Brown v the Owners of Unit Plan 273 (Civil Disputes)
[2011] ACAT 2
•11 January 2011
ACT CIVIL & ADMINISTRATIVE TRIBUNAL
ANNE K BROWN v THE OWNERS OF UNITS PLAN 2737
[2011] ACAT 2
XD 1092 of 2010
Catchwords: Unit Titles – form of proxy - power of Executive Committee to limit proxies to unit owners – power to limit right of proxy holder to vote
List of legislation: Unit Titles Act 2001, s 115
Tribunal: Ms Jennifer David, Senior Member
Date of Original Order: 16 November 2010
Date of Reasons for Decision: 11 January 2011
AUSTRALIAN CAPITAL TERRITORY )
CIVIL & ADMINISTRATIVE TRIBUNAL ) XD 1092 of 2010
BETWEEN:
ANNE K BROWN
Applicant
AND:
THE OWNERS OF UNITS PLAN 2737
Respondents
Tribunal: Ms Jennifer David, Senior Member
Date: 16 November 2010
CORRECTED ORDER
1.Application granted.
.....................................
Ms Jennifer David
Senior Member
REASONS FOR DECISION
BACKGROUND
On 4 August 2010 the Applicant's husband (Michael Brown) applied to the Tribunal for a ruling on the validity of the proxy form being used by the Owners of Units Plan 2737 for their Annual General Meeting. The proxy form provided that:
"I/WE HEREBY APPOINT ………… [must be a Unit Owner in UP 2737] OR failing him/her, the CHAIRPERSON to act as my/our PROXY at the Annual General Meeting of the Owners - Units Plan 2737 to be held on
16 August 2010 or at any adjournment thereof."- Mr Brown also applied for a decision on "whether or not proxies can be used for the election of the Executive Committee, and of the Chairperson."
- As Mr Brown was not the owner of a unit title in Units Plan 2737, on 30 August 2010 the Tribunal ordered that Mrs Anne K Brown, who is such an owner, be substituted as the Applicant and the Owners of Units Plan 2737 be substituted as the Respondents.
- The matter was heard on 16 November 2010 when, after hearing oral submissions by both parties, I determined that, under section 115 of the Unit Titles Act 2001 ('UT Act'), the Executive Committee was not entitled to limit proxies to owners of unit titles under Units Plan 2737. I also determined that the Executive Committee did not have power under the UT Act to exclude proxies from voting in the election of the members for the Executive Committee and for its Chairperson. I apologise to the parties for the confusion in the recorded orders and for the reasons set out below reaffirm my oral determinations of
16 November 2010.
FINDINGS AND REASONING
- The Applicant submitted the following in support of her argument that the Proxy Form issued by the Executive Committee of Units Plan 2737 for the Annual General Meeting on
16 August 2010 was invalid in stating that a proxyholder must be a Unit Owner in Units Plan 2737:
a)The definition of "proxy" in the Oxford Concise Dictionary (7th ed. 1987) was general, not limited to particular persons to be holders of a proxy and not limited to the powers they could exercise under the proxy. That definition is "agency of substitute or deputy; person authorized to act for another; document authorizing person to vote on behalf of another, vote so given".
b)The definition of "proxy" in the Australian Investors Directory 2003 which provides that as follows: "proxy (1) a written authorisation by a member of a company for another person (a proxyholder) to vote on the member's behalf at a general meeting of a company. The proxy may specify the way in which the proxyholder is to vote on each resolution, or may leave the matter to the proxyholder's discretion. Commonly, the chairman of the meeting is given proxies by many members. (2) A proxyholder. There is no requirement for a proxyholder to be a member of the company." Again, this definition does not limit who can be a proxyholder nor limit the matters on which a proxyholder may vote.
c)Section 115(3)(b) of the UT Act provides that an owner must not appoint either the manager or a service contractor as a proxy to vote at a general meeting. By deduction, this means that a non-owner can be appointed a proxy since the sub-section only provides for two limits to those who can be appointed.
