Ocean Park Towers [2009] QBCCMCmr 489 (7 December 2009)

Last Updated: 1 March 2010

REFERENCE: 0517-2009

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	13096
Name of Scheme:	Ocean Park Towers
Address of Scheme:	3494 Main Beach Parade MAIN BEACH Q 4217

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Nicolas Malouf Investments Pty Ltd, the owner of Lot 34

I hereby order that the application for an order by Nicolas Malouf Investments Pty Ltd, the owner of Lot 34 against the body corporate for Ocean Park Towers community titles scheme 13096 that the election of chairperson at the Annual General Meeting dated 21 March 2009 be declared null and void and either that another election for chairperson be conducted or that the decision of the chairperson to disallow the two secret ballot votes for Lots 30 and 34 be reversed and the votes be counted as part of the ballot, is dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0517-2009

“Ocean Park Towers” CTS 13096

The scheme
“Ocean Park Towers” community titles scheme 13096 is subject to the Body Corporate and Community Management Act 1997 (Act) and the Body Corporate and Community Management (Standard Module) Regulation 2008 (Standard Module).

Application
This application made on 3 June 2009 is by Nicolas Malouf Investments Pty Ltd, the owner of Lot 34 (Applicant) against the Body Corporate seeking an outcome that the election of chairperson at the Annual General Meeting dated 21 March 2009 (AGM) be declared null and void and either that another election for chairperson be conducted or that the decision of the chairperson to disallow the two secret ballot votes for Lots 30 and 34 be reversed and the votes be counted as part of the ballot.

The Applicant provided a copy of the minutes of the AGM indicating that:

• Alan McGillivray was the chairperson (page 1).
• Mr N Malouf was present in person (page 1).
• Lot 30 was represented “By proxy to Nicholas Malouf - arrived 9.05am” (page 1).
• Lot 34 was represented “Present in person by Nicholas Malouf – arrived 9.05am” (page 1).
• Under ‘Invalid proxy/voting papers’ (page 1), the chairperson declared:
  • − “Lot 30 Secret Ballot Voting Paper was ruled invalid as the Chairperson ruled that the meeting had commenced and the vote would not be accepted.”
  • − “Lot 34 Secret Ballot Voting Paper was ruled invalid as the Chairperson ruled that the meeting had commenced and the vote would not be accepted.”
  • − “Lot 17 Secret Ballot Voting Paper was ruled invalid as the Chairperson ruled that the meeting had commenced and the vote would not be accepted as it was lodged after counting had commenced and the vote was subsequently withdrawn.”
  • − “The ruling on Lots 30 and 34 was disputed by Mr Nicholas Malouf but again overruled by the Chairperson. Judy Carter of SSKB, when consulted, advised that it was usual practice to allow votes to be lodged as long as counting had not begun and it had not. Mr Malouf advised the Chairperson that he would have the Chairperson’s ruling on not accepting the Secret Votes for Lots 30 and 34, referred to the Commissioner under the Act for reversal.”
• After Motion 1: “Secret Vote Counting: Judy Carter acting as Returning Officer asked the Chairperson if he would like her to commence the counting of the votes, and the Chairperson’s response was to proceed” (page 1).
• Under ‘Election of Committee Members’ (page 4): the nominations for chairperson were Alan McGillivray and Michael Pinter; a secret ballot was held; and Alan McGillivray received 9 votes and Michael Pinter received 7 votes.
  

Nicholas Malouf, the authorised signatory for the Applicant, submits he arrived at the AGM close to 9am and conversed with the treasurer for a short time at a table set up at the rear of the meeting room to receive attendees. He states that the treasurer informed him his votes had to be handed in at the table at the front of the room to Stewart Silver King and Burns (Body Corporate Manager) and that when he handed the votes to the Manager at 9.05am he was told by the chairperson the votes would not be accepted. Mr Malouf says the votes were not opened by the Manager.

Submissions to the Commissioner
On 9 June 2009, the Commissioner provided a copy of the application to the Body Corporate Manager for distribution to the owner of each lot (excluding the Applicant) and the committee, with an invitation to respond to the matters raised in the application (s 243, Act). Submissions were made by a number of lot owners and Judy Carter from the office of the Body Corporate Manager (given the allegations made and the issues in dispute, I have accepted this submission). The Applicant made a written reply to submissions.

