Body Corp Blog

Risks Of A Voluntary Role – Committee Member Liability

Over the past few years practising in the area of strata and community titles, a noticeable trend has been an ever-increasing volume of litigation concerning disputes between individual Committee members and other stakeholders, including owners and managers.
 

Committee members may well feel the need to drive the Body Corporate in a certain direction and if an owner or group of owners have a different view, tensions will often arise as the Committee implement decisions through their executive power. This can often lead to hostile relationships between Committee members and others in the scheme.
In Queensland, a Committee member is not civilly liable for an act done or omission made in good faith and without negligence in performing the person’s role as a Committee member. Additionally, a Committee member is not liable for defamation as a consequence of publishing material which they are required to do so for a general meeting (e.g. a motion or explanatory note submitted by an owner).

It follows that, a Committee member is not protected for acts done without good faith, negligently, or for publishing defamatory material not required as a consequence of their office. Whilst the Body Corporate may have certain insurances to protect Committee members where they fall short of the legislative protections, such insurance policies will usually have appropriate limitations and exclusions, including where the member acts recklessly.

The position is similar in New South Wales, with protection from personal liability for acts done or omitted to be done in good faith and for the purpose of executing the person’s functions as an officeholder. Such liability, instead, attaches to the Owners Corporation.

Accordingly, provided a Committee member acts with due care and diligence, it is unlikely that they will have any risk of personal liability and the Owners Corporation should have appropriate insurance to respond to losses that arise from most innocent accidents and mistakes. Nonetheless, there is always a risk that a member will expose themselves to personal liability where they act recklessly or outside the scope of their duties as an office bearer.

In short, it is very easy for Committee members to make defamatory statements as a consequence of the pressure which may be exerted on them by various interest groups in the scheme and the resulting friction. Legislative and insurance protections are limited and, accordingly, Committee members should take care and not act with haste in retorting to their agitators.
 

Liability limited by a scheme approved under Professional Standards Legislation
Disclaimer – This article is provided for information purposes only and should not be regarded as legal advice.
 

Posted in: Body Corp Blog at 02 April 17