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Again referring to a vote in a 8 unit strata in Armadale Melbourne.
How should you handle a unit owner who expresses in an email they abstain from the vote ?
I believe to abstain is effectively a No.
So with this abstaining vote, the vote is 5 Yes, 2 No, 1 abstain.
So we have a majority of 5 out of 8 so the motion is passed.
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No, an abstention is a non vote. The distinction can be significant in a case where the percentage of those voting is critical (as often occurs in NSW).
For instance, if there are 10 people at a meeting, voting on a special resolution, the law says it can’t pass if more than 25 percent of those voting vote against. If 8 vote yes, two vote no, it passes. If 7 vote yes and three vote no, it fails. If 7 vote yes and two vote no and 1 abstains, the vote against is 2 out of 9 against, or 22 per cent so the motion passes.
An abstention is a non vote, not a no vote.
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Hi Jimmy, a group of owners in our strata complex have to vote on a motion that is a special resolution. The trouble is, the matter to be decided on was passed through various stages by dishonest and nefarious means. In other words, it’s null and void.
If we vote against the motion, all hell will break loose. If we abstain, our votes won’t count.
How do we stick to our moral compasses when deciding what to do?
All you can do is set aside all the politics and shenanigans and vote on the proposal on its merits, and according to your conscience.. Every issue will have a winner and a loser – Hell will break loose when it wants to, regardless of what you do.
FYI: For anyone reading this who may be in any doubt, an abstention is not a vote, which may seem obvious but is critical in calculating special resolutions which are based on the percentages of people voting.
For instance, if there are 30 owners at a meeting and 23 of them vote for a special resolution and seven vote against, the resolution passes because that’s fewer than 25 percent voting against.
However, if three of the 30 abstain, the number of people voting is now 27 and the seven “nay” votes constitute more than 25 per cent. You could say that in a tight vote an abstention is a No and should be regarded as such. It is not a neutral decision.
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The NSW Act might be worded differently from in the ACT but in the ACT a special resolution requires 1) a majority in favour and 2) “the votes cast against the resolution number not more than 1/4 of the total number of votes that can be cast on the resolution by people present at the meeting (including proxy votes)”. [It can also be done on unit entitlements in a poll vote.]
People abstaining on a particular motion are nonetheless present at the meeting and could have cast a vote. So, if there were 100 people eligible to vote at the meeting, 51 voted in favour, 25 voted against and 24 abstained, the motion would pass as a special resolution. On the first criterion, there are more votes in favour than opposed. On the second criterion, 25 ‘no’ votes out of the 100 “votes that can be cast on the resolution by people present at the meeting” is not more than a quarter, even though it is almost a third of the votes that were cast. Both criteria are satisfied and the special resolution is passed.
I think an abstention is an active decision to neither support nor stand in the way of some proposition, which sounds exactly like what the original poster wants to do.
The NSW Act might be worded differently from in the ACT…
I just checked. NSW is very different. JT is right in NSW and I am right in the ACT.
In NSW: “In this Act, a resolution of an owners corporation is a “special resolution” if–it is passed at a properly convened general meeting, and, of the value of votes cast, not more than 25% are against the resolution…”
In my 51/25/24 example of yes/no/abstain, it would pass in the ACT and fail in NSW. The difference is that in the ACT the 25% against are out of everyone who could have voted at the meeting whereas in NSW it is out of only those who cast a vote, and abstaining is not casting a vote.
I prefer the ACT approach since the test is really about determining that there is not a substantial minority opposed and only those who actively vote ‘no’ are really opposed. People who abstain might be ambivalent, which is not opposition.
Thanks Jimmy and Sir Humphrey. I too prefer Canberra’s rules “anyone who could have voted”, assuming it’s on unit entitlements. Then, the motion would have had buckely’s chance of passing. Who is Buckley anyway?
And to set aside the politics. Impossible. An email from the SC was sent to all owners just before the meeting; on the one hand, they criticised and named one owner who had placed a motion on the agenda to repair a small area of common property, falsely suggesting it would cost owners hundreds and thousands of dollars, while on the other hand, subtly informing owners reasons why all the other motions should be accepted. Is this actually legal?
We all voted with our consciences.
Can anyone guess the outcome? The repairs to common property was not approved. The other motions were. A suggestion that those with a conscience go to NCAT was met with retribution.
In NSW: “In this Act, a resolution of an owners corporation is a “special resolution” if–it is passed at a properly convened general meeting, and, of the value of votes cast, not more than 25% are against the resolution…”
Commentary on SR voting in NSW by a strata lawyer commenting on another strata lawyers’ view; 1996 Act.
The view expressed by Alex (Ilkin) is the one I have been accustomed to.
It is explained in terms of 18(2), on the basis that 18(2)(a) indicates that the question of whether the motion passes is determined on votes cast only, whereas 18(2)(b) and 18(3) are directed at how the value of votes is determined.
If you then look to the definition of “special resolution” in the dictionary, the reference to clause 18(2) and 18(3) is in relation to determining the 25% value of votes that are cast (and not determining whether the motion is passed or not).
Essentially Alex’s view treats the words “votes” in the phrase “not more than 25 percent … of votes is cast” as meaning votes that could be cast, whereas CCH is treating “votes” to mean votes that were in fact cast.
So on that view the motion passes under 18(2)(a) on votes actually cast for and against, and the 25% is determined on unit entitlements (or reduced developer entitlements) under 18(2)(b) and 18(3) of “votes” within the meaning of the definition of “special resolution” in the Dictionary.
There is a certain symmetry in your view, which certainly adds to its appeal.
However, as the matter is ambiguous, I am convinced by the notion that the legislature intended the 25% to be effectively a “veto” power, or a kind of reversal of the “onus”. If people are present and abstain, on that view they are electing not to exercise the veto power. The calculation of the 25% according to votes that could be cast is consistent with this interpretation.—————
And for what it is worth the NSW Parliament were asked to consider as a part of the 2015 reforms changing the definition to that found in the Corporations Act.(b) the resolution must be passed by at least 75% of the votes cast by members who are entitled to vote on the resolution
Funny part is I can find a Supreme Court case, strata case, where the Justice uses this definition when referring to a special resolution.
Funny part is I can find a Supreme Court case, strata case, where the Justice uses this definition when referring to a special resolution.
Did you mean “can’t” rather than “can”? Would make more sense in the context.
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