VICTORIAN CIVIL AND ADMINISTRATIVE TRIBUNAL
civil DIVISION
OWNERS CORPORATIONS LIST	VCAT REFERENCE NO. OC2266/2020
CATCHWORDS	
Termination of appointment of owners corporation manager – removal and co-opting Committee members - subsequent ballots and meetings convened by owners corporation manager - Owners Corporations Act 2006 ss 11, 74, 83, 103, 108, 109, 112, 113, 119, 165(1)(ba), 202 – Reg 9, Owners Corporations Regulations 2018  - Grima v Quantum United Management Pty Ltd (Owners Corporations) [2016] VCAT 1960 - Jenkins v OCVM Commercial Pty Ltd (Owners Corporations) [2019] VCAT 1078 - O’Rourke & Anor v Network Pacific Real Estate Pty ltd (Civil Claims) [2009] VCAT 2040.	

FIRST APPLICANT	Graham Rodda	
SECOND APPLICANT	Susan McCarthy	
RESPONDENT	OCC Management Pty Ltd (ACN: 615 067 046)	
INTERESTED PARTY
WHERE HELD	CBD North Melbourne Pty Ltd
By videoconference	
BEFORE	C. Powles, Member	
HEARING TYPE	Hearing	
DATES OF HEARING	14 October 2020, 4 February 2021, 25 – 26 February 2021 & 20 April 2021	
DATE OF ORDER	9 August 2021	
CITATION	Rodda v OC Management Pty Ltd (Owners Corporations) [2021] VCAT 888	

Order

The Tribunal declares that the appointment of OCCM Pty Ltd as the manager of the Owners Corporation No. 1 PS8011118 and Owners Corporation No. 2 PS8011118 (together, the owners corporations) was revoked on the 3 September 2020.
The Tribunal orders that:
1.	OCCM Pty Ltd and its servants and agents are restrained from holding itself out as manager of;
2.	the ballot circulated by OCCM Pty Ltd on or about 22 September 2020 is invalid and of no effect;
3.	the outcomes of the Special General Meeting convened and conducted by OCCM Pty Ltd on 24 February 2021 are invalid and of no effect;
4.	OCCM Pty Ltd must as soon as practicable deliver to the owners corporations all books, records and funds relating to and of the owners corporations.
5.	Costs are reserved pending written submissions from the parties.

C. Powles
Member 
APPEARANCES:		
For Applicants	Mr N. Jones of Counsel
Mr D. Slattery, Solicitor	
For Respondent & interested party	Mr J. Cohen, solicitor	

