EGM's - to call or not to call?
By Frank Higginson02 Nov 2008
We recently acted for a resident manager who successfully appealed against an adjudicator’s decision.
The case arose out of a general meeting which had voted in favour of the resident manager obtaining a variation to its management rights agreements to create a further five year option term in each agreement.
Some salient facts were:
- The committee had called an EGM (paid for by the resident manager) to consider the variation.
- Circulated with the agenda for that EGM was a four page ‘Question & Answer’ document from the resident manager. This was clearly written by the resident manager, as opposed to the committee or any advisor to the committee.
At the first instance, due to the above issues, the adjudicator decided that the result of the meeting was invalid.
On appeal, that reasoning was overturned. Some key elements of the decision from a body corporate perspective are:
- Calling an EGM to consider a matter that will benefit an owner, or a class of owners, is not improper. This is especially supported if that owner or class of owners pays the body corporate’s costs. Ultimately, there are some decisions that can only be made at general meeting, and there is no reason for a committee not to put those matters to general meeting. This is only reasonable.
- There were no grounds at law to declare the result of the meeting invalid because of the circulation of additional material with the agenda. The BCCM Act did not expressly prohibit additional material being sent with an agenda.
So, what should we take from this decision?
- Provided that a committee recovers the costs of the general meeting from the owner concerned, calling an EGM to make a decision on a matter at the request of that owner is not inappropriate.
- To be completely safe, if an owner wishes to circulate material not required by legislation with an agenda they should send that through their own methods. All owners have access to the body corporate records to obtain addresses if required.