Regency Place Nerang [2005] QBCCMCmr 36 (25 January 2005)

Last Updated: 5 July 2005

REFERENCE: 0539-2004

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	19650
Name of Scheme:	Regency Place Nerang
Address of Scheme:	36 Weedons Road Nerang Qld 4211

TAKE NOTICE that pursuant to an application made under the abovementioned Act by the following persons: Barbara Elizabeth CLARKE, as the owner of Lot 41; Kathleen Edith Rosalie DAVIES, as the owner of Lot 51; Robyn POLLARD, as the owner of Lot 56; Edward LEE, as the owner of Lot 57; Vincent Edwin GARRATT, as a co-owner of Lot 59; Diana GIBSON, as the owner of Lot 60; Gregg Leslie GUYDER , as the owner of Lot 62; John Crawford McMAHON, as a co-owner of Lot 65; Eileen Winifred IRWIN, as the owner of Lot 73; Gary Alan TWYFORD, as the owner of Lot 82; Helen Janis GOODE, as a co-owner of Lot 103,

I hereby order that – 1. the application so far as it seeks the invalidation of the resolution passed in respect of Motion 9 at the annual general meeting held on 16 July 2004, being a motion titled "Increase in Caretaking Salary" for a variation to the Caretaking Agreement, is dismissed. 2. the resolution purported to have been passed in respect of Motion 10 at the same meeting and titled "Extension of Caretaking and Letting Agreements" for a variation to both the Caretaking and Letting Agreements to include an additional option to extend them, was at all times void.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0539-2004

"Regency Place Nerang" CTS 19650

The applicants, Gary Twyford of Lot 82 and 11 other owners, have sought the following orders of an adjudicator under the Body Corporate and Community Management Act 1997 ("the Act") -

"To rescind Motions 9 and 10 of the AGM Regency Place Nerang, 16 July 2004,
AND/OR
To invalidate the voting outcome/procedure in respect to Motions 9 and 10 of the AGM Regency Place Nerang, 16 July 2004."

The applicant also made application for an interim order of an adjudicator in the same terms as the order sought above. On 27 August 2004 the Commissioner for Body Corporate and Community Management refused to refer the application for an interim order to an adjudicator under section 247 of the Act on the grounds that the orders sought are final in their determination of the dispute and therefore not in the nature of injunctive relief to ground an interim order.


JURISDICTION:
This is a dispute between a number of owners (the applicants Twyford and Others) and the body corporate (the respondent), concerning the validity of resolutions passed in respect of Motions 9 and 10 at the annual general meeting held on 16 July 2004, for variations to increase the caretaking salary under the Caretaking Agreement and to extend the terms of both the Letting and Caretaking Agreements respecxtively. These are matters falling within the disputes resolution provisions of the legislation (see sections 227(1)(b), 228(1) and 276 of the Act) and may be determined by a departmental adjudicator.

General powers of an Adjudicator in making an order:
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 this 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) of the Act). An adjudicator’s order may contain ancillary or consequential provisions the adjudicator considers necessary or appropriate (section 284(1) of the Act).


APPLICATION AND SUBMISSIONS:
In accordance with section 243 of the Act, a copy of the application was provided to the respondent body corporate (committee), to the Caretaking Service Contractor, Lesley Bloor as Trustee for the Bloor Trust as an affected party, and to all of the owners other than the applicants, with an invitation to respond to the matter of dispute raised in the application. The committee lodged a written submission opposing the application, as did Lesley Bloor through her solicitor Robert Brandon of Attwood Marshall Lawyers. Submissions were also received from the following owners: Betty Sandersof Unit 40; Frieda Sutkevicius of Unit 4; Anthony & Lisa Sofoulis of Lot 37; Douglas Steedman of Unit 50; Janice Gestro of Lot 89 (Unit 75); Margaret Kirby of Unit 94; Robert & Nina Learmond of Unit 69; Michael Powell of Lot 78; Adam & Michelle FLYNN of Unit 46;
Mervyn Hudson of Unit 64; Kevin Powell; Paul Simpson of Lot 54, variously supporting and opposing the application. All of the submissions have been read and taken into account in my determination of the application. The applicants did not view the submissions in order to consider a response to them (see sections 244 and 246 of the Act), however Bloor did view owners’ submissions.

