CAN VOTING PAPERS BE SENT TO THE BODY CORPORATE MANAGER?

Introduction

An adjudicator recently ruled that voting papers sent to a body corporate manager were invalid as they were not given in compliance with section 84(2) of the Accommodation Module.  Section 84(2)(b) provides that a voter casts a written vote by giving the voting paper to the secretary (by hand, by post or by facsimile) before the start of the meeting.  The adjudicator said two voting papers given to the body corporate manager by facsimile and e-mail were invalid because they were not given to the secretary.

This has caused shockwaves in the body corporate management industry because it has been longstanding convention for voting papers to be given to the secretary care of the body corporate manager’s address.  This convention has given committees decades of comfort in turning up to a general meeting knowing that a professional strata manager has done the “hard yards” of collecting, organising and collating the papers to allow for a smoother and quicker general meeting.

Does the entire body corporate management industry have to change what they are doing now?  Do secretaries have to devote many more volunteer hours to fulfilling these administrative tasks in the lead up to an AGM?  I don’t think so.

An introductory note

This is a lengthy article.  In it, I am openly disagreeing with a decision made by an experienced and respected adjudicator.

It needs to be lengthy in order to properly dissect this recent adjudication decision, particularly the authority the adjudicator was relying upon, and justify the opinion I hold.  If nothing else, what follows may be an insight into the level of scrutiny and careful consideration that goes into complex questions of law.

If you would prefer to “cut to the chase” and simply know my view on how can voting papers be given to the secretary, then it is:

  • If the voter gives their voting paper to the secretary by posting it to the secretary’s return address – it is valid even if that return address is the mailing address of the body corporate manager.
  • If the voter hands the voting paper to someone else (including a body corporate manager) to then give to the secretary: it is invalid.
  • If the voter sends the voting paper by facsimile or post to someone else to then give to the secretary: it is invalid – the voting paper has to be sent to the secretary by post or facsimile to the secretary’s return address.

The recent decision

In Whitsunday Waters Resort [2020] QBCCMCmr 84, an adjudicator held:

“In Van Deurse & Anor v Q1 Management Pty Ltd & Anor, Member Roney QC was unequivocal that this provision prohibits a voting paper from being returned to a body corporate manager.”

The adjudicator’s citation of the Van Deurse decision was: [2017] QCATA 113 at [91]-[93].

Member Roney QC heard the appeal to the Queensland Civil and Administrative Tribunal (QCAT) in Van Deurse against an adjudicator’s decision in Q1 [2016] QBCCMCmr 550.

It is necessary to closely examine the decisions in Q1 and Van Deurse in order to scrutinise the decision in Whitsunday Waters Resort.



In Q1, the adjudicator below made these findings having regard to the circumstances of the Q1 case:

  • There was a strongly contested motion that needed to pass by special resolution.
  • The chairperson declared that the motion apparently passed by a slim majority.
  • That slim majority was only possible because 10 votes against the motion were ruled invalid and not counted.
  • The committee had proposed the motion and had an obvious interest in seeing it pass. The adjudicator went so far as to criticise the committee for trying to find “minor voting irregularities as an excuse to rule the voting paper invalidate”[1].
  • The general meeting material gave competing instructions on where to send written votes.

The adjudicator at first instance made these findings:

“The voting papers were confusing in that the papers directed lot owner’s (sic) to cast their vote by forwarding it to the Body Corporate Manager at a given address. The second paragraph on the first page of that document directs the lot owner’s (sic) to send the voting paper to the Body Corporate Manager, yet the last page of the voting paper directs the lot owner to return the voting paper to the Secretary at Q1. The reply paid envelope had the Secretary’s address on it, but the evidence suggests that the details and instructions were confusing. Due to the confusion, some lot owners returned their voting papers to the body corporate manager, [the Body Corporate Manager], instead of directly to the Secretary. These votes were not counted.” [2]

The body corporate manager and the secretary had different mailing addresses.

  • The 10 lot owners who had their votes discounted had “crossed out the address for the Secretary on the voting envelope and caused the voting papers to be given to [the Body Corporate Manager]”.[3] In other parts of the reasons, the adjudicator clarifies that they were “handed”[4] to the body corporate manager.

