La Sabbia [2005] QBCCMCmr 257 (17 May 2005)

Last Updated: 5 July 2005

REFERENCE: 0091-2005

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	24687
Name of Scheme:	La Sabbia
Address of Scheme:	76 Old Burleigh Road SURFERS PARADISE QLD 4217

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

Nancy Stefanovski, the owner of lot 2

I hereby order that the application by Nancy Stefanovski, the owner of lot 2, the following orders: 1. A declaration: a) That the body corporate chairperson, at the AGM of the body corporate held on 15 November 2004 wrongly declared that motion 21 was lost; b) Motion 21 of the AGM of the body corporate held on 15 November 2004 be declared passed. 2. An order that the applicant be permitted to make improvements to the common property to which the applicant has been granted exclusive use on the following terms and condition, that is to say: a) That the applicant make improvements in accordance with plans and specification supplied by the applicant to the body corporate; b) That subject to reasonable terms and conditions, the body corporate approve such plans and specifications; c) That parties enter into a deed of indemnity mentioned and referred to in this application or such other terms and conditions as considered appropriate. 3. Such further or other orders as the commissioner or adjudicator thinks fit. is dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0091-2005

"La Sabbia" CTS 24687

The applicant, Nancy Stefanovski, the owner of lot 2, has sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act) quote:

The Applicant seeks the following orders:

1. A declaration:

a. That the body corporate chairperson, at the AGM of the body corporate held on 15 November 2004 wrongly declared that motion 21 was lost;
b. Motion 21 of the AGM of the body corporate held on 15 November 2004 be declared passed.

2. An order that the applicant be permitted to make improvements to the common property to which the applicant has been granted exclusive use on the following terms and condition, that is to say:

a. That the applicant make improvements in accordance with plans and specification supplied by the applicant to the body corporate;
b. That subject to reasonable terms and conditions, the body corporate approve such plans and specifications;
c. That parties enter into a deed of indemnity mentioned and referred to in this application or such other terms and conditions as considered appropriate.

3. Such further or other orders as the commissioner or adjudicator thinks fit.

Section 276(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 the Act or the community management statement; or

(c) a claimed or anticipated contractual matter about-

(i) the engagement of a person as a body corporate manager or service contractor for a community titles scheme; or

(ii) the authorisation of a person as a letting agent for a community titles scheme.

An order may require a person to act, or prohibit a person from acting, in a way stated in the order (section 276(2)). An adjudicator's order may contain ancillary and consequential provisions the adjudicator considers necessary or appropriate (section 284(1)).

The scheme is a subdivision of 97 lots recorded under a building unit plan (now a building format plan) of subdivision. The regulation module applying to the scheme is the standard module.

The dispute concerns the validity of a motion submitted by the applicant to the AGM of the body corporate on 15 November 2004. The motion, numbered 21, proposed the improvement of part of the exclusive use area allocated for the benefit of the owner of lot 21. I have not been fully appraised of the extent and nature of those proposed improvements, and for the purposes of determining this application I consider I do not require such knowledge. The validity of the motion in question will depend on the determination of certain aspects relating to meeting and voting procedures. I do not intend to undertake a merits assessment of the reasonableness or otherwise of the applicant’s proposal, if this is what is in fact contemplated by the second of the orders sought by the applicant. I consider that in respect of the proposal, the requirement of the special resolution should be met and observed.

Whilst the application is voluminous, the issues in dispute are reasonably contained, namely the validity of three votes cast in respect of the applicant’s motion. In order to satisfy the requirements of a special resolution, the applicant requires to satisfy me of the invalidity of at least one vote counted in opposition to her proposal, and as well, to satisfy me that relevant circumstances require the acceptance of two other voting papers completed in favour of the applicant’s proposal, but not included in the count in favour of the motion for reasons dealt with in the application. I intend to deal with these two issues in turn.

The alleged invalidity of the voting paper of lot 95

The applicant submits that the voting paper of the owner of lot 95, Margaret Pemberton, "should be declared invalid". The applicant alleges that:

Voting paper for lot 95, Ms Margaret Pemberton was not signed on all pages and should be declared invalid. This voting paper recorded a "no" vote for Motion 21. ... Pursuant to Section 51(2) of the standard module a voter casts a written vote by completing the voting paper as required by the accompanying instructions. The voting paper requests a signature of the voters at the bottom of each page of the voting paper. The applicant submits that the voting for lot 95 did not sign the voting paper as required by these instructions.

