Introduction

Strata committees play a crucial role in the day-to-day management and decision-making processes of strata schemes in New South Wales. However, circumstances may arise where the conduct or performance of a committee member necessitates their removal to ensure the effective governance and harmony of the owners corporation.

Understanding the procedures for removing a strata committee member is important for owners corporations facing such situations. This guide outlines the available methods, including removal during Annual General Meetings (AGMs), through a vote by the owners corporation, or via intervention by the NSW Civil and Administrative Tribunal (NCAT), as well as potential alternatives to removal.

Is it Possible to Remove Strata Committee Members? 

Yes, it is possible to remove members from a strata committee under certain conditions:

• Election at AGM: Each year, at the Annual General Meeting (AGM), a new strata committee is elected. Members from the previous term can stand for re-election if they choose. If previous members do not choose to stand again, their term comes to an end automatically.
• Removal by Owners Corporation: The owners corporation can vote to remove one or more strata committee members. This requires a general resolution passed at a general meeting.
• Tribunal Intervention: The NSW Civil and Administrative Tribunal has the authority to remove a strata committee or individual members of the committee under specific circumstances. These include:
  • Failure to comply with NSW strata laws.
  • Lack of due care or diligence in carrying out their duties.
  • Engagement in serious misconduct.

These mechanisms ensure that strata committee members who are not performing their duties effectively or legally can be replaced to maintain the proper management of the strata scheme.

Process for Removing Strata Committee Members in a General Meeting

Under the amended strata laws effective from 2024, the owners corporation can remove a member of the strata committee by passing an ordinary resolution at a general meeting—replacing the previous requirement for a special resolution.

Key consequences of this amendment include:

• Removal mechanism: An ordinary resolution is now sufficient to remove a committee member.
• Re-election restriction: The removed member is ineligible for appointment or election for 12 months from the date of the resolution.

By lowering the voting threshold and enforcing a re-election ban, this change simplifies the procedure and ensures that the governance of the strata scheme can be refreshed or corrected as needed by the owners corporation.

Approaching NCAT for Removal of Strata Committee Members under Section 238

Criteria for Removal

Under Section 238 of the Strata Schemes Management Act 2015 and in line with NCAT’s powers to make orders on strata committee composition, NCAT may remove a committee member who:

• Fails to comply with the Strata Schemes Management Act, its regulations, or the scheme’s by-laws.
• Lacks the required care and diligence in performing committee duties.
• Engages in serious misconduct that undermines effective governance.

The decision in Vojkovic v Savva confirmed these criteria are illustrative rather than exhaustive, allowing NCAT to consider other factors necessary to protect the committee’s integrity.

Need for Substantial Evidence 

NCAT’s decision to remove a committee member is not taken lightly and is based on substantial evidence. The Tribunal looks for clear violations of the law or the by-laws and not mere dissatisfaction with the committee member’s performance. Precedent cases, such as McDaid v The Owners Strata Plan No. 60346 and Lockrey v Rosewall, highlight the necessity for significant justification before NCAT intervenes in the internal affairs of an Owners Corporation.

NCAT requires clear and compelling evidence before removing a committee member. The Tribunal looks for:

• Documented violations of the law or by-laws
• Evidence of neglect, mismanagement, or serious misconduct
• Precedent support, as seen in McDaid v The Owners Strata Plan No. 60346 and Lockrey v Rosewall, which underscore the importance of substantial justification

Mere dissatisfaction or personality clashes will not suffice; applicants must demonstrate that removal is necessary to maintain effective governance.

Procedural Steps for Removal

• Mediation: The process begins with a mandatory mediation session through Fair Trading, aiming to resolve the dispute amicably.
• Application to NCAT: If mediation fails, an application to NCAT is required, wherein the applicant must clearly articulate the reasons for seeking removal and substantiate these claims with robust evidence.
• NCAT Hearing Process: Managing the NCAT process involves meticulous preparation, including the submission of relevant documents and, if necessary, presenting the case at a hearing. This might require legal assistance to ensure that the application is compelling and meets NCAT’s rigorous standards.

Lot owners and strata managers should approach the removal of a strata committee member with a thorough understanding of the legal requirements and the potential impact of such actions on the governance of their strata scheme. This approach ensures that any steps taken are justified, procedurally correct, and in the best interests of the strata community.

Don’t Want to Remove a Committee Member? Try These Alternatives Instead

Removing a committee member from their position should be considered a last resort due to the potential divisiveness and reputational impact it can have on your strata body corporate. It’s important to carefully weigh the situation and explore all other avenues before initiating such a significant action. Here’s a guide to consider alternative solutions:

• Direct Communication: Often, issues can be resolved by simply discussing them. If a committee member’s behaviour is causing concerns, a direct conversation might clarify misunderstandings or provide the individual with feedback on their role and responsibilities. This discussion could be facilitated by an appropriate representative from the committee.
• Mediation Services: Engaging a neutral third party to mediate can help resolve conflicts without the need for drastic measures. Under many organisational rules, such as the model constitution, mediation is a required first step before further actions can be taken. Mediation aims to find a mutually agreeable solution and is often successful in resolving disputes without further escalation.
• Waiting Out the Term: Committee members typically serve for a predetermined term, usually ending at the next Annual General Meeting (AGM). If a committee member’s term is nearing its end, and the issues aren’t severely impacting the association’s function, it may be practical to wait until the next election. This allows for the natural conclusion of their term without the need for formal removal.
• Non-Re-election: If the issue arises close to the term’s end, the association could opt not to re-elect the member. This passive approach avoids the confrontation of a removal process and allows the member to complete their term, thereby minimising potential conflict or disruption within the organisation.
• Legal Consultation: In situations where the behaviour of a committee member might have legal implications, or if the internal procedures do not resolve the issue, it may be necessary to seek legal advice. This can provide clarity on the rights of the association and the committee member, ensuring that any action taken is legally sound.

Each of these alternatives offers a way to address issues with a committee member without immediate removal. It’s crucial for the health and effectiveness of the association to handle such matters thoughtfully, ensuring that actions are fair, justified, and in accordance with the governing rules of the association.

Conclusion

Removing a strata committee member is a serious step that requires careful consideration of the legal processes and potential impacts on the strata community. Understanding the options, from resolutions at general meetings to applications to NCAT or exploring alternative dispute resolution, is crucial for ensuring fairness and proper governance.

If you are an owners corporation or lot owner considering the removal of a committee member, or if you require guidance on navigating the relevant procedures and legal requirements, seeking expert advice from experienced NSW strata lawyers is recommended. Contact PBL Law Group today for assistance tailored to your specific circumstances.