On Friday 7 January 2005 I conducted a teleconference with the following parties: the principal applicant Gary Twyford; Anne Farrell of Body Corporate Services Pty Limited, Body Corporate Manager for the respondent body corporate; and Peter Brandon of Atwood Marshall Lawyers for Lesley Bloor. The teleconference was conducted so that I could better understand the facts of the matter and the position of the parties on the various issues relating to the dispute.

In response to information given by Twyford during the course of the teleconference that a separate group of owners had obtained a legal opinion relating to the dispute, I suggested that there was a benefit if that opinion could be viewed and commented on by the relevant parties to the application and the opinion and comments then taken into account in my determination. Twyford undertook to persuade the group to do this however he was unsuccessful, though he did submit that the opinion concerned the "illegality of the secret vote concerning Motion 9 (Caretaker’s Remuneration)."

The brief facts of the matter, as they appear to me from the application, the submissions and the teleconference, are as follows.

At the annual general meeting ("the meeting") held on 16 July 2004, the following Motions 9 and 10 were both voted on by secret ballot and were carried as ordinary resolutions ("Resolution 9" and "Resolution 10") on a vote of : 44 votes Yes and 33 votes No; and 44 votes Yes, 32 votes No, and 1 Abstention, respectively –

"Motion 9 Increase in Caretaking Salary
Submitted by Committee

That the Body Corporate agree to a variation of the Caretaking Agreement dated 3^rd August 2001 as set out in the Deed of Variation attached and marked "A" and that the Body Corporate enter into and execute the said Deed to give effect to such variation and that the secretary and a member of the Committee be authorised to affix the common seal of the Body Corporate to the Deed."

"Motion 10 Extension of Caretaking and Letting Agreements.
Submitted by Mr & Mrs Bloor

That the Body Corporate agree to a variation of the Caretaking and Letting Agreements dated 3^rd August 2001 as set out in the Deed of Variation attached and marked "B" and that the Body Corporate enter into and execute the said Deed to give effect to such variation and that the secretary and a member of the Committee be authorised to affix the common seal of the Body Corporate to the Deed."

Copies of both Deeds of Variation were circulated with the notice of meeting. The relevant terms of the Deeds are as follows –

Deed of Variation "A" (Increase in Caretaking Salary – Motion 9):

Paragraph 3 of the Operative Part:

"The Body Corporate and Manager agree to vary the Caretaking Agreement by:

(1)	deletion of clause 1 in Schedule A and substitution of the following clause:

"1.(a) (i) For the year ending 17^th August 2004, a remuneration of $75,159.27 per annum.

(ii)	For the year ending 17th August 2005. the remuneration shall be increased by a further $9,000 per annum.
(iii)	For the year ending 17th ASugust 2006, the remuneration shall be increased by a further $9,000 per annum.

(b) Not withstanding clause 1(a), the remuneration shall continue to be increased each year in accordance with clause 2 of this Schedule."

Deed of Variation "B" (Extension of Caretaking and Letting Agreements – Motion 10):

Paragraph 3 of the Operative Part (Variation of Caretaking Agreement):

"The Body Corporate and the Manager agree to vary the Caretaking Agreement by:

(1)	inclusion of the following clause 10(b):

(b) The Manager shall have the option of reappointment for a further term as Manager for a period from 18^th August 2011 to 14^th July 2014 upon the same terms and conditions as are set forth herein with the exception of this clause. Such option can only be exercised by the Manager giving notice in writing to the Body Corporate at least three (3) calendar months prior to the date of expiration of the extended term (17^th August 2011)."

Paragraph 4 of the Operative Part (Variation of Letting Agreement):
"The Body Corporate and the Manager agree to vary the Caretaking Agreement by:
(1) inclusion of the following clause 8(b):

(b) The Agent shall have the option of renewal of this Agreement for a further term as Agent for a period from 18^th August 2011 to (insert date ten years after date of meeting) upon the same terms and conditions as are set forth herein with the exception of this clause. Such option can only be exercised by the Manager giving notice in writing to the Body Corporate at least three (3) calendar months prior to the date of expiration of the extended term (17^th August 2011)."

