{"id":86,"date":"2015-08-17T04:53:57","date_gmt":"2015-08-17T04:53:57","guid":{"rendered":"http:\/\/www.theonsitemanager.com.au\/news\/?p=86"},"modified":"2015-10-17T04:55:16","modified_gmt":"2015-10-17T04:55:16","slug":"how-to-waste-a-body-corporates-money","status":"publish","type":"post","link":"https:\/\/theonsitemanager.com.au\/news\/how-to-waste-a-body-corporates-money\/","title":{"rendered":"How to waste a body corporate&#8217;s money"},"content":{"rendered":"<p>If you\u00a0have even a passing interest in federal politics, you will have seen the furore over Bronwyn Bishop\u2019s recent\u00a0<a href=\"http:\/\/www.abc.net.au\/news\/2015-07-20\/pm-says-bishop-has-copped-a-justifiable-hiding\/6632986\">taxpayer funded chopper flight\u00a0<\/a>to a Liberal fundraiser which was only an hour or so away by car.<\/p>\n<p>No doubt it was the easiest $5,000 she ever spent at the time.<\/p>\n<p>When it came to light there was quite legitimate outrage about the spending, and the sole defence seems to be that it was \u2018<em>within guidelines<\/em>\u2019. Some guidelines they must be.<\/p>\n<p>It has since been paid back.<\/p>\n<p>And so no one thinks we are singling out the Liberals, if you want to see what happens on the \u2018other\u2019 side of politics you have to look no further than the Health Services Union, firstly through\u00a0<a href=\"http:\/\/www.smh.com.au\/federal-politics\/political-news\/craig-thomson-convicted-and-fined-25000-20141217-1294ha.html\">Craig Thompson<\/a>, and then\u00a0<a href=\"http:\/\/www.abc.net.au\/news\/2015-07-09\/evidence-reveals-kathy-jacksons-alleged-lavish-lifestyle-court\/6608544\">Kathy Jackson<\/a>\u00a0(the allegations for which are still winding through the system).<\/p>\n<p>The common theme?<\/p>\n<p>Other people\u2019s money.\u00a0Yours and ours with respect to Bronwyn\u2019s as Australian taxpayers and the members of the Health Services Union\u00a0for Kathy and Craig.<\/p>\n<p>From our end, we think body corporate\u00a0committee members need to understand they are in the same boat.\u00a0There is absolutely a difference in the context that most committee spending will not be pursuing personal entertainment like the examples above, but when a committee is spending money their mind set should be to treat it like their own.<\/p>\n<p>The\u00a0<a href=\"http:\/\/www.rocksresort.com.au\/\">Rocks Resort\u00a0<\/a>is a resort at Currumbin on the Gold Coast. No doubt it does a booming trade every ANZAC\u00a0Day when the Sunrise team rolls into town for the ANZAC service (let alone other holiday periods).<\/p>\n<p>It is in a very beautiful part of the world.<\/p>\n<p>What is not so beautiful is what has been going on inside the body corporate for many years.<\/p>\n<p>The body corporate issued eight Remedial Action Notices\u00a0to the resident manager between 18 June 2010 and 7 October 2010.\u00a0A Remedial Action Notice is also commonly called a breach notice.\u00a0They mean the same thing \u2013 the resident manager must rectify the issue complained of or the body corporate may have a right to terminate the\u00a0<a href=\"http:\/\/hyneslegal.com.au\/management-rights\/what-are-management-rights\">management rights<\/a>\u00a0agreements.<\/p>\n<p>These styles of matter generally then descend into:<\/p>\n<ul>\n<li>characterising in detail the conduct complained of; and<\/li>\n<li>arguing whether that conduct was actually required under the management rights agreements.<\/li>\n<\/ul>\n<p>For the purposes of this article, that was in dispute, but was not considered in the\u00a0<a href=\"http:\/\/www.qcat.qld.gov.au\/\">Queensland Civil and Administrative Tribunals\u2019s<\/a>\u00a0decision.<\/p>\n<p>As a resident manager must do in the circumstances, the validity of the Remedial Action Notices was contested.\u00a0To do otherwise is to render the management rights agreements liable to\u00a0<a href=\"https:\/\/www.qld.gov.au\/law\/housing-and-neighbours\/body-corporate\/roles-and-responsibility\/service-contractor\/terminating-an-engagement\/\">termination<\/a>.<\/p>\n<p>After ten hearing days (spread amongst\u00a0June, August and October 2014) the decision about the validity of the Remedial Action Notices was handed down last month.<\/p>\n<p>The body corporate lost, and lost badly.\u00a0 It would almost be amusing if it wasn\u2019t so serious.<\/p>\n<p>The relevant provisions of the Module require that for a Remedial Action Notice\u00a0to be valid the person upon whom it is served must be given a chance to remedy the default within a statutory timeframe.