NSW: Was our special resolution valid with only one owner present?

Quorum

According to Schedule 1, clause 17(2)(a) of the Strata Schemes Management Act 2015 (SSMA):

"(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"

Based on the above, in an 11-lot scheme, a minimum of three lot owners must be present at the meeting to satisfy the 25% quorum requirement. A person who votes electronically may be counted for quorum purposes, depending on the meeting notice and whether the meeting arrangements permit pre-meeting voting.

I note that only one lot owner was present but another lot owner only voted but was not present and, therefore, the minimum quorum requirement under the above provision was not met.

However, where 25% of the lot owners are not present at the general meeting, Schedule 1, clause 17(4) of the SSMA provides that:

"(4) Procedure if no quorum If no quorum is present within the next half-hour after the relevant motion or business arises for consideration at the meeting, the chairperson must—

(a) adjourn the meeting for at least 7 days, or

(b) declare that the persons present either personally or by duly appointed proxy and who are entitled to vote on the motion or business constitute a quorum for considering that motion or business and any subsequent motion or business at the meeting."

Accordingly, if the strata manager was acting as the chairman and waited for the required half-hour period and subsequently declared a quorum in accordance with the above provision, a quorum would then be deemed to exist for the purposes of considering the relevant motion and any subsequent business at the meeting.

Special resolutions

In accordance with section 5 of the SSMA, a special resolution requires that no more than 25% of the votes cast, calculated by unit entitlement, be against the resolution. This means that at least 75% of the votes cast, calculated by unit entitlement, must be in favour of the resolution.

Accordingly, if both lot owners at the meeting voted in favour of the common property by-law amendment, and the quorum requirements were satisfied in accordance with the procedure outlined above, the special resolution would be considered valid, provided the voting requirements of the persons present were also met.

There is no minimum percentage requirement for the votes to be against the resolution. However, any financial owner can requisition a motion to be considered at a general meeting.

There is no conflict of interest at a general meeting. However, the case may differ in a strata committee meeting where conflict of interest may arise.