The adjudicator in Q1 invalidated the resolution. She held that the 10 voting papers given to the body corporate manager should have been counted, and relevantly made these findings:

  • “I am of the view, that given the nature of the confusion within the voting papers and explanatory material, including postal addresses for both the Secretary and [the body corporate manager], combined with the fact that [the body corporate manager] has acted as Secretary for the scheme at times, that any votes hand delivered to [the body corporate manager], complied with section 86(2) of the Standard Module[5], on this point alone, and should be counted.”[6]
  • “Combined with the fact there were differing mailing addresses to send the voting papers too, and the fact that [the body corporate manager] had acted in the capacity of Secretary for the body corporate in the past, could have led some voters to be confused as to where to deliver their voting papers, and a belief that by delivering voting papers to [the body corporate manager] was in compliance with the voting instructions.”[7]

The secretary of Q1 appealed that decision. The appeal was ultimately dismissed, but Member Roney QC in Van Deurse made some instructive comments and findings along the way:

  • despite the confusion in the voting instructions and the body corporate manager having “acted in the capacity of Secretary … in the past”, the appeal tribunal simply found that the 10 votes did not comply with section 86 of the Standard Module because they were not given to the secretary; but
  • the appeal tribunal ultimately dismissed the appeal and upheld the adjudicator’s decision to invalidate the resolution because it was the just outcome in circumstances where voters were invited to return their papers to the body corporate manager.

Member Roney QC reached his views in circumstances where voters were wrongly informed that they could send voting papers to the secretary at the secretary’s address and to the body corporate manager at the body corporate manager’s address (and these mailing addresses were different) and the 10 disallowed votes were handed to the body corporate manager who was to then pass them on to the secretary.

What seemed to trigger the dispute was the fact that the committee disallowed votes handed to the body corporate manager because those votes were against the committee’s preferred position on the motion.

The Van Deurse decision has since been applied in two decisions by the same adjudicator as apparently being “unequivocal”[8] that section 86 of the Standard Module “prohibits”[9] a voting paper from being returned to a body corporate manager.

Why does any of this even matter?

It has been the convention in Queensland’s strata industry for many decades that voting papers are to be sent to the secretary care of the body corporate manager’s address.  This has occurred for a long time with very few challenges.

In my experience, nearly every community titles scheme with a professional body corporate manager has administrative arrangements in place whereby voting papers can be sent to the secretary care of the body corporate manager’s office.

If this convention could no longer stand, the secretary of every body corporate in Queensland would need to have their own addresses to receive voting papers by post and facsimile quite apart from the body corporate manager.  This will cause obvious complications if the secretary:

  • resides interstate or overseas and cannot attend the general meeting;
  • does not have the means to make sure those voting papers are immediately sent to whomever is attending the general meeting, if they cannot make it; or
  • simply does not want to be swamped with dozens, if not hundreds, of voting papers.

Until recently, the only challenge to this industry convention that gained traction was in Q1 where there was the unique situation of conflicting addresses for the return of written votes, and the committee disallowed votes handed to the body corporate manager. It was in those circumstances that the Van Deurse decision was made.

It is not surprising Member Roney QC made the decision he did: section 86(2) of the Standard Module says voting papers are to be given to the secretary by hand. If they are given to the body corporate manager by hand to then pass on to the secretary, then the body corporate manager is acting as an intermediary.

What if the voting papers were posted to the secretary care of the body corporate manager’s address, and that is the only way in which the secretary wants the voting papers returned to them?  Remember, Q1 dealt with circumstances in which the secretary’s mailing address was different to the body corporate manager’s mailing address.

In Hollis Holdings Pty Ltd v Hanley & Ors [2002] QDC 85 at [23], His Honour Judge Dodds considered circumstances in which two lot owners sent their voting papers to another lot owner.  That lot owner then acted as an intermediary to deliver them to the secretary.  The voting papers were rejected, and the adjudicator and Judge Dodd’s on appeal upheld that ruling. Judge Dodd’s explained that:

“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.”

What Hollis Holdings and Van Deurse have in common is that these appeal bodies both found that voting papers delivered to a secretary by an intermediary fall outside the scope of section 86(2) of the Standard Module.  The voter has to give their voting paper to the secretary by hand, by post or by facsimile.

