New South Wales Supreme Court CITATION : Eventang Development (Pyrmont) Pty Limited v The Owners Strata Plan 51573 & anor. [2001] NSWSC 452 FILE NUMBER(S) : SC 13026/2000 HEARING DATE(S) : 28 May 2001 JUDGMENT DATE : 1 June 2001 Eventang Development (Pyrmont) Pty Limited PARTIES : The Owners Strata Plan 51573 Strata Schemes Board of NSW JUDGMENT OF : Sully J at 1 COUNSEL : M. A. Bradford - Plaintiff P. Koroknay - Defendant Alex Ilkin & Co. - Plaintiff SOLICITORS : David Le Page - lst Defendant I. V. Knight - 2nd Defendant Strata Schemes Management Act 1996 (NSW) Justices Act 1902 (NSW) LEGISLATION CITED : Strata Titles Act 1973 Strata Schemes Management Regulation 1997 Interpretation Act 1987 (NSW) CASES CITED : Liverpool Borough Bank v Turner (1860) 45 ER 715 at 718 Day Ford Pty Ltd v Sciacca (1990) 2 Qd. R 209 at 216, 217 DECISION : Appeal dismissed with costs SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION SULLY J 1 June 2001 13026/2000 - Eventang Development (Pyrmont) Pty Limited v The Owners Strata Plan 51573 & anor. JUDGMENT 1 HIS HONOUR: By a summons filed on 3 November 2000 Eventang Development (Pyrmont) Pty Limited, ("Eventang"), appeals against an order made in favour of the Owners, Strata Plan 51673, ("the Strata Owners"), by the Strata Schemes Board of New South Wales, ("the Board"). Such an appeal lies by virtue of s 200 of the Strata Schemes Management Act 1996 (NSW), ("the Strata Act"). The appeal lies, relevantly, only upon a question of law; and is governed, generally speaking, by the provisions of Part 5 of the Justices Act 1902 (NSW) as applicable to "a determination that a Justice ………………… made ………………in the exercise of summary jurisdiction on an information or complaint". 2 The particular relief claimed in the summons is: "1. An order pursuant to Sec 109(a) of the Justices Act quashing the order of the Second Defendant to dismiss the appeal of the Second Defendant. 2. An order pursuant to Sec 154(1)(a) of the Strata Schemes Management Act, 1996 ("the SSM Act") declaring that the resolutions passed at the Annual General Meeting of the First Defendant held on 19th August 1999 ("the Meeting") are to be treated as a nullity. 3. Alternatively to the relief sought in 2 above, an order that the matter be remitted to the Second Defendant to be dealt with according to law. 4. (a) A declaration that the Second Defendant erred in law in not finding that the principles of waiver and/or estoppel were to be applied so as to preclude the First Defendant from insisting on strict compliance with the requirements of Sec 118 of the SSM Act. (b) A declaration that the Second Defendant erred in law in not finding that the resolutions passed at the Meeting were to be treated as a nullity pursuant to Sec 154(1)(a) of the SSM Act. (c) A declaration that the Second Defendant erred in law in not exercising the discretion to treat those resolutions as a nullity pursuant to Sec 154(1)(a) of the SSM Act. 5. Costs" 3 Both the Strata Owners and the Board are joined as defendants to the summons. By a notice filed on 1 December 2000 the Board entered a submitting appearance, submitting to the orders of this Court save as to costs. The Strata Owners appeared by counsel at the hearing before this Court and contested Eventang's entitlement to any of the relief claimed by it in the summons. 4 The following facts are either admitted, or are established to my satisfaction on the probabilities: [1] On 27 November 1995 Strata Plan 51673 was registered. Eventang was the original owner. The principal of Eventang was one Thomas Young. CSM Services Group Pty Ltd ("CSM") were appointed Strata Managing Agents for the Owners Corporation. [2] On 23 July 1996 Eventang executed under its common seal a document purporting to be a notice given pursuant to the Strata Titles Act 1973 , the legislative predecessor of the Strata Act, of the appointment of Mr. Young as its company nominee with respect to a number of lots in the Strata Plan. Each lot was identified by its proper lot number. Each of the designated lots was, at the time of the giving of the notice, retained by Eventang in its own ownership. The notice was addressed to: "The Secretary, the proprietors - Strata Plan Number 51673" at the appropriate address. It will be necessary to say, presently, something more about the nature and effect of this document. [3] The first annual general meeting of the Body Corporate of the Strata Plan took place on 25 July 1996. According to the minutes of the meeting one Mr. P. J. Callaghan of CSM, who was in attendance at the meeting with two other representatives of CSM, was nominated and elected to chair this particular meeting. The minutes contain a list of proxies which were, as I infer, accepted as valid for the purposes of the meeting. Among those proxies Mr. Young is listed. The listing is expressed as: "Mr. T. Young - Eventang Development (Pyrmont) Pty Limited ………..