Body Corporate Meetings – proxy votes vs voting using a power of attorney?

If a lot owner of a body corporate is unable to attend a general meeting, it is not unusual for them to in essence “give” their vote by way of proxy to another lot owner.  However there are restrictions on the circumstances in which a proxy vote can be exercised.  Pursuant to section 103 of the Body Corporate and Community Management Act 1997 (Act) the regulation module applying to the community titles scheme may provide for, among other things, the way a proxy is appointed, how it can be used and the maximum period of appointment.

For example, under regulation 105 of the Body Corporate and Community Management (Accommodation Module) Regulation 2017 (Accommodation Module) if there are 20 or more lots included in the community titles scheme, one person cannot hold proxies greater in number than 5% of the lots.  If there are fewer than 20 lots included in the scheme, one person cannot hold more than 1 proxy.  Under regulation 107 of the Accommodation Module a proxy cannot be exercised, among other things, for voting on:

• choosing a member of the committee;
• a majority resolution;
• the engagement of a person as a body corporate manager or service contractor;
• amendments to or termination of such engagements; and
• motions decided by secret ballot.

The use of a power of attorney however is not subject to the legislative restrictions placed on the use of proxy votes, as was illustrated in the case of Willahra Tower [2016] QBCCMCmr 368.

It that case the applicant former body corporate manager (Applicant) challenged the validity of a motion passed at the scheme’s annual general meeting which resulted in the appointment of a new body corporate manager.

Prior to the annual general meeting, 27 powers of attorney (POAs) in favour of one individual (Attorney) were submitted to the Applicant on behalf of the body corporate’s secretary.

The Attorney exercised the powers granted by voting in favour of the Applicant’s competitor.

The Applicant argued the practical effect of the use of the POAs in this way was that they undermined the requirements of sections 105 and 107 of the Accommodation Module in respect of the use and appointment of proxies for voting at general meetings.

This argument was rejected on the basis the Accommodation Module should not be read in a manner that limited the number of powers of attorney that may be used for voting purposes as if it is an appointment similar to that of a proxy.

The Accommodation Module specifically contemplates the use of powers of attorney and places no limit on them.  In comparison, the Accommodation Module contemplates the use of proxies and places limits on their use.

The use of the POAs in this manner did not usurp the proxy provisions of the Accommodation Module as a power of attorney is not that same as a proxy.   The two relationships were entirely different and intended to be treated differently.  Accordingly the votes had been validly cast.

Takeaways

An appointment under a power of attorney is not the same as being granted a proxy.   Subject to the actual terms of the document, the powers granted to an attorney are much wider than those which flow under a grant of proxy, the powers of which within a body corporate context are subject to statutory restrictions.

Links and further references

Cases

Willahra Tower [2016] QBCCMCmr 368

Legislation

Body Corporate and Community Management Act 1997

Body Corporate and Community Management (Accommodation Module) Regulation 2017

Further information about body corporate disputes

If you need assistance in relation to any body corporate related dispute, contact Dundas Lawyers Gold Coast for a confidential and obligation-free discussion:

Disclaimer

This article contains general commentary only.  You should not rely on the commentary as legal advice.  Specific legal advice should be obtained to ascertain how the law applies to your particular circumstances.