Reasons
Summary
1	On 3 September 2020, the committee of two owners corporations (the Committee) decided to terminate (the termination decision) the appointment of the manager of the owners corporations, OCC Management Pty Ltd (OCCM) and appoint a different manager for the owners corporations, Ross Hunt Real Estate Pty Ltd (Ross Hunt).
2	OCCM has continued to act as manager of the owners corporations since that time, despite the termination decision. OCCM has not returned the owners corporations’ books, records and funds. 
3	Later in September 2020, OCCM circulated a ballot to lot owners in the owners corporations seeking a resolution affirming its appointment as manager of the owners corporations (the September ballot).
4	In October 2020, Graham Rodda, a lot owner in the owners corporations and chair of the Committee, applied to the Tribunal to be authorised to institute proceedings on behalf of the owners corporations against the OCCM in order to obtain:
a.	declarations confirming the termination decision and that the September ballot was of no effect; and
b.	orders restraining OCCM from holding itself out as the manager of the owners corporations and requiring OCCM to deliver to the owners corporations all books, records and funds of the owners corporations.
5	Mr Rodda’s application was listed for hearing initially on 14 October 2020 and then adjourned for hearing in early 2021 on the preliminary issue of his authorisation to institute proceedings against OCCM.
6	After hearing from the parties on 28 January 2021 and 4 February 2021, the Tribunal joined Susan McCarthy, another lot owner, as an applicant and authorised both Ms McCarthy and Mr Rodda (together, the applicants) to institute proceedings against OCCM on behalf of the owners corporations under s 165(1)(ba) of the Owners Corporations Act 2006 (the Act).
7	In early February 2021, OCCM gave notice of a special general meeting of the owners corporations to be held on 24 February 2021 (the 2021 SGM), at which resolutions would be put to revoke the termination decision and to elect new members to the owners corporations’ committee.
8	The proceedings were listed for hearing before me for two days commencing on 25 February 2021.
9	On 23 February 2021, CBD North Melbourne Pty Ltd (CBDNM), the owner of more than 25% of lot entitlements in the owners corporations, applied to the Tribunal for an adjournment of the hearing commencing on 25 February 2021 pending the determination of the outcome of the 2021 SGM.
10	At the hearing on 25 February 2021, the parties confirmed that the 2021 SGM had been held the day before. I joined CBDNM as an interested party to the application and advise the parties I would begin to hear the proceedings but would, after hearing from the parties for the time listed, adjourn the proceedings to a date after the outcome of the SGM could be determined.
11	After hearing the proceedings on 25 – 26 February 2021, I resumed the hearing on 20 April 2021, at which time the parties provided further evidence and submissions in relation to the outcome of the 2021 SGM.
12	At both the hearings in February and in April 2021, all the parties undertook to not act on any outcome of the 2021 SGM until the final decision of the Tribunal in these proceedings.
13	For the reasons set out below, having considered all the material submitted by the parties and the evidence provided at hearing, I find that:
a.	the committee of the owners corporations validly terminated the appointment of OCCM as manager of the owners corporations in September 2020;
b.	the termination of OCCM’s appointment as manager of the owners corporations has not been validly revoked or set aside, nor has OCCM been reappointed as manager of the owners corporations; and
c.	OCCM has been acting as, and holding itself out as, manager of the owners corporations when, since September 2020, it has not, in fact, been manager of the owners corporations.
14	Accordingly, I have made the orders sought by the applicants.
Submissions and reasons
15	The applicants submitted the following material in support of the application:
a.	Points of Claim dated 5 October 2020;
b.	submissions dated 13 October 2020; 24 February 2021 and 6 April 2021;
c.	affidavits of Graham Rodda dated 3 October 2020 (GR Aff 1); 27 January 2021 (GR Aff 2); 27 January 2021; 23 February 2021 (GR Aff 4); 6 April 2021 and 19 April 2021 (GR Aff 6);
d.	affidavit of Ai-Lynn Wong dated 4 April 2021;
e.	affidavit of Hannah Ryan dated 4 April 2021;
f.	affidavit of Eila Yarnall dated 4 April 2021;
g.	affidavit of Jan Berry dated 4 April 2021; 
h.	affidavit of Matthew Wood dated 6 April 2021;
i.	email from Graeme Bawden to Mr Rodda and others dated 1 June 2020; 
j.	arrears lists for the owners corporations dated 13 October 2020; and
k.	proxy form dated 20 July 2024 owner of Lot M909. 
16	OCCM and CBDNM submitted the following material in response to the application:
a.	Points of Defence dated 20 November 2020;
b.	submissions dated 13 April 2021 (the OCCM submissions);
c.	affidavits of Michelle Liu dated 13 October 2020 (ML Aff 1); 27 January 2021;
d.	affidavit of Veronica Chen dated 23 February 2021 (VC Aff);
e.	minutes and proxy forms for the SGM; and
f.	proxy form dated 31 May 2020 for owner of Lot M909.
17	At the hearings, Mr Rodda gave evidence for the applicants and Mr Michael Jeans, Ms Michelle Liu and Ms Veronica Chen gave evidence for OCCM and CBDNM.
18	To decide whether to make the orders sought, I am required to make findings about the following:
a.	did the Committee have the power to make the termination decision under the Act?
b.	was the termination decision made in accordance with the Act? 
c.	if the Committee had the power to make the termination decision and it was made in accordance with the Act, do the outcomes of the September ballot or the 2021 SGM result in the termination decision no longer being in effect?
Committee’s power to make the termination decision
19	An owners corporation may revoke the appointment of a manager. An owners corporation may delegate any power or function of the owners corporation to the committee of the owners corporation. It may do so by 
resolution at a general meeting but must not delegate the power of delegation itself or a power or function that requires a unanimous resolution, a special resolution or a resolution at a general meeting. 
20	The owners corporations entered into a contract of appointment of an owners corporation manager (the Contract) with OCCM on 5 September 2018.
21	The Contract included a clause, common to many contracts of appointment of an owners corporation manager, that provides that the owners corporation can only terminate the appointment without reason after the owners corporation passes an ordinary resolution at a general meeting resolving to do so. 
22	On 12 November 2019, the owners corporations resolved at a special general meeting that the functions and powers of the owners corporations be delegated to the Committee (the delegation decision). OCCM does not dispute that the delegation decision was a validly made.
23	In correspondence between the parties throughout September 2020, OCCM sought to rely on Clause 8.1.2 as the reason why OCCM did not have to comply with the termination decision; that is, because it was not made after an ordinary resolution was passed at a general meeting resolving to do so. Later, at hearing and in its submissions, OCCM did not challenge the applicants’ submissions that Clause 8.1.2 was void under s 202 of the Act because it restricts the owners corporations from exercising their power to delegate to the Committee their powers under s 119 of the Act. I note that the applicants’ submissions on this issue are consistent with previous Tribunal decisions. 
24	However, OCCM submits the Committee could not otherwise make the termination decision because of the operation of clause 8.1.1 of the Contract, which states that either party may terminate the appointment at any time only if the other party has committed a fundamental breach of the Contract and fails to rectify the breach within a reasonable time after written notice specifying the breach. OCCM submits they have not been in fundamental breach of the Contract and that the Committee did not provide any written notice of any breaches to OCCM before making the termination decision. 
25	OCCM’s submission in relation to clause 8.1.1 conflates the issue of whether the owners corporations are in breach of the Contract with whether the owners corporations, and through them the Committee, have the power to terminate the Contract.  In Grima, Senior Member Vassie stated: 
Section 119(6) of the Act provides that an owners corporation may revoke the appointment of a manager. Section 202 of the Act provides that a provision of a contract is void to the extent that it purports to exclude, modify or restrict the operation of the Act. …  the power given under s119(6) to revoke the appointment is absolute and cannot be modified or restricted by the terms of the management contract, even though revoking the appointment otherwise than in accordance with the terms of the contract may amount to a breach of the contract and may expose the owners corporation to a claim for damages for breach of contract.
26	I find that clause 8.1.1 is void under the Act for the same reason that clause 8.1.2 is void under s 202. As held by Senior Member Vassie, an owners corporation’s power to revoke the appointment of a manager is absolute under s 119(6) and in this case cannot be modified by the Contract. The question of whether the termination decision exercising that power is a breach of the Contract for which OCCM may have a remedy is a separate issue not currently before the Tribunal and not a limitation on the power of an owners corporation to revoke the appointment of a manager.  
27	Accordingly, I find the Contract does not prevent the Committee from making the termination decision without an ordinary resolution at a general meeting having been passed or written notice of an alleged fundamental breach having been given.
28	As the delegation decision was validly made and the Contract does not limit the Committee’s delegated power to make the termination decision, I am satisfied that the Committee did have the power to make the termination decision under the Act. 
Was the termination decision made in accordance with the Act?
29	OCCM submits that the termination decision was not made in accordance with the Act because the meeting at which the termination decision was made, held at 6pm on 3 September 2020 (the September meeting):
a.	was not convened in accordance with s 109; and
b.	did not have quorum in accordance with s 112; as a result of which the resolutions passed at the September meeting were only interim resolutions that have still not taken effect under s 112(7).
30	In particular, OCCM submits that:
a.	previous decisions of the Committee to terminate the membership of the Committee of some lot owners and co-opt other lot owners to the Committee were not made in accordance with the Act; and
b.	as a result, lot owners who remained Committee members were not given notice of the September meeting, lot owners who were invalidly co-opted to the Committee were given notice of the September meeting and there was not a quorum of lot owners appointed to the Committee in accordance with the Act at the September meeting.
31	In response, the applicants submit any breach of s 109 in the convening of the September meeting was of a trivial nature, that the previous decisions of the Committee about termination of Committee membership and co-opting to the Committee had been validly made and so there was quorum of the Committee at the September meeting.
32	In considering the parties’ submissions, I note that, while I am not bound by previous decisions of Tribunal members, I should consider them in determining whether I should make findings that are inconsistent with those decisions. Of particular relevance to the submissions about the Committee’s compliance with notification and other procedural requirements under the Act is the decision in Jenkins.
33	In Jenkins, Member Rowland found that a ballot of an owners corporation passing a resolution revoking the appointment of the owners corporation manager was conducted in breach of the relevant provisions of Part 4 of the Act in force at the time, including because notice of the ballot was short served and that quorum may not have been achieved. In finding that the breaches did not render the ballot void, Member Rowland stated:
[35] 	The Owners Corporations Act 2006 does not provide for a consequence for a breach of the notice and quorum sections of Part 4 of the Act. It does not specifically state that anything done, or any decision made in breach of the sections is void. It is therefore necessary to consider the proper construction of the sections to determine the effect on a decision made in breach of the sections …