The applicants state that the successful outcomes of both motions were flawed on a number of grounds, in particular –

• There was "misunderstanding, confusion and insufficient information" and "insufficient time" in respect of both motions, resulting in voting owners being unable to cast an informed vote.
• The report by the service provider which recommended an increase in the caretaking salary from $66,159.27 (plus GST) to $95,841 (plus GST) created a financial hardship for owners, may devalue lots, made lots harder to sell, and was not justified on the basis of the work required (especially so in the future with successive annual CPI adjustments).
• There is a discrepancy in number of votes recorded for both motions (77 votes) as against the number of those persons present (in person, by voting paper, and by proxy) as shown in the minutes of the meeting (42 voters).

The applicants are of the belief that a majority of owners do not want the variations contained in either motion and want the opportunity to vote again on them.

I will not recount the arguments of the applicants, the body corporate (committee) or the Resident Managers (the Bloors) here, but shall raise and examine them when addressing each of the matters under the following heading "Determination".


DETERMINATION:
"Regency Place Nerang" was registered as a group titles plan (now termed a standard format plan) on 24 July 1998 and comprises 97 lots. It is regulated by the Body Corporate and Community Management (Standard Module) Regulation 1997.

Resolution 10:
I shall deal with each of the resolutions separately, commencing with Resolution 10 for the extension of the agreements. The applicant’s grounds for finding Resolution 10 invalid mainly follow as a consequence of the objections taken against Resolution 9, seemingly the main point of contention, and as a separate ground for invalidation became apparent during my examination of the material submitted by the parties, then I do not intend at this point to examine any other grounds.

My order is that Resolution 10 is invalid for the following reason.

Section 87(2)(c)(ii) of the Standard Module states (adjudicator’s emphasis) –

87 Authority to make engagement or give authorisation, or amend
engagement or authorisation
(2) The body corporate may act under subsection (1) only if--

(c) the material forwarded to members of the body corporate for the general meeting that considers the motion approving the engagement, authorisation or amendment includes--

(ii) for an agreement to amend a person’s engagement as a service contractor, or a person’s authorisation as a letting agent, to include a right or option of extension or renewal--an explanatory note in the approved form explaining the nature of the amendment.

This provision makes clear that a body corporate may act to include an additional option of extension in a letting agent agreement or a service contractor’s agreement (which includes a caretaking agreement) only if an "approved form" is included with the documentation forwarded to owners with the notice of meeting at which the relative motion is to be considered.

The "approved form" referred to is BCCM Form 20, last amended on 26 April 2004. No such completed Form 20 was forwarded to voters. During the course of the teleconference I raised the question with Farrell whether a Form 20 had been provided to owners. Farrell replied that Brandon (Bloor’s solicitor) had forwarded a completed form to her office but for one reason or another the form had not been included with the documentation accompanying the notice of meeting to owners as required by section 87(2)(c)(ii).

Section 49 of the Acts Interpretation Act includes a provision that, generally, strict compliance with a form prescribed or approved under an Act is not necessary and substantial compliance is sufficient. Accordingly, as it may be argued that substantial compliance is applicable I need to investigate what information was provided to owners in the meeting material that may meet the disclosure requirements of the form.

Form 20 requires different material in respect of extensions to a service contract and a letting agent authorisation. Resolution 10 encompasses both areas as it seeks extensions to both the Caretaking Agreement and the Letting Agreement with "Regency Place Nerang" body corporate.

For the caretaking extension, certain details must be first provided such as the name of the service contractor (caretaker), current agreement expiry date, period of proposed extension, and current annual remuneration. The form then requires that further details in narrative form are to be provided to the following questions: - "Does the service contractor carry out general caretaking and cleaning duties?", "Does the service contractor supervise employee or contractors?", "Who pays for the equipment required to carry out general caretaking and cleaning duties?", and "Details of any areas of common property the use of which is granted to the service contractor by way of an occupation authority?".

While the routine details would have been available to owners/voters from information in the accompanying Deed of Variation, the details relative to the questions (shown above in italics) were not, from my examination of the material, so available.

For the letting agent authorisation (of an extension), similar details must be provided (name of letting agent, agreement expiry date, and the period of proposed extension, as well as further details in narrative form to the following questions: "Any restrictions on the type of letting (e.g. Permanent, short term or holiday) imposed in the letting authorisation", and "Details of any areas of common property the use of which is granted to the letting agent by way of an occupation authority?

Again, the routine details were available but from my examination of material sent to owners, details relative to the questions were not.

