Spedding v The Owners Units Plan 3941 (Unit Titles) - [2025] ACAT 12

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

SPEDDING v THE OWNERS UNITS PLAN 3941 (Unit Titles) [2025] ACAT 12

UT 45/2023
Catchwords: UNIT TITLES – meetings – Unit Titles (Management) Act 2011 – omission of special purpose fund budget from notice of annual general meeting – the common law of meetings – argument that an entire meeting is void due to the omission of one resolution from the meeting notice and from the meeting agenda – the effect of the Unit Titles (Management) (Meeting Agenda) Guidelines made under the Unit Titles (Management) Act 2011 – whether entire annual general meeting is void for irregularity under section 129(1)(e)(i) – meaning of ‘irregularity’ – considerations in decision-making under section 129(1)(e)(i) - meeting not void

Legislation cited: Legislation Act 2001 ss 146, 156
Unit Titles (Management) Act 2011 ss 41, 72, 75, 129(1)(e)(i), Schedule 3, ss 3.6, 3.7, 3.8, Dictionary

Subordinate

Legislation cited: Unit Titles (Management) (Meeting Agenda) Guidelines 2020
Unit Titles (Management) (Meeting Agenda) Guidelines 2023

Cases cited:Bourne v Murphy [1996] NSWCA 59
Maiorana v The Owners – Strata Plan No 1418 [2019] NSWCATCD 36
The Muslim League of NSW v Hussein Waniya [2000] NSWSC 986
The Owners Corporation Units Plan 202 v Brudenall & Ors (Unit Titles) [2015] ACAT 64
Owners Strata Plan 46528 v Hall [2009] NSWSC 278
Owners Strata Plan No 57164 v Yau [2016] NSWSC 1056
Owners Strata Plan No 57164 v Yau [2017] NSWCA 341
Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28
R v Gray; ex parte Marsh (1985) 157 CLR 351
Read v The Owners – Strata Plan No 2533 [2021] NSWCATAP 218
Shree Sanatan Dharm Sabha of NSW Inc v Mani [2006] NSWSC 657
Turner v King [1992] 1 Qd R 307

List of

Texts/Papers cited: Christopher R Kerin, Guide to ACT Strata Law (Kerin Benson Lawyers, 2017)

Tribunal:Senior Member J Kalokerinos
Date of Orders:  27 February 2025
Date of Reasons for Decision:      27 February 2025
Date of Publication:  6 March 2025
AUSTRALIAN CAPITAL TERRITORY          )
CIVIL & ADMINISTRATIVE TRIBUNAL     )          UT 45/2023

BETWEEN:

DAVID SPEDDING
Applicant

AND:

THE OWNERS – UNITS PLAN 3941
Respondent

TRIBUNAL:Senior Member J Kalokerinos

DATE:27 February 2025

ORDER

The Tribunal orders that:

The application is dismissed.
………………………………..

Senior Member J Kalokerinos

REASONS FOR DECISION

The Orders sought

On 8 December 2023, Mr David Spedding (the applicant) filed an application with the ACT Civil and Administrative Tribunal (ACAT, or the Tribunal). Following amendments to the application made at a directions hearing on 12 January 2024, the amended order sought was that:
1. ACAT declare that the Annual General Meetings held on 4 October 2023 and 21 October 2022 are void for irregularity.
UTMA Section 129(1)(e)(i) refers.

The proceedings

Submissions were lodged by both of the parties. In response to the application, the respondent submitted detailed submissions and sought orders that the application be dismissed. On 12 January 2024, a senior member of the tribunal made orders that the questions whether the 2022 and 2023 AGMs were considered at law to be void for irregularity would be considered on the papers, and that, as appropriate, the question of what orders should follow from that determination would be considered at further hearing. The parties were ordered to provide further submissions and did so. The senior member became unavailable to determine the matter on the papers and the matter was subsequently allocated to me for determination. My decision and reasons for decision follow.

The jurisdiction of the tribunal

Part 8 of the Unit Titles (Management) Act 2011 (UTM Act) deals with disputes within an owners corporation. Section 125 provides that where there is a dispute relating to an owners corporation between the corporation and an owner, a party to the dispute may apply to the tribunal for an order in relation to the other party. Section 129 of the UTM Act then sets out the kinds of orders that may be made. Section 129(1)(e)(i) provides that ACAT may declare “that a general meeting or executive committee meeting is void for irregularity.”

Factual background

The Cladding Special Purpose Fund (the fund) was a special purpose fund established at a Special General Meeting (SGM) of the respondent held on 15 February 2022.[1] Its purpose was to fund the replacement of flammable cladding installed in the construction of the unit complex of which the respondent is the owners corporation.[2]

Submissions

[1] Witness statement of Mr Michael Grady, Senior Strata Manager, dated 10 January 2024 at [11]
[2] Respondent’s submissions filed 10 January 2024 at [2.3]

