Broadwater Tower [2003] QBCCMCmr 378 (12 February 2003)

Last Updated: 7 September 2007

P J HANLYREFERENCE: 0571-2002

ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	9041
Name of Scheme:	Broadwater Tower
Address of Scheme:	17 Bayview Street RUNAWAY BAY QLD 4216

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

George Hannaford, the co-owner of lot 29



I hereby order that the ballot papers lodged by the owners of lots 26, 90, and 132 in respect of the committee elections conducted at the annual general meeting held on 20 September 2002 shall be admitted by the body corporate, and an entry to this effect shall be minuted at the next general meeting.

I further order that the application for an order to declare the notice dated 28 August 2002 of the annual general meeting of the body corporate for Broadwater Tower invalid, is dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0571-2002

"Broadwater Tower" CTS 9041

The applicant, George Hannaford, has sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act), quote -

To declare the notice dated 28 August 2002 of the annual general meeting of the body corporate for Broadwater Tower CTS 9041 invalid, and that owners receive a new notice of annual general meeting which conforms in all respects with the BCCM (Standard Module) Regulation 1997 applicable to CTS 9041.

Section 223(1) of the Act 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)).

In the supporting grounds, the applicant states that:

1. The ballot paper for the election of ordinary members of the committee is completely wrong because it does not permit a secret ballot to occur.

2. There appears in the voting paper in several places "Supplementary note by committee" and there is no record in any minutes of committee meetings to that effect. S37 of the regulations appears to be relevant. The applicant wants all of these to be removed in the next notice of meeting. The proposers of these motions had no right of reply!

3. It is quite unfair for the applicant’s motions #’s 17 & 18 to be placed at the end of the voting paper while the committee’s motion on the same subject is "up front".

4. It was feasible for the body corporate manager to have placed the applicant’s "explanatory note" in their proper place.

5. Instruct the body corporate manager to ensure the correct date is used on the next voting paper as well as delete CMS 9041 and insert CTS 9041 on the notice of annual general meeting.

The body corporate committee and all owners were invited to respond to the application. A significant number of owners responded, most of whom opposed the application. Eight owners expressed varying degrees of support for the application. A submission was received from the body corporate manager, on behalf of the committee. This submission opposed the application.

The owners who supported the application did so for a variety of reasons.
One owner was concerned about the failure of the motion to install a spear pump in the complex, particularly in light of the serious water restrictions, which were then in force on the Gold Coast. He noted that the committee had recommended a "no" vote to this motion, and that the chairperson, who held 8 proxies, had spoken against the motion at the meeting, based on what the owner believed was a poor understanding of the simple technicalities involved. He stated that he objected to the committee making unqualified recommendations, especially as weeks prior to the AGM a committee member found PVC piping with a shutoff valve, which appeared to be of a previous spear pump piping, installed in the grounds. He further stated that no effort was made to obtain a pump and see if any water was available, in spite of his suggestion that this be done.

Two owners of another lot objected to the fact that a secret ballot was not held, stating that some owners may not have voted for this reason. These owners also expressed the view that the refurbishment of the Admiralty room should not proceed until further consultation has taken place, and that the voting on the spear pump motion was badly served by the opinion expressed by the committee. Finally, these owners expressed concern about the lack of disclosure of the level of funds to be expended by the body corporate in the "Rea" case.

Another owner stated that there was reason to suspect that the processes associated with the motions and the ballot papers had been corrupted, and in support of this statement, cited alleged committee recommendations in relation to motions, and how to vote material allegedly sent to absentee owners.

A further complaint was made by the owners of another lot that they were not identified in the minutes of the meeting as having voted, in spite of the fact that they were present at the meeting and cast their votes in person. As a result, they believed that any owners who were not present at the meeting might think that they had not voted. The owners also regarded the conduct of the "so called secret ballot" as totally unsatisfactory, and then commented on several other aspects of the meeting with which they took issue. They suggested that the AGM should be invalidated and carried out again according to standard rules and procedures.

