Green v The Owners - Units Plan No. 199 - [2014] ACAT 52

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

GREEN & ORS v THE OWNERS - UNITS PLAN No. 199
(UNIT TITLES) [2014] ACAT 52

UT 14/03
Catchwords: UNIT TITLES – voting requirements for special resolution –requirements met – motion validly passed
Legislation:Unit Titles Act 2001 (ACT) ss 106, 107, 146, 166
Unit Titles (Management) Act 2011(ACT) ss 129, Schedule 3, 3.14, 3.16, 3.31, 3.7

Tribunal: Ms J. Lennard – Senior Member

Date of Orders: 8 August 2014
Date of Reasons for Decision: 8 August 2014

ACT CIVIL AND ADMINISTRATIVE TRIBUNAL UT 3 of 2014
BETWEEN:
CAROLE SLADEN, LINDSAY GREEN,
BRUCE BRAMMALL, BRYAN CLARKE
& TONY SWAN
Applicant

AND:
THE OWNERS – UNITS PLAN No. 199
Respondent

TRIBUNAL: Ms J. Lennard – Senior Member

DATE:8 August 2014
ORDER

The Tribunal Orders that:

The application is dismissed.

The matter is set down for 14 August 2014 at 2pm for a directions hearing in relation to the merit review of Motion 3.1 of the General Meeting held 5 February 2014.

………………………………..
Ms J. Lennard – Senior Member

REASONS FOR DECISION

On 5 March 2014 the ACT Civil and Administrative Tribunal (the Tribunal) received an application filed by certain owners of Units Plan No. 199 against the Executive Committee of the Owners of Units Plan No. 199 (the executive committee).
A directions hearing was held on 28 March 2014 and directions were made about the following:
(a)The application was listed for hearing on 24 April 2014 on the question of what were the correct voting requirements for Motion 3.1 which had been put at a General Meeting held on 5 February 2014. The hearing was also to consider the correct voting requirements for Motion 3 put at a General Meeting held on 19 July 2011, if a counter-claim was filed.
(b)The applicants were to file, by 9 April 2014, a timeline, witness statements and other relevant documents they proposed to rely on as well as written submissions.
(c)The respondents were to file a response including any counterclaim, a timeline, witness statements and other relevant documentation they proposed to rely on as well as written submissions.
(d)It was noted that if the applicants were unsuccessful at the hearing on 24 April 2014, the Tribunal would undertake a merits review of the decision made in respect of Motion 3.1 at the General Meeting held on 5 February 2014. The application would be given a date for a directions hearing so that the merits review could be progressed.
The parties filed the documents as directed.
The hearing was held on 24 April 2014. The parties appeared without legal representation.

