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Dealing with unlawful motions

By Frank Higginson03 Jun 2011

Aside from dealing with a year of stress and paperwork, the chairperson of a body corporate also inherits a statutory power and obligation to rule motions out of order at general meetings.

We say that this is both a power as well as an obligation because the wording of the legislation is that the chairperson must rule a motion out of order in the following circumstances:

If passed, the motion would:

  • conflict with the BCCMA, the module, the by-laws or a motion previously carried at the general meeting; or
    • be unlawful or unenforceable for some other reason; or
    • The substance of the motion was not included in the agenda (except where it is a procedural motion about the conduct of the meeting).
  • A committee cannot pick and choose which motions passed a general meeting they will implement. The law requires them to implement all lawful decisions of the body corporate. The power and obligation of a chairperson to rule an unlawful / unenforceable motion out of order before it is decided is designed to avoid time, energy and resources being spent on an otherwise futile endeavor.

Accordingly, the reason a chairperson is required by law to exercise this power is to bring about an early end to a proposal that would be unlawful or unenforceable, if passed.

When exercising this power at a general meeting, the chairperson is required to:

  • give reasons for their ruling; and
  • explain that the ruling can be reversed by the persons present and entitled the vote.

Being required to give reasons for a ruling puts a chairperson in the spotlight, so it is important that these reasons are considered, accurate and astute to the sensitivities of those that proposed the motion or may be affected by it.

If a chairperson rules a motion of order and a lot owner successfully challenges that ruling, then the body corporate may be put to the expense of calling another general meeting so the motion can be decided. Likewise, if an invalid motion is put to a meeting and passed, it is open to a lot owner to challenge the motion and have it declared ineffective, which results in the body corporate spending time and incurring expense which could otherwise have been avoided.

All lot owners have a right to submit motions they would like to be considered at the next general meeting. While this right encourages owners to actively participate in the way the body corporate is run, it can also lead to some interesting proposals being suggested that should be dealt with at an early stage.

We encourage all committees to seek legal advice as soon as possible (ie when the notice of AGM / EGM is being put together) to determine whether any motions are unlawful and, if so, to assist with the reasons for ruling any motion out of order.