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- Unreported Judgment
Van Deurse v Q1 Management Pty Ltd QCATA 113
Van Deurse & Anor v Q1 Management Pty Ltd & Anor  QCATA 113
Joseph J.E. Van Deurse and Tunnis F. Been
Q1 Management Pty Ltd
Body Corporate for Q1 CTS 34498
5 October 2017 and further written submissions delivered on 9 and 11 October 2017
Member P Roney QC
23 October 2017
The appeal is dismissed
APPEAL AND NEW TRIAL – APPEAL – GENERAL PRINCIPLES – RIGHT OF APPEAL – WHEN APPEAL LIES – ERROR OF LAW – where s 289(2) of the Body Corporate Community Management Act allows a person aggrieved by an Adjudicator‘s order to appeal on a question of law to the Queensland Civil and Administrative Tribunal (QCAT) – what is error of law – The formula for the counting of votes for special resolution under s 106 of the Body Corporate and Community Management Act 1997 (“BCCM Act”) – Intermediaries and s 86(2) of the Standard Module – Words and phrases – when a voter casts a written vote by completing the voting paper as required by the accompanying instructions; and giving the voting paper to the secretary (by hand, by post or by facsimile) before the start of the meeting – delivery of votes through Intermediaries including the Body Corporate Manager – powers to make an order that is just and equitable under BCCM Act s 276 when there is a dispute about ‘a claimed or anticipated contravention of the Act or the Community Management Statement’ or about the ‘exercise of rights or powers, or the performance of duties, under the Act or the Community Management Statement
Body Corporate and Community Management Act 1997 (Qld), s 51, s 86, s 106, s 276, s 289, s 290
Body Corporate and Community Management Legislation Amendment Regulation (No.1) 2003 SL No. 263
Body Corporate and Community Management (Standard Module) Regulation 2008, s 70, s 71, s 73, s 86, s 87
Corporations Act 2001 (Cth), s 1322
Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 146
Australian Hydrocarbons NL v Green (1985) 10 ACLR 72
Body Corporate for Palm Springs Residences CTS 29467 v J Patterson Holdings Pty Ltd  QDC 300
Body Corporate for Surfers Waters v Angland & Anor  QDC 34
Crown Towers  QBCCMCmr 472
Dindas v Body Corporate for 1 Park Road  QDC 302
Festival Towers  QBCCBCmr 128
Hollis Holdings Pty Ltd v Hanley & Ors  QDC 85
McEvoy v Body Corporate For No. 9 Port Douglas Road  QCA 168
Morat Pharmaceuticals Pty Ltd v Hoft Pty Ltd  QCA 319
Petrie Mansions  QBCCMCmr 611
Q1  QBCCMCmr 550
Sani Villa  QBCCMCmr 334
Wheeler and Smith v Body Corporate for Calypso Towers  QCATA 66
Joseph Van Deurse
Mr B Strangman of Counsel, instructed by Pevy Lawyers
Mr D Atkinson of Counsel, instructed by Carter Newell
First Applicant was self-represented, and represented the Second Applicant by leave
REASONS FOR DECISION
|The jurisdictional provisions||13|
The parties’ submissions here
Arguments about the lack of evidence to justify findings
Intermediaries and s 86(2) of the Standard Module
Were the requirements of s 86 met here
|Voting rights unreasonably denied to a lot-holder and the power under s 276 to make just and equitable orders||25|
- The Applicants are owners of lots in a residential high rise development at 9 Hamilton Avenue, Surfers Paradise known as Q1. They have appealed against the decision of an Adjudicator appointed by the Commissioner for Body Corporate and Community Management which had the effect of declaring that a particular resolution purportedly passed at an Annual General Meeting (“AGM”) of the Body Corporate held on 12 April 2016 was invalid.
- The Applicants have standing to appeal on the basis that they contend that they each made submissions to the Adjudicator, and in addition, the First Applicant was a member of the Committee of the Body Corporate at the relevant time.
- The First Respondent had, since at least December 2001, been the caretaker of and had the letting rights in Q1 pursuant to the terms of a deed in relation to the caretaking and letting of the premises entered into in 2001.
- Motion 15, put to the AGM, was proposed by the Committee and required a special resolution. Hence, voting by proxy was not permitted. It was in the following terms:
That the Body Corporate authorise the commencement of proceedings against Q1 Management Pty Ltd to enforce the Deed of Assignment of the Caretaking and Letting Agreement dated 16 December 2011 and otherwise as advised by the Body Corporate’s solicitors to require Q1M to transfer to the Body Corporate the Trade Marks related to the “Q1” name provided for by clause 6.1 of the Deed; and
That the committee be authorised to include an amount of $40,000 in the 2016 administrative fund budget, to provide funds for the legal costs required for the proceedings.
- This was one of a number of motions which were put to the Body Corporate AGM on that date. The minutes of the AGM recorded that relevantly 254 votes were cast in respect of that motion, and therefore applying the formula for the counting of votes for special resolution under s 106 of the Body Corporate and Community Management Act 1997 (“BCCM Act”), two thirds of the votes cast, namely 170 votes, were required to be cast in favour of the motion for the motion to be resolved by way of special resolution.
- The minutes recorded a purported 172 “yes” votes for the motion and it was therefore declared as passed. It is common ground that if three fewer “yes” votes had been counted, or five or more “no” votes had been counted, Motion 15 would have been defeated. It is also common ground that the Chairperson at the meeting ruled that 10 votes which were against Motion 15 were invalid, and they were therefore not counted, on the grounds that the circumstances leading to the sending of those voting papers were such that there was ruled to have been a non-compliance with s 86(2)(b) of the Standard Module. That was said to be because in most cases those voting papers were passed by the owners to the Secretary of the Body Corporate via the then Body Corporate Manager, Ernst Body Corporate Management Pty Ltd (“Ernst”) or were passed on by the lot owner to a different intermediary, either Mr John Wilder (“Mr Wilder”), or Ms Alexandra Blewman (“Ms Blewman”) who in turn passed them on to Ernst, who in turn passed them to the Secretary.
- I shall refer to these 10 votes as the “Intermediary 10” to distinguish them from votes disallowed on other bases.
- Section 86 provides as follows:
86 Exercise of vote at general meetings
- 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—
- by proxy;
- by casting a written vote;
- 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.
- A voter casts a written vote by—
- completing the voting paper as required by the accompanying instructions; and
- giving the voting paper to the secretary (by hand, by post or by facsimile) before the start of the meeting.
- As the Adjudicator correctly observed, in 2003, amendments were made to the legislation so that the word “personally” formerly in the section as applying to the casting of a written vote on an open motion, was changed to refer to it being required to be “by hand”. The explanatory notes to the amending regulation — the Body Corporate and Community Management Legislation Amendment Regulation (No.1) 2003 SL No. 263 — stated at page 48 that the word – “personally” has caused confusion as to whether it should be strictly construed as being given to the secretary by the voter. The amendment reflects this approach by providing that if a voter completes a voting paper, that voter has the choice of giving the completed voting paper to the secretary himself or herself by hand, or by post, by facsimile or electronically. The voter cannot give the completed voting paper to another person to hand to the secretary.
- In this case the Adjudicator held that the 10 votes which were against Motion 15 and which were declared invalid, met the requirements of s 86 despite the fact that they some had “given the completed voting paper to another person to hand to the secretary”, in each case via the Body Corporate manager, and in many cases via antecedent intermediaries.
- It is conceded by the Applicants, and the Second Respondent Body Corporate, that the special resolution would not have passed had five or more of the Intermediary 10 disallowed negative votes been treated as valid.
- It is also common ground that one of the “yes” votes which was allowed to be cast toward the motion was invalid, namely that cast by the owner of Lot 1410, because it was ambiguous in voting both for and against the motion, although at the meeting the Chairperson determined to resolve that ambiguity by some means. However for the purposes of this appeal, I am content to proceed on the basis that one fewer “yes” votes ought to be reflected in the result, so an affirmative vote of 171 votes identified as having been validly cast.
- The Appeals Tribunal was told during submissions, on behalf of the Appellants, that the dispute behind the Committee putting forward Motion 15 turns on what the Body Corporate regards as its entitlement to be transferred certain intellectual property interests by Q1 Management. The Body Corporate Committee took the view that the Caretaking and Letting Manager was not honouring an agreement it had signed to transfer the Q1 trademark to the Body Corporate but had kept the trademark to itself, as a result of which owners who owned their properties for investment were unable to obtain website bookings of their units if they wished to use a letting agent other than Q1 Management. On the other hand, leading up to the meeting, Q1 Management wrote to owners insisting that it was entitled to ownership of the Q1 trademarks, that it had always been willing to transfer the trademarks to the Body Corporate in exchange for a licence, but that the licence being proposed by the Body Corporate Committee was not satisfactory to it because it proposed allowing the Body Corporate to grant use of the trademarks to offsite letting agents. It considered protected use of the trademarks as vital to its efforts to achieve maximum rental returns for the units it managed.
