NSW How valid is a signed contract if it was misrepresented to the people who signed it?

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prodaroda

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14 May 2020
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My strata AGM was held on Thurs, and there was a motion to renew a buliding caretaker contract for 5 years.
I did some research beforehand and found out the price in the contract is almost 3x what other similar apartments are paying.
At the meeting, only 4 owners out of the 116 showed up.
I brought up that we shouldn't sign this contract right now so we can do some due diligence, but my strata manager argued very hard that we shouldn't bother with the due diligence and just sign it, and she may have made some misrepresentations that affected the outcome of the vote.
The motion was passed to sign the contract with 2 votes to 2, plus 4 yes proxy votes that my strata manager was holding.
Since then I've spoken to 10 owners that never showed up to the meeting and they all say that they would have attended the meeting and voted with me if my research was brought to their attention.

I know this is probably a case of trying to close the door after the horse has bolted, but I just feel like we've been hoodwinked by our strata manager, and I'm trying to find any legal loophole to invalidate the motion or the contract that was signed.
 

Rod

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27 May 2014
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You would probably have to show some inappropriate/corrupt behaviour.

You can certainly argue to have the strata manager replaced due to her failure to perform duties in a responsible manner.
 

prodaroda

Active Member
14 May 2020
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Thanks Rod. I've since been doing a lot of reading of the Strata Schemes Management Act 2015, as well as digging into our past AGMs
I've found that Section 102 (1), and Regulations 2016 section 25, states that owners corporation must get 2 quotes for any spending over $30k. This wasn't done for in relation to our Building manager's contract, both in the previous AGM, as well as the one in 2017. Only our building manager's contract was presented.

I also found out that one of the proxies was actually assigned to our building manager, who then voted for renewing his own contract.
This is in direct contravention of Schedule 1 Clause 25(7), but our strata manager says it's perfectly fine because the owner specifically gave instructions on the proxy form to vote in favour of renewing the contract.

So the owners are hoping to have this contract terminated in NCAT. What do you think of our chances?
 

Tim W

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The strata manager is obviously getting (or expects to soon get)
a generous cut of the excessive fees from his mate the caretaker.

4 out of 116?
Are you even sure that you had a quorum at the meeting?
 

Rod

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I don't practice in NSW.

The legislation you highlighted shows the strata manager likely breached the Act.

You should talk to a NSW lawyer to find out what affects that has on contracts. 3rd parties may be able to rely on the authority of the strata manager to enforce the contract.

Get proper legal advice.
 

prodaroda

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14 May 2020
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Thanks for the advice. I've since requested a strata owners meeting and added a motion to terminate the contract through mediation or tribunal.

The strata manager has been doing everything she can to stop the meeting from happening. She called me and wrote to me that I'm opening myself up to various defamation and liability lawsuits.

Then today I get a "concerns notice" from a lawyer saying the words I used in the meeting motion is defamatory and wants me to remove the motion from the meeting, or they reserve the right to commence legal action without any further notice.

While I fully intend to comply with their demands because I don't think it's worth spending my personal money to fight for, what are the chances that this is just a scare tactic?

Is there really any grounds to sue me if they lost a tribunal hearing because the words used in my motion is defamatory?
 

prodaroda

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14 May 2020
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@Tim W the Act allows the chairperson to call a quorum after 30mins.

And yes, I have no doubt they are getting kickbacks. Especially now that I've got a litigation threat.
 

Tim W

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@Tim W the Act allows the chairperson to call a quorum after 30mins.
Yeah, I'm familiar with that bit.
I'm just not automatically assuming that the manager knew what he was doing.
prodaroda also said:
And yes, I have no doubt they are getting kickbacks. Especially now that I've got a litigation threat.
In which case, consider replying with "Well, go on then!"
 

Rod

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While I fully intend to comply with their demands ....
Why?? I don't know the words you used, however as they were said the context of organising a strata meeting then you likely have a solid defence. I'd not withdraw a simple motion to remove the strata manager. She gets to pay your costs if she proceeds with court action and loses.

If your comments were not related to the issue at hand (eg you called her child abuser) only then do you have a problem.

I like @Tim's suggestion:

In which case, consider replying with "Well, go on then!"
 

prodaroda

Active Member
14 May 2020
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It's a very long story, and it means I have to include the caution notice. Am I allowed to do that on an internet forum. And wouldn't putting the stuff I said in my emails on this forum count as publication of defamatory material?