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Claytons committee meetings

By Frank Higginson03 Dec 2010

Although I am not officially senior enough to have ever partaken of a Claytons, the more senior amongst our readership probably remember the advertising phrase ‘The drink you have when you are not having a drink.’ Claytons was the pre cursor to light beer in Australia (yes a joke), and was sold on the basis that it looks like you were having an alcohol infused drink when you were not.

So what has all that got to do with management rights?

From a legislative perspective, one of the main aims of the BCCM Act and modules is self governance of bodies corporate. This means the government wants volunteers (such as committee members) to be able to run their committees the way they choose, subject to the stated legislative constraints.

The modules set out what has to happen for committee meetings. The right notices need to be given, owners are given the opportunity to attend, and records must be kept and given to owners.

Naturally, and almost without exception, active committee members will meet outside committee meetings to discuss what is going on, and perhaps what they are looking to achieve. It is correct that these meetings are simply informal chats about whatever they may be, and any issues notionally agreed to then require formal discussion (and ratification) at a properly convened committee meeting.

We have had a few clients recently where their committees are having regular informal meetings and then seeking to enforce the outcomes agreed at those meetings outside of the legal committee structure. Notional resolutions are being made, and then sent to the body corporate manager for inclusion with the next minutes sent to owners. This is fraught with danger for all concerned.

A previous article we have written deals with the abuse of votes outside committee. These ‘informal’ meetings are no different.

Committees must be open and transparent. Any process that avoids openness and transparency (intentional or otherwise) and prevents owners of informing themselves properly of what is going on in the scheme, is potentially unlawful.

Whilst the legislation supports self governance, it does not extend to circumstances where actions, no matter how well intended, are likely to circumvent the obligations contained in the BCCM Act and the modules.

If actions are taken by bodies corporate based on these informal decisions, to the extent that they are later deemed to circumvent the required statutory requirements, there is a real risk that they might be declared unenforceable or void, leading to all sorts of ugly complications for all concerned.