- The issue therefore, which was raised by Motion 15, was an important one, and contemplated committing significant resources to at least the commencement of litigation against Q1 Management with a view to compelling it to perform what the Body Corporate saw to be its contractual obligations to do so. Even if defeated though, it was a motion which could be put at an EGM, or an AGM to be called in the future.
- After the resolution was passed, Q1 Management applied to an Adjudicator for interim and final orders. The final orders it sought were that Motion 15 be deemed lost and for QCATA to find that the Body Corporate was not authorised to commence the legal proceedings against it.
- The Adjudicator received comprehensive submissions from all interested parties, and in her decision of 30 November 2016, the Adjudicator ordered that the resolution passed on Motion 15 was invalid.
- In the ultimate paragraph of the Reasons provided for making that order, the Adjudicator concluded that the evidence supported a finding that the resolution passed was invalid “due to voting irregularities” and found that the motion was therefore lost. A careful reading of the Reasons makes clear that her reference to “voting irregularities” is intended to be a reference to irregularities both in relation to the circumstances leading to the distribution and receipt of voting papers, but also to the manner in which voting papers were dealt with at the meeting itself, including how the treatment of the critical Intermediary 10 “no” votes which were treated as invalid because of non-compliance with s 86 of the Standard Module. It also apparently refers to a number of other anomalies or what was seen to be inappropriate practices in the way in which the proceedings leading to the passing of the resolution was held to have occurred. Unfortunately, it is not easy to ascertain precisely how and in what way it is said that many of these so called irregularities affected the result, and the Applicants contend that there was no evidence to show there were material irregularities in any event.
- The Applicants’ grounds of appeal against the Adjudicator’s findings are as follows:
- There was no evidence, or insufficient evidence, as a matter of law, to justify findings in the Reasons that:
- The Body Corporate Committee adopted an approach to assessing votes;
- An inconsistent approach was applied to determining the validity of particular votes;
- The Committee attempted to rule as many of the “No” notes invalid as possible, whilst refusing to apply the same level of scrutiny to the “Yes” votes;
- The alleged process adopted by the Committee tainted the outcome of the resolution concerning Motion 15;
- The Motion 15 was lost;
- Some of the ten votes delivered to the Ernst Body Corporate Management:
- should have been counted;
- would have affected the outcome;
- The Body Corporate had resisted the appointment of a returning officer for the AGM.
- The Adjudicator erred in finding that it is valid for voters to cast their votes by giving completing voting papers to an intermediary to hand to the secretary.
- The Adjudicator erred in finding that, if there is a rule that precludes the casting of votes through an intermediary, the conduct to that effect in relation to Motion 15 fell within some recognised exception.
- The Adjudicator erred in finding, in effect, that those supporting the validity of Motion 15 bore the onus of proof.
- The Adjudicator denied natural justice to the Body Corporate, its Committee and the First Applicant in that the Adjudicator:
- Failed to apprise the Body Corporate, its Committee or the First Applicant of the basis upon which she was contemplating making the decision;
- Failed to have regard to a letter from Carter Newell, solicitors for the Body Corporate and its Committee including the First Applicant, dated 29 September 2016;
- Failed to have regard to the submissions from lot owners as to the conduct of Q1 Management Pty Ltd and those who share its interest.
- In submissions before me, the Applicants did not press their grounds of appeal relating to being denied natural justice set out in paragraph 5 above.
- The Body Corporate did not itself appeal the Adjudicator’s decision. I was informed that this was because the Body Corporate could not obtain a resolution to enable it to do so within the time for appealing. It nevertheless appeared as a Respondent to the appeal, but supported the Applicants’ position in relation to seeking to set aside the Adjudicator’s order, although not on all the same bases as the Applicants themselves had sought to advance.
- There seemed to me to be some considerable tension within the conclusions of the Adjudicator about the stated reasons for declaring the vote in relation to Motion 15 valid and the conclusions about what should have occurred in relation to the treatment of the ten critical “no” votes. That is to say that whilst it might well have been within the scope of the Adjudicator’s powers to rule that the circumstances leading to the purported declaration of the passing of Motion 15 was sufficient to cast doubt upon the validity of the vote and therefore to declare it has not having been passed was open, if, as appears to have been the case, she concluded that there was improper rejection of critical Intermediary 10 “no” votes and which should have been accepted, then the proper result was to have declared that on the votes received or treated as having been validly received but for that 10, the motion was defeated. In the latter circumstance, it was not necessary to consider whether there were irregularities which tainted the process.
- Nevertheless the following evidentiary findings can be derived from the Adjudicator’s Reasons, although I confess to some confusion when reading some of those reasons because it is not always evident where in the Reasons a submission is being identified and where positive findings of fact are being made. In that regard, for example, I refer to the critical paragraph  which identifies under 10 dot points, matters that the Adjudicator appears to have found to have occurred on the evidence, but which are prefaced by the statement “from the evidence there are concerns raised regarding the voting process at the AGM and my observations include the following...”. That statement appears to confuse the notion of what the subject of concerns, with what are positive findings of fact she is making about the process. But in any event it seems reasonably clear that the Adjudicator found that:
- 10 lot owners who purported to vote “no” to Motion 15 had their votes disallowed. They were the owners of Lots 305, 909, 1105, 1301, 1503, 1601, 1708, 2303, 2901 (or where it is elsewhere described 2801) and 3407;
- Each of those lot owners’ votes was disallowed at the meeting on the basis that it had been provided by the owner, directly or indirectly through another intermediary or intermediaries to the Body Corporate Manager, Ernst;
- The owners of some of those 10 lots were outside of the State, or indeed the country. In that regard the owner of Lot 305 lived in Victoria, Lot 909 in the Philippines, and the owners of Lots 1105, 1503 and 1601 were overseas. This may have impacted on their capacity to provide their vote directly to the Secretary of the lot owners, although the precise number is not identified in the Reasons or posted their ballot paper direct to Ernst. At least Lot 2303 did so. The owner (or at least his power of attorney) of each of Lots 1105, 1503 and 1601 signed the voting papers and these were returned to Ernst directly. The Adjudicator was apparently unable to determine on the evidence whether they were collected by another intermediary and returned to Ernst;
- The intermediaries who were involved were Ms Blewman, who in some cases handed voting papers directly to Ernst, but in others, for example Lot 305, was given the voting paper by another intermediary who had taken it from the lot owner. The second intermediary was Mr Wilder;
- Insofar as the owners of Lots 305, 909 (referred to in the Reasons as 9009), 1105, 1503 and 1601 gave their voting papers to either of both of those intermediaries, Mr Wilder or Ms Blewman;
- There is no suggestion that Mr Wilder or Ms Blewman were involved in influencing the decision makers who cast those votes and there was nothing to suggest that those voters were subject to the undue influence of the intermediary, or any other persons, and there was no demonstrated risk that the vote was a personal commitment of an enthusiastic, free and genuine vote;
- Although the reason given for rejecting each of the Intermediary 10 “no” votes at the time of the meeting was non-compliance with s 86 of the Standard Module, that subsequently other reasons were found to justify that rejection, including in relation to Lots 2901 (or 2801 as it is elsewhere referred) and 3407 that their owners were not financial lot holders at the time and were therefore not entitled to vote, and in relation to Lot 1708, that the identified representative who signed the vote was not on the roll;
- There are a number of voting papers which recorded the “yes” vote in favour of Motion 15 which were questionable. These were identified in the submissions for Q1 Management, namely the vote on behalf of Lot 405 was signed by a person who was not a company nominee properly authorised and that there were other reasons to complain about formalities associated with signing “yes” votes for Lots 5104, 6104 and 6204;
- Despite the complaints by Q1 Management about the validity of the votes for Lots 207, 2005, 2805, 3305 and 4807 based on the fact that not all pages were signed, they were in fact properly accepted as valid;
- Other “yes” votes which might also have been the subject of scrutiny and possible rejection because not all pages were signed were not treated to that scrutiny. In that context the votes by the owners of Lots 706, 2005, 2805, 3305 and 4807 were relevant;
- One “yes” vote by the owner of Lot 1410 which was treated as valid had ticked the box both for and against that motion, and although the Chairperson decided that he could ascertain the intention of the lot owner was to vote “yes” for Motion 15, but that this was incorrect procedure and the vote should have been rejected;
- There was also the suggestion that the Body Corporate Manager recorded the “yes” votes at the meeting as below the 170 threshold, at 169, that the AGM minutes record 172 “yes” votes. There was complaint that some of the “yes” votes were invalid, but that “the Committee managed to replace some of the invalid votes” by using “mystery late votes” to increase the “yes” votes by three;
- The voting papers were confusing in that they directed the lot owners to cast their vote by sending it to the Body Corporate Manager at the Body Corporate Manager’s address, and which in some places in the voting papers was a different address to that in others;