[44] 	One of the main purposes of the Owners Corporations Act 2006 is to provide for the management, powers and functions of owners corporations …

[45]		The provisions of Part 4 of the Owners Corporations Act 2006 relate to the                  process of meetings and decisions of owners corporations. I do not perceive a legislative purpose to invalidate a decision of an owners corporation made in breach of Part 4 of the Act. Instead, I perceive a legislative purpose to set out a framework for volunteer committees and lot owners. I perceive a legislative purpose to provide a fair and transparent process to give lot owners the opportunity to participate in the decision-making process of the owners corporation. I do not consider invalidating every decision made in breach of the Act serves the purpose of Part 4. Where Part 4 intends for a specific consequence for a breach, it sets it out, as it did for sections 87 and 89 of the Act. If it were intended that any breach, of any section, would render a decision void, the Act would have expressly stated so. 

[46] 	In my opinion, the Act does not provide a consequence for a breach of the provisions of Part 4 (apart from sections 87 and 89), because the Act recognises that a breach may be substantial or trifling. Each breach needs to be examined in its own context to determine what remedy, if any, is fair.

[47] 	Instead of providing a consequence for a breach, the Act provides that an aggrieved person, entitled to do so, may make a complaint to the Owners Corporation under Part 10 of the Act and/or apply to the Tribunal for any of the remedies set out under section 165 of the Act.

[48] 	The Tribunal may make any order it considers fair but must act within well-established principles of law. Not every breach will justify a remedy. In deciding whether an order should be made the Tribunal may have regard to; the effect on the outcome of anything done in breach of the Act; whether any lot owner suffered prejudice; whether the decision has been ratified; the impact on third parties and any other relevant matter.

[49] 	In conclusion, a meeting, resolution or decision made in breach of a provision of Part 4 of the Owners Corporations Act 2006 does not automatically render it void and of no effect …

