil Dispute) [2012] ACAT 46

XD 130 of 2012

XD 100 of 2012

Catchwords:             UNIT TITLES  - written request for general meeting – person entitled to vote – function of executive committee – effect of delegation of functions to manager – interim order staying holding of general meeting

List of legislation:     Unit Titles Act 2001 ss 96 (2), 110
ACT Civil and Administrative Tribunal Act 2008, s.53

Tribunal:                  Ms Linda Crebbin, General President

Date of Orders:  14 February 2012  
Date of ex tempore Reasons:      14 February 2012
Date of published reasons:          9 July 2012

IN THE ACT CIVIL &                   )

ADMINISTRATIVE TRIBUNAL )   FILE NUMBER

XD 12/100

Mark Coghlan, Claude D’Abrere, Troy Roughley & Judith Walker as members of the
Executive Committee of the Owners  
Corporation of Units Plan 930

Applicants

Chris Miliano, Mario Spiteri, Bruce Grant, Kathryn Gray, Tracey-Lee Kowalski, Gordon Tomes, Trevor Raymond, Cameron Shaw, Sandra Jokic, Alan Ashman, Sheree Harford, Richard Siddall, John Barisic, Egon Kulessa, & Belinda Lewis as owners of Units Plan 930     

Respondents

Tribunal:  Ms L. Crebbin, General President

Date of order:   14 February 2012

ORDERS

1. This application is to be heard at the same time as application XD 12/130.

1. The respondents are to send an amended or further written request for a general meeting by the end of the day on 15 February 2012.

1. The conference listed for 23 February 2012 at 10.45am is vacated.

1. The application will be listed for further directions at 9.30am on 27 February 2012 if the applicants decide not to call a general meeting.

1. Otherwise, the application is listed for further directions at 9.30am on 26 March 2012.

These orders should be read in conjunction with orders made in application XD 12/130 on 14 February 2012

........................................

Ms L. Crebbin,
General President

IN THE ACT CIVIL &                   )

ADMINISTRATIVE TRIBUNAL )   FILE NUMBER

XD 12/130

Mark Coghlan, Claude D’Abrere, Troy Roughley & Judieth Walker as the members of the

Executive Committee of the

Owners Corporation of Units Plan 930

Applicants

Capital Strata Management Services Pty Ltd trading as Capital Strata Management Services

Respondent

Tribunal:  Ms L. Crebbin, General President

Date of order:   14 February 2012

ORDERS

1. The respondent’s name is amended to Capital Strata Management Services Pty Ltd trading as Capital Strata Management Services.

1. The applicants’ details are amended by adding the words “as the members of the Executive Committee of the Owners Corporation of Units Plan 930” to the title of the proceedings.

1. Applications XD 12/100 and XD12/130 are to be dealt with together.

2. The general meeting of the owners corporation of Units Plan 390 scheduled to be held at 7.30pm on Thursday 16 February 2012 is stayed until further order.

3. The respondent is to provide the applicants with the following information by 10am on 16 February 2012:

   (i)a copy of the Corporate Register;

   (ii)details of any authorised representative of a unit owner or owners;

   (iii)information about any amounts payable to the owners corporation by any unit owner as at 16 January 2012 and 16 February 2012.

1. By the end of the day on 23 February 2012, the applicants will tell the respondent and the tribunal whether they have decided to call a general meeting and if so, direct the respondents to arrange a venue and do other work necessary to facilitate the holding of a meeting no later than 16 March 2012.

2. If the applicants decide to call a general meeting they will provide the respondent with an approved agenda and approved form of proxy by the end of the day on 23 February 2012.

3. If the applicants decide that they will not call a general meeting, this application will be listed for further directions at 9.30am on 27 February 2012 together with application XD12/100.

4. This application is listed together with application XD12/100 at 9.30am on 26 March 2012.

5. The parties may request that the application be re-listed at short notice.

The Tribunal notes that the applicants undertake not to press the respondents to complete a site survey or to change the insurance for the owners corporation pending the holding of the general meeting referred to in order 6 above.

These orders are to be read in conjunction with orders made in application XD 12/100 on 14 February 2012

........................................

Ms L. Crebbin,
General President

REASONS FOR DECISION

1. This short statement explains why the tribunal made interim orders on 14 February 2012 which amongst other things, stayed a general meeting of the owners corporation of Units Plan 930 that had been called for 16 February 2012.

2. The tribunal understands that Units Plan 930 is a complex of about 55 units most of which are occupied by owners. These proceedings involved two separate, but related, applications lodged by the members of the then executive committee of the owners corporation.