- There was confusion which led to some lot owners returning their voting papers to the Body Corporate Manager instead of directly to the Secretary and that as a result those votes were not counted;
- That in places on the AGM notice, the Body Corporate’s address was listed as care of the Body Corporate Manager;
- That there were no votes noted as invalid (it would appear other than the critical Intermediary 10 “no” votes invalidated because of s 86) that were treated as irregular because of missing pages or not being signed or dated “which may not have necessarily invalidated those voting papers”;
- Some voting papers were signed by non-owners where there was neither a company nominee nor a power of attorney;
- The Body Corporate took a strict view in relation to informality on technical grounds when dealing with voting papers which voted “no” for Motion 15, but “a more liberal view” on similar issues where the voting paper recorded a “yes” for Motion 15, thereby leading to more no votes being rejected for technical reasons than was the case with similarly deficient “yes” votes. My comment here is that the reference here to the “Body Corporate” in the Reasons must necessarily refer to the Chairperson of the meeting because of course it was only the Chairperson that ruled on the validity of the papers. The identity of the Chairperson at that meeting does not appeared to have been identified in the minutes of the meeting although it is to be noted that there were four representatives from the Body Corporate Manager, Ernst, and the solicitor who represented the Body Corporate in this appeal present at the meeting;
- In submissions made to the Adjudicator on 29 September 2016, the solicitors for the Body Corporate contended that the Chairperson simply acted on the advice of the Body Corporate Manager as to what voting papers were valid, and in a Dispute Resolution Application which was issued by Mr McCarthy, an owner, he identifies that in fact at the AGM, the Chairperson took advice from the Body Corporate Lawyer before declaring the ten critical votes invalid by reason of the fact that they were not directed to the Committee Secretary. That fact is not specifically referenced in the Reasons;
- The ten disallowed voting papers delivered to Ernst were in the requisite sealed ballot voting envelopes but with the address of the Secretary crossed out on some. The evidence suggests there were only a few in that category. There were ten voting papers in envelopes delivered to Ernst;
There is no conclusive evidence as to who personally hand delivered each of the ten voting papers to Ernst;
- Given the nature of the confusion within the voting papers and explanatory material, including postal addresses for both the Secretary and Ernst, combined with the fact that Ernst has acted as Secretary for the scheme at times, that any votes hand delivered to Ernst, complied with s 86(2) of the Standard Module, on this point alone, and should be counted toward the vote;
- Independently of the Intermediary 10 votes, the owners of Lot 2801 (or 2901 it is sometimes referred to) and Lot 3407 were not financial. Those two are within the 10. Their votes would have been invalid in any event. But another one of the 10, Lot 1708, might not have been properly signed by the lot owners;
- Another paper amongst the Intermediary 10 votes, that from Lot 1708, was signed by a person, when the entity recorded on the roll was a different person, acting as a trustee for a corporation. The Body Corporate would seek to challenge that voting paper on the basis that there was no authority pursuant to which that person would be entitled to cast a vote on behalf of the owner;
- That some lot owners express concerns with the Secretary and his conduct and “the way the votes were being counted”, whatever that might mean. The Adjudicator rejected the submission on behalf of the Body Corporate that the voting register was created and finalised by Ernst, and that all individual votes were treated consistently, and an example of this was the way in which the invalid vote by the Lot 1410 was resolved in favour of it being an affirmative vote. In submissions before me it was contended that the findings at Reasons  to the effect that the Secretary contacted that voting lot owner to clarify the position before the vote was declared was inaccurate, and that this did not occur until after the meeting.
- At Reasons  to  the Adjudicator held as follows:
 When counting votes for special resolution, the counting of votes cast at the AGM for Motion 15 must be by at least a two-thirds majority in favour of the motion. The votes in favour of Motion 15 was with a margin of only three votes. In the circumstances only a small number of the votes would need to have been found to have been irregularly dealt with by the body corporate and Motion 15 would have been lost.
 Despite the applicant and the respondent attempting to recount votes and to re-examine those votes that were deemed invalid, there is still a dispute regarding the voting papers and what are deemed to be valid.
 Having said that it is impossible for me to determine whether or not some “Yes” votes counted, ought to have been ruled invalid, and whether or not some “No” votes not included in the count, ought to have been included as valid votes. Further of all the votes delivered to Ernst, except for the 2 where lot owners owed a debt to the body corporate and 1 voting paper not clear as to whether the correct company nominee had signed the voting papers, it is my view that at least 7 of the 10 voting papers should have been counted, and as such, this would change the voting outcome for Motion15.
 Clearly, from the evidence, I am satisfied that there is sufficient concerns that votes were not accurately counted on Motion 15 at the AGM. Combined with the fact the voting outcome was close in that the number of votes needed to pass the motion was by a three vote margin, considering the valid and invalid decisions on other voting papers, combined with the fact that most of the voting papers handed to Ernst should have been counted, there is sufficient evidence to find that the voting irregularities for Motion 15 would have meant that it was likely that the motion would not have passed.
- The Adjudicator summarised her conclusions in the following terms:
 I find that the voting information sent to lot owners was confusing and it is little wonder that some lot owners were unclear as to how to return their voting papers. The fact many lot owners handed their voting papers to Ernst, is understandable given the fact that Ernst had acted as Secretary for the scheme in the past, their address appeared in the voting papers and many lot owners believed that providing the voting papers to the body corporate manager would suffice.
 Further, I am satisfied that the approach adopted by the committee in declaring votes invalid or valid and the inconsistent approach applied to individual votes, in my view, has rendered the determination of the votes cast for and against Motion 15 as unreliable and lacking certainty. As the voting outcome was so close, the evidence suggests a finding that the voting outcome for Motion 15 at the AGM held on 12 April 2016 is unsafe and must be declared invalid due to voting irregularities.
 Further, I am persuaded that the committee submitted Motion 15 and in my view, it had a vested interest in ensuring the motion passed. Motion 15 required 170 votes to be cast in favour for it to be resolved by way of special resolution, the committee’s position is that 172 Yes votes were cast.
 On the evidence, I am persuaded by the applicants’ argument that the committee has achieved the result on Motion 15 by attempting to rule as many of the No votes invalid, as it can, while refusing to apply the same level of scrutiny to the Yes votes. Having found that some of the Intermediary 10 votes delivered to Ernst should have been counted, I am satisfied, from the evidence, that the process employed by the committee has tainted the result of Motion 15, and it is now impossible for me to determine the proper outcome of how lot owners voted for this motion at the AGM.
 The evidence supports a finding that the resolution passed on Motion 15 is invalid due to voting irregularities and the motion was therefore lost. Should the body corporate wish to revisit this matter a motion can be proposed at the next AGM or EGM, with properly prepared voting papers and explanatory material, with specific instructions that are clear and unequivocal as to how and where voting papers are to be completed and returned.
The jurisdictional provisions
- Section 276 of the BCCM Act provides:
276 Orders of adjudicators
- An adjudicator to whom the application is referred 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 claimed or anticipated contravention of this Act or the community management statement; or
- the exercise of rights or powers, or the performance of duties, under this Act or the community management statement; or
- a claimed or anticipated contractual matter about—
- the engagement of a person as a body corporate manager or service contractor for a community titles scheme; or
- 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.
- Without limiting subsections (1) and (2), the adjudicator may make an order mentioned in schedule 5.
- An order appointing an administrator—
- may be the only order the adjudicator makes for an application; or
- may be made to assist the enforcement of another order made for the application.
- If the adjudicator makes a consent order, the order—
- may include only matters that may be dealt with under this Act; and
- must not include matters that are inconsistent with this Act or another Act.
- Section 289 of the BCCM Act provides:
289 Right to appeal to appeal tribunal
- This section applies if—
- an application is made under this chapter; and
- an adjudicator makes an order for the application (other than a consent order); and
- a person (the aggrieved person) is aggrieved by the order; and
- the aggrieved person is—
- for an order that is a decision mentioned in section 288A, definition order—an applicant; or
- for another order—
- an applicant; or
- a respondent to the application; or
- the body corporate for the community titles scheme; or
- a person who, on an invitation under section 243 or 271(1)(c), made a submission about the application; or
- an affected person for an application mentioned in section 243A; or
- a person not otherwise mentioned in this subparagraph against whom the order is made.
- The aggrieved person may appeal to the appeal tribunal, but only on a question of law.
- Section 290 of the BCCM Act provides:
- An appeal to the appeal tribunal must be started within 6 weeks after the aggrieved person receives a copy of the order appealed against.
