QLD: Q&A AGMs, Motions in Strata and the Obligation to Act

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We regularly receive questions from QLD lot owners about strata AGM motions. Frank Higginson and Chris Irons, Hynes Legal have helpfully supplied the following responses.

Jump directly to the QUESTION you are after:

• QUESTION: There are three decisions being made under one Motion. Is this an approved method of voting or should there be three Motions?
• QUESTION: Should a Chairperson forewarn the submitter that a motion is likely to be ruled out of order? This could save time and also allow the opportunity to amend the motion.
• QUESTION: At a committee meeting, a motion was put forward by the chairperson and it proceeded to a vote. The vote was deadlocked 3 v 3 and the chairperson then had a casting vote. Is this right?
• QUESTION: Who may move a motion to amend a motion? Can, for example, an owner present at the AGM, move a motion at the AGM to amend a motion put forward by the committee?
• QUESTION: A resident in our scheme would like to have General Business included as an item on our AGM Agenda. Is that permissible, or can only the motions included in the circulated Agenda be dealt with at an AGM?
• QUESTION: If a Motion is ‘passed’ at an AGM by Ordinary Resolution, is there any obligation by the Strata Committee or Body Corporate Manager to put it into action?
• QUESTION: Should strata AGM motions be ruled as Out of Order if they are based on and contain incorrect and misleading information?
• QUESTION: We have been advised that voting at body corporate AGM will not involve any debate. If a process removes speaking for or against a strata AGM motion, I am of the opinion this would be non-compliant with legislation.
• QUESTION: Is it OK for a Committee to recommend a preferred contractor in a Motion With Alternatives?
• QUESTION: Is it possible to speak in relation to a strata AGM motion if you are not a committee member?

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Question: There are three decisions being made under one Motion. Is this an approved method of voting or should there be three Motions?

Question 1:

Our Community Titles Scheme consists of 75 Lots. The most recent Management and Letting Agreements lapsed due to the Manager failing to take up options on time.

Our Committee and the Manager have submitted motions, to be decided by secret ballot, at the upcoming AGM relating to the proposed new ‘Agreements’. The motion put forward, with two alternatives, lists both the proposed Caretaking Agreement and the Letting Agreement as well as listing a nominated person to be the ‘approved person’ under both Agreements.

My view is that there are three decisions being made under one Motion. Is this an approved method of voting or should there be three Motions?

Question 2:

Our Committee called an EGM to cover two Motions.

The first was straight forward but the second one covered two completely different matters yet we were expected to give a YES or NO answer to it. This was impossible as I (along with other owners) wanted to vote YES for the first matter but NO for the second. The first matter was to add a clause to the Caretaking Agreement, the second was to delete part of a clause in the Letting Agreement.

Also, they did not quote the clause that was to be deleted, just giving the number of the clause in the Agreement, they wanted to be deleted so unless you checked this Agreement you did not know what you were voting for/against.

A number of owners wrote to our Strata Managers voicing our concerns with this but we were fobbed off and the EGM went ahead without any owners being able to attend because of the COVID 19 situation. We believe it cannot be right to be forced to vote on two separate issues with only one voting choice. Are we Correct?

Answer: Both of these queries are essentially about motions with alternatives.

Both of these queries are essentially about motions with alternatives. Section 72 of the Standard Module (equivalent provisions of other Regulation Modules) provides for what a motion with alternatives is and how it should be treated. Of note is section 72(1) which states:

72 Motion with alternatives

1. This section applies if 2 or more motions (the “original motions” ) proposing alternative ways of dealing with the same issue are submitted, under section 69 , as motions for consideration at a general meeting of the body corporate.
   Example—
   The secretary of the body corporate receives motions from 3 owners of lots proposing the engagement of a person as a body corporate manager. Each motion proposes a different person.

The legislation doesn’t define what ‘the same issue’ is. Both of these queries are effectively disputing how ‘the same issue’ has been applied in each case and as such, this may require dispute resolution through the Commissioner’s Office if you can’t resolve the issues yourselves. Bear in mind you’ll need to provide grounds to back up your argument and all owners and the committee will be invited to ‘have their say’ as well. In other words, simply because you don’t agree with how these instances have been treated doesn’t necessarily mean they were wrong.

You may also need to seek legal advice.

Chris Irons
W: https://www.hyneslegal.com.au

This post appears in Strata News #375.

Question: Should a Chairperson forewarn the submitter that a motion is likely to be ruled out of order? This could save time and also allow the opportunity to amend the motion.