Another owner expressed the view that owner’s opinions about various matters are not taken seriously by the committee. She was supportive of the application to have rectified those matters not properly carried out by the committee.

Another owner stated that the previous year owners were asked to vote on a complex motion about upgrading the Admiralty Room, and she is totally opposed to the body corporate spending so much on that project until the matter is more fully discussed. This owner therefore supported the application to invalidate the annual general meeting.

Another owner was concerned that his ballot paper for the committee election had been disallowed because it had not been returned in the envelope supplied by the secretary. Unfortunately, the owner in question has passed away since making his submission, however I have had regard to the contents of the submission in making my determination in this matter. The submission contained an analysis of the relevant sections of the regulation module relating to committee elections both by open and by secret ballot. The owner expressed the view that it would create a dangerous precedent if the decision of the returning officer that votes were not allowed because of a technicality were allowed to stand.

Finally, the owners of a lot complained about the committee elections; the absence of the applicant’s explanatory notes to his motions and the manner in which the committee submission had been prepared and lodged.

Many of the forty submissions opposing the application were similarly worded, and in essence stated that the owner (or in some instances the occupier) was not in favour of having the annual general meeting and committee ballot declared invalid, and had not been misled by minor technical mistakes in the documentation. The submissions also stated that the signatories considered that adequate steps had been taken to ensure the validity and secrecy of votes in the committee ballot.

The submission from the committee opposed the application, and provided background material in relation to the dispute. The committee requested that the Commissioner’s office exercise its discretion about any technical non-compliances, and, whilst acknowledging that the committee positions should have been determined by a secret ballot, submitted that the way in which the ballot was conducted ensured the anonymity of those owners who did vote. In addition, it was contended that, while a very small number of owners may have chosen not to vote in the ballot because it was not being conducted strictly in accordance with the regulations, this number could not in any event have affected the outcome of the ballot.

The applicant replied to the submissions.

At the outset, I reiterate the comments made by me in my interim order:

In deciding this application, I am mindful of the views expressed by His Honour Judge Boulton DCJ in Chen and Body Corporate for Wishart Village CTS 19482 (District Court Brisbane 29 May 2001):

The very detailed provisions of the standard module regulation to which I have referred above make it almost inevitable that from time to time there will be non-compliance. Equally though the provisions of the Act make it clear that non-compliance of an insubstantial nature will not be allowed to imperil the actions of bodies corporate or their committees, particularly in the instance of committees where actions are taken bona fide.

I shall deal firstly with the ballot paper for the election of committee members. Section 12(2) of the Body Corporate and Community Management (Standard Module) Regulation 1997 (Standard Module) provides that a committee election must be by secret ballot unless the body corporate, by ordinary resolution, resolves that the election be held by open ballot.

It is common ground that the body corporate had not resolved to hold elections by open ballot, prior to the annual general meeting in question.

After this was drawn to the committee’s attention, the committee resolved by flying minute issued on 12 September 2002 to implement a procedure at the annual general meeting that would ensure as practicably as possible that the ballot was secret. Notwithstanding this action, the fact remains that the ballot was not a secret ballot as prescribed; however, I am of the view that the committee’s actions were taken bona fide. I also consider that the procedure would essentially have kept secret the identity of those who did cast a vote. The question that must be answered is whether any owner did not vote because they were concerned that their vote might not be kept secret, and whether that failure to vote would have influenced the outcome of the committee election. In order to ascertain this information, submissions were sought from all owners. Although 48 submissions were received, not one owner (apart from the applicant) stated that they had refrained from voting in the committee elections because a secret ballot was not held. Several owners expressed concern that other owners may not have voted for this reason, but the same owners did not say that they had not voted for this reason. If a large number of owners had stated that they had not voted because a secret ballot was not held, then obviously the integrity of the election would have been in doubt, and I would most likely have ordered that a fresh election be held on that ground alone.

