Quorum present not all financial

The act says this:

12   Quorum

(1)  A motion submitted at a general meeting of an owners corporation must not be considered, and an election must not be held, unless there is a quorum present to consider and vote on the motion or on the election.

(2)  There is a quorum for considering and voting on such a motion or at such an election only if:

(a)  at least one-quarter of the number of persons entitled to vote on the motion or at the election is present, either personally or by duly appointed proxy, or

(b)  at least one-quarter of the aggregate unit entitlement of the strata scheme is represented by the persons who are present and entitled to vote on the motion or at the election, either personally or by duly appointed proxy.

(3)  However, if there is more than one owner in the strata scheme and the quorum calculated in accordance with subclause (2) is less than 2 persons the quorum is 2 persons entitled to vote on the motion or at the election.

The emphasis there was mine. Then quickly moving on to the section about who is and isn't entitled to vote, it says this:

10   Persons entitled to vote at general meetings

(8) Voting rights may not be exercised if contributions not paid
A vote at a general meeting (other than a vote on a motion requiring a unanimous resolution) by an owner of a lot or a person with a priority vote in respect of the lot does not count unless payment has been made before the meeting of all contributions levied on the owner, and any other amounts recoverable from the owner, in relation to the lot that are owing at the date of the notice for the meeting.

I would have thought “entitled to vote” implies that your vote would be counted.  My reading is if you're not “financial” you can't vote and therefore can't be considered as forming part of the quorum.

In other words, you can raise your hand as often as you want but if your levies aren't up to date, you can't propose motions, nominate candidates for election or vote on motions. You are effectively not present. But I am, as ever, open to being proved wrong.

Jimmy

I love your work wombat.

Cl 10(1) of Sch 2 stands no matter what a persons financial position but the plain English Act is not so plain English. I actually agree with wombat from just, face value, reading the Act that being not financial does not extinguish entitlement to vote; it just means the vote doesn't count BUT I also acknowledge that is not how it works. It is one of those areas where what it appears to say is not what it means in operation.

Being non financial means your not entitled to vote. It is legal consensus. If someone has a case law quote that would really help.
You will find it on page 303 of high profile strata solicitor Alex Ilkins book NSW Strata and Community Schemes Managment and the Law; 4th Edition. Not financial = no entitlement to vote unless it is a unanimous matter.

It also means that a motion on an AGM agenda should not be put to the meeting if submitted by a non financial person. The motion will get on the agenda but it should not be put to the meeting.

It also means only votes that are potentially “countable” at a meeting count toward determining a quorum.

One of the sad things about legislation is that people cannot go back to the authors and ask; what did you mean?

I believe all legislation should come with an accompanying plain English companion that does it best to describe the purpose and intent of each section and clause in the legislation.

There is a twist but;
How would people like to have a vote exersized even though they are not financial?  The key to doing so is found in SCS 10/34078. This matter was dealt with by a Senior CTTT Member acting as a Strata Schemes Adjudicator.

The Adjudicator stated in his reasons, words to the effect, that a non-owner was entitled to vote at the AGM because the non-owner was a proxy. The non-owner is entitled to vote and so is entitled to submit motions. So any motion on the AGM agenda submitted by the non-owner, who was a proxy, was fine.

Now it gets interesting. There is no financial restriction on appointing a proxy; i.e. it does not matter if a person is financial or not, they can still appoint someone else as their proxy.  By virtue of being appointed as a proxy a person is then entitled to vote; according to the “logic” of the Adjudicator in SCS 10/34078.

By appointing a proxy the question of the financial status of the person who is now entitled to vote would relate to someone other than the non financial owner. The non-owner (the proxy holder) is entitled to vote, according to the “logic” of SCS 10/34078, and a non owners being financial or not financial is a meaningless question.

If a non financial owner gives a proxy to another owner then the question of clause 10(8) of Sch 2 would become “is the other owner financial” because the other owner is now entitled to that vote; according to the “logic” of the Senior Member in SCS 10/34078.

In reality the proxy is merely conveying the owners vote, for the owner, in the owners’ absence, if the owner is financial. If the owner is not financial then the proxy can vote all day but that vote should not be counted but if one wants to use SCS 10/34078 as “the benchmark” for who has voting entitlement then the door is open for non financial people to give voting entitlement to others via a proxy, others who could then vote by virtue of being a proxy without the need to be financial.

I know of two schools of thought on that matter.
One is you get to vote because you have paid.

The other is that because it is a cheque you are not actually deemed financial until the money is in the OCs bank account. The cheque needs to be banked, cleared and the funds transferred before the OC actually has your money. This train of thought is backed by various pieces of legislation.

The good news is that there are proposed changes on this issue but i believe it involves the person in arrears needing to banked the cheque 4 days prior to the meeting and if it does not appear in the OC account before the meeting it is still deemed to have been paid – that is the gist of what is proposed.

Bring cash – or stay financial, they are the best options.

wombat said:

 I would like to know the legislation that supports this. Can you help me with this Billen Ben?
Even a bank cheque needed to be cleared overnight before it hit the oc's bank account.

Hi Wombat;
I hope it was in G F Bugden's strata book, if not then i would have to think about it some more. I do not have the book anymore but that rings a bell with me.

From SCS 10/34078 page 3,

h.     I do not consider that there is any real substance in the assertion that the Executive Committee is not able to propose motions. The reality is that the motions were proposed by lot owners who also were members of the Executive Committee. While the Committee does not have standing, its members who are lot owners, do. I assume that neither Ms Gilmour nor Mr Bonnano had a proxy to act for a lot owner. The minutes attached note that they had approval and consent from lot owners, and the attendance sheet records that each held a proxy from a lot owner, but I am unable to find the actual proxy in the materials provided.
The Act, Schedule 2 Clause 9 (1) provides:

A person is not entitled to move a motion at a meeting or to nominate a candidate for election as a member of the executive committee unless the person is entitled to vote on the motion or at the election.

Unless there were a proxy, neither Ms Gilmour nor Mr Bonnano would be entitled to vote. Thus, neither could move a resolution.

G J Durie Strata Schemes Adjudicator 22 Oct. 2010

Neither Ms Gilmour or Mr Bonnano are owners. Both had motions on the AGM agenda.
It seems to me that the Adjudicator is saying if you have a proxy you are entitled to vote, move motions, nominate candidates and all the other goodies that come with being an actual owner.
I found the comment surprising coming from a Senior Member.

You will notice the Adjudicator says “move a resolution”. Motions are moved and resolutions are the result of a passed motion. One does not move a resolution. I have trouble having any confidence in the organization (CTTT).
Hope this helps.

wombat said:

I recall someone on this forum saying that the CTTT is not a “real” jurisdiction.

 

That was me. I say that because CTTT outcomes do not set precedent nor do they constitute persuasive argument. Each outcome is its own result.
There is one case by Senior Member Balding, now a Deputy Chair, where she quotes two different former cases that have great similarity to the one she was dealing with. She notes the decisions in the other matters are all over the place (my words, not hers). One of the two referenced cases gave the requested orders; the other dismissed the matter – a complete farce if s3(d) of the CTTT Act means anything.

You might find it interesting that I was recently trying to have a Members performance reviewed under Schedule 3 of the CTTT Act but as the Member was acting as an Adjudicator the CTTT Chair felt the CTTT Act did not apply and as such declined to refer the complaint to the review panel.

Adjudicator are Adjudicators and not Members for the purpose of the Schedule 3 of the CTTT Act ?????
That is interesting because it should follow that s83 of the CTTT Act would also not apply when a Member is acting as an Adjudicator.