A Costly Mistake for Owners Corporations: VCAT Reinforces Special Resolution Rule

Failing to tick the right procedural box can stop your case before it starts. That is exactly what happened when Evolve Lawyers, with Cam Truong KC and Michelle Bennett of Counsel, successfully obtained a stay of a Victorian Civil and Administrative Tribunal (VCAT) proceeding brought by an owners corporation against our client for alleged breaches of owners corporation rules. 

Why was the application stayed? 

VCAT determined that the owners corporation had not passed the requisite special resolution under section 18(1) of the Owners Corporation Act 2006 (Vic) (OC Act) before commencing the application. Without that special resolution, the application could not continue. 

Clarification from VCAT 

In its decision on the matter, VCAT confirmed that a claim for a civil penalty amount not exceeding $1,100 to be paid to the owners corporation under section 166 of the OC Act does not trigger the exception under section 18(2) of the OC Act because a civil penalty is not of a nature that falls ‘within the civil jurisdictional limit of the Magistrates’ Court’, being $100,000, as that phrase was explained in Owners Corporation 1 PS723350Q v Owners Corporation 2 PS723350Q (Owners Corporations) [2025] VCAT 592. 

Key takeaway 

Owners corporations must obtain a special resolution before issuing legal proceedings where the amount claimed is less than $100,000. If owners corporations do not obtain the required special resolution, they risk wasting time and incurring significant costs that will be ultimately borne by their members. 

Advisors 

Winston Lay and Nicole Tram (Evolve Lawyers), with assistance from Cam Truong KC and Michelle Bennett of Counsel. 

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