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  • #7265
    Anonymous

      At a recent exectutive committee meeting of our strata of 8 units only 5 members were in attendance. Of those 5 owners only 4 were up-to-date with their payments and were therefore not “financial” and subsequently not allowed to vote. This meant that only 4 were able to vote during the meeting and mostly the decisions went 3-1.

      With so few people in attendance, does this form a real quorum and can 3 people decide on big financial decisions ($40,000.00) by just 3 people.

      Is there any recourse to this decision by law?

       

      Thanks in advance.

      Cool

    Viewing 15 replies - 1 through 15 (of 16 total)
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    • #12507
      Jimmy-T
      Keymaster

        The answer is actually  very simple.  Call another general meeting, make sure your supporters'  levies are up to date, gather all the proxies you can and overturn the decision.

        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.
        #12508
        Anonymous

          Is a quorum present?

          Under the New South Wales legislation (the Strata Schemes Management Act 1996) “the quorum for considering and voting on a motion submitted at a meeting of an executive committee that has 2 or more members is at least one-half of the members.” Therefore 4 the 8 unit owners entitled to vote will form a quorum.

          Is the motion passed?

          The Strata Schemes Management Act goes on to say that:

          “Subject to this Act, the decision on any matter, where there is only one member of the executive committee, of that member or, if there are 2 or more members of an executive committee, of the majority of the members voting on that matter is the decision of the executive committee at any meeting of an executive committee at which a quorum is present.”

          A 3 to 1 vote is a majority vote. Therefore the motion will have been passed.

          Can the EC make large financial decisions i.e. $40,000.00?

          This may depend on the powers which the EC have been delegated. If you look at the minutes of your last AGM you will probably find a motion which states the extent of the decisions which the EC can make (this may say that there are no restrictions to what the EC can make decisions on).

          There are also a number of provisions of the Strata Schemes Management Act which may have application to your situation depending on factors such as the purpose of the spending. Section 80 for instance, limits the amount of money which an EC can spend if it has not first been approved at general meeting, while under the new provisions implemented under the Strata Schemes Management Regulation 2010 an EC cannot spend more than $12,500 (or $1000 per lot, whichever is the lower) on legal services without approval by resolution at general meeting.

          Whether the decision is valid is a question which would require further details before it could be properly considered, but as Jimmy has said above the best option may be to call an EGM and pass a motion against the proposed spending.

          Regards,

          Daniel

          TEYS Lawyers

          #12511
          Jimmy-T
          Keymaster

            This raises anither question – the meeting may have  been quorate with proxies included but what about non-financial members?  I know they can't vote at General Meetings but what about the EC?  By the way, you could challenge a decision that's been made “illegally” at the CTTT.  But it would probably be more efficient, less stressful and more reliable to put your own house in order at an EGM, as it were.

            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.
            #12596
            Anonymous

              Thanks folks, this is still ongoing and causing a great deal of angst amongst this small property. So it looks like there's a few holes we could exploit.

              #12932
              Anonymous

                Hi all, our Executive Committee has 8 members in a strata of 27 owners.

                Do we need 4 OR 5 votes out of 8 in order to achieve a 'majority' vote so that we can act on issues?

                With the chairman being unable to give a casting vote, does that mean that if we have 4 votes out of 8 with one of the vote belonging to the chairman, then we can't proceed? That we can only go ahead if we have 5 votes out of 8 if it includes the chairman's vote?

                Sorry if it sounds confusing.

                #12934
                Billen Ben
                Flatchatter

                  JimmyT said:

                  This raises another question – the meeting may have  been quorate with proxies included but what about non-financial members?  I know they can't vote at General Meetings but what about the EC? 

                  Wouldn't it be weird if an non-financial owner was not allowed to vote as an EC member when a non-owner who is on the EC does not have to worry about such matters.

                  I can't recall anything specific in the Act about the need for an EC member to be remain financial to vote on matters at EC meetings.
                  We have had, over time, EC's made up of owners, both financial and non financial, with a smooth blend of non owners thrown into the mix.

                  #12942
                  Whale
                  Flatchatter

                    Ben's right!! There's nothing to prevent non-financial Proprietors from voting at an Executive Committee Meeting, so you're stuck with a bad decision unless the Secretary is prepared to convene a further Meeting or General Meeting.

                    #12949

                    What is majority? said:

                    Hi all, our Executive Committee has 8 members in a strata of 27 owners.

