La Porte D'Or [2001] QBCCMCmr 57 (7 February 2001)

P J HANLYREFERENCE: 0752-2000

INTERIM ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	12681
Name of Scheme:	La Porte D'Or
Address of Scheme:	3422 Gold Coast Highway SURFERS PARADISE QLD 4217

TAKE NOTICE that pursuant to an application made under the abovementioned Act by the Body Corporate for La Porte D’Or CTS 12681

I hereby order that the application for an interim order that the scrutineer, Marie Peterson of Suite 3, 24 Bay Street, Southport, appointed by the committee to assist in the counting of the votes at the annual general meeting of the body corporate held on 16 December 2000, be ordered to deliver up the voting papers, ballot papers and other meeting material of that meeting to the Office of the Commissioner for Body Corporate and Community Management at Bundall or to such other place as the adjudicator may order, is dismissed.

I further order that the voting papers, ballot papers and other meeting material shall be held by Marie Peterson until 16 March 2001, after which time the body corporate shall be at liberty to take possession of the material.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0752-2000

“La Porte D'Or” CMS 12681

The applicant, the Body Corporate for La Porte D'Or, has sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act), quote -

That the scrutineer, Marie Peterson of Suite 3, 24 Bay Street, Southport, appointed by the committee to assist in the counting of the votes at the annual general meeting of the body corporate held on 16 December 2000, be ordered to deliver up the voting papers, ballot papers and other meeting material of that meeting to the Office of the Commissioner for Body Corporate and Community Management at Bundall or to such other place as the adjudicator may order.

The applicant has also sought an interim order of an adjudicator in similar terms.

Section 225(1) of the Act provides that an adjudicator may make an interim order if satisfied, on reasonable grounds, that an interim order is necessary because of the nature or urgency of the circumstances to which the application relates. An adjudicator’s order may contain ancillary or consequential provisions the adjudicator considers necessary or appropriate (section 230(1)).

In the supporting grounds, the applicant states that the annual general meeting was held on 16 December 2000, with each motion on the agenda being considered by secret ballot. The applicant further states that the committee engaged Marie Peterson to assist with the counting of votes, and after the meeting, all voting papers and associated material were placed in a box and given to Marie Peterson for safekeeping, as there is a real possibility that the previous body corporate manager will challenge the result of one of the motions, whereby she was not re-engaged by the body corporate. The applicant contends that the meeting material should be held by an independent party to prevent any possibility of unauthorised or unsupervised access to the material. The applicant further contends that the meeting material must remain confidential due to its commercial sensitivity.

The respondent, the previous body corporate manager, was invited to respond to the application. Solicitors instructed by the principal of the body corporate manager prepared a submission, in which it was contended that the secret ballot was not conducted in accordance with the requirements of the Standard Module; that the purported appointment of scrutineers by the body corporate committee was an abuse of power and therefore invalid and that the tally of votes was defective. In the circumstances, the respondent requested that this office hold the meeting materials and that they be made available for inspection by any affected party.

On 1 February 2001, I conducted a teleconference with the solicitors for the parties. I advised the parties at the outset that I did not propose to order that the meeting materials be held by the Commissioner’s office, as I considered it to be an impractical solution. I further advised the parties that I proposed to inspect the meeting materials after which time I would make a decision as to where they should be held, and whether any inspection of them should be allowed.

I therefore propose to order that the meeting materials are to remain in the possession of Marie Peterson until 16 March 2001, after which time the body corporate shall be at liberty to take possession of them. I have set this date having regard to section 193(2) of the Act.

I inspected the meeting materials on 5 February 2001, at Marie Peterson’s office. I have also since been provided with minutes of the meeting, which have been prepared by the new body corporate manager, but without access to the meeting materials. This fact was acknowledged by the body corporate manager at the foot of the first page of the minutes.

I have also given considerable thought as to whether I should allow the respondent to inspect the meeting materials. I note that the committee resolved by “flying minute” on 18 December 2000 to discharge the respondent from its obligation to prepare and distribute minutes of the annual general meeting held on 16 December 2000. Under normal circumstances, an outgoing body corporate manager would have access to all of the meeting materials just by virtue of the fact that the minutes would have to be prepared. The respondent’s solicitor contends that maintaining the confidentiality of the voting papers denies the respondent the ability to properly examine and assess the meeting materials to determine if it is appropriate to further challenge the outcome of the voting at the annual general meeting. I assume that it is the outcome of motion 10 to which this comment refers.