- If requested by the principal registrar, the commissioner must send to the principal registrar copies of each of the following—
- the application for which the adjudicator's order was made;
- the adjudicator's order;
- the adjudicator's reasons;
- other materials in the adjudicator's possession relevant to the order.
- When the appeal is finished, the principal registrar must send to the commissioner a copy of any decision or order of the appeal tribunal.
- The commissioner must forward to the adjudicator all material the adjudicator needs to take any further action for the application, having regard to the decision or order of the appeal tribunal.
- Section 146 of the Queensland Civil and Administrative Tribunal Act 2009 provides:
146 Deciding appeal on question of law only
In deciding an appeal against a decision on a question of law only, the appeal tribunal may—
- confirm or amend the decision; or
- set aside the decision and substitute its own decision; or
- set aside the decision and return the matter to the tribunal or other entity who made the decision for reconsideration—
- with or without the hearing of additional evidence as directed by the appeal tribunal; and
- with the other directions the appeal tribunal considers appropriate; or
- make any other order it considers appropriate, whether or not in combination with an order made under paragraph (a), (b) or (c)
The parties’ submissions here
- Despite orders by the Tribunal that required the parties to the appeal to file written outlines of submissions going to the issues to be determined at all, neither of the Respondents did so, except in each case to purport to indicate that reliance would be placed upon the entirety of the submissions which were made to the Adjudicator. Of course, the submissions which were made to the Adjudicator went to a multiplicity of issues, not merely those which are concerned with the questions of law raised in the appeal. None of them addressed the findings of the Adjudicator since they predated the findings. In the end, neither Counsel for either Respondent made reference to any specific part of the submissions which were made to the Adjudicator.
- Furthermore, the submissions filed for the Applicants in this Tribunal went little further than to restate the grounds of appeal set out above, and Mr Van Deurse said little by way of oral submissions.
- Limited written submissions were filed on a specific issue after the hearing of argument.
Arguments about the lack of evidence to justify findings
- As to the first ground which was concerned with whether there was evidence or insufficient evidence “as a matter of law” to justify the findings of the Reasons, I was not taken to what the evidence did or did not establish in that regard in each of the categories in respect of which it was said that there was no or insufficient evidence. The submissions which went to these grounds contended that there was no evidence of any action taken by the Committee whatsoever before the AGM or of anything done by the Committee which demonstrated some particular approach to assessing votes, or attempting to procure a situation in which as many “no” votes as possible were ruled invalid, was involved in the process or that the Body Corporate had resisted the appointment of a returning officer. The Adjudicator expressly found that there was such evidence.
- Neither the Applicants nor the Second Respondent sought to address the issue of how this ground or these grounds raised an issue of law. The Applicants have not sought to point to what the evidence did in fact show and how that would have achieved some different result.
- It is not an error of law to make a wrong finding of fact; Minister for Immigration and Multicultural and Indigenous Affairs v Al-Miahi 65 ALD 141  FCA 744 -.
- In the context of the AAT, the majority of the Full Court in Federal Commission of Taxation v Trail Brothers Steel & Plastics Pty Ltd (2010) 186 FCR 410 at  (citations omitted) stated that what is "on a question of law" for the purposes of s 44 of the AAT Act has been analysed in many cases and includes:
- whether the AAT has identified the relevant legal test;
- whether the AAT has applied the correct test;
- whether there is any evidence to support a finding of a particular fact ...; and
- whether facts found fall within a statute properly construed ...
- It is not an easy thing to establish that a tribunal made an error of law because there was "no evidence" to support the findings that it made. Often the case is, at best, that there must have been an error of law because a party says it ought to have succeeded on the evidence. See, for example, Haritos v Commissioner of Taxation  FCA 96, .This is insufficient – the taxpayer must establish that the relevant finding of the Tribunal was not open to it in the sense of there being no evidence to support the finding; ibid Haritos; MIMA v Al-Miahi 65 ALD 141 at 149 - and Tisdallv Webber (2011) 193 FCR 260, 270-271.
- Gordon J summarised the "no evidence" ground in Bell v Commissioner of Taxation  FCA 1042 as follows:
In relation to the "no-evidence" ground, a decision will be set aside where a decision maker has made a finding of fact without probative evidence to support it or drawn an inference which was not open on the primary facts: Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 356; Bruce v Cole (1998) 45 NSWLR 163 at 188. Further, only jurisdictional facts are relevant: VWBF v Minister for Immigration and Multicultural and Indigenous Affairs (2006) 154 FCR 302 at . The finding complained of must be identified accurately: VWBF at . (Emphasis added)
- It does not seem to me to ultimately have affected the conclusions that the Adjudicator reached about what orders to make that she made comment about the behaviour of the Committee in the context of promoting a “yes” vote for Motion 15, or the manner in which votes were ruled upon by the Chairperson. There is no suggestion that the Chairperson who ruled on the validity of the 10 voting papers which were declared invalid did so because of any influence from the Committee and there is no evidence of any collusion between the chairperson and any member of the Body Corporate or its Committee.
- Comments by the Adjudicator which the Applicants take to be critical of the Committee, that the Committee improperly resisted the appointment of a returning officer, even if incorrect, were not a ground for which the Adjudicator decided to declare Motion 15 invalid. In large part her comments were directed to what was the subject of argument, but her conclusions about the usefulness of appointing a returning officer are innocuous and do not disclose any error of law.
- There is nothing in the evidentiary material, or indeed in the Reasons, to establish a basis for an evidentiary finding that all votes that were cast were not given proper consideration, except for the 10 invalid votes properly counted, and properly recorded that voter’s intention. I exclude for present purposes aforementioned invalid “yes” vote which ought to have been ruled invalid.
- All the ballot papers were able to be examined after the ballot, and all were still available to be reviewed by the Adjudicator or this Tribunal. There is no suggestion of any interference with what was contained in those ballot papers or in the way in which the result was recorded. Having said that, it does not seem to me that the Adjudicator founded his decision upon any of the conduct which the Applicants contend the Adjudicator considered and gave weight to, despite there being no or insufficient evidence of it.
Intermediaries and s 86(2) of the Standard Module
- The second issue concerns what is said to be the Adjudicator’s error in finding that it was valid for voters to cast their votes by giving completed voting papers to an intermediary to hand to the Secretary. And as a corollary to that, if there was a rule precluding the “casting of votes” through an intermediary, that the conduct in this case fell within some recognised exception to that rule. As a further adjunct to this argument, the Applicants contended that if the conduct in question did fall within some recognised exception, the Adjudicator made an error in contending that those supporting the validity of Motion 15, bore the onus of proof in showing the facts did not bring the matter within the exceptions.
- For the Appellants it was contended that where intermediaries were involved in the delivery of voting papers, the Adjudicator should have decided that the voting papers were invalid unless the First Respondent could prove they were valid, and that it should not be up to the Body Corporate to investigate and prove that exceptions to the strict rules did not apply. It is not entirely clear from the Appellants’ and Body Corporate’s submissions to what ruling this issue in relation to the onus of proof arises in the Reasons.
- The reasons do not refer to any party or the other having any onus, or whether it was discharged.
- In paragraphs  and following of the Reasons, the Adjudicator examined some of the other Adjudicators’ decisions, and two District Court decisions which had dealt with the proper interpretation of s 86. These included the decisions in Body Corporate for Surfers Waters v Angland & Anor  QDC 34, Hollis Holdings Pty Ltd v Hanley & Ors  QDC 85, Festival Towers  QBCCBCmr 128, and Crown Towers  QBCCMCmr 472.
- In Surfers Waters Judge Robin QC DJC was concerned with an earlier version of what became s 86 of the Standard Module and concerned the language in s 51 of the Standard Module under the BCCM Act. It provided that a written vote was “cast by completing the voting paper as required by the accompanying instructions and giving them to the Secretary (personally, by post or by facsimile) before the start of the meeting.
- In that case, there was what was described as “the bulk delivery” of votes by the Letting Manager’s son in circumstances in which there was nothing indicative of any sinister circumstance surrounding that conduct. In His Honour’s Reasons - he held:
 Mr MacIntosh, who represented the respondents, Mr and Mrs Angland on the appeal submitted that “personally” refers to the secretary personally, relying on an analogy with various provisions in respect of service which may commonly be 6 treated as satisfied if there is service on the person intended to be served personally (as opposed to service by the person in whose interest service is to be effected personally) or by post or by facsimile or other means. See, in particular, s.39 of the Acts Interpretation Act, which applies whether legislation uses variants of serve, give, notify, deliver, send, or other expressions. The lack of any need to specify delivery to the secretary personally may well be an indication that, here, something is to be done by the voter personally.