                    Do we need 4 OR 5 votes out of 8 in order to achieve a 'majority' vote so that we can act on issues?

                    With the chairman being unable to give a casting vote, does that mean that if we have 4 votes out of 8 with one of the vote belonging to the chairman, then we can't proceed? That we can only go ahead if we have 5 votes out of 8 if it includes the chairman's vote?

                    Sorry if it sounds confusing.

                    Dear Guest

                     

                    Good question.  You need a quorum of Executive Committee members to convene a meeting.  A quorum is one half of the members (so 4 in your case) – see clause 9 of Schedule 3 to the Strata Schemes Management Act 1996 (the Act).  The quorum requires a majority vote in order to pass a resolution.  This means 51 per cent of those present. (see clause 11 of the Act). 

                    So, lets say all 8 members are at the meeting.  The Executive Committee requires 5 votes to pass a resolution.  The Chairperson only has one vote and not a casting vote (unless he is a substitute for another member who is absent, then he will have two votes).

                    Even if you have the bare quorum (4 members), the Executive Committee will require 3 votes to pass a resolution.  

                    Each member has 1 vote.  Poll votes do not apply at EC meetings.

                     

                    Loraine Booth

                    Lawyer

                    ———————————-

                    #12964
                    Anonymous

                      Hi Lorraine,

                      Thanks for your reply and help.

                      “Even if you have the bare quorum (4 members), the Executive Committee will require 3 votes to pass a resolution. ” 

                      If those three votes were by the Chairperson, Secretary and Treasurer …would that be ok? Or would it have to be Secretary+Treasurer+random EC member because of the 'casting vote' restriction?

                       

                      Thanks,

                      Confusion over majority when counting Chairperson's vote.

                      #12974
                      random
                      Flatchatter

                        What is majority? – My understanding is that in an EC, it is one vote per member (including all office bearers), there is no casting vote. So if you had an EC of 8, and there was a meeting with just 4 present, the 3 votes could come from any of those four present, which yes could be the Chair + Secretary + Treasurer (if they were three of the four present).

                        #12998
                        Anonymous

                          Thanks Random. To be on the safe side we usually aim for 5 votes out of 8 EC members.

                          I was a bit confused because if that 5 included the chairperson then that fifth vote could be considered the 'casting vote' and thus be not valid. We haven't been advised by our strata manager that it's unacceptable so have continued to do so. I was concerned that we weren't achieving majority with the chairperson's vote.

                          Cheers : )

                          #12999
                          Jimmy-T
                          Keymaster

                            A “casting” vote is an additional vote given to the chair (or NOT, in this case) when a vote is tied (and only when a vote is tied).

                            A normal vote by the chair is not a casting vote, even if it tips the balance one way or the other.

                            I strongly suggest that at your next AGM you either lose a seat or gain one.  Even numbers lead to all sorts of unfortunate things like … um … compromises.

                            But seriously, ask any strata manager and they'll tell you even numbers on ECs are a nightmare.

                            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.
                            #13000
                            random
                            Flatchatter

                              But Jimmy, there shouldn't be any such thing as a “casting” vote given to the chair anyway…

                               

                              From 8(2) of Schedule 3 of the Strata Schemes Management Act 1996:

                              “The chairperson does not have a casting vote in relation to any motion but may vote in his or her own right as a member of the executive committee.”

                               

                              So it should be one committee member, one vote, no casting votes.

                              #13003
                              Jimmy-T
                              Keymaster

                                Absolutely right, Random! Have a look at what I said:

                                A “casting” vote is an additional vote given to the chair (or NOT, in this case) when a vote is tied (and only when a vote is tied).

                                I'm talking generalities about a casting vote under other circumstances, hence the use of the words “NOT in this case”.

                                What Is Majority was under the impression that if the chair cast a deciding vote, that was a casting vote.  Which it isn't.

                                So yes, you're right, under Strata law in NSW it's one committee member one vote (proxies aside). I don't disagree with that at all.

                                But there are committees in other areas of life that do have casting votes.  That's why I was trying to explain the difference to W.I.M. 

                                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.
                                #13004
                                random
                                Flatchatter

                                  Sorry, I missed the fact it was a general definition of a casting vote, and somehow thought the “or not in this case” was in relation to being the 5th vote out of 8 (the not a casting vote but a normal vote). My bad, I just read it wrong.

                                   

                                  But yes What is majority?, having any 5 EC members vote in a committee of 8 is safe. 🙂

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