Muddied Waters
The recent adjudication decision of Whitsunday Waters Resort [2020] QBCCMCmr 84 (“Whitsunday Waters”) has caused consternation in BoCo land.
The decision has body corporate manager’s questioning thelong-standing practice of a BCM accepting voting papers, essentially on behalfof the secretary.
In short, Whitsunday Waters is a decision about whether a motionto grant a lease over an area of common property achieved a special resolution,and whether votes received for the motion were validly submitted.
The way votes must be exercised at a general meeting for schemesgoverned by the Body Corporate and Community Management (AccommodationModule) Regulations 2008 (Qld) (the “Accommodation Module”) is setout in section 84 of the Accommodation Module.
Relevantly, section 84(2) of the Accommodation Module states:
“(2) 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 facsimile) before the start of the meeting"
The requirements under the Standard Module are the same.
In Whitsunday Waters, the Adjudicator interpreted the decisionof Van Deurse & Anor v Q1 Management Pty Ltd & Anor[1],in conjunction with the Body Corporate and Community Management LegislationAmendment Regulation (No.1) 2003 SL No. 263, to mean section 84(2)(b) ofthe Accommodation Module “prohibits a voting paper from being returned to abody corporate manager.”
Two votes were invalidatedbecause they were sent by the owner via the body corporate manager, ratherthan directly to the elected Secretary of the body corporate.
What is curious about the decision is that it focusseson the two votes cast by email and by fax. The decision does not make anycomment about any votes posted to the Secretary, care of the BCM.
It may be the Adjudicator simply had no causeto turn their mind to the issue.
It may be the return address for the votingpapers was “PO Box 1234”, meaning the Adjudicator simply was not put on enquiryas to who owned the PO Box. Was it the PO Box of the BCM?
If the return address was care of “SuperStrata Managers, PO Box 1234”, would the Adjudicator have investigatedthe validity of the postal votes?
The decision is, with respect to theAdjudicator, rather unhelpful as it has muddied the waters, instead ofproviding much needed clarification.
As a result of the decision there are now manyBCM’s questioning whether they can continue the usual practice of acting as thepost box for the secretary.
Regrettably, there is no clear answer to thequestion.
One view is that a BCM who is the “careof” address of the Secretary on the meeting notice is not an intermediaryand that as such it is in order for votes to be sent to the BCM as thenominated return address for the secretary.
However, until this view is clearly accepted by an adjudicatoror a member or members of a Court or Tribunal of competent jurisdiction, thereis always a chance a voting paper sent to the Secretary care of the BCM’saddress is open to challenge and may be ruled invalid.
Another view is that a voting paper must be sent to theSecretary, without the possibility of any interference by an intermediary, thatis, sent to an address, for example, a PO Box, under the control of theSecretary.
Because of the Whitsunday Waters decision, this appears theprevailing view. Regrettably, if that is the case, the view completelyoverlooks the practical ramifications of voting papers not being able to besent care of the BCM.
Adjudicators are interpreting the legislation not from theperspective of what is workable for the body corporate, but from theperspective of what is intended by the specific wording of the legislation,having regard to:
- The explanatory notes of the amendment to this section when the word “by hand" replaced the word "personally" - which in effect say:
The explanatory notes to the amending regulation — the Body Corporate and Community Management Legislation Amendment Regulation (No.1) 2003 SL No. 263 — state 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; and
- Peter Beattie's speech in Parliamentwhen he introduced the amending legislation referred to above, which wasrecognised in the QCATA Q1 Management decision referred to above asfollows:
“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.”
“Isn’t the post man an intermediary” I hear you say. Not for thepurposes of interpreting the relevant section of the Module. Essentially thepost man is recognised as an authorised intermediary.
“What if the someone other than the Secretary collects thevoting papers for the mail” I hear you say. An excellent question, towhich there is no clear answer. I expect that will simply be a matter of factin the event of an application by an owner alleging voting papers were handledby an intermediary.
The ramifications of Whitsunday Waters being adopted asauthority for the proposition that voting papers cannot be sent to theSecretary, care of the BCM, is that a secretary, who we know by and large willbe unpaid, will be responsible for receiving all votes personally.
The issue is crying out for clarity. In the absence of theWhitsunday Waters decision being appealed, there will be no clarity, at leastat a judicial level.
In our view the issue is serious enough to warrant urgentlegislative intervention such that the Modules are amended to make it crystalclear that voting papers may be returned to the secretary care of the BCM.
So…. what now?
Given the uncertainty created by the WhitsundayWaters decision, we believe that any voter who wishes to have their vote on anopen motion not open to challenge should give the voting paper directly to theSecretary either:
- by hand; or
- by post to the Secretary’s postaladdress (it may be wise for a PO Box to be established for the scheme only accessibleby the secretary, and any open voting papers that are to be posted, are postedto that PO Box);
- by facsimile to a fax machine underthe sole control of the Secretary; or
- by e-mail to the Secretary’s to ane-mail address under the sole control of the Secretary.
Unfortunately, it is sometimes thecase that prudence and practicality are mutually exclusive.
Fair to say Whitsunday Waters has muddied the waters!!
As always, the Active team is here to assist with any body corporate legal issues you may have.
[1] [2017] QCATA 113 (23 October 2017).
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