COMMUNITY CORPORATION 22863 INC [2024] SADC 153

Applicant: COMMUNITY CORPORATION 22863 INC Solicitor: BOTTEN LEVINSON - Counsel: MR B ROBERTS KC Interested Party 1: MR S NAGY No Attendance Interested Party 2: MR A HOLZAPFEL No Attendance Interested Party 3: MR P CONSTABLE No Attendance Interested Party 4: MR S BRIGGS No Attendance Interested Party 5: MR F LITCHFIELD No Attendance Interested Party 6: MR J COLLETT No Attendance Interested Party 7: KURSACE AIR PTY LTD Solicitor: LEVENTIS LAWYERS - Counsel: MR C MUNT (EXCUSED) Interested Party 8: MR V CAVALERI No Attendance Hearing Date/s: 11/11/2024 File No/s: CIV-24-004700 B DISTRICT COURT OF SOUTH AUSTRALIA (Civil) DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment. The onus remains on any person using material in the judgment to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court in which it was generated. COMMUNITY CORPORATION 22863 INC v KURSACE AIR PTY LTD AND OTHERS (INTERESTED PARTIES) [2024] SADC 153 Judgment of his Honour Judge Burnett 25 November 2024 REAL PROPERTY - STRATA AND RELATED TITLES - GENERAL MATTERS - JURISDICTION AND POWERS OF COURTS AND TRIBUNALS STATUTES - ACTS OF PARLIAMENT - INTERPRETATION - OBLIGATORY AND DISCRETIONARY PROVISIONS - GENERAL PRINCIPLES STATUTES - ACTS OF PARLIAMENT - INTERPRETATION - REFERENCE TO FRAMEWORK OF ACT These proceedings concern an application by the applicant, Community Corporation 22863 Inc (the Corporation), for an order pursuant to s 149(1) of the Community Titles Act 1996 (SA)(the Act) that two resolutions passed by the Corporation be declared sufficient for the purposes of the Act. The Corporation is a community corporation established under the Act for the apartment complex known as the Air Apartments (the Building). The external cladding on the Building, comprised of aluminium composite panels, represents a fire hazard. On 16 January 2023, the City of Burnside issued the Corporation with a fire safety notice requiring it to remove 80% of the cladding. On 25 October 2023, at an extraordinary general meeting of lot owners, the Corporation passed a resolution that authorised the Corporation to enter into a contract with a builder to remove all of the -- 1 of 16 -- external cladding on the Building. On 14 March 2024, at another extraordinary general meeting, the Corporation passed a further resolution which authorised the Corporation to expend money under the contract with the builder. The resolutions were passed by special resolution but because they exceeded the limits of expenditure set by s 119 of the Act and regulation 21 of the regulations made under the Act, were required to be passed unanimously. Held: (1) The application of the Corporation is granted, and an order is made that the 25 October 2023 and 14 March 2024 resolutions are declared sufficient for the purposes of the Act. It follows that under s 149(1)(b), they are taken to be a resolution of the kind required by the Act. (2) The power to grant relief applies to s 149(1)(a)(where a unanimous resolution is required) as well as s 149(1)(b), despite a formatting error. Formatting is a relevant matter in construing a statute but must be considered along with other matters including the context, words and purpose: Alcom v Republic of Columbia [1983] 3 WLR 906 considered; SAS Trustee Corporation v Miles (2018) 265 CLR 137 applied. (3) Section 149(1) gives the court an unfettered discretion to make an order. There is no rule which confines the discretion but a series of factors or principles may guide the court in the exercise of the discretion: Norbis v Norbis (1986) 161 CLR 513 applied. (4) In the circumstances of this case, relevant factors to consider include the following matters: (1) does the exercise of the power accord with the purpose of s 149 of the Act? (2) was the expenditure necessary or discretionary? (3) did the Corporation put forward and pass the resolutions in good faith? (4) do the resolutions act in way that is particularly unfair to one member or group of members at the expense of other members? (5) does the resolution impose an unreasonable burden on members as a whole or particular members or groups of members? (6) was the meeting properly convened and did the members have proper notice of the resolutions? (7) what degree of support was there for the resolutions? (8) what opposition was there to the resolutions and what were the reasons for that opposition? (9) what were the consequences for the Corporation if the resolutions were not passed and carried into effect, as determined at the time of the passing of the resolutions? (10) what are the consequences now if an order is not made declaring the resolutions sufficient? (5) These matters, considered individually and in the context of each other, strongly favour the granting of an order that the resolutions be declared sufficient for the purposes of the Act. Community Titles Act 1996 (SA), ss 10, 77, 114, 118, 119, 149, 149; Planning, Development and Infrastructure Act 2016 (SA) s 157; Community Titles Regulations 2011 (SA) r 21; Strata Titles Act 1985 (WA) s 200, referred to. Owners of Ellement 996 Strata Plan 53402 and Tobias [2022] WASAT 49; Megarry (1959) 75 LQR 31; Alcom v Republic of Columbia [1983] 3 WLR 906; Frances Bennion, Statutory Interpretation (Butterworths 2nd ed, 1992), 514; SAS Trustee Corporation v Miles (2018) 265 CLR 137; Norbis v Norbis (1986) 161 CLR 513; PS Chellaram & Co v China Ocean Shipping