This article about no confidence motions has been supplied by Frank Higginson, Hynes Legal.
This is a post regarding some of the most common misconceptions we have to address in our day-to-day advices to strata managers, resident managers and committee members. It also comes from having sat through plenty of meetings ourselves.
There is nothing more frustrating than being in a meeting and sitting around while discussion extends to things that the Body Corporate and Community Management Act 1997 (BCCM Act) simply does not contemplate (or allow).
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What are they?
Well, the first is….
No confidence motions
You might be able to do it from the floor of parliament house, but in strataland a motion of this type is meaningless. Committee members are voted in for their tenure under the BCCM Act which is until the next AGM.
The BCCM Act sets out how and when committee members may be removed. Failing things like insanity, the sale of their unit etc, the only way to remove a committee member if you do not otherwise want them to be there is to have them voted out by ordinary resolution.
You do not need to have cause to do that. A body corporate just can. If only we could do the same with our politicians.
There is a process to remove committee members under the Code of Conduct, but by the time you go through all that the AGM will more than likely have rolled around anyway!
Conflicts of interest and voting
When it comes to voting at general meetings there is no such thing as a conflict of interest for your own vote. There are absolutely conflict of interest provisions at committee level, but at general meeting level you can exercise a vote on a matter on which you have a direct interest. You cannot use proxies for that though.
Casting / determining votes
A casting vote is one which otherwise breaks a deadlock. It allows someone to effectively vote twice and it is usually the chairperson of the meeting.
You see this in some public forums but it does not exist in strataland. If a motion ends up with the same number of votes both for and against (i.e. 10-10) then it is not passed. This is because there is not a majority in favour of it. The same applies at committee level. A vote of 3-3 is a tie and the motion is not passed.
Chairpersons at either level do not have a casting vote to swing the resolution one way or the other. They absolutely have their own vote as of right, but not another one.
A right of veto
We do not channel the US political system where the president has a right of veto. In the USA if a law is passed that the president does not like they can simply refuse it. Not in strataland – if it is passed by the type of resolution required under the BCCM Act then that is the end of the story. It is final no matter what the chairperson might think.
Remember this simple rule: A resolution can be revoked in the same manner in which it was passed. This means a committee can change their mind at committee meetings or by a vote outside committee.
Likewise, a general meeting resolution can only be revoked at general meeting by the same type of resolution. A committee cannot overturn a general meeting resolution unless the resolution specifically contemplated that.
Remember that overturning a resolution is one thing but that is only worthwhile before the resolution has been acted on. If, as a result of that resolution, the body corporate has entered into a binding contract with a third party (such as a management rights agreement) seeking to overturn the resolution will be useless as it has already been acted on.
The misconceptions that we sometimes come across are incredible.
As always, if you need help, let Hynes Legal know.
This article was first published on the Hynes Legal website.
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