Owners Corporations Blog- Voting at Meetings- Ordinary Resolutions

The legislation is confusing. There are different rules and requirements for ordinary resolutions as opposed to special or unanimous resolutions. In this blog, we will deal with ordinary resolutions, voting by polls and written votes.

For ordinary resolutions

Section 87 of the Owners Corporations Act 2006 provides that for any resolution of an Owners Corporation there is to be one vote for each lot, whether the resolution is voted on at a meeting or by ballot.

Section 89(1) of the OC Act provides that a person may vote on a resolution at a meeting by a show of hands or in another prescribed manner unless the meeting resolves otherwise.

The prescribed manner is set out in Regulation 7B of the Owners Corporations Regulations 2018. The prescribed manner, whether hard copy or electronic, includes the following—

        (a)    the Owners Corporation plan number;

        (b)    the lot owner’s name and address;

        (c)    the lot number;

        (d)    if the vote is being cast by proxy, the name of the proxy;

        (e)    the closing date for the vote;

        (f)     whether the motion requires an ordinary resolution, a special resolution or a unanimous resolution;

        (g)    the text of the motion;

        (h)    any voting instructions;

        (i)     a statement that explains the implications of abstaining from a motion;

        (j)     a statement that the lot owner has the right to appoint a proxy;

        (k)    the signature of the lot owner or the proxy and the date of the signature.

I would be surprised if anyone uses the prescribed manner with the amount of detail set out above given the level of detail and information that a voting form would be required to have.

Section 89 (3) provides that a lot owner may (either in person or by proxy) before or after the vote is taken for an ordinary resolution require that a poll be taken based on one vote for each unit of lot entitlement. This effectively cancels out Section 87.

Voting in a poll must be by written vote.

Section 89A provides that chairpersons also have a second or casting vote if there is a voting deadlock.

An ordinary resolution shall be passed if a simple majority of votes cast at the meeting vote in favour of the resolution.

So what does the above mean?

For ordinary resolutions, if a poll is called, voting is based on lot entitlement. So if each lot has an unequal distribution of lot entitlement, voting results can be different if someone asks for a poll (as opposed to a show of hands where everyone gets one vote per lot).

What is also important is the fact that the vote passes if a simple majority of votes vote in favour of the resolution. This is important because an abstain is not a vote. A vote is either in favour or against a motion. A lot owner abstaining is not actually casting a vote and should not be counted for the purpose of whether the vote passes.

This can be relevant in circumstances such as the following example:

Where there are 10 lot owners in attendance and there is a show of hands.

4 people vote in favour of the resolution, 3 people vote against the resolution and 3 people abstain because they want to pick a side. In this circumstance, the vote passes because there is a simple majority in favour of the resolution even though only 4 out of 10 people present voted in favour of the resolution.

Therefore, it is always important to vote (whether for or against).

What is a written vote?

The legislation does not specify what is a written vote. It does not refer back to the term “prescribed manner” which is the voting form required under Section 7B so arguably might mean something less formal than set out in Section 7B. In either case, it should have as a minimum, the lot number, the resolution being voted on and the vote (i.e. in favour or against). Ideally, it would include the lot owner’s name and address, signature and if the vote is being cast by proxy, the name of the proxy holder. Some of those matters could be omitted depending on the circumstance. For example, that additional information is more likely required in circumstances where there is a number of attendees but probably can be dispensed with when there is say only a handful of lot owners present and the person running the meeting (i.e. the manager) knows each of the lot owners and is personally collected the voting forms confirming they are from the persons authorised to vote on the respective lot owners behalf.

In our view, the preferred course would be to have all written votes compliant with the requirements in Section 7B to avoid any argument that the vote is not valid.

All voting forms should be held as part of the records of the Owners Corporation and be available should a challenge after the meeting occur.

Summary

It is important that procedure under the Act is followed. Where possible ensure that all written voting complies with the requirements of Section 7B of the Regulations or has the maximum amount of information available in the circumstances. Preparation is important. Managers should be prepared with the ability to conduct electronic voting or paper voting.

Elections of committees also constitute resolutions which means that each nominee should be voted on as an ordinary resolution.

Need advice or assistance in a VCAT case?

Phillip Leaman, principal of the Owners Corporations practice group of Tisher Liner FC Law and his very experienced team can provide assistance to Owners Corporations, committees, lot owners and managers in a range of Owners Corporations legal matters. We have substantial experience in taking actions against builders, building surveyors, architects and plumbers for original building defects on common property and private lot property.

We also act for lot owners and Owners Corporations in respect to Owners Corporation governance and assisting managers and committees.

We believe Owners Corporations want to maintain peaceful, functional living environments for owners. Our mission is to provide a fresh perspective on resolving legal disputes and to inspire Owners Corporations to achieve outcomes that preserves the value of assets and restores harmony. We are expert Owners Corporations lawyers.

For advice or assistance, please contact Phillip Leaman on 03 8600 9314 or by email [email protected].