Defining a Conflict of Intrerest

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Hi everyone. I have a rather silly query that I was hoping someone would be able to assist with. Sorry for the length of the post.

I'm a director of a Right to Manage company. We took over management of our building recently; there are about 30 resident 'members'. Members are leaseholders and so own a property in the building. 5 of the members (me included) were appointed as directors.

We have a caretaker in the building and he is a keyholder. One of the directors is also a keyholder in case the caretaker is away or offsite and we need access and it was agreed at a directors meeting that this person could use a locked access door for occasional private access. One of the members has objected to this arrangement and is causing a massive fuss, claiming that the director has unfair advantage and is causing a potential security risk, and is stirring up quite a storm with a very belligerent and aggressive attitude. It's causing quite a headache, not least because the directors are volunteers and we are all neighbours; a silly little agreement that was seen as quite benign is turning into a sweaty mess because of one person's sense of injustice.

The directors have sole discretion over what is allowed in the building and so are going to formally vote on the issue. It was agreed that the director that is a keyholder will not have a vote because there would be a conflict of interest. The problem is that one of the other directors is the partner of the complainant. We feel that this puts this person in conflict, however, whilst they do co-habit, they both own separate properties in the building and so are both leaseholders in their own right.

My opinion is that both directors are conflicted and the other 3 should vote, but I'm not a lawyer. Perhaps neither are technically conflicted and should have a vote, perhaps being the partner isn't a conflict? I really am not sure, so I was wondering what a lawyer's take would be on this?

Ive attached a copy of sample articles that are almost identical to ours.

thanks again
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[Openlaw15]

Re: Defining a Conflict of Intrerest

Hi everyone. I have a rather silly query that I was hoping someone would be able to assist with. Sorry for the length of the post.

I'm a director of a Right to Manage company. We took over management of our building recently; there are about 30 resident 'members'. Members are leaseholders and so own a property in the building. 5 of the members (me included) were appointed as directors.

We have a caretaker in the building and he is a keyholder. One of the directors is also a keyholder in case the caretaker is away or offsite and we need access and it was agreed at a directors meeting that this person could use a locked access door for occasional private access. One of the members has objected to this arrangement and is causing a massive fuss, claiming that the director has unfair advantage and is causing a potential security risk, and is stirring up quite a storm with a very belligerent and aggressive attitude. It's causing quite a headache, not least because the directors are volunteers and we are all neighbours; a silly little agreement that was seen as quite benign is turning into a sweaty mess because of one person's sense of injustice.

The directors have sole discretion over what is allowed in the building and so are going to formally vote on the issue. It was agreed that the director that is a keyholder will not have a vote because there would be a conflict of interest. The problem is that one of the other directors is the partner of the complainant. We feel that this puts this person in conflict, however, whilst they do co-habit, they both own separate properties in the building and so are both leaseholders in their own right.

My opinion is that both directors are conflicted and the other 3 should vote, but I'm not a lawyer. Perhaps neither are technically conflicted and should have a vote, perhaps being the partner isn't a conflict? I really am not sure, so I was wondering what a lawyer's take would be on this?

Ive attached a copy of sample articles that are almost identical to ours.

thanks again
ADD

Why not appoint a representative from members who have no director responsibilities (ie delegate) under section 10 of the Directors powers/ responsibilities of the Articles of Association. It will then stop the abusing power/ conflict of interest arguments. Said persons can therefore decide, in the caretaker's absence, whom the appointed person shall be to 'privately access' the locked room.

[ADDLED]

Re: Defining a Conflict of Intrerest

Thanks openlaw, that's an interesting idea. There is a bit more detail that I should have added to give more context.

The door in question is a fire escape door in the ground floor stairwell outside the director's door that leads to a secluded area of the private courtyard. They have a dog and the director has historically used the door late at night or early morning to let the dog out.

The door used to have a push bar release that only operates from inside. A couple of months ago some contractors propped the door open whilst they were on site, someone accessed the building, burgled a flat. Since then we have had ceramic bar locks fitted - the type where you smash the tube and the lock springs open - which can be opened without breaking the bar by using said key, and so preventing people using the door as a general exit.

Three of the directors have no issue with this arrangement, two do, one of these being the complainant's partner. We all agree the keyholder shouldnt vote because theyre conflicted.

I suppose my question is, in your opinion, does the complainant's partner have a conflict of interest too?

Apologies again for the novel, it seems such a stupid thing but it's rea;;y causing friction between a few tolerant people and one argumentative hot-head.

tks
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