Failure to pass a special resolution to commence legal proceedings

Section 18 of the OC Act states that an OC must not bring legal proceedings unless it is authorised by special resolution to do so (except in the case of proceedings for the recovery of fees or enforcement of the OC rules).

In Burbank Australia Pty Ltd v Owners Corporation [2015] VSC 160, McDonald J confirmed that failing to obtain a special resolution before issuing proceedings does not nullify a proceeding. Instead, it is an irregularity that is capable of being cured.

In Burbank an order was made staying the proceeding until a special resolution could be obtained. In an earlier case, Giurina v Owners Corporation No 1579 and ors [2012] VSC 466, Lansdowne As J held that joining the members of the OC could also cure the irregularity.

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