For Bodies Corporate established by the Body Corporate and Community Management Act 1997, committees can exercise considerable powers. Getting onto committees is relatively straightforward and usually occurs at annual general meetings. Removing people from committees is much more complicated. So, what’s involved? And what can Bodies Corporate do to make the process easier.

Term of Office

Committee members have a term of office that usually runs for about a year, or the period between one annual general meeting and the next. However, a committee member’s term of office can end sooner if that person:

1. dies; or
2. becomes ineligible to hold the position; or
3. resigns by written notice given to the chairperson or secretary; or
4. is not present at 2 consecutive meetings of the committee without the committee’s leave; or
5. is convicted of an indictable offence; or
6. is removed from office.

Removing a committee member

A committee member may be removed in one of two ways:

1. by ordinary resolution at a general meeting (Removal Meeting); or
2. for breaching the Code of Conduct for Committee voting members.

Both ways require a Removal Meeting, which is usually an extraordinary general meeting.

Removal by ordinary resolution at a general meeting

Removing a committee member by ordinary resolution at a general meeting is the easier of the two options. However, this option can still be tricky as it requires:

1. calling and convening the Removal Meeting; and
2. identifying an eligible person who consents to replacing the removed committee member (Replacement Member).

Calling the Removal Meeting is straightforward provided a majority of the committee agree to initiate the removal. For example, where you have a committee of 7 voting members and at least 4 of them have decided to remove and replace 1 of the voting members. 

Problem with Removal Meetings

Removal Meetings become more complicated when it is initiated by lot owners who are not on the committee. This requires a “requested extraordinary general meeting” that must be signed by at least 25% of all the lots in the scheme.

If you have a particularly dysfunctional committee, they could refuse to call the Removal Meeting, even when lot owners have requested it and provided signatures for 25% of all the lots in the scheme.

In this scenario, the lot owners trying to initiate the Removal Meeting will usually have to apply to an adjudicator for orders that compel the Body Corporate to call and convene the Removal Meeting, which can be a slow and expensive process.

Replacement Members

Assuming the Removal Meeting is called and convened, a common oversight is the need to appoint a Replacement Member. This is because the composition of the Committee must remain the same between annual general meetings.

The Replacement Member does not necessarily need to be approved by ordinary resolution at the Removal Meeting, provided the removal does not result in the total number of committee members falling below the quorum needed for a committee meeting.

For example, if you elect a committee of 6 voting members, the minimum quorum for the committee is 3. If one member is removed, the committee will still have 5 voting members, meaning it will still have a quorum, and the 5 remaining members can appoint their own Replacement Member.

However, if you elect a committee of 3 voting members (the statutory minimum) and one member is removed, the committee will not have a quorum. This means that the Replacement Member will need to be approved by ordinary resolution at the Removal Meeting.

Removal for breaching the Code of Conduct

Removing committee members for breaching the Code of Conduct is (by far) the slowest and most convoluted removal option.

To begin the process, the Body Corporate must give a written notice to the relevant committee (Removal Notice). The Removal Notice must state several things, including the following:

1. the basis upon which it is believed that the committee member has breached the Code of Code, citing the relevant provision (Breach);
2. details identifying the Breach in no more than 600 words; and
3. advising the committee member that:
   • they have at least 21 days to respond to the Removal Notice (Response); and
   • the Response must be no more than 600 words.

The Body Corporate must then consider a motion to remove the committee member at a Removal Meeting, but this cannot be called until after the period to provide the Response ends (Response Period). This means that Removal Meeting cannot be held until:

1. at least 6 weeks after the Removal Notice is issued; or
2. at least 3 weeks after the Response Period ends.

Then, when calling the Removal Meeting, the Body Corporate must include as part of the agenda both the Removal Notice and the Response. This is to ensure that when lot owners vote on whether to approve the removal, they can make a full, fair, and informed decision.

What is the solution?

Removing Committee members is slow and complicated. So, what is the solution?

One way is empowering Committees to decide their own membership during their term of office.

As mentioned, Committees already have very broad powers, save for “restricted issues”. Removing Committee members is a restricted issue because it requires an ordinary resolution at a Removal Meeting, but this need not be the case.

A Body Corporate could decide at a general meeting that removing committee members was not a restricted issue. This would, at the very least, enable Committee members to eject members by a majority resolution and appoint a Replacement Member, provided they maintain a quorum.

This is not a perfect solution and, as with most solutions, it could cause its own problems. But what we have seen, time and time again over the last decade and more, is that bad committee members that should be removed are not removed. Instead, bad committee cause good committee members to resign. The bad Committee member then nominates their own Replacement Member, who may be cut from the same cloth. The end result is a highly dysfunctional Body Corporate that faces an assortment of risks, including being placed into external administration.

If your Body Corporate requires further advice and assistance in relation to Committee membership or removing Committee members, please contact Mario Esera at HWL Ebsworth Lawyers.

Article Contributed by Mario Esera, Partner, HWL Ebsworth Lawyers

The post REMOVING BAD COMMITTEE MEMBERS: HARDER THAN YOU THINK! appeared first on Smart Strata | Body Corporate Management.