Co (1991) 65 ALJR 642, considered. -- 2 of 16 -- COMMUNITY CORPORATION 22863 INC v KURSACE AIR PTY LTD AND OTHERS (INTERESTED PARTIES) [2024] SADC 153 Introduction 1 These proceedings concern an originating application in which the applicant, Community Corporation 22863 Inc (the Corporation), seeks, pursuant to s 149 of the Community Titles Act 1996 (SA) (the CT Act), an order that two resolutions passed by the Corporation be declared sufficient for the purposes of the CT Act. 2 The Corporation is a community corporation established under s 10 of the CT Act for the apartment complex known as the Air Apartments (the Building). There are 141 community lots in the Building. There is external cladding on the Building which represents a fire hazard. On 16 January 2023, the City of Burnside issued the Corporation with a Fire Safety Notice requiring it to remove 80% of the cladding. 3 The Corporation seeks an order in respect of two resolutions that were passed on 25 October 2023 and 14 March 2024 respectively. The 25 October 2023 resolution authorised the Corporation to enter into a contract with a builder to remove the external cladding on the Building. The 14 March 2024 resolution authorised the Corporation to expend money under that contract. The resolutions on 25 October 2023 and 14 March 2024 were passed by special resolution. It was accepted, for the purposes of these proceedings, that the CT Act required the resolutions to be passed unanimously. 4 Following the provision of notice by the Corporation to the persons required to be given notice under s 149(2) of the CT Act, eight parties applied to be joined as interested parties. The Court ordered that those parties be joined as interested parties to the application. Only one party, the seventh interested party, Kursace Air Pty Ltd, filed a Notice of Acting. None of the other interested parties took any part in the proceedings. Kursace Air advised the Court at the commencement of the hearing that it took no position in relation to the application and sought, and was granted, leave to be excused. 5 There was no oral evidence given at the hearing. The Corporation filed a number of affidavits as to the background to the application, the circumstances in which the resolutions were passed, the communications with the City of Burnside, the entry into and performance of the contract with the builder and the consequences if the order was not made. Background to the application 6 The Corporation was established as a community corporation in 2005, following the redevelopment of the Building, now known as the Air Apartments and situated at 220 Greenhill Road, Eastwood, from offices to residential apartments. There are a total of 141 community lots in the Building comprising 139 residential apartments, one lot used as a wine cellar and one lot used as an office. -- 3 of 16 -- [2024] SADC 153 2 7 In the course of the redevelopment, aluminium composite panels (ACP) were installed on the exterior of the Building as a weatherproof decorative feature (i.e. cladding) to cover, inter alia, balcony structures and columns. Evidence has since established that ACP is highly combustible and dangerous. In 2017, there was a fire at the Grenfell Tower in London which was caused by the presence of ACP. This has led to concerns worldwide about ACP and steps have been taken by councils and regulatory authorities to identify buildings where ACP is present and ensure that the ACP are removed. 8 In September 2018, the Building Fire Safety Committee of the City of Burnside (the Fire Safety Committee) first contacted the Corporation about the presence of ACP on the Building. There followed a series of communications between the Corporation and the Fire Safety Committee to identify the steps that should be taken to address the risk posed by the ACP. On 4 May 2021, the Fire Safety Committee issued a fire safety notice to the Corporation pursuant to s 157(4)(a) of the Planning, Development and Infrastructure Act 2016 (SA)(the PDI Act). In that fire safety notice, the committee advised the Corporation that it considered the fire safety of the Building was not adequate and required the Corporation to report within 3 months on the work or other measures necessary to ensure that the fire safety of the Building was adequate. 9 Following the issue of the fire safety notice in September 2018, the Corporation had a series of meetings with lot owners (also referred to as members) in which it discussed matters arising from the issue of the fire safety notice. The Corporation engaged Lamond Advisory Pty Ltd to provide project management and strategic contractual advice in relation to the replacement of the cladding and issues associated with the cladding. The Corporation continued to engage with the Fire Safety Committee. 10 The addressing of the cladding by the Corporation and its removal became more urgent when, on 16 January 2023, the Fire Safety Committee issued the Corporation with a further fire safety notice (the Fire Safety Notice) pursuant to s 157(7) of the PDI Act. In that Notice, the fire safety committee referred to a report that the Corporation had obtained from RED Fire Engineers that had found that approximately 30% of the Building’s exterior envelope was covered with ACP and posed an undue fire and life safety hazard and recommended its removal. The fire safety committee required in the 16 January 2023 Fire Safety Notice that the work in the report should be undertaken together with the removal of further identified ACP. Pursuant to s 157(7)(a) of the PDI Act, the Corporation was required to remove and replace the identified ACP by 30 June 2024. The identified ACP to be removed comprised about 80% of the ACP on the exterior of the Building. 