In support of the validity of the wording of the Proxy Form, the Respondents submitted that:
a)There was no objection to the wording of the Proxy Form at the Annual General Meeting. The objection by Mr Brown was made subsequently. The same wording had been used in a Proxy Form issued for a Special General Meeting in May 2010 without any objection.
b)The Executive Committee of Units Plan 2737 met prior to the Annual General Meeting, considered section 115 and made improvements in the wording of the Proxy Form.
Sub-section 115(2) provides that the form appointing a proxy must be approved by the Executive Committee. The Executive Committee decided to limit proxyholders to unit owners as they are a single interest group and the common point is ownership of a unit title.c)There is no definition of a "proxy" in the UT Act. Such a single interest group as the owners of unit titles under Units Plan 2737 are akin to a co-operative or association. Under their respective Acts proxyholders for both types of groups are to be members of the cooperative or association: section 178(4) of the Cooperatives Act 2002 provides that a person may only be a proxy if the person "is an active member of the cooperative"; Clause 30(1) the Associations Incorporation Regulation 1991 provides that members are only "entitled to appoint another member as proxy" for a general meeting of an association. The Executive Committee had sought to place a similar limit on who could be appointed a proxy for the Units Plan 2737 Annual General Meeting.
d)In Ford's Principles of Corporate Law (12th ed.) p2, the author notes that only members of a corporation can be appointed proxyholders.
Having considered all the above submissions I made the following findings:
a)Sub-section 115(3) having excluded two types of person who could not be appointed as proxyholders, the section had to be interpreted as not limiting the persons who could be appointed proxy holders to unit owners only. Having included two limits on the persons who could be appointed proxyholders, if the legislature had intended to limit possible proxyholders to unit owners, it would have included such a limitation in the section. Therefore, it follows that the wording in the Proxy Form for the Annual General Meeting on 16 August 2010 was invalid in that it sought to limit possible proxyholders to Unit Owners in Units Plan 2737.
b)The power of approval of the Proxy Form by the Executive Committee provided for in subsection 115(2) of the UT Act, does not include the power to change the legal effect of the legislation in relation to what persons can be appointed as proxyholders by the Unit Owners in Units Plan 2737.
c)Unless the Unit Owner states in writing that there is a limit (or limits) on a proxyholder's power to vote, there is no limit on what topics a proxyholder validly appointed under section 115 of the UT Act by a Unit Owner can vote. The legislation not providing limits, a proxyholder is entitled to vote for the members of the Executive Committee and for the Chairperson.
DETERMINATION
Based on the above findings and reasons, the Tribunal therefore determined as follows:
1. That the Proxy Form for the Annual General Meeting of Units Plan 2737 on
16 August 2010 was invalid and of no legal effect when it provided that:i.Unit Owners could only appoint another Unit Owner as a proxy; and
ii.Proxyholders so appointed could not vote at the election of the Executive Committee.
………………………………..
Ms Jennifer David
Senior Member
PUBLICATION DETAILS
TO BE PUBLISHED
To be completed by Tribunal Staff
PART A FILE NO:
APPLICANT: ANNE K BROWN
RESPONDENT: THE OWNERS OF UNITS PLAN 2737
COUNSEL APPEARING: APPLICANT: NIL
RESPONDENT: NIL
SOLICITORS: APPLICANT: NIL
RESPONDENT: NIL
OTHER: APPLICANT: NIL
RESPONDENT: NIL
TRIBUNAL MEMBER/S: Senior Member Jennifer David
DATE/S OF HEARING: 16 November 2010 PLACE: CANBERRA
DATE/S OF DECISION: 16 November 2010 PLACE: CANBERRA
PART B
RECOMMENDATION:
FULL REPORT ( ) CASE NOTE ( ) UNREPORTED DECISION ( )
COMMENTS:
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