[footnotes removed]
34	I consider Member Rowland’s analysis of Part 4 of the Act to equally apply to the provisions of Part 5 of the Act, which include ss 109 and 112. I find there is a clear legislative purpose to provide a fair and transparent process for committees to make decisions and that if it were intended that any breach of any section of Part 5 would render the decision of a committee void, this would be expressly stated in the Act. 
35	Further, it is consistent with that legislative purpose that the procedural requirements for committees set out in the Act allow a committee, as elected representatives of the lot owners, to make timely and effective decisions on behalf of the owners corporation.
Who were the members of the Committee at the time of the September meeting? 
36	In order to determine whether the September meeting was convened in accordance with s 109 and quorum was achieved at the September meeting, I must first determine who the members of the Committee were at the time of the September meeting.
37	The parties agree that 12 lot owners, including Mr Rodda, were appointed to the Committee at a special general meeting on 12 November 2019 (the 2019 SGM). Several members of the Committee were members of the Committee as proxies of individual lot owners, including the owner of Lot C303. 
38	Before the last hearing of these proceedings, the applicant submitted a copy of an email from the then Chair of the Committee sent to other Committee members on 1 June 2020 stating that he was resigning “from all positions with … [the owners corporations] effective immediately”. OCCM did not dispute the fact of this resignation. Accordingly, after 1 June 2020, there were 11 members of the Committee.
39	At a Committee meeting on 15 June 2020 (the June meeting), five members of the Committee were present and resolved to terminate the Committee membership of another five members of the Committee (the terminated members), who were not present at the June meeting.  It was resolved that the terminated members that “each having failed to attend meetings and in- line with the provisions  the Owners Corporations Regulations 2018 will no longer remain in committee positions” (the termination resolution).  
40	At the June meeting, the Committee also resolved to “co-opt to the Committee” (the co-opting resolution) four other lot owners and another individual as proxy for the owner of Lot M909 (the proxy member) (together, the co-opted members). 
41	The June meeting was chaired by the then general manager of OCCM (the general manager). On 22 June 2020, the general manager sent an email to the terminated members advising that their membership of the Committee had been terminated.
42	The Committee met again on 20 July 2020 (the July meeting). The July meeting was also attended by the general manager. The minutes of the July meeting indicate nine lot owners attended the meeting, along with a representative of OCCM. Five of the nine lot owners were members of the Committee appointed at the 2019 SGM. The other four lot owners were lot owners who had been co-opted to the Committee at the June meeting. 
43	The July meeting minutes record the “Minutes of the previous Committee Meeting – confirmed”. 
44	By 13 October 2020, the owner of Lot C303, whose proxy was one of the terminated members, was more than 90 days in arrears for fees due and payable to the owners corporations.
45	OCCM submits that:
a.	the Committee did not have quorum at the June meeting, meaning that the termination resolution was only an interim resolution;
b.	the termination resolution has not been confirmed at any subsequent Committee meeting at which a quorum of Committee members was present;
c.	the termination resolution was not valid because it refers to the Regulations in the context of Committee Members’ absence from meetings, which should be read as a reference to Regulation 9, but because the June minutes do not show the Committee members considering whether the terminated members had given prior notice of or reasonable explanation for their absence from previous Committee meetings, the termination resolution was not in “compliance” with Regulation 9; 
d.	the proxy member could not be a member of the Committee because he was not a lot owner and no written authority for him to act as proxy for a lot owner had been provided in accordance with section 87;
e.	because the lack of quorum at the June meeting meant the termination resolution was only an interim resolution, the terminated members continued to be Committee members after that date and so needed to be notified of the July meeting, which they were not, meaning the July meeting was not held in accordance with s109; and
f.	as a result, the termination resolution was not and could not have been confirmed at the July meeting or at any subsequent meeting, meaning that the Committee membership as at the September meeting remained the 11 lot owners on the Committee at the time of the resignation of the then Chair on 1 June 2020.
46	The applicants submit that:
a.	if there was not quorum at the June meeting because only five of the 11 committee members attended the June meeting, then by the time of the July meeting the proxy for the owner of Lot C303 was suspended as a Committee member under s 103(7)(b), meaning that by the July meeting there were 10 committee members;
b.	five of those 10 committee members attended the July meeting ,meaning the Committee had quorum at the July meeting and the confirmation of the minutes of the previous Committee meeting, being the June meeting, took effect at that time by operation of s 112(7)(a);
c.	the general manager did not raise any concerns about the notices given for, or the resolutions passed at, the June meeting and July meeting and confirmed the validity of the termination resolution by sending the email to the terminated members after the June meeting;
d.	none of the terminated members disputed the termination resolution or sought to attend Committee meetings after the June meeting or before the September meeting; and
e.	while the proxy member had initially been authorised only in relation to the finance subcommittee of the owners corporations, written authorisation was later given for the proxy member in relation to “all matters” of the owners corporations. 
47	It is not disputed between the parties that at the time of the June meeting 11 lot owners, or proxies of lot owners, were members of the Committee. Only five members of the Committee attended the June meeting. Accordingly, the Committee did not have quorum at the June meeting.
48	For the following reasons, I do not accept OCCM’s submission that the termination resolution was not valid because the minutes of the June meeting did not show that the terminated members had been given an opportunity to show they had given prior notice of or a reasonable explanation for their absences from previous Committee meetings.
49	First, in GR Aff 4 at [6] – [7], the applicants set out the details of six previous Committee meetings held between November 2019 and May 2020 that the terminated members did not attend and did not provide prior notice or reasonable explanation for why they were not attending. Copies of the minutes each of those meetings were exhibited to GR Aff 4 as GR1 – GR6. OCCM did not dispute this evidence. Accordingly, I find the Committee could resolve at the June meeting following regulation 9 that the terminated members ceased to hold office as Committee members.
50	Second, regulation 9 does not require an owners corporation committee to give, for a proposed resolution under regulation 9, any notice or warning of, or opportunity to make submissions the proposed resolution to the members the subject of the proposed resolution. I find that if an owners corporation committee is satisfied on the basis of its own records that a member has been absent from 25% or more of committee meetings within any six-month period without giving prior notice of or a reasonable explanation for their absence then the committee may resolve to terminate that members membership of the committee without notice to that member. This is consistent with the objective of allowing owners corporation committees to make timely and effective decisions, by ensuring there is prompt replacement of committee members who are not effectively participating in the committee decision-making process.
51	Third, at hearing, Ms Liu, who is one of the terminated members, acknowledged that she had not attended Committee meetings during the six months before the June meeting, was aware of the termination resolution after the June meeting and did not object or raise an issue with the termination resolution before the September meeting. She also acknowledged that she was not aware of any other terminated members objecting to the termination resolution after the June meeting and before the September meeting.
