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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.