The applicant submitted that irregularities under section 129(1)(e)(i) arose:
(a)under the Unit Titles (Management) (Meeting Agenda) Guidelines 2020 (UTM Meeting Agenda Guidelines argument) because the notices for the 2022 and 2023 AGMs did not contain the ‘budget’ for the Cladding Special Purpose Fund, and
(b)through a purported breach of Schedule 3 to the UTM Act which concerns general meetings (the Schedule 3 argument) and which required the passage of an ordinary resolution approving a ‘budget’ for the Cladding Special Purpose Fund.
In support of his claim of invalidity, the applicant made submissions about the correct application of a range of provisions of the UTM Act. He also cited a strata law textbook which stated that a failure to include annual financial statements or the general fund budget in the notice of general meeting would invalidate the notice and require the re-issue of the notice and potentially re-setting the date of the meeting.[3]
[3] Applicant’s Reasons for Application dated 8 December 2023, citing CR Kerin, Guide to ACT Strata Law (Kerin Benson Lawyers, 2017), page 77
The respondent noted that the proper definition of the term ‘budget’ as employed in the UTM Act is central to the contentions of the parties.[4] The term ‘budget’ is not defined in the UTM Act.
The UTM Meeting Agenda Guidelines argument
[4] Respondent’s submissions filed 10 January 2024 at [3.3]
The UTM Meeting Agenda Guidelines are a notifiable instrument made by the Attorney-General under section 41 of the UTM Act.
The 2020 Guidelines were in force between 1 November 2020 and 7 September 2023, when they were replaced by the Unit Titles (Management) (Meeting Agenda) Guidelines 2023, which took effect on 8 September 2023. Accordingly, the 2020 UTM Meeting Agenda Guidelines applied to the 2022 AGM and the 2023 UTM Meeting Agenda Guidelines applied to the 2023 AGM.
The two instruments are identical in the following respects relevant to the applicant’s case. Part 2 of Schedule 1 to the instrument sets out a list of items which must be included for each AGM. The list includes 11 items, including matters like elections for the Executive Committee (listed at the first dot point), consideration of structural defects (dot point 2), presentation of financial statements (dot point 6), insurance (dot point 8) and audit (dot point 9). Included at dot point 7 is “Finances and proposed budgets in connection with each fund, ie, administrative fund, general fund, sinking fund, special purpose fund”.
The applicant submitted that the omission of a proposed budget for the Cladding Special Purpose Fund from the notice of the 2022 and 2023 AGMs constituted a breach of the UTM Meeting Agenda Guidelines and an irregularity under section 129(1)(e)(i). The respondent did not specifically address the operation of the UTM Meeting Agenda Guidelines in its submissions, but it provided detailed submissions on the related matter of the effect of section 3.8(1) of Schedule 3 on whether defects in notice invalidated the meetings[5] and the application of the Tribunal’s power under section 129 to declare a meeting void for irregularity.[6]
The section 75 and Schedule 3 arguments about the requirement for an ordinary resolution
[5] Respondent’s submissions filed 10 January 2024 at [3.24] to [3.28]
[6] Respondent’s submissions filed 10 January 2024 at [4.1] to [4.4] and Respondent’s further submissions filed 22 January 2024 at [1.1]-[2.5]
Schedule 3 to the UTM Act contains requirements setting out how general meetings of owners corporations must be conducted and how decisions are made at those meetings.[7] Section 3.7(3)(b) of Schedule 3 provides, relevantly, that “[f]or a notice of an annual general meeting, the notice must include a copy of the following … the general fund budget.”
[7] The Note to Schedule 3 of the UTM Act refers
In his submissions, the applicant drew attention to section 72 of the UTM Act which defines ‘general fund’ to mean “the corporation’s administrative fund or a special purpose fund” and to the following parts of section 75:[8]
75 General fund – budget
(1) At each annual general meeting of an owners corporation, the corporation must, by ordinary resolution, approve a budget (the general fund budget) for the administrative fund and each special purpose fund for the financial year in which the meeting is held.
(2) The general fund budget must state for the financial year in which the annual general meeting is held—
…
(c)an estimate of payments to be made out of the general fund […].
[8] Applicant’s Reasons for Application dated 8 December 2023
The applicant submitted that the omission of a resolution approving a ‘budget’, as defined in sections 72 and 75, for the Cladding Special Purpose Fund constituted an irregularity under section 129(1)(e)(i).[9]
[9] Applicant’s Reasons for Application dated 8 December 2023
The respondent lodged detailed submissions setting out the structure of the relevant provisions of the UTM Act and providing analysis of their interaction with the factual circumstances.[10]
[10] Respondent’s submissions filed 10 January 2024
The respondent noted that the word ‘budget’ as first used in section 75(1) is not defined in the UTM Act. The respondent also submitted that the term ‘general fund budget’ is also not defined by the Act where it is used in the obligation in section 3.7(3)(b) of Schedule 3 that a notice of an AGM must include a copy of the general fund budget. ‘General fund budget’ is defined in the Dictionary to the UTM Act, but the definition is expressly limited to division 5.2 of the UTM Act. Schedule 3 is not in division 5.2 of the Act and accordingly that definition does not apply.[11] In its further submissions, the respondent also drew attention to section 156(1) of the Legislation Act 2001 which provides that a definition in the dictionary to an Act or statutory instrument applies to the entire Act or instrument unless the Act or instrument provides for the definition to have a more limited application. The respondent’s submission noted that the instant circumstances were identical to those in the second example provided in section 156(1): “In an Act, the word z is defined in the dictionary. The definition provides, in part, that ‘z, in part 4 (Registration of vehicles), means ...’. The definition of z applies only to pt 4.”[12] Accordingly, where the term ‘general fund budget’ appears in section 3.7(3)(b) of Schedule 3, it does not carry the meaning given in section 75(1).
[11] Respondent’s submissions filed 10 January 2024 at [3.17]-[3.19]
[12] Respondent’s further submissions filed 22 January 2024 at [3.1]-[3.3]
The respondent submitted that resort must be had to the general dictionary definition. The respondent cited the Macquarie Dictionary definition, which provides, relevantly, that ‘budget’ means: “1. an estimate, often itemised, of expected income and expenditure, or operating results, for a given period in the future. 2. (sometimes upper case) estimates of government income and expenditure. 3. a plan of operations based on such an estimate. 4. an itemised allotment of funds for a given period.”[13]
[13] Respondent’s submissions filed 10 January 2024 at [3.4]-[3.7]
