The First Virtual EGM Has Been Challenged

The interim orders in Watermark Residences [2020] QBCCMCmr 306 provides some relief for bodies corporate that held virtual general meetings during the COVID-19 restrictions.

In summary:

• The body corporate called an extraordinary general meeting (EGM) to agree on the matters that needed to be decided at a general meeting.
• To meet COVID-19 social distancing restrictions the committee decided to conduct the EGM without physical attendance.
• There were some other minor deficiencies with how the EGM was called, and was to be held, that did not strictly comply with the legislative requirements of holding meetings.
• A group of owners sought to invalidate the EGM based on the failure of the body corporate to strictly comply with the legislative requirements of holding meetings.
• The application for interim orders was dismissed.

Ultimately, at least on an interim basis, the adjudicator found that:

“There is just not a prima facie argument that owners will not be able to exercise a fair vote, and ultimately, that is what we are concerned with when looking at body corporate elections.”

We successfully argued that no owner had suffered (or was going to suffer) any detriment as a result of the way the meeting was being held because the committee took significant steps to ensure that no owner was disadvantaged by the failure of the body corporate to strictly comply with the legislative requirements of holding meetings. As examples, the committee:

• posted and emailed the meeting material to all owners and followed up with owners to confirm the meeting material had been received;
• encouraged written voting papers to be submitted in advance, such that a large majority of owners had already cast their vote before the EGM;
• successfully tested the conferencing software in anticipation of the meeting;
• allowed owners who were unsure about video conferencing to meet with members of the committee who provided technical assistance;
• provided clear and regular communications to owners about how the EGM was to be conducted and allowed for queries or concerns to be raised and addressed in advance.

This is an important decision for general meetings held during COVID-19 that may have been conducted by a modified procedure which did not strictly meet the legislative requirements.

Although this decision has only been made on an interim basis it provides some releif that a common sense approach is being applied by the Commissioner’s Office to these types of matters.

The key  takeaway from this decision is that owners must be provided with the ability to fairly cast a vote at their general meetings and the Commissioner’s Office will not intervene if no disadvantage has been suffered that affected an outcome.

Mahoneys were engaged early by this committee and we were able to successfully guide them through this significant event.