NSW: Do Committee Members in Breach Have the Right to Vote?

This article discusses committee member conflict of interest, explaining whether strata committee members accused of by-law breaches can participate in discussions or vote on enforcement decisions.

Question: If committee members are breaching visitor parking rules, do their votes count when we vote on enforcing this bylaw?

We have two visitor parking spots in a block of eight. Two different members of the owner’s committee park their car in these spaces on a permanent basis even though they have their own garage. 

Other resident’s visitors and tradesmen have to park on the street because of this. There is nothing in the by-laws approving their parking. 

Do their votes count on issues as owner committee members when we vote because realistically, they are disobeying the committee’s visitors car park ruling?

Answer: If a motion dealing with such a breach is on the agenda of a strata committee meeting, then those members may not be able to participate in the discussion of the motion or vote on it.

Strata committee members should not be parking in visitor parking spaces because doing so is likely a breach of by-laws. If a motion dealing with such a breach is on the agenda of a strata committee meeting, then those members may not be able to participate in the discussion of the motion or vote on it.

I will assume that the visitor parking spots are common property and you have a by-law to the effect that owners and residents must not use them without permission and that they are meant to be used by visitors on a non-permanent basis. This is because the current model by-laws 1 and 4 in schedule 3 of the Strata Schemes Management Regulation 2016 provide as follows and most strata schemes have by-laws that are a version of them:

1. Vehicles

   An owner or occupier of a lot must not park or stand any motor or other vehicle on common property, or permit a motor vehicle to be parked or stood on common property, except with the prior written approval of the owners corporation or as permitted by a sign authorised by the owners corporation.

4. Obstruction of common property

   An owner or occupier of a lot must not obstruct lawful use of common property by any person except on a temporary and non-recurring basis.

There is no provision in the Strata Schemes Management Act 2015 (SSMA) that allows an owners corporation or strata committee to excuse someone from compliance with by-laws. However, on the other hand, there is nothing in the SSMA that compels an owners corporation or strata committee to enforce its by-laws.

If there is a motion on the agenda of a strata committee meeting to deal with a breach of a by-law by a strata committee member, then clause 18 of Schedule 2 of the SSMA may apply to prevent them from participating in the discussion of the motion or voting on it. Clause 18 provides to the effect that if a strata committee member has a direct or indirect pecuniary interest in a motion and that interest appears to raise a conflict with the proper performance of the member’s duties, then that member cannot be present when the motion is discussed or vote on it, unless the other committee members permit them to do so. Under section 37 of the SSMA, strata committee members must carry out their functions for the benefit of the owners corporation and with due care and diligence. This would extend to making decisions that benefit all owners such as making sure the character of visitor parking spaces as being parking for visitors of all owners and the owners corporation is maintained. A vote by a strata committee member to the effect of preventing the owners corporation enforcing its by-laws may be seen as conflicting with this duty under section 37 and thus engaging the procedure in clause 18.

A motion about whether to issue a notice to comply with a by-law or take legal action about a breach of a by-law may mean that there is a pecuniary interest being considered because if the motion is passed, then the strata committee member is potentially exposed to a fine and incurring legal costs.

If, on the other hand, the issue of a by-law breach is a motion on the agenda of a general meeting, clause 18 and section 37 do not apply because when a strata committee attends and votes at a general meeting, they do so in the capacity of being a lot owner and not in their capacity as a member of the strata committee.

Carlo Fini
Lawyer (NSW)

This post appears in the July 2021 edition of The NSW Strata Magazine.