11 The Corporation instituted an appeal against the issue of the notice to the Environment, Resources and Development Court which is yet to be determined and remains in the conference stage under s 16 of the Environment, Resources and Development Court Act 1993. -- 4 of 16 -- [2024] SADC 153 3 12 Just prior to the issue of the 16 January 2023 Fire Safety Notice, the SA Government announced a government loan scheme, entitled the Aluminium Composite Panel Cladding- Limited Loan Scheme (the Loan Scheme) for the replacement of ACP on eligible buildings. The Corporation, through its management committee, engaged in communications with the South Australian Government Financing Authority (SAFA) regarding the loan scheme and the participation by the members of the Corporation in that scheme. At an extraordinary general meeting of the Corporation held on 5 April 2023, 69 members indicated that they were likely to participate in the loan scheme, 10 said that they were not likely to participate, and 12 members abstained from voting. The vote was not binding. 13 The Corporation has, since the announcement of the loan scheme, communicated with SAFA about the loan scheme and the terms of any loan. The Corporation received an email from SAFA on 13 February 2023 confirming that a loan of $10m to the Corporation had been approved subject to the Corporation providing evidence that it was authorised to contract and had obtained all necessary resolutions at a properly convened meeting of the Corporation’s members and the Corporation obtaining development approval for the work. 14 On 5 April 2023, at an extraordinary general meeting of the Corporation, a resolution was passed that the Corporation remove and replace 100% of the ACP currently attached to the Building with an approved product. An information session had been held on 29 March 2023 at which the Corporation provided details about the need to remove the ACP. The Corporation formed the view that it was necessary to remove all of the ACP for a number of reasons. First, there remained a risk of fire if only part of the ACP was removed. Secondly, there was, in the Corporation’s view, a risk that the Fire Safety Committee of the Council might later issue a further notice requiring the removal of the remainder of the ACP. Thirdly, it was likely that considerable extra costs would be incurred if initially the ACP was only partially removed and later the remainder was removed. Fourthly, it was likely that the Corporation would be unable to obtain insurance for the Building or could only do with an unacceptable excess for the risk of fire, if ACP remained. Fifthly, there would be an unfairness to particular members if only some of the ACP was removed as that would involve a choice to be made of which panels were removed. 15 Between April 2023 and October 2023, the Corporation sought tenders from builders for the removal and the replacement of the ACP. Duratec Limited (Duratec) was selected by the management committee as the preferred tenderer. The tender price submitted by Duratec was $14,987,786.80. 16 The Corporation held an extraordinary general meeting on 25 October 2023. Prior to the holding of that meeting, the Corporation had held an information session for members on 11 October 2023 at which details of the tender process and the selection of the proposed tenderer were provided to members. At the 25 October 2023 meeting, the following motion was put to members: -- 5 of 16 -- [2024] SADC 153 4 ACP Cladding Replacement (special resolution) Motion: That the Corporation sign a contract with the preferred builder to replace the Alucobond Cladding with a compliant aluminium product as quoted. 17 The motion was passed, as a special resolution (the Contract Resolution), with 69 votes in favour, 10 votes in opposition and 6 abstentions. The Contract Resolution is one of the resolutions that is the subject-matter of the application. 18 Also, at the extraordinary general meeting held on 25 October 2023, a special resolution was passed that the Corporation would participate in the State Government Limited Loan Scheme to assist with lot owners paying their portion of the contributions required for the cladding rectification works. 19 Following the passing of the special resolution at the extraordinary general meeting, on 30 October 2023, the Corporation entered into a contract with Duratec for the replacement of the ACP on the Building. Duratec commenced the work in about November 2023 and began issuing progress claims to the Corporation. In April 2024, development approval was granted for the works. Duratec had as at 6 November 2024, received the sum of $10,173,174 plus GST under the contract. In the event that the contract with Duratec was terminated, the Corporation would be liable for substantial damages. 