( there is here inserted a reference to each relevant lot number) ………….to Mr. R. Chan" . [4] The second annual general meeting of the Body Corporate was held on 13 November 1997. Mr. Callaghan was again nominated and elected to chair the meeting. Once again, proxies were carefully noted. There are only two proxies noted, each of them being a proxy given by Mr. Young. The proxies are noted in the following form: "Mr. T. Young of Eventang Development (Pyrmont) Pty Ltd to Mr. Chan ………….. (there is then included a reference to the lot number of each relevant lot) " ; and: "Mr. T. Young of Eventang Development (Pyrmont) Pty Ltd to Mr. D. Hassall………. (there is then inserted a reference to each relevant lot number) " . There is nothing in the minutes of this annual general meeting to suggest that the proxies given by Mr. Young were challenged in any way, let alone rejected as invalid. [5] The proxy form given by Mr. Young to Mr. Hassell in connection with the 1997 annual general meeting was not in evidence at the hearing before the Board and is not in evidence in this Court. There was, however, in evidence before the Board an exhibit in the form of a chronology. It appears from this document that the proxy form given to Mr. Hassall gave his name and gave his address as, simply, "Sydney" . [6] On 9 August 1999 a notice of annual general meeting was issued. It notified 19 August 1999 as the intended date of the meeting, and listed eleven agenda items. On 18 August 1999 a voting paper executed by Eventang was faxed to CSM. Indicated on the paper was Eventang's voting intention respecting each of the items 1 to 9 inclusive on the agenda. A proxy appointment form, also executed by Eventang, was also faxed. It appointed Mr. David Hassell as proxy. It will be necessary to consider, presently, the nature and effect of this document. [7] On 19 August CSM wrote to Mr. Young. The letter reads as follows, formal parts omitted: "Thank you for forwarding your Proxy Notice in respect of the annual general meeting to be held today. It has now come to our attention that the Company Nominee form dated 23 July 1996 does not comply with the provisions of the Strata Schemes Management Act 1996. It would be appreciated if an appropriate current and complete form could be forwarded to enable the Strata Roll to be updated." [8] This letter was despatched by ordinary post. A copy of the letter was exhibit 8 at the hearing before the Board and is part of exhibit A in the hearing before this Court. Noted at the foot of the exhibited copy of the letter is the following: "Received this morning in mail. Too late to act. Jack" . There is, unfortunately, no indication of the actual date of receipt of CSM's letter of 19 August. What is clear is that the letter was not received prior to the annual general meeting held on 19 August. [9] The 1999 annual general meeting convened at 5.00 pm on 19 August 1999. Once again, Mr. Callaghan was nominated and elected to chair the meeting. What actually occurred at the meeting is evidenced in part by the minutes of the meeting; and in part by evidence given orally at the Board hearing by Mr. Hassall, and by a Mr. Brownowski whose wife was the proprietor of a particular lot in the Strata Plan. [10] So far as the minutes themselves disclose what happened at the meeting, they show that, once again, a careful note was made of intended proxies. The list is a lengthy one, and the last item in it reads: "Mr. T. Young - Eventang Development (Pyrmont) Pty Ltd ……….. (there is here included a reference to each relevant lot number) …………to Mr. D. Hassall " . The minutes nowhere record that any challenge was made to the legitimacy of the proxy thus notified; or that the proxy was formally disallowed, either by a ruling of the Chairman, or by a resolution of the other persons then present and entitled to vote. What the minutes do note is that resolutions were put and carried in connection with the confirmation of the minutes of the preceding annual general meeting; and in connection with the receiving and the adopting of the Audited Financial Statements for the period ended 31 July 1999. Thereafter the minutes note the carrying of a resolution that a Special Levy of $90,000 be raised "effective 1 September 1999 to acquit the deficit in the Administrative Fund account as at 31 July 1999 and to allow for some immediate working capital" . It is then noted: "At 5.55 pm Ms J. M. Moore (N 407), Mr. C. Wong (S 2) and Mr. D. Hassall as proxy for Mr. T. Young - Eventang Development (Pyrmont) left the meeting of their own accord." [11] On any view of what actually happened at the meeting on 19 August, those minutes are seriously deficient and misleading. For what in fact happened at the meeting was that when the question of the levying of a Special Levy was reached on the agenda, Mr. Callaghan as Chairman of the meeting announced, for the first time and without any prior warning of any kind whatsoever, that he was ruling Mr. Hassall's proxy from Mr. Young to be invalid for the reason that the nomination by Eventang of Mr. Young as its nominee was itself invalid. It was that confrontation which led to the withdrawal of Mr. Hassall and of the other persons named in the portion of the minutes which I have earlier quoted. The effect of the exclusion by the Chairman of the proxy given by Mr. Young, as Eventang's nominee, to Mr. Hassall made it possible for the resolution respecting the proposed Special Levy to be carried. It was no secret that Mr. Hassall would cast his proxy against the proposed resolution for the Special Levy. Nor was it any secret that the number of votes covered by Mr. Hassall's proxy was itself sufficient, if cast against the proposed resolution, to ensure the defeat of the resolution. Mr. Hassall gave oral evidence before the Board member. Part of that evidence, given in chief, was as follows: "Q. We will go to motion 2.2 about the $6,000 (sic: but read "$60,000") levy; do you recall that motion? A. Yes. Q. There was discussion in that regard, wasn't there? A. Yes. Q. A vote was taken in regard to it? A. Yes. Q. How did you vote? A. Against. Q. How did you show you voted against it? A. With my hands raised. Q. When Mr. Callaghan was counting the votes, how did he do so when he got to you? A. With the pointing of the finger, I believe, for an against. Q. Then he declared