In its submissions, the respondent explained that, as a matter of practical reality, the ordinary purpose of a budget, to give an estimate of the expected income and expenditure for a given period, did not apply here. The sources of funds for the Cladding SPF and the expected cost of the works had been quantified and approved at the 2021 AGM (16 December 2021) and were known with certainty by the conclusion of the February 2022 SGM. Accordingly, by the time of the 2022 and 2023 AGMs, the income and expenditure for the Cladding SPF was certain and the subject of binding legal obligations.[14]
[14] Respondent’s submissions filed 10 January 2024 at [3.8]-[3.9]
The respondent submitted that, in light of this, the obligations under section 3.7(3)(b) of Schedule 3 to provide details about the Cladding SPF in the 2022 and 2023 AGM Notices and any obligation under s 75(1) for the approval of an ordinary resolution about the Cladding SPF at the 2022 and 2023 AGMs were met by the statements of financial position and statements of financial performance in relation to the Cladding SPF. These formed part of the 2022 and 2023 AGM Notices and formed part of motions which were passed at both meetings concerning the approval of the audited financial statements.[15]
[15] Respondent’s submissions filed 10 January 2024 at [3.10]
The respondent submitted that it was not necessary for the Cladding SPF to presented as a separate budget in a format similar to other documents entitled ‘Proposed Budget’ which applied for the administrative fund and the sinking fund because the obligation in section 75(1) of the UTM Act is concerned with future income and expenditure, and in the case of the Cladding SPF, all the necessary approvals of the respondent to enter into contracts to effect the Cladding Replacement Project, the establishment of the Cladding SPF and payments into and out of it, were concluded matters as a result of the 2021 AGM and the February 2022 SGM.[16]
[16] Respondent’s submissions filed 10 January 2024 at [3.11]-[3.14]
The respondent submitted that this conclusion was bolstered by the fact that, were the relevant requirements to be those the applicant contended, this would mean that the decisions reached at the February 2022 SGM by way of special resolution could be nullified at a subsequent general meeting by an ordinary resolution.[17]
[17] Respondent’s submissions filed 10 January 2024 at [3.15]
The respondent submitted further arguments if the above arguments were not accepted. The respondent argued that since the definition of ‘general fund budget’ as defined in the Dictionary to the UTM Act expressly did not apply to section 3.7(3)(b) of Schedule 3, the ordinary meaning of the term must therefore apply. It argued that the ordinary meaning of the term does not include a budget for a special purpose fund, because:
(a)as a matter of text, the ordinary meaning of the word ‘general’ in the term ‘general fund budget’ is, by definition, the opposite of ‘special purpose’ in describing a ‘special purpose fund budget’, and
(b)as a matter of context and purpose, the other applicable requirement under section 3.7(3) at paragraph (a) is to provide a copy of the annual financial statements, being a record of prior or historical expenditure in the past financial year. This suggests that the purpose of the ‘general fund budget’ required to form part of a notice for an AGM and passed at an AGM relates to forward-looking income and expenditure.[18]
The scope and application of section 3.8 of Schedule 3 (defective notice of meetings)
[18] Respondent’s submissions filed 10 January 2024 at [3.16]-[3.23]
The applicant dealt at some length in his submissions about the scope and application of section 3.8(1) of Schedule 3 of the UTM Act.[19] Given this, it is convenient to set out the section in full:
[19] Applicant’s Reasons for Application dated 8 December 2023
3.8 Defective notice of meetings
(1)     The proceedings at a general meeting are not invalid only because a person did not receive proper notice of the meeting.
(2)     However, if a person did not receive notice of the meeting in accordance with section 3.6 (2), the person may make a request for the adjournment of the meeting by written notice to the executive committee before the day or time fixed for the start of the meeting.
(3)     A request by a person under subsection (2) may be made by someone else on the person’s behalf.
(4)     If the executive committee receives a request for adjournment under subsection (2), the committee must give the request to the chairperson of the meeting immediately after the chairperson is elected.
(5)     The chairperson may adjourn the meeting to a time, date and place to be decided (by ordinary resolution) by the people present and entitled to vote on all motions at the meeting if the chairperson considers on reasonable grounds that—
(a)notice of the meeting in accordance with section 3.6 (2) was not given to the person by or for whom the request was made; and
(b)in the circumstances it would be unfair to allow the meeting to go ahead at present.
The applicant submitted that section 3.8 is limited in its application only to late receipt of notices, that is, only to circumstances where a notice which was sent out on time, was received late, and a request for an adjournment was made prior to the commencement of the meeting. The applicant submitted that subsection 3.8(1) must be read together with the other subsections and with section 3.6.[20] He speculated that a general meeting where the notice omitted the date, time or location of the meeting and only the committee members attended because other owners were not aware of the time, date or place of the meeting, could not take the benefit of section 3.8(1). He cited the relevant part of the Explanatory Statement in support of his interpretation.[21]
[20] Section 3.8(2) refers to section 3.6(2), which provides:
(2) The executive committee must give notice of the general meeting—
(a)so that the notice would reasonably be expected to be received at least 14 days before the date fixed for the meeting; or
(b)if a motion is to be moved that requires an unopposed or unanimous resolution—so that the notice would reasonably be expected to be received at least 21 days before the date fixed for the meeting.
[21] Applicant’s Reasons for Application dated 8 December 2023
The respondent made submissions contending that, in the event that its earlier arguments regarding the scope and application of the UTM Act in the instant circumstances were not accepted, section 3.8(1) would be a complete response to the applicant’s argument.[22]
[22] Respondent’s submissions filed 10 January 2024 -[3.24]-[3.28]
In response to the applicant’s submissions about the limitations of the section 3.8(1), the respondent contended that:
(a)section 3.8(2) commences with the word ‘however’, which creates a distinction between section 3.8(2) and the preceding section 3.8(1), and
(b)the alternative procedure enumerated in sections 3.8(2) to (5) being expressed to apply specifically in circumstances where section 3.6(2) has not been met, reinforce the conclusion that section 3.8(1) was intended to apply to circumstances to which sections 3.8(2) to (5) do not apply, as it would render the latter provisions otiose.

