Cluster without Fluster

By Roy Zazeraj

"I didn't do it, nobody saw me, you can't prove anything" Bart Simpson

Oh to be a trustee

Conflict is frequently fuelled by ignorance and misunderstanding, from the low octane variety to the truly supercharged. This can be based on innocent lack of information, wilfully wrong opinion, or a volatile mixture of the two. Or on minds like blotting paper - which soak it up and get it backwards.

Consider the role of the body corporate (BC) trustee. A trustee fulfils a crucial and highly responsible function, and all BC members should have sound knowledge of what is expected of a trustee. After all, the trustees have a significant influence over what is (for most ordinary people) our most valuable asset. But the trustee duties and responsibilities are often poorly understood - either by the duly elected trustee or by the other members of the BC. Or heaven forbid, by both. This is not helped by the general lack of interest shown by many BC members, and the widely held belief that it is just a matter of "serving on the committee".

It's a lot more serious than that. Given the often complex and onerous responsibilities that trustees face, it is incumbent on BC members to seek out and elect the most competent trustees. Apart from strong personal ethics and a sufficiency of courage, trustees should ideally bring some expertise and appropriate experience to the board (for example, in accounting, bookkeeping, legal, property, electrical, security, maintenance). But, too often, trustees are simply elected from amongst the ignorantly willing, the bored, the pushy - or those with an axe to grind. Hugh Leonard suggests that the famous Spooner would have referred to the last-mentioned as shining wits. Those with any helpful competence are either too busy, too superior or not interested in committee politics. I recently met a lawyer who resigned from his BC trustee board after a year, as it was "a waste of time and riddled with idiots and politics" - so he's walked away and left it to them! There is even a good chance that your least competent neighbours have percolated upwards and are now making decisions on your board of trustees. As in politics, we get the government we deserve. The end result is a heavy reliance on managing agents to provide any required competence, and there don't seem to be too many competent managing agents around.

So what is expected of a trustee? The duties and responsibilities of a BC trustee are determined by the Sectional Title Act, and through it the Management and Conduct Rules applicable to your scheme (the standard rules are spelt out in Annexures 8 and 9 of the Act) We don't intend to discuss them here, but I do recommend the useful Propell publication "Trustees' Pocket Guide", edited by our very own columnist Tertius Maree. These statutory documents should be easily attainable, distributed, known and discussed by BC members. Communicating with and educating BC members should be seen as a key role of the trustee board. With a little effort, ignorance and misunderstandings can be limited here.

What we will discuss are the duties and responsibilities of trustees derived from common law. Common law is a body of law that has been established by the courts over time. These principles apply to anyone in a position of trusteeship, are significant, are not always as easily attainable and are probably given inadequate consideration in the sectional title context. They are therefore a major potential source of misunderstanding and conflict. The trustee's most important common law duties are the duty to act with due care and diligence and the duty to act in good faith.

In acting with due care and diligence trustees are expected to handle any property entrusted to them with greater care than they would when dealing with their own property. Such extra care means that a trustee should be aware of all factors influencing a particular situation, including statutory and common law, and any amendments to these. The duty to act in good faith can best be interpreted as acting in terms of instructions received, on behalf of and in the best interests of BC members. The common law duties that follow emanate from these two core duties.

The duty to gather specialised advice when their own knowledge is insufficient. If lacking in any specialised fields (such as finance, accounting, structural engineering, investments or legal) it is the duty of a trustee to seek expert advice. Decisions taken on the strength of this advice remain the responsibility of the trustees and they can be held personally liable for acting inappropriately as a result of the negligence of a third party, expert or not. Like when your BC is having an out of money experience.

The duty to act impartially in respect of all beneficiaries (i.e. BC members). All members should be treated equally and objectively and trustees should not allow personal prejudices and stereotypes to influence their judgement.

The duty to prevent conflicts of interest. Trustees should demonstrate independence of mind, impartiality and total objectivity in decision-making. Possible conflicts of interest (e.g. if a trustee is a director of a painting company tendering to paint your complex) these should be openly disclosed and where appropriate the trustee should recuse him/herself from the decision-making process.

So being a trustee is no small matter. Doing it properly helps to reduce conflict-generating ignorance and misunderstanding. If not a trustee yourself, persuade the most competent to stand (that could be you) and then give them your full support. If you are a trustee, stay fully informed of your duties and responsibilities and aspire to doing the best job possible. It is, after all, a position of trust and infers an element of altruism. And anyway, who really wants to be average. As Robert Murphy has so helpfully pointed out, the average human being has one breast and one testicle. Talk to you soon.