the result, did he? A. That's correct, but the motion was passed. Q. At this stage - it is important. Take it slowly. Can you recall roughly, as best as you can, how the conversation occurred then; had he declared that the motion had been passed? A. Mr. Broinowski asked how the motion could be passed and there was discussion between him and myself, and then Mr. Callaghan -- Q. Take it slowly. This has to be written down, you see, sir? A. Yes. Q. You said "how could the motion have been passed"? THE MEMBER: Mr. Broinowski [EVENTANG'S SOLICITOR]: Mr. Broinowski said that, sorry. Q. Then did Mr. Callaghan or somebody say something? A. Yes. Then Mr. Callaghan said, "The proxy is null and void under section 118(5). Q. Did you say anything -- A. We asked could he elaborate on that and he said Mr. Le Page could explain the situation better. Q. Do you recall what Mr. Le Page said, as best as you can? A. Basically to the effect that the proxy didn't have my address on it, and that a company must have their nominee's address on there. THE MEMBER: Q. Sorry, you will have to repeat it "basically to the effect that my proxy did not have an address on it"? A. Yep. Q. And? A. So the proxy was null and void. [EVENTANG'S SOLICITOR]: Q. Company nominee as well? A. Yes, a company must – no, a company. THE MEMBER: Q. You used the words "a company nominee" -- A. Yes. A company must nominate the nominee's address. I basically then said, "Was Mr. Tom Young notified of this?". Where Mr. Callaghan then said, "Yes, I have sent a letter today." [EVENTANG'S SOLICITOR]: Q. Was there any discussion about how the letter was sent? A. I then said maybe he could have faxed it over or given him a call, and then I was told "Under the Act I'm not obliged to". Q. Sorry? A. "Under the Act I'm not obliged to". Q. Was there any more of the conversation -- A. Basically I said I didn't think it was fair the way the meeting was being conducted, and I believe then Mr. Le Page then told me that since I'm not a lot owner or have any proxies that I couldn't speak on the issue anyway. Q. Can you recall any more than that, sir? A. Basically after that, I said it was, you know, a sham, so to speak, and walked out of the meeting and asked anybody else in support to walk out so as there wasn't enough numbers for the meeting to continue and another meeting could be held." There was some brief cross-examination of Mr. Hassall, but it did not suggest in any way that he was either untruthful or mistaken in the evidence which he thus gave. The Board member who presided at the hearing before the Board, appears to have accepted his evidence. [12] Following the events of 19 August 1999, Eventang sought from an Adjudicator of the Board an order pursuant to s 154 of the Strata Act . That section provides relevantly: "(1) An Adjudicator may order that a resolution passed at a general meeting of an owners corporation be treated as a nullity on an from the date of the order if satisfied that the resolution would not have been passed but for the fact that the applicant for the order: (a) was improperly denied a vote on the motion for the resolution, ………………….". [13] On 9 May 2000 the Adjudicator dismissed Eventang's application. On 6 June 2000 Eventang appealed to the Board against the Adjudicator's decision. The appeal was heard on 17 July 2000 by Mr. J. Bordon of the Board. On 18 September 2000 Mr. Bordon handed down a reserved decision dismissing the appeal. It is from that decision that the present appeal to this Court has been brought. 5 The essential reasoning of the Board member appears in the following passages which conclude the judgment. It is convenient to reproduce, rather than to paraphrase, them: "It is clear that chapter 4 of the Act, which concerns itself with the rights of owners, occupiers and other persons with interests in lots in a scheme, is the governing legislation. It requires notices to be given by these various persons with an interest in lots and is clearly intended to cover all such persons including corporations. It seems to me that the intent here is that non-compliance with the requirements for the giving of this notice means that the person is deprived of a vote. Subsection 118(1) makes this clear in my view. All other provisions in the regulations relating to the right to cast a vote are to be read subject to this provision. The requirements of section 118 are basic and mandatory. They go directly to the keeping of records by the Owners Corporation of details of owners etc. and their interests which give rise to the right to vote. This includes the clear identification of the person who is nominated by a corporation under section 122. This section provides as follows:- 122 How can a corporation exercise functions in relation to a lot? (1) A corporation may authorise an individual to exercise on its behalf any function conferred by or under this Act on the corporation as owner or mortgagee of a lot or as a covenant chargee having the benefit of a covenant charge affecting a lot and may revoke the authority of any individual so authorised. (2) A function exercised with respect to a lot by an individual authorised under this section by the owner, mortgagee or covenant chargee is taken to have been exercised with respect to the lot by the owner, mortgagee or covenant chargee. (3) Nothing in this section affects any liability or obligation imposed by or under this Act on a corporation which is an owner or mortgagee of a lot or a covenant chargee. (4) A document under the seal of a corporation purporting to be an authorisation under this section or to be a revocation of such an authorisation