52	Fourth, I find that if any of the terminated members had in fact given prior notice of or had a reasonable explanation for not attending previous Committee meetings and objected to the termination resolution it is more likely than not they would have raised this issue with the Committee or OCCM at some time before the September meeting. They did not do so.
53	Accordingly, I am satisfied that the termination resolution was made consistent with the operation of regulation 9. 
54	However, as the Committee did not have quorum at the June meeting, the termination resolution and the co-opting resolution were only interim resolutions under s 112(6) that would not take effect unless one of the requirements under s 112(7) were met.
55	In considering the composition of the Committee by the time of the July meeting, I find the owner of Lot C303 was in arrears for fees due and payable no later than 90 days before 13 October 2020, which means the owner of Lot C303 was in arrears by 15 July 2020. Accordingly, by the time of the July meeting the owner of Lot C303’s proxy’s membership of the Committee was suspended by operation of s 102(7). 
56	In considering OCCM’s claim that the July meeting was not held in accordance with s 109 because the terminated members were not notified of the July meeting, I find that the terminated members had been notified by the general manager of the termination resolution almost one month before the July meeting and did not raise any objections to the termination resolution before the July meeting. 
57	I accept that the terminated members technically remained members of the Committee while the termination resolution remained an interim resolution and that, accordingly, s 109(1) required they be given notice of the July meeting. However, the terminated members had failed to attend meetings in the previous six months before the June meeting, failed to attend the June meeting and failed to raise any objections to the termination resolution in the approximately one month between when they were notified of the termination resolution and the July meeting. In that context, and the context of enabling committees to make fair, timely and effective decisions, I find the breach of s 109(1) to be trivial and am not satisfied that the breach means the decisions made and resolutions passed at the July meeting are invalid or of no effect.
58	Five members of the Committee who had been appointed at the SGM, and so not affected by the termination resolution, attended the July meeting. Because of the suspension of Lot C303’s proxy’s membership of the Committee, there were 10 lot owners who were members of the Committee by the time of the July meeting. 
59	Accordingly, for the purposes of s 112, the Committee had quorum at the July meeting. The attendance of the co-opted members, including the proxy member, at the July meeting makes no difference to the finding of quorum drawn from the 10 Committee members remaining of those who had been appointed at the SGM.
60	I find that the record in the July minutes that states “Minutes of the previous Committee Meeting – confirmed” is clear evidence of the confirmation of the termination resolution and the co-opting resolution, meaning both resolutions at that point took effect under s 112(7). As a result, the terminated members were no longer members of the Committee after the July meeting.
61	In relation to the status of the proxy member, on the morning of the final hearing the applicants provided a copy of a proxy form by the owner of Lot M909 dated 20 July 2020, authorising the proxy member in relation to “all matters” of the owners corporations. I am satisfied this is sufficient evidence of the appointment of the proxy member to be able to be co-opted as a member of the Committee. 
62	While this authorisation had not been provided at the time the co-opting resolution was made as an interim resolution, it had been provided by the time of the July meeting. Accordingly, I find that by the time the co-opting resolution was confirmed at the July meeting, the proxy member had sufficient authorisation to have his co-opting to be a member of the Committee confirmed and so he, along with the other co-opted members, became a member of the Committee after the July meeting.
63	The parties did not submit there had been any further change to the membership of the Committee between the July meeting and the September meeting.
64	Accordingly, by the time of the September meeting, the Committee had eleven members: six of the twelve lot owners who had been appointed at the SGM (other than the Chair who resigned in June 2020 and the five terminated members) and the five co-opted members.
Was the September meeting convened in accordance with s 109?
65	OCCM submits the September meeting was not convened in accordance with s 109 because notice of the September meeting was not given by the secretary of the Committee at least three business days before the September meeting to “all lawfully elected” members of the Committee. 
66	I find that notice of the September meeting was sent:
a.	electronically at approximately 7pm on 1 September 2020; and
b.	by Mr Rodda, who is chairperson, not the secretary of the Committee.
67	Accordingly, notice of the September meeting was not sent at least three business days before the September meeting by the secretary of the Committee and so was not given in compliance with the requirements under s 109.
68	As the applicants submit, and I accept, Mr Rodda as the chairperson was entitled to call the September meeting under s 108(a) and so notice of the September meeting was given by a person who was lawfully entitled to call the meeting if not to actually give the notice under s 103. 
69	In relation to the short notice given, there was no subsequent complaint, before the commencement of these proceedings, by any Committee member that they were not given sufficient notice, nor any evidence that the short notice caused any detriment to any Committee member. In any event, it was resolved at the 2019 SGM that the Committee would not be required to give three days’ notice for Committee meetings.
70	In light of the above, I find the fact that the notice of the September meeting was given by Mr Rodda rather than the secretary of the Committee and was short served are trivial breaches of the procedural requirements under Part 5 and do not result in the resolutions of the September meeting being void.
71	OCCM’s submission that notice of the September meeting was not sent to the “lawfully elected” members of the Committee relies on its submission that the termination resolution was an interim resolution that has never been confirmed and so notice of the September meeting should also have been sent to the terminated members. I have set out my reasons above for why I do not accept the submission that the termination resolution has not been confirmed and so I do not accept that the notice of the September meeting should have been sent to the terminated members in order to comply with s 109. 
72	Notice of the September meeting is addressed to 11 email addresses, including an email address for Mr Rodda.  The 11 email addresses appear to be (and there has been no submission that they are not) addresses for the remaining six lot owners who were appointed as members of the Committee at the SGM and for the co-opted members. 
73	Accordingly, I am satisfied that Notice of the September meeting was sent to all lot owners who were members of the Committee at the time of the September meeting.
74	In light of the above, while I have found there has been a minor or trivial breach under s 109 in the convening of the September meeting, I am not satisfied those breaches justify a finding that the September meeting was convened in a way that means resolutions made at the September meeting are not valid or binding.
Did the Committee have quorum at the September meeting?
75	The minutes of the September meeting record the attendance of four of the Committee members who had been appointed at the SGM and of the five co-opted members. Accordingly, of the 11 members of the Committee as at the time of the September meeting, well more than half of them attended the September meeting, meaning the Committee had quorum under s 112(1) at the September meeting.
76	The termination decision passed as a resolution (with eight votes in favour and one abstention) of the Committee.  As a resolution of the Committee, the termination decision had effect as a resolution of the owners corporations.
77	In light of the above, I am satisfied the termination decision was made in accordance with the Act.
Do subsequent events mean the termination decision is no longer in effect?