I do not interpret the Van Deurse decision as authority for prohibiting voting papers from being returned to the secretary care of the body corporate manager’s mailing address.

The one adjudicator who has found the Van Deurse decision to be “unequivocal” insofar as it “prohibits” voting papers being sent to a body corporate manager has, with respect, been referencing the wrong parts of the decision as authority for this.

Paragraphs 91-93 of Member Roney QC’s decision in Van Deurse are referenced by that same adjudicator in Cypress Apartments [2019] QBCCMCmr 249 and Whitsunday Waters Resort [2020] QBCCMCmr 84.  But Member Roney QC had much earlier in his decision in Van Deurse made the ruling that the voting papers given to the body corporate manager instead of the secretary were noncompliant with section 86(2) of the Standard Module.  These were Member Roney QC’s words at paragraph 63:

“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 precondition to bringing the circumstances within one of the exceptions. It would be a necessary element, but not a sufficient element.”

Member Roney QC was referring to the decision of His Honour Judge Robin QC in Body Corporate for Surfers Waters v Angland & Anor [2000] QDC 34.  Here, Judge Robin QC was dealing with a dispute where the son of the caretaking service contractor bulk delivered voting papers from owners on a motion to extend the management rights.  In that way, the son of the caretaker was acting as an intermediary.  The question before Judge Robin QC was whether this was a permissible way for voters to give their voting paper to the secretary – to have them delivered by the caretaker’s son.

Earlier in his reasons in Van Deurse from [48]-[50], Member Roney QC’s examined in detail that decision of Judge Robin QC in Surfers Waters.  Judge Robin QC strictly applied what is now section 86(2) of the Standard Module in the context of whether a voting paper could be accepted in a way that was not strictly in accordance with section 86(2).  Namely, whether there could be exceptional reasons (ie an emergency) for a secretary to accept voting papers given to them by an intermediary (the manager), rather than by the voter handing it to the secretary or sending them by post or facsimile to the secretary’s return address.  Judge Robin QC said in Surfers Waters at [19]:

“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.”

Member Roney QC found that the 10 voting papers handed to the body corporate manager instead of directly to the  secretary were noncompliant with section 86(2), and there was no reason to think this could fall within any of the hypothetical exceptions Judge Robin QC considered in Surfers Waters could arise in an emergency.  That is why Member Roney QC considered the adjudicator in Q1 was in error in finding that those 10 voting papers should have been accepted as valid where he relevantly said at [50]:

“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.”

What both Member Roney QC and Judge Robin QC were considering was whether votes delivered by an intermediary were valid:

  • In Van Deurse, the 10 votes were given by hand to the body corporate manager to then give by hand to the secretary, in circumstances where there were conflicting instructions on how to send votes by post.
  • In Surfers Waters, the voting papers were collected by the caretaker’s son to then give by hand to the secretary.

In both cases, someone was acting as an intermediary to get voting papers to the secretary in some way other than in compliance with section 86(2), which requires the voter to give their voting paper to the secretary – by hand, by post or by facsimile – before the start of the meeting.  Those are the three ways voting papers are given to the secretary, and Van Deurse was only concerned with voting papers given by hand, not by post or facsimile.

A voter is not using an intermediary if they send the voting paper to the secretary’s nominated return address by post or facsimile.

However, the adjudicator in Whitsunday Waters Resort [2020] QBCCMCmr 84 invalidated two voting papers that were sent by facsimile and e-mail to the body corporate manager.  The brevity of the adjudicator’s enquiries do not reveal this, but my own enquiries inform me that the voting instructions were that voting papers could be sent to The Secretary c/- the body corporate manager’s facsimile and e-mail address.

Neither Van Deurse nor Surfers Waters were dealing with a circumstance in which voting papers were given to the secretary by post, facsimile or e-mail to a return address that was care of the body corporate manager.  So I do not think Van Deurse stands as “unequivocal” authority that section 86(2) “prohibits” voting papers being sent by post or facsimile to the secretary care of the body corporate manager’s address in any circumstances whatsoever.  That principle does not, in my view, arise when the circumstances of Van Deurse are carefully scrutinised.  Van Deurse was only unequivocal authority that section 86(2) prohibits voting papers being given by hand to a body corporate manager instead of the secretary.