 It seemed to me there was a disharmony, in Mr MacIntosh’s approach, between the use of the word “personally” in subsection (1), where it plainly refers to the voter and the use of the word in subsection (2) in close proximity, where it also sensibly refers to the voter. Mrs Cull, for the appellant body corporate, went much further than that, submitting that where the legislature has permitted the person entitled to vote to do so by a “written vote” as well as by voting personally at a meeting or through a proxy who attends the meeting, it has insisted on strict satisfaction of conditions before a written vote is valid, which are set out in subsection (2). Mrs Cull referred me to a grammarian’s categorisation of s.51(2) and like provisions as including a “dangling participle” in that it is nowhere expressed just who should do the “completing” and the “giving”. She says, and I am inclined to agree, that it must be the same person, namely, the voter. She says, and again I agree, having regard to the contents of Mr Beattie’s speech, among other things, that this is a “consumer protection” provision which is designed to protect all lot owners by creating an assurance that every written vote cast is a sincere and honest expression of the voter’s views, as authenticated by the voter’s taking the trouble personally to give the voting paper to the secretary if the alternative modes of transmission are not resorted to. That state of assurance, the argument runs, cannot be reached where some intermediary is interposed, who is the one who in the event gives a voting paper to the secretary.
 I turn to Mr Beattie’s speech in Parliament, whose contents indicate that it comes within paragraph (g) of s.14B(3) of the Acts Interpretation Act rather than under paragraph (f), although some of it reads as though it might serve for a speech within (f). Speaking generally (and the court makes it clear nothing is being suggested regarding Mr and Mrs Angland) Mr Beattie said:
“MR BEATTIE: On a number of occasions, letting managers have assumed a position that they should not have assumed. For example, investment owners have been threatened that, if they do not vote in a certain way at a body corporate meeting, when it comes to allocating which units are to be rented then their units will not be included, or will be put down the list. That has the effect of severely limiting the monthly income or, indeed, the yearly income of those investment owners.
Mr Davidson: The returns
MR BEATTIE: Indeed – the returns. So we need to make certain – as this legislation does – that those letting managers cannot get away with going that. The mechanism they use for getting their own way at body corporate meetings is to get a proxy from investment owners. So they turn up with a bundle of proxies at the body corporate meeting and then run the show. That is a practice that I do not support.
The Motion going before the body corporate could include such self-interest matters as extending the letting manager’s contract or providing the letting manager with an area of common property for his or her storage or other purposes. There is clearly a conflict of interest, and that needs to be dealt with in the legislation. As honourable members would understand, investment owners are not going to be terribly forthcoming about disclosing this sort of practice, because their financial return is on the line, and they would only disclose that sort of information if it was done in a confidential way and if there was no real threat to them. This legislation stops letting managers exercising the right to use a proxy vote from those investment owners at a body corporate meeting, nor can any of their associates. We are ensuring a lot more fairness and equity in the operation of body corporate meetings.
Quite a lot of elderly people live in those units. If a person is renting out a number of them for investment owners then elderly people are almost disfranchised. They have a vote, but then their letting manager comes in with a bundle of votes, he or she could dominate that body corporate meeting and make decisions in their own financial interest and decisions about the use of common property that may not necessarily be in the overall interests of all owners. I am delighted to see that provision.
There has been an extensive overhaul in this legislation of the legislative requirements regarding meeting procedures, the election of committees, financial management of body corporate funds, voting entitlements and arrangement, and the powers of the body corporate and its committee. The matters range over lengthening the time for convening a meeting, what constitutes a quorum, those expenditures that require tenders to be obtained, how proxies and 8 written votes may be exercised, financial penalties against owners who do not pay contributions on time … and simplified voting procedures for multiple owners of lots, for example, husband and wife joint tenants."
- Later in his Reasons Judge Robin introduced the possibility of exceptions to the “no intermediary rule”, which possibility has produced some controversy in this case, and perhaps others as to whether there is an unstated proviso to be read into the language of equivalent of s 86 of this present Module which is to suggest that if one can demonstrate that there has been a personal commitment by a voter to his or her vote to the extent of personal particular steps being taken in relation to that voting paper to get it to the Secretary in a way that indicates to the Secretary the voter’s personal, considered imprimatur and implies a warranty to the Secretary that the vote is “an enthusiastic, free and genuine one”, that there may be some scope for what His Honour described as some kind of exception to the apparently clear rule encapsulated in s 86.
- His Honour said as follows:
 It may also be accepted that the use of the word “personally” in s.51(2) is clumsy and may lead to inconvenient or absurd consequences. If Mr MacIntosh is right, is it really necessary that votes be given over when the secretary is personally present or (as might indeed have happened here) should it be sufficient that they are left somewhere where the secretary will have access to them in due course? If (as I think to be the case) Mrs Cull is right and “personally” refers to the voter, it seems inconvenient in the extreme if the voter (who may use the services of Australia Post to give over a vote – see s.39A(2) of the Acts Interpretation Act) may not use the services of a relative, a friend or a courier service. There may be room for the use of such agents, and I would not wish to say anything to exclude it, but the risk is obvious. A voter who wishes to have a written vote counted would be wise to comply strictly with s.51(2); doubtless, shortcuts will be taken in emergency, situations which may lead to further elicitation by adjudicators or judges. I think, at the least, that what the provision requires is a personal commitment by the voter to his or its vote to the extent of personal and particular steps being taken in relation to that voting paper to get it to the secretary in a way that indicates to the secretary the voter’s personal, considered imprimatur and implies a warranty to the secretary that the vote is an enthusiastic, free and genuine one.
 I would reach the same view even if I had not been made aware of Mr Beattie’s speech. In my opinion, it is an eccentric interpretation which would apply “personally” to the voter in subsection (1) and to the secretary in subsection (2) notwithstanding that subsection (2) also deals with things to be done by the voter. The matter would be clearer if “(personally, by post or by facsimile)” came before “to the secretary” rather than after them. It appears to me that Mr MacIntosh’s submission really gives no effect at all to the bracketed words, “personally” in particular.
- What Judge Robin did not say was the case was that a voter who used an intermediary, was entitled to have that vote treated as valid if the voter could prove that the vote reflected the voter’s personal, considered position and, that the vote was an enthusiastic, free and genuine one. To hold otherwise would have been inconsistent with the clear language of .86 which makes no mention of an alternate test of that kind which might be met if a voting paper was not given to the Secretary by the voter. Nor does anything in the language of the section itself allow for an exception in extenuating circumstances where it might otherwise be difficult, if not impossible, for a voter to actually cast a vote by giving it to the Secretary, because for example there was an emergency situation. These comments by Judge Robin were obiter, and apart from reference being made approvingly to them in a number of decisions which I will now mention, no case except that under appeal in this case has found any of those conditions enlivening the exception, to have been met.
- In the following year in the decision in Petrie Mansions  QBCCMCmr 611, an Adjudicator referenced the analysis of Judge Robin and identified in relation to the so called exceptions, what it said the Judge was identifying as “setting minimum requirements that must be taken into account when considering a departure from the strict application of the rule”.
- In Petrie Mansions there was nothing to demonstrate that there was any basis to depart from the rule and it was held that “if voting papers, ballot papers and/or proxies are to be delivered to the Secretary other than by post or facsimile, then each voting paper, ballot paper and/or proxy 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 if it is done immediately prior to the meeting”.
- In Hollis Holdings, Judge Dodds of the District Court, was hearing an appeal from an Adjudicator’s decision which, inter alia had ruled that two voting papers which were not delivered to the Secretary personally, but were delivered to the person who was the Resident Manager of the development (and who had a direct interest in the issue which was raised in the motion in question), were invalid because they were delivered to an intermediary and not delivered directly to the Secretary.
- At  to  inclusive Judge Dodds concluded as follows:
 In Angland [Surfers Waters], Judge Robin QC considered what s 51(2) of the Standard Module Regulation required. In that case, the respondents held the letting and management rights in respect of the Scheme. Motions for a meeting of the body corporate were of a nature potentially affecting the economic interests of the respondents. The respondents or a family member had canvassed lot owners for written votes and supplying facsimile copies of voting papers to persons entitled to vote then collected the completed voting papers and delivered them to the offices of the secretary. His Honour considered that what was required by s 51(2) was that there be a personal commitment by the voter “to his or her vote to the extent of personal and particular steps being taken in relation to that voting paper to get it to the secretary in a way that indicates to the secretary the voter’s personal considered imprimatur and implies a warranty to the secretary that the vote is an enthusiastic, free and genuine one”. In the event he held that the votes in question were void. In reaching that view His Honour had regard to the second reading speech in the Legislative Assembly to the Building Units and Group Titles Bill delivered on 18 November, 1994. An identical provision to s 51 of the Standard Module Regulation became s 81 of the Building Units and Group Titles Act 1980. The speech dealt with the desirability of curtailing persons such as letting managers who may have an ability to cause detriment to unit holders, canvassing and collecting votes for motions at meetings and delivering them to the secretary to achieve a desired outcome.
