Replace Executive Committee Member who recently sold.

In the ACT, in this situation, the remaining EC can appoint another member of the OC to fill a casual vacancy. Perhaps it is the same wherever you are? If so, you might be able to put up your hand and/or suggest the other willing person and the remaining EC could appoint one of you. 

@Stevecro said:
In NSW the SSMA 1996 says: 

• (2)  When a vacancy occurs in the office of a member of an executive committee (otherwise than by reason of subclause (1) (d)), the owners corporation must appoint a person eligible for election as a member to fill the vacancy. Any person so appointed holds office, subject to this clause, for the balance of his or her predecessor’s term of office.

I guess you could call an Extraordinary General Meeting (EGM) and replace the vacancy there. How soon should that be done? The act does not say how soon, however like everything else it should be done as soon as practicable.

I am not sure that the quoted text would necessarily require a general meeting, though it might. In the ACT the Act says the EC can exercise any function of the OC unless directed otherwise by a general meeting resolution or the Act specifies a particular resolution of a general meeting to make that sort of decision. If that is similar elsewhere and if the Act specifies the process of election of an EC member at the AGM, appointment to fill a casual vacancy at some other time might not be the same thing and might be a function the EC can exercise.

Just because the EC can exercise a function does not always mean it should rather than refer to a general meeting. That is a matter for judgement.

Costa – no sour grapes from me either, but your question was answered by Stevecro way back in post #3, but to reiterate, there is no provision for votes by proxy at Executive Committee Meetings, and Members are elected by the Owners Corporation at General Meetings.

So even though, as Jimmy foreshadowed in post #5, the remaining Members of your Executive Committee rushed to elect anyone but you to the empty chair, that process was contrary to the Act, Mr X is not a Member, you should at least inform your Secretary of that fact, and perhaps reconsider proceedings under Sect 138.

Sorry Jimmy, but I don’t think that’s right, and whilst I hate quoting bits of the Act, Schedule 3 (with my emphasis underlined and an explanation in italics)….

Cl.2(3) states “The members of an executive committee must be elected at each annual general meeting of the owners corporation“; and

Cl.4(2) states “When a vacancy occurs in the office of a member of an executive committee [otherwise than by reason of subclause (1) (d) (i.e. at the end of their term)], the owners corporation must appoint a person eligible for election as a member to fill the vacancy. Any person so appointed holds office, subject to this clause, for the balance of his or her predecessor’s term of office”. 

So in as much as both delaying the filling of a Executive Committee (E/C) vacancy until the next AGM an convening an EGM just for that purpose may be undesirable, that’s what I believe is the intent under the provisions of the Act – despite the fact that in some other situations a decision of the E/C is taken to be one of the Owners Corporation.

Again, whilst Cl.3 provides for acting E/C Members to be appointed as you describe, I am of the opinion that means a personal attendance by another Owner in that acting capacity and not a written proxy by the absent Member in the form and with the intention allowed at General Meetings.

Always learning, so I’m happy to be corrected though.

Regarding election of EC mid-term replacements by the EC (rather than a general meeting) I can only go by what I know is standard practice in my building and I believe in many others, and that is that the EC elects replacements.

I think the significant difference between my interpretation of the law from Whale’s is that he thinks the Act means the Owners Corp has to elect a replacement and I think the EC, acting on behalf of the owner’s corp, can do so, and in saying that, I would cite Section 21 (below).

I the building in which I live, the EC announces a vacancy in its minutes and then the chairman quietly anoints someone and the EC duly elects them.

In five years of shuffling the decks this way, our chair has arranged things so that all but one of the EC members is now his personal choice.

A couple of years ago, the chairman wanted to appoint one of his mates who had cause a lot of grief in the building and I stood against him, just to give the EC a choice.  

It was a stalemate and neither of us were elected (a win-win for me).  At the next AGM, the chair used his 50 percent-plus proxies to change the rules so that nominations were not declared before mid-term elections of replacements “to save the embarrassment of the losing party.”