78	After the September meeting, Mr Rodda, on behalf of the Committee, sent a letter to OCCM dated 3 September 2020, advising OCCM of the termination decision. 
79	Over the next few days, the parties exchanged correspondence in which they made clear their respective positions: the Committee’s being that the termination decision had immediate effect, OCCM’s being that the termination decision was invalid. 
80	As set out above, the September ballot was then conducted and, subsequently, the 2021 SGM held.
81	OCCM submits that the outcome of the September ballot and, if not the September ballot, the outcome of the 2021 SGM are that resolutions have been passed by a majority of the members of the owners corporations that:	
a.	revoke the termination decision;
b.	elect a new Committee; and
c.	affirm the appointment of OCCM as manager of the owners corporations.
82	The applicants submit that the September ballot and the 2021 SGM were irregularly conducted and convened, meaning that the resulting resolutions were not valid. 
83	OCCM and CBDNM submit OCCM had authority to arrange the September ballot under s 83(d)(ii) and to convene the 2021 SGM under s 74(d)(ii) because OCCM was nominated by CBDNM as manager of the owners corporations for the purposes of those sections.
84	For reasons set out below, I find that:
a.	the September ballot and the 2021 SGM were arranged and conducted by OCCM at a time when they were no longer the manager of the owners corporations as a result of the termination decision; and
b.	OCCM’s central involvement in, and representations made by and on OCCM’s behalf in relation to, the September ballot and the 2021 SGM means the outcomes of the September ballot and the 2020 SGM are not valid resolutions of the owners corporations and so do not affect the validity of the termination decision.
September ballot
85	On 15 September 2020, solicitors acting on behalf of OCCM sent a letter to lot owners stating that the termination decision was invalid because it was made by the Committee and not a decision “undertaken by all the lot owners” and advising that “OCCM will be circulating a ballot for the Owners Corporation to vote on whether or not to revoke the purported termination of its Contract of Appointment”.
86	On 22 September 2020, OCCM sent a Notice of Ballot to Lot Owners (the ballot notice) to all lot owners. The ballot notice contained a preamble in which it was again stated that the termination decision “was undertaken by the committee and not by the Owners Corporation, as required by Section 119(6)”, a statement that is, for the reason set out above, legally incorrect. 
87	The motion proposed in the ballot notice was to revoke the termination decision and affirm OCCM’s contract of appointment. The end of the ballot notice lists the details of the manager of the owners corporations as “Mr Michael Jean’s, OCC Management Pty Ltd”, provides OCCM’s business address and under the heading “Position” states “Manager nominated by lot owners whose lot entitlements total at least 25% of all lot entitlements under section 83 of the Owners Corporations Act 2006 – CBD North Melbourne Pty Ltd”.
88	The parties dispute the outcome of the September ballot. Mr Rodda claims that quorum was not achieved in the ballot voting process for either of the owners corporations. CBDNM and OCCM claim the motions proposed in the ballot were approved by more than 50% of lot owners with more than 50% of lot entitlements.
89	At hearing, Ms Liu confirmed that OCCM prepared and sent out the ballot notice. She stated that the contents of the ballot notice were discussed with representatives of CBDNM and that the September ballot had been arranged because OCCM and CBDNM considered the termination decision to be unreasonable and a breach of the contract of appointment.
OCCM’s authority to arrange the ballot
90	Before assessing the consequences of the above representations by OCCM in the course of arranging the ballot, I must consider OCCM’s submission that it was authorised to arrange the ballot under s 83(d)(ii) as nominated by CBDNM. 
91	I do not accept that s 83(d)(ii) allows a lot owner whose lot entitlements total at least 25% of all lot entitlements (a 25% lot owner) to nominate to arrange a ballot a party who is not at the time the ballot is to be arranged the manager of the owners corporation. I find the reference to “the manager of the owners corporation” in s 83(d) must refer to the manager currently appointed by the owners corporation at the time the ballot is to be arranged. Otherwise, this provision would allow a 25% lot owner to independently circumvent the processes clearly set out in the Act for the appointment of and termination of the appointment of owners corporation managers.  Such an interpretation of this provision would be clearly inconsistent with the purposes of the Act to provide clear and transparent processes for the enforcement of decisions by and on behalf of an owners corporation. 
92	Accordingly, OCCM was not, as a result of the termination decision, the manager of the owners corporations at the time the September ballot was arranged and so it could not be nominated by CBDNM to arrange the September ballot.
93	At hearing, it was submitted that CBDNM, as a 25% lot owner, could itself arrange a ballot under s 83(c) and that, in arranging the September ballot, OCCM was merely making arrangements as agent for CBDNM and not as manager of the owners corporations. I do not accept that submission. I find that in its communications with lot owners about the September ballot OCCM was clearly representing itself as manager of the owners corporations. Nowhere in the communications does OCCM state that it is acting as agent for CBDNM in relation to the September ballot. 
94	In response to a question from the Tribunal at the hearing, Ms Liu confirmed that the only work OCCM has done for CBDNM was in OCCM’s capacity as manager of the owners corporations. Under cross examination, Mr Jeans stated that he understood OCCM was arranging the September ballot in its capacity as manager and not in any other capacity. 
95	Accordingly, I am not satisfied OCCM had actual authority to act as agent for CBDNM in arranging the ballot under s 83(c). I am satisfied that:
a.	at the time of the September ballot CBDNM and OCCM were of the view that the termination decision was not valid and OCCM continued to be the manager of the owners corporations; and so 
b.	OCCM was nominated by CBDNM to arrange the September ballot as owners corporation manager and not as agent of CBDNM.
96	In light of the above, I find that, despite the representations to the contrary in the ballot notice, OCCM did not in fact have any authority under s 83 or any other authority to arrange the September ballot.
Consequences of OCCM’s representations in arranging the September ballot
97	In O’Rourke & Anor v Network Pacific Real Estate Pty ltd (Civil Claims) (O’Rourke), Senior Member Vassie considered an application challenging a notice of an annual general meeting, and accompanying documents, sent by an owners corporation management company (Network Pacific) at a time when VCAT had found the management agreement between Network Pacific and the owners corporation was no longer in effect. Senior Member Vassie ordered that the scheduled annual general meeting should be cancelled, and that Network Pacific could not act upon any proxy or authorisation given to it in support of any motion at a meeting of the owners corporation to appoint it as the owners corporation manager.
98	In his reasons, Senior Member Vassie made the following comments:
[18]	The material which Network Pacific distributed bore the imprimatur of the manager of the owners corporation. A member reading it would be much more likely to be influenced by something emanating from the manager – and Network Pacific had been the manager for some years – than by something emanating from another member. The material went much further than merely informing members of recent developments. It gave a highly partial account of those developments. It was highly critical of the applicants. It accused them of having acted selfishly and in breach of obligation to other members. It recommended that they not be reappointed as committee members. Perhaps it was understandable that the material contained an apologia for Network Pacific’s own history of management. But to use its imprimatur as manager to campaign against the applicants for a vote at the very meeting that as being convened was, in my opinion, to prejudice the chances of a fair vote at the meeting …
[20] 		… the notice of annual general meeting was so tainted by the accompanying material that it was unlikely that member who had received the material and who attended the meeting would be in a position to give fair and proper consideration to any proposed resolution to be put at the meeting.