is admissible in evidence and is, unless the contrary is proved, taken to be such an authorisation or revocation. Eventang's notice dated 23 July 1996 is clearly deficient in that it does not comply with requirements of 118(2). The proxy appointment form dated 18 August 1999 appointing "David Hassall of Sydney" does not absolve Eventang from having to comply with requirements of Section 118. In this respect I agree with Mr. Le Page's submission that a proxy cannot cast a vote where there is no right to vote in the first place. Although Clause 10(3) schedule 2 provides that a corporation may exercise the voting rights as an owner by the company nominee in person or by proxy appointed by the corporation, clause 10(10) provides that the clause does not confer the right to vote on a person deprived of the right to vote by failing to comply with section 118. (In any event as pointed out by the Adjudicator and Mr. Le Page the proxy appointment form was otherwise defective). It is my view that it does not assist the appellant in the present case that in the past the provisions of Section 118 had been ignored. That in the present case, the Chairman of the Owners Corporation of the AGM declared that Eventang was not entitled to cast a vote because of failure to give a proper notice in relation to its nominee can not be said to be "improper" in the sense of "wrong" or "incorrect" (which is the relevant dictionary definition). I should indicate that I do not draw any inferences adverse to the Owners Corporation from the evidence given by Mr. Hassall and Mr. Brownowski. It may be that Mr. Callaghan and other members of the Owners Corporation who were in favour of the resolutions carried at the AGM acted in a perceived 'window of opportunity'. This does not make the insistence on the requirements of the legislation "improper"." 6 In connection with the present appeal to this Court, Eventang was required by SCR Part 51B Rule 8 to file and serve a statement of the grounds of the appeal. The grounds thus notified by Eventang are as follows: "1. The Second Defendant ("the Board") erred in law in finding that any non-compliance by a person (who is otherwise entitled to vote) with the requirements of Sec 118 of the SSM Act means that the person is deprived of the right to vote. 2. The Board erred in law in finding that the Plaintiff had not complied with the relevant requirements of Sec 118 of the SSM Act. 3. The Board should have found that, at the Meeting, the Plaintiff was purporting to exercise its right to vote by a proxy and that it was not in fact tendering a vote through its nominee, within the meaning of Sec 118(5) of the Act. 4. The Board erred in law in finding that it did not assist the Plaintiff that in the past the requirements of Sec 118 had been ignored by the First Defendant. 5. The Board should have found that the First Defendant had, by its conduct in the past and/or at the Meeting, waived any non-compliance by the Plaintiff with the requirements of Sec 118, or that the First Defendant was estopped from insisting that the Plaintiff comply strictly with those requirements. 6. The Board erred in law in finding that the Proxy Appointment form was "otherwise defective". 7. The Board should have found that the Proxy Appointment form substantially complied with the SSM Regulation and that such compliance was sufficient. 8. The Board should have found that the First Defendant, by its conduct in the past and/or at the Meeting, waived any deficiency in the Proxy Appointment form, or that the First Defendant was estopped from asserting that any such deficiency operated to deprive the Plaintiff of its right to vote. 9. The Board erred in law in failing to give any or any sufficient reasons for the finding in 4 above." 7 In order to consider whether the foregoing process of reasoning of the Board member manifests appellable error of law, it is necessary to consider, first, certain provisions of the Strata Act. 8 Section 14 of the Act gives legislative effect to the provisions of Schedule 2 to the Act. Schedule 2, in turn, prescribes a scheme respecting the meetings and the procedure of an Owners Corporation. Division 1 of Part 2 of Schedule 2 is entitled, and deals in detail with: "General provisions relating to procedure for meetings". Clause 10 of Division 1 is headed: "Persons entitled to vote at general meetings". Three in particular of the 11 sub-clauses of clause 10 are relevant in the present case. They are: "(1) Each owner, and each person entitled to a priority vote, has voting rights that may be exercised at a general meeting of the Owners Corporation, but only if the owner or person is shown on the strata roll and, in the case of a corporation, the company nominee is shown on the strata roll. (3) The voting rights of an owner, first mortgagee or covenant chargee of a lot (other than a joint owner, mortgagee or covenant chargee) may be exercised: (a) unless the owner, mortgagee or covenant chargee is a corporation - in person or by proxy, or (b) if the owner, mortgagee or covenant chargee is a corporation - by the company nominee in person, or by proxy appointed by the corporation. (10) This clause does not confer a right to vote on a person deprived of the right by failing to comply with section 118." 