The law

The effect of the UTM Meeting Agenda Guidelines

The UTM Act does not prescribe the effect of non-compliance with the UTM Meeting Agenda Guidelines. In their submissions, neither of the parties provided any precedents concerning the effect of the UTM Meeting Agenda Guidelines, and the effect of non-compliance therewith.
The Schedule 3 argument about the requirement for an ordinary resolution and the scope and application of section 3.8 of Schedule 3 (defective notice of meetings)
I was not persuaded by the applicant’s arguments about the operation and effect of section 3.8 of Schedule 3. I agree with the respondent’s analysis of the provision. The applicant submitted that the component parts of the section must all be read together, and only related to provision of late notice for a meeting. However, this interpretation is not supported by a plain reading of the text of the section. The heading to the section is broad in its compass and does not limit it to applying only to provision of late notice. The Explanatory Memorandum, cited by the applicant in favour of his interpretation, simply provides: “Defective notice of meetings – specifies the procedures for a meeting where the notice of the meeting was defective.”[23] I do not find any support for the applicant’s interpretation in it.
[23] Clause 98 of the Explanatory Statement to the Unit Titles Bill 2000

The example which the applicant cited to illustrate the dangers of an untrammelled application of section 3.8 was an extreme one. He postulated that, on a broad reading of section 3.8, it might be argued that it could save a general meeting where the notice omitted the date, time or location of the meeting and only the committee members attended because other owners were not aware of the time, date or place of the meeting. Even if a quorum were able to be achieved under such a scenario, I do not agree that section 3.8 could save such a meeting. However, it could apply in circumstances where a mere technical defect in the notice were made, which did not cause any substantial injustice or prejudice to the members or any other persons entitled to attend the meeting.
Decisions about the effect of non-compliance with statutory meetings requirements
There is a disposition, from time to time expressed by some members of clubs, associations or other member-based organisations, to consider a constitution or other governing document:
…as a code of fundamental rights and to characterise the slightest departure from them as “unconstitutional” or “invalid”. But a provision in a document of this kind is to be construed in accordance with the same principles of construction adopted by the courts in problems of interpretation of statutes and documents. A provision in a “Constitution” of this kind prescribing the time for performance of some act has no greater force or different legal effect than a similar provision in an ordinary contract or statute…Provisions in statutes prescribing that certain things are to be done within a certain time may be mandatory or directory according to their nature.[24]
[24] Green v Page [1957] Tas SR 66 per Burbury CJ at [81]; cited by the Full Court of the Supreme Court of South Australia in Popovic v Tanasijevic [2001] SASC 289 at [42] per Williams J, Doyle CJ and Martin J agreeing. Green concerned a claim of invalidity of the election of the board of a sporting association at an AGM convened in November, in circumstances where the rules prescribed that the elections and AGM were to be held in September. The claim failed.
There is considerable caselaw to the above effect concerning the effect of non-compliance with the governing rules of voluntary associations, but also concerning the effect of non-compliance with statutory provisions in a range of different contexts.
Turner v King [1992] 1 Qd R 307 concerned a parliamentary election, where a Returning Officer was absent for periods of time from the room in which ballot papers were deposited. There, the statutory provisions around counting of votes and ensuring the security of the ballot papers did not give rise to a necessary implication of invalidity where the ballot papers may have been left unattended for a period of time. The Full Court of the Supreme Court of Queensland found that the judge at first instance (sitting as the then Queensland Elections Tribunal) did not intend to find that a breach of the relevant statutory provisions had occurred, but that “if one had occurred, as a consequence of the events which he was satisfied took place, then it was not one which automatically invalidated the election.”[25] The Court noted that “statutory directions, while very useful in laying down specific rules of conduct for the purpose of uniformity and guidance, should not be regarded on the one hand as absolute or on the other hand as exclusive. It means that if the breach of security were such as to produce a reasonable view that a false result may have occurred, then in the absence of a breach of statutory direction the common law would provide a ground for its invalidation.”[26] The reference to the common law there, was a reference to the common law of elections. In Turner v King, there was no reasonable ground for supposing that the ballot papers were actually tampered with.[27] If there was, the common law of elections may have assisted the appellant’s case. In that case, the court referred to “laxity” of practice, which led to potential breach of the legislation, but characterised the laxity as having “no relevant practical consequence”. In other words, not every breach of a statute (or subordinate law) necessarily carries with it the consequence of invalidity.
[25] Turner v King [1992] 1 Qd R 307 at [311] per Macrossan CJ
[26] Turner v King [1992] 1 Qd R 307 at [316]-[317] per Derrington J
[27] Turner v King [1992] 1 Qd R 307 at [319] per de Jersey J
This type of analysis is regularly applied across a range of jurisdictions in the context of bodies corporate, including owners corporations.
The Muslim League of NSW v Hussein Waniya [2000] NSWSC 986 concerned a challenge to the validity of the general meeting of a large association incorporated under the Associations Incorporation Act 1984 (NSW), stemming from alleged breaches of provisions of its constitution relating to general meetings. The Court noted that the meeting was well-attended and proceeded in an orderly fashion.[28] In finding that the meeting was validly convened and held, Young J said:
…one must not be overly technical about notices in relation to meetings and I think that proposition, which is true enough under the Corporations Law, is a fortiori the case under the Act. One must look at the notice convening the meeting and read it sensibly as it would appear to a person reading it as a lay person without legal training and ask, ‘is that person informed as to what is the purpose of the meeting?’[29]
[28] [2000] NSWSC 986 at [9]-[10]
[29] [2000] NSWSC 986 at [15]
Young J’s dictum is apposite: not every slip in a notice of meeting or in practice at a meeting will render the entire meeting void - one must look at the notice convening the meeting and the conduct of the meeting and consider them sensibly as they would appear to a person reading it or attending it as a person without legal training and ask whether that person has been informed as to the purpose of the meeting and had the opportunity to consider the appropriate business of the meeting.
His Honour (by then Chief Justice in Equity) made a similar point in Shree Sanatan Dharm Sabha of NSW Inc v Mani [2006] NSWSC 657, a case which concerned the validity of a committee meeting, at [20]:
…one must not be too prissy about giving notice of meetings in small organisations. On the other hand, one must be careful that the members’ rights are all protected. It seems to me on the evidence that I have that the members of the committee were all informed of the general nature of the matters which were concerning the Sabha, and discussions were had as to what could be done about the matters that were concerning the Sabha.
These cases are important because they illustrate the approach that Courts have taken when considering the validity of a meeting where there is evidence of technical slips in notices or in some practices adopted at a meeting, is to look at the whole of the circumstances and consider in substance whether there has been any prejudice to the members, in particular whether they were fully informed about the purpose of the meeting prior to considering whether or not to attend it, and whether they had a full opportunity to consider relevant matters appropriately before the meeting or were deprived of an opportunity to do so.