 In s 51 the phrase “giving them to the secretary” is both enlarged and limited by the bracketed words to giving them “personally, by post or by facsimile”. I agree with Judge Robin QC that the words refer to the voters’ actions. Giving to the secretary personally involves at least personally delivering the voting paper to the secretary’s return address. Giving to the secretary by post involves posting the completed voting paper addressed to the secretary at the return address. Giving by facsimile involves sending the completed voting paper to the secretary at the secretary’s return facsimile address by means of facsimile equipment. These means provide a wide range of means by which a vote may be counted and are easily complied with. They may be seen as minimising the undue influence of persons such as letting managers referred to in the second reading speech and as maximising the “personal commitment” to an “enthusiastic, free and genuine” vote referred to by Judge Robin QC.
 I think the adjudicator was correct in upholding the ruling that the two votes were invalid. The votes were not given to the secretary before the start of the meeting as required by s 51(2). The adjudicator’s reference to the material suggesting that Hollis was an opponent and critic of the refurbishment program was with the decision of Angland in mind. The fact situation in Angland was in one sense more extreme than the present case but it cannot be said that the principle behind s 51(2) was not called up here when it came to recording valid votes.
- In Sani Villa  QBCCMCmr 334, an Adjudicator was considering, inter alia the admissibility of five ballot papers which were not handed to the relevant officer personally, or posted or faxed to her and in that regard considered and applied the approach of Judge Robin in the Body Corporate for Surfers Waters.
- The Adjudicator in Sani Villa went on to identify that the case law established what was described as “the general application of the provision”, namely that voting papers must be delivered personally by the voter to the Secretary and not by an intermediary, and that Judge Robin otherwise identified what appeared to be setting minimum requirements that must be taken into account if there is to be a departure from the strict application of the rule.
- The Adjudicator in Sani Villa referred to what was seen as countenancing “emergency situations as being an occasion where alternative means to delivery to those outlined in (the section) may be acceptable”. An example of this was said to be where there is a postal strike and an owner may be obliged to have their vote delivered by a courier as the only available alternative (being unable to attend the meeting because of sickness and, for whatever reason, unable to send a facsimile vote). The Adjudicator however held that this was not a situation where any such departure could be contemplated because it was not made in an emergency situation “or by a disinterested party”.
- The decision in Festival Towers referred to earlier post dated the 2003 amendments to the Act referred to earlier in these Reasons. In Festival Towers the Adjudicator reviewed some of the abovementioned authorities and concluded that not only were the ballot papers in question collected by an intermediary, they were not original voting papers but copies of blank voting papers, completed by someone else and faxed to owners for their signature and return. The Adjudicator concluded:
Oaks say that in the light of Robin J’s words - “if the alternative modes of transmission are not resorted to” – it means that it is arguable that only the “giving personally” which was the consideration in Surfers Waters, has to be direct, and that there is no reason why a vote which is posted or faxed has to be given “personally” by the voter. In fact it would be difficult to establish who had posted or faxed a vote, such that it could be done by an intermediary. I agree that the legislation does not establish explicitly that the “giving” of a vote by post or fax must be at the hand of the voter. However, I find that the authorities referred to do not generally allow an intermediary to collect votes and then “hand” them on such as by taking them to a meeting, and I am of the view that it cannot have been the intention of the legislature that if votes are instead posted or faxed, that the involvement of an interested intermediary would become acceptable. The use of the postal service or a fax machine by its nature involves a “middle man” but the legislature allows such “mechanical intervention”, in any event for a vote on an open motion.
Whilst there is no way of knowing that a faxed or posted vote has not been interfered with by anyone who faxed it or consigned it to the mail on behalf of the voter, where a faxed vote has been “faxed on” by an interested party, in my view it is a vote which has been “collected” by the intermediary in such circumstances as have rendered votes invalid in reliance on the authorities quoted.
It seems to me that the overriding consideration is that the secretary must be satisfied that the vote delivered to him or her is the vote of a person eligible to vote, and made of his or her own free will, that is, “enthusiastic, free and genuine.” That cannot be the case where an interested party has not only intercepted the voting papers contrary to the instructions of the body corporate, but also prepared the voting papers for the voter with its own choice of candidates. It must be open to challenge that the free will of the voter has not been overturned, or even, as the Applicants emphasise, that the “genuine-ness” cannot be authenticated, even though, in the way of casting the vote required by the body corporate, authenticity could not be guaranteed.
Once an agent has intervened, authenticity and free-will are spotlighted and must be demonstrated as unequivocal to the secretary. There were only 4 submissions made at all in this application, and it may well be that the majority of owners in this 401 lot scheme do not care who is on their committee, or have no knowledge of and/or interest in the committee membership. Three owners said they were happy with the way in which Oaks had encouraged their vote and the process adopted by Oaks. That leaves a considerable question mark over the wishes of the remaining 39 voters whose votes remain on the “dubious list.”
It is well understood by Parliament that a letting agent has considerable power when its actions have the capacity to affect the income of owners in its letting pool. In his speech on 18th November 1994 on the second reading of the Building Units and Group Titles Bill in respect of what became s.81 of the Building Units and Group Titles Act 1980 the Legislative Assembly and is now reflected exactly in the wording in the standard module provisions, Peter Beattie said –
“...... There is clearly a conflict of interest [between the interests of the letting agent and there interests of the owner], and that needs to be dealt with in the legislation. As honourable members would understand, investment owners are not going to be terribly forthcoming about disclosing this sort of practice,[giving a proxy vote to the letting agent]because their financial return is on the line, and they would only disclose that sort of information if it was done in a confidential way and if there was no real threat to them. This legislation stops letting managers exercising the right to use a proxy vote from those investment owners at a body corporate meeting, nor can any of their associates. We are ensuring a lot more fairness and equity in the operation of body corporate meetings.
Oaks submits that if the election voting process which it promoted is held to be in doubt, that the (45) owners should be asked to confirm their votes, or the election should be held again. It says there is no capacity for an adjudicator simply to hold that certain votes were invalid as sought by the Applicants. Oaks does not give any grounds for holding this view, and adjudicators have previously invalidated votes in situations where the legitimacy of their casting has been satisfactorily challenged.
- In that case, the Adjudicator gave consideration to requiring the lot owners whose votes were not cast properly to confirm their votes and for the scheme to hold another election at a general meeting, but decided not to do so because lot owners who wanted to confirm their votes could have done so and most had not, and the Adjudicator therefore declared the result having regard to the findings about the invalid votes which were passed not directly to the Secretary.
Were the requirements of s 86 met here
- Counsel for the Body Corporate submitted, whilst the decision in Surfers Waters opened the door to arguments that what on the face of it appear to be the strict requirements for delivery of a valid voting paper at a general meeting, no decision hitherto was actually applied them in a way which meant that voting papers delivered through an intermediary were in fact valid or met the so called “emergency” requirements.
- The Adjudicator appears to have concluded at Reasons  that the Intermediary 10 votes delivered by Ernst were delivered in compliance with s 86(2) of the Standard Module.
- She did not appear to consider any of the alternative bases upon which any Intermediary 10 votes might have been rejected for other reasons.
- It is difficult to see anything in the Adjudicator’s analysis which adopts in a reasonable way Judge Robin’s analysis as to which of the “emergency situations” which he contemplated might arise and which might excuse strict compliance with s 86 arose in the present case. Judge Robin most certainly did not conclude (and in my view it would be wrong in law to conclude), that s 86 is either deemed met, or not required to be met in circumstances in which voters who have used intermediaries can demonstrate that their votes were in no way tainted by the involvement of the intermediary or any other person, or that the votes were able to be proven to be given enthusiastically, free and genuinely. The necessity to prove that they met that circumstance would undoubtedly be a pre-condition to bringing the circumstances within one of the exceptions. It would be a necessary element, but not a sufficient element.
- The element identified here by the Adjudicator, namely the confusion associated with the directions given by the Body Corporate which identified the possibility of the votes being sent to the Body Corporate Manager (although not other intermediaries) in my view did not justify the conclusion that the votes complied with the requirements of s 86.
- For the reasons which I will now deal with, is not however the end of the matter because there is no doubt that the process was tainted by the errors that I have just described, and the jurisdiction under s 276 of the making of an order which was just and equitable arose even if the requirements of s 86 were not met.
