VIC: Q&A Dealing with Problem Committee Members

This Q&A is about dealing with problem committee members. We look at destructive members and conflict of interest on a committee in Victoria.

Table of Contents:

• QUESTION: Our committee is dealing with a rogue chair. Is there anything we can do to ensure our Chair abides by the Act and manages the OC Committee’s business appropriately and through a democratic process?
• QUESTION: After lodging formal complaints about the committee, I was barred from the Zoom meeting while the complaints were discussed. Should I have been able to present my viewpoint?
• QUESTION: Our previous Chair has been replaced but still holds a position on the committee. They behave in a very destructive manner, undermining the committee. Can the committee sanction this person?
• QUESTION: One of our lot owner has a business which has a contract at the apartment complex. Are they able to nominate for an Owners Corporation committee position or is this a conflict of interest?




Question: Our committee is dealing with a rogue chair. Is there anything we can do to ensure our Chair abides by the Act and manages the OC Committee’s business appropriately and through a democratic process?

I am a lot owner and member of our OC Committee. Together with a few other lot owners/OC Committee members, we find ourselves in the minority (by votes) due to the Chair going continually rogue, regularly bypassing consultation with the whole OC Committee for works undertaken and generally being dictatorial and unpleasant when questioned about unilateral decisions taken by him.

We are not getting a great deal of support from the OC management company. They state the Chair was duly elected at the AGM and that they as managers have no power to intervene to ensure that the Chair presides over the OC Committee in a manner expected from the Act.

Is there anything that can be done to ensure that our Chair abides by the Act and manages the OC Committee’s business appropriately and through a democratic process?

Answer: It is likely that the decisions being made by the chair are not valid.

The committee of management is elected at the AGM by owners and there the committee is delegated power to make ordinary resolutions for the owners corporation.

All committee members have an equal vote unless powers have been specifically delegated to the chairperson. The only extra power a chairperson has in relation to voting is the ability to make the casting vote in the event of a split vote. It is therefore likely that the decisions being made by the chair are not valid.

If you are concerned about the behaviour of the Chairperson, we suggest trying to speak to them first. If that does not work, you can remove the chairperson by a majority vote from the committee.

Please note if you vote to remove them as Chairperson, they will remain a committee member. In order to remove a committee member, you will need to vote to remove them at a general meeting of the owners corporation. The secretary, the manager acting on authority of the committee, or a lot owner nominated by owners whose lot entitlements total at least 25% of the total may call an SGM to do so.

Alex Smale
The Knight
Email

This post appears in Strata News #539.

Question: After lodging formal complaints about the committee, I was barred from the Zoom meeting while the complaints were discussed. Should I have been able to present my viewpoint?

After several years of getting no committee response to complaints about the committee, I lodged a formal complaint. I joined the committee last year to try and push through changes and resolve the issues.

At the AGM, the manager barred me from the ZOOM meeting for about 30 min while the committee discussed the complaints with the other owners. It was deemed I was being vexatious and any management fees would be charged to me or any other lot owner in future.

Does the Owners Corporation have the power to do this?

Should I have been allowed to express my viewpoint regarding the complaints and hear what was said, especially as it was regarding committee unfair treatment and their repeated failure to follow model rules?

The attitude towards me by others, once I was allowed back into the meeting, was one of annoyance.

I was removed from the committee at the AGM and this has been reported in the AGM notes along with the complaints lodged, which are incorrect.

Can I ask for the AGM notes to be corrected and reissued?

Answer: If there are discussions in the meeting that the Owners Corporation deems you are conflicted, it would be in the best interest of the Owners Corporation to not include the conflicted party in the discussion.

The Owners Corporations Act 2006 could levy fees (expenses of the Owners Corporation) to lot owners according to lot liability. Therefore, if the Owners Corporation is levying fees to you, it should be based on your lot liability.

In annual general meetings, during the voting period of that meetings, all owners must be given the opportunity to vote. On the other hand, if there are discussions in the meeting that the Owners Corporation deems you are conflicted, it would be in the best interest of the Owners Corporation to not include the conflicted party in the discussion. I make the distinct point in these two circumstances – all owners must not be hindered from voting at an annual general meeting and owners who are conflicted, in my view, should not be included in discussions, where the Owners Corporation is investigating if they will action the complaint submitted.

Minutes of the annual general meeting could be amended at the next annual general meeting where the majority of the members (present and eligible to vote at the meeting) resolves to amend those minutes.