So how can voting papers be given to the secretary?

Is the voter strictly complying with section 86(2) if they return the voting paper to the secretary care of the body corporate manager’s mailing address?  I think they are if those are the instructions they have been given.

The focus on an intermediary – whether that is a body corporate manager, a caretaking service contractor, a lot owner, or anyone else – only arises where that intermediary imposes themselves in the chain of a voter giving the paper to the secretary.

My view is that:

  • If the voter hands the voting paper to someone else (including a body corporate manager) to then give to the secretary: it is invalid[10][11].
  • If the voter sends the voting paper by facsimile or post to someone else to then give to the secretary: it is invalid[12] – the voting paper has to be sent to the secretary by post or facsimile to the secretary’s return address.
  • If the voter gives their voting paper to the secretary by posting it to the secretary’s return address – it is valid even if that return address is the mailing address of the body corporate manager.

It is for a secretary to determine the return address they want to be served documents to. In my view, the secretary decides what their return address is because the nomination of that address and voters sending their votes to the secretary at that return address is 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.”[13]

Why is there so much confusion?

A different adjudicator considering a different dispute arising in Cypress Apartments [2018] QBCCMCmr 364 relevantly commented at [14] that:

The vote for Lot 14, which was mailed, may have been valid if it was mailed to the secretary, noting that the apparent mailing address for the secretary in the EGM notice was care of the [body corporate manager].

That adjudicator made that decision in full awareness of the Van Deurse decision.

A year later, the same adjudicator who made this most recent Whitsunday Waters Resort decision found in Cypress Apartments [2019] QBCCMCmr 249 that all voting papers posted to the body corporate manager (presumably this was the postal address for the secretary) were invalid.

If you are following this article carefully you might be wondering why two different adjudicators in relation to the same scheme (Cypress Apartments) have seemingly taken two different approaches to the validity of voting papers sent to a body corporate manager even though that was the secretary’s nominated return address.

Firstly, adjudicators, tribunals and courts make decisions based on the circumstances before them. One decision does not automatically stand as a precedent or authority in other matters unless it is a decision of a superior court or tribunal and its circumstances fit those that are under scrutiny. Lawyers often argue over whether an authority can be distinguished from the circumstances of the case they are arguing about.

Secondly, adjudication decisions do not create binding precedent. Adjudicators can, and often do, reach different conclusions.

The wrap-up

What lies beneath the surface of litigation (or the strata industry) is often the most interesting part of a legal dispute.  The arguments about the validity of voting papers in the Q1 and Whitsunday Waters Resort adjudications arose because of political contests within those strata communities.

Faced with sharp controversy, allegations of impropriety, and general meeting results that turn on a slim majority of votes, it is no wonder that adjudicators and the appeal tribunal prefer to err on the side of caution and invalidate any contested resolution.  As those independent decision-makers see it – the process for casting and collecting voting papers should be aboveboard and conducted in a way to ensure that votes can be cast in ways that are “enthusiastic, free and genuine”.  If there is any doubt about the result, then the simplest resolution to the dispute is to reset the result and allow the community to vote again.

The secretary is a voting committee position.  Caretaking service contractors, body corporate managers and their associates are ineligible to be voting committee members.  The secretary is presumed to be independent of the commercial influences of those stakeholders, so they can make up their own mind on where they are willing to receive the post.

If the secretary has any doubt that voting papers sent to them care of the body corporate manager’s address cannot come to them with the warranty that the vote is enthusiastic, free and genuine – then they may nominate a different address or the committee can recommend that the motion is decided by secret ballot.

If a body corporate wants to take a conservative approach to this, then its secretary should nominate their own return address to receive voting papers by post or facsimile, instead of the body corporate manager’s address.  If you follow my opinion, there is a risk that an adjudicator will invalidate voting papers.  You may then either have to call another general meeting to clean it up, or appeal the adjudicator’s decision.  Appeals are permitted because an adjudicator may have made an error of law.

My role, as a lawyer, is to give advice based on my view of what the law (the legislation) does and does not require.  That sometimes means not treating an adjudicator’s decision as scripture.  Similarly, adjudicators resolve disputes based on their view of what the law does and does not require.  The right to appeal exists because of the possibility of an error of law.

