Vailima [2005] QBCCMCmr 563 (12 October 2005)

Last Updated: 19 July 2006

REFERENCE: 0418-2005

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	11368
Name of Scheme:	Vailima
Address of Scheme:	5 Hill Avenue BURLEIGH HEADS QLD 4220

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

John McDaid, the owner of lot 2

I hereby order that the application by John McDaid, the owner of lot 2, for an order that the body corporate be prevented from ordering the applicant to remove the decking area erected on the common property outside lot 2 which was erected after the body corporate unanimously approved the erection of the timber decking at its AGM on 19 December 2003, is dismissed. I further order that the special resolution considered at the EGM of the body corporate held on 14 March 2005 numbered 2 and headed Installation of decked area lot 2 (special resolution) is declared to have been carried and the construction by the applicant of a deck on common property was, and is, approved. I further order that the minutes of meeting of 14 March 2005 are to be amended to record the fact that the motion numbered 2 was carried and not lost as currently recorded and that a copy of this order is to be included with the minutes of that meeting in the body corporate minutes book.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0418-2005

"Vailima" CTS 11368

The applicant, John McDaid, 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:

An order that the body corporate be prevented from ordering the applicant to remove the decking area erected on the common property outside lot 2 which was erected after the body corporate unanimously approved the erection of the timber decking at its AGM on 19 December 2003.

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 8 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.

This dispute can be resolved quickly as it appears that all owners have proceeded on a fundamental error; namely the incorrect determination of the special resolution considered at the EGM held on 14 March 2005. At that meeting, a motion that the body corporate approve the installation of a decked area adjoining lot 2 was resolved to have been "lost". The vote was 4 yes, 2 no, and 1 abstention. Both the applicant, and the owner who appears principally opposed to the deck constructed by the applicant, Hazel Parkins of lot 6, have simply assumed that the resolution was lost. In fact, Ms Parkins relies on the lost of the motion in support of her opposition to the deck. In her submission she states at paragraph 6:

The only duly constituted motion in relation to the decking area installed by the owner of lot 2 was at the EGM of 14^th March 2005.

Ms Parkins then lists out the reasons why that meeting was validly convened, contrary to the previous meeting at which the applicant thought he had obtained approval for the deck, and then concludes:

The motion was therefore lost and as such the body corporate’s only duly constituted resolution in relation to the works by lot 2 resolved that the works should not be approved.

The motion required a special resolution. Section 106 of the Act provides for the counting of votes on a special resolution:

106 Counting of votes for special resolution
(1) This section applies if a motion is to be decided by special resolution at a general meeting of the body corporate for a community titles scheme.
(2) One vote only may be exercised for each lot included in the scheme, whether personally, by proxy or in writing.
(3) The motion is passed by special resolution only if--
(a) for a meeting notice of which is given--
(i) before the commencement of subparagraph (ii)--the votes counted for the motion are more than the votes counted against the motion; or
(ii) after the commencement of this subparagraph--at least two-thirds of the votes cast are in favour of the motion; and
(b) the number of votes counted against the motion are not more than 25% of the number of lots included in the scheme; and
(c) the total of the contribution schedule lot entitlements for the lots for which votes are counted against the motion is not more than 25% of the total of the contribution schedule lot entitlements for
all lots included in the scheme.

The applicable provision is section 106(3)(ii). Firstly however it is necessary to clarify that an abstention from voting is not a vote. I have previously considered and determined this aspect in 0325 of 2005, quote:

The committee has responded to this aspect in its final submission. I quote relevantly from that submission:

Further, the scheme of the division 3 of part 4 of the regulations clearly distinguishes between votes cast for or against motions on the one hand, and abstentions from voting on the other. Whilst s.53A(7)(b), s.56 and s.59 of the regulations provide for the declaration and / or recording of abstentions from voting, these requirements do not derogate from the essential position that an abstention from voting is not a vote. The requirement in the regulations for the declaration and recording of abstentions from voting on individual motions in respect of members who have either completed a written voting paper or who personally attend a general meeting where voting is by a show of hands is not inconsistent with the essential fact that an abstention from voting is not a vote, and the number of abstentions from voting on individual motions (if any) is readily ascertainable by virtue of counting the number of votes cast (whether for or against a particular motion), as is the identity of the lot number of those who abstain from voting readily ascertainable.

Consistent with the essential position that an abstention from voting is not a vote, s.42A of the regulations, which governs requirements for voting papers for all motions at a general meeting, provides in sub-section (4)(e) that a voting paper must enable a person who is a voter for a general meeting to cast a written vote. Significantly, s.42A does not require a voting paper to enable a voter to abstain from voting, and this is not surprising given the contradiction in terms between "voting" and "abstaining from voting". ...

I agree with the body corporate’s submission on this aspect, and conclude that the applicant is incorrect in his view that the legislation requires a voting paper to including the option to "abstain". Whilst I consider the above statement of the body corporate expresses the basis for this conclusion very well, it is similarly clear from the language used in the various sections. Section 42A(4) which states that a voting paper must

(e) enable a person who is a voter for a general meeting to cast a written vote on each motion to be considered at the meeting.

What then is "to cast a written vote"? I consider this question is answered in the language of section 56(4)(a)(iii) which states

For each lot for which a vote was cast, or for which there was an abstention from voting – the lot number and whether there was a vote for the motion, a vote against the motion, or an abstention from voting on the motion.

The terminology used clearly evidences that to vote "yes" or "no" is to "cast" a vote, whereas, an abstention is to abstain from voting or to not cast a vote. A voting paper requires only that a voter be enabled to "cast a written vote", and to "cast a written vote" requires only the options "yes" and "no".

So, to return to the point, there were 4 votes for the motion to approve the deck and 2 against; the abstention is irrelevant to the determination of the validity of the special resolution. Applying the requirements of section 106(3), the motion is passed by special resolution if:

(ii) after the commencement of this subparagraph--at least two-thirds of the votes cast are in favour of the motion
Two thirds of 6 is 4. This requirement is satisfied.

(b) the number of votes counted against the motion are not more than 25% of the number of lots included in the scheme
The important words here are "not more than". The two votes against the motion are exactly 25% of the number of lots in the scheme. This requirement is also satisfied because of the words "not more than".

(c) the total of the contribution schedule lot entitlements for the lots for which votes are counted against the motion is not more than 25% of the total of the contribution schedule lot entitlements for
all lots included in the scheme.
I have checked the contributions schedule lot entitled for this scheme and all entitlements are equal at 1 each. Again, the requirement of "not more than 25%" is satisfied.

On the above basis, the special resolution considered at the EGM of the body corporate held on 14 March 2005 numbered 2 and headed Installation of decked area lot 2 (special resolution) was carried and the construction by the applicant of a deck on common property was approved. I intend to order to this effect, and further, that the minutes of meeting of 14 March 2005 are to be amended to record the fact that the motion was carried and not lost as currently recorded.