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  • #7388

    In a two unit strata scheme (with two owners) a quorum at a general meeting is made of 2 persons entitled to vote on the motion.

    I understand that the vote of the unfinancial member does not count but I cannot see why this could affect the quorum given that the unfinancial owner is still entitled to vote.

    An owners entitlement to vote is not affected by levy arrears but their right to have their vote counted is affected by levy arrears.

    If the two owners are present to consider a motion and one owner is in levy arrears does this make the motions passed at the general meeting invalid?

Viewing 15 replies - 1 through 15 (of 15 total)
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  • #12814
    Avatarbpositive
    Flatchatter

    This leads me to ask another question. I have been twice denied voting rights even though I had a cheque with me at the time of the meeting.

    #12815
    AvatarBillen Ben
    Flatchatter

    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.

    #12832

    Get too close to financial deadline at your peril. The financial deadline of a general meeting should be given a wide berth as should a discount date. 

    A former strata manager gave a lot owner a 10% discount on levies even though they were not paid before the due date. i.e. by the discount date, the day before the due date.

    According to the oc bank statement the lot owner had over $20,000.00 in arrears on the discount date. The lot owner attempted to pay the outstanding amount by a combination of EFT and bank cheque on the discount date to be eligible for the discount. The attempt failed despite the strata managers support that the amount was “paid” before the due date.

    The amounts are brought to the oc bank account when they are received by the bank and this is when they have been paid. 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.

    The discount missed by the lot owner was $600.00 on a $6,000.00 quarterly levy. So it hurt. It took an application to the CTTT to establish the lot owners ineligibility. The CTTT agreed in this case that the financial deadline had been breached.

    The oc and strata manager parted ways soon after.

    #12833

    The CTTT application that dealt with the missed $600.00 discount also dealt with 3 general meeting held while the lot owner was not financial.

    Two of the general meetings were attended only by the unfinancial owner. The two meetings were adjourned because of a lack of a quorum but the unfinancial owner did not adjourn for the minimum 7 days. The CTTT said the meetings were invalid because they were not adjouned for the minimum 7 days.

    The third general meeing that was attended by both owners on the notified date. No adjournment. The CTTT did not invalidate the third general meeting but said that the votes of the unfinancial owner could not be counted.

    Here is a case were Clause 10(8) of Sch 2 has been applied retrospectively and where the validity of the meeting was left standing which would mean that the quorum was valid.

    I understand that the CTTT adjudicator did not cast their mind to the specific issue of the quorum and that even if they had that that doesn't mean their “logic” would have made perfect sense.

    If Clause 10(8) of Sch 2 had the weight that some give it wouldn't its retrospective application trigger a ripple effect where the unfinancial owners entitlement to vote would be removed which would have a flow on effect on the quorum and the validity of the meeting?

    Remember this is a two lot scheme so the outcome of some of the resolutions at the general meeting have been turned 180 degrees. A fact that I have exploited in subsequent CTTT applications.

    Despite this I am still uncertain about the true effect of Clause 10(8) of Sch 2 because of the changing mind of the CTTT and the legal consensus that says it has an effect on a persons voting entitlement.

    I'm not one to take a legal consensus as gospel. A legal consensus is open to challenge. The lawyer that sucessfully challenges the legal consensus is well worth his salt. As for the rest they are just part of a nodding crowd.

    #12834

    Is it possible to view the matter of SCS 10/34078 online. The matter that Billen Ben mentioned.

    I am curious about the application of a proxy in my case.

    As a proxy form must be kept on the oc records it may be the only way to have an owners vote recorded when that owner is refused their entitlement to vote at a general meeting due to the managers belief that they are not financial.

    I say the “managers belief” that a person in not financial because I have found that the accounts kept by the manager often do not meet the requirements of the legislation for one reason or another. Accounts can be sucessfully disputed. I have done it with the $600.00 discount. see above.

    If there is a risk that the acounts are disputable then the safest thing for all involved would be to record all the owners votes (financial and unfinancial). If this is not done then a critical moment in time at the general meeting may be lost forever. Clause 10(8) of Sch 2 can be applied retrospectively so nothing is lost by recording the votes of an unfinancial member.

    A person is entitled to cast a vote when they have a interest in a lot. Having notified the owners corporation of that interest there is nothing in the SSMA to prevent an owner casting a vote and having it recorded.

    For a chairperson of a general meeting to deny a person having their vote recorded would be risky especially when the accounts may be disputable.

    #12837
    AvatarBillen Ben
    Flatchatter

    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.

    #12839

    Thanks Billen Ben. I reckon we've thrashed that topic.