9 Section 118 provides, relevantly: "(1) Person with right to vote at meetings must notify owners corporation A person who has an interest in a lot that, subject to this Act, gives the person a right to cast a vote either personally or by nominee at meetings of the owners corporation must notify the owners corporation in writing of that interest. (2) Contents of notice The notice must specify the following information and, if the interest i a mortgage, include confirmation by the mortgagor or be verified by statutory declaration of the mortgagee: (a) the person's full name and an Australian address for service of notices, (b) the lot concerned and the exact nature of the person's interest in it, (c) the date on which the person acquired the interest, (d) if the voting entitlement conferred by the interest is one that, according to Schedule 2, is to be exercised by a nominee, the nominee's full name and address for service of notices. (4) Owners corporation may require notice to be given The secretary of the owners corporation, if of the opinion that a person obliged to give notice under this section has not done so, may by a requisition in writing served on the person, require the person: (a) to state, within 14 days, whether or not the person is a person required to give notice under this section, and (b) if the person is such a person, to give that notice. (5) Person prevented from casting vote if certain requirements not met A person is not entitled to cast a vote at a meeting of the owners corporation if the person has not complied with a requisition served on the person under subsection (4) or, in the case of a vote to be tendered through a nominee, if the nominee's full name and address for service of notices have not been notified under this section." 10 When the owner of a lot is a corporation, then the requirements of section 118 have to be read in conjunction with the provisions of section 122, which latter section, as now relevant, is quoted in the foregoing extract from the published reasons of the Board member. 11 In addition to the relevant legislative provisions respecting company nominees, it is relevant to have regard also to clause 11 of Division 1 of Part 2 of Schedule 2, which clause deals with the appointment of proxies. So far as is now relevant, clause 11 provides: "(1) Who is a "duly appointed proxy"? A person is a duly appointed proxy for the purposes of this Part if the person is appointed as a proxy by an instrument in the form prescribed by the regulations. (2) Form of proxy The prescribed form is to make provision for the giving of instructions on: (a) whether the person appointing the proxy intends the proxy to be able to vote on all matters and, if not, the matters on which the proxy will be able to vote, and (b) how the person appointing the proxy wants the proxy's vote to be exercised on a motion for the appointment or continuation in office of a strata managing agent (3) Proxy to be given to secretary of owners corporation The instrument is ineffective unless it is given to the secretary of the owners corporation at or before the first meeting in relation to which the instrument is to operate and it contains the date on which it was made. (4) Period for which proxy effective An instrument appointing a proxy has effect for the period specified in the instrument (being a period of not more than 12 months) or for 2 consecutive annual general meetings, whichever is the greater, unless sooner revoked." 12 The essential reasoning of the Board member, and the essential reasoning of the submissions put for the Strata Owners at the hearing in this Court, can be expressed in the form of the following connected propositions: [1] The notice given by Eventang on 23 July 1996 did not state an address for the service of notices upon the designated nominee. [2] The notice did not comply, therefore, with the requirements of section 118(2)(d). [3] Those requirements are, in the words of the Board member, "basic and mandatory" , [4] Eventang, by having failed so to comply with the requirements of section 118(2)(d) had lost its right to vote at all, and whether by nominee or by proxy. [5] Mr. Hassall had, therefore, no standing at the meeting of 19 July 1999, not because of formal deficiencies in an otherwise proper appointment of a proxy; but because there could not be in any event such a valid appointment of a proxy. 13 In my opinion, this reasoning is erroneous. I consider the correct reasoning to be expressed in the following connected series of propositions: [1] Section 118(2)(d) does not make it compulsory for an owner which is a corporation to exercise its voting rights only by a company nominee duly appointed pursuant to the Strata Act. [2] An owner which is a corporation has voting rights which it cannot exercise at all unless it first gives notice in writing in such a fashion as satisfies the requirements in that regard of section 118(1), (2)(a), (2)(b) and 2(c) of the Strata Act. A failure on the part of the corporate owner to do as much will entail, by reason of the operation of clause 10(1) of Division 1 of Part 2 of Schedule 2, that the corporate owner's voting rights may not be exercised until the statutory requirements have been fulfilled. [3] Once a corporate owner has fulfilled those statutory minimum requirements with regard to the proper notification of its own lawful standing and entitlements, it may thereafter exercise its voting rights in either of two ways; that is to say, either by a nominee duly appointed; or by a proxy duly appointed. [4] If in a particular case a corporate owner who has fulfilled the requirements of section 118(1) and of paragraphs (a), (b) and (c) of section 118(2), wishes to exercise its voting rights through a nominee, then, undoubtedly, the nominee must be designated in a way that satisfies the requirements of section 118(2)(d). [5] There is nothing in the legislation that requires that every provision of subsections (1) and (2) of section 