UOAQ Newsflash #13 - Common Law Coincides with Common Sense
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Dear Subscriber,

Following the publication of our article about bundled insurance motions in July, we were contacted by a strata lawyer Peter Gore.  Peter has taken the trouble to research the matter, providing us with a detailed argument, supported by case law, explaining why bundling two separate proposals into one motion is invalid.  He notes that… "On this occasion, common law coincides with common sense." What more could you ask for?.

We are grateful for Peter’s efforts and support, and look forward to the strata industry following our lead and desisting with what is a quite nonsensical industry-wide practice.

Wayne Stevens
Unit Owners Association of Queensland Inc.

WHO KNEW?  Some Insights Into Strata Insurance

2.7: WHY 2 INTO 1 WON'T GO
Common Law Coincides with Common Sense

Why would anyone bundle two quite discrete proposals into one motion?

The UOAQ is concerned 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, bundling is unreasonable, and perhaps nonsensical.

The UOAQ published an article about this matter, as Newsflash #9, in July 2016.[i]

We have received interesting feedback from our readers. One of them, a solicitor Peter Gore, has taken the trouble to research the matter further.  Drawing upon fundamental legal principles and time-honoured precedents, Peter agrees with the UOAQ’s conclusion that bundled motions are generally invalid.

The UOAQ wishes to thank Peter for his time and effort in this matter, and is grateful that he is happy for us to pass his correspondence on to our members.  This is what he wrote… 


Common Law Coincides With Common Sense

A recent article issued as a Newsflash by the Unit Owners Association Queensland queried the propriety of “the emerging practice of bundling two very different proposals into one motion…” and concluded that the practice “just doesn’t make sense”. As a solicitor who practises in the area of body corporate law, I agree with that conclusion. On this occasion, the law and common sense coincide.

Bodies corporate established under the Body Corporate and Community Management Act 1997 (Qld) have limited powers. Essentially they have the powers necessary to administer the common property and the body corporate assets for the benefit of owners and to enforce the community management statement. A body corporate makes decisions through the general meeting or, in limited cases, through the body corporate committee. In order to ensure that body corporate decisions can be demonstrated to be within power and, therefore, legal, it is essential that decisions are clear, precise and unambiguous.

Therefore, motions put to general meetings should deal with one discrete issue. If two issues are combined into one motion, it may be difficult to demonstrate that the decision reached at the meeting is valid. Particularly will this be the case where the legislation requires a decision on a particular issue to be passed by either an ordinary or special resolution.

For this reason, the Chairperson of a general meeting should rule out of order a motion that combines two different proposals in one resolution. Instead, the meeting should be asked to vote separately on each discrete proposal so that the will of the meeting is clearly demonstrated.

There is little judicial authority on this question. However, in relation to English companies, Justice Eve in Blair Open Heath Furnace Company v. Reigart, Chancery Division 1913 said that it was” quite irregular” for the Chairman of a company to take one poll on two separate resolutions. “A poll having been demanded on each resolution, it was the duty of the chairman to direct a separate poll to be taken on each, and he had no power to incorporate these two resolutions in one poll”.

In 1906, in Patentwood Keg Syndicate v Pearce, Buckley J of the English High Court said that “the resolutions should not have been put to the poll en bloc, but separately”.  Buckley J held that the resolution in question was not valid.

Under both the Standard and the Accommodation Module Regulations, an owner may submit a motion for consideration at a general meeting. Thus the possibility exists that there may be two or more motions proposed about the same issue by different owners. Section 72 of the Standard Module Regulation requires that, where two or more owners submit motions for consideration at a general meeting “proposing alternative ways of dealing with the same issue”, the voting paper must “list as alternatives under 1 motion … the substance of each of the original motions…”. The evident reason for this requirement is to ensure that a general meeting does not have to consider a multitude of motions about the same issue. The section says that a voter may either vote for the motion and one of the alternatives or may vote against the motion.

Kind regards
Peter L Gore

Where to from here?

Many UOAQ members have already instructed their Body Corporate Managers (BCM) to ‘cease and desist’ from this practice of bundling motions.  This is a good start. The UOAQ looks forward to SCA, the BCMs’ representative association, following our lead and encouraging all of its members to split the discrete proposals into separate motions.

And, we are actively searching for a test case to finalise this matter once and for all.  If any UOAQ member is looking for guidance and support in this regard, please contact the UOAQ.

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

Why wouldn’t we split these two different proposals into two different motions so that we can vote on each one separately?
[i] This article (also published in LookUp Strata) attracted comments regarding bundling effecting owners other than relating to insurance matters here.
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