Catherine Jones of Lot 2 supports the application stating she believes not accepting the secret ballot because of a perceived technicality is unfair and unjust. She states none of the secret ballots had been opened at the time Mr Malouf handed in his votes.

Alan McGillivray of Lot 7 outlined his concerns about the accuracy of the minutes of the AGM and showed that the Body Corporate Manager did not agree with his requested changes. He states Ms Vitko was not present despite the record in the minutes. Mr McGillivray submits the decisions on the validity of proxy and voting papers did not occur before the meeting opened but after the resolution of the first motion of business. He asserts the record of events in attachment D to his submissions accurately reflects what occurred. The attachment records after Motion 1: “Secret Vote Counting: Judy Carter acting as Returning Officer asked the Chairperson if he would like her to commence the counting of the votes, and the Chairperson’s response was to proceed. At 9.05am Mr Malouf arrived at the meeting and attempted to lodge voting papers for Lots 30 and 34; the Chairperson advised Mr Malouf that his secret ballot voting papers would not be accepted because the counting had commenced. At 9.07am Mr and Mrs Isaacs arrived at the meeting and were similarly advised that their secret ballot voting paper would not be accepted” (page 1). The attachment records the decisions about the validity of the secret vote on page 4 under ‘Election of Committee Members’: “Lot 30 Secret Vote was ruled invalid because the returning officer had not received it before counting commenced” (the same reason was given for the secret vote for Lots 17 and 34). The attachment records the result of voting in the ballot for the position of chairperson: Alan McGillivray 9 votes and Michael Pinter 7 votes. Mr McGillivray submits all rulings on the invalidity of secret ballot votes are appropriately recorded under ‘Election of Committee Members’. He states it is arguable whether the Applicant is permitted to lodge a secret ballot vote on behalf of Lot 30 given the regulation limits the use of proxy at a general meeting on a ballot for the election of a member of the committee. Mr McGillivray provided a copy of the voting instructions document (attachment G) he says was circulated by the Body Corporate Manager and which warns owners about giving the voting paper to another person to deliver.

Jacqueline Carey of Lot 14 considers the application should be denied submitting the Isaacs arrived almost simultaneously with the Applicant and accepted the ruling made by the chairperson. She states the voting instructions included with the notice of business requested that all proxies and voting papers be returned to the Body Corporate Manager at least 24 hours before the meeting. Ms Carey says secret vote counting had commenced because the minutes record that after Motion 1 Ms Carter had asked and been granted permission to start the count. She submits there is a question about the Applicant seeking to lodge secret vote papers on behalf of Lot 30 when the voting instructions say that giving it to another person to deliver will render the voting paper invalid. Ms Carey also questioned the minutes stating: the chairperson’s rulings could not be made before the meeting opened at 9am; Lot 18 was not present; and Lot 3 was in attendance only for the last 10 minutes.

Chris Green of Lot 16 supports the application submitting he believes the chairperson acted inappropriately.

Ian Malouf of Lot 30 would like to see the sealed ballots included in the original ballot.

Michael and Jennifer Pinter of Lot 35 support the application submitting that the chairperson knew the votes were crucial and that they would not have been for him.

Rick and Debra Stout of Lot 36 believe the vote is void and the secret votes for Lots 30 and 34 should be allowed.

Judy Carter submitted the chairperson was ready to commence the AGM at 9am; she and David Kelly were still recording voting papers and the chairperson was obliged to hold off for some 3 to 4 minutes; the chairperson called for votes for the first motion at 9.05am and at the same time Mr Malouf arrived; before the votes had been recorded and called for the first motion, Mr Malouf attempted to bring up 2 secret ballot envelopes for Lots 30 and 34 and a proxy form from Lot 30; the chairperson refused Mr Malouf permission to hand the envelopes or proxy to David Kelly; prior to the second motion being called, she asked the chairperson if she could commence counting the secret ballots; and the chairperson gave permission and a second late arrival approached the table to hand in a secret ballot envelope which the chairperson declined although she had not commenced removing the tags from the first secret ballot envelope.

