NSW: Q&A Proxy Votes & Quorum Requirements for Annual General Meeting

Lot owner from NSW have questions about dealing with proxy votes and the quorum requirements for annual general meetings. Leanne Habib, Premium Strata provides the following responses.

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

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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.

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:

(a) if the strata scheme has 20 lots or less, one,

(b) 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.

This post appears in Strata News #215.

Question: Leading up to our AGM, our Strata Manager was holding too many proxy votes, so divvied them up to lot owners. Can this be done? Can you also explain the quorum requirements for annual general meeting?

We have a complex comprising of 36 units in NSW.

At our recent AGM, we had proxy votes allocated to our Strata Manager.

With new Strata law directives for NSW, our Strata manager is only allowed a certain amount of proxy votes that they can represent.

• NSW: Strata Reform & Proxy Votes: How many can you hold?

The Strata Manager then proceeded to give (divvy up) these allocated (to her) proxy votes to other Lots to act as proxy on behalf of these owners.

1. Is our Strata Manager legally allowed to do this. Or should these proxy votes have become void and not included to make up a Quorum.
2. what are the quorum requirements for the annual general meeting? How many lots in a 36 unit complex are needed to make up a quorum?

Answer: For the quorum in your scheme – at least ¼ of persons present or ¼ of unit entitlements.

Clause 26 of the SSMA 2015 deals with the appointment of proxy votes and subsection (7) states:

Limit on the 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 is 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.

The Strata Manager then proceeded to give (divvy up) these allocated (to her) proxy votes to other Lots to act as proxy on behalf of these owners.

Is our Strata Manager legally allowed to do this, or should these proxy votes have become void and not included to make up a Quorum?

In a large scheme, this would not be possible under any circumstances as proxies must be given to the secretary 24 hours before the meeting. In a non-large scheme such as yours, we also believe this is not possible in the absence of the person appointing the proxy having specifically nominated substitute/alternate proxies in case their originally appointed proxy had exceeded the legal limit.

Quorum Requirements for Annual General Meeting

How many lots in a 36 unit complex are needed to make up a quorum?

For your scheme at least ¼ of persons present or ¼ of unit entitlements:

The requirements for a quorum are set out in Sch 1 of the SSMA 2015, Clause 17 as set out below:

17 Quorum

(1) Quorum required for motion or election A motion submitted at a meeting must not be considered, and an election must not be held at a meeting unless there is a quorum present to consider and vote on the motion or on the election.

(2) When quorum exists A quorum is present at a meeting only in the following circumstances:

(a) if not less than one-quarter of the persons entitled to vote on the motion or election are present either personally or by duly appointed proxy,

(b) if not less than 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 who are entitled to vote on the motion or election,

(c) if there are 2 persons who are present either personally or by duly appointed proxy and who are entitled to vote on the motion or election, in a case where there is more than one owner in the strata scheme and the quorum otherwise calculated under this subclause would be less than 2 persons.

This post appears in Strata News #193.

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.

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.

Read Next:

• NSW: Do you have vacancies in your strata committee? Here’s what to do
• NSW: Executive Committee (Strata Committee): Powers, Functions and Meetings

Leanne Habib
Premium Strata
P: 02 9281 6440
E: [email protected]
You can connect with Leanne & Premium Strata on Facebook, Twitter & LinkedIn.

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

Visit our Strata Committee Concerns OR NSW Strata Legislation.

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