Body corporate legislation makes provision for motions to be ruled ‘Out of order’ if:

• the motion, if carried, would conflict with the legislation or the body corporate by-laws
• the motion, if carried, would conflict with another motion already voted on at the meeting
• the motion, if carried, would be unlawful or unenforceable for another reason
• the substance of the motion was not included on the agenda for the meeting.

Is there any provision, actual or implied, which imposes an obligation on the chairperson to forewarn the proposer of a motion that, in the form submitted, it is likely to be ruled out of order and afford the proposer an opportunity to amend the motion? To say nothing prior to the actual meeting seems likely to waste a lot of time an effort and consideration of a matter merely because of a mere technicality?

Answer: There’s no obligation per se. That said, what you are suggesting makes complete sense.

Chris Irons

There’s no obligation per se. That said, what you are suggesting makes complete sense. If a motion is received which is clearly going to be ruled out of order, there’s absolutely nothing stopping the chairperson or body corporate manager from calling the submitter and having an informal chat along the lines of ‘look, this one will not make the cut, for these reasons, so did you want to continue with it or did you want to withdraw it and have a think about either rewording or holding off?’.

This applies to any motion submitted which on the face of it looks a bit problematic. It can actually serve an educational purpose to do this and as you say, can save an awful lot of time, money, and heartache.

All that said, be prepared for the submitted to tell you in no uncertain terms they will not withdraw. It’s their motion, after all.

Frank Higginson

And if I was to put my ‘being a difficult lawyer’ hat on, I would say that if the committee was against the motion then it would be far from unheard of for the chairperson to simply ambush them on the day and rule it out of order without telling their proposer…..

W: https://www.hyneslegal.com.au

This post appears in Strata News #366.

Question: At a committee meeting, a motion was put forward by the chairperson and it proceeded to a vote. The vote was deadlocked 3 v 3 and the chairperson then had a casting vote. Is this right?

At a committee meeting, a motion was put forward by the chairperson and it proceeded to a vote even after discussion of the motion being out of order and duly noted by the strata manager. Is this motion effective?

The vote was deadlocked 3 v 3 and the chairperson then had a casting vote, which was essentially not to enforce a Referee’s order and not to enforce the bylaws.

Subsequently the committee was presented with a flying minute to vote on the same issue and the result was to overturn the previous motion 4 v 2.

At this stage we presume that the chairperson voted against the motion, along with the Committee person who has a conflict of interest and chose to vote despite advice from the strata manager.

Does the flying minute override the previous committee meeting vote?

Answer: There are no casting votes at committee level.

There are no casting votes at committee level.

3 all means the motion is not passed.

However, the committee can change their mind afterwards too. Just because a vote was defeated first time around doesn’t mean it cannot be reconsidered by the committee again and voted differently later.

This post appears in Strata News #326.

Question: Who may move a motion to amend a motion? Can, for example, an owner present at the AGM, move a motion at the AGM to amend a motion put forward by the committee?

Answer: Section 94(2): ‘… an amendment can not be made that changes the subject matter of the motion’.

From a purely legislative point of view, section 94 of the Standard Module (and equivalent sections of the other Modules) provides for the amendment of a motion at a general meeting (GM). There are some details about how that is done, although the most important part is section 94(2), which provides that ‘… an amendment can not be made that changes the subject matter of the motion’.

The legislation doesn’t define ‘subject matter’. That said, I think you can quite clearly see the section is not intending that a motion gets amended at a GM to the extent that it changes what the motion is seeking to achieve. Looked at another way, the section is providing the body corporate the ability to make an amendment that is procedural or minor in nature.

And really, that’s how it should be and what this section (and the question) does is highlight just why the legislation puts so may prescriptive timeframes and processes about GMs and motions.

All members of the body corporate need an equal opportunity to receive the agenda, in advance and to have time to absorb it and consider their options. A lot owner may, for example, on receipt of an agenda with motions want to take the time to research the motion or indeed, seek legal advice about it.

It’s particularly necessary to allow time in advance for people voting by ballot paper (or electronically, if and when that happens). I know it is commonplace for owners and committees to ask about whether motions can be tabled from the floor at a GM and they are sometimes miffed when told they can’t. Hopefully, this section and question emphasises why that is the case.

You cannot simply throw up new things or significant changes at a meeting and expect everyone to be comfortable voting on it there and then. That’s not how body corporate decision making happens.

This post appears in Strata News #320.