Consideration

Overall, I accept the logic of the respondent’s submissions. The respondent’s submissions carefully analyse the relevant statutory provisions and apply them to the facts.
As noted by the applicant in his further submissions, the respondent did not specifically address the question of whether there was a breach of the UTM Meeting Agenda Guidelines in its submissions.[30] In the following part of this decision, I explain my decision about the application of the UTM Meeting Agenda and the effect of a breach. In case it is considered that I am in error in my primary conclusions about the interpretation of Schedule 3 of the Act, I also apply the following analysis to the effect of the asserted breach of Schedule 3.
[30] Applicant’s further submissions filed 29 January 2024
The Guidelines are made under section 41(2) of the UTM Act. Section 41(2) provides that the Minister (currently the Attorney-General) may make guidelines about items that the chairperson must include on an agenda under this section. In my opinion, it is notable that this obligation is framed as a duty of the chairperson of an owners corporation, not as an obligation of the owners corporation per se. In the event, this point is not critical to the outcome of the case, and given that it was not raised or addressed by either party in their submissions, I have not based my decision on it.
It is arguable that the UTM Meeting Agenda Guidelines were breached by the omission of a specific proposed budget item for the Cladding SPF at the relevant AGMs. However, this conclusion is not free from doubt, given the respondent’s argument that the relevant content was in fact dealt with through resolutions at previous meetings, principally the 2021 AGM and the February 2022 SGM and the fact that the relevant costs and funding sources had been identified and set aside and much of the funds were expended by the time of the 2022 AGM, and were almost completely expended by the date of the 2023 AGM. In any case, if it is considered that there has been a breach of the UTM Meeting Agenda Guidelines, I have been unable to identify any published caselaw concerning the effect of non-compliance with them.
The effect of non-compliance with the Guidelines and Schedule 3 fall to be considered by the application of the principles of statutory interpretation and the common law of meetings.
The relevant test for considering whether, in the absence of explicit provision, a breach of legislation will lead to invalidity, is the High Court’s classic test in Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28:
An act done in breach of a condition regulating the exercise of a statutory power is not necessarily invalid and of no effect. Whether it is depends upon whether there can be discerned a legislative purpose to invalidate any act that fails to comply with the condition…A better test for determining the issue of validity is to ask whether it was a purpose of the legislation that an act done in breach of the provision should be invalid…In determining the question of purpose, regard must be had to ‘the language of the relevant provision and the scope and object of the whole statute.[31]
[31] [1998] HCA 28 per McHugh, Gummow, Kirby and Hayne JJ at [91] and [93]
In recent years, courts and tribunals across multiple Australian jurisdictions have been asked to adjudicate on similar challenges to matters at owners corporations meetings and have applied this analysis. In essence, it has the effect that consideration of context and purpose may sometimes require that the words of a statute are interpreted differently to their literal or grammatical meaning. In applying this test in comparable circumstances to those of the instant case, invalidation has not been found to be a consequence of failure to comply with analogous provisions.[32]
[32] For example: Owners Strata Plan 46528 v Hall [2009] NSWSC 278; Owners Strata Plan No 57164 v Yau [2016] NSWSC 1056 (upheld on appeal in Owners Strata Plan No 57164 v Yau [2017] NSWCA 341); Maiorana v The Owners – Strata Plan No 1418 [2019] NSWCATCD 36 ; Read v The Owners – Strata Plan No 2533 [2021] NSWCATAP 218
In Owners Strata Plan 46528 v Hall [2009] NSWSC 278 (Hall), Kirby J of the NSW Supreme Court broke down the test in the following terms:
(a)The language of the statute; did it include mandatory language, like ‘must’?
(b)The subject matter and the objects of the statute
(c)The consequences of holding void every act done in breach of the provision (the inconvenience).
In Hall, Kirby J addressed similar circumstances, where a notice dealt with a number of matters required by legislation which used the word ‘must’, but omitted other matters which should also have been included. His Honour noted that it would be a startling and most inconvenient conclusion to find that the AGM could therefore not be characterised as an AGM and all business transacted at it a nullity.[33]
[33] Owners Strata Plan 46528 v Hall [2009] NSWSC 278 at [73]
In Owners Strata Plan No 57164 v Yau [2017] NSWCA 341, a similar issue of whether ‘must’ was mandatory or directory in nature in the context of NSW strata legislation was one of the matters in issue. The Court did not discern a legislative purpose to invalidate an act of the Executive Committee where there was non-compliance with the legislation’s notice provisions. The primary judge in that case (upheld on appeal) noted that a failure to comply with the notice requirements might take any number of forms, “some may be significant, others may be trifling. It is difficult to see why the objects or purpose of the Act would be promoted by holding that every resolution or decision of an executive committee made at a meeting convened contrary to the notice requirements was invalid and of no effect.”[34]
[34] Owners Strata Plan No 57164 v Yau [2016] NSWSC 1056 at [96]. The challenge to the meeting in this case failed.
