Special resolution at adjourned meeting

When we are trying to pass a special resolution to approve new Conduct rules for our scheme and there is no quorum present at the meeting our PM tells me that the meeting is then adjourned to the same time same place next week and that whoever is present there forms a quorum and can pass the resolution. So this means that 2 people can actually approve Conduct Rules?

The answer to this is in the STSM Act.

The STSM Act states that a certain quorum is needed for a general meeting and should that quorum not be achieved within half an hour from the time of the meeting then the meeting is adjourned to the same time same place next week.  At this adjourned meeting whoever is present will form a quorum (as long as there are at least two members present in person).  (PMR 19)

This leads to the problem then that 2 people can approve Conduct Rules. 

To assist with this situation the STSM Act in 2016 added a clause regarding this – where the special resolution is in essence passed by less than 50% of the members. (PMR 20)

In cases like this the Act prescribes that the members should wait a week before implementing the resolution.  So, you need to notify all members (by sending them the minutes of the meeting stating that there were only two people present who approved the Conduct Rules) and then they have a week to object or accept this.  If someone objects (must hold at least 25% of the votes in PQ) then another SGM must be called to discuss the resolution.  If nobody objects then the resolution is taken as passed.

Portions of the STSM Act:

Section 1 – Definitions

“special resolution” means a resolution—

    1. passed by at least 75% calculated both in value and in number, of the votes of the members of a body corporate who are represented at a general meeting; or
    2. agreed to in writing by members of a body corporate holding at least 75% calculated both in value and in number, of all the votes;

 PMR 19

      1. (1) Business must not be transacted at any general meeting unless a quorum is present or represented.

(2) A quorum for a general meeting is constituted—

      • for a scheme with less than 4 primary sections or a body corporate with less than four members, by members entitled to vote and holding two thirds of the total votes of members in value;
      • for any other scheme, by members entitled to vote and holding one third of the total votes of members in value,

     provided that at least two persons must be present unless all the sections in the scheme are registered in the name of one person, and provided further that in calculating the value of votes required to constitute a quorum, the value of votes of the developer must not be taken into account.

 (4)        If within 30 minutes from the time appointed for a general meeting a quorum is not present, the meeting stands adjourned to the same day in the next week at the same place and time; provided that if on the day to which the meeting is adjourned a quorum as described in sub-rule (2) is not present within 30 minutes from the time appointed for the meeting, the members entitled to vote and present in person or by proxy constitute a quorum.

PMR 20 (9)If a special resolution is passed at a general meeting by members holding less than 50 per cent of the total value of all members’ votes—

  1. the body corporate must not take any action to implement that resolution for one week after the meeting, unless the trustees resolve that there are reasonable grounds to believe that immediate action is necessary to ensure safety or prevent significant loss or damage to the scheme; and
  2. within seven days from a resolution referred to in sub-rule 9 (a), members holding at least 25 per cent of the total votes of all members in value may, by written and signed request delivered to the body corporate, require that the body corporate hold a special general meeting to reconsider the resolution.