By Nicole Wilde

20 August 2019

A property developer, sued by the Owners Corporations that it created, has unsuccessfully applied for summary dismissal of the Owners Corporations’ legal proceedings against it in the Victorian Civil and Administrative Tribunal (“VCAT”).

At an interlocutory hearing, the developer asked VCAT to dismiss the Owners Corporations’ proceedings on the basis that they had not passed valid or effective special resolution authorising the legal proceedings against the developer, as section 18(1) of the Owners Corporations Act 2006 requires.

It is understood from the VCAT decision in that the Owners Corporations’ claims against the developer alleged that the developer breached its duty as the ‘initial owner’ by causing the Owners Corporations to pass various resolutions appointing a property maintenance company to provide services to the Owners Corporations for a 10 year term, thereby causing the Owners Corporations to suffer loss and damage.

The developer’s solicitors inspected the ballot voting forms returned by the lot owners in response to ballots conducted by the Owners Corporation to pass the special resolutions authorising the legal proceedings, and alleged some of the voting forms were invalid. Some of the developer’s challenges to the validity of voting forms included that:-

a. the voting form had not been signed by the registered owner of the lot;

b. the lot owner who completed the voting form had not put their correct lot number on the voting form;

c. the voting form had only been signed by one co-owner when the lot was owned by two owners;

d. the voting form had been signed by a proxy for a lot owner, and where there was no evidence of the proxy form being completed by the lot owner in favour of the proxy;

e. owner completing the voting form had not properly ‘ticked’ whether their vote was ‘for’ or ‘against’ the special resolution;

f. the person completing the voting form did not provide proof of their authorisation to sign the form, where the lot owner was a company;

g. a lot owner was not allowed to ‘re-submit’ their voting form before the ballot closing date.

Other challenges by the developer to the special resolutions included that there was insufficient notice of the ballot given to lot owners and a foreshadowed argument that the actual text of one of the special resolutions was not adequately expressed to authorise a legal proceeding against the developer.

Ultimately VCAT dismissed the developer’s summary dismissal application, but the decision provides a sound reminder about the importance of properly completing voting forms to avoid challenges to the validity of important Owners Corporation resolutions.

 

If you have any further questions please contact Nicole Wilde or a member of the Owners Corporation Law Team.

 

Read the decision in full here:

VCAT Case Reference: Owners Corporation 4 PS5398033E v Bensons Property Group Pty Ltd (Owners Corporations) & Roscon Property Services Pty Ltd [2019] VCAT 652 (17 May 2019)

 

Disclaimer
The material contained in this publication is meant to be informational only and is not to be construed as legal advice. Tisher Liner FC Law will not be held liable or responsible for any claim, which is made as a result of any person relying upon the information contained in this publication.

Related Articles

View All
Owners Corporation / Owners Corporations & Strata

For Transparency’s Sake: Respect the Rights of an Eligible Person to Inspect Owners Corporation Records Free of Charge

Owners Corporations in Victoria have a legal duty to make the records of the owners corporation available for...
Read More
Owners Corporation / Owners Corporations & Strata

Multiple Owners Corporations: Ever wondered how they are meant to operate?

The concept is easy, one plan of subdivision, creates different types of common property areas, and multiple owners...
Read More
Owners Corporation / Owners Corporations & Strata / Construction

“No Permit Building Work” in Victoria: When are owner legal claims ‘time-barred’ from being commenced?

However, there are limited situations where building work is carried out without a building permit:- Either the...
Read More
Owners Corporation / Owners Corporations & Strata

Combustible Cladding – VCAT’s Decision in the Docklands, Lacrosse Tower Fire Case

The following fact sheet provides a summary of the Lacrosse Tower decision: LU Simon Builders Pty Ltd “Docklands...
Read More
Owners Corporation / Owners Corporations & Strata

Making Owners Corporation law easy for committees to understand

Committees often have to deal with complex repair projects or legal disputes in the evenings or weekends when they are...
Read More
Owners Corporation / Owners Corporations & Strata / Planning

Cladding Rectification Agreements: what you need to know about getting a loan to replace flammable cladding

The new legislation, which came into effect of 30 October 2018, will enable local councils to enter into a cladding...
Read More
Owners Corporation / Owners Corporations & Strata

Important Alert: The new Owners Corporations Regulations 2018 (Vic) come into effect on 2 December 2018.

The new regulations include some exciting new changes including a new, practical Model Rule regulating the external...
Read More
Business Law / Construction / Employment Law

September 2018 Newsletter

September 2018 Newsletter See the full newsletter here Welcome TLFC Law are pleased to welcome Min Seetoh to the...
Read More
Owners Corporation / Owners Corporations & Strata

Short-stay accommodation law reform in Victoria: Are you aware of the changes?

The purpose of the Act is to regulate the provision of short-stay accommodation arrangements (up to a maximum of seven...
Read More
Owners Corporation / Property & Development / Owners Corporations & Strata

Considering renovating your apartment? Have you checked you legally own it?

Our population is growing and the construction of higher-density housing is booming Considering renovating If you opt...
Read More
Owners Corporation / Owners Corporations & Strata / Health & Aged Care

Owners Corporations & Retirement Villages in Victoria

People in Victoria over 55 years of age and who have retired from full time employment, may be eligible to purchase a...
Read More