Can a member be removed from the strata committee for taking the owners corporation to NCAT?

The fact that a lot owner is involved in NCAT proceedings against their owners corporation does not, by itself, automatically disqualify that person from serving on the strata committee.

The more important question is whether the committee member has a direct or indirect pecuniary interest in a particular matter being considered by the strata committee, and whether that interest appears to conflict with the proper performance of their duties.

Schedule 2, clause 18 of the Strata Schemes Management Act 2015 (NSW) (the Act) deals specifically with disclosure of pecuniary interests. Where such an interest exists, the committee member must disclose the nature of the interest. Unless the strata committee determines otherwise, that member must then not be present during the committee's deliberation of that particular matter or participate in the decision.

Accordingly, an owner pursuing the owners corporation through NCAT may well have a conflict in relation to some specific committee matters concerning those proceedings. For example, it would be difficult for that committee member to participate in confidential discussions concerning the owners corporation's litigation strategy, settlement negotiations, instructions to its lawyers or decisions directly concerning the defence of that owner's application.

That is quite different, however, from saying that the NCAT proceedings create a blanket conflict of interest preventing the person from continuing as a strata committee member.

Committee members remain subject to their statutory duties. Section 37 requires committee members to exercise their functions honestly and fairly, with due care and diligence and, so far as practicable, for the benefit of the owners corporation. The section also limits the use or disclosure of information obtained through committee membership.

In practical terms, the appropriate approach would ordinarily be for the committee member to disclose the interest and refrain from participating in committee consideration of matters directly related to their own proceedings where clause 18 applies. They can otherwise continue to perform the ordinary functions of a committee member.

Can the owners corporation remove the member anyway?

Yes. This is an important distinction. Whether there is actually a legal conflict of interest is separate from the owners corporation's power to remove an elected committee member.

Section 35(1)(e) of the Act provides that a committee member vacates office if the owners corporation, by resolution at a general meeting, determines that the person's office is vacated. Following the legislative amendments, this is now an ordinary resolution.

The legislation does not require the owners corporation to establish misconduct, a conflict of interest or some other specified ground before passing such a resolution.

Accordingly, a motion could simply provide:

"That pursuant to section 35(1)(e) of the Strata Schemes Management Act 2015, the Owners Corporation resolves that the office of [name] as a member of the strata committee be vacated."

A reason does not form part of the statutory test under section 35.

There is, however, a procedural distinction where an owner has submitted the motion for inclusion on the agenda. Schedule 1, clause 4 requires an owner submitting a motion to provide the motion together with an explanation of up to 300 words. That requirement should not be confused with a requirement to prove grounds for removal. The explanation accompanies the proposed motion; it does not create a substantive statutory test that must be satisfied before the owners corporation may remove the committee member.

Therefore, describing the reason for the proposed removal as "conflict of interest" does not necessarily mean that a conflict of interest within clause 18 has actually been established. The owners corporation may nevertheless vote upon a properly notified section 35 motion.

Allegations that the committee is not issuing agendas, keeping minutes or otherwise complying with the statutory meeting procedures should be considered separately from the question of whether a particular committee member has a conflict of interest.