These strata managers and lot owners from QLD have a variety of questions about holding positions on the executive committee. Frank Higginson, Hynes Legal and Peter Hunt, Mathews Hunt Legal provide the following responses.
Jump directly to the QUESTION you are after:
- QUESTION: A Committee Member stands in for and receives payment from the caretakers on a regular basis when they are away. Can they stay on the committee and vote, or is this a conflict of interest?
- QUESTION: Can someone be both executive and ordinary member if they have received the necessary number of votes at the AGM?
- QUESTION: A lot owner who has nominated for holding a position on the executive committee is currently in breaches for non-compliance with by-laws. Is there any way a committee can decline to accept a nomination?
- QUESTION: Some members of the committee do not respond to requests or emails. Can we refuse members from holding committee positions in future based on lack of activity?
- QUESTION: What is the lawful status of the chairman holding multiple positions on the executive committee? At our Residential community scheme, the Chairperson has claimed the roles of both Chair AND Secretary.
- QUESTION: At our recent AGM, our chairman received majority votes (9 votes for all executive positions). Our Body Corporate Managers advised us that it is legal for one person to hold all three positions on executive committee.
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Question: A Committee Member stands in for and receives payment from the caretakers on a regular basis when they are away. Can they stay on the committee and vote, or is this a conflict of interest?
The on-site Caretakers are on Contract to the Body Corporate Committee. The complex has 150 Villas. When they go away for weeks at a time, a Resident looks after the Complex, mowing etc., and is paid by the Caretaker.
The Resident is on the Committee. My understanding is the Resident can stay on Committee, but can’t vote, as it is a conflict of interest, or he is classed as an associate of the Caretaker.
Answer: Section 10(2) of the Standard Module does indeed provide that someone is ineligible to be voting member if they are an ‘associate’.
You’re right in that if someone declares a conflict of interest as a committee member, they are not entitled to vote on a motion involving that issue – refer s53 of the Standard Module.
What you’re talking about, though, is someone not being eligible to be a voting member of the committee because they are an associate of the caretaker. That’s a different issue. Section 10(2) of the Standard Module does indeed provide that someone is ineligible to be voting member if they are an ‘associate’.
The potential meaning of ‘associate’ is set out in section 309 of the Act and contemplates several scenarios, one of which is a ‘fiduciary relationship’. I’m not willing to be definitive and say that there is a ‘fiduciary relationship’ and that this person is an ‘associate’, as it always depends on circumstances and I’ve seen plenty of disputes on that topic. What I would say is that if there is concern about the situation then legal advice should be sought to clarify.
Chris Irons
Hynes Legal
E: [email protected]
P: 07 3193 0500
This post appears in Strata News #398.
Question: Can someone be both executive and ordinary member if they have received the necessary number of votes at the AGM?
At our last AGM I nominated for Chair and ordinary member. I am now chair.
I received the 3rd highest number of votes for ordinary member as well. The current Treasurer received the 4th highest for ordinary member.
Can we be both executive and ordinary members based on the votes at the AGM?
I understand that it is possible for one person, based on the votes, to hold all 3 executive positions. The votes ranged from 26 to a low of 9 for ordinary members. On both counts, I received 24 votes.
Answer: A person cannot be elected as both an executive member of the committee and as an ordinary committee member.
A person’s nomination for a position as an ordinary committee member is of no effect if that person has been elected as an executive member of the committee (even if that person’s name appears on a ballot for ordinary members).
This means that a person cannot be elected as both an executive member of the committee and as an ordinary committee member.
Therefore, if the votes are received in favour of anyone elected as an executive member, those votes must not be considered when determining the election of ordinary members of the committee.
This post appears in Strata News #331.
Peter Hunt
Mathews Hunt Legal
E: [email protected]
Question: A lot owner who has nominated for holding a position on the executive committee is currently in breaches for non-compliance with by-laws. Is there any way a committee can decline to accept a nomination?
A committee of a 16 lot scheme has had an AGM which has been adjourned and has 6 nominations for the Committee members (including the chairperson, treasurer and secretary).
