Can a person be a Trustee as well as a Service Provider for the Body Corporate? For example – can Karien Coetzee be a Trustee as well as having her Garden Service company mowing the lawns of the scheme and tending to the gardens?

The biggest and most important duty of a Trustee is the “Fiduciary duty” or as per the STSM the “Fiduciary relationship” with the BC.

The STSM Act in Section 8 explains this duty by stating that this Fiduciary relationship implies the following things that a Trustee must do:

  • Act honestly and in good faith in relation to the BC; and in particular
    • Exercise his powers ito the Act in the interest and for the benefit of the BC
    • Not act without or exceed the powers
  • Avoid any material conflict between his interest and the BC’s interest; and in particular
    • Not receive any personal economic benefit (direct or indirect)
    • Notify the other Trustees of any material interest he may have in a contract of the BC

In terms of Act a person who wants to be a Trustee and receive a personal economic benefit must first get written approval from all owners.

So in essence the person should decide if they rather want to be a Trustee or rather be a service provider.  They can only be both with the written permission from all owners.

The quote from the Act is on the next page.

The STSM Act also specifies that a Trustee who have an interest in a contract of the BC may not be a part of the decision making ito this contract in fact he must not even be present when the matter is considered.

Quote from the STSM Act:
PMR 6(3)A trustee who has any direct or indirect personal interest in any matter to be considered by the trustees must not be present at or play any part in the consideration or decision of the matter concerned.

Quote from the STSM Act:
Fiduciary position of trustees

Section 8.
(1) Each trustee of a body corporate must stand in a fiduciary relationship to the body corporate. 

(2) Without derogating from the generality of the expression “fiduciary relationship”, the provision of subsection (1) implies that a trustee—
(a) must in relation to the body corporate act honestly and in good faith, and in particular—

  • exercise his or her powers in terms of this Act in the interest and for the benefit of the body corporate; and
  • not act without or exceed those powers; and

(b) must avoid any material conflict between his or her own interests and those of the body corporate, and in particular—

  • not receive any personal economic benefit, direct or indirect, from the body corporate or from any other person; and
  • notify every other trustee of the nature and extent of any direct or indirect material interest which he or she may have in any contract of the body corporate, as soon as such trustee becomes aware of such interest.

(3) A trustee of a body corporate who acts in breach of his or her fiduciary relationship, is liable to the body corporate for—

  • any loss suffered as a result thereof by the body corporate; or
  • any economic benefit received by the trustee by reason thereof.

(4) Except as regards the duty referred to in subsection (2)(a)(i), any particular conduct of a trustee does not constitute a breach of a duty arising from his or her  fiduciary relationship to the body corporate if such conduct was preceded or followed by the written approval of all the members of the body corporate where such members were or are cognisant of all the material facts.