Can one director call an EGM what appears to be selfish reasons?

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    Can one director call an EGM what appears to be selfish reasons?

    Block of 4 flats where the freehold is owned by the leaseholders. There are 2 directors. One has called an EGM to discuss mainly his liability to not pay towards certain aspects of the communal paths and soakaways and the right way to problem solve when there is a dispute. At a recent AGM they could have raised this but nothing was said. All communaly area repairs have always been split 4 ways.
    The agenda is very vague. Is this an appropriate use of the EGM? No one has replied yet



    Freedom at the point of zero............

    #2
    It is likely that any one of the leaseholders, not just the directors, can call an EGM, all that they would have to do is comply with the requirements in the company articles.

    Whether or not the reason you state is a good reason for a EGM to be called depends on what the terms of the lease say. If the director has found out that the way that service charge costs for the communal areas have previously been charged is incorrect and he genuinely is under no obligation to contribute towards these costs, then I would say that it is completely reasonable for him to call a meeting to discuss this.
    If the leases require all leaseholders to contribute towards these costs in the proportion that has previously been charged, there is almost certainly no good argument for there to be any change (and therefore probably no good reason for a meeting to have been called) but that doesn't necessarily mean that he can't call a meeting.

    Comment


      #3
      Subject to the Articles, directors may call an EGM at any time. It is up to the members to vote as they see fit.

      Members can require an EGM to be held as long as they hold 5% of the voting rights, so in your case, assuming that each leaseholder is a member and has one vote, any member may call an EGM.

      As Macromia says check the wording of the lease, Often it will allow the freeholder to change the basis of allocation to any reasonable proportion.

      Comment


        #4
        I cannot see any harm in allowing all members to have a say in the running of the Company.

        Comment


          #5
          Thanks Macromia and eagle2. I have always agreed in everyone having a say but AB has been bombarding me with nasty electronic comms for a month now and I have had to block them for my own sanity.
          I informed AB that they can communicate with me on paper at the company's registered address (which is not my own). I've had one letter mainly being argumentative about emails, work done in my own apartment and saying they had reported me to a anti racism group for 'a remark'.

          AB has a long running gripe that I aired on here a couple of years ago and I can't find the post now.

          Basically in the 90s just after purchase AB fenced off part of the communal path that went to their rear door and knocked a hole in freeholder property namely the boundary wall giving AB an exclusive courtyard garden. (Origninally the path was used for dustmen and coal deliveries to that particular flat.) The sewer access to ABs flat is in the main part of the communal path). There is no evidence of consent for this work from the freeholder.
          When the wall (which borders the street) needed repointing AB refused to have 'their' part done. The other 3 flats had the work done on the other part of the wall and split the bill 3 ways as one leaseholder wanted to sell.

          About 3 years ago I advised AB that 'their' part of the wall bounding the street was in a very poor state of repair and that if it collapsed and injured someone the company insurance would not pay out. AB appeared at the AGM with deeds saying the company had to pay for 'his wall' to be re-pointed. AB likes to do everything verbally so they can dominate and bully others. I am secretary. I and another director suggested he get the wall repaired as a matter of urgency but deliberately remained silent on who should pay.

          AB only acquired one builder estimate which they accepted. AB kept phoning/texting me on progress. AB had new London stock bricks, new bespoke gate and failed to note that the builder was going to charge VAT on top. In the end he demanded the company pay the £5000 bill. I refused. AB went into orbit. Lawcruncher advised due to Estoppel by agreement AB had to pay. AB sulked for 2 years then came back to the AGM all fine.

          Now the concrete communal path that leads from the communal back gate to the other 3 flats needs repair and AB says he does not have to contribute. AB's sewer access is in this path and the roof downpipes discharge into the soakaway/drains there. If AB wanted to access their rear bedroom window externally they would have to use the path. The lease says that repairs to the communal areas including the roof should be split 4 ways. AB has paid towards the stair carpets and upper hall decoration in the past, roof and chimney repairs.
          No formal notice of EGM has been recieved just an forwarded emal from another leaseholder demanding my presence.

          All help greatfully received.



          Freedom at the point of zero............

          Comment


            #6
            I would be tempted to arrange an EGM anyway to dispose of the matter. Alternatively, you could wait for a formal notice as long as you are satisfied that it has not been sent to the registered office.

            The chances are that AB will be outvoted 3 to 1. Even if the voting is split, the Articles probably state that the Chair has the casting vote, so in order to succeed AB is likely to require the 2 other members to vote with him.

            You can refer to the lease if it states that the costs should be split 4 ways, You can ask AB to seek legal advice and produce it to you for further consideration if he is of the opinion that he is not required to comply with the lease.

            The previous works and the failure to split the costs equally complicates matters but you can argue that was exceptional and was not a precedent.

            Comment


              #7
              Thanks eagle2.

              I visit the registered offices daily - no letter has arrived.

              For me it is 200 mile round trip to the EGM venue - a PH in early December down the road from where AB lives. The leaseholders are 1. a large property company who never respond to anything 2. a pair of newbies who are terrified of AB and have ceased all comms 3. myself who owns a lease with a close family member who was in receipt of the email telling me to attend and who has no intention of going hiself and is a director. In the email one of the items for discussion is 'dispute resolution' which is already catered for in deeds.

              I see all this just as a device to make me do what AB wants and so they can feel he has some sort of control.

              After the last debacle over the wall I did suggest to AB that they bring a case against me and company (probably a bit rash) if they still thought they were correct. Nothing happened.

              I've just re-read the lease and articles and can see nothing to indicate that AB does not have to pay their share. How do you make someone see this and stop them being so manipulative?



              Freedom at the point of zero............

              Comment


                #8
                I recommend that you arrange an EGM. Many meetings are held on Zoom these days which would avoid the need to travel a long distance.

                You can ask for details of any subjects to be raised in advance of the meeting and make it clear that nothing else will be considered at the meeting,

                You should conduct the meeting fairly and reasonably. You can refer to the lease and ask if anyone has any legal grounds for not complying with it to provide you with evidence so that it may be considered further. You can refer to the lease which deals with how disputes are to be resolved. It is worth asking for full details of any alternative dispute resolution service proposed by a member so that you may consider it further,

                I realise that it is not simple, but AB needs to be dealt with firmly and he needs to understand that he is a minority and that you will deal with matters fairly and reasonably in the interests of all members. You should not dismiss all his comments out of hand, he may have a good idea which is worth considering and he does have the right to raise issues, so you should invite him (and other members) to make constructive comments. Above all else, you should treat all members equally and fairly, which is not easy at times.

                Comment


                  #9
                  Thanks again eagle2. You raise some good points there. I'm happy with zoom but I think AB (who is nearly 80) may not have the tech needed to interact. I will press on that way and see what transpires.



                  Freedom at the point of zero............

                  Comment


                    #10
                    It's also worth remembering that, if there is potentially going to be any sort of vote regarding how to proceed, all leaseholders should have been given the opportunity to vote (even if by proxy).

                    Comment


                      #11
                      Originally posted by Interlaken View Post
                      Thanks again eagle2. You raise some good points there. I'm happy with zoom but I think AB (who is nearly 80) may not have the tech needed to interact. I will press on that way and see what transpires.
                      That is another good reason to use Zoom or something similar. You can mute individuals if they speak out of turn and you can retain control of the meeting.

                      I agree with Macromia, if you can hold proxy votes or arrange support from members in advance of the meeting that will assist you,

                      Once AB realises that he is outnumbered, he should lose interest in calling meetings,

                      Comment

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