The vote is where a unit holders’ meeting earns its keep. Subdivisions 4 and 6 of Division 5 of Part V of the Capital Market Act 2015 set the quorum, the chair, the weight of each vote, who is barred from voting and when a poll replaces a show of hands.
Quorum: half the voting rights
“The quorum for a meeting of the members is 50 percent of the voting rights and the quorum shall be present at all times during the meeting.”
The quorum is measured in votes, not heads, and applies subject to the deed (section 228(1)). Members present by proxy or corporate representative count, so a scheme with one superannuation fund holding 45 per cent of the units has a quorum whenever that fund attends; a widely held scheme may struggle. If no quorum is present within 30 minutes, the meeting is adjourned to the date, time and place the trustee specifies, or failing that to the same time and place the next week; if there is still no quorum within 30 minutes at the resumed meeting, it is dissolved (section 228(3)–(4)).
The chair and the auditor
For a meeting the trustee called under section 213 or 214, the trustee may appoint a chair in writing; otherwise, or if the appointee is unavailable or declines, the members present elect a member to chair (section 229(1)–(2)). For meetings called by members or ordered by the Court the members present elect the chair, unless the Court directs otherwise (section 229(3)). A challenge to a right to vote may only be made at the meeting and is decided by the chair, “whose decision is final” (section 243). The scheme’s auditor is entitled to attend any meeting and to be heard on any business that concerns the audit, personally or through a written representative (section 230).
How many votes, and whose count
Section 239 gives each member “one vote for each interest or unit that member has in the scheme”. Where units are held jointly and more than one joint holder votes, only the vote of the holder named first in the register counts (section 240). On a poll a member with two or more votes need not cast them all and may cast them in different ways (section 244). Section 242 explains how to work out the value of an interest when a poll turns on value, as it does for a special resolution: the last sale price on the stock exchange for quoted units, the withdrawal price for an unquoted liquid scheme, or otherwise a price the trustee determines in writing. See what a special resolution is.
The trustee and its associates cannot vote
The trustee of a scheme and its associates “are not entitled to vote on their interest on a resolution at a meeting of the scheme if they have an interest in the resolution or matter other than as a member”. Where the scheme is listed on an exchange, however, the trustee and its associates may vote their interest on resolutions to remove the trustee and choose a new trustee.
A trustee that holds units, or whose directors or related companies hold units, cannot use them to vote down its own removal or to approve its own remuneration. “Associate” is defined widely in section 3 to include spouses and minor children, employees and partners, directors and related companies, and anyone acting on the person’s instructions. The exception for listed schemes treats listed units like shares, so in a listed scheme a trustee with a large holding can vote against its own removal. See can a trustee buy units in its own scheme.
Show of hands or poll
Section 245 draws the line. A special resolution “shall be decided on a poll”; any other resolution is decided on a show of hands unless a poll is demanded. On a show of hands the chair’s declaration of the result is conclusive, and neither the chair nor the minutes need state the numbers (section 245(4)). On a poll the resolution passes “if it has been passed by at least 50 percent of the votes cast by members entitled to vote on the resolution” (section 245(3)), a figure that sits uneasily beside the 75 per cent by value definition of a special resolution in section 2(1). A poll may be demanded on any resolution, although the deed may exclude polls on the election of the chair or an adjournment (section 246). Section 247 says who may demand one:
| Who may demand a poll | When |
|---|---|
| At least five members present and entitled to vote | Before the vote, before the show-of-hands result is declared, or immediately after it is declared |
| Members present with at least 5 per cent of the votes that may be cast | |
| The chair |
The deed may let fewer members or a smaller percentage demand a poll, but not more (section 247(2)); and the 5 per cent is measured at close of business the day before (section 247(4)). Because a show of hands gives a retiree with 500 units the same weight as a fund with 50 million, the large holder will almost always demand a poll on anything contested.
The register fixes who holds how many units; the proxy forms received 48 hours earlier fix who may vote them. Under section 231 a resolution passed at a resumed meeting is passed on that day, and only unfinished business may be dealt with after an adjournment. See how proxies work and what records a trustee must keep.
Sources
- Capital Market Act 2015 — ss 2(1) (“special resolution”), 3, 228–231, 239–247
Before relying on anything here, read the current text of the Capital Market Act 2015 and check for later amendments. If a decision matters to you, get advice — start with the Office of the Public Solicitor, or find a firm in the law firms directory.