In my view, and with all due respect, the adjudicator in Whitsunday Waters Resort made an error of law.  He misapplied the decision of QCAT’s appeal division in Van Deurse.

Post-script

Since the initial publication of this article, I have received a number of queries. I provide the following additional information in response to those.

  • What if the secretary is not present at the general meeting? Who do voters hand their voting papers to then?

In that case, they would then be handed to the person chairing the general meeting, as permitted by section 87(2) of the Standard Module.

  • Section 86(2) of the Standard Module says voting papers have to be given by hand, by post or by facsimile. Can voting papers be sent by e-mail?

Yes. Returning a vote by facsimile does not just mean by a fax machine. Common definitions of facsimile now refer more generally to “a system of transmitting and reproducing graphic material by means of signals sent over telephone lines”, which was one of the definitions preferred by an adjudicator in Rose-A-Lyn [2018] QBCCMCmr 275 at [39].

  • Could the body corporate manager receive the voting papers on behalf of the secretary as an “authorised power” given under section 119 of the BCCMA?

In Whitsunday Waters Resort, the adjudicator considered arguments put forward by the committee that the body corporate manager was authorised to exercise the powers of the secretary given under section 119 of the BCCMA when receiving voting papers returned to the secretary. He considered it was not obvious that receipt of voting papers is a power of the secretary and followed the view of another adjudicator in Cypress Apartments [2018] QBCCMCmr 364 at [58]-[60] on the same point.

What was not acknowledged in either Whitsunday or Cypress Apartments is that the term “power” is defined for the purposes of section 119 in schedule 6 of the BCCMA to include “doing an act or making a decision for the purpose of performing a function.” The ordinary meaning of a function is a kind of action or activity proper to a person (such as a secretary).

In my view, receiving voting papers is a function of a secretary. The purpose of allowing a body corporate to authorise a body corporate manager (who is engaged to provide administrative services) is to have them do acts for the purpose of performing the secretary’s functions. It eases the burden placed on a volunteer secretary by allowing a body corporate manager to assist with these administrative functions.

When considering the proper definition of “power” for the purpose of section 119, another adjudicator in Milieu Middlemount [2019] QBCCMCmr 248 held at [13]:

“It would not be surprising if the Body Corporate had authorised [the body corporate manager] to exercise a power or carry out a function of a secretary of a nature provided for in the Accommodation Module, particularly with respect to general meetings.”

The adjudicator attached a footnote to that finding that included a reference to section 84 of the Accommodation Module, which sets out that a voter may cast a written vote by giving the voting paper to the secretary by hand, by post or by facsimile.

This simply reinforces my view a secretary can nominate the body corporate manager’s address as the return address for voting papers.

About the author

Jason Carlson is a partner of Grace Lawyers, a specialist strata law firm. This week the firm launched its new website: gracelawyers.com.au

Jason is also a director of Strata Community Association (Qld) and has been a member of its legislation committee for many years.  In that capacity, Jason has been extensively lobbying for changes to Queensland’s body corporate legislation to improve the strata industry.

This information is intended to provide a general summary only and should not be relied on as a substitute for legal advice.

[1] Q1 [2016] QBCCMCmr 550 at [53].
[2] Ibid at [21].
[3] Ibid, at [18].
[4] Ibid, at [10] and [14].
[5] Section 86(2) of the Standard Module is a mirror provision to section 84(2) of the Accommodation Module.
[6] Ibid, at [38].
[7] Ibid at [71].
[8] Cypress Apartments [2019] QBCCMCmr 249 at [13].
[9] Ibid at [13], and again in Whitsunday Waters Resort [2020] QBCCMCmr 84 at [3].
[10] That is what happened in the Q1 decision and was the factual circumstances upon which Member Roney QC found the 10 voting papers handed to the body corporate manager were not in compliance with section 86(2): Van Deurse at [61]-[64].  They had to be handed to the secretary, and not anyone else.
[11] Voting papers can also be given to the person chairing a general meeting, if the secretary is not present: section 87(2) of the Standard Module.
[12] Hollis Holdings Pty Ltd v Hanley & Ors [2002] QDC 85.
[13] His Honour Judge Robin QC in Body Corporate for Surfers Waters v Angland & Anor [2000] QDC 34 at [19].