Voting rights unreasonably denied to a lot-holder and the power under s 276 to make just and equitable orders
- I have set out above the terms of s 276 of the Act. The Adjudicator referred to her powers under that section to paragraph  of her Reasons
- The relationship between the provisions that allow for the exercise of voting rights in the Act and the power arising under s 276 were discussed in Body Corporate for Palm Springs Residences CTS 29467 v J Patterson Holdings Pty Ltd  QDC 300. There McGill SC DCJ held (citations omitted);
 The scope of an adjudicator’s powers under s 276 was considered in a little more detail in Dindas v Body Corporate for One Park Road CTS 2114  QDC 302 by Wilson DCJ. In that case his Honour rejected an argument based on the notion that the body corporate operates on democratic principles, or perhaps moral principles. His Honour noted at  that s 276 was posited on the existence of a dispute about legal rights arising within the parameters of the legislation and, hence, a just and equitable order made under the section was necessarily one made in accordance with the law, and not one which rested on any notion of pure democracy. At  his Honour quoted as applicable to this legislation a passage in McPherson’s “Law of Company Liquidation” (4th edition) at p 177, to the effect that the mere fact that the minority were outvoted by the majority does not in itself amount to oppression. His Honour referred to the decisions in Houghton v Immer (supra), McColl (surpa), and Hablethwaite (supra). I would respectfully agree with his Honour’s comment on the third of those decisions at .
 At  his Honour concluded:
“Neither decision is, then, authority for the proposition that the adjudicator’s powers under s 276 to make a just and equitable order to resolve a dispute necessarily connotes the power to override other rights which lie behind, and form the basis of, voting rights. The legislation plainly contemplates and permits a majority (determined by reference to voting rights granted by the Act) to assert its will by the legitimate exercise of that voting power. The principle adumbrated in Hablethwaite is confined to circumstances surrounding the actual exercise of voting rights; it does not support the much broader proposition which the respondents propound.”
 After noting at  that it followed that the adjudicator had fallen into error in overriding votes simply on the basis that the decisions were “unreasonable”, his Honour continued:
“The power arising under s 276 may only, as follows from the discussion set out above, be exercised if the orders which are made do not unacceptably trample the appellants’ rights as lot owners.”
 Decisions at a general meeting which had been overturned on the basis that they amounted to a fraud on the minority were reversed, in essence it seems to me on the basis that the adjudicator must have applied the wrong test as to what constituted a fraud on the minority. Wilson DCJ after referring to Houghton v Immer (supra) held that it was insufficient to establish an entitlement to relief on this basis simply because of findings that particular resolutions were unreasonable: . His Honour said that without evidence of fraud or actual oppression, that was a step too far: . The effect of his Honour’s decision was that s 276 does give an adjudicator the power to grant what might be described as equitable relief or relief on equitable grounds, that is on the basis of some breach of an equitable principle, but does not go further and give the adjudicator a discretion to set aside a decision which was taken in accordance with the mechanism established under the Act simply on the basis that he disagrees with it. With respect, I would agree with and endorse his Honour’s approach.
 It seems to me that the authorities referred to did not support the proposition that the adjudicator was not entitled to have regard to equitable principles, or give relief on equitable grounds, when making such order as was just and equitable in the circumstances. There is also no reason, in the light of the provisions of the legislation generally, for construing this provision in such a restrictive way. I accept that inferior courts and statutory tribunals and other decision makers do not in general have equitable jurisdiction unless it is conferred on them, but whether it has been conferred in a particular case depends on the true construction of the relevant Act. On the other hand, it does seem to me that the authorities do establish the proposition that an adjudicator’s power under s 276(1) is not unrestrained, that is to say, it is not simply a question of whether the adjudicator thinks that, if a particular order were made, the result would be just and equitable in accordance with the subjective view of the adjudicator. The authorities suggest that an interpretation as wide as that will not readily be adopted, and it seems to me that there is nothing in the Act to suggest that such a wide power was intended here.
 The Act clearly contemplates that various matters are to be decided by the members of the body corporate in general meeting, and provides a mechanism for regulating the voting rights of members in general meeting, and the inference from such provisions is that the members are entitled to exercise such voting rights at general meetings. There is no general fiduciary obligation on proprietors in general meetings in relation to the way in which they exercise their votes: Houghton (supra) p 52. Accordingly it would be no basis for setting aside the resolution of the members in the general meeting that the majority’s desire to be rid of the respondent as a caretaker should not be given effect to because this had the effect of terminating contractual rights which were from the point of view of the respondent a valuable asset. Circumstances may arise under which a resolution of the members in general meeting which had such an effect would amount to a fraud on the power, but it would not be a fraud on the power merely because it had that effect, or merely because the adjudicator thought that such an outcome was unfair to the respondent.
 Accordingly, the appellant cannot show the respondent’s application is doomed to fail because the adjudicator lacked the power to give relief for breach of an equitable principle. On the other hand, the respondent is not entitled to support the existing decision of the adjudicator simply on the basis that the adjudicator thought that the result was unfair to the respondent. It is in my opinion necessary to show some proper basis in law or equity for the grant of relief under s 276(1) where that has the effect of preventing a majority of the members of the body corporate from exercising effectively their rights to vote at general meetings, in accordance with the scheme laid down by the Act and regulation.
- I invited the parties to make further written submissions on the scope for application of s 276 here in light of the Adjudicators’ factual findings. In its further submissions the First Respondent referred to part of what was said by Robin DCJ above, referenced in a later decision of this Tribunal, and asserted that the Adjudicator must have based her decision in part on the application of s 276. That submission did not condescend to identifying the circumstances which at law gave the Adjudicator the power to grant what might be described as equitable relief or relief on equitable grounds, that is on the basis of some breach of an equitable principle or some other legal principle. The Tribunal was left to identify for itself what that might be.
- The Second Respondent Body Corporate provided further written submissions, which were made available to me on 16 October 2017. In those submissions the Second Respondent contended that the decision in Palm Springs can be seen to support the proposition that notwithstanding the broad terms of s 276, an Adjudicator should not interfere with a decision made by the members of the Body Corporate except when there is some “identifiable breach”.
- In my view, that is an unnecessarily narrow reading of what the Court identified there were the circumstances by which it might be shown that there was a basis in law or equity for the grant of relief. It is not necessary that there be some “breach” of a particular section of the Act before the jurisdiction under s 276 is enlivened. Indeed, the reference made by the Second Respondent to a more recent decision in Wheeler and Smith v Body Corporate for Calypso Towers  QCATA 66 at  makes clear, by repetition of the language used in Palm Springs that what is required is “some proper basis in law or equity for the grant of relief”.
- In McEvoy v Body Corporate For No. 9 Port Douglas Road  QCA 168 at  the Court referred to the fact that the relevant powers to make an order that is just and equitable under s 276 “arise when there is a dispute about ‘a claimed or anticipated contravention of [the Act or] the Community Management Statement’ or about the ‘exercise of rights or powers, or the performance of duties, under (the Act) or the Community Management Statement”. Reference is also made to the decisions in Morat Pharmaceuticals Pty Ltd v Hoft Pty Ltd  QCA 319 and Dindas v Body Corporate for 1 Park Road  QDC 302 at . That conclusion is consistent with what was said in Palm Springs.
- For the Second Respondent, it was submitted that the role of the Adjudicator was to determine the dispute presented by the parties by reference to the rights contained in the Act and the evidence and arguments presented by the parties. In my view this too is unnecessarily narrow, insofar as it wrongly fails to recognise the jurisdiction of the Adjudicator when considering the exercise of powers, or the performance of duties, in the sense referenced in the decision in McEvoy. It also wrongly focuses solely on rights or remedies under the Act. The Second Respondent also submitted the Act did not allow Adjudicators “to interfere with decisions on the basis of their particular, or general, perceptions of fairness”. That much may be accepted.
- It was further submitted for the Second Respondent that the Adjudicator misconceived her role, because the power under s 276 did “not permit the Adjudicator to carry out some general audit or commission of enquiry to the vote. It does not lay an onus on the Body Corporate to establish to the Adjudicator that each vote has been treated in a manner which she would consider appropriate”. This submission was made in the context of a contention that the decision as a whole should be read and evidencing a finding by the Adjudicator that she could not determine the proper outcome of the vote because it was now impossible for her to determine whether some “yes” votes should have been ruled invalid or some “no” notes ruled valid.
- The submission went on to repeat in large part criticisms which were previously made about the absence of evidence to support the findings by the Adjudicator which cast doubt upon the appropriateness of various types of conduct by the Body Corporate, on the rulings which were made in the course of the meeting about the validity of some votes, or as to the motives of the Body Corporate in purportedly bringing about the disallowance of those votes.
- The submission went on to contend that there was indeed no authority to establish that there were any exceptions in principle set down by s 86 which prohibited the delivery of votes by intermediaries. It was submitted that the comments by Robin DCJ in Palm Springs were not only obiter but constituted “speculation” on the part of Judge Robin QC.