Another cause for concern was that the ballot paper did not disclose how many committee members were to be voted for. I note, however, that the list of candidates included in the meeting material revealed that Richard Inder was the only nominee for the positions of chairperson and treasurer, and that William Board was the only nominee for the position of secretary. That being the case, those persons were obviously elected unopposed. The "Note" appearing underneath the list of candidates states that the committee must comprise of at least 3, but not more than 7, individual persons (including any non-voting members). This information is repeated on the ballot paper itself. Any person reading this material would certainly have been able to determine that there were 5 more members of the committee to be elected. Even so, owners were not obliged to vote for 5 of the 8 nominees. They could have chosen to vote for any number of the nominees. Accordingly, the instruction in the far right column to "mark however many candidates you prefer" is in accordance with the prescribed forms, except that on the prescribed form the word "tick" is used instead of the word "mark". I am not satisfied that the use of the word "mark" would have confused any voter. In fact, the wording used in sections 16(7)(a) & (b) and 17(7)(a) & (b) of the Standard Module states that to vote a "person must ...place a mark in the space opposite the name of the candidate the person wishes to vote for"

On that point, one of the submissions stated that the chairperson had advised the meeting that any mark at all (a tick or a cross) would be taken as a vote for that person, but it was submitted that this would in itself have proved confusing if voters had placed ticks against five candidates and crosses against the remaining candidates. In my view, the chairperson would have intended to convey to owners that a tick or a cross or any other mark signifying an intention to register a vote for a particular nominee would be accepted. Obviously if owners used a combination of ticks and crosses on the same ballot paper, the traditional interpretation of a tick for a "yes" vote and a cross for a "no" vote would have been applied.

The final concern expressed in relation to the ballot paper was that several ballot papers were not accepted as they had been returned in envelopes other than those supplied by the secretary. Sections 16(7)(c) and 17(7)(e)(i) of the Standard Module provide that the completed ballot paper must be placed in the ballot-paper envelope supplied by the secretary, and then, after certain further prescribed steps are taken, must be given or returned to the secretary. Notwithstanding this provision, there is nothing to prevent an owner from using a substitute envelope, rather than the envelope supplied by the secretary, provided all of the prescribed information required by the secretary appears on the substitute envelope. In the case of a proper secret ballot, I would think that two envelopes would be required, as it would be unlikely that an owner would have a substitute envelope with a detachable tab. The purpose of sections 16 and 17 is to give voters a step-by-step guide to the conduct of elections. However, if an owner were to lose the envelope sent by the secretary, or if the envelope were otherwise unable to be used, because it had been ripped or damaged, then the use of a substitute envelope should not invalidate the ballot paper. In my view, the importance of the voting process is to ensure that every eligible owner who casts a vote, and takes appropriate steps to forward or deliver that vote to the secretary, has that vote admitted.

In this instance, 6 ballot papers were not admitted. One of those had been signed by a proxy, and was clearly invalid (section 74(3)(c) of the Standard Module). Two of the remaining ballot papers could not be identified, as the lot number of each voter had not been shown on the envelope. The decision in relation to these two ballot papers was also correct. The other 3 ballot papers were not admitted simply because they were not in the envelope provided by the secretary. As explained above, the use of a substitute envelope should not invalidate a ballot paper. Accordingly, I propose to order that the ballot papers of lots 26, 90 and 132 were valid ballot papers, and that the records of the body corporate should be amended to include the results from those ballot papers in respect of the committee elections. I note that the result of the elections will be unaltered by this order.

I do not intend to make any other orders concerning the ballot papers, because I have decided that, on balance, the rights of the owners have not been prejudiced by the fact that a secret ballot did not take place. In making this determination I am also mindful that the committee has been in place for almost 5 months, and a fresh election is unlikely to bring about any different result. Having said this, the committee should take note that future elections must be held by secret ballot, unless in the meantime the body corporate resolves otherwise.

