Valid EC meeting? Valid decisions? | Executive Committees | Flat Chat Forum: Your Questions Answered
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We had an Executive Committee Meeting with some controversial agenda items set down for a particular date, the notice was on our notice board for all to see… but the meeting was actually held three days early, apparently due to a typo in the agenda date, with no correction made to the agenda on the board. (Not clear yet who turned up and who didn’t.)
Is the meeting and are the decisions made valid? I’m not on the committee but made a submission to be considered, but too late for the earlier meeting; and I would like to have gone and listened.
OK, reading as much material as I can, I think the EC meeting was invalid and, logically, the decisions made at it probably were too – but I don’t think that means much more than you have a bunch of incompetents running your building. If they had any sense they would quickly call another meeting to ratify the decisions they made, if there were any possible repercussions.
By the way, I hope one of our professional members puts me right if I have got this wrong.
I’ve outlined my reasoning below but in purely pragmatic terms, there are enough safeguards under the Act for owners to call an EC to account if they have made bad decisions in meetings that were unconstitutional. I suspect the most you would ever get from Fair Trading and the CTTT would be a ‘there … there …” and a pat on the head.
There are three things that occur to me. The first is that the Adjudicator can declare decisions made at a meeting of an owners corporation invalid if the meeting hasn’t been conducted under the terms of the Act (see 153 below). But is an EC meeting a meeting of the owners corporation? It may be significant that in the preceding and succeeding items in the Act it refers to ‘general meetings’, but only ‘meetings’ in 153.
So is an EC meeting a meeting of the owners corporation, as defined by the Act? I would think not but section 21 (also below) says that decisions made by the EC are to be taken as decisions made by the Owners Corp unless the owners supersede those decisions at a general meeting.
And there is another thread running through these clauses about the validity of meetings – the Adjudicator can reject an application that a vote at a general meeting was invalid – n the application being on the grounds that owners were denied the chance to vote on it – if their vote wouldn’t have affected the outcome.
In other words, even if you rightly claimed that you weren’t given proper notice, it would only be if your vote would have changed the outcome can you ask for the decision to be invalidated. However, this reference in the Act is only in relation to General meetings. See section 154 below.
Finally, the Act is quite specific in terms of the circumstances in which decisions made in good faith, but where the EC wasn’t legally constituted, can still stand (Section 17) below.
That would suggest to me that decisions made at an EC meeting that wasn’t properly notified may not be valid – but it’s an easy fix – the EC just has another meeting (possibly electronically) and takes another vote to validate all its decisions.
153 Order invalidating resolution of owners corporation
(1) An Adjudicator may make an order invalidating any resolution of, or election held by, the persons present at a meeting of an owners corporation if the Adjudicator considers that the provisions of this Act have not been complied with in relation to the meeting.
(2) An Adjudicator may refuse to make an order under this section but only if the Adjudicator considers:
(a) that the failure to comply with the provisions of this Act did not adversely affect any person, and
(b) that compliance with the provisions of this Act would not have resulted in a failure to pass the resolution or have affected the result of the election.
21Executive committee’s decisions to be decisions of owners corporation
(1) A decision of an executive committee is taken to be the decision of the owners corporation, subject to subsection (4).
(2) However, the following decisions may not be made by the executive committee:
(a) a decision that is required by or under any Act to be made by the owners corporation by unanimous resolution or special resolution or in general meeting,
(b) a decision on any matter or type of matter that the owners corporation has determined in general meeting is to be decided only by the owners corporation in general meeting.
(3) An owners corporation may in general meeting continue to exercise all or any of the functions conferred on it by this Act or the by-laws even though an executive committee holds office.
(4) Despite any other provision of this Act, in the event of a disagreement between the owners corporation and the executive committee, the decision of the owners corporation prevails.