Background

Lindsay Green, Carole Sladen, Bruce Brammall, and Bryan Clarke, four of the applicants in this matter, were members of the executive committee of Units Plan No. 199 in 2011.
In early 2011, the owner of unit 15 requested approval for an extension to his unit.
The owner of unit 15 had legal advice that the extension would not cause significant increases to the unit entitlement of unit 15, nor significant decreases to the unit entitlement of the other units within the complex; and therefore that there was no necessity to make an application to amend the unit entitlements.
The executive committee also sought legal advice and was advised that the default articles for Units Plan No. 199 contained the following clause:
4 Erections and alterations
(1) a unit owner may correct or alter any structure in or on the unit or the common property only –
(a) in accordance with the express permission of the owners corporation by unopposed resolution; and
(b) in accordance with the requirements of any applicable territory law.
The Unit Titles Act 2001(ACT) was applicable to applications for extensions, variations of the lease and amendment to unit entitlements at the time of the meeting in July 2011. Section 146 of the Unit Titles Act 2001 required a special resolution of the owners corporation authorising an application to the planning and land authority for amendment to the schedule of unit entitlements. Section 106 provided that the requirements for passing a special resolution at a general meeting were that the number of votes cast in favour of the resolution had to be greater than the number of votes cast against it; and the votes cast against the resolution had to number less than one third of the total number of votes that could be cast on the resolution by people present at the meeting, including those present through a proxy.
Section 166 of the Unit Titles Act 2001 required an unopposed resolution of the owners corporation to authorise an application to be made for variation of the lease. Section 107 provided that the requirements for passing an unopposed resolution at a general meeting were that – (a) no votes were to be cast against the resolution; and (b) at least one vote was to be cast in favour of the resolution. Note 1 to the section said that an abstention for any unit would not prevent an unopposed resolution from being passed, provided that at least one vote was cast in favour of it.
A general meeting of the owners of Units Plan No. 199 was held on 19 July 2011. Before the meeting the executive committee circulated a covering letter and some background notes relating to three motions to be put to the general meeting.
Three motions were passed unopposed at that general meeting: one approving the extension to unit 15; the second retrospectively approving an extension to unit 34; and the third approving amendments to the schedule of unit entitlements for Units Plan No. 199. The extensions to unit 15 were duly undertaken.
In August 2011, the owners corporation applied to the ACT Planning and Land Authority (ACT PLA) to amend the unit entitlements. From September 2011, the levies for the units affected by the amendment to the unit entitlements were increased or decreased in accordance with the schedule approved by the meeting in July 2011, even though the schedule had not been registered. In October 2011 ACT PLA gave permission to amend the entitlements and the Executive Committee engaged Chamberlains Law Firm to complete the registration process. The registration process required the production of the original certificates of title for the units affected by the amendment to the unit entitlements.
This process was not completed, due to difficulty in obtaining the original certificates of title and in October 2012, Chamberlains Law Firm ceased working on the matter. The application for registration is now beyond the time limit set by legislation. The Owners Corporation would now need to request ACT PLA to grant an extension of time for completion of the application to amend the unit entitlements.
In August 2013, the current executive committee was elected. The executive committee sought advice from ACT PLA. That advice was not in evidence before the Tribunal however, in its written submission, the respondent states:
ACTPLA advised that it does not require a change [to] the entitlements as a result of the extension to Unit 15. But if the Owners Corporation wishes to do so, ACTPLA can once again extend the authority. Because it is 2 and a half years since the 2011 general meeting, ACTPLA would now require [a] new valuation advice on the appropriate distribution of entitlements based on relative values in 2014.
The respondent’s documents also noted that a number of units have been extensively renovated since 2011 and the schedule of amended entitlements as presented to the July 2011 meeting would no longer be accurate. The applicants did not contest this evidence.
A general meeting of the owners held on 5 February 2014 passed the following resolution:
That no further attempt be made to register the amendments to the original Schedule of Unit Entitlements for Units Plan 199 which were approved at the general meeting of owners on 19 July 2011 (‘Motion 3.1’).
The owners also passed a motion authorising the levies to be reset in accordance with the original schedule of unit entitlements.