The committee doesn’t want to accept one nomination because of breaches for non-compliance with by-laws.
Can they decline the nomination if the nominating person is currently in breach? The code of the conduct would be in breach as well.
Is there any way a committee can decline to accept a nomination?
Answer: Only when they are unfinancial can something be done. You cannot reject a nomination for this.
Frank Higginson
Hynes Legal
E: [email protected]
P: 07 3193 0500
This post appears in Strata News #321.
Question: Some members of the committee do not respond to requests or emails. Can we refuse members from holding committee positions in future based on lack of activity?
I am in Queensland part of small body Corporate as secretary.
There are only 6 units in the group and we have 4 committee members. The issue is when there is a decision to be made or account approval and the Body Corporate manager sends emails for approval, only two ever respond which is not enough.
Can we refuse members from holding committee positions in future based on lack of activity, as it is extremely frustrating?
Answer: Unfortunately not.
Unfortunately not – owners have the rights to appoint themselves on the committee.
But if the committee holds physical meetings and an attendee does not attend twice in a row without the committee’s approval, the committee member is removed from their position.
Frank Higginson
Hynes Legal
E: [email protected]
P: 07 3193 0500
This post appears in Strata News #249.
Question: What is the lawful status of the chairman holding multiple positions on the executive committee? At our Residential community scheme, the Chairperson has claimed the roles of both Chair AND Secretary.
At our Residential community scheme, 7 people are on Committee and vote.
The Chairperson has claimed the roles of both Chair AND Secretary.
A different person is the Treasurer. In addition, there are 5 ordinary committee members.
This equates to 7 voters but 8 positions.
What is the lawful status of the chairman holding multiple positions on the executive committee?
Answer: The required number of voting members is based on people, not positions.
This is fine. The module provides:
The one person may hold the positions of chairperson, secretary and treasurer, or any 2 of the positions, in conjunction.
The required number of voting members is based on people, not positions.
Frank Higginson
Hynes Legal
E: [email protected]
P: 07 3193 0500
This post appears in Strata News #228.
Question: At our recent AGM, our chairman received majority votes (9 votes for all executive positions). Our Body Corporate Managers advised us that it is legal for one person to hold all three positions on executive committee.
I am an ex-treasurer for a body corporate in Queensland. At a recent AGM, both myself & the secretary had nominated ourselves for re-election. However, the chairman received majority votes (9 votes for all executive positions). Our Body Corporate Managers advised us that it is legal for one person to hold all 3 positions on the executive committee.
My understanding is that ordinary committee members can be elected in order of votes received. Can you please advise if this view is still valid in cases of nominations received for these positions, or only valid in case of no nominations received?
The Chairman has been holding all positions on the executive committee for the past few years and makes it difficult for others to participate and resolve issues within the complex.
Any guidance would be greatly appreciated.
Answer: One person can hold all executive positions. If they get the votes, they get the votes.
Two things:
- One person can hold all executive positions. If they get the votes, they get the votes.
- Ordinary member wise, if there are four or fewer nominations before the close of nominations they are all simply elected. If there are more than four, then it is most votes received on the ballot, and it is basically optional preferential voting. Owners could vote for all candidates or just two. It is up to them. If all owners voted for every candidate the final four spots would be decided a method of chance at the meeting. I have been at them where we have tossed coins and drawn straws to decide who gets in.
And remember the chairperson is only one vote – not three. If there are one executive member and four ordinary members, there are only five votes. And if four are against the chair, then….
Frank Higginson
Hynes Legal
E: [email protected]
P: 07 3193 0500
This post appears in Strata News #190.
Have a question about executive committee positions or something to add to the article? Leave a comment below.
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Regarding the Committee member who also stands in for the caretaker when the caretaker is aware.
Am involved with a Maroochy complex where this was happening for many years. The Committee member concerned was at times either the Chairman or (mostly) the Treasurer. She and her husband ran a locum business for a number of complexes in the area, and at our complex they would take on the role of Caretaker and Rental Manager. As you would imagine, none of the many investors were game to challenge her serving as both Treasurer and Rent Mngr.
