Question: Our 7 member COO has a mid-term vacancy. 50% of the remaining members have voted ‘No’ to filling the vacancy, despite a relevant nomination. Can three of the COO make this decisions?
We live in a building of 34 apartments in WA. The strata company voted at the last AGM to have 7 members on the COO. One of the members of the COO sold her apartment, leaving a vacancy on the COO.
An owner nominated himself, backed by two other owners, to be on the COO and fill the vacancy. I am one of the two supporting owners.
The existing members of the COO had a meeting where the voting took place, 3 for his appointment and 3 against.
Notwithstanding the three that voted against decided to reject his nomination and keep the COO at six members only. The other three that voted for were in fact ignored.
As voting by all owners to approve 7 members was carried out at the AGM, should this be complied with until voting can be done again at the next AGM?
Can three of the COO arbitrarily make decisions without observing the vote of all owners?
The matter is becoming quite urgent and serious with an owner looking into legal options.
Answer: The COO can continue to act as if they still have 6 members, therefore still fulfilling their quorum requirements.
Please bear in mind that we have not viewed the Strata Plan or the bylaws for this Strata Scheme. Our response therefore is reliant on the Standard Governance bylaws being the bylaws for this Strata Scheme.
The Governance bylaws provide the following:
- Bylaw 4 (3) COO consists of not less than 3 nor more than 7 of the owners, as determined by the Strata Company at their Annual General Meeting
- Bylaw 4 (9)(a) A COO member vacates office when they cease to be an owner or co-owner or on resignation or death?
- Bylaw 4 (10) The remaining members may appoint a person eligible for election to the council to fill a vacancy in the office of a member of the council
- Bylaw 4 (11) A quorum of the council is 4 if the council consists of 7 members
- Bylaw 4 (12) The continuing members may continue to act if there is a vacancy in the council – as long as their number of members is not reduced below the quorum
- Bylaw 6 (1) The members must appoint a chairperson, treasurer or secretary at their first meeting after they assume office as such members
- Bylaw 6 (2) (b) A person may be appointed to 1 or more of those offices
- Bylaw 6 (3A) The remaining members must appoint a member to fill a vacancy in an office ie: chairperson, treasurer or secretary
As per the bylaws listed above, when a Strata Scheme elects 7 members to the Council at an AGM, the quorum is determined to be 4. All matters put to the COO for consideration will require 4 members to confirm their agreement/approval as the quorum, and for the matter to be resolved.
Schedule 1 Bylaw 4 (10) provides the remaining members of the council with an ability to elect another member however this is optional to the COO as the bylaw specifies the COO may appoint a person eligible for election to the council to fill a vacancy in the office of a member.
If the vacating member was an office bearer then this office vacancy must be filled as per Bylaw 6 (3A), however this can be filled by any other current member as per Bylaw 6 (2)(b).
As per your notes, the council have met and considered the election of another member to fill the member vacancy. The motion has not been supported by a quorum of the council and therefore the nomination has not been accepted. This process is in compliance with the legislation and the Strata Company bylaws and is not required to be referred to all owners via an Extraordinary General Meeting to resolve or consider. The council are elected annually, with the term finalising at the conclusion of the next Annual General Meeting.
The COO can continue to act as if they still have 6 members, therefore still fulfilling their quorum requirements.
The Council has limitations set within the legislation in relation to the funds they are able to expend without further authority from the owners and other approvals or formalities.
The recent legislation reform also requires the COO members to act honestly and in good faith, exercise a degree of care and diligence, and disclose any direct or indirect pecuniary interest that may conflict with their performance on any matter as per Section 137.
Shelley Fitzgerald Emerson Raine E: shelley@emersonraine.com.au P: 9330 3959