118 must be satisfied in a single document. There is no reason apparent on a fair reading of the legislation why a corporate owner cannot satisfy in one particular document provided at one particular time all of the requirements of sub-sections (1) and (2), save only the requirement of paragraph (d) of sub-section (2); and thereafter, as particular occasion may require, furnish the additional information necessary in order to effect a lawful and sufficient designation of a nominee to represent the corporate owner for the purpose, relevantly, of exercising the corporate owner's own voting rights. [6] That is what happened in the present particular case. It was not disputed at the hearing before this Court that, if Eventang were in default at all in compliance with the requirements of section 118(1) and (2), that default derived from a failure to comply with the requirements of paragraph (d) of sub-section (2). Had Mr. Thomas Young himself attended the meeting in 1999 and sought to vote as company nominee, then in my opinion, and putting to one side for the moment, considerations of waiver and estoppel, Mr. Young's standing would have been vulnerable to challenge for the reason that the notice given in July 1996 did not satisfy the requirements of section 118(2)(d). [7] The fact is, however, that Mr. Young did not attend the meeting and seek to vote at it; nor did he purport to give, as company nominee, a proxy to Mr. Hassall. The only purported giving of a proxy to Mr. Hassall was evidenced by the proxy appointment form, exhibit 7 before the Board member, which form evidences a purported exercise by Eventang itself of its right pursuant to clause 10(3) of Division 1 of Part 2 of Schedule 2, to exercise its voting rights, not by a company nominee, but by a proxy directly appointed by it as owner. [8] The question whether Mr. Hassall had been properly appointed as proxy of Eventang for the purposes of the 1999 meeting depended, therefore, not upon any perceived defect in the section 118(2)(d) nomination of Mr. Young, but on the sufficiency of the proxy appointment instrument itself. It is true that the reasons of the Board member include the observation: ( "In any event as pointed out by the Adjudicator and Mr. Le Page the proxy appointment form was otherwise defective)". It seems to me, with respect to the Board member, that a fair reading of the entirety of his judgment justifies the view that the parenthesised material is in the nature of a rhetorical aside or an afterthought, rather than the expression of a fundamental step in the reasoning put forward in support of the ultimate decision reached by the Board member. 14 If the foregoing reasoning be correct, then it becomes necessary to look with some care at the form of the relevant proxy appointment instrument. 15 The Strata Act contains a regulation-making power of the kind normal in contemporary statutes. Pursuant to that power the Strata Schemes Management Regulation 1997 has been gazetted. Clause 26(3) of that Regulation provides that; "……………..an instrument appointing a proxy must be in or to the effect of Form 3 in Schedule 2". The proxy appointment form that was exhibit 7 before the Board member is a printed form following the Form 3 as prescribed in Schedule 2 to the Regulation. The relevant substantive portion of the form, exhibit 7, is as follows: "Date…18th August 1999 I/We EVENTANG DEVELOPMENT (PYRMONT) PTY LTD - THOMAS YOUNG the owners of lot 50 units In Strata Plan No. 51673 appoint DAVID HASSALL of SYDNEY as my/our proxy for the purposes of meeting of the owners corporation (including adjournments of meetings). Period or number of meetings for which appointment of proxy has effect …. *months/*meetings *Delete whichever does not apply (Note: The appointment cannot have effect for more than 12 months or 2 consecutive annual general meetings, whichever is the greater.) " The emphasised material in the quotation is reproduced as it appears in the Form prescribed by the Regulation. 16 It will be observed that the proxy appointment form has not nominated a period during which, or a number of meetings for which, the intended proxy is to have effect. It becomes, thereupon, necessary to consider whether the failure to complete that part of the form has the consequence that the intended proxy is ineffective. 17 Relevant to that question are certain of the provisions of section 80 of the Interpretation Act 1987 (NSW). The relevant provisions are: "(1) If an Act or statutory rule prescribes a form, strict compliance with the form is not necessary but substantial compliance is sufficient. (2) If a form prescribed by an Act or instrument requires the form to be completed in a specified manner, or requires specific information to be included in …………………….the form, the form is not duly completed unless it is completed in that manner and unless it includes, ……………….that information." 18 The question whether the prescribed Form 3, when correctly construed, comes within sub-section (1), or within sub-section (2), of section 80, falls to be considered in the light of the only statement of general principle upon which an abundance of particular reported decisions agrees, namely, the following observations of Lord Campbell LC in Liverpool Borough Bank v Turner (1860) 45 ER 715 at 718: "No universal rule can be laid down for the construction of statutes, as to whether mandatory enactments shall be considered directory only or obligatory with an implied nullification for disobedience. It is the duty of Courts of Justice to try to get at the real intention of the Legislature by carefully attending to the whole scope of the statute to be construed." 