In the last Carryn’s Corner Contribution I discussed some important aspects on the annual general meeting (“the AGM”). Some of the topics included when the AGM is to be held; the notice requirements; and the agenda items. I covered Prescribed Management Rules 50 – 56. In this contribution I will deal with some of the other important aspects of the AGM.
Quorum
There must be a quorum present in order to hold an AGM. No business shall be transacted at any general meeting unless a quorum of persons is present in person or by proxy at the time when the meeting proceeds to business.
To count for the purposes of establishing a quorum, an owner must be present in person, by proxy or by a representative recognised by law, and he or she must be entitled to vote. At least two voters must attend in person for there to be a quorum.
For the purposes of any general meeting at which there is no proposed unanimous resolution the quorum requirements are:
- If there are 10 units or less in the scheme then qualified owners holding at least 50% of the votes are required to establish a quorum.
- If there are more than 10 but less than 50 units then qualified owners holding at least 35% of the votes are required.
- If the scheme has 50 units or more then qualified owners holding at least 20% of the votes are required to establish a quorum for such a meeting.
It is important to note that there is a raised quorum requirement when a unanimous resolution is proposed to be considered. In this case the quorum requirement also depends on the number of votes as well the values of the votes of owners. A proposed unanimous resolution cannot be validly passed at a general meeting unless owners who are entitled to exercise not less than 80% of the number and the value of the votes of all owners in the scheme are present or represented at that meeting.
If sufficient numbers to make a quorum are not present within 30 minutes of the time scheduled for the start of the meeting, the meeting must be adjourned to the same day the following week at the same time and place. Unless this is not practicable and all unit owners are advised personally or in writing of the new venue before the start of the adjourned meeting. If at the adjourned meeting a quorum is not present within 30 minutes of the time appointed for the meeting, the owners present in person or by proxy, and entitled to vote, shall form a quorum.
The rationale for this provision is that the legislation requires the body corporate to hold an AGM. It is therefore imperative that the body corporate has the power to pass motions including adopting budgets, even though a quorum is not present at an adjourned meeting.
Chairman
The chairman’s primary function is to preside over, and chair, every AGM of the body corporate, unless otherwise resolved by members of the body corporate at such meeting.
If there is no such chairman or if, at any meeting, the chairman of the trustees is not present within 15 minutes after the time appointed for the holding of the meeting, or if he is unwilling or unable to act as chairman, the members present shall elect a chairman for such meeting.
The chairman does not have any more voting power at a general meeting than he or she has as a owner. A non-owner chairperson is not entitled to vote. If voting is done by a show of hands, the chairperson has the discretion to change the manner of voting to one by poll.
The chairperson normally convenes the general meetings, draws up the agenda for each meeting and conducts the meetings in accordance with the general rules for meetings and associations. The chairperson should declare the meeting open and welcome those present. He or she is obliged to declare the meeting “properly constituted” if proper notice has been given and “duly constituted” if the required quorum is present. He should give details on the proxies and representatives present. He or she must ensure that the members present sign the attendance register. The chairman can then move to the first item on the agenda, and must read and explain, without personal interpretation, each motion and allow discussion to take place without digressing from the issue at hand; ensure that consideration is given to each item on the agenda; then put each motion to the vote; control, count and record the vote; declare the result of the vote; and must adjourn the meeting after all the motions have been dealt with. The chairman must maintain order and regulate the orderly expression of views as well as to guide the meeting through its agenda to its conclusion.
Article reference: Paddocks Press: Volume 10, Issue 6, Page 5.
Carryn Melissa Durham is a Specialist Sectional Title Lawyer (B.A LL.B, an LL.M), currently completing her Doctorate in sectional titles. Carryn heads up the Paddocks Private Consulting Division. For more information please contact Nicole on 021 686 3950 or consulting@paddocks.co.za.
This article is published under the Creative Commons Attribution license.
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