In a recent similar instance where I issued an order invalidating a resolution on the same grounds, I made the following comments which are also relevant here -

"Accordingly there was no substantial compliance with the form in the form of the the information being otherwise available in the material before voters. Some may argue that the undisclosed details are of no great importance and if known would not have changed the vote. That argument is irrelevant as parliament has legislated that such details must be provided to owners/voters with the motion so that they may properly consider, in an informed manner, whether to provide a means for extending the term of the current management agreement. The Explanatory Notes to the amending legislation that introduced section 87 from 1 December 2003, Amendment of Body Corporate and Community Management (Standard Module) regulation 1997, states in relation to that provision, "To ensure that the body corporate is appropriately informed in making such a decision, subsection(2)(c) specifies the information that must be provided with the material for the generals meeting at which the motion is to be considered....and later, ...In the particular case where an extension to the term of an agreement or authorisation is sought, an explanatory note must be provided in the approved form."

For the above reason the purported resolution, Resolution 10, passed in respect of Motion 10 is invalid and my order is to that effect.


Resolution 9:
Resolution 9 is for an increase in the caretaking salary of the caretaking service contractor (Lesley Bloor for the Bloor Trust). I have previously set out the three main grounds (in dot point) relied on by the applicants in seeking this resolution be declared invalid. I shall deal with these in turn, and others I consider need examination.

1. There is a discrepancy in number of votes recorded for both motions (77 votes) as against the number of those persons present (in person, by voting paper, and by proxy) as shown in the minutes of the meeting (42 voters).

The applicants state that 77 votes were recorded for Resolution 9 (comprising 44 for; 33 against) whereas, from their observation, the minutes only showed a total of 42 persons eligible and present to vote, comprising "2 "Proxies", 12 "Present in person and by Voting Paper", and 28 "by voting paper".

As this motion was decided by secret vote (but see later on this point), all of the voting papers were mailed by owners directly to the independent Returning Officer, Mr Logan Irwin, and at no time would they have been handled or even seen by committee members, the Resident Manager, the Body Corporate Manager or any other person until the vote was taken at the meeting.

The applicants have not alleged that this was not the case; nor is there any suggestion that Irwin, or the two scrutineers appointed to oversee the counting for Motions 9 and 10, acted in anyway improperly.

On this point, the committee asked the Returning Officer to make submission to this office concerning the conduct of the secret vote taken for both Motions 9 and 10. In his letter to the Commissioner dated 5 October 2004, Irwin confirms that 77 valid votes were received for both motions, after rejecting 7 votes (3 votes received were not in particulars envelopes; 2 lots had lodged no company nominee form; 1 (original) vote was superseded; and 1 voter was no longer on the roll), and that the vote was 44 in favour and 33 against. He said that the count was verified by the two scrutineers and that all of the prescribed requirements under sections 53A(5) and 53B of the Standard Module were met.

I am satisfied that the count is correctly shown in the minutes. Of course the listing of persons entitled to vote in the minutes refers to votes for open motions not those that were secret. Also, though it is irrelevant so far as Resolution 9 is concerned, it appears that in reconciling the number of votes cast against the listing, the applicants omitted to take into account persons who voted from the floor of the meeting.


2. There was "misunderstanding, confusion and insufficient information" and "insufficient time" in respect of both motions, resulting in voting owners being unable to cast an informed vote.

There is no doubt that many owners are angry that the Resident Manager claimed, and the committee submitted a motion for, a substantial increase in the caretaking salary and angrier still that the motion passed at the AGM. The anger does not appear to be personal as against the Bloors, but at the size of the increase.

I have before me a copy of the minutes of a "Regency Place Owners Meeting" that took place on 3 July 2004, near two weeks before the AGM. This followed a notice dated 26 June from an Eileen Irwin of the meeting, to discuss the "why and wherefores" regarding changes in the scheme, including " proposed developments and changes – financial, painting and building"

I also have a copy of a circular to owners from Diana Gibson dated 8 July, which exhorts owners to vote against Motion 9 (and 10) in saying –

"..that unless the secret vote on Motions 9 and 10 receives a majority of NO votes, we, Regency Place owners, will be obliged to sign a new contract committing ourselves to additional caretaking fees of $9,000 for each of the three years and an annual fee in excess of $100,000...and CPI will raise this figure each subsequent year."

and later,

"...I will be voting NO to...an increase in the caretaking fee of $9,000 this year, $18,000 the following year, and $27,000 the third year with built-in CPI increases each and every year."