Cynics might suggest that it was really so that the office-bearers could elect whoever they wanted before anyone even realised what was afoot.

Trust me, if I thought there were any legal grounds for challenging this, I’d have the lot of them down at Fair Trading and NCAT  faster than you can say “proxy harvest”.

But even if I am right, a general meeting can overturn an EC decision – wonder if that applies to EC mid-term recruitment too.

This is what Section 21 says:

21   Executive committee’s decisions to be decisions of owners corporation

(1)  A decision of an executive committee is taken to be the decision of the owners corporation, subject to subsection (4).

(2)  However, the following decisions may not be made by the executive committee:

(a)  a decision that is required by or under any Act to be made by the owners corporation by unanimous resolution or special resolution or in general meeting,

(b)  a decision on any matter or type of matter that the owners corporation has determined in general meeting is to be decided only by the owners corporation in general meeting.

(3)  An owners corporation may in general meeting continue to exercise all or any of the functions conferred on it by this Act or the by-laws even though an executive committee holds office.

(4)  Despite any other provision of this Act, in the event of a disagreement between the owners corporation and the executive committee, the decision of the owners corporation prevails.

Stevecro said:

… there is no provision for ‘Proxy Forms’ for EC meetings. I really don’t know where people get that idea from. There is no prescribed proxy form for EC meetings, if the Act allowed for proxies for EC meetings there would be a prescribed proxy form to go with it (I guess).

I’m afraid you guess wrong.  This is not a matter of interpretation- it’s a matter of fact. The word proxy is not used but this is what the Schedule 3 Regulations say about owners sitting in for absent EC members as well as EC members voting on absent members’ behalf.  These are proxies, by any other name – no forms required:

3 Acting members of the executive committee

(1) A member of the executive committee may, with the consent of the executive committee, appoint an owner or company nominee of a corporation which is an owner to act in his or her place as a member at any meeting of the executive committee.

(2) The owner or company nominee so appointed is, while so acting as a member, taken to be a member.

(3) An owner or company nominee of a corporation may be so appointed whether or not he or she is a member of the executive committee already.

(4) If a person so appointed is a member of the executive committee the person may, at any meeting of the executive committee, separately vote in the person’s capacity as such a member and on behalf of the member in whose place the person has been appointed to act.

Also, this is what the Fair Trading fact sheet on executive committees says on the subject:

Non‑attendance at meetings

An executive committee member can appoint another owner or company nominee, whether or not they are a member of the executive committee already, to vote for them at an executive committee meeting. This must be approved by the executive committee.

Regarding whether or not the EC can elect new members, you are not in a position to know what the intention of the Act was.  You can have an opinion but yours is not borne out by any experience with which I am familiar and I’ve been writing about this stuff for 12 years now.

The Act clearly states that decisions of the EC are to be taken as decisions of the Owners Corporation. Or, in other words, the EC can make decisions on behalf of the owners corp.

For instance Executive Committees can decide to replace gym equipment, provided they get two quotes and there is no restriction on their spending imposed by the Owners Corp at an AGM.  

EC’s can also decide to issue Notices To Comply, and it says so on the form, provided that power has not been removed by the owners at a general meeting.

In both cases, the Act describes these decisions as being made by the Owners Corporation.

In fact, there is a standard motion that must be put on the agenda of every AGM, asking if the owners corp wants to instruct the EC not to consider certain issues during the coming year.  This could be used to tell the EC to hold a full election for and empty seat, if that’s what the owners wanted.  Usually, however, it’s to prevent one or two EC members continually presenting the same proposals only for them to be rejected when they don’t get the numbers.

Nowhere in the Act does it specify that retired EC members must be replaced by a vote of owners at a general meeting, or that it has to be by a special resolution (which would require a general meeting).

There are specific decision that the EC can’t make – and these are listed in the Act and Schedule 3 Regulations.  Replacing an EC member is not one of them.

I would “guess” the intention of the Act was to avoid having general meetings every time an EC member fell sick, moved house, got bored or got too busy at work.