Chris Irons
E: [email protected]

Question: A resident in our scheme would like to have General Business included as an item on our AGM Agenda. Is that permissible, or can only the motions included in the circulated Agenda be dealt with at an AGM?

A resident in our scheme would like to have General Business included as an item on our AGM Agenda. Is that permissible, or can only the motions included in the circulated Agenda be dealt with at an AGM?

Are there any circumstances where an item raised at an AGM that is not on the circulated Agenda may be voted on other than, for example, a procedural motion?

Personally I don’t have any objection to this idea as a means of giving owners a chance to be heard, but I would be glad to receive advice on both its legality and how it would work in practice if it is allowed.

Answer: There is no such thing as general business at an AGM. If the motion is not on the agenda, it cannot be voted on.

There is no such thing as general business at an AGM. If the motion is not on the agenda, it cannot be voted on. This is because the legislation allows people to cast votes beforehand to exercise their rights which then removes the need for them to come to the meeting. Therefore, if motions could come from the floor on the ay those owners would be disenfranchised by not being able to have their say.

There is no reason people cannot have a natter after the meeting, but from my end, that is best done when the meeting has officially closed, the new committee is in place, and then general items can be canvassed. Nothing discussed there will be binding though like a vote at the meeting itself.

This post appears in Strata News #319.

Question: If a Motion is ‘passed’ at an AGM by Ordinary Resolution, is there any obligation by the Strata Committee or Body Corporate Manager to put it into action?

If a Motion is ‘passed’ at an AGM by Ordinary Resolution, is there any obligation by the Strata Committee or Body Corporate Manager to put it into action? E.g. The Body Corporate authorise the Body Corporate Manager to arrange a gutter clean and roof inspection from a suitably qualified contractor – Motion Passed by Ordinary Resolution.

Answer: They should do what the motion directed. It is as simple as that.

This post appears in Strata News #295.

Question: Should strata AGM motions be ruled as Out of Order if they are based on and contain incorrect and misleading information?

Should a motion proposed for an upcoming AGM be ruled as Out of Order if it is based on and contains incorrect and misleading information?

As most of our unitholders live out of state, strata AGM motions are voted by mail ahead of the actual meeting so there is little opportunity for open discussion.

Answer: Generally it would be considered fair and reasonable for owners to be given the opportunity to comment on strata AGM motions prior to voting.

The Module says

48 Power of person chairing meeting to rule motion out of order [SM, s 81]

1. The person chairing a general meeting of the body corporate must rule a motion out of order if—
   1. the motion, if carried, would—
      1. conflict with the Act, this regulation or the by-laws, or a motion already voted on at the meeting; or
      2. be unlawful or unenforceable for another reason; or
   2. except for a procedural motion for the conduct of the meeting, or a motion to correct minutes—the substance of the motion was not included in the agenda for the meeting.
2. The person chairing the meeting must, when ruling a motion out of order—
   1. give reasons for the ruling; and
   2. for a ruling given under subsection (1) (a) —state how the ruling may be reversed by the persons present and entitled to vote on the issue.
3. The persons present and entitled to vote may reverse a ruling given under subsection (1) (a) by passing an ordinary resolution disagreeing with the ruling.
4. The reasons given by the person chairing the meeting for ruling a motion out of order must be recorded in the minutes of the meeting.

That sets out a step by step process, but the key is what we have highlighted in bold above. What is incorrect or misleading are matters of opinion and there may, or maybe not, be reasons to rule a motion out of order if that is the case – but only by reference back to one of the reasons we have bolded above.

These ones really do hinge on the actual working of the motion.

This post appears in Strata News #217

Question: We have been advised that voting at body corporate AGM will not involve any debate. If a process removes speaking for or against a strata AGM motion, I am of the opinion this would be non-compliant with legislation.

Our AGM is to be held in late January 2018. Minutes from the last (Budget) meeting has included a note that:

“The Committee wish to advise that unlike previous years, there will not be a debate process at the Annual General Meeting.

Further to the above, the Committee request for you to complete your voting paper and return to “the Strata Manager” prior to the date of the meeting …….”

As such a process removes speaking for or against a strata AGM motion, I am of the opinion this would be non-compliant with legislation. I cannot see the purpose of attending a meeting where the voting would be counted prior to the meeting by the Strata Manager and those attending simply told the results.

Answer: “the general principles of meeting procedure establish that debate must be allowed prior to voting.”