I also have a copy of a circular dated 22 June from Mark & Lesley Bloor addressed to owners, similarly canvassing the votes of owners, but naturally for a yes vote to Motion 9 (and 10). Attached to the circular was a copy of a report by K&G Strata Consultants, commissioned by the committee, recommending the previously quoted rise from $66,159 to $95,481 and stating that they would phase the increase in over 3 years (ie 3 years @ $9,000 approximately).

The committee considered the consultant’s report at its meeting of 27 May 2004 and the minutes show that the following motion was passed on a vote of 4:3 with no abstentions –

"That the Managers salary be increased by $9,000 per annum over the next 3 years, which would be an $27,000 increase by the year 2007."

However this result is contested by a committee member Vincent Garrett who says that the comment "Mr Vince Garrett left the meeting after advising he would support the proposal" was incorrect as he only supported the rise for 1 year, and in consequence the voting should have been recorded as Yes 3; No 4, with the motion failing. However, in a submission by Michael Powell he states that Garrett’s vote was actually recorded as against and not for the motion; those in favour of the motion being Durie, K Powell, M Powell and Sparks. That is, the vote could only have changed to Yes 4; No 2 if Garrett’s vote was discounted through his not being present when the vote was taken.

What is relevant here in determining whether owners had insufficient information and/or insufficient time is to look at the documents that were before owners and the relevant legislative procedures and requirements.

The body of Motion 9 reads as follows –

That the Body Corporate agree to a variation of the Caretaking Agreement dated 3^rd August 2001 as set out in the Deed of Variation attached and marked "A" and that the Body Corporate enter into and execute the said Deed to give effect to such variation and that the secretary and a member of the Committee be authorised to affix the common seal of the Body Corporate to the Deed."

I have emphasized the words of reference in the motion where voters were directed to the attached Deed to ascertain the variation being voted upon. I have already quoted the relevant part of the Deed but shall repeat the body of the document here –

"The Body Corporate and Manager agree to vary the Caretaking Agreement by:

(2)	deletion of clause 1 in Schedule A and substitution of the following clause:

"1.(a) (i) For the year ending 17^th August 2004, a remuneration of $75,159.27 per annum.

(ii)	For the year ending 17th August 2005. the remuneration shall be increased by a further $9,000 per annum.

(iv) For the year ending 17^th August 2006, the remuneration shall be increased by a further $9,000 per annum.

(b) Not withstanding clause 1(a), the remuneration shall continue to be increased each year in accordance with clause 2 of this Schedule."

The Deed shows what the remuneration will be at the next relevant point in time (end of contract year) and then that it shall be increased "by a further $9,000" for 2005 and "by a further $9,000" for 2006. I do not agree with the applicants or other owners in their submissions that this wording is confusing and that it might mean a once only $9,000 increase and not a "cumulative rise" of $9,000 each year. While owners were in receipt of the circulars canvassing their vote, and there were more than the two mentioned, the wording in the motion and in the Deed must be taken to be what owners assessed in making their decision to accept or reject the proposal. There is nothing in either the wording of the motion or the Deed that I consider is misleading, and while some additional information to owners may have contained exaggerations (eg that the skills of the Bloors largely led to the $100,000 average lot value increase rather than the nation-wide increase in property values) and gloss, there was nothing that impinged on the plain meaning of the motion and Deed.

In regard to the argument that insufficient time was given owners in which to make up their mind whether to accept or reject the salary proposal, the Bloors have correctly submitted that the legislation (see section 43 of the Standard Module) requires a minimum period of notice of a meeting to be 21 days and owners were given this statutory notice period. One cannot argue that the legislation is wrong in only allowing 21 days for owners to make an informed decision on an agenda proposal.

3. The report by the service provider which recommended an increase in the caretaking salary from $66,159.27 (plus GST) to $95,841 (plus GST) created a financial hardship for owners, may devalue lots, made lots harder to sell, and was not justified on the basis of the work required (especially so in the future with successive annual CPI adjustments).