20 On 14 March 2024, the Corporation held a further extraordinary general meeting. Prior to that meeting an information session had been held on 14 February 2024 at which details of the Duratec contract were provided to members. Further, on 13 March 2024 representatives of Duratec attended a “meet -and-greet session” with lot owners at which details of the experience and expertise of Duratec and the works were discussed. At the 14 March 2024 meeting, the following motion was put to members: ACP Cladding Replacement Contract (Special Resolution) Motion: In accordance with s 119 of the Community Titles Act 1996, Community Corporation 22863 Inc (Corporation) is authorised to expend the amounts for which it is liable under the AS 4902-2000 contract for the Facade Works at 220 Greenhill Road Eastwood dated 30 October 2023 (Contract) as Principal under the Contractor to the Contractor Duratec Limited, when the amounts become due and payable including: The Contract Sum under the Contract up to $15,553,145 plus GST. …. 21 The motion was passed as a special resolution, (the Expenditure Resolution) with 91 votes in favour, 11 votes in opposition and 4 abstentions. This is the second resolution that is the subject-matter of the application. 22 Also, at that meeting ordinary resolutions were passed: -- 6 of 16 -- [2024] SADC 153 5 (1) each lot owner would pay to the Corporation the contribution specified in the annexure to the resolution to fund the payment to Duratec of the Contract Sum of $15,553,145 plus GST, such contribution to be paid either as a lump sum or by way of instalments. That resolution was passed with 91 votes in favour, 11 votes in opposition and 4 abstentions. (2) in accordance with s 118 of the CT Act, the Corporation was authorised to enter into a contract with SAFA pursuant to the ACP Cladding Loan Scheme for a loan amount up to a maximum of $10,000,000. That resolution was passed with 93 votes in favour, 7 votes in opposition and 6 abstentions. 23 The Corporation has issued levies to members for the payment of their contributions of the contract price payable to Duratec. Further levies are to be issued in November 2024 and February 2025. 24 The presence of the ACP on the Building has affected the ability of the Corporation to obtain insurance for the Building. Insurers have either declined to provide insurance for the Building while any ACP remains on the Building or will only do so with an excess for fire events that is unaffordable or uncommercial. 25 The Corporation and SAFA entered into the Facility Agreement on 26 September 2024. On 30 October 2024, the Corporation received from SAFA the first drawdown on that Facility in the sum of $3,238,809.49. Some 41 members of the Corporation have elected to participate in the loan scheme. 26 The Corporation provided notice to its members on 6 June 2024 of this application. The Corporation, through its solicitors, has advised the interested parties of the hearing dates and the intention of the Corporation to request the Court deal with the originating summons summarily in the event that there was no opposition to that application. None of the interested parties, except for Kursace Air Pty Ltd, have responded to that notification or participated in the court proceedings any further. Legislative background 27 The following provisions of the CT Act and the Community Titles Regulations 2011 (SA) (CT Regulations) are relevant to the determination of this application. 28 Section 77(1) of the CT Act provides that if a community corporation defaults in the payment of a monetary liability, the liability is enforceable against the members of the corporation jointly and severally. 29 While s 114 of the CT Act provides that the community corporation may fix the amount of contributions that it requires from the owners of the community lots, the amount of contributions that may be levied is limited by s 119 of the Act and regulation 21. -- 7 of 16 -- [2024] SADC 153 6 30 Section 119 provides: 119—Limitation on expenditure Expenditure of an amount exceeding the amount prescribed for that purpose by regulation must not be made by a corporation unless the expenditure has been specifically authorised by an ordinary, special or unanimous resolution of the corporation depending upon the amount involved. 31 The terms special resolution and unanimous resolution are defined in s 3 of the Act. In the case of a special resolution, it means a resolution that is passed at a properly convened meeting of the corporation at which the number of votes cast against a resolution is 25 per cent or less of the total number of votes that could be cast at a meeting at which all members are present and entitled to vote. A unanimous resolution is a resolution that is passed at a properly convened meeting of the corporation without any vote being cast against it. 32 Regulation 21 of the CT Regulations imposes the limits of expenditure by a community corporation. It provides: Expenditure by a community corporation— (a) of less than an amount that is equivalent to $2,000 multiplied by the number of community lots in the scheme must be authorised by an ordinary resolution of the corporation; (b) of an amount that is equal to, or more than, the amount referred to in paragraph (a) must be authorised by a special resolution if— (i) the expenditure is reasonably required for completing works that are required by a council (or a body established by 1 or more councils) or a public authority, or for works that are required in connection with or as a consequence of such works; or (ii) the expenditure is less than an amount that is equivalent to $5,000 multiplied by the number of community lots in the scheme; (c) of an amount that is equal to or more than the amount referred to in paragraph (b)(ii) (but is not expenditure of a kind referred to in paragraph (b)(i)) must be authorised by a unanimous resolution. 