Adjudicator Rosemann made these comments in Pacific Mansions [2012] QBCCMCmr 167 (original footnotes removed):

[44] The body corporate legislation does not specifically refer to the conduct of debate on motions at a meeting. It simply specifies how voting will be conducted. However, in my view, the general principles of meeting procedure establish that debate must be allowed prior to voting. A widely recognised authority on Australian meeting procedures says:

“The purpose of debate is to allow members to state relevant facts and express their views on the business before the meeting. This is an essential part of the democratic process by which organisations reach decisions. Members should be allowed to share their information and to attempt to persuade their fellows of the rightness of their views.”

[45] The fact that some voters are not present to participate in debate is immaterial. The persons who are present at the meeting are entitled to withdraw their written vote, and substitute an alternative personal vote, at any time before the result of the motion is declared. The fact that a chair believed no owner present would change their vote is no basis to prevent debate.

[46] The need to allow debate does not mean a chair cannot control the conduct of debate, and indeed they should. A chair should give each voter present an opportunity to speak, ensure others do not interrupt, require speakers to keep to the point, and so on. Debate could be limited by restricting the time allotted to each speaker. However, I consider this would require the agreement of the meeting, through a procedural motion that was proposed, voted on, passed and minuted. The chair or committee could not unilaterally impose such a restriction.

I would add to Ms Rosemann’s helpful explanation that the content of the debate does not have to be included in the minutes of the general meeting, even though the participants may feel strongly about their comments being “put on the record”. Recording what is said in such debates is not required by the legislation, and may turn minutes into a small novel.

This post appears in Strata News #175.

Question: Is it OK for a Committee to recommend a preferred contractor in a Motion With Alternatives?

Is it normally alright for a Committee to recommend a preferred contractor in a Motion With Alternatives eg about painting our complex?

Our Committee is submitting a Committee Motion to our AGM about the painting of our complex. This will involve a motion with alternatives. Can our Committee include, either in the Motion or the Explanatory Schedule, our recommendation as to which of the 3 painters we prefer, especially if the preferred contractor is not the cheapest?

Answer: The committee has an absolute right to make a recommendation

The committee has an absolute right to make a recommendation. As has been held in the District Court:-

Obviously, any note put forward by the submitter of the motion is going to present an argument in favour of the motion. I cannot see anything in the regulation which requires the submitter of the motion to include in the explanatory note arguments against the motion as well as arguments in favour of it, so as to be balanced, and such a proposition strikes me as not supported by anything in the legislation or the general law.

This post appears in Strata News #118.

Question: Is it possible to speak in relation to a strata AGM motion if you are not a committee member?

Is it possible to speak in relation to a motion being put to the AGM if you are not a committee member?

In that, most owners don’t attend the AGM and have the opportunity to vote electronically or by post, it would be necessary for my remarks to be distributed to all owners prior to their voting if I am endeavouring to put new material before them with the intent of persuading them to vote in a certain fashion.

Answer: Generally it would be considered fair and reasonable for owners to be given the opportunity to comment on strata AGM motions prior to voting.

Generally, it would be considered fair and reasonable for owners to be given the opportunity to comment on a motion at an AGM prior to voting. However, your question relating to circulating information prior to the AGM, so that owner voting electronically or by voting paper still receive the information, depends on the circumstances.

There are two scenarios where an owner may want to provide other owners with additional information in relation to a motion:

1. If the owner has submitted the motion themselves

   If an owner has submitted a motion for inclusion on an AGM agenda, they may submit an explanatory note, up to 300 words. This explanatory note must be sent to owners with the voting paper for a general meeting. (See Section 73 of the Body Corporate and Community Management (Standard Module)). Your Strata Manager or an independent consultant will be able to help you with wording an explanatory note.

2. If the owner wishes to provide additional information on a motion submitted by someone else

   If an agenda has already been distributed or the motion has been submitted by someone else then you will not be able to provide an explanatory note for the motion. If you have a good relationship with the party submitting the motion, you may be able to work with them and have them submit the explanatory note to the motion.

   There is nothing in the legislation prohibiting an owner from independently sending correspondence direct to each owner, separate to the AGM Agenda. This may be an option for you if you are not able to get an explanatory note on the Agenda. You should ensure that your correspondence does not contain any defamatory material and you may put your contact details on the correspondence so that owners who wish to seek further clarification can contact you directly.

This post appears in Strata News #111.

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Chris Irons
E: [email protected]
Frank Higginson
E: [email protected]
P: 07 3193 0500
W: https://www.hyneslegal.com.au

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