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Our SC recently had a meeting with only 4 of the 9 members in attendance.
The Chairman held two proxies. We feel that these proxies may not be valid as they were probably signed before the Agenda was set and distributed.
We have requested a copy of the Agenda and information about when it was circulated from both the Strata Manager and the Chairman. This information has not been sent to us and nor has our email request been replied to.
The committee members present agreed to engage a lawyer to respond to a formal complaint we have made about the committee and in particular one member of the committee. Our formal complaint was made via a lawyer.
So, are the proxies valid if there had been no discussion of engaging a lawyer when they were signed?
If the proxies are not valid, are the four members of the committee who agreed to engage a lawyer, liable for payment for the lawyer?
If the engagement of the lawyer is valid , which member of the SC should be nominated to deal with the lawyer?
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The meeting should never have gone ahead.
Proxy votes may not be used at strata committee meetings. Other non-members can represent absent members, but only after the committee has agreed to this and to be able to agree, they have to have a quorum in the first place.
This is what the Act says:
A motion submitted at a meeting of a strata committee must not be considered unless there is a quorum present to consider and vote on the motion.
So all the decisions made at that meeting should be rescinded immediately or mediation requested prior to orders being sought at NCAT.
If the chair and secretary refuse to rescind the decisions and hold another meeting, they should be informed in writing that if they continue to seek legal advice without proper authority, they will be personally liable for the legal bills that are accrued.
Normally the secretary or chair would communicate with lawyers but it can be anyone the strata committee or owners corp appoints in general meeting, provided that person agrees.
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In addition to Jimmy T’s advice an owners corporation and its representatives must not seek legal advice or the provision of any other legal services or initiate legal action unless a resolution approving that action is passed at a general meeting of the owners corporation or unless the particular action is exempted under the Regulations.
STRATA SCHEMES MANAGEMENT ACT 2015 – SECT 103
Legal services to be approved by general meeting
103 Legal services to be approved by general meeting
(1) An owners corporation or strata committee of an owners corporation must not obtain legal services for which any payment may be required unless a resolution approving the obtaining of those services is passed at a general meeting of the owners corporation.
(2) An owners corporation or strata committee may obtain legal services without obtaining approval under this section if:
(a) it is of the opinion that urgent action is necessary to protect the interests of the owners corporation, and
(b) the cost of the legal services does not exceed $10,000 or another amount prescribed by the regulations for the purposes of this subsection.
(3) Approval under this section is not required for the following:
(a) to obtain legal advice before commencing legal action,
(b) to take legal action to recover unpaid contributions, interest on unpaid contributions or related expenses,
(c) to take any other legal action prescribed by the regulations for the purposes of this section.
(4) A failure by an owners corporation or the strata committee of an owners corporation to obtain an approval under this section does not affect the validity of any proceedings or other legal action taken by the owners corporation.
(5) In this Division:
“legal services” includes obtaining legal advice and taking legal action.Restrictions on the EC taking legal action are similar in the ACT. Nonetheless our EC has taken legal action several times since the estimated cost was below the threshold that triggers the requirement for general meeting approval.
@Stratademocrats said:
The Strata Manager … responded: “I don’t understand what the issue is here? There were 4 members present in person and 2 members gave proxies. That’s 6/9 present. As long as the proxies were provided before the meeting the timing is irrelevant, and if the meeting was invalid we wouldn’t have allowed it to occur.”Can you tell us where in the SMA or regulations it states that proxies are not valid?
This is quite complicated and there’s a bit of chicken and egg about it all but I have posted relevant extracts below which I will try to unpack now.
It’s not that proxy votes are specifically banned for strata committee meetings, it’s that there is no provision in the Act or Regs for proxy votes at committee meetings. There can be alternative voting arrangements, and “Acting Members”. But not proxies, per se.
The critical issue is that the committee has to agree to accept Acting Members (who can include existing members voting on absent members’ behalf) but they have to first be agreed by the committee which has to be quorate to do so. The proposed Acting Members are not counted towards the quorum.
To be quorate there must be at least half the members present. Absent members can be considered “present” if they have stated in writing that they intend to vote by means that have already been agreed at a general meeting as being permissible. This would include by Skype, phone or electronically. NB: These alternative means of voting would have to have already been accepted at a general meeting.
My understanding is that written votes can’t be considered towards the quorum unless a vote in writing has been accepted at a general meeting as a form of attendance under Section 4 (1).
So I would put that right back at the strata manager and ask them to show you the section of the Act or regulations that allows proxy votes to be considered as counting towards the quorum.
Schedule 2: 12 Quorum
(1) Quorum required for motion
A motion submitted at a meeting of a strata committee must not be considered unless there is a quorum present to consider and vote on the motion.
(2) When quorum exists
A quorum is present at a meeting only in the following circumstances:
(a) in the case of a strata committee which has only one member, if the member is present,
(b) in any other case, if not less than one-half of the persons entitled to vote on the motion are present.