33 Regulation 21(b)(i) was inserted by an amendment in February 2023,1 prior to the Contract Resolution or the Expenditure Resolution. 34 The application has sought relief pursuant to s 149 of the CT Act from the requirement that the 25 October 2023 and the 14 March 2024 resolution be passed by a unanimous resolution. Section 149 provides: 1 The Community Titles (Resolutions) Amendment Regulations 2022 (SA). -- 8 of 16 -- [2024] SADC 153 7 149—Relief where unanimous or special resolution required (1) Where— (a) this Act or the by-laws require the passing of a unanimous resolution and the community corporation passes a special or ordinary resolution but not a unanimous resolution; or (b) this Act or the by-laws require the passing of a special resolution and the corporation passes an ordinary resolution but not a special resolution the corporation, or a member of the corporation who voted for the resolution or whose vote was cast by another person for the resolution, may apply to the District Court or the Magistrates Court to have the resolution declared sufficient for the purposes of this Act and, if the court makes that order, the resolution will be taken to be a resolution of the kind required by this Act or the by-laws. (2) Notice of an application must be served on (a) every person who voted against the resolution and every person who was entitled to exercise the power of voting conferred under this Act but who did not exercise that power in relation to the resolution; and (b) any other person whom the court declares to have a sufficient interest in the proceedings to require that the person should be served with notice of the application, (c) and the court may direct that any person served with, or to be served with, notice of the application be joined as a party to the proceedings. (3) The court should not order a party who opposes an application under this section to pay the costs of a successful Corporation unless the court considers the actions of that party in relation to the application were unreasonable. Determination of the originating application 35 The Contract Resolution, passed on 25 October 2023, authorises the Corporation to enter into a contract and therefore incur a liability to Duratec, which because of the amount involved, requires the passing of a unanimous resolution. The Expenditure Resolution, passed on 14 March 2024, authorises the Corporation to expend monies, by payment to Duratec, also requires the passing of a unanimous resolution. Both resolutions, although passed with a large majority, were not passed by a unanimous resolution. 36 An argument may have been raised pursuant to regulation 21(b)(i) of the CT Regulations that the expenditure was reasonably required for completing works that were required by a council or public authority. The difficulty with that argument is that the Fire Safety Notice only required the removal and replacement of about 80% of the ACP on the Building. The resolutions authorised the incurring of a liability and the payment of sums that involved the removal and replacement of all of the ACP. That amount is in excess of the amount required to remove and replace 80% of the ACP, although there is no evidence as to the precise amount of the excess. There was no submission by the Corporation for the purpose of this -- 9 of 16 -- [2024] SADC 153 8 application or evidence advanced that the whole of the expenditure was reasonably required for completing the works required by the Fire Safety Notice. It follows therefore it cannot be said for the purposes of regulation 21(b)(i) that the expenditure was reasonably required for completing works that were required by the Fire Safety Notice. 37 I am satisfied therefore that the jurisdictional facts exist for the making of an order under s 149 of the CT Act. The CT Act requires the passing of a unanimous resolution and the Corporation only passed a special resolution but not a unanimous resolution. The Corporation therefore seeks relief pursuant to s 149 of the CT Act and seeks an order that the Court declare the resolutions sufficient for the purposes of the Act. Notice of the application has been served on the persons required to be served under s 149(2) of the CT Act. 38 There have been no relevant cases dealing with an application under s 149(1) of the CT Act. Section 200(2)(n) of the Strata Titles Act 1985 (WA) provides a broadly similar power to s 149(1) and was considered by the WA State Administrative Tribunal in Owners of Ellement 996 Strata Plan 53402 and Tobias.2 In that case, an order was made that the corporation was taken to pass the resolution as a unanimous resolution. However, that was a decision based on that particular legislation in Western Australia and does not provide assistance in dealing with this application. 