Background

1. On 16 January 2012, a petition signed by 15 people was sent to the manager of the owners corporation. The petition requested the executive committee to call a general meeting so that the members of the owners corporation could consider a motion to remove all the existing members of the executive committee and appoint new members in their stead.  It was not necessary for the Tribunal to know about the issues that led to the presentation of the petition, suffice it to say that it was apparent that there were conflicts about several issues and that as a result, an atmosphere of tension and perhaps even mistrust had developed between several owners, some of the members of the executive committee and the manager.

2. The manager sent a copy of the petition to the executive committee on the evening of the day that it was received. After an exchange of emails with the executive committee, the manager proceeded to call a general meeting. It set the date, arranged a venue and sent out notices and proxies. The members of the executive committee had not asked the manager to do so and indeed, had specifically instructed the manager not to do so.

3. The manager’s case in summary was that it called the general meeting and sent out notices, notwithstanding the instruction of the executive committee, because it had an obligation to the owners corporation and because the executive committee had delegated its functions, including its functions in relation to the preparation and distribution of notices of general meetings, to the manager. The executive committee, it was said, could no longer exercise those functions itself.

4. The first application was filed with the tribunal by members of the executive committee on 31 January 2012. This was four days after the manager advised the executive committee and the petitioners that it had set a date for the general meeting and arranged a venue. The first application named the 15 petitioners as respondents. In the first application, the executive committee asked 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 (the UT Act) and whether the proposed motion was valid. I note that the UT Act applied at the times relevant to this matter. The Unit Titles (Management) Act 2011 (the new Act) came into effect a few weeks later.

5. Section 96 (2) of the UT Act (now found in a slightly different form in section 3.5, Schedule 3 of the new Act) provided:

   The executive committee of an owners corporation must call a
   general meeting ... if it receives a written request, stating the matters to be considered at the meeting, from people who are entitled to vote on all motions for units whose combined unit entitlement is at least 1/4 of the total unit entitlement in the units plan.

1. Section 96 of the UT Act did not set a time limit by which a general meeting was to be held. The new Act now provides that such meetings should be held within 28 days of receipt of a written request.

2. Section 110 (now found in section 3.20, Schedule 3 of the new Act) of the UT Act explained who was entitled to vote on a motion at a general meeting. It said:

110 Who is entitled to vote?

(1) The people entitled to vote on a motion at a general meeting of an
owners corporation are as follows:

(a) for a unit owned by a single individual—the unit owner;
(b) for a unit owned by a single company—the company’s
representative;
(c) for a unit owned by 2 or more people (whether as joint owners
or tenants in common)—the unit owners representative.

(2) However, if a unit is subject to a mortgage and a mortgagee voting
notice is in force for the unit, the person entitled to vote for the unit
is the mortgagee’s representative rather than the relevant person

mentioned in subsection (1).

(3) If the owners corporation has 3 or more members, a person is only entitled to vote for a unit on a motion requiring an ordinary or
special resolution if all amounts payable to the owners corporation
for the unit have been paid. (emphasis added)

1. 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 are entitled to vote on all motions for units whose combined unit entitlement is at least 1/4 of the total unit entitlement in the units plan’.

2. 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.

3. The second application was filed on Friday, 10 February 2012 and named the manager as the respondent. That application asked for a number of orders or declarations including an urgent injunction to stop the general meeting that the manager had called and arranged for 16 February 2012. Other orders sought included orders requiring the manager to give the executive committee a copy of the corporate register in electronic form and an order requiring the 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. 

4. Because of the short time frame, the tribunal listed an urgent hearing for 14 February 2012 on the question of whether an interim order should be made about the general meeting scheduled for 16 February 2012.  Although that order was sought in the second application, it was clearly of interest to the respondents to the first application. Accordingly, all parties were notified of the hearing. The amount of notice was of necessity, very short.

5. The Tribunal dealt with the request for an injunction as an application for an interim order under section 53 of the ACT Civil and Administrative Tribunal Act 2008 (ACAT Act). Section 53 of the ACAT Act gives the tribunal a power to make interim orders to protect the position of a party pending the hearing of a substantive application.

6. Subsection (1) of section 53 of the ACAT Act sets a threshold that must be met before the tribunal’s power is enlivened. The tribunal must be satisfied that if an order were not made before the substantive application is heard, the party applying for the order would be disadvantaged or suffer harm. This is a threshold requirement. If it is met, the tribunal has a discretionary power provided by subsection (53) (2) of the ACAT Act to make an order that it considers appropriate to protect the position of the party that applied for the order. The tribunal’s discretion under subsection (53) (2) of the ACAT Act goes to both the making of the order and to the terms of the order.

