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Sending non statutory material with general meeting agendas

By Frank Higginson04 Jan 2009

Welcome to 2009!

Late last year we successfully represented two resident managers in two separate pieces of litigation which considered in great detail the ability of a body corporate to circulate non statutory material with an agenda for a general meeting.

The first matter revolved around a four page ‘question and answer’ document drafted by a resident manager in relation to a variation to his management rights agreement. The resident manager left the document with the body corporate manager, expecting it would be posted to the owners on his behalf separately to the agenda. The body corporate manager chose to send the document with the agenda for the general meeting called to consider the variation.

The second matter was where an owner challenged the ability of a body corporate to circulate legal advice about a motion relating to entry into a new management rights agreement. The legal advice was obtained by the body corporate, at the expense of the resident manager, from a firm independent of the resident manager.

In both instances, the decisions handed down authorised the inclusion of the additional material. In neither instance was it found that the inclusion of the material tainted the outcome of the motion.

What these cases confirm is that the committee has an overriding obligation to act reasonably. In both of these cases, it was determined that the committee acted reasonably in circulating the non statutory material.

These decisions should not to be taken as an open licence to circulate anything that an owner or a committee wishes to put forward with a motion outside the statutory minimums. Both decisions leave scope to finding a motion invalid if the material circulated was unreasonable in the circumstances. Whether material is unreasonable will depend on the facts and circumstances of the particular matter.

All the best for a healthy and prosperous year.