The issue before the Tribunal

ACAT has power pursuant to section 129(1)(b)(ii) of the Unit Titles (Management) Act 2011 (the UTM Act) to make a declaration that a resolution of a general meeting or executive committee meeting is void for irregularity
The applicants contend that there is only one issue before the Tribunal; namely, whether Motion 3.1 is validly passed – that is, whether the motion was passed in accordance with the voting requirements set out in the UTM Act.
On 8 January 2014, a notice of the general meeting to be held at 7:30 PM on 5 February 2014 was sent to the owners. A copy of the notice was in evidence before the Tribunal. While no question was raised by the applicants with regard to the validity of the notice, the Tribunal notes that the notice complied with the requirements of section 3.7 of Schedule 3 of the UTM Act in that:
(a)sufficient notice of meeting was provided to the owners;
(b)the notice specified the date, time and place of the meeting; and
(c)a form to be used as a proxy or absentee voting paper was attached to the notice.
There was evidence before the Tribunal that before the general meeting, four proxy votes were received in favour of Ms Berry (the Secretary of the Executive Committee), as well as 14 valid absentee voting papers. It was conceded by the parties that these 18 proxy/absentee votes constituted valid voting.
There was also evidence before the Tribunal that during the course of the general meeting some owners left the meeting and provided absentee voting papers to the secretary. This appears to be contrary to section 3.31 of Schedule 3 to the UTM Act which provides: A person entitled to vote on a motion may cast an absentee vote on the motion by recording the vote on an absentee voting paper and giving it to the owners corporation before the meeting begins. [emphasis added]
Section 3.31 of Schedule 3 to the UTM Act provides that where an absentee voting form accompanied the notice of the general meeting and a person casts an absentee vote by recording the vote on that absentee voting paper and giving it to the owners corporation before the meeting begins, the absentee vote is a valid vote and the person who casts that absentee vote is taken to be present at the general meeting at which the motion is moved.
A copy of the minutes of the General Meeting held on Tuesday, 19 July 2011 was in evidence before the Tribunal. The minutes show that the following motion was carried unopposed:
MOTION 3 – RESOLVED that the amendments to Units Plan 199’s schedule of unit entitlements, as described in Attachment D, be approved.
Section 146 of the Unit Titles Act 2001, as in force in July 2011, provided:
146 Unit entitlement authority—grant
(1) An owners corporation may apply to the planning and land authority for authority (a unit entitlement authority) for the amendment of the schedule of unit entitlement.
(2) The planning and land authority may, by written notice to the owners corporation, grant a unit entitlement authority if satisfied on reasonable grounds that —
(a) the application is authorised by a special resolution of the owners corporation made within 3 months before the application is made; and
(b) the amendment is necessary to reflect accurately the current relative improved values of the units, or a change in those values that is anticipated after a particular event happens. [Emphasis added]
Section 146 of the UT Act as presently in force, is in the same terms.
Section 3.14 of Schedule 3 to the UTM Act provides as follows:
(1)Decisions at general meetings must be made by ordinary resolution, unless this Act requires otherwise.
(2)If, at a general meeting, an owners corporation makes a resolution of a particular kind (that is, an ordinary, special, unopposed or unanimous resolution), a resolution of the same kind at a general meeting is required to amend or revoke the earlier resolution, unless this Act requires otherwise.
A copy of the minutes of the general meeting held on 5 February 2014 was in evidence before the Tribunal. The minutes show that Motion 3.1 received 25 votes in favour, eight votes against and three abstentions. If the two absentee voting papers handed to the chairman during the course of the meeting are excluded from the voting then the results are: 23 votes in favour, 8 votes against and 3 abstentions.
The applicants contended that the effect of section 3.14 (2) is that since the original motion at the 2011 meeting to amend the unit entitlements was passed unopposed, then the motion at the 2014 meeting should also be passed unopposed. The Tribunal notes that while the words of the motion passed in 2014 do not expressly amend or revoke the original motion, the effect is to revoke the decision to amend the unit entitlements and also to relieve the executive committee of continuing with the existing application, or commencing a new application for registration of an amended schedule of unit entitlements.
The UTM Act was passed on 20 October 2011. It took effect on 30 March 2012. That Act contains the rules about management of unit plans, including rules relevant to meetings and voting. The rules contained in the Act replace and supercede the rules contained in the Unit Titles Act 2001. The UTM Act sets out the voting requirements for resolutions at general meetings of the owners corporation held after 30 March 2012.
I am satisfied that the motion revoking the original motion to approve amendment to the unit entitlements required a special resolution passed at a general meeting.
Section 3.16 of Schedule 3 of the UTM Act provides that the requirement for passing a special resolution at a general meeting are that the number of votes cast in favour of the resolution is greater than the number of votes cast against it and the votes cast against the resolution must number less than one third of the total number of votes that can be cast on the resolution by people present at the meeting (including proxy votes).
On the evidence before the tribunal there were 34 votes eligible to be cast at the meeting, being 16 persons present, 16 absentee votes and four proxy votes. The tribunal notes that the legislation provides that a person who casts a valid absentee or proxy vote under this section is taken to be present at the general meeting at which the motion is moved.
The motion was passed with 23 votes in favour, 8 votes against and 3 abstentions. The number of votes cast in favour of the resolution was greater than the number of votes cast against it; the 8 votes cast against the written resolution is less than one third of the total number of 34 votes able to be cast by persons present at the meeting.
The tribunal is satisfied that the correct voting requirements for Motion 3.1 at the general meeting held on 5 February 2014 were met and that the motion was validly passed.

………………………………..
Ms J. Lennard – Senior Member