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Our AGM was held last night. A group Owners sought and received a good block of proxy votes. A slightly bigger number of proxies were given to ‘The Chairman’. The current EC Chairman then used those proxies to defeat every motion calling for compliance with the Terms and Conditions of our mandatory Building Insurance Policy, the terms of the building’s Development Consent, certain of our By-always etc, etc.
One attendee has claimed that the proxies must be given to an individual and not the ‘Chairman’ and that as such the Meeting and the Resolutions passed to defeat the Motions can and should ruled invalid under Section 2 of the NSW SSMA.
Also, the EC last month held a meeting without issuing an Agenda and without reaching a quorum. When I pointed out to the Strata Manager that this couldn’t be classified as an EC Meeting the SMA then held a subsequent paper EC Meeting, again without issuing an Agenda or advising Owners of the ‘meeting’ and ‘ratified’ seven pages of Resolutions ‘passed’ without Motions being notified and listed. The only person ‘present’ at the paper meeting and the chair of the meeting was the Strata Manager. The first anyone knew of this was when we received the ‘Minutes’ of this paper meeting the day before our AGM. Included in the resolutions was one pertaining to my lot. This was ‘passed’ without me receiving any notice of a motion and therefore without having the option of responding to a proposed motion over my Lot/Unit. Shouldn’t this ‘meeting’ and its ‘resolutions’ also be declared invalid?
Any advice would be greatly appreciated.
Thanks
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Millie – in response to your questions:
Provided the appointment of a proxy is on the Prescribed Form, indicates how the appointee is instructed to vote (e.g. on all matters), is dated, and is given to the Secretary at or before the General Meeting to which it applies (or at least 24 hours before for Schemes of >100 Lots) then an appointment of a recognised office holder such as the Executive Committee “Chairman” as proxy would be valid.
However (there’s always at least one of these in matters Strata) votes by Owners at a General Meeting that resolved to do or not do something that’s prohibited or prescribed under the Law, such as to comply with the conditions of a Development Consent for the Scheme issued under the NSW Environmental Planning and Assessment Act, or with an Owners Corporation’s duty of disclosure under the Federal Insurance Contracts Act, or not to enforce compliance with a By-Law in accordance with the NSW Strata Schemes Management Act (SCMA) IF a majority were of the reasonable opinion that a Breach had in fact occurred, would all be invalid.
That raises the matter of Executive Committee Meetings (ECM) where such “reasonable opinions” regarding Breaches are usually formed, and where the entirety of Sch.3 of the SCMA sets-out the “Constitution” of how such Meetings are to take place, including Notice of Meetings, Agendas, and Minutes, and again if as your post indicates these procedures weren’t followed, then the entirety of the meeting that your Strata Manager arranged with himself would be invalid; as clearly it’s not an ECM.
There should have been an ECM immediately after your recent AGM where, among other things the newly elected Committee Members would vote on the appointment of Office Holders for the coming 12 months.
I’m guessing that despite their past shenanigans the proxy-farming Owner was re-elected as a Executive Committee Member and then re-elected Chairman at the following ECM, but while you get what the majority votes for, there is another light at the end of the tunnel.
In addition to the invalidity of some AGM resolutions, despite the fact that your Strata Manager may be delegated the role of Secretary (e.g. to convene all meetings) that other “light” is that the elected Secretary can by written advice to the Strata Manager assume that role themselves for a particular meeting or more generally.
So as I recently advised another Flatchatter, don’t allow the tail to wag the dog to a greater extent than what’s acceptable to the majority.
Millie – I’m reluctant to ask about what it was that you took to the NCAT and about the stated rationale behind its decision to send you “packing”, so suffice to say that it’s a pity that their reported decisions still seem to be too often determined from a spin of that oft-mentioned chocolate wheel that it inherited from the former CTTT; same jockeys, different horse!
Regarding your AGM, I’m afraid that your elected Executive Committee Chairman will be able to chair the Meeting and to exercise those proxies that he’s farmed UNTIL the new Legislation comes into force in July 2016, where-after no individual will be able to hold any more then one (1) proxy for Schemes having less than 20 lots, and for larger Schemes a number of proxies equal to 5% of the total lots.
A couple of long-shots; ask the Chairman to let you examine all Proxy Forms before the commence met of the Meeting to ensure that each is properly completed and to make ineffective any that aren’t, and to have the block of owners that’s collectively pulling its hair out call for a poll vote on all Motions that it concerned about. Even if the outcome of the poll vote is the same as it would have been under the one vote / one value system, calling for the former will at least send a message to the others in attendance.
Millie – it’s awfully difficult for you to influence proceedings at an AGM when you couldn’t personally attend, but notwithstanding that and the foibles of the NCAT you would in my opinion make better progress there if you were to concentrate one-by-one the many items of low-hanging fruit that your posts have identified instead of going in boots-and-all for the statutory appointment of a Strata Manager.
As but one example, the Chair’s refusal to conduct a poll vote would be worth a challenge under Sect 153 particularly in circumstances where the result of the vote as taken likely produced a different outcome.
So NCAT refused your application for the appointment of a statutory manager?
Considering this is one of the worst cases of EC incompetence, illegal behaviour and action bordering on corruption that I have come across in 12 years of writing about strata, I think it’s time the “great and the good” in your building were brought to book.
They are clearly holding on for the dreadful day when the old guard kick Clover out of Town Hall and their mates can get your building re-zoned.
I would certainly be appealing the NCAT adjudication at a District Court, making sure that the Press was alerted when all these fine upstanding people are called to account for their blatant disregard of strata law and council zoning.
It’s time someone put a spoke in their wheels.
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.
You don’t need permission to attend an EC meeting, an owner is entitled to attend – para 14 Schedule 3. You certainly don’t need to give any notice, but you can’t speak unless the EC grants you permission.
At least 72 hours (not 24) notice of an EC meeting must be given, and a notice posted on the board or the notice sent to all owners. The notice must state where the meeting is to be held and include a sufficiently detailed agenda.
In relation to a proxy at an EC meeting, I think what you mean is a representative of the owner. The EC can refuse to aloow a non-owner to attend.
I don’t know what drugs your EC is smoking, but you can ask them to comply with the law (unlikely as it may be). They can pass a contrary resolution but they can’t override the law.
I have it on the personal assurance of Innovation and Better Regulation Minister Dominello that any obvious attempts to circumvent the anti-proxy harvesting laws (or any other laws) should be challenged under Section 232 (a) and (c), as well as Section 24 of the Strata Act, quoting his speech in support of the Second Reading of the Bill to show the intent of the law.
It says: “Voting methods, increased participation and dealing with proxy voting are … critical issues to strata communities” and refers to “the scourge of proxy farming.”
Shifting dates and calling meetings adjourned so that they can be held under the terms of the previous laws are a clear attempt to subvert the current laws and should be challenged via a request for orders at NCAT to rescind the decisions made and invalidate the election.
Mr Dominello has told me his department will be looking closely at any such challenges to see if the law needs to be tightened even further.
232 Orders to settle disputes or rectify complaints
(1) Orders relating to complaints and disputes
The Tribunal may, on application by an interested person, original owner or building manager, make an order to settle a complaint or dispute about any of the following:
(a) the operation, administration or management of a strata scheme under this Act,
(c) an agreement appointing a strata managing agent or a building manager.24 Order invalidating resolution of owners corporation
(1) The Tribunal may, on application by an owner or first mortgagee of a lot in a strata scheme, make an order invalidating any resolution of, or election held by, the persons present at a meeting of the owners corporation if the Tribunal considers that the provisions of this Act or the regulations have not been complied with in relation to the meeting.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.
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