7. The interpretation and application of section 53 was considered by the Tribunal in detail in the matter of Morgan and Construction Occupations Registrar [2011] ACAT 18.

8. In this case, I 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.  I decided that orders should be made to stay the holding of the general meeting scheduled for 16 February 2012 and to facilitate the holding of a general meeting on a later date.  

1. The people present at the hearing provided information about some of the events that led the executive committee to file the two applications. Of particular relevance was an indication by Mr Siddall, one of the respondents to the first application and a signatory to the petition, that the petitioners recognised that the petition might not meet the requirements of section 96 (2) of the UT Act because of questions firstly, about whether everyone who signed the document was authorised to do so and secondly, about whether everyone who signed the document was a person who was entitled to vote as defined by section 110 of the UT Act. As a result, Mr Siddall said that they were in the process of circulating a fresh petition that he expected to be finalised very shortly and that would, without doubt, meet the requirements of section 96 (2) such that a general meeting would have to be called by the executive committee in response to it.

2. I also noted the following:

   (i)The manager forwarded the petition to the executive committee as an attachment to an email sent on the evening of 16 January 2012. The email asked the executive committee to advise the manager of its “decision as to the date of the meeting...” by close of business on 19 January 2012. The email did not say anything about whether the manager was satisfied that the petition met the requirements of section 96 (2), nor did it contain information that would allow the members of the executive committee to determine that issue themselves.

   (ii)On 19 January 2012, the chair of the executive committee emailed the manager saying that it had the matter under consideration and would advise of “our requirements in due course”.  After further emails, the chair and secretary emailed the manager on 24 January stating that it had not been possible to arrange a meeting of the executive committee to consider the petition in the time frame suggested by the manager because some of the members were away. In any event, it was noted that the legislation required that there be 7 days notice of executive committee meetings.

   (iii)The manager was asked to provide a copy of the corporate register to the executive committee in electronic form by 27 January 2012. It did not do so. As at the date of the hearing, the members of the executive committee did not have a copy of the corporate register. It was provided on 16 February 2012 in response to an order made by the Tribunal.

   (iv)There was some debate about whether the executive committee had been given information by the manager about the payment of levies by owners. The members of the executive committee said that the manager had not provided information that would allow them to verify that the petitioners were all people who were entitled to vote at the time they signed the petition. The manager said that ample financial information had been provided to the members of the executive committee, although it was agreed that the information they had would not allow them to verify the levy status of the petitioners as they sought to do.

   (v)At the hearing, the manager indicated that it recognised that it was possible that some of the petitioners had not paid all amounts payable to the owners corporation at the time that they signed the petition. The manager thought that that would not nullify the executive committee’s obligation to respond to the petition by calling a general meeting. The manager thought that it would be sufficient if the petitioners ensured that they were entitled to vote by paying any amounts payable before the general meeting commenced.

1. I 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. Perhaps more importantly, 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 to contribute to on-going tension between owners.

1. I acknowledged that, on the other hand, the petitioners would be prejudiced if the meeting of 16 February was stayed because this would delay the airing and resolution of their grievances.  However, I 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.

2. 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.

3. On balance, I was satisfied that an interim order should be made. I 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 new petition was presented.

4. I 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 as at the time that they signed the petition, should not be counted. Contrary to the view of the manager, section 96 (2), in my opinion, 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.

5. Further, I did not accept that the executive committee had delegated its power to call a general meeting to the manager. It is not the case that the executive committee, having engaged a manager, lost the power to exercise its own functions or to give direction to the manager.

6. I do not understand why the corporate register was not provided to the executive committee by the manager until the Tribunal ordered that it be made available. Nor did there appear to be any reason why the executive committee could not have been given information about the payment of levies, regardless of whether the manager thought that that information had already been provided. It was not unreasonable for the members of the executive committee to want to satisfy themselves that they were required to respond to the petition by calling a general meeting, particularly given the serious nature of the proposed motion. Neither the manager, nor the owners would have been prejudiced by the provision of that information. 

7. I was satisfied that the members of the executive committee were acting in accordance with what they understood to be their obligations and the requirements of the legislation when they responded to the manager’s email of 16 January 2012. Their response was a little slow, but might have been hastened by a more helpful initial email from the manager.

8. It was unfortunate that there was not a greater degree of open communication between the manager, the members of the executive committee and the petitioners from the outset. The tone of the conversations between the various participants at the tribunal hearing, was combative. That is not conducive to harmonious living in a multi unit complex.

1. I note that the applications were ultimately withdrawn so that it was not necessary to make a final decision or formal findings about the issues raised in the applications.

........................................

Ms L. Crebbin,
General President