The New Alternative: Group of Same-Issue Motions

23 March 21

THE NEW ALTERNATIVE: GROUP OF SAME-ISSUE MOTIONS

The new regulations commenced on 1 March 2021 for the standard, accommodation, commercial and small scheme modules. The regulations for specified two-lot schemes were amended but not replaced. Summaries of the changes implemented by the new and amended regulations have been copiously published in recent months since their public release on 29 September 2020.

Whilst broad overviews are great, most lawyers have an eye for detail and I, for one, am eager to get stuck further into the finer aspects of the new legislation. One of the particularly welcome changes for me was the replacing of ‘motions with alternatives’ with the concept of ‘group of same-issue motions’. My appreciation for this new methodology arises in part from having seen the old regime produce a number of inconsistencies and unfair results. The new approach should cure a lot of these issues.

Section 89 of the Body Corporate and Community Management (Standard Module) Regulation 2020 (SM) deals with group of same-issue motions. Equivalent provisions are found in the other modules, but this article will reference the standard module.

Section 89 of the SM essentially sets out a process whereby motions dealing with the same issue are grouped into a category. Section 93(2)(c)(i) of the SM requires the group to have a title and gives the example ‘Motions about pool refurbishment’. Section 93(2)(c)(ii) of the SM requires the motions to be listed in order from those requiring a resolution without dissent first, special resolution second, majority resolution third and ordinary resolution last. That all appears relatively straightforward.

Back to section 89 of the SM, the process that must be followed in order to determine which of the motions in the group is the successful motion is as follows:
 Voters can vote on each of the motions how they like – s89(3) SM.
 Each motion is assessed based on the usual requirements for a motion of its type (i.e. resolution without dissent, special resolution, majority resolution or ordinary resolution) to determine whether it is passed – s89(4) SM. Motions that pass become ‘qualifying motions’.
 If there is only one qualifying motion, it becomes the body corporate’s decision – s89(5) SM.
 If there is more than one qualifying motion, the one with the highest number of votes in favour is the body corporate’s decision – s89(6) SM.
 If two or more qualifying motions receive an equal highest number of votes in favour, the motion that receives the fewest votes against is the body corporate’s decision – s89(7) SM.
 If two or more qualifying motions each receive the equal highest number of votes in favour and against, the outcome must be decided by chance in the way the meeting decides (e.g. coin toss or drawing a motion from a randomly mixed collection) – s89(8) SM.

Whilst that may appear confusing at first, if the steps are followed one-by-one, it is actually quite straightforward. Nonetheless, there are still a number of questions that the legislation does not specifically address. One of the main ones that springs to mind is how group of same-issue motions interact with the calling of a ‘poll’.

Under section 109 of the Body Corporate and Community Management Act 1997 (Act), a voter can request a poll for counting votes on an ordinary resolution (other than one conducted by secret ballot). The effect of calling a poll is that the motion must be assessed based on the contribution schedule lot entitlements of the voting lots. The motion passes only if the contribution entitlements for lots in favour of the motion is more than the contribution entitlements for lots against the motion (s110 Act).

In the absence of any legislative restriction on the use of polls for motions that are part of a group of same-issue motions, our view is that a voter is entitled to call for a poll on one or more ordinary resolutions that form part of the group. However, where there is more than one qualifying motion, you could end up in a situation where one or more ordinary resolutions have qualified by way of poll (with the votes for and against based on contribution entitlements), with other motions qualifying based on number of lots for and against. No proper comparison can be taken between the qualifying motions as you are not comparing ‘apples with apples’. What to do?

My preferred view in this situation is that any ordinary resolution or resolutions that qualify as the result of a poll must then be converted or reassessed to determine the number of votes for and against on a per lot basis (i.e. the usual method of tallying votes without a poll). This will then enable the motion/s to be properly compared against other qualifying motions in the group.

Is this approach correct? Time will tell, but it seems to me to be the most logical interpretation and application of the legislation. Nonetheless, it would not surprise me (nothing should in the strata world!) if an adjudicator determines that the use of polls are not permitted on group of same-issue motions. No doubt the issue will be tested in the

Commissioner’s Office at some point – watch this space!

 

Article Written by Jarad Maher of Small Myers Hughes Lawyers


Liability limited by a scheme approved under Professional Standards Legislation
Disclaimer – This article is provided for information purposes only and should not be regarded as legal advice. 

Additional Documents

Click here to download: Group_of_Same_Issue_Motions__Qld_.pdf

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