Biarritz [2001] QBCCMCmr 74 (12 February 2001)

RA MeekREFERENCE: 0611-2000

ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	10247
Name of Scheme:	Biarritz
Address of Scheme:	85 Old Burleigh Road SURFERS PARADISE QLD 4217

TAKE NOTICE that pursuant to an application made under the abovementioned Act by

Wilbow Pty Ltd, the owner of lot 89

RA MeekI hereby order, by way of declaration, that the words “for voting for a special resolution prohibiting, wholly or partly, the use of proxies” in section 72(2)(c) of the Accommodation Module refer only to votes cast by proxy in favour of the motion referred to in that sub-section, and do not include votes cast by proxy against the particular motion.

I further order that the voting record, and the minutes of the AGM held on 31 August 2000, of the body corporate shall be amended to reflect the outcome of the motion (being motion 10 headed “Motion to Restrict the Use of Proxies in an Election Ballot); in particular that the motion was not carried and is of no effect.

I further order that a copy of this order shall be sent to all owners with the next notice of general meeting of the body corporate.
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STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0611-2000

“Biarritz” CTS 10247

The applicant, Wilbow Pty Ltd, the owner of lot 89, has sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act), quote -

An order that the declared result for motion 10 of the AGM of the body corporate for Biarritz ... held on Thursday 31 August 2000 is invalid and that either:

The motion and the declared result thereof be ruled invalid and struck from the minute book of the body corporate; or

That the minute book be amended to declare motion 10 as having been “lost”.

Section 223(1) provides that an adjudicator may make an order that is just and equitable in the circumstances (including a declaratory order) to resolve a dispute, in the context of a community titles scheme, about –

a) a claimed or anticipated contravention of the Act or the community management statement; or

b) the exercise of rights or powers, or the performance of duties, under this Act or the community management statement; or

c) a claimed or anticipated contravention of the terms, or the termination of, or the exercise of rights or powers under the terms of, or the performance of duties under the terms of an engagement contract or an authorisation contract.

An order may require a person to act, or prohibit a person from acting, in a way stated in the order (section 223(2)). An adjudicator’s order may contain ancillary or consequential provisions the adjudicator considers necessary or appropriate (section 230(1)).

I do not intend to set out the applicant’s grounds in any detail. These grounds are known to the other party via the submission process, and from the submission received from the secretary it seems to me that the grounds are not disputed, but rather the interpretation to be given to section 72(3)(c) of the Accommodation Module. That section provides –

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Use of proxy [SM, s 74]

72(3) A vote by proxy must not be exercised at a general meeting—

(a) if the member who gave the proxy is personally present at the meeting, unless the member consents at the meeting; or

(b) on a particular motion, if the person who gave the proxy has exercised a written vote on the motion; or

(c) for voting for a special resolution prohibiting, wholly or partly, the use of proxies.

Briefly, the applicant contends that –

The secretary wrongly interpreted section 72(3) .... The secretary has interpreted this to mean that no proxies whatsoever are to be used in respect of such a motion (ie. whether voting for or against the motion) whereas the correct interpretation is that a proxy may not be used to vote “in favour of” such a resolution but can be used to vote against such a motion. ...

Section 72(3)(c) deals with votes for a special resolution. In this context, the correct interpretation of the word “for” is “in favour of”. If the legislation had intended this section to prohibit votes for and against a motion prohibiting the use of proxies, it would have (consistent with earlier expression used) read as follows:

For voting on a motion prohibiting, wholly or partly, the use of proxies.

The rationale behind allowing proxy votes against such a resolution, but not allowing them in favour of such a resolution is clear. If an owner has elected to use the proxy system, he or she could reasonably expect that the holder of the proxy would not vote in favour of a resolution which would prohibit the use of proxies in the future.

The secretary has submitted that his interpretation of the section, namely that it prohibits proxy votes both for or against the motion, is correct. He states that he does not consider that “the regulation was intended to disallow proxy “yes” votes only as this would appear to be discriminating and undemocratic”.

The irony of the matter is that the inclusion of proxy votes against the motion will determine the outcome of the motion. The motion was ruled carried by special resolution by a vote of 24 Yes votes and 21 No votes. It is acknowledged that there were four proxy votes in respect of the motion; 3 against and 1 for. Based on his interpretation, the secretary excluded all proxy votes from the count in determining the motion. Based on the applicant’s submission, the 1 proxy vote for the motion was rightly excluded from the count, but the 3 proxy votes against were wrongly excluded from the count. The applicant submits that the 3 proxy votes against the motion should have been included in the count, which would have resulted in a tied vote on the motion with 24 votes both for and against the motion. On this count, the motion would not have been carried for failure to comply with the requirements for a special resolution under section 98 of the Act.

The applicant’s interpretation of the section is the correct one, and the rationale stated in the grounds is also correct. For the secretary’s interpretation of the section to be correct, the section would need to have stated to the effect “for voting on ...” or simply “on a special resolution prohibiting ...”. The use of the word “for” in the section was intentional to denote a vote in favour of the motion.

In the circumstances, I intend to order that the voting record, and the minutes of the AGM shall be amended to reflect the outcome of the motion; in particular that the motion was not carried. I further intend to order that a copy of this order shall be sent to all owners with the next notice of meeting so that all owners might be informed why a motion they might have thought had been carried was in fact not so carried.
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