- The balance of the submissions made on behalf of the Second Respondent suggested that even if the Intermediary 10 votes were not “necessarily invalid”, that this Appeals Tribunal ought conduct an analysis of the basis upon which it is said that eight of those 10 votes ought be treated as invalid for other reasons of various kinds including:
- In the case of two of them, that the lot owners were said to be unfinancial;
- In the case of one of them, because it was not signed by the lot owner
- In the case of three of them because of the involvement of the other intermediary, Ms Blewman in delivering them to Ernst, and because Ms Blewman was a candidate for election to the Committee, and was therefore an interested party or in some way or another that this reflected a failure by those members to have exercised free judgment in the casting of those votes; and
- In a further case, that an employee of the Body Corporate was involved in delivery on one of the votes to the Body Corporate Manager.
- It is to be noted in relation to each of these contentions, that the Adjudicator did not make findings of fact in relation to those issues in a way favourable to the contentions now made by the 2nd respondent , nor in a way that even demonstrated that there was no factual or legal dispute as to whether each of those votes should be treated as invalid on that basis. It is not apparent that there is any basis for the Second Respondent’s contention that “at least” eight of the 10 votes “would still be invalid”, unless that means that it is submitted that eight were, and the use of the term “ at least” is surplusage. There is no submission put forward to suggest that any more than the eight could on any basis be treated as invalid.
- If indeed only eight of those 10 votes could on any basis legitimately have been treated as invalid, then there are only 171 “yes” votes, assuming all of those “yes” votes were validly accepted, and 84 “no” votes. Hence, the domain was 255 votes and a special resolution required 170 of them. The Second Respondent would therefore apparently invite this Tribunal, on appeal, to allow the appeal on the basis that it would mage a finding of fact that the resolution was passed by a margin of a single vote in circumstances in which there can be no doubt, because of the way in which those 10 voters dealt with their votes, that they believed they were entitled to lawfully pass them to an intermediary to the Body Corporate Manager, and where that occurred in circumstances in which the instructions to voters were demonstrably misleading as to whether it was permissible to provide them to the Body Corporate Manager in order for them to reach the Secretary.
- Chapter 4 of the Body Corporate and Community Management (Standard Module) Regulation 2008 describes the requirements for the calling of meetings of bodies corporate. Section 70 sets out the requirements for notice of general meetings and these include the requirement that written notice of the meeting be given to the owner of each lot in the scheme, be accompanied by a voting paper for all open motions to be decided at the meeting, and where necessary be accompanied by explanatory material required under s 73 and be accompanied by any other document as required under the Act or Regulation.
- Section 71 sets out the requirements for voting papers, and one of those requirements under subsection (4) is that the voting paper must “enable the person who is a voter for the general meeting to cast a written vote on each motion to be considered at the meeting”.
- The terms of s 86 have already been discussed at length in these Reasons, however they make clear the method by which a written vote may be cast.
- Section 87 facilities voting at general meeting, including by persons who have completed voting papers, and this provision permits the giving of 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”.
- Although there is nothing specifically in the module which requires that any notice of a meeting to be held, which is accompanied by a voting paper, direct a lot holder as to the way in which the lot holder may cast a written vote, it is implicit in the scheme to be found within that module that it:
- Contemplates that each lot holder will be given a valid opportunity to exercise a written vote; and
- Will be told relevant things about what it is the vote is to be taken on; and
- When and where the meeting will occur, generally in order to ensure that lot holders are given a fair and reasonable opportunity to exercise their vote.
- As was recognised by McGill SC DCJ in the decision in Palm Springs referred to above, the legislation plainly contemplates and permits a majority (determined by reference to voting rights granted by the Act), to assert its will by the legitimate exercise of that voting power. It seems to me that the opportunity to permit the majority to insert its will in that way is defeated if accompanying the voting papers being sent to lot holders, even if an ambiguous one, as to the manner upon which a voter may vote on a motion which is contrary to the express terms of s 86 of the Act. Of course, in other jurisdictions irregularities associated with the calling of general meetings do not invariably invalidate the process. In that regard the terms of s 1322 of the Corporations Act provide in the context of corporations that acceding, including a company meeting which is required to be called under the Act, is not invalidated because of any procedural irregularity, unless the Court is of the opinion that the irregularity has caused or may cause substantial injustice which cannot be rectified by an order of the Court. The onus is on the party seeking to have the proceeding declared invalid to establish that a substantial injustice would occur; Australian Hydrocarbons NL v Green (1985) 10 ACLR 72.
- There is a considerable body of case law which has dealt with the consequences associated with the irregular calling of company meetings and as to the circumstances in which the Courts, acting on a broad notion of fairness, decides to interfere with the process. Neither Counsel referred me to any of these in support of their arguments.
- It seems to me that there can be no doubt that there were significant procedural irregularities in the way in which the ballot papers were distributed, and in the way in which the instructions were given to members as to how to return them.
- Whilst the circumstance that some ten of those who voted might have been misled by those instructions, and might, but for that misleading conduct have taken steps to ensure their voting papers were delivered personally in the relevant sense would not in my view justify the conclusion in this case that the votes were validly cast, it does lead to the conclusion that the process which led to the recording of votes on Motion 15 miscarried.
- It is more than evident from the findings of the Adjudicator, that she regarded the outcome of the AGM in relation to the vote on Motion 15 to be sufficiently tainted by the process to suggest that it was inappropriate to treat the motion as having been passed. Undoubtedly her views in that regard were influenced by the closeness of the vote, and the fact that, depending on what interpretation one placed upon the requirements in the Act for a vote to be valid, the result could easily have gone either way.
- Of course, there is necessarily a balancing of interests to be considered in the circumstances in which one is considering what the appropriate outcome should be having regard to what is just and equitable, having made the findings that were made and the requirements for the calling of meetings. On the one hand, the only suggested prejudice associated with upholding the orders of the Adjudicator, or perhaps more accurately determining that it is just and equitable to hold that the purported resolution passed on Motion 15 be treated as invalidly passed, is that a further meeting would be required at which the motion would be put.Assuming the committee of Q1, or others with the power to put a motion at an AGM are still minded to do so, there would be nothing to prevent Motion 15 to be re-put to the Body Corporate in general meeting in circumstances in which the process would be ensured to be completely untainted by the difficulties associated with the original vote. Were that to occur, it may well result in a more accurate reflection of the will of the lot holders in Q1.
- Implicit in the requirements of the Act is the necessity for the Body Corporate to make decisions where they require a special resolution, to reflect the objective will of its membership. Ideally that objective will would not be attended by technicality and become bogged down in contention about form or manner in which that will came to be expressed in a ballot paper. It is certainly undesirable that there be a situation, as undoubtedly occurred here, where a Body Corporate Manager, having apparent impartiality in the whole process, but the entity which indeed was responsible for drafting and sending out the ballot papers, and the explanatory information associated with it specifically invited lot holders to return their vote to the Body Corporate Manager rather than directly to the Secretary.
- It does not seem to me to be of any practical significance in this case that, as Counsel for the Second Respondent sought to contend, elsewhere within the material sent to lot -holders it was made clear that the voting papers were required to be returned to the Secretary. Indeed, it would be hardly surprising at all the lot holder would not read in fine detail the instructions that they were provided in relation to the provision of their votes looking to find inconsistencies and to seek clarification as to the legal position where there were inconsistencies.
- In my view it therefore follows that the injustice which flows from the conduct of the agent of the Body Corporate, and therefore the Body Corporate in misleading voters into believing they could return their votes to the intermediary Ernst, ought be remedied by treating the declared result on Motion 15 as invalid, particularly having regard to the closeness of the vote to achieve a special resolution.
- In a case in which the counting of the relevant Intermediary 10 votes against the motion would have made no difference to the result, it would not have been necessary to invalidate the result to achieve a just outcome. But in this case the counting of even 3 of those votes, taking into account which of them were invalid for non-s 86 reasons has the potential to have caused the purported decision of the Body Corporate in relation to Motion 15 to be perverse and not be an accurate record of the will of the lot owners as a whole.
- I should not be taken to be saying in these Reasons, that in any circumstance in which there are doubts cast upon the voting process associated with the passing of special resolutions, or in circumstances in which there are disputes about what votes properly ought be treated as valid and those which are not, that where the vote is close, that it is just and equitable to disallow the passing of the resolution. I am most certainly not saying so.
- I therefore order that the appeal be dismissed, with the result that the Adjudicator’s declaration that the resolution passed on Motion 15 at the AGM held on 12 April 2016 as invalid is upheld.
- I therefore dismiss the appeal.
 Reasons , , ,  and .
- Published Case Name:
Van Deurse & Anor v Q1 Management Pty Ltd & Anor
- Shortened Case Name:
Van Deurse v Q1 Management Pty Ltd
 QCATA 113
Member P Roney QC
23 Oct 2017