Commissioner’s Office: Group of same issue motions

Current regulations that apply to motions with alternatives, or motions dealing with the same issue, have caused some contention amongst body corporate residents. In view of this, it may come as welcome news that the provisions on motions with alternatives have been removed from the new regulations that will commence on 1 March 2021.

Instead, two or more motions that propose alternative ways of dealing with the same issue will now be categorised – on the agenda and in the voting papers – as a ‘group of same-issue motions’.

Under current regulations, where there are motions dealing with the same issue, a body corporate’s meeting agenda and voting papers are required to include firstly, the motion submitted by the body corporate committee that identifies the issue to be dealt with, and secondly, a list of the alternative motions received by the body corporate proposing different or alternative action in relation to the issue. If one of the alternatives requires a special resolution to pass under the regulations, all alternatives must meet that higher threshold.

Feedback from bodies corporate has been that, in some instances, a higher-threshold alternative may be submitted strategically for the purpose of making it more difficult for other alternative motions to pass, by raising the threshold that is required. This, coupled with the fact that owners are only able to vote for the actual motion plus one of the alternatives – or against the motion entirely – has meant that the existing arrangements do not always provide the fairest indication of group opinion.

The aim of the “group of same-issue motions” provisions in the new regulations is to facilitate – as far as practicably possible – the success of the most popular motion in the group and the strengthening of owners’ voting rights. Under the new provisions, owners will now be able to vote for or against any or all motions in the group, or abstain from voting on any or all of the motions. This is achieved by providing a two-step process for dealing with a group of same-issue motions.

Step 1: Identify the qualifying motions

Each of the motions in the group of same-issue motions will have a particular resolution type that must be satisfied for that motion to be passed. This means that there will be a mixture of different motions that may have different resolution types within the one group. While some of the motions may only require an ordinary resolution, others may require a special resolution, or a resolution without dissent.

A motion that receives the required number of votes to pass is a ‘qualifying motion’.

Step 2: Identify the successful qualifying motion

If there is only one qualifying motion out of the group, that motion will automatically be the successful motion.

If there are no qualifying motions in the group, there is no successful motion.

If there are multiple qualifying motions, the qualifying motion with the highest number of votes in its favour will be the successful motion and the body corporate’s decision.

So, how do you break a tie when multiple qualifying motions receive an equal highest number of votes in favour? Of these contenders, the one that received the least votes against it will be the successful motion.

The question then remains – what about the situation where there are multiple qualifying motions with equal votes in their favour and equal votes against? The new regulations provide that a tie of this kind will be resolved by chance. Whether this involves pulling the motions out of a hat or drawing straws is up to the owners at the general meeting to decide.

A group of same-issue motions in practice

Now, consider the scenario where a secretary receives motions from three lot owners proposing different ways to address the body corporate’s boundary fence, which is falling apart.

BROKEN BOUNDARY FENCE

ORIGINAL MOTION 1: To replace the boundary fence with a higher quality colorbond fence at a cost of X (special resolution).

ORIGINAL MOTION 2: To replace the wooden boundary fence with a similar wooden boundary fence at a cost of Y (ordinary resolution).

ORIGINAL MOTION 3: To repair the damage to the broken boundary fence at a cost of Z (ordinary resolution).

Original motion 1 receives 17 votes in its favour, 1 vote against and satisfies the requirements of a special resolution. Original motion 2 receives 17 votes in its favour, 5 votes against and satisfies the requirements of an ordinary resolution. Original motion 3 receives 4 votes in its favour, 10 votes against and does not meet the threshold for an ordinary resolution.

As original motion 3 did not satisfy the requirements of an ordinary resolution, it is out of the running. As both original motions 1 and 2 satisfy the requirements for their resolution type, they are both qualifying motions.

The next step is to work out which of the qualifying motions 1 and 2 has the most votes in its favour. As both qualifying motions received an equal highest number of votes, we must then look at the number of votes against. Original motion 1 is the successful motion, as it received the least number of votes against it.

Procedural requirements

It is worth noting that, as well as a having a group title, a group of same-issue motions should be listed on the voting papers in descending order, starting with the higher threshold resolutions. The order would therefore be as follows:

1.    Motions requiring resolution without dissent

2.    Motions requiring a special resolution

3.    Motions requiring a majority resolution

4.    Motions requiring an ordinary resolution

Where the voting paper includes a group of same-issue motions, an explanatory schedule must accompany the voting paper. Section 90 of the new Standard Module contains an explanatory schedule checklist that should be followed for a group of same-issue motions. Importantly, the checklist requires that the explanatory schedule should include an explanatory note that provides general direction on voting rights, counting of votes and qualifying motions. A thorough example of this kind of explanatory note has been provided in section 90 as a guide.

At first glance, the new provisions appear harder to grasp due to the number of factors involved. On unpacking the different elements, however, the concept is surprisingly simple. It is our hope that this article has provided some clarity on a topic that may otherwise seem daunting.

Author: Michelle Scott, Commissioner for Body Corporate and Community Management

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