Is it a conflict of interest if an EC treasurer works part-time at the strata management company?

Section 71 of the Strata Schemes Management Act ('the Act') requires a Strata Managing Agent or Building Manager to disclose any direct or indirect pecuniary interests they may have in a property, and the current penalty for failing to do so is 50 penalty units (at $110 per unit, therefore being $5,500). However, an interest only arising from a prospective appointment is exempt. Furthermore, the Treasurer only works for the Strata Management company and not in the role of being the delegated Strata Managing Agent for the strata scheme, so this would not be considered an interest that must be disclosed.

Schedule 2, clause 18 of the Act, then requires members of the strata committee to disclose any direct or indirect pecuniary interests they may have in any matter if it appears to raise a conflict with the proper performance of their duties in relation to consideration of that matter. Failure to do so can result in fines of 10 penalty units ($1,100).

In this scenario, the committee member would disclose that they are in the employment of the strata management company (see subclause (2)(a). After they have disclosed this, the strata committee must then decide if the person making the disclosure can:

1. be present during deliberation of the strata committee with respect to the matter (i.e. the matter of appointment of the strata managing agent); and
2. take part (vote) in any decision on that matter.

Also, the person cannot be present during the deliberation of this decision or take part in voting.

Lastly, the disclosure must be recorded in the owners corporation's disclosure book, and the strata committee must decide on the fee payable to inspect the disclosure book. The simplest way to determine the fee would be to make it be the same amount as the fee prescribed for inspection of the records, as the disclosure book would form part of the records.

In summary:

1. There is a conflict of interest only with regards to the appointment of the strata managing agent.
2. The interest should be disclosed, and then a decision should be made on whether the committee member can participate in decisions on that matter exclusively.
3. The committee may decide to preclude that person from authorising payments to the strata managing agent (if that is necessary, as most Strata Managing Agents have authority to make payments, including to themselves). If they are precluded, another person must be appointed to authorise those payments.