#77594
Jimmy-T
Keymaster

    If someone declares a conflict of interest, it should really be up to the others in the meeting to determine whether the conflicted person leaves the discussion.

    That’s not what the law says – and for very good reason.  If the person concerned has a forceful nature and the committee chair and strata manager are either in their pocket or just wishy-washy or easy-going, then the conflicted person can easily stay and sway the discussions to suit themselves, to the point of objectors staying silent.

    Of course, this depends on what kind of meeting you are talking about Section 18 of Schedule 2 of the Act only applies to committee meetings and doesn’t use the term “conflict of interest” but “pecuniary interest”.

    The online legal dictionary definition of “pecuniary” is that it refers to something paid or given in money, or a monetary interest in something. “For example, a person who owns stock in a company is said to have a pecuniary interest in the company, because his investment, loss, and gains can be measured in dollars,” it says. It goes on to define pecuniary as:

    1. relating to, or in the form of, money
    2. consisting of, given, or exacted in money, or in monetary payments.

    So the question of whether or not someone voting in favour of their own proposed renovations is a conflict of interest is irrelevant in terms of NSW strata law (and probably a rabbit hole down which we should not have strayed).

    However, if you have someone on the committee who will benefit financially from a decision, they must declare it or face a potential fine of $2200, and then they should leave the meeting and take no further part in those discussions. One example would be a builder who is pitching for the job or, dare I say it, an owner who wants a ban or Airbnbs lifted so they can rent out their flat.

    This is what schedule S, Section 18 of the NSW Act says:

    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.

    and

    The opinions offered in these Forum posts and replies are not intended to be taken as legal advice. Readers with serious issues should consult experienced strata lawyers.