NSW: Q&A Proxies and Voting Rules for Owners Corporation Meetings

Lot owners from NSW have questions about dealing with proxy votes and other voting rules for owners corporation meetings.

According to Strata Community Association (NSW), here is the definition of:

• Proxy Voting: An owner who is unable to attend a meeting may authorise (give their proxy) to another person to exercise their vote. This is achieved via proper completion of the prescribed form.

Table of Contents:

• QUESTION: What are the voting rights of a majority lot owner when a poll vote is called at an Owners Corporation meeting?
• QUESTION: Is this general meeting valid? What about the quorum?
• QUESTION: Can a proxy vote be cast in AGM elections for Owners Corporation committee members?
• QUESTION: At a Committee meeting (not an owners corporation meeting), can a Strata Committee member have another committee member act as their proxy if they know they will be absent from the meeting?
• QUESTION: How many owners in a complex of 12 units are required to vote against a motion at an extraordinary general meeting.
• QUESTION: I was told AGM vote was not valid as I had sent it in 12 hrs before instead of 24 hours. Why are the rules around voting at AGMs so strict?
• QUESTION: Can a proxy vote be voted out by other members at a Strata meeting.
• QUESTION: Can a vote on a decision be raised after a decision and expense has occurred? Under what circumstances does a decision require a special resolution? And who decides a special resolution is appropriate?
• QUESTION: As a special resolution is carried if “not more than 25% of the value of the votes cast are against the resolution”, can I confirm that “not more than 25% against” is different from “75% or more in favour”?
• QUESTION: Do the changes in the Strata Schemes Management Act limiting the number of proxy votes an individual may hold also apply under the Community Land Management Act?
• QUESTION: Absent owners provide a signed proxy voting form which is then handed out to individuals within the meeting. Is this legal?
• QUESTION: At our recent AGM, a husband and wife owner of one of the units EACH took a proxy giving them 2 proxy votes for their 1 lot. Is this allowed or is it a maximum of 1 proxy per lot?
• QUESTION: Are the following forms available for download – Notice of Annual General Meeting and Proxy Voting Forms?
• QUESTION: What information is included on NSW Proxy Voting Forms?

Question: What are the voting rights of a majority lot owner when a poll vote is called at an Owners Corporation meeting?

I own one lot in a duplex strata scheme and hold 60% of the unit entitlements.

In our scheme, for an ordinary resolution, does the majority rule apply if a poll is called at an Owners Corporation meeting? In particular, where there are strong differences of opinion as to the necessity/timing of capital works to be included in the CWFP will the majority prevail?

If yes, what recourse does the minority unit entitlement holder have, if any, to object to the resolution?

Answer: As with a lot of things in strata management the majority rules

As with a lot of things in strata management the majority rules and as per Schedule 1, Section 14 of the Strata schemes Management Act 2015 all motions are to be voted on by simple majority with each person having one vote.

However as you have stated if a poll vote is called by a person entitled to do so then the voting value of the vote is equal to the unit entitlements of that lot. So with 60% of unit entitlements that would be a majority.

As detailed on Section 14(4), below for ease of reference, a poll can be demanded immediately before or after a vote is taken.

If the minority unit entitlement owner does not agree with a decision they always have the right to apply for Mediation Services though NSW Fair Trading and subsequently for consideration at NSW Civil and Administrative Tribunal if an agreement cannot be reached at mediation.

STRATA SCHEMES MANAGEMENT ACT 2015 – SCHEDULE 1

14 Decisions at meetings

1. Simple majority vote to generally apply: A motion put to a meeting, or an election of officers of the owners corporation or members of the strata committee, is to be decided according to a majority in number of the votes cast for and against the motion with each person having one vote for each lot in respect of which the person is entitled to vote.
2. Vote of original owner who owns more than half of lots to be reduced: For the purposes of determining an election for officers of the owners corporation or members of the strata committee or appointing a strata managing agent (other than in the case of a poll), if the total unit entitlement of lots of the original owner is not less than half of the aggregate unit entitlement, the value of the vote in respect of the lots held by the original owner is taken to be reduced by two-thirds (ignoring any fraction).
3. Value of votes to apply for poll: If a poll is demanded by a person present and entitled to vote on a motion or for the election of officers of the owners corporation or members of the strata committee at the meeting, the motion is to be decided according to the value of the votes cast for and against the motion and the value of a vote cast by a person entitled to vote in respect of a lot is equal to the unit entitlement of that lot. However, the value of the vote of an original owner is to be calculated in the same way as for a special resolution.
   