39 A preliminary issue arises in relation to the power of the court to make an order where a unanimous resolution is required but only a special resolution or ordinary resolution has been passed. The issue arises because that circumstance is provided for in s 149(1)(a) but the power of the Court to make an order is provided for in s 149(1)(b), which, as formatted, does not apply to s 149(1)(a). The formatting may be a relevant matter when construing legislation. Megarry V-C, writing extrajudicially, stated:3 Nor would any reasonable man ignore the typographical arrangement, such as indentions (see eg Piper v Harvey [1958] 1 QB 439, where the decision gave effect to the indention: see 1010 S.J. 856, 857) or the lack thereof (see Re Allsop [1914] 1 CH1 at 15, where the view of the court ran counter to that indicated by the lack of indention). Yet both punctuation and arrangement may be of the highest importance in suggesting one interpretation and concealing another. … It is perhaps not altogether clear just how strict and far-reaching the rule is [that is punctuation and arrangement should be ignored], especially as to arrangement; but if the rule really requires the courts wholly to disregard such matters, it seems quite unreal. At the very least, punctuation and arrangement must often exert some subconscious influence on the Bench. 2 [2022] WASAT 49, [79]-[92]. 3 (1959) 75 LQR 31. -- 10 of 16 -- [2024] SADC 153 9 40 Sir John Donaldson MR in Alcom Ltd v Republic of Columbia4 held that the Act had to be construed in the way that it was printed.5 41 It appears from these passages, that formatting is a relevant matter in the construction of a statute but must be considered along with other matters including in particular the context, words and purpose. As Edelman J held in SAS Trustee Corporation v Miles:6 ... this Court said that the task of statutory construction must begin and end with the text of the statute. That statement does not mean that the text of a statute must be interpreted only according to the range of semantic meanings of the individual words. It means only that the interpretation of a statute, like any other legal instrument, is an interpretation of its words. Those words are interpreted in their context and in light of their purpose although legal rules can sometimes exclude or restrict the use of some context. In ascertaining the reasonably intended meaning of Parliament context is, literally, those matters to be considered (simultaneously) together with the text. Context can give words an interpretation that is the opposite of their ordinary meaning and grammatical sense. Context can also permit a construction of words that excludes their application to matters that would have fallen within the application of their literal meaning. However, as with contractual interpretation, where “the clearer the natural meaning the more difficult it is to justify departing from it”, so too in statutory interpretation “questions of degree arise” and it will be more difficult to displace an interpretation that “has a powerful advantage in ordinary meaning and grammatical sense”. 42 In the present case, s 149(1)(a) would have no application and no meaning if the power granted to the Court to declare a resolution sufficient did not apply to both sub-paragraphs (a) and (b) of s 149(1). Further, as submitted by senior counsel for the Corporation, s 149(1) can properly be read as a compendious whole, but with a disjunctive “or” between the two sub-paragraphs. The words in s 149, when considered in their context and in light of their purpose, are to be construed as enabling the court to make an order that a resolution of the type referred to in sub- paragraph (a) is sufficient for the purposes of the Act. Still further, construing the power to make an order only if the conditions in s 149(1)(b) were satisfied, would defeat the purpose of s 149(1) which is provide relief where unanimous or special resolutions are required. That much also appears from the heading “149-Relief where unanimous or special resolution required”. 43 It follows that the Court has power to make an order declaring sufficient resolutions of the type referred to in subparagraph s 149(1)(a), that is a resolution that was passed as a special or ordinary resolution, but a unanimous resolution was required. In the circumstances of this case, the Court has power to declare the Contract Resolution and the Expenditure Resolution sufficient, even though they were passed by special resolutions, when a unanimous resolution was required. 44 The next question is whether the Court should exercise its discretion to declare the special resolutions that were passed sufficient for the purposes of the 4 [1983] 3 WLR 906, 910. 5 See also Francis Bennion, Statutory Interpretation (Butterworths, 2nd ed,1992) 514. 6 (2018) 265 CLR 137, [64]; [2018] HCA 55. -- 11 of 16 -- [2024] SADC 153 10 Act. Section 149(1) gives the Court an unfettered discretion to make such an order. Brennan J in Norbis v Norbis7 provided guidance as to how such a discretion should be exercised. Brennan J held:8 It is one thing to say that principles may be expressed to guide the exercise of a discretion: it is another thing to say that the principles may harden into legal rules which confine the discretion more narrowly than the Parliament intended. The width of a statutory discretion is determined by the statute; it cannot be narrowed by a legal rule devised by the court to control its exercise: Gardner v Jay (1885) 29 Ch D 50 at 58-9; followed in Huntley v Alexander (1922) 30 CLR 566. Brennan J went on to hold:9 If it is possible to develop such guidelines, it is possible to ensure order and consistency in the exercise of the discretionary jurisdiction under the Family Law Act. In Ward v. James (1966) 1 QB 273, Lord Denning M.R. addressed the problem of guiding the exercise of an unfettered judicial discretion. He said (at p.295) The cases all show that, when a statute gives discretion, the courts must not fetter it by rigid rules from which a judge is never at liberty to depart. Nevertheless the courts can lay down the considerations which should be borne in mind in exercising the discretion, and point out those considerations which should be ignored. This will normally determine the way in which the discretion is exercised, and thus ensure some measure of uniformity of decision. From time to time the considerations may change as public policy changes, and so the pattern of decision may change: this is all part of the evolutionary process. 