Even it were shown to be true that the increase was not warranted for the work done, that it devalued lots and created hardship for some or all owners, the point of general meetings and voting rights for all owners is that they accept or reject any motion put before them. The Bloors could have put up a motion for an even larger increase – the legislation does not prohibit this – and it would have again been a matter for owners to assess and vote on, the result being decided by the majority vote. These arguments, while perhaps being true in some respects, cannot be advanced to strike down a resolution that was validly put and passed.

I shall move on to the last point which, though not raised by the applicants in their application, was always a matter for consideration. In his post-teleconference submission of 11 January Twyford reported he was unable to convince the group of owners to submit the legal opinion they have apparently obtained regarding the validity of the secret vote for Motion 9. That is unfortunate as its exposure would have meant that it could have been taken into account in my decision, but of course only after all parties had the opportunity to comment on its merit. It seems that the group wishes to use its knowledge in another way and that is their choice.


4. Secret Vote vs. Open Vote.

I have made reference to section 87(2) of the Standard Module when finding Resolution 10 to be invalid on the ground that this provision was not complied with in that no Form 20 was forwarded to owners with the notice of meeting.

It appears that the committee and/or the Body Corporate Manager proposed Motion 9 as similarly requiring a secret vote based on the application of the same legislative provision (confirmed by M Powell in his submission). That view was incorrect and the motion should have been put to an open vote for the following reason.

Section 87(2)(a) and (b) is the relevant provision (my emphasis added) -

87 Authority to make engagement or give authorisation, or amend
engagement or authorisation
(2) The body corporate may act under subsection (1) only if--

(a) the body corporate passes an ordinary resolution approving the engagement, authorisation or amendment and, for the passing of the resolution, no votes are exercised by proxy; and
(b) the motion approving the engagement, authorisation or amendment is, for any of the following, decided by secret ballot--

(i) an authorisation of a person as a letting agent;
(ii) an engagement of a person as a service contractor if the person is to be a caretaking service contractor;
(iii) an agreement to amend a person’s engagement as a service contractor, or a person’s authorisation as a letting agent, to include a right or option of extension or renewal.

Section 87(2) only imposes the requirement of a secret vote on motions that are for the purposes set out in sub-paragraphs (b)(i), (ii) and (iii), though only (ii) and (iii) relate to service contractors including caretakers. Sub-paragraph (ii) concerns the engagement of a person as a service contractor and is therefore not relevant as Motion 9 concerns an amendment to an existing caretaking agreement.

Sub-paragraph (iii) does refer to an agreement to amend a person’s engagement as a service contractor but only where the amendment is "to include a right or option of extension or renewal". Motion 9 does not seek to include an option to extend or renew in the caretaking agreement but to vary the salary terms in the agreement.

Accordingly, section 87(2)(b) does not apply to Motion 9 and it should have been decided by open vote and not secret vote.

However, it is my view that the determination of Motion 9 by secret vote rather than an open vote as required does not void the result. The essential aspect of the vote is that the correct type of resolution, namely an ordinary resolution, was used to determine the motion. Had for example a special resolution been required then its determination by ordinary resolution would have been fatal to the resolution.

The legislation imposes the requirement for a secret vote in certain situations where parliament has decided owners may wish to vote anonymously. A secret vote does not vary the rules for determining whether a motion passes or fails but merely provides a cloak of secrecy for voters.

The general requirement for all secret votes to be decided without the exercise of proxies (see section 74(3)(g) of the Standard Module) is also a specific requirement under section 87(2)(a) for motions such as Motion 9 for amendments not caught by sub-paragraph (2)(b). That is, is prohibition of the use of proxies applied for voting on Motion 9.

Accordingly, the addition of secrecy in the manner of voting on Motion 9 does not adversely affect owners in their voting, in fact secrecy may have aided some owners in voting in the manner they wished because of the anonymity. Had the reverse been the case (determined openly when should have been secret), then it would be a sustainable argument to void the resolution because, for example, owners did not wish the Resident Owner to know they voted against extending the agreement period. In my view, there is an equally strong argument for the legislation to require a secret vote when a Resident Manager is seeking a beneficial agreement variation such as an increase in salary.

In the circumstances I do not consider that the determination of Motion 9 by secret vote has disadvantage any party, or changed the vote of any person except perhaps in the manner adopted by the applicants to vote against the motion when they might have voted otherwise in an open vote. I therefore find that the declaration that Motion 9 passed should not be disturbed.