Although the UTM Meeting Agenda Guidelines are not primary legislation, the common law rules of statutory interpretation also apply to the interpretation of subordinate legislation. Applying this analysis to the Guidelines, I find that the alleged breach in the instant case would not lead to invalidity of the entire notice and, therefore, the meeting. First, the Guidelines include the word ‘must’ in referring to the items to be included in a meeting agenda. However, not every use of the word ‘must’ in comparable circumstances has been held to impose a mandatory obligation.[35] Additionally, the instrument itself is titled ‘Guideline’, which suggests that something short of full compliance would not inexorably lead to invalidity. As I have previously indicated, it may also be significant that the obligation is placed on the chairperson, not on the owners corporation or the committee as whole.
[35] Owners Strata Plan 46528 v Hall [2009] NSWSC 278 at [73]
Second, the subject matter and objects of the Act (specifically Schedule 3) and the Guidelines concern good corporate governance in owners corporations, how meetings are to be conducted and specifically, provision of clear and not misleading notices of meetings. I do not find a legislative purpose to invalidate the AGM of an owners corporation where a single resolution has been made (or omitted) in breach of one of these requirements. Rather, I perceive a legislative purpose to set out a fair and transparent framework for owners, providing an opportunity to participate in the owners corporation’s decision-making processes. I do not consider that invalidating every act or omission in breach of section 75 or the Schedule or the Guidelines serves these purposes. If it were intended that any breach, of any provision, would render a decision void, the Act (or the Guideline) would say so. In my opinion, the Act and the Guideline do not set out a consequence for breach of these provisions or the Guideline because the legislation recognises that a breach may be substantial or trifling, and each breach must be reviewed in its own context to determine what remedy (if any) is appropriate. The Act establishes a route for aggrieved owners to make an application to the Tribunal under the Act and the Tribunal needs to carefully consider each case to determine if a remedy is appropriate.
In the instant circumstances, I find that these objects were supported. The quantum of funds to support the Cladding SPF, the source of the funds and the expected cost of the works had all been considered and approved at the 2021 AGM and the February 2022 SGM. Accordingly, the substantive business relating to the Cladding SPF concerned reporting on the expenditure and this was included on the agenda (statements of financial position and statements of financial performance). In my view, it is not the discernible purpose of the Guidelines or these provisions of the UTM Act to invalidate all acts or omissions (or the acts or omissions in the instant case) contravening the Guidelines or the UTM Act.
Third, the breach of this provision, in the instant circumstances could not reasonably be considered to have the result of invalidating the entire AGM. I have no doubt that the owners attending the meeting believed that they were at the corporation’s AGM. They transacted the business of the meeting, voted on motions and passed resolutions without realising that an item had been overlooked.[36] To find that the omission of one item required under the Guidelines had the outcome of invalidating the entire meeting would be completely disproportionate to the nature of the breach and would have significant consequences in terms of cost and inconvenience for the owners corporation and the members. Although one agenda item had been overlooked, its substance had been dealt with elsewhere, and the meetings were still AGMs.
[36] On the face of the evidence of the minutes of the 2022 and 2023 AGMs, it does not appear that the issue of the omission of this agenda item was raised at those meetings. With respect to the 2023 AGM, upon receipt of the notice of meeting for the 2023 AGM, the applicant queried the strata manager about the omission of the proposed budget for the Cladding SPF. In response, a revised notice of meeting was distributed containing the balance of the forecast costs, consistent with previous resolutions: Emails of 19 and 20 September 2023 and respondent’s timeline page 8. There is no evidence that the respondent pressed the point any further. In any case, the Cladding replacement project was completed shortly thereafter, with the Certificate of Completion issued on 15 December 2023: respondent’s timeline at 1288
These reasons should not be interpreted as supporting a view that no breach of the requirements of Schedule 3 or the UTM Meeting Agenda Guidelines will result in invalidity. If multiple resolutions required under the Schedule to be considered at a meeting or multiple items listed in the Guidelines as requirements for notices were omitted from a meeting notice, or other circumstances were present, such as bad faith or clear evidence of substantive (not merely procedural) prejudice to members, the result may be otherwise. The magnitude of the failure must be considered. A grave failure to comply could lead to invalidation, but that has not been made out here.
As noted earlier in these reasons, the applicant cited a textbook which stated that a failure to include annual financial statements or the general fund budget in the notice of general meeting would invalidate the notice and require the re-issue of the notice and potentially re-setting the date.[37] The reference cited in the textbook specifically refers to a failure to include annual financial statements or the general fund budget in the notice of meeting. This reference does not assist the applicant’s case because both of those matters were included in the notice and their inclusion or otherwise is not in issue in this case. Furthermore, in the ordinary course of corporate business, the inclusion of annual financial statements and a general fund budget are core matters for consideration at any owners corporation AGM as they are fundamental to the corporation’s proper functioning. The reference in the textbook does not mention special purpose funds which are, in any case, qualitatively different as they are intrinsically not as fundamental a matter as the annual financial statements and the general fund budget.
Was there an “irregularity” within the meaning of s 129(1)(e)(i) of the UTM Act?
[37] Applicant’s Reasons for Application dated 8 December 2023, citing CR Kerin, Guide to ACT Strata Law (Kerin Benson Lawyers, 2017), page 77

