Conflict of Interest - Council of the Strata Company

Learn how to identify a conflict of interest in the context of a Strata Company, and understand the obligations of councils concerning the handling of such conflicts.

Overview 

The Strata Titles Act 1985 states that any member of the strata council must inform the Council in writing of any conflict of interest, as soon as is practicable after they become aware of it. It goes further to say that if there is a conflict of interest, the council member must not vote (i.e. they must abstain from voting) on any matter in which they have an interest.

Section 137 of the Strata Titles Act explains further to clarify what would be determined as an 'interest'.

Strata Titles Act 1985 - Legislation

137. Council members: general duties and conflicts of interest

(1) This section applies to a person who is —
(a) a member of the council of a strata company (including when acting as an officer of the strata company); or
(b) an individual authorised under section 136(2) by a corporation to perform the corporation’s functions as a member of the council, or an officer, of a strata company.

(2) A person to whom this section applies —
(a) must at all times act honestly, with loyalty and in good faith in the performance of functions as a member of the council or an officer of the strata company; and
(b) must at all times exercise the degree of care and diligence in the performance of those functions that a reasonable person in the person’s position and the circumstances of the strata company would reasonably be expected to exercise; and
(c) must not make improper use of the person’s position —
    (i) to gain, directly or indirectly, an advantage for the person or any other person; or
    (ii) to cause detriment to the strata company.

(3) A person to whom this section applies —
(a) must inform the council in writing of any direct or indirect pecuniary or other interest that the person has that conflicts or may conflict with the performance of a function as a member of the council or, if applicable, as an officer of the strata company; and
(b) must do so as soon as is practicable after the person becomes aware of the relevant facts; and
(c) in the case of a member of the council, must not vote on a matter in which the member has an interest required to be disclosed under paragraph (a).

(4) Subsection (3) does not apply to an interest arising solely from the fact that the member is the owner of a lot in the scheme.