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16/04/2013 at 8:30 am #8792
we have 4 units in our strata scheme, with one person owning 2 units (and having approx. 58% of the unit entitlement all up).
A Extraordinary GM was called to vote on a special levy, and only the one owner attended (he who has 2 units)
The EGM passed a resolution that a special levy be raised, and subsequently we received a bill for $14,000
We have pointed out to the strata managers that a quorum is 2 persons, and as this was not reached the special levy is not valid. Their response is that we are wrong and they have now issued letter of demand 9including costs)
so…is a quorum 2 persons (office of fair trading says it is, but as above the strata managers say this is wrong), and what is our next step 9other than pay the $$)?
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16/04/2013 at 12:42 pm #18275
I’d say your SM is right. This is what the Act says:
12 Quorum
(1) A motion submitted at a general meeting of an owners corporation must not be considered, and an election must not be held, unless there is a quorum present to consider and vote on the motion or on the election.
(2) There is a quorum for considering and voting on such a motion or at such an election only if:
(a) at least one-quarter of the number of persons entitled to vote on the motion or at the election is present, either personally or by duly appointed proxy, or
(b) at least one-quarter of the aggregate unit entitlement of the strata scheme is represented by the persons who are present and entitled to vote on the motion or at the election, either personally or by duly appointed proxy.
(3) However, if there is more than one owner in the strata scheme and the quorum calculated in accordance with subclause (2) is less than 2 persons the quorum is 2 persons entitled to vote on the motion or at the election.
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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.
16/04/2013 at 2:43 pm #18277It’s a moot point, but in this case I’m inclined to agree with the Office of Fair Trading (OFT) in that as there is more than one Owner in your Scheme, and 25% of that number does calculate as less than the 2 persons required under Sch 2: Cl.12 (3) the NSW Strata Schemes Management Act (SCMA), then a valid quorum is 2 persons who are entitled to vote, and the Meeting should have been adjourned.
This matter must have been dragging-on for a while if you’ve been charged interest and/or debt recovery fees (that can only be charged upon the expiry of 30 days beyond the due date for the initial payment), and whilst I know that this point doesn’t right a possible wrong, what would have been the point of the Strata Manager adjourning the Meeting when the outcome of a reconvened Meeting would have been the same, whether or not the other two Owners attended, simply because that one Owner holds 58% of the possible vote on a unit entitlement (poll vote) basis?
If you really (really) want to right a resolution that in my opinion was incorrectly taken, then as a first step you can seek a definitive ruling through mediation of the matter with the OFT by completing this application form, noting the requirement for you to have evidence in support of your claim including your advice from the OFT (name?) and that your past representations to your Strata Manager have been frustrated.
Even if mediation fails, there are still subsequent avenues for you to pursue resolution, commencing with this application for Adjudication and the issuing of Orders under S148 & S149 of the SCMA by the NSW Consumer, Trader and Tenancy Tribunal.
17/04/2013 at 11:17 am #18279The Strata Manager is wrong, DOFT and Whale are right, there was no quorum so on its face it is invalid.
Although as Whale correctly points out, what is the point, if the owner holds 58% of the entitlements, I would pursue it so that any interest and charges are reversed. If the special levy is invalid, then they can’t charge you those extras. Perhaps you can start out by writing them a formal letter setting out the requirement in the Act re the section 12(3) requirement and tell them that you require them to reverse those charges/penalties, and for another meeting to be held.
18/04/2013 at 2:26 am #18281Not trying to be funny, honest, but somebody needs to talk me through this.
The situation is that you have four units and one owner owns two of them, which amounts to 58 percent of the Unit Entitlements.
The Act says a quorum is created if:
a) at least one-quarter of the number of persons entitled to vote … is present, either personally or by duly appointed proxy, or
(b) at least one-quarter of the aggregate unit entitlement of the strata scheme is represented by the persons who are present … either personally or by duly appointed proxy.
And, yes, it does say that if the quorum would be less than two, as calculated as a quarter of the owners, then it would be two “persons”. Does that mean two individuals? Every other definition talks about the figures represented by persons who are present , including by proxy.
If there is a definitive ruling that “person” means individual then I will concede the point. But I know that many AGMs depend on proxies – and surely the owner of the two lots would be considered, if not as two people, as a person and a proxy.
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.
18/04/2013 at 10:04 am #18282I’m no expert but I’ve got to agree with Jimmy here.
The only doubt I have is that I believe the meeting has to vote to accept proxies before the proxies can be exercised. But I have heard of Chairmen collecting proxies to dominate a meeting and bulldoze motion through.
I HATE this sort of gobbledygook language in legislation, why cannot they keep it simple so that the general public can easily understand it without resorting to expensive legal advise to understand what the legislation actually means.