In case it is considered that I am in error in my primary conclusions, it is desirable that I express conclusions about whether there was an “irregularity” within the meaning of s 129(1)(e)(i) of the UTM Act.
“Irregularity” is not defined in the UTM Act. In R v Gray; ex parte Marsh (1985) 157 CLR 351, in circumstances where “irregularity” was not defined in the relevant statute, Gibbs CJ referred to the dictionary definition of the word.[38] According to the Macquarie Dictionary, “irregularity” in its relevant sense, means “a breach of rules”. However not every breach of legislation will necessarily constitute an irregularity. This point was made by Beazley JA in Bourne v Murphy [1996] NSWCA 59 in the context of alleged breaches of local government election regulations. Her Honour found that it was not any irregularity which would suffice to enliven the power of the court to make declarations consequent upon irregularity, but rather “it must be an irregularity such that the result of the election is thereby uncertain”.[39] In considering whether the bar for ‘irregularity’ within the meaning of the section was met, her Honour went on to consider the seriousness of the consequences of granting a remedy under the relevant section and the extraordinary consequence which would flow if any small slip were considered to be an irregularity with the consequences attendant thereto.[40] Direct application of her Honour’s dictum here would make the applicant’s case untenable as it would mean that the ‘irregularity’ of the failure to include the specific resolution in the AGM notices and to consider it at the meetings could have had the effect of invalidating both AGMs. I am not satisfied that it constituted an irregularity for this purpose.
[38] (1985) 157 CLR 351 at [367]-[368]
[39] Bourne v Murphy [1996] NSWCA 59 at [30]
[40] For example, the wrong classification of a single ballot paper: [1996] NSWCA 59 at [36]
This analysis is consistent with the analysis applied by Member Daniel (as she then was) in The Owners Corporation Units Plan 202 v Brudenall & Ors (Unit Titles) [2015] ACAT 64. In that case, the issues included, relevantly, whether proper notice of a special resolution was given in advance of an AGM, in the circumstance where the notice of meeting did not refer the requirement for a special resolution and the information provided to owners was said to be so inaccurate and misleading about the effect of the motion so as to amount to a lack of proper notice being given.[41] In declining to find that the resolution was not passed as a special resolution for want of notice, Member Daniel set out many of the considerations which also apply to the instant case:
73.I am not satisfied, however, that in the overall context of the history of the matter, the deficiencies in that document were such as to amount to the owners being misled as to the nature of the proposal, or that it would have a possible adverse financial impact upon them. There was a factual background of over a decade of events including litigation, numerous pieces of legal advice and previous resolutions for maintenance being passed then revoked. Against the full history of the matter, I am satisfied that notwithstanding deficiencies in the revised maintenance proposal and covering letter, the owners were fully informed of the nature and substance of the proposal and that it would have a direct financial impact upon them. The respondents also relied upon the fact that no detailed costings accompanied the proposal. I am not persuaded that detailed costings are necessary in order for the owners to be fully apprised of the nature of the motion being debated in 2015, let alone in 2002.
74.The content of the motion as set out was such that it gave the reader notice of the nature of the motion and that they may wish to attend or consider that motion. It is clear, particularly given the history of this owners corporation in relation to this practical issue, that no one would have been taken by surprise at the substance and seriousness of the motion.
[41] The Owners Corporation Units Plan 202 v Brudenall & Ors (Unit Titles) [2015] ACAT 64 at [66]
I find that in the instant case, the information about the Cladding Special Purpose Fund contained in the 2022 and 2023 AGM notices was not misleading and its omission as a separate budget item from the meeting notice and separate consideration in the meeting agenda in circumstances where it was, in substance, included elsewhere on the agenda could not reasonably have had a material adverse financial impact on the members. Accordingly, I find that its omission did not constitute an irregularity for the purposes of section 129(1)(e)(i). As outlined by the respondent in its submissions[42] and in the witness statement of the Senior Strata Manager,[43] the debate about the need for the cladding, how it would be funded and the management of the works had been had, at length, and resolved by the time of the 2022 AGM. As noted by the respondent, the applicant had played a significant role in these debates.[44] Continued consideration of the project’s budget would have been inutile; the budget had been the result of consideration of motions at annual and special general meetings prior to the 2022 and 2023 AGMs. The funds for the project had been identified, raised, set aside and to a large degree expended by the time of the 2022 and 2023 AGMs; the certificate of completion was issued in December 2023.
The exercise of discretion under section 129 of the UTM Act
[42] Respondent’s submissions filed 10 January 2024
[43] Witness statement of Mr Michael Grady, Senior Strata Manager, dated 10 January 2024
[44] Respondent’s submissions filed 10 January 2024 at [4.4]
If I am wrong, and it is considered that the failure to include the cladding as a separate budget item in the agenda in the notice of meeting of the 2022 or 2023 AGMs or to consider it as a separate resolution at either of those AGMs is considered an irregularity within the meaning of section 129(1)(e)(i), then for the following reasons, I decline to make an order under that section.
The use of the word “may” in section 129 makes it abundantly clear that the Tribunal has a discretion about whether or not to make an order under it. For more abundant clarity, the Legislation Act 2001 provides that in an Act, “the word may, or a similar term, used in relation to a function indicates that the function may be exercised or not exercised, at discretion.”[45] ‘May’ does not mean ‘must’. As the respondent noted in its submissions, there is no mandatory requirement that the Tribunal must make any orders, even if the circumstances for relief are made out.[46] To do otherwise would be to impermissibly denude the word of its meaning.
[45] Legislation Act 2001, section 146(1)
[46] Respondent’s submissions filed 10 January 2024 at [4.2]
Consistent with the ordinary principles of decision-making by tribunals, a range of considerations go into the making of a determination about whether to make an order under section 129. The applicant submitted that the Tribunal does not have the power to make orders that are inconsistent with the provisions of an authorising Act.[47] With respect, such a submission is too broadly cast to be accepted as a whole argument about the application of the discretion under section 129(1)(e)(i). As will be clear from these reasons, non-compliance with the provisions of the Act does not automatically result in invalid meetings or resolutions. The very existence of section 129 and the power reposed by it in ACAT confirms this – it provides a forum through which persons can seek relief in respect of resolutions or meetings where there has been non-compliance with the Act where the consequence of non-compliance is not otherwise specified in the Act.[48]
[47] Applicant’s Reasons for Application dated 8 December 2023