19 The importance of anything to do with the correct identification of a lawful entitlement to vote at a meeting of an Owners Corporation to which the Strata Act, and its subordinate Regulation, apply is obvious from a reading of the legislation. So far as concerns the exercise by proxy of a lawful entitlement to vote, clause 11 of Division 1 of Part 2 of Schedule 2 makes plain that the due appointment of a proxy is important enough to require adherence to certain prescribed formalities. Sub-clause (4) makes plain, in my opinion, that it is fundamental to the relevant legislative intent that a proxy should not be, in effect, a mere, open-ended delegation of voting entitlement. It is, I think, of great significance for present purposes that one of the things that the Legislature has prescribed, not in the Form contemplated by sub-clause (1) of clause 11, but by a specific sub-clause in clause 11 itself, is the requirement of a time limit, chosen as between two permitted alternatives, that is to be a requirement of a valid proxy appointment. 20 I have considered whether the present question might not be resolved on the basis that the intent behind sub-clause (4) could properly be understood as embracing the notion that, in default of any particular specification of a time period, it is to be deemed that the effect of the particular proxy, unless it is sooner revoked, is to be such a period as encompasses two consecutive annual general meetings. 21 I do not think that it is permissible so to construe sub-clause (4). Had the Legislature intended some such deeming operation of the sub-clause, then nothing would have been simpler than for the Legislature to have enacted the sub-clause in some such form as: "An instrument appointing a proxy has effect for the period specified in the instrument (being a period of not more than 12 months) and in default of any such specification of a period has effect for such period as encompasses two consecutive annual general meetings, unless sooner revoked". That the Legislature has not adopted some such expedient, easy as it would have been to have done so, seems to me to exclude the reading into the sub-clause as it actually stands of some such unspecified deeming provision. 22 I have come to the conclusion that the better view is that the proper construction of sub-clause (4), when read together with the prescribed Form 3, entails that a proxy appointment form which does not specify with a proper clarity, and by reference to either of the two permitted alternatives, an intended period of duration of the proxy, is ineffective as a valid proxy appointment. 23 It follows that, in my opinion, the proxy appointment form which was furnished to Mr. Hassall in connection with, in particular, the annual general meeting of 19 August 1999 was ineffective as such an appointment. 24 It must follow, therefore, that the present appeal cannot succeed unless Eventang can make good that part of its submissions which postulates that there had been an effective waiver or estoppel raised in connection with any defects in the proxy appointment form of 18 August 1999; and that such waiver or estoppel arises by reason of an antecedent course of conduct by the agents of the Strata Owners, and either at the meeting of 19 August itself, or on other occasions prior to that particular meeting. 25 These submissions of Eventang raise at once a difficult question of law, namely, whether the established principles of waiver or of estoppel have any proper application at all to the operation of the legislative scheme embodied in the Strata Act and its subordinate Regulation. 26 It is useful to begin the discussion of this particular topic by noticing the way in which the submissions of Eventang articulate the facts said to give rise to an available waiver or estoppel. The submissions point to the following matters: [1] The Strata Owners had accepted Eventang's votes by way of a proxy in favour of Mr. Hassall at previous annual general meetings in 1996, 1997 and 1998. [2] The Strata Owners had engaged in correspondence with Mr. Thomas Young, the proposed company nominee, in June of 1999 and in connection with a proposal of Eventang that there should be an Extraordinary General Meeting. [3] The Strata Owners had included Eventang's proposed motions on the agenda for the 1999 Annual General Meeting. [4] The Strata Owners had failed to requisition Eventang at any stage prior to the 19th August 1999; and then, the only such requisition related to the company nominee form executed in July 1996. [5] The Strata Owners had received Eventang's proxy form in favour of Mr. Hassall shortly prior to the 1999 Annual General Meeting, and without demur. [6] The Strata Owners had already accepted from Mr. Hassall proxy votes cast by him for Eventang on each of the two motions preceding the motion for the Special Levy. 27 Eventang points, as well, to certain submissions put by the solicitor who appeared for the Strata Owners at the hearing before the Board. The relevant submissions are, to say the very least, revealing in their aggressive frankness. They bear quotation: "STRATA OWNERS SOLICITOR: This is a matter that concerns strictly documents and legislation, but I have taken on board my friend's concern about there not having been given any evidence. THE MEMBER: What do you say about Mr. Ilkin's argument about the prior behaviour of the strata managing agent in relation to acceptance -- STRATA OWNERS SOLICITOR: All that means is that those prior meetings may have been wrongly decided. You can't avoid the requirements of the legislation