VIC: Q&A Voting on Motions When There is a Conflict of Interest

Sharing is caring!

VIC lot owners are curious about voting on motions when there is a conflict of interest.

Question: Can owners vote on AGM motions when they have a conflict of interest in the company associated with the motion.

GET NOTIFIED WHEN WE PUBLISH NEW Q&As, NEWS AND ARTICLES TO THE SITE

We are part of an apartment complex in Victoria and would like to know if owners can vote on AGM motions when they have interest in the company associated with the motion. Is this not a conflict of interest?

If not, is their vote discounted completely and not added to the overall count or is their vote considered as an abstained vote and counted.

We have been advised that non-financial members are discounted and not added to the count, but, there’s a question mark on conflict of interest voters.

Answer: The Owners Corporation Act 2006 does not prohibit a lot owner from voting on a motion where there is a conflict or perceived conflict of interest.

Great question, and a relatively simple one to answer on a basic level.

The Owners Corporation Act 2006 does not prohibit a lot owner from voting on a motion where there is a conflict or perceived conflict of interest.

The Act is silent on this matter for lot owners. However, there are several parts which mention similar circumstances for the Manager and Committee members.

Refer Sections 117 and 122 of the Act. These both have similar language, stating they must not make improper use of their position to gain, directly or indirectly, an advantage personally or for any other person.

You are correct about non-financial members. This is covered clearly in Section 94 of the Act, stating they cannot vote on ordinary resolutions unless the amount(s) owed to the Owners Corporation is paid in full. Of course, non-financial members can still vote on a special or unanimous resolution.

The designated person who chairs your meeting should always highlight and request that lot owners in attendance disclose any pecuniary interests they might have, prior to the meeting commencing. This alerts others to any interest or conflict, allowing them to make their own informed decisions when matters arise.

Joel Chamberlain
Horizon Strata Management Group
E: [email protected]
P: 03 9687 7788

This post appears in the September 2020 edition of The VIC Strata Magazine.

Have a question about voting on motions when there is a conflict of interest or something to add to the article? Leave a comment below.

Embed

Read next:

• VIC: Q&A Who chairs the annual general meeting? Can we choose?
• VIC: Q&A Can You Install CCTV Without Permission?
• VIC: Q&A Stairwells and Fire Safety

Visit our Strata Committee Concerns OR Strata Title Information Victoria

Looking for strata information concerning your state? For state-specific strata information, take a look here.

After a free PDF of this article? Log into your existing LookUpStrata Account to download the printable file. Not a member? Simple – join for free on our Registration page.