UOAQ Newsflash #09 - When Two Into One Won't Go
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Dear Subscriber,

We have been concerned for a number of years about the emerging practice of bundling two very different proposals into the one motion, particularly as it mainly involves the strata insurance Statutory Motion.  It means you can only vote YES for both proposals or NO for both...you cannot vote YES for one and NO for the other.
In our opinion, this is most unreasonable, and perhaps nonsensical.

The matter has been formally raised with the BCCM Commissioner for referral to the Attorney General, but we are still waiting for any official response.

It was also raised in a recent Adjudication Application, but was not directly resolved in the decision.

In the meantime, there is nothing to stop owners insisting on being allowed to vote separately on different proposals
.

Wayne Stevens
President
Unit Owners Association of Queensland Inc.

When Two Into One Won't Go - Why would anyone combine two quite different proposals into the one motion?


It was not so long ago in Queensland that the Alternative Motions regime[i] was introduced.  It requires that all proposals with a common purpose be included in the one motion with alternatives.

For example, if there are two quotes for painting the building, the motion could be:
 
Do we paint the building?            YES    NO    ABSTAIN      

If you voted YES, do you prefer:
(a)          Painter A @ $xxx?            YES
OR
(b)          Painter B @ $yyy?            YES

This motion has, first, a threshold question in the form of a motion from the Committee asking whether any of the proposals will be adopted, and then, if so, which one.   These alternatives are usually separated by the word ‘OR’.

But it seems that as soon as you sort out one problem, another pops up.

A practice has emerged where two quite different proposals are being bundled into the one motion.  They do not have a common purpose, and they are not alternatives.  They are joined together with the word ‘AND’, and are presented to the owners in the one motion.

Here is a typical example:
 
STATUTORY MOTION   Ratification of Insurance Renewals

We resolve that the Body Corporate confirm the insurances set out below AND the Committee be authorised to seek quotations and effect a renewal of the policies at the expiration of these policies.

YES______  NO_____  ABSTAIN_____

This motion clearly contains two discrete proposals:
  • The first one is the mandatory Statutory Motion which requires the owners to review, at their AGM, their current strata insurances.[ii]
  • The second concerns something else, i.e. placement of their future strata insurance.
What happens, then, if an owner wishes to endorse the current insurance policies but wants to reject the proposal about next year’s insurance…or vice versa?

The simple answer is, the owner can’t. There is just the one motion, and the owner has just one vote per motion.  The owner can either approve both proposals in the motion or reject both, but cannot approve one but reject the other.

This doesn’t seem fair and reasonable to us.  Moreover, it just doesn’t make sense.

According to the BCCM Commissioner’s Office, there is no specific statutory impediment to this practice of bundling motions.

Nor can we find any definitive decision in the reported adjudications.

There is perhaps some guidance in a recent Adjudication Application.[iii]  The Applicantquestioned the reasonableness of bundled motions.  However, the Adjudicator was not required to rule directly on this point: it was found that the motion in dispute was void because, inter alia [iv], it “did not fully explain the situation such that it was misleading to owners” and “The Motion is poorly worded, confusing and nonsensical”.[v]

Harsh words indeed, but they don’t resolve the current dilemma.

We are left in the position where we don’t know if this finding is just a one-off, limited to the particular facts of that case, or whether it has broader application i.e. as a general principle, you cannot bundle two or more different proposals into the one motion. 

So far, this practice of bundling motions seems to be limited to the strata insurance Statutory Motion.

It is our experience that this practice generally occurs where the Body Corporate Manager sources the strata insurance quotes and claims the commission, generally up to 20% of the premium.

The Statutory Motion itself requires nothing more than a review/confirmation of the current year’s strata insurance, and the BCCM legislation takes pains to specify what has to be included in that motion.  These directions contain no reference to future strata insurance. 

You would think it wouldn’t be very difficult for any strata professional to simply follow these directions[vi], and to provide for next year’s insurance in a separate motion.[vii]

Why most Body Corporate Managers persist with this bundling option is unclear.  It certainly offers no benefit to the owners.

No doubt it will continue as a general practice until an obliging owner takes the question of bundled motions to Adjudication and obtains an unambiguous ruling.

In the meantime, you may care to ask your own Body Corporate Manager:

Why can’t we split these two different proposals into two different Motions so we can vote on each one separately?

[*Disclaimer:  Ross Anderson is an Executive Member of the UOAQ and was the Applicant in both Adjudications referred to in this article.  Ross contributed significantly to this particular article submitted on behalf of the UOAQ.]
 
[i] BCCM (Accommodation Module) 1997 s.70 (see also Standard Module s.72)
[ii] Accommodation Module s.175 (see also Standard Module s.177)
[iv] Among other things
[v] NORTHCLIFFE paras.48 & 57
[vi] This is somewhat rhetorical…see WAVES [2016] QBCCMCmr 132 @ http://www.austlii.edu.au/au/cases/qld/QBCCMCmr/2016/132.html
[vii] It is noted that NORTHCLIFFE has listened to the Adjudicator and split the two proposals into separate motions for their forthcoming 2016 AGM.  
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