At the AGM one of the owners asked to add something to the agenda of the meeting. When refused by the Trustees he quoted the fact that the STSM Act in PMR 17(6) states that the meeting has to approved the agenda and that the meeting can deal with any new business.
Is the owner right on this – how do we deal with this?
Another owner received the notice of the meeting and when getting to point on the agenda of approval of the agenda he stated that the other points added under special business he does not approve to be discussed.
We have to look at various parts of the STSM Act to answer these questions.
PMR 15(3) The notice of a general meeting must be accompanied by at least
- an agenda, as required in terms of these rules;
- a copy or comprehensive summary of any document that is to be considered or approved by members at the meeting; and
- a proxy appointment form in the prescribed format.
And
PMR 17
(7) Subject to sub-rules (5) and (6), the trustees determine the agenda for an annual or special general meeting; provided that the agenda must contain—
- a description of the general nature of all business, and
- a description of the matters that will be voted on at the meeting, including the proposed wording of any special or unanimous resolution.
If we then look at PMR 17(5) we see this
PMR 17(5) Members or a bondholder who request a meeting in terms of sub-rule (4) must include one or more motions or matters for discussion with their request and these motions or matters must be included, without amendment, in the agenda for the meeting.
PMR 17(4) states that owners have the right to request a meeting (at least 25% of the owners in PQ)
PMR 17(4)The trustees may by resolution call a general meeting whenever they think fit and must do so if either—
- members entitled to 25 per cent of the total quotas of all sections; or
- the holder of mortgage bonds over not less than 25 per cent in number of all the primary sections, deliver to the body corporate a written and signed request for a special general meeting; provided that if the trustees fail to call a meeting thus requested within 14 days of delivery of the request, the members or bondholder concerned are entitled to call the meeting.
So, the owners have a right to request a meeting under certain circumstances and must then provide the agenda points they want to be discussed at the meeting and voted on.
But for a normal AGM the agenda is set out by the Trustees and PMR 17(6)
PMR 17(6)The order of business at general meetings is as follows:
- confirm proxies, nominees and other persons representing members and issue voting cards;
- determine that there is a quorum;
- elect a person to chair the meeting, if necessary;
- present to the meeting proof of notice of the meeting or waivers of notice;
- approve the agenda;
- approve minutes from the previous general meeting, if any;
- deal with unfinished business, if any;
- deal with any business referred to in sub-rule (5);
- if the meeting is the first general meeting referred to in section 2(8) of the Act, deal with the business set out in rule 16(2);
- if the meeting is an annual general meeting —
- receive reports of the activities and decisions of trustees since the previous general meeting, including reports of committees;
- approve the schedules of insurance replacement values referred to in rule 23(3), with or without amendment;
- determine the extent of the insurance cover by the body corporate in terms of rules 23(6), (7) and (8);
- approve the budgets for the administrative and reserve funds for the next financial year; Was PMR 56(b)
- consider the annual financial statements;
- appoint an auditor to audit the annual financial statements, unless all the sections in the scheme are registered in the name of one person;
- if the body corporate has more than four members who are owners of primary sections and is not managed by an executive managing agent in terms of rule 28, determine the number of trustees to be elected to serve during the next financial year; and
- elect the trustees;
(k) report on the lodgment of any amendments to the scheme’s rules adopted by the body corporate under section 10 of the Act and, if applicable, table a consolidated set of scheme rules;
(I) deal with any new or further business;
- give directions or impose restrictions referred to in section 7(1) of the Act; and
- dissolve the meeting.
So, if an owner raises an issue at the AGM for the first time – based on PMR 17(7) this cannot be discussed and voted on at the meeting as the details of the resolution was not sent with the notices of the meeting to give the Trustees as well as the owners time to prepare for the discussion and the vote.
It is confusing that PMR 17(6)(e) states that the meeting must approve the agenda. This does not mean that items can be added to the agenda at the meeting – it only means that the order of the agenda (as circulated) needs to be approved.
And PMR 17(6)(l) states that the meeting must deal with any new or further business. This also does not mean that points can be added at the meeting to the agenda.
The agenda item “General” have always been a contentious issue seeing that having this will give owners the impression that they can add anything to the meeting without proper notice being given. This point now removes the need for the item “General”. It still does not mean that owner can add new agenda points under this item. Should owners at the meeting raise points / issues that are not on the agenda it is advisable to give them the opportunity to raise it, but then it is important to explain to them that it cannot be discussed or voted on at the meeting seeing that proper notice of it has not been given to all owners. These items should then be taken as directions to the incoming Trustees to investigate and possibly table at the next general meeting for discussion and voting thereon.
This agenda point (PMR 17(6)(l) is the point on the agenda where the Trustees (before sending out the notices of the meeting) can add special business – like for instance the special resolution to approve new Conduct Rules. Or if an owner asked the trustees to add an agenda point (before the notices has gone out).
We have to keep referring them back to the fact that agenda items must go out with the notices of the meeting and all the details must be attached for the owners to consider the matter and how they want to vote.
With regards to the owner not approving the special business items added you can use the above as well and reiterate that the Trustees together with the prescriptions of the Act decides the agenda as per PMR 17(7) and PMR 17(6). The agenda point of “Approval of the agenda” is only to approved the order of the agenda points – what is discussed first and what next and what last. That does not mean that agenda points can be removed by owners at the meeting. Nowhere in the Act does it state that owners can remove agenda points.