The next point raised by the applicant was the presence of supplementary notes by the committee on several of the motions considered at the annual general meeting. The applicant pointed out that there did not appear to have been any committee resolutions relating to these notes. The applicant requested that these notes be removed from the next notice of meeting, as the proposers of the motions had no right of reply. The body corporate manager stated in the submission dated 18 September 2002 that the meeting notice and all associated documents, including supplementary explanations by the committee to various motions, were settled and approved administratively on the weekend of 24 and 25 August by the chairperson. As the body corporate committee is the administrative arm of the body corporate, I consider that it is appropriate that owners be provided with information which might be of assistance to them in making a decision on a particular issue. The information provided in relation to motion 14, for example, is not the sort of information which owners might ordinarily be expected to have available to them. I do not consider it necessary for the committee to formally resolve to include supplementary notes to motions, provided the presence of the notes has committee support. This is especially so in a situation where information may have only just come to the notice of the committee as the meeting material is being prepared, and it is decided that the information should be conveyed to owners to allow them to make a fully informed decision on a particular matter, even though there is insufficient time to have a formal committee meeting. I also observe that the presence of notes from the committee recommending a certain vote did not deter many owners from voting in the opposite way, demonstrating that owners have made their own decisions about various issues. I do not regard the absence of a committee resolution in relation to the supplementary notes as a proper basis to invalidate the annual general meeting.

I also do not accept that having his motions placed towards the end of the voting paper disadvantaged the applicant. If owners are completing the entire voting paper, presumably they will give consideration to each motion as it is reached. The sequence of motions is therefore immaterial. I note that leaving aside the votes that could have been taken from the floor, as many votes were recorded in relation to the applicant’s motions as any other motions, notwithstanding that those votes were then not counted, because of the passage of motion 10. Had the votes been counted, both motions would have been defeated in any event. I do not regard this as a proper basis to invalidate the annual general meeting.

Turning to the question of the applicant’s explanatory notes, the correspondence reveals that the applicant submitted his motions on 28 June 2002, and advised that "an explanatory note for each (would) be forwarded at a later date prior to the agenda being mailed to all owners." However, the explanatory notes were not forwarded to the secretary and the body corporate manager until 26 August 2002, by which time the notice of meeting and associated material had been prepared.

Section 41(2) of the Standard Module provides that a motion may be included on the agenda of an annual general meeting only if the secretary receives the motion before the end of the body corporate’s financial year immediately preceding the meeting. Section 45(2)(a)(iii) provides that the agenda for a general meeting must include a motion submitted under section 41 by a member of the body corporate and required to be included in the agenda. Section 45(4) of the Standard Module states "if the lot owner seeking the inclusion of a motion under subsection (2)(a)(iii) supplies an explanatory note about the motion, and the note is not longer than 100 words, the note must accompany the agenda."

Subsection 45(4) does not stipulate that the explanatory note must be supplied at the time that the motion is proposed. However, the explanatory note must obviously be in the hands of the secretary before the agenda is prepared, so that it can, as required, "accompany" the agenda. I do not consider it reasonable for the applicant to have expected that the explanatory notes would be included with his motions when he supplied the explanatory notes 2 months after the date on which he proposed his motions. There is nothing in the notes that could not have been stated at an earlier time. The committee meeting to which the opening sentence of note 1 refers was held on 24 July 2002. I do not regard this is a proper basis to invalidate the annual general meeting.

Finally, I am also satisfied that owners were not confused or misled by the fact that the incorrect date was shown on the voting paper, given that the motions on the voting paper were listed on the summary of motions, which bore the correct date. It is of course a reasonable expectation of owners that such errors should be identified prior to meeting material being circulated, however, it is not sufficient in my view to invalidate the notice of meeting. I also note that the prescribed form "BCCM 4 Version 1 – Notice of Annual General Meeting of the Body Corporate" requires the CMS number of the scheme to be shown, not the CTS number, as claimed by the applicant. In any event, the CMS and the CTS numbers are identical.