The body corporate is anxious to ensure that those who voted on motion 10 cannot be identified. I share the view that, unless there are compelling reasons to do so, the integrity of a secret ballot should not be compromised, as would be the case if the voting papers were examined. Whilst some of the lots share lot entitlements, other lots have lot entitlements which would readily identify them, or at least narrow the field.

At the inspection, I counted 112 voting paper envelopes, and this corresponded to the number of voting papers which had been submitted. I detected anomalies in three of the particulars tabs attached to the voting paper envelopes, and I detected anomalies on two voting papers.

One voting paper had been submitted on behalf of a lot that had been resubdivided, and therefore no longer existed. It is likely that the voting paper was intended to be lodged for a different lot, but it would not have been possible for the scrutineers to guess which lot that might have been. As a result of this defect, the voting paper should have been rejected and should not have been removed from the envelope, but it had been removed, and was amongst the voting papers which I inspected. Under normal circumstances, the voting paper would not have been identifiable after having been removed from the envelope, but it was able to be identified as it had been endorsed by one of the scrutineers with the words “resubdivided lot - 0 lot entitlement”. The vote on this voting paper was in favour of motion 10.

A person who stated that she had the authority of the owners, as she had equity in the lot, had submitted the second voting paper on which I detected an anomaly. The person was not registered as an owner, was not shown on the roll as the representative of the owners and was not a subsidiary scheme representative. This person’s voting paper should also have been rejected and should not have been removed from the envelope, but having been removed, was placed with the other voting papers and was not able to be identified.

The third voting paper had been submitted by owners but the particulars tab attached to the voting paper envelope had not been signed, as required by section 16(7)(e) of the Standard Module. This voting paper should also have been rejected and should not have been removed from the envelope, but having been removed, was placed with the other voting papers and was not able to be identified.

Of the 112 voting papers, I was able to confidently identify one voting paper which should not have been included in the count (namely the voting paper for the resubdivided lot), which left 111 voting papers. Of those 111 voting papers, there were two which should have been rejected as discussed above. However, the differential between the votes was not such that these two votes would have changed the outcome, whichever way they voted, either on a straight vote count, or on a poll. The count was 44 votes in favour of motion 10, 63 votes against motion 10, and 4 abstentions. On the poll, it was 1517 lot entitlements in favour, 2456 lot entitlements against and 132 lot entitlements abstaining. I note that the minutes of meeting, although recording that motion 10 was lost, show the numbers of votes as totalling 50 in favour, 64 against and 4 abstentions. On the poll, it was recorded as 1517 in favour, 2346 against and 132 abstentions. Clearly there has been an error in relation to the number of votes, as there were only 112 voting papers. The lot entitlements in favour of motion 10 and the lot entitlements of the abstentions accord with my records, although the lot entitlements against motion 10 are at slight variance with my records.

I also noted that two voting papers had not had the lot entitlements noted on the back when they were opened. Both votes were in favour of motion 10, but once again, I am satisfied that the poll vote end result would not have altered, as the difference between the poll votes was 939 lot entitlements against motion 10, and none of the lots has a lot entitlement higher than 150 lot entitlements (and that particular lot didn’t even lodge a vote).

I am therefore satisfied that there is no good reason to allow the meeting materials to be inspected by the previous body corporate manager.

The respondent’s solicitor has also taken issue with the actual method of counting the votes, pointing out that the secret ballot was not conducted in accordance with the Standard Module. In spite of this, there is no allegation of impropriety, nor is there any suggestion that voting papers were tampered with. I certainly detected no evidence of “rogue” votes or any other form of tampering during the course of my inspection. Whilst I accept that the counting appears not to have been carried out in strict accordance with section 20 of the Standard Module, I am not persuaded that the outcome of the voting has in any way been compromised as a result.

In the circumstances, it is not intended to invite further submissions regarding this matter, or to make a further order, since this decision, though an interim one as sought by the applicant, is final in its determination of this matter. If the parties consider that an appeal of this decision is warranted, then they should appeal the interim order.