45 McHugh J in PS Chellaram & Co v China Ocean Shipping10 held (in relation to the exercise of an unfettered discretion to award security for costs) that the weight given to any particular circumstance depends not only on its own intrinsic persuasiveness but also upon the impact of the other circumstances that have to be weighed. 46 The Court, in accordance with these principles, should not apply any fixed rule that might determine how the discretion should be exercised, but instead set out a number of guidelines or circumstances, which in this case, will guide how the discretion should be exercised in the circumstances of this case. I consider that in the circumstances of this case, the Court should apply the following guidelines when considering whether or not to make the order declaring the resolutions sufficient: (1) does the exercise of the power accord with the purpose of s 149 of the CT Act? (2) was the expenditure necessary or discretionary? 7 (1986) 161 CLR 513; [1986] HCA 17. 8 Ibid, 537. 9 Ibid, 538. 10 (1991) 65 ALJR 642; [1991] HCA 36. -- 12 of 16 -- [2024] SADC 153 11 (3) did the Corporation put forward and pass the resolutions in good faith? (4) do the resolutions act in a way that is particularly unfair to one member or group of members at the expense of other members? (5) does the resolution impose an unreasonable burden on members as a whole or particular members or groups of members? (6) was the meeting properly convened and did the members have proper notice of the resolutions? (7) what degree of support was there for the resolutions? (8) what opposition was there to the resolutions and what were the reasons for that opposition? (9) what were the consequences for the Corporation if the resolutions were not passed and carried into effect, as determined at the time of the passing of the resolutions? (10) what are the consequences now if an order is not made declaring the resolutions sufficient? 47 I will now consider each of these matters, although in some respects the matters overlap. 48 First, the purpose of s 149 is to provide relief to the Corporation in appropriate circumstances from the expenditure limits that are imposed by s 119 and regulation 21. Section 149 recognises that in some cases, it may not be possible for the Corporation to obtain a unanimous or special resolution authorising expenditure in excess of the limits or that, through inadvertence, the Corporation has failed to obtain such a resolution. This is a case where it was not possible for the Corporation to obtain the unanimous resolutions. Further, the Corporation put forward the resolutions so that it could take action which it considered was in the best interests of the Corporation and its members. There is objective evidence that supports the position that the action taken was in the best interests of the Corporation. The Corporation was seeking to address a risk that posed a substantial danger to the safety of the Building and the lot owners. The engagement of Duratec was to address that risk and to comply with the requirements of the Fire Safety Notice. I therefore consider that the exercise of the discretion in the circumstances of this accords with the purpose of power that is provided for in s 149(1) and is a factor in favour of making the order. 49 Secondly, and related to the first matter, the expenditure was necessary and not discretionary. It was necessary to address the Fire Safety Notice and the risk to the Building posed by the ACP. It cannot sensibly be said that the ACP could have been left on the Building and not replaced. There was no evidence that the -- 13 of 16 -- [2024] SADC 153 12 works to replace the ACP could have been undertaken for a lesser cost or more efficiently. Again, this is a factor in favour of making the order. 50 Thirdly, I consider that the Corporation put forward the resolutions in good faith and that the resolutions were passed and carried into effect in good faith. The resolutions were put forward as special resolutions. They were put to the meetings of the Corporation after extensive consultation with members, information sessions and after extensive work and investigation by the Corporation to find a solution to an urgent and serious issue. There was no suggestion that the resolutions were required to be unanimous resolutions and there was no statement to that effect by any person opposed to the resolutions. It was a reasonable reading of regulation 21 that a unanimous resolution was not required and that the works were reasonably required to comply with the Fire Safety Notice. The fact that the Corporation was acting in good faith is a neutral factor. Had there been bad faith on the part of the Corporation, that would have a reason to refuse to make the order. 