Background

Proxies for Queensland incorporated associations are a fraught area. The issue arises as to whether an association should include proxies in its rules. A balance has to be struck between allowing members who cannot attend meetings in person (often because the membership is located throughout Queensland or indeed Australia) and facilitating mischievous proxy wars of some gathering votes from uninformed and uninterested members to dominate a meeting. Some associations have adopted the view that only members can be proxy holders to prevent those external to the association from gaining the right to speak and cast a vote at meetings.

In this case, the Yorkeys Knob Boating Club Inc (Club) decided to terminate the status of a member who in turn appealed the Club’s decision to a general meeting of the Club.

A general meeting to hear the appeal was convened, but it was announced that proxy votes would not be permitted. The member sought an order a day prior to the meeting, allowing proxies to be included in the vote.

The Club argued that its rules stated that, “The appeal should be determined by the vote of the members present in such meeting”. (emphasis added)

The Court found that rule was to be interpreted in the light of another general rule that at every general meeting, every question, matter or resolution shall be decided by a majority of votes of the members present which includes members’ votes cast by proxy by persons present at the meeting and holding the proxy votes. Further, the rule previously stated by the Club did not contradict or alter the general rule about meetings.

The Club also argued that to permit proxies at the meeting undermined natural justice, particularly the right to be heard, which was prescribed in the rules. Proxy members would not hear the cases of the parties in order to make a decision.

The Court did not accept this proposition. It was regarded merely as a theoretical possibility of the right being eroded. The ordinary meaning of the rules was to be preferred.

The Court made an order that proxy votes should be accepted at the meeting.

Lessons

Management Committees need to exercise care when disciplining members, ensuring they follow their own rules, the Association Incorporation Act provisions and the principles of natural justice.

Incorporated Associations should ensure that their proxy rules are clear and reflect the position desired by members. Older associations that adopted the old set model rules will not have the benefit of newer versions of the model rules, which clarify the position of proxies for the purposes of voting and forming part of a quorum of the meeting.

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