The body corporate did include the voting paper for lot 95 in the count in opposition to the motion. The body corporate has submitted that:

It is the (body corporate’s) usual practice to accept unsigned voting papers in circumstances where the voter’s intention is clear, as in the case of Margaret Pemberton’s "NO" vote. ... The respondent acknowledges that the final page of the voting paper itself requests a signature from the voter however it is the respondent’s submission that a mere request is not a requirement that a voter sign ever page of their voting paper to be counted as a valid vote. Accordingly the respondent submits Margaret Pemberton’s "NO" vote is valid and was validly included in the vote on motion 21.

I note that the requirement to sign "the bottom of each page compromising the voting paper" is a requirement of the "voting paper" which appears as part of the "Notice of AGM of the body corporate" in the forms issued by the Office of the Commissioner, Body Corporate and Community Management. Whilst some of these forms have official status under the legislation, this particular form (the notice of AGM form, compromising the agenda, voting paper and ballot paper etc) has no official status under the legislation. It is a form prepared for the assistance of bodies corporate in convening meetings, but the use of the form is not mandatory under the legislation. In respect of voting at a general meeting, sections 51 and 52 of the standard module are relevant, quote:

51 Exercise of vote at general meetings
(1) A voter for a general meeting may vote on a motion, other than a motion to be decided by secret ballot, in any of the following ways--
(a) personally;
(b) by proxy;
(c) by casting a written vote;
(d) if the body corporate has by ordinary resolution decided that voters for general meetings may record votes electronically for open motions--by casting an electronic vote.
(2) A voter casts a written vote by--
(a) completing the voting paper as required by the accompanying instructions; and
(b) giving the voting paper to the secretary (by hand, by post or by facsimile) before the start of the meeting.
(3) A voter casts an electronic vote by--
(a) completing and signing an electronic form of the voting papers; and
(b) sending the voting papers electronically to the secretary, in accordance with--
(i) any requirement under the Electronic Transactions (Queensland) Act 2001 about how a document must be signed or sent electronically; and
(ii) the instructions accompanying the voting papers, to the extent the instructions are consistent with a requirement mentioned in subparagraph (i).
(4) A written or electronic vote on a motion may be withdrawn by a voter at any time before the result of the motion is declared, except that an owner’s written or electronic vote cannot be withdrawn by a person voting as the proxy of the owner.

52 Voting at general meeting
(1) Voting at a general meeting must be done in the way provided in this section unless the body corporate decides by special resolution that voting is to be done in another way.
(2) Voting by persons present at a general meeting must be by show of hands, or by giving completed voting papers to the secretary or, if the secretary is not present, the person chairing the meeting not later than the start of the meeting, unless--
(a) a ballot is required by the Act, this regulation or the by-laws; or
(b) the person chairing the meeting decides a ballot is necessary to ensure an accurate count of votes.
(3) If 1 or more, but not all, of the co-owners of a lot are present at the meeting, the co-owner or co-owners present vote as the owner of the lot.
(4) No vote may be counted for a lot on a motion if there is a conflict between the votes of the co-owners of the lot.
(5) A general meeting may pass a resolution on a motion only if the motion is--
(a) a motion--
(i) included as an item of business on the general meeting’s agenda; and
(ii) stated in a voting paper accompanying the notice of the meeting; or
(b) 1 or more of the following--
(i) a procedural motion for the conduct of the meeting;
(ii) a motion to amend a motion;
(iii) a motion to correct minutes.

Whilst the sections provide for voting by written voting paper, I consider there is no requirement in the sections for the requirement that each page of the voting paper be signed. Rather this is a requirement of the form. In the circumstances, I am satisfied that substantial compliance, by which I mean compliance with the form sufficient to allow the both the voter and the intention of the voter to be identified, is sufficient to validate the vote. In this instance, I am satisfied that both the voter and the intention of the voter regarding the relevant motion can be identified. I further consider there is no suggestion, allegation or evidence of fraud in respect of the vote. Consequently, I am not prepared to invalidate the vote of the owner of lot 95. I consider the failure to sign the final two pages of the voting paper a minor irregularity which should not invalidate the vote.

The denial of this aspect of the application effectively determines the outcome of the application, given that the applicant requires the invalidation of this vote in order to succeed. Nevertheless, I intend to continue with a determination of the second aspect raised by the applicant.

