Do you know the process of calling an EGM or when calling this type of meeting may be necessary?
Each year, in accordance with the Body Corporate and Community Management Act 1997, there is a requirement that the Annual General Meeting (AGM) be held within 3 months from the schemes financial year end.
However, what is the process when there are motions that need to be considered outside of the AGM that need General Meeting consideration? In this months Adjudicators Order, one of the issues covered is the validity around whether an Extraordinary General Meeting (EGM) was correctly called and the Adjudicator explains what is required in accordance with the body corporate legislation to not only call an EGM but also other procedural matters around the correct process etc.
The Adjudicator notes:
“There are three legislative mechanisms by which a general meeting can be called:
- A committee member, including a non-voting committee member, can call a meeting if authorised by a resolution of the committee to call that particular meeting.
- A general meeting must be called in response to a valid notice requesting the EGM.
- A general meeting may be called by a person authorised to call the meeting under the order of an adjudicator.
In regard to the second mechanism, an EGM must be called if a notice asking for an EGM to decide motions proposed in the notice is signed by or for at least 25% of all lots and given to the secretary, or the chairperson in the secretary’s absence. Accordingly, the notice must include the request for the EGM, the motions to be considered at the EGM, and the signatures of at least 25% of owners.
A requested EGM must be called within 14 days after a valid notice is given and then held within six weeks after the notice is given. If the EGM is not called within 14 days, the owners who signed the original request may ask another committee member to call the EGM. That member must then call the EGM within 14 days of being given the written request.”
“I will note generally some key requirements for the calling of a general meeting:
- The agenda for each general meeting must be prepared by the committee. That includes a general meeting that is a requested general meeting.
- A general meeting must be held within 15km of scheme land, unless there is a resolution to hold it further than 15km from scheme land.
- The general meeting notice must be given to each owner and must state the time and place of the proposed meeting.
- The notice must include the agenda, a proxy form, a corporate nominee form (where required), and a voting paper for all open motions, any required explanatory material and any other material required under the legislation
- For a hard copy vote for any motion to be decided by secret ballot, the notice must include a secret voting paper, an envelope marked ‘secret voting paper’ and a separate particulars envelope or a particulars tab forming part of the secret voting paper envelope that can be detached without unsealing or opening the envelope.
- For an electronic vote for any motion to be decided by secret ballot, the notice must include instructions as to how a voter may cast an electronic vote.
- A voter can vote electronically on an open motion at a general meeting only if the body corporate has passed an ordinary resolution allowing that, and the body corporate operates a system for receiving electronic votes that rejects votes cast by persons who are ineligible and have not already voted, and that does not allow a person other than the secretary to receive the votes.
- A voter can vote electronically on a secret ballot motion at a general meeting only if the body corporate has passed an ordinary resolution allowing that, and the body corporate operates a system for receiving electronic votes that does not disclose a voter’s identify, rejects votes cast by persons who are ineligible and have not already voted, and that does not allow a person other than the returning officer to receive the votes.”
Part of the dispute made by the applicant was that there was not the required 25% of owners that had requested, in writing, to call the meeting – but it is worth noting that when the request to call the EGM was made 29 owners had signed the request which equated to 28.71% of owners however prior to the notice of the meeting being issued, an owner of 4 lots sold their units and the new owner of the 4 lots withdrew their support for calling the meeting which then reduced the 28.71% down to 24.75% – below the required 25%. The Adjudicator felt that as there is an allowance for owners who have submitted motions for consideration to withdraw their motions anytime up to when the motions are considered at the meeting, why should their not be the same allowance for owners to withdraw support for calling an EGM even though there is nothing specifically stated in legislation.
In this situation, on the grounds that there was a serious question about the validity of the meeting (among other things), the Adjudicator made an interim order that the motions purportedly carried at the meeting could not be implemented or relied upon until a final order had been made by the Commissioner – the interim order is held in place for 12 months.
The full order can be read here.
More information on calling an EGM can be found here.
It is important to note that the adjudicators orders that we review each month are made on a case by case basis by the commissioners office based on the applications, submissions, by laws pertaining to each of the schemes, legislation that is applicable and are not a fit all order.