18/04/2013 at 6:30 pm #18286@kiwipaul said:
The only doubt I have is that I believe the meeting has to vote to accept proxies before the proxies can be exercised. But I have heard of Chairmen collecting proxies to dominate a meeting and bulldoze motion through.
I don’t think you need prior approval of proxies at General Meetings – just at executive committee meetings – otherwise 90 percent of of AGMs wouldn’t happen.
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.
18/04/2013 at 9:24 pm #18287It’s Executive Committee Meetings where proxies need to accepted (or not) prior to the commencement of the Meeting.
But back on topic, I think that this is one of those times where the underlying intent of the Legislation is actually reflected in its wording.
The impacts upon strata democracy arising from the malaise of disinterested owners, owners of multiple Lots, and from those owners who farm proxies is bad enough in larger schemes, but it’s potentially severe in smaller schemes where overcoming those is much, much harder.
That’s why my interpretation was that Sch 2: Cl.12 (3) was the means by which the Legislators could put some special requirements around the General Meetings held by those smaller schemes (<9 Lots) with more than one owner, by requiring the attendance of at least 2 persons who are entitled to vote in order to form a quorum.
I don’t see why a quorum calculated in that way could not be a combination of proxies and personal attendees; it just needs a minimum of two!
It’s all of no consequence in sancataldo’s case though, as the Legislators omitted to prohibit poll votes in small schemes.
Jimmy, to save us all getting migraines debating this, maybe ask our friends at Makinson & d’Apice for an opinion.
18/04/2013 at 9:38 pm #18288I think this post got lost as I didn’t see the “awaiting moderation” message.
I wouldn’t call it gobbledook, but in the wrong place even ordinary words like “owners” and “persons” (even “individual”) can create problems.
Sometimes I feel sorry for lawyers (but not often).
My own interpretation would be that Schedule 2 clause 12 (3) should be read in terms of “entitlements to vote”.
I’d be wary of going to the CTTT to have the motion overruled. They will often resolve things in terms of “would your vote have made a difference”.
a) If the OP had attended and voted against, the motion would have still have been carried on show of hands.
b) If the OP and the 4th owner had attended and voted against, the show of hands would have been a tie, and the poll would have carried the motion.
c) If there really wasn’t a quorum, the EGM would have been reconvened in 7 days, and either (a) or (b) would have happened then.
d) And if there wasn’t a quorum at the reconvened EGM, after 30 minutes Mr 58% would have become the quorum.
e) Or, he could have turned up to vote for his 1st unit, and brought his wife with a written proxy to vote for the 2nd unit.
Same result each time.
I think half this story is missing.
1) Why didn’t sancataldo (OP) and the 4th owner go to the EGM?
2) If the missing 42% of UEs is split half-half (assumption) between the OP and 4th owner, and the OP received a bill for $14,000 then the total special levy must be around $66,000.
3) What work worth $66,000 arose so “suddenly” in a 4-lot scheme?
4) Did the mandatory 10-year plan include this item?
5) What time period was allowed between the EGM resolution and the due date for payment?
6) What time period elapsed between the due date and the letter of demand?
7) Is Mr 58% the developer (original owner) of the scheme?
8) If so, see Schedule 2 clause 18 (3).
Also, Schedule 2 clause 18 (1) might shed some light on the interpretation of quorum raised by the OP.
19/04/2013 at 6:31 pm #18291In this case the reason why there was no quorum was because only one person attended, and that person attended in their own right. As silly as it sounds, if they had held a proxy from someone else, then there would have been a quorum, because effectively two people would have been “in attendance”. Or they could have appointed someone else as proxy for one of their lots.
Note that the person attending can’t appoint themselves as their own proxy.
If you go back to the meaning of “meeting”, you can’t have a meeting with just one person. So as a general proposition a quorum needs to be more than one, subject to whatever a constitution/other governing document says, how many people are on an EC etc.
However, it is a moot point because the result would have been the same, albeit it is worth raising because of the penalties that have been applied.
Kangaroo raises some good points, why didn’t sancataldo attend, or send in a proxy? What is the levy for?
19/04/2013 at 10:27 pm #18293@Whale said:
…impacts upon strata democracy arising from the malaise of disinterested owners…There are no ‘disinterested’ owners, only uninterested owners.
In the ACT, proxies count towards a quorum of a general meeting but not absentee votes. The key wording was “a quorum made up by people entitled to vote… in relation to not less than half the total number of units…”
An recent tribunal decision interpreted that to mean that the number of units represented in person or by proxy was what counts on the basis of the words I underlined. Of course, NSW wording may be different.
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