99	I find that the above comments are equally applicable to the conduct of OCCM, and the representations it made, in the sending of the ballot notice. OCCM represented itself as the owners corporation manager at a time when its contract with the owners corporations had been validly terminated and stated what has been found to be a legally incorrect position about the termination of the contract of appointment, both in the ballot notice and in the letter to lot owners sent on 15 September 2020. While it is not stated explicitly in those documents, it is implicitly a serious criticism of the Committee and its reasons for making the termination decision. 
100	In light of the above, I am satisfied that the contents of the letter sent on 15 September 2020, and more significantly the ballot notice, are sufficiently tainted by the misrepresentations made by and on behalf of OCCM that lot owners receiving the material would not be in a position to give fair and proper consideration to the proposed motions in the ballot notice. 
101	As a result, I do not have to determine the outcome of the September ballot as I find that, whatever its outcome, any resolutions passed were not valid and so could not affect the validity of the termination decision.
2021 SGM
102	On or about 9 February 2021, a Notice of Special General Meeting (the 2021 SGM notice) was sent to lot owners advising that a Special General Meeting of the owners corporations was to be held on 24 February 2021. 
103	A covering note to the 2021 SGM notice was from Michael Jeans, with an OCCM signature block and a logo, stating that “[s]ome owners representing over 25% of the Lots of Entitlement have expressed concern that they have not been formally informed of the activities of the Owners Corporations … and have requested that the information that has not been presented to Owners be delivered and have requested that we convene a Special General Meeting.”
104	The 2021 SGM notice was on OCCM letterhead and stated to be “[c]onvened by owners representing more than 25% of Lot Entitlements”. The end of the first page of the 2021 SGM notice is marked “Manager: Michael E. Jeans”. The 2021 SGM notice included a contents page and attachments, including a “Voting paper for AGM”. Attached to the 2021 SGM notice were:
a.	a proposed agenda which included, at item 13, a proposed resolution for the election of a Committee and, at item 15, a proposed resolution revoking the termination decision and affirming OCCM’s contract of appointment; 
b.	a document entitled “Owners Corporation Manager’s Report to Owners February 2021” authored by “Michael E. Jeans Owners Corporation Manager”; and
c.	precedent proxy forms and committee nomination forms for the owners corporations marked to be returned to “OCCM PO Box 1265, BOX HILL VIC 3128” or “michael@occm.com.au”.
105	The voting papers for the 2021 SGM have the OCCM logo on their first page and provide an email address to which scanned copies of the papers can be sent: michael@occm.com.au
106	The 2021 SGM minutes state that:
a.	a quorum was present for one of the owners corporations but not the other; 
b.	Michael Jeans chaired the meeting; 
c.	four lot owners were elected to serve as Committee members until the next Annual General Meeting; and 
d.	 in relation to the motion to affirm the contract of appointment with OCCM and revoke the termination decision, that: 
i.	at the time of the 2021 SGM, there was “currently in action at VCAT to determine the status of the Ballot [being the  September ballot] and to determine if the Ballot result should be accepted”;  
ii.	"there has been a major disregard for the commercial contract with OCCM and the decision to replace the management company without a proper tender process is contrary  to all the policies put in place by the … Committee”; and
iii.	the motion was passed with no members voting against the motion.
107	The parties made a range of submissions and provided evidence in affidavit and at hearing about the conduct of the 2021 SGM, including about how the 2021 SGM was conducted by videoconference; whether a show of hands could properly be made in accordance with the Act at a meeting conducted by videoconference; whether there was in fact quorum; whether it was clear to all attendees at the meeting which lot owners and proxies were present and how they were voting; and whether proxies were valid.
108	I have considered the submissions but find it unnecessary to make findings about these matters because I find that OCCM:
a.	did not have authority under s 74 to convene the 2021 SGM; and
b.	took such a central role in the convening and conducting of the 2021 SGM when it was not, in fact, manager of the owners corporations that the outcome of the 2021 SGM cannot be considered valid the decisions of the owners corporations.  
109	I find that OCCM did not have authority under s 74 for the same reasons that I found OCCM did not have authority under s 83 to arrange the September ballot. 
110	For the same reasons I have set out above in relation to s 83, I find that the reference to “the manager of the owners corporation” in s 74(d) must refer to the owners corporation manager currently appointed at the time the special general meeting is to be convened, which OCCM was not because the termination decision remained valid by early February 2021, when the 2021 SGM was convened. I am also not satisfied that OCCM was acting merely as agent for CBDNM under s 74(c) for the same reasons given in relation to s 83. 
111	In convening and conducting the 2021 SGM and communicating with lot owners about the 2021 SGM, OCCM represented itself as continuing to act under its contract of appointment and, in agreeing to chair the 2021 SGM, took the role an owners corporation manager would take at a special general meeting. I am satisfied that in doing so OCCM went further than merely informing lot owners of recent developments. Rather, OCCM made representations, including but not limited to by continuing to operate as manager of the owners corporations, that prejudiced the chances of a fair vote at the 2021 SGM. I find that the 2021 SGM was irregularly convened and conducted by OCCM to such a degree that resolutions passed at the 2021 SGM are invalid and of no effect.