   Note— Section 5 sets out the manner in which a special resolution is determined.
4. Polls: A poll may be demanded immediately before or after a vote decided by a majority in number has been taken. The demand for a poll may be withdrawn by the person who made it

Robert Fothergill
Strata Life
E: [email protected]
P: 02 9456 9917

This post appears in Strata News #497.

Question: Is this general meeting valid? What about the quorum?

We have just had an EGM stated as (DATE) with pre-meeting voting closing (24 HRS PRIOR).

The notice of the meeting was misleading. On one side of the header, it says:

The meeting will be held on (DATE) via electronic vote commencing at (TIME)

Next to that it says:

Should you be unable to attend the scheduled meeting, you are encouraged to complete the Proxy Form and return to the office of ______ at least 24 hours prior to the commencement of the meeting.

As it was unclear, I rang the Strata Manager to ask if there was an actual meeting. He said no. I asked how that can work if votes are to be counted, motions passed, and minutes produced.

He said the Strata Managers do it, the votes act as proxies.

Is it correct that there doesn’t have to be a meeting of the Owners Corp following the electronic vote?

Isn’t there a need to have a quorum of owners?

Answer: The owners corporation may, by resolution passed at a general meeting, determine that a vote may be cast by some other specified means.

The owners corporation may, by resolution passed at a general meeting, determine that a vote may be cast by some other specified means. On the assumption that your owners corporation has done so, no physical meeting needs to take place and yes, any meeting (however held) must have a quorum.

As an owner, you have rights to make application to NCAT for Orders to invalidate a resolution of or election held by the Owners Corporation if there has been a breach of the strata legislation but NCAT has the discretion not to do so if the failure did not adversely affect anyone and if compliance with the strata legislation would not have made a difference to the outcome of voting.

Leanne Habib
Premium Strata
E: [email protected]
P: 02 9281 6440

This post appears in Strata News #495.

Question: Can a proxy vote be cast in AGM elections for Owners Corporation committee members?

Can a proxy vote be cast in AGM elections for Owners Corporation committee members? If Yes:

1. The person granting a proxy to another person may not know who the committee candidates are, as candidates can be nominated as late as the AGM itself.

Each incumbent committee member who be able to hold up to 5pc of owners as proxies, which in a seven-member committee, would be up to 35pc, giving them a very good chance at self-renewal if proxies are cast for each other.

Answer: Yes, however, at the AGM the nominations are taken and the number of committee members is determined.

Yes, however, at the AGM the nominations are taken and the number of committee members is determined. It is the strata committee meeting immediately following the AGM which determines the office bearers and the balance remain members of the committee and there are no proxies at strata committee meetings.

Leanne Habib
Premium Strata
E: [email protected]
P: 02 9281 6440

This post appears in Strata News #463.

Question: At a Committee meeting (not an owners corporation meeting), can a Strata Committee member have another committee member act as their proxy if they know they will be absent from the meeting?

Answer: Not as a “proxy” per se, but effectively, yes, with the consent of the strata committee.

Not as a “proxy” per se, but effectively, yes, with the consent of the strata committee, as per the section below:

34 Acting members of strata committee

1. A member of a strata committee may, with the consent of the strata committee, appoint an owner or company nominee of a corporation that is an owner who is eligible to be a member to act in his or her place as a member at any meeting of the strata committee.
2. The owner or company nominee appointed is, while so acting as a member, taken to be a member.
3. An owner or company nominee of a corporation may be appointed whether or not he or she is already a member of the strata committee.
4. If a person so appointed is a member of the strata committee, the person may, at any meeting of the strata 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.

Leanne Habib
Premium Strata
E: [email protected]
P: 02 9281 6440

This post appears in the March 2021 edition of The NSW Strata Magazine.

Question: How many owners in a complex of 12 units are required to vote against a motion at an extraordinary general meeting.

Answer: It depends whether you are asking about a unanimous, special or ordinary resolution.

It depends whether you are asking about a unanimous, special or ordinary resolution. No one can vote against a unanimous resolution for it to pass. With a special resolution no more than 25% of the value of votes cast can be against the resolution. An ordinary resolution only requires a simple majority.

Leanne Habib
Premium Strata
E: [email protected]
P: 02 9281 6440

This post appears in Strata News #433.

Question: I was told AGM vote was not valid as I had sent it in 12 hrs before instead of 24 hours. Why are the rules around voting at AGMs so strict?

My ballot vote for our AGM was rejected as I sent it in 12 hrs before instead of 24 hours before, so I was told it was no longer valid. 

I had no idea the rules around this were so strict?  Is there anything else I can do to have my vote considered?

Answer: Unfortunately, in your case, your vote was submitted after the deadline and therefore could not be counted.

