Having recently sold out of a unit block in NSW (at a considerable loss) where the chair and secretary refused to accept that the three representatives of the developers on the strata committee had a conflict of interest when it came to discussions about defects, I can safely say there are no StrataKops even in NSW,
I have also just learned that the committee has quietly withdrawn a defects claim without even telling owners it was doing so.
What it will take – and ALL it would take – is one owner to go to Fair Trading and NCAT and ask for a motion to be overturned or even for the committee to be replaced by a compulsorily appointed strata manager for clear breaches of the Act.
In this case, if anyone feels strongly enough, they should run a test case at ACAT where a decision has been potentially influenced by perceived conflict of interest – i.e. the conflicted members’ votes were the deciding factor – and see what the Tribunal members say.
It doesn’t have to be done in a combative way – just seeking a clarification through the only valid means available.
Meanwhile, I have turned again to AI (with all its flaws) to dig a little deeper and it came up with this:
There is at least one significant ACAT case directly on point, and it’s become something of a landmark for ACT strata governance.
Gracie v The Owners – Units Plan No 3411 & Ors [2016] ACAT 3
The catchwords for this case explicitly identify “conflict of interest” as a central issue, alongside annual general meeting procedure, merits review, and whether an administrator should be appointed. Casenote
The owners corporation involved two stages developed by Statehay Pty Ltd. Stage 1 (Lakeside) had 112 units completed around 2009, while Stage 2 (Central Park) had 128 units completed in April 2014 — all of which remained owned by Statehay, giving the developer a majority of votes at OC meetings. At the 2015 AGM, Statehay used that majority to block motions supported by the Stage 1 owners, and to pass motions the Stage 1 owners opposed. Kerinbensonlawyers
The applicant, a Lakeside unit owner, sought the appointment of an administrator under the Unit Titles (Management) Act.
The OCN ACT has described the key principle that came out of the case: it is not enough to merely confess to a conflict of interest — conflicts have to be actively addressed and managed. “The elephant cannot be silent in the room.” Ocnact
The OCN ACT has noted this case had significant implications for OC decision making in the ACT, with other owners now able to challenge decisions on the grounds that the continued participation of highly conflicted individuals led to “unreasonable influence” on decisions. Ocnact
There are also related cases worth knowing about. In Executive Committee Units Plan 930 v Capital Strata Management and Miliano and Others, ACAT affirmed that if an OC member owes any money to the OC, they are not entitled to vote on any resolution at an AGM or special general meeting — which touches on a related form of conflict (financial interest in the outcome). Ocnact
For Flat Chat purposes, Gracie v Units Plan 3411 is the key ACT authority: it establishes that a majority unithodler with an obvious conflict of interest (developer controlling the scheme) cannot simply acknowledge the conflict and then vote as they please — there must be active management of that conflict, or decisions can be challenged and overturned.
This doesn’t address the issue directly – should a committee member be able to vote on an issue affecting their own lot? But there is a clear advantage that other non-member owners don’t have and that should at least be grounds for raising the issue, asking the committee member to recuse themselves and potentially challenging the decision if their vote decided the issue.