Conclusion
112	It appears that OCCM, with the support of a 25% lot owner, being CBDNM, unilaterally decided not to accept the termination decision, which it was in fact required to do under the Act. Instead, OCCM continued to operate as manager of the owners corporations in conducting a ballot and calling a special general meeting. 
113	The outcome OCCM was seeking from the September ballot and the 2021 SGM was clearly to regain its role as manager of the owners corporations. In continuing to act as manager while seeking that outcome, it was, in effect, failing to acknowledge the legal effect of the termination decision and made clear and repeated representations to lot owners that it was entitled to do so. 
114	I am satisfied that OCCM’s conduct, with the support of CBDNM, affected the outcomes of the September ballot and the 2021 SGM to such a degree that those outcomes cannot be considered to be valid under the Act and I find that they are not.
115	In light of the above, I find that:
a.	OCCM’s contract of appointment with the owners corporations was validly terminated by the owners corporations on 3 September 2020; and
b.	the termination of OCCM’s contract of appointment remains in effect.
116	Accordingly, I am satisfied the orders and declaration sought by the applicants as set out at the beginning of these reasons should be made.
117	OCCM and the applicants have sought orders that they be awarded costs of the proceedings. I will consider written submissions from the parties on the issue of costs and will decide based on those submissions without a hearing unless a costs hearing is specifically requested by one or both of the parties. If either or both parties continue to seek orders for costs in the proceeding, I require that party to provide to the Tribunal and the other party:
a.	submissions on costs by 6 September 2021; and
b.	 submissions in reply, if any, by 4 October 2021.

C. Powles
Member

9 August 2021