Under Regulation 15 of the strata regulations, the secretary of the owners corporation must give information about the “closing date” of the ballot for pre-meeting electronic voting. Under sub-section (8) “close of the ballot”, for a meeting of the owners corporation, is defined to be 24 hours before the commencement of the meeting.

Unfortunately, in your case, your vote was submitted after the deadline and therefore could not be counted. Now that you are aware of this legislative requirement, please ensure you submit your notes no later than 24 hours before the commencement of the meeting and vote otherwise strictly in accordance with the instructions provided to you.

Leanne Habib
Premium Strata
E: [email protected]
P: 02 9281 6440

This post appears in Strata News #433.

Question: Can a proxy vote be voted out by other members at a Strata meeting.

Answer: No, a proxy vote cannot be ousted by other owners at a general meeting because all owners are entitled to vote in person or by proxy.

No, a proxy vote (unless the proxy vote is ruled out of order or invalid) cannot be ousted by other owners at a general meeting because all owners are entitled to vote in person or by proxy (unless the owner turns up and wishes to vote in which case the proxy cannot vote).

Further, if the proxy holder hold proxies in excess of the permitted maximum, then such excessive proxies will be invalid.

For further information see: NSW Fair Trading, Meetings of the Owners Corporation

Leanne Habib
Premium Strata
E: [email protected]
P: 02 9281 6440

Question: Can a vote on a decision be raised after a decision and expense has occurred? Under what circumstances does a decision require a special resolution? And who decides a special resolution is appropriate?

Answer: Once an expense has been incurred and paid for it is difficult to reverse

Once an expense has been incurred and paid for it is difficult to reverse and usually, the only decision that would arise, is a decision to ratify the incurring of an expense.

The strata legislation dictates which decisions must be made by special resolution. Examples of decisions requiring a special resolution include by-laws for owners carrying major renovations, management by-laws, exclusive use of common property by-laws, leasing of the common property, creation of easements, strata plans of subdivision, alterations to the common property.

Leanne Habib
Premium Strata
E: [email protected]
P: 02 9281 6440

This post appears in Strata News #406.

Question: As a special resolution is carried if “not more than 25% of the value of the votes cast are against the resolution”, can I confirm that “not more than 25% against” is different from “75% or more in favour”?

The Act says a special resolution is carried if “not more than 25% of the value of the votes cast are against the resolution”.

I would like to confirm that if 4 people (with equal lot entitlements) cast votes with 3 in favour and 1 against, the special resolution motion is lost.

In other words, “not more than 25% against” is different from “75% or more in favour”. The reasoning as that 25% is not more than 25%.

Answer: Not more than 25% against is a lower threshold than at least 75%.

Your reasoning is correct – not more than 25% against is a lower threshold than at least 75% as in company law.

In your case, not more than 25% voted against, (only 25% voted against) therefore the motion carries.

Leanne Habib
Premium Strata
E: [email protected]
P: 02 9281 6440

This article is not intended to be personal advice and you should not rely on it as a substitute for any form of advice.

This post appears in Strata News #380.

Question: Do the changes in the Strata Schemes Management Act limiting the number of proxy votes an individual may hold also apply under the Community Land Management Act?

Do the changes in the Strata Schemes Management Act limiting the number of proxy votes an individual may hold also apply under the Community Land Management Act? I live in a Neighbourhood Association and want to be clear as to how many proxy votes an individual may hold under the Community Land Management Act, but cannot find this in the Act.

Answer: We are not aware of any corresponding anti-proxy farming amendments having been made to the Community Land Management Act or Regulation.

Leanne Habib
Premium Strata
E: [email protected]
P: 02 9281 6440

This post appears in Strata News #375.

Question: Absent owners provide a signed proxy voting form which is then handed out to individuals within the meeting. Is this legal?

I have an interesting question regarding Proxy votes.

Our Strata contains a number of owner born overseas that are not interested in attending meeting AGMs or EGMs.

One individual persuades these owners to provide a signed Proxy Appointment Form but without completing the Proxy voting details on the form.

At the meeting or immediately prior he hands out these forms to persons he chooses and has them place their name as the proxy Appointed. Thus he provides himself with control of the voting and has indeed a gerrymander over that meeting. The managing agent who chairs these meeting has said there is nothing illegal and proceeds with the meeting.

I am of the opinion that the Managing Agent is incorrect and indeed this would be illegal and tantamount to fraud. I am unable to locate any reference to this behaviour in the Strata Act of NSW 2015, would appreciate your opinion.

Answer: As there is no default person appointed as a proxy, the proxy could be subject to challenge.

