This is a long and complex set of questions, so I have broken them down and answered them separately.
Conflict Of Interest and Voting How does the prevention of participating in a vote where committee members have a financial interest work? What is this meant to help manage? Does this have implications/relevance when a developer continues to own multiple units in a building and also has multiple seats (but a minority) on a strata committee?
This is meant to prevent owners who have a financial or business interest in the scheme from swaying votes to favour their business. For instance, owners who are running short-term lets might fall foul of this or if they are renting their property to business that the other owner want to restrict and have the power to do so.
It’s a very loosely worded law (see below) which is yet to be tested at the Tribunal and has a few grey areas. But in a nutshell, judging by section 18 of Part 3 of schedule 2 of the Act (below) any committee member who makes money from a matter being discussed, or is an employee of a company that similarly makes money, must declare their interest (Max fine $1100 for failure to do so) and should leave the meeting while it is being discussed.
NB, this only applies to strata committee meetings. They could still rock up at a general meeting and throw around such voting power as they may have.
Also, if the conflicted party has multiple members on the committee and they vacate, depending on the numbers, that could leave the committee inquorate, meaning any decisions made would be potentially subject to challenge.
For that reason, if no other, the number of representatives of the developer elected to the committee should be restricted, if possible.
18 Disclosure of pecuniary interests
(1) If—
(a) a member of a strata committee has a direct or indirect pecuniary interest in a matter being considered or about to be considered at a meeting, and
(b) the interest appears to raise a conflict with the proper performance of the member’s duties in relation to the consideration of the matter,
the member must, as soon as possible after the relevant facts have come to the member’s knowledge, disclose the nature of the interest at a meeting of the strata committee.
Maximum penalty—10 penalty units.(2) A disclosure by a member at a meeting of the strata committee that the member—
(a) is a member, or is in the employment, of a specified corporation or other body, or
(b) is a partner, or is in the employment, of a specified person, or
(c) has some other specified interest relating to a specified corporation or other body or to a specified person,
is a sufficient disclosure of the nature of the interest in any matter relating to that corporation or other body or to that person which may arise after the date of the disclosure and which is required to be disclosed under subclause (1).
(3) Particulars of any disclosure made under this clause must be recorded by the strata committee in a book kept for the purpose and that book must be open at all reasonable hours to inspection by any person on payment of the fee determined by the strata committee.
(4) After a member has disclosed the nature of an interest in any matter, the member must not—
(a) be present during any deliberation of the strata committee with respect to the matter, or
(b) take part in any decision of the strata committee with respect to the matter.
(5) (Repealed)
(6) A contravention of this clause does not invalidate any decision of the strata committee.
(7) Without limiting subclause (1), a person has an indirect pecuniary interest in a matter if a person connected with the person has a direct interest in the matter.