The body corporate statutory regime can be quite complex, and it is expected that, from time to time, certain irregularities in process will occur. However, so long as the procedural irregularity does not prejudice anyone, and that it does not happen again, often these irregularities are not fatal.
Some irregularities absolutely are fatal, such as strict requirements to have at least two quotes for a motion proposing expenditure above the body corporate’s major spending limit, and the strict requirements about engaging service contractors. These are provisions designed to protect the body corporate, so their contravention will always make those decisions invalid.
However, other things might not be bad. According to Justice Carmody in Finger v Dickie  QCATA 113, as a general rule, defective motions and resolutions contravening body corporate legislation will not be upheld, unless exceptional circumstances exist. To show those exceptional circumstances, you need to show that:
a. the irregularity was trivial or frivolous, with no material or substantial impact on the substance or form of the motion or resolution; and
b. that the irregularity caused no prejudice, disadvantage or disbenefit to the parties, or any relevant third party.
For example, assume a body corporate must hold its AGM by no later than 31 October. The notice for the meeting must be sent at least 21 clear days before the meeting is held, meaning it must be sent out no later than 10 October. However, there have been unexpected difficulties in the management of the body corporate. The latest the notice can be sent is 14 October.
The body corporate has a difficult choice. Does it send the notice on 14 October to hold the meeting on 4 November, beyond the timeframe to hold the AGM? Or does it send the notice on 10 October, shortening the notice period to 17 days?
Of course, the proper approach is for the body corporate to apply to an adjudicator for permission to hold the meeting out of time. But not every body corporate does that.
The issue here is, which choice does not cause prejudice or disadvantage? If the AGM is held 4 days late, although that is not ideal and the budget might be tight, it is difficult to see how this would cause problems.
On the other hand, shortening the notice period to 17 days would give people much less time to receive the notice, consider the agenda, vote, and return their votes. A shortened notice period will likely prejudice some people.
In these circumstances, the body corporate is better off holding the AGM late. Although a body corporate should make an application to an adjudicator to hold it late, it doesn’t mean that if it doesn’t, the AGM will be invalid. If all other requirements are met, an adjudicator is not going to tell a body corporate that held its AGM 4 days late that it was invalid – because what is the alternative? Holding another AGM even later? That would be silly. So although the body corporate should seek permission first for any irregularity, if it is not prejudicial and not repeated, it has high chances of being forgiven.
The general rule is, if there is a concern about procedure, the Commissioner’s Office will have the resources to tell you what the legislation requires. The body corporate legislation should always be followed, and you should never rely on forgiveness for procedural irregularities. Apart from causing harm to the body corporate, it might have personal consequences if the irregularities are severe enough, such as being removed from the committee.
This article is intended as general information only and should not be relied upon as legal advice. For specific legal advice please contact us here.