[48] This point was also made by Beazley P (with whom Leeming JA and Emmett AJA agreed) in Owners Strata Plan No 57164 v Yau [2017] NSWCA 341 at [111] in relation to the role of the Adjudicator under section 153 of the former Strata Schemes Management Act 1996 (NSW)
In its submissions, the respondent identified a range of reasons why the Tribunal should not exercise its discretion to make an order of irregularity under section 129(1)(e)(i). I set those out below, accompanied by the supporting reasoning for each as identified by the respondent in its submissions:
(a)The making of an order would be futile: it would be futile to make orders impugning the Cladding Special Purpose Fund given that decisions about the establishment and undertaking of the cladding replacement project were made at the February 2022 special general meeting, well prior to the 2022 AGM, and the funds had already been expended by the date the application to the Tribunal was made; furthermore, the works undertaken could also not reasonably be reversed.[49]
(b)The making of an order would lead to a disproportionate outcome: the outcome sought, ie the invalidation of the whole of the 2022 and 2023 AGMs (and the attendant cost and inconvenience), is disproportionate to the matter complained of, ie the inclusion of a budget for the Cladding Special Purpose Fund, in the circumstances where most of the matters determined at the 2022 and 2023 AGMs were not matters connected to the Cladding Special Purpose Fund[50] and cladding costs were considered in other parts of the meeting. It would be extraordinary if such a significant and disproportionate outcome could arise from what might be considered to be a minor irregularity.
(c)There was no surprise about the matter; it had been the subject of extensive prior consideration at meetings of members: the need for the cladding replacement project was clearly communicated at several prior general meetings and in communications from the Executive Committee, stemming from safety concerns and significant impacts on insurance, through premium increases, limitation of coverage and the unwillingness of other domestic insurers to offer coverage.[51]
(d)The applicant did not act promptly to complain about the matter: in relation to the 2022 AGM notice and the 2022 AGM, it was more than 12 months before the applicant applied to the tribunal for relief. Following the 2022 AGM, the respondent had made decisions and acted based on the outcome of that meeting.[52]
(e)The applicant (and the members as a whole) had already had (and taken up) opportunities to ventilate the matter in a special general meeting: the members had considered the Cladding Special Purpose Fund and the cladding replacement project at the February 2022 SGM which had determined these matters. At that meeting, the applicant exercised his right to be heard by putting a motion seeking that the Executive Committee re-examine the cladding replacement project and provide the members at the next general meeting with updated, fully costed and fully funded proposals, but chose to rescind the motion prior to it being voted on.[53]
(f)The actions of the owners corporation in relation to the matter had been taken consistent with directions previously endorsed by the members: Through the administrator in place at the time, the owners corporation continued the cladding replacement project, as noted in an update to members in July 2022, and as ratified at a further SGM in August 2022, less than two months before the 2022 AGM.[54] Other related proposals were also put to the August 2022 SGM and did not pass; the members had extensively considered the matter.[55]
(g)The making of an order would subvert the clear will of the collective unit owners: the applicant had put motions or proposals to earlier general meetings which had not been supported and accordingly to grant the order here would subvert the will of the members.[56]
(h)The making of an order would visit substantial cost on the owners corporation: substantial costs, principally comprising the cost of a further administrator, would be visited on the respondent. These were estimated by the respondent to be in the hundreds of thousands of dollars.[57]
(i)The substantial costs would be disproportionate to the benefits expected to be derived from the making of an order: The previous administrator in place took a conservative approach and sought not to make any decisions unless they were necessary for the functioning of the owners corporation, and otherwise sought to defer such decisions until the administrator was able to hold a general meeting and pass control to a validly elected Executive Committee.[58]
(j)The statutory context of section 129(1) suggests that section 129(1)(e)(i) is concerned with the irregularity of an entire meeting: section 129(1)(e)(ii) is concerned with the irregularity of a specific resolution and section 129(1)(e)(iii)(C) is concerned with the irregularity of a specific rule of an owners corporation.[59] Thus the task of the Tribunal is to determine whether the entirety of the 2022 and 2023 AGMs were void for irregularity, rather than a specific resolution, which was not argued by the applicant. The respondent submitted that the distinction is significant because it draws attention to the specific alleged irregularities and whether they result in the voiding of the entire of the 2022 and 2023 AGMs. An irregularity with a specific matter at or in relation to a general meeting does not necessarily result in an irregularity with the whole of the general meeting: it is the latter with which section 129(1)(e)(i) is concerned.
[49] Respondent’s submissions filed 10 January 2024 at [4.4(a)]
[50] Respondent’s submissions filed 10 January 2024 at [4.4(b)]
[51] Respondent’s submissions filed 10 January 2024 at [4.4(c)]
[52] Respondent’s submissions filed 10 January 2024 at [4.4(d)]
[53] Respondent’s submissions filed 10 January 2024 at [4.4(e)]
[54] Respondent’s submissions filed 10 January 2024 at [4.4(f)]
[55] Respondent’s submissions filed 10 January 2024 at [4.4(g)]
[56] Respondent’s submissions filed 10 January 2024 at [4.4(h)]. It is not entirely clear whether the making of an order would subvert the will of the collective unit owners, however based on the evidence tendered with the Tribunal, that conclusion could be drawn. As noted earlier in these reasons, the matter of the omission of these resolutions from the notices of meetings and their consideration at the meetings was not raised at either AGM. There is evidence of only one member (the applicant) raising the omission of a specific Cladding SPF budget item from the 2023 AGM agenda prior to that meeting, but the strata manager sought to respond to that concern and issued a revised notice of meeting in response to it, addressing the substance of the applicant’s concern: Emails of 19 and 20 September 2023 and respondent’s timeline page 8.
[57] Respondent’s submissions filed 10 January 2024 at [4.4(i)]
[58] Respondent’s submissions filed 10 January 2024 at [4.4(j)]
[59] Respondent’s further submissions filed 22 January 2024 at [1.1]-[1.7]
The Tribunal finds this analysis persuasive, and ultimately compelling.
Additionally, given the effluxion of time since the 2022 and 2023 AGMs and the fact that the Cladding Replacement Project was completed in December 2023, there would be no practical utility in invalidating the AGMs. Indeed it would be counter-productive and constitute an unnecessary cost to the owners.[60] Invalidating the entire proceedings at the two AGMs would visit upon the respondent and the owners an impact out of proportion to the issue raised by the applicant. The Tribunal declines to make an order under section 129(1)(e)(i).
[60] Similar points were made by the NSW Civil and Administrative Tribunal Appeal Panel in Read v The Owners – Strata Plan No 2533 [2021] NSWCATAP 218. The challenge to the meeting in that case failed.
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Senior Member J Kalokerinos