By Prof Graham Paddock

Prof Graham PaddockTime and date of AGMQ1. Does the AGM agenda and time change if only one owner in a 140-unit complex asks for it to?

Once formal notice of the AGM has been given, there is no mechanism in the Act or prescribed rules to change the set date or time.

The trustees are not, in deciding when to hold the AGM, entitled to choose a date or time that is designed to be unsuitable for any owner or group of owners. But subject to this restraint, the trustees could, in deciding when to hold the AGM, take into account the request of just one owner over the wishes of others. If this was the case and they inconvenienced a lot of other owners, I guess they might not stand a good chance of being elected as trustees again.

Liability of trustees

Q2. The body corporate has request a special general meeting in order to remove the current trustees due to certain irregularities. These are, among others:

1.    The rates for the common property are still outstanding, yet the trustees have imposed a special levy for other matters. The body corporate is of the opinion that if a special levy was imposed to pay the outstanding rates, there would have been no problem. There was nonotification or consultation when the special levy was imposed.

2.    The previous managing agents have misappropriated funds from the body corporate, yet the trustees have not instituted criminal or civil proceedings against these managing agents. The trustees say that they are waiting to “climb on board” another body corporate’s case against these managing agents.

Can the current trustees be held responsible for these and other irregularities, even though they will be removed from office?

A2. The potential personal liability of trustees is set out in section 40 of the Act, which you can download from the library on this site.

But the short answer is no. Only where the fraudulent or grossly negligent actions of trustees have caused the body corporate loss or the trustees have personally benefited at the body corporate’s expense does the possibility of recourse against the trustees personally arise.

Majority owner steamrolling

Q3. I am in an industrial estate of 19 units. One company owns 15 units and is steamrolling us into doing what it wants. Is this legal?

A3. The Act and prescribed rules do not contain any provisions that stop a majority owner using the votes to steamroll other owners.

At the moment, your options are to establish and prove that the steamrolling has caused you actual prejudice and then either go to the high court or initiate an arbitration to get relief. Parliament is currently busy with the Community Scheme Ombud Service Bill that is designed to give owners in sectional title and other types of community schemes quicker and cheaper access to justice. Hold thumbs!

Article reference: Paddocks Press: Volume 6, Issue 1, Page 6
Professor Graham Paddock is an authority on sectional title law and practice, the lead consultant to the government for new legislation. Prof Paddock has been involved in sectional title training for a number of years and he is putting together Paddocks Club, which will be launched next week.
This article is published under the Creative Commons Attribution license.