(3) A person who has voted, or intends to vote, on a motion or at an election at a meeting by a permitted means other than a vote in person is taken to be present for the purposes of determining whether there is a quorum.
Section 4 (1)
person present at a meeting includes a person who is not personally present but is able to vote at the meeting by another means specified under clause 28 of Schedule 1 or clause 10 of Schedule 2.
Schedule 2: 10 Manner of voting
(1) A vote at a meeting by a person entitled to vote must be cast in person unless the strata committee, by resolution, determines that a vote may be cast by some other specified means.
Note. A person may be present at a meeting even if not actually at the meeting (see section 4 (1), definition of person present).
Schedule 1: 28 Manner of voting
(1) A vote at a meeting by a person entitled to vote or by a proxy must be cast in person unless the owners corporation, by resolution passed at a general meeting, determines that a vote may be cast by some other specified means.
34 Acting members of strata committee
(1) A member of a strata committee may, with the consent of the strata committee, appoint an owner or company nominee of a corporation that is an owner who is eligible to be a member to act in his or her place as a member at any meeting of the strata committee.
(2) The owner or company nominee appointed is, while so acting as a member, taken to be a member.
(3) An owner or company nominee of a corporation may be appointed whether or not he or she is already a member of the strata committee.
(4) If a person so appointed is a member of the strata committee, the person may, at any meeting of the strata committee, separately vote in the person’s capacity as such a member and on behalf of the member in whose place the person has been appointed to act.If you want to be alerted when anyone replies to your posts or responds to this topic, please register and login, then you will be able to subscribe to the topic. The opinions offered in these Forum posts and replies are not intended to be taken as legal advice. Readers with serious issues should consult experienced strata lawyers. NB: Longer threads may spill over to additional pages - look for the numbers on the bottom right, under the last post.
Stratademocrat – Proxies are voting rights of an eligible voter (who cannot attend the upcoming meeting) transferred to another person who CAN attend the meeting. Proxy votes can be used at a committee meeting however the committee must decide this by resolution at a meeting prior to them being used. This is made clear in Schedule 2 Part 10(1).
As Jimmy T has already pointed out – a Strata Committee can decide by resolution how a vote can be be cast at a meeting. The SSMA states that a committee member does not need to be actually present to vote on a Motion (see the definition and relevant sections below) or to make up a Quorum.
Some alternative ways of voting when a person may be deemed to be ‘present’ even if they are not personally present are: (1) voting in writing, or (2) voting via social media, or (3) voting via teleconferencing, or (4) voting via video (e.g. Skype), or (5) proxy voting using the appropriate Form and process https://www.fairtrading.nsw.gov.au/mobile0c9a66/biz_res/ftweb/pdfs/About_us/Forms/Proxy_appointment.pdf.
The use of proxy votes as a means of voting at a committee meeting should have been decided at a meeting prior to March 8 meeting where proxy votes were used. If no resolution about the use of proxy votes had been made prior to the March 8 meeting then the use of proxy votes at the March 8 meeting would not have been valid, therefore the meeting would not have achieved a Quorum and the meeting would not have been valid.
The SSMA 2015 Definition: “person present” at a meeting includes a person who is not personally present but is able to vote at the meeting by another means specified under clause 28 of Schedule 1 or clause 10 of Schedule 2.
Schedule 2
9 Decisions at meetings
(1) Voting at meetings A motion put to a meeting is to be decided according to a majority of the number of the votes cast for and against the motion by the members present (other than any tenantmember) or in the manner set out in subclause (2). If there is only one member of the strata committee, the decision of the strata committee is the decision of that member.
10 Manner of voting
(1) A vote at a meeting by a person entitled to vote must be cast in person unless the strata committee, by resolution, determines that a vote may be cast by some other specified means.
Note : A person may be present at a meeting even if not actually at the meeting (see section 4 (1), definition of
“person present” ).(2) The regulations may make provision for or with respect to the following:
(a) the means of voting (other than in person) that may be adopted by a strata committee,
(b) without limiting paragraph (a), procedures for voting by such means,
(c) prohibiting the use of specified means of voting.
12 Quorum
(1) Quorum required for motion A motion submitted at a meeting of a strata committee must not be considered unless there is a quorum present to consider and vote on the motion.
(2) When quorum exists A quorum is present at a meeting only in the following circumstances:
(a) in the case of a strata committee which has only one member, if the member is present,
(b) in any other case, if not less than one-half of the persons entitled to vote on the motion are present.
(3) A person who has voted, or intends to vote, on a motion or at an election at a meeting by a permitted means other than a vote in person is taken to be present for the purposes of determining whether there is a quorum.
(4) The quorum for meetings of a strata committee is to be calculated on the basis of the number of members last determined by the owners corporation for the committee.