Rochelle Castro
RC & Co Lawyers
E: [email protected]
P: 1300 072 626

This post appears in the October 2021 edition of The VIC Strata Magazine.

Question: Our previous Chair has been replaced but still holds a position on the committee. They behave in a very destructive manner, undermining the committee. Can the committee sanction this person?

I am the Chair of a large residential apartment building, serving on an OCC comprising twelve.

I was voted by the committee to replace the previous Chair who had been in the position for many years. This person remains on the committee but is behaving in a very destructive manner. This person engages in lengthy email battles with several members, descending into very personal insults and accusations posed as questions (eg “is he hiding something?”).

The rest of the committee is working extremely well together and has demonstrated great professionalism in attempting not to engage. However, mud sticks.

My question is how the committee might sanction this person. I understand that as they currently do not hold a position on the committee (ie Chair or Secretary), we can’t pass a motion of No Confidence. Can we pass a motion to sanction and what might this look like? Also, is there a model Code of Conduct (more comprehensive than the few lines in the Act) that we could use?

Answer: The legislation does not provide a method or means of ‘sanctioning’ a member of the Committee.

The legislation does not provide a method or means of ‘sanctioning’ a member of the Committee. The Committee may convene a Special General Meeting for the purpose of removing a Committee member, but other than that there is no authority or pathway granted to the Committee to manage the actions of a member who has been acting unruly, or ‘destructively’.

Each member has a statutory obligation to act in good faith, and generally this is taken to include acting in a constructive fashion for the good of the Owners Corporation. It may well serve to provide a timely reminder at the next Committee Meeting of this obligation.

Another avenue is to simply ‘push on’ with the matters of the Owners Corporation before the Committee and ignore communication that is personal in nature or clearly provocative in either content or purpose. Whilst not ideal in all scenarios or for all discussions, it may be the most appropriate path to demonstrate that both the Chairperson and majority of the Committee have the intention of managing the Owners Corporation needs rather than becoming embroiled in matters of personality.

If members feel strongly that correspondence is bullying or defamatory in nature, the rest of the Committee might choose to seek legal advice on the mater.

Alex McCormick
The Knight
Email

This post appears in Strata News #361.

Question: One of our lot owner has a business which has a contract at the apartment complex. Are they able to nominate for an Owners Corporation committee position or is this a conflict of interest?

One of our lot owner has a family business which has a contract at the apartment complex. Are they able to nominate for an Owners Corporation committee position?

If they do, can other owners object to that nomination as a conflict of interest?

If this situation occurs how should that objection be put forward at the AGM?

Answer: If there is any type of third party relationship it should be discussed so everyone is aware of the situation.

Conflict of interest is something that should always be disclosed, transparent and spoken about openly with all of the owners corporation.

Although I am not sure what service the family business delivers to the owners corporation, if there is any type of third party relationship it should be discussed so everyone is aware of what the current situation is.

If someone would like to join the committee then they do have to disclose any conflict of interest and should also make sure they do not profit from any decision that is made by the committee or owners corporation.

An example of this could be that a committee member is also an OC Manager with a different OC Company to the one that is currently managing the property.

Should the committee decide to look at appointing a new OC Company, this particular committee member would be able to submit a proposal from their OC Company but would need to disclose the conflict of interest and also be removed from any part of the decision process around the proposal and appointment of the new OC Management Company.

Referring back to your original questions I would suggest the below:

• Yes, the lot owner in question can nominate themselves or be nominated for a position on the OC Committee
• Yes, other lot owners may object to that nomination as a conflict of interest but it would come down to an overall vote and not just one owners objection.
  In this case I would suggest putting in a written nomination before the meeting that openly discloses the conflict of interest and the service that is currently provided and how this owner intends to work in the best interest of the owners corporation in the new position on the OC Committee (if elected) and that it would not be to benefit his/her individual business. This can then be recorded in the minutes.​
• If objection does occur at the meeting it could be verbally and in writing in the minutes but as mentioned above that could be addressed by openly disclosing it all very early.

I hope the above is helpful and please feel free to reach out if you would like any further information.

Jane Giacobbe
Strata Reports Victoria
E: [email protected]
P: 0402 341 848

This post appears in Strata News #272.

This article is for reference purposes only and is not intended to be a comprehensive review of the developments in the law and practice or to cover all aspect of the subject matter. It does not constitute legal or other advice and should not be relied upon this way. Readers should take legal or other advice before applying the information containing in this publication.

Have a question about dealing with problem committee members in Victoria or something to add to the article? Leave a comment below.

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