Responsible Conduct of Body Corporate Meetings During the COVID-19 Pandemic

Only days ago, the Australian Government urged non-essential gatherings of more than 500 people should be cancelled.  Just this morning, that was extended to a ban on indoors gatherings of 100 people or more.   On Monday, President Trump called for Americans to avoid social gatherings of more than 10 people.

While some may debate whether body corporate meetings are essential, strata communities must continue to govern themselves in the midst of the turmoil caused by the COVID-19 pandemic.  But this must be done responsibly, and cognisant that many stakeholders in a body corporate will want to avoid direct contact while still having a say in the management of their strata community.

The solution lies in embracing modern technology so that bodies corporate can continue to make decisions in these pressing times.  I will take you through how this can be achieved.

20^th century legislation for a 21^st century society

 The Body Corporate and Community Management Act 1997 (Qld) (BCCMA) came into effect in 1997.  In that year:

• Netscape Navigator was the web browser of choice.
• There were approximately 1 million websites.
• We all had to patiently wait for the ring tone of our dial-up modem to finish so we could be connected to the internet, and would sweat at the thought of being disconnected and having to go through it all again if someone called the house phone.

On 1 January 2020, there were just over 1.7 billion websites.  We now live in a very different digital age.

The BCCMA has not moved with the times yet.  The closest recognition in the BCCMA to this digital age is that lot owners can elect to receive levy notices by e-mail.

That will change shortly when the new BCCM regulation modules are introduced, which is expected to occur by the end of 2020.  They will expressly permit electronic voting, electronic service of notices and minutes, and allow bodies corporate and their committees to establish means for electronic attendance at meetings.

But you do not have to wait until then to allow electronic attendance at meetings.  You also don’t have to brave a visit into the outside world to hand deliver a voting paper or to send it by post.

Electronic attendance at committee meetings

 The legislation currently recognises the need for a physical location for a committee meeting.[1]  However, it has been the longstanding practice of adjudicators to take no issue with, and encourage, electronic means of attending committee meetings.

In O’Quinn Street Apartments [2008] QBCCMCmr 104, the adjudicator said:

“Many small schemes, or schemes where owners are interstate, in fact conduct committee meetings by telephone conference or linking up without being physically present. This Office has never ruled that this practice is unlawful since it is the object of the Act to allow lot owners to manage a scheme in the best way for them, albeit within the framework of the legislation. Voting members for the committee need to be “present” … but that does not necessarily mean “present in person.” In my view, there was therefore no need for a committee meeting to be convened whereby committee members assembled in the same room to cast their votes. The committee might have made a decision by telephone link up or in some other way which gave an opportunity for each committee member who wished to take part, to be heard, and to vote…”

An adjudicator has ordered that a lot owner may attend committee and general meetings by telephone where reasonably practicable to do so[2], and made sharp comments about the lack of transparency of a chairperson who would not facilitate this.

Electronic attendance at general meetings 

The matter is somewhat more complicated for attendance at general meetings.  A quorum for a committee meeting is constituted by those “present”[3], whereas a quorum for a general meeting requires two voters to be “present personally”[4].

Given these distinctions, and on a literal interpretation, I am of the view that there must be two voters physically present at a general meeting to form a quorum.  That considers the important business that is transacted at a general meeting, the need to scrutinise voting papers, and to have two sets of eyes on everything that is happening so a corroborated record of the meeting can be made.

In Jewel Whitsunday [2014] QBCCMCmr 306 at [22]-[25], an adjudicator:

• recognised that the BCCMA and the regulation module are silent on attendance by telephone for a general meeting but recognised that adjudicators consistently refuse to invalidate a meeting merely because a quorum was not technically present; and
• in turn refused to invalidate an AGM where only one voter was physically present and another present by telephone because that technical noncompliance was insignificant and all owners had the opportunity to submit voting papers.

In Malibu Gardens [2015] QBCCMCmr 362, an adjudicator was faced with a dispute over the validity of a resolution to raise a special levy.  A year earlier, the body corporate had unanimously resolved to permit voting and attendance at general meetings electronically.   The adjudicator found that a person who attends a meeting by means of teleconference or videoconference is “personally present”.

Adjudication orders do not create binding precedent but do provide a good guide for how similar disputes may be resolved. The consensus is that adjudicators generally don’t take issue with forming quorum by electronic means unless there is some evidence of prejudice or detriment.  They will exercise their discretion to make an order that is just and equitable to resolve a dispute based on technical matters.

Where to from here?

 In these difficult times, I make these recommendations.

Committee meetings

Committees should promptly decide (by way of vote outside committee meeting) to establish electronic means of attending their meetings that is available to committee members and lot owners.

Embrace electronic means of attending committee meetings.  Many of the programs (like Zoom and Skype) have the ability for a host to set controls on the participants that can use their microphone.  That will assist in ensuring that the basic rules for committee meetings (ie lot owners are observers and cannot speak unless invited to) are adhered to.

General meetings

Provide instructions and encouragement for all voters to submit their voting papers by post, fax or e-mail[5] well in advance of the general meeting, and then attend a general meeting electronically (ie by teleconference or videoconference).  It is important that the voting paper is still submitted.

There should be at least one person physically present wherever the meeting is being held to collect voting papers from those who choose to physically attend.  That could be a voter acting as the “host” of the teleconference.

Similar restraints on those attending the meeting by videoconference to those discussed above can be imposed.  The person chairing the meeting controls the rules of the meeting, such as the amount of time set aside for debate or discussion.  Make the most of technology in those circumstances.

All voters and stakeholders in a community should respect the varying comfort levels of others to close human contact and comply with arrangements to submit voting papers and attend meetings electronically.

Closing thoughts 

The advances in technology to facilitate electronic communication allows the strata industry to continue with its business.  All stakeholders should embrace this.  I believe that when new technologies are thrust upon us, after a short while we begin to wonder how we managed with the “old ways”.

The challenges we face with the COVID-19 crisis will introduce all of us to more modern ways of holding and running meetings.  It would not surprise me if many strata communities simply continue with these electronic means of attending meetings once this crisis abates.

This article was contributed by Jason Carlson, Partner – Grace Lawyers.

[1] See section 46 of the Standard Module and the Accommodation Module which provide that a meeting must be held where the committee decides, but requires it to be held within 15km of the scheme land if at least half the committee require that.

[2] Apartments on the Lakes [2010] QBCCMCmr 417

[3] Section 49(2) of the Standard Module.

[4] Section 82(2) of the Standard Module.

[5] Rose-A-Lyn [2018] QBCCMCmr 275 at [36]-[41] – an adjudicator found that sending a scanned copy of a voting paper by e-mail is the same as giving a voting paper to the secretary by facsimile.