by saying: oh, you made that mistake last time. It's a simplistic argument. It means that if Mr. Ilkin and his client want to invalidate all the prior meetings, here's a heaven-sent opportunity for that. The fact that matters have been overlooked in past meetings is neither here nor there. Mr. Ilkin is really criticising Mr. Callaghan for not doing to (sic) same thing again. We might have overlooked it the last time. Why couldn't he do it this time? That's what his argument really is and that's just not good enough. The fact is that there was a very good reason relating to the finances of this body corporate why Eventang had to be prevented from voting, if at all possible, and, yes, it was a device. It's not denied. Eventang had to be prevented from voting so that this body corporate would be restored to some financial state of affairs. It was trading in deficit and Mr. Young's - as Mr. Hassall's voting against the motion showed - concern was not to raise money. We acknowledge that it was a device, but it was a device that was strictly in accordance with the Act. Yes, it has not been taken before. It had been overlooked before. Presumably Mr. Callaghan had not noticed it before, but this time he picked up on it. It may have been unfair to Eventang not to give him more notice. I don't know when Mr. Callaghan first noticed it - presumably on the morning of the meeting, that he wrote that letter, or the day before, whenever he wrote it. But how does that affect the application of the Act? It doesn't affect it at all." 28 My initial, and strong, reaction to the foregoing material was that it could not be correct to suppose that a proper construction and application of the requirements of the Strata Act and its subordinate Regulation would leave without effective remedy the victim of such calculated trickery. It is, therefore, with great reluctance that I have felt constrained to come to the contrary conclusion. 29 I have done so for reasons of principle which are discussed helpfully in a recent publication: Michael Spence: 'Protecting Reliance: The Emergent Doctrine of Equitable Estoppel', especially in the section headed "Estoppel and statute" at 72-75. I have had particular regard to the decision there cited of the Full Court of the Supreme Court of Queensland, Day Ford Pty Ltd v Sciacca (1990) 2 Qd. R 209, especially at 216, 217, where the following principles are summarised: "A number of cases consider the place of estoppel in supporting the enforcement of a contract which would otherwise be void for illegality. In Kok Hoong v Leon Cheong Kweng Mines Ltd [1964] A.C. 993 reference is made to the familiar rule which in its ordinary form is stated in this fashion: a party cannot set up an estoppel in the face of a statute. At 1016 the Privy Council suggested that a test to apply in the type of case before it namely one involving the laws of money lending was to ask "whether the law that confronts the estoppel can be seen to represent a social policy to which the court must give effect in the interests of the public generally or some section of the public". A similar approach had been adopted in Maritime Electric Co. v General Dairies Ltd [1937] A.C. 610 especially at 620 where it was said that in deciding whether an estoppel might be set up against the operation of a statute "the Court should first of all determine the nature of the obligation imposed by the statute, and then consider whether the admission of an estoppel would nullify the statutory provision". At 621 the Court declared that it was "unable to see how the Court can admit an estoppel which would have the effect pro tanto and in the particular case of repealing the statute". There is no need to multiply examples by the citation of authorities since the appropriateness of this approach based on consideration of social and statutory policy is so amply supported." 30 In applying these principles to the given facts of the present case, it seems to me to be significant that section 245 of the Strata Act proscribes comprehensively any attempt to contract out of the provisions of the statute. This is consistent with the stated aims of the legislation, which are: to provide for the management of strata schemes; and for the resolution of disputes arising in connection with such management. Critical to the exercise of those legislative policy objectives is the orderly and consistent application of orderly and consistent requirements in the all-important areas of the vesting, and of the practical exercise, of proprietorial voting rights. An approach that had the practical effect of permitting an Owners Corporation or its Managing Agents, or particular owners or groupings of owners, to disregard the legislative requirements as to orderly and consistent voting principles and practices whenever it suited their convenience to do so, would be, in my opinion, an approach tending to undermine the public policy considerations which are clear from the comprehensive nature and scope of the legislation. 31 I have come, therefore, to the conclusion that whatever it might be thought, on the given facts, should be the position as to waiver and estoppel, the legislative scheme is such as to prevent, as a matter of law, the applicability of either of those doctrines so as to avoid the consequences of a failure to comply with the relevant requirements of that scheme. 32 For the whole of the foregoing reasons, I am of the opinion that the appeal should be dismissed with costs. ********** Last Modified: 06/04/2001 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. 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