This article outlines the practical steps available when problems arise at an annual general meeting (AGM) and explains how adjudicators have approached some procedural errors in past decisions.
The requirements for calling and holding an AGM is governed by one of the associated regulation modules of the Body Corporate and Community Management Act 1997 (the Act).
We often receive enquiries where people are questioning the process before or after their AGM. There are many moving parts involved in organising and holding a body corporate’s AGM, and the prescriptive regulations mean occasional procedural errors are almost inevitable.
When a mistake does occur, and it affects you or your body corporate, it is important to know that there are a few ways to address it.
What can go wrong
There are a number of procedural errors bodies corporate may inadvertently make that are not in strict compliance with the Act. These may include:
- failure to give proper notice
- holding the meeting outside the legal timeframe
- voting irregularities
- motions improperly excluded from the agenda.
Before lodging a dispute resolution application, consider other steps you can take to try to resolve the issue.
Ask the committee to vote on the issue
The committee has a range of responsibilities both before and after an AGM. If your concern relates to a procedural error that the committee has the power to resolve, the first step may be to contact them and attempt self-resolution.
One option is to submit a motion to the committee. A motion is a written, action-focused request outlining what you want the committee to do. For example, if minutes have not been sent within 21 days of the AGM, you may submit a motion requesting that they be issued as soon as possible.
Self-resolution forms are available on our webpage to assist with this part of the process.
If the committee refuses to pass your motion and self-resolution is unsuccessful, you may consider lodging an application for conciliation.
Ask the committee to call another general meeting
If the committee cannot vote on the issue you would like to address, you can submit a motion about the issue and ask the committee to call an extraordinary general meeting (EGM).
In some cases, giving owners the chance to vote on your proposed motion may resolve the dispute.
For example, if you submitted a motion that requires a general meeting decision, but your motion was erroneously omitted from the agenda of the AGM, you could ask the committee to call an EGM to have the motion voted on.
Another example could be an instance where one or more owners were not given proper notice of the AGM and were unable to vote. The committee cannot vote to change an AGM decision. If those owners’ votes would have changed the outcome of a motion, you could ask the committee to call an EGM – with proper notice given – to have the motion voted on again.
If the committee does not act on your request, you can require an EGM to be called by submitting a written request signed by owners (or their representatives) of at least 25% of the lots.
Once a valid request is received, the committee must call an EGM within 14 days, and the meeting must be held within 6 weeks of receiving the request.
In practice, the process for calling and holding an EGM should take no longer than 6 weeks. By comparison, an adjudication application can take around 5-6 months from lodgement to a final order, depending on the complexity of the matter.
In some situations, calling an EGM may provide a fast and more efficient resolution. In others, it may simply form part of the self-resolution process.
Consider whether the situation may resolve itself
Not every procedural issue requires formal dispute resolution. In some cases, the legislation provides alternative mechanisms that may effectively correct the problem.
For example, the legislation requires the body corporate to invite all lot owners to nominate for committee positions before the end of the financial year.
If this step is missed, there may still be other opportunities to nominate. Where executive positions or the maximum number of ordinary positions have not been filled from the original nomination process, nominations must be called from the floor at the meeting.
In these circumstances, it is worth considering whether the initial breach remains relevant once additional nomination opportunities are provided.
Another example involves AGMs held outside the required timeframe. Legislation requires an AGM to be held within three months of the end of the body corporate’s financial year. However, a late meeting is not automatically invalid.
Adjudicators generally consider whether the delay caused any real disadvantage to owners before deciding if a meeting should be set aside.
How adjudicators approach AGM procedural errors
Not every procedural mistake will invalidate a meeting or its decisions. Although adjudicators’ decisions are not binding precedents, they do provide helpful guidance on how errors are assessed.
Adjudicators must make orders that are just and equitable in the circumstances. Generally, adjudicators will examine whether the:
- error caused prejudice or disadvantage to owners
- outcome of a vote was affected
- procedural irregularity had a material or substantial impact.
For example, in Blue Water Luxury Apartments [2018] QBCCMCmr 540, the AGM was not invalidated despite late notice of the meeting, as no owner was shown to be disadvantaged.
Similarly, in Tropic Palms Manoora [2022] QBCCMCmr 106, it was stated that irregularities must have a material or substantial impact before a meeting or decision will be invalid.
In short, minor technical errors, without real consequences, may not be enough to overturn decisions.
If a procedural error has impacted the outcome of a decision or caused detriment to an owner or the body corporate, an adjudicator is able to make orders that include:
- declaring a motion void
- declaring a meeting void
- requiring the body corporate to re-vote on a particular motion
- requiring a new general meeting to be called.
Adjudication should be the last resort as there are several other avenues for resolving AGM issues. In most cases, these steps must be attempted to meet the mandatory self-resolution requirement.
Before lodging a dispute application with our office, consider:
- could self-resolution resolve the matter?
- will other legislative mechanisms resolve the issue?
- how have similar AGM issues been treated by adjudicators?
Ultimately, taking these additional steps may lead to a faster and more practical resolution to AGM issues than pursuing formal dispute resolution.
This post appears in Strata News #791.
Commissioner for Body Corporate and Community Management
P: Information Service Freecall 1800 060 119
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