Resident manager involvement in general meeting voting

AccomNews Wednesday, January 15, 2014

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The Office of the Commissioner for Body Corporate and Community Management continues to field enquiries about the extent to which a resident manager may lobby for owners’ support for motions submitted to a general meeting.

Some of the circumstances suggested by callers have included a resident manager offering to complete voting papers on behalf of owners in the letting pool or distributing sample voting papers including voting recommendations or asking owners to send their voting papers back to the resident manager for collation and delivery to the body corporate.

While the legislation is silent on the specific notion of lobbying, a resident manager canvassing owners for support for an upcoming vote should be aware of the following provisions of the Body Corporate and Community Management Act 1997 and the associated regulation modules:

• the schedule 2 and 3 codes of conduct within the act as they apply to caretaking services contractors and lettings agents;

• the requirement for voting papers for a secret ballot to be given by the voter directly to the returning officer and not through a third party or intermediary (see section 88 Accommodation Module/section 90 Standard Module); and

• the requirement for voting papers for an open ballot to be given by the voter to the secretary or to the body corporate manager if that function is delegated by the secretary, but not through a third party or intermediary other than in emergent circumstances (section 84 Accommodation Module/section 86 Standard Module).

Resident managers who hold both the caretaking and letting rights for a scheme are bound by both the schedule 2 and 3 codes of conduct. These codes state that resident managers:

• must not take unfair advantage of their position;

• must not exert undue influence on, or use unfair tactics against, the body corporate or the owner of a lot in the scheme;

• must act in the best interests of the body corporate and individual lot owners unless it is unlawful to do so;

• must not engage in unconscionable, fraudulent or misleading conduct; and

• must not cause a nuisance or hazard on scheme land or interfere unreasonably with the use or enjoyment of common property or a lot included in the scheme, or otherwise behave in a way that unreasonably affects a person’s lawful use or enjoyment of a lot or common property.

Accordingly resident managers should be careful in any activities aimed at securing owner support. Failure by a resident manager to afford due regard to the codes when lobbying owners may jeopardise the validity of a voting outcome and have implications for the resident manager’s engagement and authorisation, should the body corporate decide to pursue remedial action.

Resident managers should also not offer, or agree to an owner’s request, to submit a voting paper to the returning officer or secretary on behalf of an owner. To do so would be contrary to the legislation and may render the voting paper invalid.

A returning officer appointed for motions requiring a secret ballot cannot lawfully delegate their powers or functions to another person, and so cannot authorise another person to receive voting papers on his or her behalf. A number of adjudicators’ orders (see for example The Citysider [2013] QBCCMCmr 305, Merrimac Heights [2012] QBCCMCmr 277 and Villa Holloway [2004] QBCCMCmr 517) have declared invalid secret ballot voting papers that were given to the returning officer via a third party (including via a resident manager).

These adjudicators’ orders have followed two key district court decisions, body corporate for Surfers Waters v Angland & Anor [2000] QDC 034 and Hollis Holdings P/L v Hanley & Ors [2002] QDC 085, which ruled that where a statutory provision requires votes to be delivered to a particular person, the vote will be invalid if received from a third party rather than directly from the voter.

An open ballot voting paper given to the secretary via a third party will similarly be held invalid, other than where the voting paper is delivered to a body corporate manager exercising the delegated powers of the secretary pursuant to section 119 of the act (see for example Petrie Mansions [2001] QBCCMCmr 611, Sani Villa [2002] QBCCMCmr 334 and Festival Towers [2010] QBCCMCmr 128).

However, both the district court and adjudicators have recognised an exception for emergent circumstances. In the Sani Villa decision referred to above, the use of a courier to deliver a vote in the event of a postal strike was identified as an example of emergent circumstances. Even so, the adjudicator in Sani Villa noted that a third party entrusted with delivering the voting paper to the secretary in the emergent circumstance must not have an interest in the motions being voted on.

The situation is less clear when it comes to a resident manager distributing “how to vote” instructions or distributing already completed voting papers to owners for signing. While the legislation does not specifically deal with such matters, it is worth noting the views of Judge Robin in the district court decision of body borporate for Surfers Waters v Angland & Anor cited above. In that matter the resident managers, or one of their family members, had canvassed lot owners for written votes, supplied copies of the voting papers to the owners entitled to vote and collected completed voting papers for delivery to the secretary. As later paraphrased and applied in Hollis Holdings P/L v Hanley & Ors, Judge Robin considered that the legislation requires: “…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 finding the votes void Judge Robin explained that the legislative requirements regarding how votes are given to the secretary: “…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… 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.”

Consequently, I would encourage resident managers to carefully consider whether their proposed act of lobbying or canvassing could unduly interfere with the free and genuine vote of owners in the scheme or put at risk the validity of any owner’s vote. If in doubt, it may be prudent to seek legal advice or contact the BCCM Office Information Service on 1800 060 119.

(Note: the full text of the adjudicators’ decisions referred to in this article may be accessed at http://www.austlii.edu.au/au/cases/qld/QBCCMCmr/)