The non-acceptance of the voting papers for lots 23 and 94

There is no dispute about the facts here. Two owners included their written voting papers for all motions in their secret ballot envelope for the election of the committee. These two voting papers were discovered by the body corporate manager in opening the secret ballot envelopes for the committee election. At the commencement of the meeting, "those persons present at the meeting passed a procedural motion that whilst the meeting would deal with the various motions ... that BCA be directed to open and count the votes for the election of office bearers so as to avoid any delay in completion of the election ... after dealing with motions 1 to 21 of the meeting" (per the applicant’s submission).

In the course of opening the secret ballot envelopes, the manager found that two completed voting papers "had been enclosed in the secret ballot envelope for the election of office bearers". Given the procedural motion, it meant that the two voting papers were discovered prior to the determination of the relevant motion, and the applicant alleges that "the valid voting papers for owners ... were available to be counted".

The body corporate refused to include such voting papers in the count for motions 1 to 21, and argues against the acceptance of the voting papers for the reasons set out in paragraphs 4, 5 and 6 of its submission. In particular, the body corporate alleges that:
The voting papers were not discovered until after the commencement of the meeting and
The voting papers were not given to the secretary in compliance with section 52(2).

In support of this, the body corporate submission refers to the instruction sheet accompanying the secret ballot forms; specifically that voters "not include ordinary voting papers or proxies in the Secret Ballot – Particulars envelopes" but rather "Return those in the separate envelope provided".

It is not denied by the applicant that the two voters in question failed to return their completed voting papers to the secretary, but instead included them with their secret ballot papers.

The two voting papers discovered with the secret ballot envelopes should not be included in the count in respect of the outcome of motions, including the applicant’s motion 21.

The terms of sections of the legislation in respect of the delivery of voting papers is absolutely clear.
Section 51(2) provides:
(2) A voter casts a written vote by--
(a) completing the voting paper as required by the accompanying instructions; and
(b) giving the voting paper to the secretary (by hand, by post or by facsimile) before the start of the meeting.
Section 52(2) provides:
(2) Voting by persons present at a general meeting must be by show of hands, or by giving completed voting papers to the secretary or, if the secretary is not present, the person chairing the meeting not later than the start of the meeting, unless--

In two separate sections, the legislation clearly provides how completed voting papers are to be dealt with: by being given to the secretary, or person chairing the meeting if the secretary is not present "before (or) not later than the start of the meeting". I consider not only is the instruction clear, but the timing for compliance with the instruction is also clear. The need for this requirement is obvious in my view. There needs to be a point in time (the start of the meeting) at which all voting papers must be in the hands of the secretary. If it were otherwise, meetings might become a shambles, or at least chaotic with voting papers being delivered at any time before the end of the meeting. There could be no declaration of the voting results on motions as required by section 56. It might even be that an owner, knowing a motion will not be carried, might leave a meeting or otherwise solicit votes from non attending / voting owners in order to seek to alter the outcome of the motion.

Secondly, in the ordinary and usual course of events, the committee election is the last item of business undertaken at the meeting. The procedural motion varied this to some extent in the case of this election. However, the procedure motion only allowed the simultaneous opening and counting of votes for the election of office bearers so as to avoid any delay in completion of the election. It was a procedural motion intended to ensure only that there was no delay in completing the meeting. This was not in any way intended to coincide with the determination of the vote for all motions on the agenda or otherwise to affect the outcome of those motions. It is implicit in this that the counting of ballot envelopes should in no way effect of alter the determination of or the declaration of the vote in respect of the ordinary motions. It is clear in my view that the two processes should be kept totally separate. This was achieved by the non-acceptance or refusal to include the two voting papers included in the secret ballot envelopes.

Thirdly, the purpose of conducting a secret ballot is precisely that, secrecy. The inclusion in secret ballot envelopes of voting papers identifying voters violates the intended secrecy of the process. Whilst I acknowledge that this might be considered a side issue in the present circumstances, it does however contradict the intent of conducting a secret ballot process. In my view, orders of adjudicators of this office should favour scenarios and interpretations which preserve the intended secrecy of any secret ballot process.

There is evidence present, not contradicted by the applicant, that before the commencement of the meeting, two owners present (and even one who had to be located and to then attend the meeting) who had included their voting papers in the secret ballot envelopes, were allowed by the secretary to retrieve these voting papers and to have them validly presented to the secretary. Whilst I consider this was above the requirements of the secretary to do or allow, it does show in my view an intention by the body corporate to act reasonably in this matter.

Accordingly, the voting papers for lots 23 and 94 should not have been included in the count, and the submission to this effect by the applicant is without merit. For the reasons set out above, this application is dismissed.