Schedule 1 of the Strata Schemes Management Act, states “26 Appointment of proxies

Duly appointed proxy A person is a “duly appointed proxy” for the purposes of this Part if the person is appointed as a proxy by an instrument in the form prescribed by the regulations and the form is signed by the person appointing the proxy or executed in any other manner permitted by the regulations.

In our view, as no “person” is actually appointed as a proxy and as there is no default person appointed as a proxy, the proxy could be subject to challenge.

Leanne Habib
Premium Strata
E: [email protected]
P: 02 9281 6440

This post appears in Strata News #238.

Question: At our recent AGM, a husband and wife owner of one of the units EACH took a proxy giving them 2 proxy votes for their 1 lot. Is this allowed or is it a maximum of 1 proxy per lot?

I am in an NSW Strata building with 9 lots.

We have just had our AGM where we voted in a new committee.

I am aware that each owner can now only carry 1 proxy vote each.

A husband and wife owner of one of the units EACH took a proxy – therefore they had 2 proxy votes from 2 other owners against their 1 lot.

Is this allowed or is it a maximum of 1 proxy per lot?

If it is a maximum of 1 proxy per lot, our ballot voting is therefore invalid, and can we do a re-vote at a Special General meeting? If this is required, how would it work? How would we conduct this and what would be the rules around it?

Answer: This is allowed because the limitation for proxy votes attaches to the person, not the lot.

In our view, this is allowed because the limitation for proxy votes attaches to the person not the lot and there is a specific exception for co-owners:

See Section 26 (7) below:

26 Appointment of proxies

7. Limit on number of proxies that may be held The total number of proxies that may be held by a person (other than proxies held by the person as the co-owner of a lot) voting on a resolution are as follows:
   1. if the strata scheme has 20 lots or less, one,
   2. if the strata scheme has more than 20 lots, a number that is equal to not more than 5% of the total number of lots.

Or is it a maximum of 1 proxy per lot?

No. Proxy votes are per person.

Given our view, no invalidation will be relevant/required.

Leanne Habib
Premium Strata
E: [email protected]
P: 02 9281 6440

This post appears in Strata News #215.

Question: Are the following forms available for download – Notice of Annual General Meeting and Proxy Voting Forms?

Answer: The legislation mandates various matters which must be included on a notice for an Annual General Meeting.

Here is a link to a printable PDF of a Proxy Appointment Form – including some notes on how the form can be used.

There is no standard template that we can offer as our templates are used for our business purposes, however, the legislation mandates various matters which must be included on a notice for an AGM (other than the 1st AGM), eg in Schedule 1 of the SSMA:

Clause 4 – 4 Inclusion of matters on agenda (1) & (2)

Clause 5 Nomination of candidates for election prior to meeting (1)

Clause 6 Required items of agenda for AGM (a) – (d)

Clause 7 Notice of general meetings other than first AGM (1) – (4)

Clause 8 Matters that must be included in notice of general meetings (1) & (2)

Clause 9 Additional matters to be included in notice of AGM (a) – (i)

We hope this information is helpful.

Leanne Habib
Premium Strata

This post appears in Strata News #196.

Question: What information is included on NSW Proxy Voting Forms?

I own an apartment in a strata complex in NSW.

May I ask about proxy voting forms?

I notice that the firms that are sent to owners so they can make a choice to lodge proxy votes do not allow for the owner to make a decision on how they would like their vote to go on each agenda item or certain issues.

If you sign over your proxy vote, the person you nominate gets to decide on the vote.

Is that the usual process?

How is that fair?

Also, as an executive committee member, is there any legal reason that prevents me writing to other owners as I am fast becoming aware that a significant number are not receiving correspondence about meetings and agenda items?

Answer: The NSW Proxy Voting Forms are governed by the Strata Schemes Management Regulation 2016.

The form of proxy is governed by the Strata Schemes Management Regulation 2016.

You should compare the Regulation Form to the proxy forms provided to you. Clearly, the lot owner may direct the proxy how to vote.

Though we are not lawyers, in terms of writing to the individual owners, it is preferable to seek a qualified request for the matters to be considered at a general meeting.  As you are a strata committee member, perhaps you could raise your concerns there.  As a last resort, you could seek mediation and proceed to application for Orders from NSW Civil and Administrative Tribunal (NCAT). You should exercise caution when phrasing your concerns to avoid issues such as defamation etc arising.

Leanne Habib
Premium Strata
E: [email protected]
P: 02 9281 6440

This article is not intended to be personal advice and you should not rely on it as a substitute for any form of advice.

Have a question or something to add to the article? Leave a comment below.

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