The validity of imperfect annual general meeting notices

In the recent case of Sher Global Enterprises Pty Ltd v Owners – Strata Plan 31758 [2018] NSWSC 1057, the NSW Supreme Court considered whether the failure of an owners corporation to strictly comply with notice requirements set out in the Strata Schemes Management Act 2015 (NSW) (and its 1996 predecessor) in relation to several AGMs would invalidate decisions of the owners corporation made at those meetings. The impugned decisions of the owners corporation in this case related to the striking of levies for the scheme at AGMs held between 2013 and 2017.

The Strata Schemes Management Act 2015 (NSW) has certain requirements as regards the content and service of AGM notices, such as including particular types of motions and financial statements, and serving the notice on owners, first mortgagees or covenant chargees entitled to case a priority vote, and tenants at least 7 days before the meeting. The owners corporation in Sher Global failed to comply with these legislative requirements in several instances.

The Court held that, from a practical point of view, an owners corporation’s failure to strictly comply with the requirements of the legislation, at least in so far as the content and service of AGM notices was concerned, did not invalidate the decisions made at those AGMs. This was despite the use of the word “must” in the legalisation potentially implying that strict compliance was necessary.

As Harrison AsJ observed, “the orderly management of strata schemes would not be assisted in anyway [sic] by an interpretation of these clauses as invalidating an AGM for every breach of these clauses”.