The Applicant replied he was endeavouring to lodge a proxy and vote from the floor; the secret ballots were delivered to the meeting; and his vote and proxy vote were recorded and shown in the minutes for all motions including Motion 1. The Applicant quoted the last paragraph of attachment G which related to the election of the committee and secret ballot voting stating (in part): “The Secret Ballot Envelope will not be opened until the voting on all motions has been completed...”

Adjudication
A dispute resolution recommendation has been made under section 248 of the Act referring the dispute to departmental adjudication.

Jurisdiction
An adjudicator may make an order to resolve a dispute about a claimed or anticipated contravention of the Act; or the exercise of rights or powers, or the performance of duties, under the Act (s 276(1), Act). The application was made within 3 months of the AGM satisfying the time limit for an application of this nature (s 242, Act).

Investigation
In accordance with the investigative powers of an adjudicator stated in section 271 of the Act, on 16 November 2009 I requested the Body Corporate Manager provide a copy of the secret ballot envelope and the completed particulars documentation submitted to the AGM for Lots 30 and 34. The Manager provided the requested copy the next day.

Decision
It is not disputed that the AGM was scheduled to commence at 9am on 21 March 2009. While there is some difference in the opinion of the Applicant, Mr McGillivray and Ms Carter about what occurred between 9am and 9.05am, I am satisfied from submissions that the Applicant sought to give a representative of the Body Corporate Manager secret ballot envelopes for Lots 30 and 34, and a proxy appointment form for Lot 30.

There does not appear to be any question about the validity of the proxy for Lot 30 despite the fact that the appointment form does not seem to have been given to the secretary at least 24 hours before the meeting as indicated in the instructions accompanying the voting paper (s 107(5), Standard Module). The proxy is recognised in the minutes provided by the Applicant and in the minutes produced by Mr McGillivray. It is clear it can be given to the secretary by the holder of the proxy (s 107(5), Standard Module). It is also clear that a “vote by proxy must not be exercised at a general meeting on a ballot for the election of a member of the committee” (s 109(3)(c), Standard Module). There is no suggestion that the proxy holder for Lot 30 attempted to exercise a vote by proxy in the ballot for the position of chairperson. The copy of the secret ballot documentation provided by the Body Corporate Manager indicates that Ian Malouf, the owner of Lot 30, voted. There is nothing to suggest that this was not the case. In this circumstance and given the outcome sought, I do not consider there is any reason to explore the proxy appointment any further.

The two versions of the minutes suggest different reasons for not accepting the secret ballot documentation for Lots 30 and 34. The minutes provided by the Applicant rely on the meeting having commenced. The chairperson’s minutes refer to counting having commenced. Both versions similarly state that the secret ballot vote count commenced after Motion 1 was transacted.

“The members of the committee are chosen in the way provided for in the regulation module” (s 99(2), Act). They “must be chosen by an election conducted in accordance with sections 16 to 28, unless the body corporate decides by special resolution that the members are to be elected in another way” (s 15(1), Standard Module). There is no suggestion that the Body Corporate has decided another way to elect members of the committee. Therefore:

• “any items of business about the election of members of the committee that are on the agenda for an annual general meeting must be conducted as the last items of business for the meeting” (s 24(1)).
• “Each ballot may proceed to the count only after the person chairing the meeting has allowed enough time for votes to be cast and announced the close of the ballot” (s 24(4)).
• To vote in the election for committee by secret ballot, “a person must give the completed particulars envelope with the ballot paper envelope enclosed, or the ballot paper envelope with the completed particulars tab attached, to the secretary, or forward the envelope to the secretary so that the secretary receives it, before or at the annual general meeting” (s 21(7)(f)).
• “When a ballot is held—a voter who has not submitted a vote for the ballot may ask the secretary for a ballot paper, ballot paper envelope and particulars envelope or tab, and vote in the way this section provides; and a voter who wishes to withdraw a vote already made for the ballot and submit a replacement vote, may, if the particulars envelope, or the ballot paper envelope with particulars tab attached, for the vote already made can be readily identified and withdrawn, ask the secretary for a ballot paper, ballot paper envelope and particulars envelope or tab, and vote in the way this section provides” (s 21(8)).
  