154 Order where voting rights denied or due notice of item of business not given
(1) An Adjudicator may order that a resolution passed at a general meeting of an owners corporation be treated as a nullity on and from the date of the order if satisfied that the resolution would not have been passed but for the fact that the applicant for the order:
(a) was improperly denied a vote on the motion for the resolution, or
(b) was not given due notice of the item of business in relation to which the resolution was passed.
(2) An application for an order under this section may not be made after 28 days after the date of the meeting at which the resolution was passed.
17 Acts and proceedings of executive committee valid despite certain circumstances
Any act or proceeding of an executive committee done in good faith is, even though at the time when the act or proceeding was done, taken or commenced there was:
(a) a vacancy in the office of a member of the executive committee, or
(b) any defect in the appointment, or any disqualification of a member of the executive committee,
as valid as if the vacancy, defect or disqualification did not exist and the executive committee were fully and properly constituted.
Gosh Jimmy, thank you for putting so much time into the reply. I love this forum! Tricky questions answered everyday and the maths at the bottom seems to be getting easier.
I think I’ll wait and have a gander at the minutes before I point out the meeting just, possibly… may have been verging on being… invalid.
An EC meeting is not the same as a meeting of the Owners Corporation. A meeting of the OC is a general meeting, and certain requirements are applicable to that. An EC meeting is a meeting of the members of the EC. The EC makes decisions on behalf of the OC, with certain decisions being reserved to the OC in a general meeting.
EC meetings can be held either in person or by paper and/or electronically, i.e. by email. An OC meeting cannot be held by paper or electronically, although you can have a “dummy” OC meeting where everyone sends in proxies.
What you have here is a failure of the notice requirements. The issue then is whether the decision would have been any different had the notice requirements been met. The primary people who may have cause for complaint are the EC members, although other owners do have the right to give notice that they object to a certain decision of the EC being made. If that is not the case, then at the most it is a procedural irregularity and in any event as Jimmy points out, all the EC has to do is have another meeting and ratify the decision/s.
I live in a large inner city apartment block. Towards the end of the year, the residents have an informal get together. This event usually takes place on the lawn-bbq area or in the foyer, if the weather is inclement.
Recently our executive committee decided to hold a “special function” on common property. The function was presented to the occupants of the building in the minutes of the Executive Committee meeting. At the next meeting it was clear that no argument against the function would be tolerated. Certain members of the Executive were extremely arrogant and dismissive to anybody that objected to the planned function. The committee had been planning the function in conjunction with a local charity for over 2 months without any consultation with the residents.
They are planing a 300 people sit down meal on the tennis court. The tennis court is in high demand all year around and in the warmer months of the year the demand is even higher. The committee will be restricting access to common property during set up and take down of the event. This includes erecting a marquee over the court, instillation of portaloos,camp kitchen, catering trucks and constant movement of people through a security building. Electricity and water will also need to be installed.
The pool, tennis court and lawn-bbq area all have a 10pm curfew.
The issues to me are noise,disruption to day to day living,[with the setting up and take down of the event], security, parking and damage to the court and insurance matters. Also with a charity involved is this really a private residents function?
Our residents’ handbook states that residents must comply with the rules of the use of the recreational facilities specified By the Executive Committee By-law 19. Surely having a function on the tennis court is not correct use of the tennis court!
By-law 3 states that residents must not create noise or behave in a manner likely to interfere with the peaceful enjoyment of the other residents or any person lawfully using the common property.
I feel both of these by-laws are being abused.
I am also concerned about costs. No budget has been presented. They appear to be solely relying on advance ticket sales and generosity. What happens if deposits have been paid to contractors and there is insufficient ticket sales? Will levies be used? There is no apparent transparency in relation to monies. If the event is cancelled will people be reimbursed?
I enjoy the peaceful life in this wonderful building and am very concerned that the Executive Committee have lost sight of what their job is i.e.: to care for the common property. I don’t want to live in a function centre or in Melrose Place. I don’t think it would be what Harry Seidler would have envisioned for his wonderful architectural achievement.
Where do we dissenters stand?
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