    On the subject consumer confidence in the CTTT my confidence has taken a beating a number of times but at others they have performed well.

    I've had an adjudicators orders overturned by a Tribunal member where the member agreed that the adjudication was not a competent jurisdiction.

    I've had a member of the office of the chairperson, wont say which one, meddling in matters that are not even within the jurisdiction of the CTTT.

    I recall someone on this forum saying that the CTTT is not a “real” jurisdiction. I know from experience that they can be successfully held to account on jurisdictional matters and that are willing to hold themselves to account too.

    Sadly one of my main critisisms of them is that they are a creature of statute but sometimes even fail to meet the objectives of the legislation that created them. And all they can do is apologise.

    #12840

    For your reference see Section 3 of the Consumer, Trader and Tenancy Tribunal Act 2001 No 82 below

     

    3   Objects of Act

    The objects of this Act are as follows:

    (a)  to establish a Consumer, Trader and Tenancy Tribunal to determine disputes in relation to matters over which it has jurisdiction,

    (b)  to ensure that the Tribunal is accessible, its proceedings are efficient and effective and its decisions are fair,

    (c)  to enable proceedings to be determined in an informal, expeditious and inexpensive manner,

    (d)  to ensure the quality and consistency of the Tribunal’s decision-making

    #12841
    Jimmy-TJimmy-T
    Keymaster

    I think most people would agree that even if the CTTT got ONE of b), c) or d) right consistently they'd command a lot more respect in the strata community.

    #12847
    AvatarBillen Ben
    Flatchatter

    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.

    #12802
    Jimmy-TJimmy-T
    Keymaster

    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

    #12804

    Hi Wombat

     

    Jimmy is correct. Section 10(8) of the Schedule 2 of the Strata Schemes Management Act has this effect.

     

    I add one more item. Where a matter requires a unanimous resolution, the vote of the unfinancial person should be counted even though the person entitled to vote is unfinancial.

     

    Regards

     

    Chris Kerin

    Senior Lawyer
    ———————————-
    TEYS Lawyers
    The Strata Law Experts
    02 9562 6500
    1300 TEYSLAWYERS
    Suite 73, Lower Deck
    Jones Bay Wharf
    26-32 Pirrama Rd
    Pyrmont NSW 2009
     

    #12805

    I really want you both to be wrong about this so I am going to try to persuade you.

     

    Clause 10(8) of Schedule 2 of the Strata Schemes Management Act does not use the word entitled so it isn't determining who is and who isn't entitled to vote. It just states that the vote does not count unless payment has been made…

     

    Clause 10(8) of Schedule 2 of the Strata Schemes Management Act does not prevent the vote being cast in the same way that Section 118(5) of the Strata Schemes Management Act does. Much stronger language is used in s118(5).

     

    Clause 10(10) of Schedule 2 of the Strata Schemes Management Act refers to s118. It states “this clause does not confer a right to vote on a person deprived of the right by failing to comply with section 118”.

     

    My argument is that if the authors of the SSMA intended Clause 10(8) of Schedule 2 to prevent a vote being cast or to remove an entitlement or right it would have been written in much the same way as s118(5) with much stronger language.

     

    Section 118(1) of the Strata Schemes Management Act states that a person who has an interest in a lot that, subject to this Act, gives the person a right to cast a vote. That right to cast their vote is the entitlement that is the subject of Clause 10(8) of the Schedule 2.

     

    Clause 36 of Schedule 2 of the Strata Schemes Management Act allows any owner entitled to vote to make a requisition for the inclusion of a motion on the agenda no matter whether they are financial or not. They would obviously have time to pay any amounts outstanding before the meeting so that the votes that they do cast are counted.

     

    Clause 10(8) of Schedule 2 simply means (to me) that a vote that has been cast (while the person entitled to cast it is not financial) cannot be counted. The right to vote cannot be exercised to its finality by having it counted.

     

    Clause 12 of Schedule 2 of the Strata Schemes Management Act makes no reference to whether a person entitled to vote is financial in determining a quorum.  In Clause 36 of Schedule 2 the secretary must respond even if the person is unfinancial.

     

    Being unfinancial does not extinguish entitlement to vote and therefore has no effect on whether a person can form part of a quorum.

    #12806

    Correction

     

    Section 118(1) of the Strata Schemes Management Act states that a person who has an interest in a lot that, subject to this Act, gives the person a right to cast a vote. That right to cast their vote is the entitlement that is the subject of Clause 10 of the Schedule 2…….The whole of Clause 10 not just Clause 10(8).

    #12812
    AvatarBillen Ben
    Flatchatter

    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.

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