51 Fourthly, the resolutions do not act unfairly to any member or group of members. They do not advantage any member over any other member. The resolutions seek to address a problem that is common to all members. The ACP is on the exterior face of the entire Building and equally impacts on all apartments and therefore all members. This is a factor in favour of granting the order. 52 Fifthly, and related to the previous factor and for the same reasons, the resolutions (and the actions authorised by the resolutions), do not impose an unreasonable burden on members as a whole or any particular member or group of members. They operate equally across all members and address a matter that must be rectified. This is a factor in favour of granting the order. 53 Sixthly, the meeting was properly convened and the members had proper notice of the motions that were put to the meeting. There had been information sessions prior to the meeting. The issue concerning the removal of the ACP had been the subject of ongoing discussion and debate for some time. Everyone attending the meeting was in a position to make an informed decision about the matter. The fact that the meeting was properly convened and the members had proper notice of the proposed resolutions is a neutral factor. Had the meeting not been properly convened or had no adequate notice been given to members that would have a factor in favour of the refusal to make the order. 54 Seventhly, there was considerable support for the resolutions. There are 141 members of the Corporation. The first resolution passed with 69 votes in favour, with 10 against and 6 abstentions. The second resolution passed with 91 votes in favour, with 11 against and 4 abstentions. In each case, there were very substantial majorities in favour of the resolution. The Corporation had a large number of members and in such circumstances, it is not surprising that a resolution did not pass unanimously. The strong support for the resolution is a factor in favour of granting the order. -- 14 of 16 -- [2024] SADC 153 13 55 Eighthly, although there was some opposition to both resolutions and eight persons applied and were granted leave to be joined as interested parties, only one party, Kursace Air, filed a notice of acting. Kursace Air said that it did not take any position in relation to the application and did not actively participate in the hearing. The interested parties opposition, at least in part, related to the ability of the Corporation to obtain finance from SAFA which was not confirmed at the time of the vote on the resolutions and at the time of their applications to be joined as interested parties. The provision of a loan by SAFA has since been confirmed. There has not been any other reason articulated for the opposition to the application. In these circumstances, I consider that the lack of any expressed reason for the opposition to the resolution that is still relevant is a factor in favour of granting the order. 56 Ninthly, if the resolutions were not passed and carried into effect, the Corporation would have been in a very difficult position. It had received a Fire Safety Notice from the City of Burnside which it was legally obliged to comply with. The safety issue remained unresolved. The ACP needed to be removed from the Building for both reasons. Further, it was likely that insuring the Building for fire risk would either by unachievable or would include terms that were onerous. The Corporation did not have any alternate means to achieve those objectives. The Corporation was not in a position where it could do nothing. I consider this to be a factor in favour of granting the order. 57 Tenthly, if an order is not made declaring the resolutions sufficient, it would follow that the resolutions are void. The contract between the Corporation and Duratec would be unable to proceed. In that event, and the Corporation defaults in payment of any liability to Duratec, the members of the Corporation are jointly and severally liable for that liability pursuant to s 77 of the CT Act. That liability could include damages if the agreement was terminated. Termination of the agreement with Duratec would also mean that the removal of the ACP on the Building would not be completed. A fire risk would or might remain. The Corporation would likely be in default of the Fire Safety Notice. The Corporation may be unable to obtain insurance. The value of the apartments in the Building would likely be affected. There are therefore a number of serious consequences that would flow from a refusal to make an order declaring the resolutions sufficient. I consider these matters to be a factor in favour of granting the order. 58 Considering each of these factors individually and in the context of each other and in the context of the background to the application, I have formed the view that the application of the Corporation should be granted. Conclusion 59 It follows from the reasons that I have expressed, the Court orders that: (1) the resolution of the Corporation made on 25 October 2023 (the Contract Resolution) is declared sufficient for the purposes of the Act. -- 15 of 16 -- [2024] SADC 153 14 (2) the resolution of the Corporation made on 14 March 2024 (the Expenditure Resolution) is declared sufficient for the purposes of the Act. 60 The effect of such an order under s 149(1)(b) is that the special resolutions which were made passing the Contract Resolution and the Expenditure Resolution are taken to be a unanimous resolution. -- 16 of 16 --