One owner eventually contacted a senior strata lawyer who advised “My gut feel is they would be very close to being an associate, and therefore prevented from being on the committee. That is more from a combination of the factors – not a single one.” The owner then went formal via the Commr’s Office…and the Treasurer resigned. Just reinforces the old saying ” Its what they do when they think no one is watching.”
This comment was received via email from M.G. in Maroochydore:
I believe you are where you are saying that one person may hold all three positions in the executive committee. Yes they can be nominated for all three positions but in the case where there is others nominated for the Secretary and Treasurer positions, if he is vote in as the Chairman then his nominations for the other two positions are cancelled or removed.
The idea for one person holding all three positions is used in a situation where there aren’t enough members or nominations for this to be voted on. The likes of a Strata with say only four units or even less is where this ruling is used, not in a complex that has ten plus units in the complex and there are more than one nominations for the positions.
We received the following reply from Todd Garsden, Hynes Legal:
Respectfully, I tend to disagree with the comment.
The Modules provide that “The one person may hold the positions of chairperson, secretary and treasurer, or any 2 of the positions, in conjunction.” (similar provisions are found in the other modules).
This was confirmed in Everton Mews [2014] QBCCMCmr 114 where an owner made an application for a declaration that the executive committee positions may not be occupied by one person. In dismissing this part of the application, the adjudicator stated, “In respect of final outcomes sought, the Applicant might note that the legislation allows executive committee positions to be held by one person.
Similar positions have been held in:
River Park Plaza [2008] QBCCMCmr 402 “There must be a chairperson, a treasurer and a secretary, although one person may hold all three or any two of those positions. In this case that means that Dixon can hold all three executive positions on the Committee but, if he does, there must be at least two ordinary members on the Committee so that the Committee membership comprises at least three.”
The Pandanus [2007] QBCCMCmr 328 nine lot – “The minutes of the AGM state that Maree Fort-Rushton was elected to these positions with 2 other individuals being elected as ordinary committee members. One person may hold these positions”
I have an investment unit where there is a majority lot owner. This Lot owner has two companies that own lots in the scheme together totalling 68 lots out of 107. Recently the majority lot owner called for an EGM to stand down the current Committee and appoint a new Committee primarily appointing 5 representatives of their own companies and leaving two ordinary positions to be filled from the floor. I was voted to hold one of those ordinary positions. I note in a previous article that if the Executive Committee is filled by one owner (or representative of that owner) they only have one vote. Can you please confirm that given the facts as stated above, the majority lot owner has only one vote on the committee?
At this same meeting a motion was put forward from the majority lot owner to change the Committee spending limit from $300.00 per lot to $1,200.00 per lot.
At this same meeting a motion was put forward from the majority lot owner to pay all Committee members $5,000 each – no reason given apart from reimbursement of possible expenses in attending meetings.
At this same meeting a motion was put forward from the majority lot owner to vote down two quotes for cleaning contracts for the scheme at a cost of $104,000 pa. and $145,000 pa, and vote for a their own motion that the Body Corporate should engage their own cleaners which can be looked after by the Committee at a cost of $175,000.
As this majority lot owner is now controlling how the body corporate will be run, the remaining private investors are at their mercy.
If you would be so kind as to clarify how many of the votes this majority lot owner has at Committee level would be a great start.
I look forward to hearing from you.
Kind Regards
Jan Davies
Hi Jan
Very sorry for the delay in getting back to you. We have received the following reply from Todd Garsden, Hynes Legal:
The Module allows a lot owner with more than 3 lots to nominate up to 3 committee positions. That would be the limit for each separate entity. So it would seem that the majority owner (across his two entities) fits within this requirement.
The body corporate can also choose to (assuming that the motion is correctly drafted):
(a) change its committee spending limit;
(b) remunerate its committee; and
(c) engage a particular contractor – even if there is an interest in that contractor by a lot owner. There is no conflict of interest at a general meeting.
However, all the decisions of the body corporate are subject to an overarching requirement to be reasonable. If one of those decisions, such as to choose the most expensive contractor over another (with no differing service level), was considered to be unreasonable it could be challenged in the Commissioner’s Office.