In the circumstances of this dispute, business relating to the election of the committee was not conducted as the last item of business for the AGM. There is no suggestion that the chairperson allowed enough time for votes to be cast and announced the close of the ballot. It is clear that the regulation contemplates conducting a ballot, at which time a voter may vote and may withdraw a vote. In my view, the decision to proceed to a count of the votes in the ballot for chairperson after Motion 1 was transacted and before the other 14 motions in the agenda were considered was contrary to the legislation. As stated by the Applicant, the correct ballot process was mentioned in the voting instructions accompanying the notice of the AGM. I do not agree that a decision made about the validity of a vote in a ballot after Motion 1 can be minuted as being made under ‘Election of Committee Members’. In my view, the stated reason for not accepting not only the votes from Lots 30 and 34, but also the vote from Lot 17 was incorrect.

It is clear Mr Malouf intended to give completed secret ballot documentation for Lots 30 and 34 at the AGM. Mr McGillivray raised a question about the legality of Mr Malouf doing this relying on the regulated proxy restrictions. Ms Carey also questioned the way the documentation was given at the meeting relying on the abovementioned voting instructions. The Applicant responded that secret ballots are dealt with in a separate section of the voting instructions and were delivered to the meeting. The abovementioned section 21(7)(f) prescribes how a vote is given to the secretary. The question is whether the votes for Lots 30 and 34 were properly given.

This issue was considered previously in Petrie Mansions [2001] QBCCMCmr 611 (5 December 2001). In making her decision, the adjudicator relied on Body Corporate for Surfers Waters CTS 20377 v Angland (District Court, Southport 10 March 2000) where His Honour PD Robin QC., DCJ considered section 51(2) of the Body Corporate and Community Management (Standard Module) Regulation 1997 which dealt with exercising a written vote for a general meeting and provided that: “A written vote is cast by completing the voting papers as required by the accompanying instructions and giving them to the secretary (personally, by post or by facsimile) before the start of the meeting”. The Court decided that section 51(2) required that voting papers (unless delivered by post or facsimile) must be delivered personally by the voter to the secretary and not by an intermediary (it is noted that section 86(2) of the Standard Module contains the same provisions as the 1997 regulation with the exception that the word ‘personally’ has been replaced with ‘by hand’).

In Petrie Mansions, the adjudicator considered section 17(7)(e)(iii) of the 1997 regulation; a provision containing equivalent provisions to section 21(7)(f) of the Standard Module insofar as it required the person voting to give the ballot-paper envelope to the secretary, or forward it to the secretary so that the secretary receives it, before or at the general meeting. While acknowledging that the Court did not give consideration to section 17(7)(e)(iii), the adjudicator concluded: “although the wording...differs slightly, the intention of the legislature was to provide a similar mechanism for delivery of...ballot papers to that provided in section 51(2) of the Standard Module for delivery of votes...I therefore consider, in light of the Surfers Waters case, that if...ballot papers ...are to be delivered to the secretary other than by post or facsimile, then each...ballot paper...must be delivered personally by the applicable lot owner to the secretary, and any such document delivered by a third party may quite properly be rejected by the secretary, or by the chairperson...”.

I agree with the reasoning of the adjudicator in Petrie Mansions. In my view, the ballot paper for Lot 30 could not be given to the secretary by the representative of the owner of Lot 34. For this reason, this ballot paper could be rejected from the count on the ballot for the position of chairperson. The result of voting of the election at the AGM is not disputed; Alan McGillivray received 9 votes and Michael Pinter received 7 votes. It is apparent that the vote from Lot 30 would not alter the result. In a ballot, the person who receives the highest number of votes is declared elected (s 26(6), Standard Module). It is evident that the vote from Lot 17 was rejected for a similar reason as Lots 30 and 34. However, it would seem this vote was withdrawn.

For these reasons, I have dismissed the application.