The corporation can choose to run all of its business through general meetings or it can, by ordinary resolution [Community Titles Act 1996 (SA) s 90(2)], set up a management committee [s 90(1)] to carry out the functions and perform the duties of the corporation within the limits of the committee’s powers [s 92(1)]. The committee cannot delegate its functions or powers, but the corporation can appoint someone, such as a body corporate manager, to assist the committee to carry out its role [s 92(3)].
Powers and responsibilities of the management committee
The management committee has full power to transact any business of the corporation [s 92(2)], except that:
- the corporation may impose limitations in the by-laws on what the committee can do [s 92(2)]; and
- the committee does not have the power to do anything for which a special or unanimous resolution is required [s 92(4)].
If a management committee is considering a controversial issue, such as raising special levies, it may be sensible to give advance notice of this to all lot owners.
Membership of the management committee
A management committee is appointed by an ordinary resolution at a general meeting of the corporation [s 90(2)]. The corporation’s office bearers (presiding officer, treasurer and secretary) must be members of the committee [s 90(3)]. All members of the committee must be natural persons (not, for example, companies) [s 90(3)]. In a residential, or mainly residential, scheme, the members of the management committee must be members of the corporation (lot owners), but, if a body corporate is a lot owner, the person appointed by it to vote at meetings is taken to be a member of the corporation [s 90(4)].
A member of the committee must be appointed for a term that expires at or before the next annual general meeting of the corporation [s 91(1)]. A committee member may be re-elected at the AGM.
A vacancy will arise before the annual general meeting if the member:
- is an office bearer and ceases to be an office bearer [s 91(2)(d)];
- resigns in writing to the secretary [s 91(2)(e)] (note that an office bearer may not resign from the committee while continuing to act as an office bearer);
- dies or sells their lot [ss 91(2)(a), (c)];
- becomes bankrupt or applies to take the benefit of a law for the relief of insolventdebtors [s 91(2)(f)];
- is convicted of an indictable offence (an offence that may be heard before a jury) or is imprisoned for any offence [s 76(7)(g)].
A member may be removed by ordinary resolution of the corporation (not the committee) on the grounds of misconduct, or neglect of duty, or incapacity or failure to carry out satisfactorily the duties of the office [ss 91(2)(h), 91(3)].
If there is a casual vacancy in the membership of the committee, the management committee may appoint a suitable person to fill the vacancy [s 97].
Duty of honesty
A committee member must at all times act honestly in the performance of their duties. Failure to do so is an offence with a maximum penalty of $4 000, or, if an intention to deceive or defraud is proved, $15 000 or four years imprisonment [s 96(1)].
A committee member must not make improper use of their official position to gain a personal advantage for themselves or another. Doing so is an offence with a maximum penalty of $15 000 or four years imprisonment [s 96(2)].
Immunity of committee members from liability
A committee member is not personally liable for an act or omission while acting, or purportedly acting, as a committee member unless the act or omission was dishonest or negligent [s 99(1)]. A liability that would, but for section 991(1), have attached to a committee member attaches to the corporation [s 99(2)].
Meetings of the management committee
A management committee must keep minutes of its meetings [s 94(7)].
A management committee meeting may be called by the presiding officer, treasurer or secretary, or by any two members of the committee [s 93(1)].
At least three days written notice of a management committee meeting must be given [s 93(2)]. The notice must set out the day, time and place of the meeting, and the meeting agenda [ss 93(2), 93(4)].
The day, time and place of the meeting must be reasonably convenient to a majority of the members of the committee [s 93(3)].
The presiding officer chairs committee meetings, but in the absence of the presiding officer, the members present may appoint another member to chair the meeting [s 94(1)].
Decisions and disclosure of interest
Decisions of the management committee are made by majority vote [s 94(3)].
It is an offence with a maximum penalty of $15 000 if a committee member who has a direct or indirect pecuniary interest (apart from an interest arising solely from the fact that the member is also a member of the community corporation [s 95(4)]) in a matter under consideration by the committee does not disclose the nature of the interest to the committee or takes part in any discussions or decisions of the committee in relation to that matter [s 95(1)].
Any disclosure of interest must be recorded in the minutes of the committee [s 95(3)].
Decisions without meeting
A decision may be made by a committee without meeting if [s 94(6)]:
- written notice setting out the proposed decision is served on every committee member; and
- within seven days after the notice is served on all members of the committee a majority of the members give written notice to the secretary setting out the proposed decision and expressing their agreement with it.
A committee member may appoint another person (who must, in the case of a residential scheme, by another committee member or a member of the community corporation) to act as their proxy at a committee meeting that the member is unable to attend [ss 94(4), 94(5)].
To work out the quorum required for a management committee meeting, divide the total number of members of the committee by two, ignoring any fraction resulting from the division, and add one [s 94(2)].
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