<\/p>\n<p>The legislative minimum was\u00a0<em>\u2018not less than 14 days\u2019<\/em>\u00a0after the remedial action notice was given.<\/p>\n<p>Each Remedial Action Notice required remedy\u00a0<em>\u2018within\u2019<\/em>\u00a014 days.<\/p>\n<p>In effect, that cut the resident manager one day short in their compliance time.\u00a0 Calling for the issue to be remedied\u00a0<u>within<\/u>\u00a014 days was requiring it to be addressed in\u00a0<u>less<\/u>\u00a0than 14 days.\u00a0 That\u00a0did not comply with the Module and all of the Remedial Action Notices\u00a0were therefore declared invalid.<\/p>\n<p>So to the extent that the Body Corporate wants to seek to terminate the management rights agreements, it needs to start again from scratch.<\/p>\n<p>Now &#8211; back to where this article started.<\/p>\n<p>The body corporate has reportedly spent more than $300,000 in legal fees getting to where it has got to.\u00a0That figure is despite the committee seemingly being self-represented at the hearing.\u00a0 Who knows what the resident manager has spent, but you can be sure it would be close to that amount, if not more.<\/p>\n<p>Costs in the Queensland Civil and Administrative Tribunal\u00a0are only awarded against the losing party where the interests of justice require it, so that will be an interesting post script to this matter.<\/p>\n<p>We have written previously about the commerciality of body corporate litigation\u00a0<a href=\"http:\/\/hyneslegal.com.au\/archived-news\/the-commerciality-of-strata-litigation-nar-57\">here<\/a>\u00a0and<a href=\"http:\/\/hyneslegal.com.au\/archived-news\/are-recovery-costs-abody-corporate-debt-nar-300\">here<\/a>\u00a0in relation to levy recovery.\u00a0This is yet another example of spending that almost certainly should not have taken place before every other avenue to resolution was exhausted.<\/p>\n<p>The immediate questions that come to mind for us are:<\/p>\n<ul>\n<li>Would owners have supported the proceeding if they had known this was the potential outcome?<\/li>\n<li>What could\u00a0the $300,000\u00a0otherwise have been spent on?<\/li>\n<li>Did the committee act in the interests of the body corporate, and reasonably, in pursuing the termination agenda and guiding the body corporate in that direction?<\/li>\n<li>Was there another way that the issues could have been resolved that didn\u2019t cost the body corporate hundreds of thousands of dollars?<\/li>\n<\/ul>\n<p>I suspect you know what we think.<\/p>\n<p>Engaging in litigation remains something that should be a very last resort. The body corporate opened itself to litigation when it pressed ahead with the issuing of the Remedial Action Notices.\u00a0 In a management rights sense, issuing a Remedial Action Notice is an incredibly hostile act and when issuing one a body corporate needs to be prepared to have proceedings filed against it.<\/p>\n<p>We think the ultimate test when you are representing the interests of others is to look at the spending as if it were your own money. If you were spending it from your own pocket, would you contemplate the action? \u00a0Can you put your hand on your heart and say it was necessary and there was no other choice?<\/p>\n<p>All very interesting questions.<\/p>\n<p>For those that are interested, you can read the judgement\u00a0<a href=\"http:\/\/archive.sclqld.org.au\/qjudgment\/2015\/QCAT15-255.pdf\">here<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>If you\u00a0have even a passing interest in federal politics, you will have seen the furore over Bronwyn Bishop\u2019s recent\u00a0taxpayer funded chopper flight\u00a0to a Liberal fundraiser which was only an hour or so away by car. No doubt it was the easiest $5,000 she ever spent at the time. When it came to light there was quite legitimate outrage about the spending, and the sole defence seems to be that it was \u2018within guidelines\u2019. Some guidelines they must be. It has since been paid back. And so no one thinks we are singling out the Liberals, if you want to see what happens on the \u2018other\u2019<a class=\"more-link\" href=\"https:\/\/theonsitemanager.com.au\/news\/how-to-waste-a-body-corporates-money\/\">Read More &rarr;<\/a><\/p>\n","protected":false},"author":1074,"featured_media":88,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mbp_gutenberg_autopost":false},"categories":[8,7,2],"tags":[],"_links":{"self":[{"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/posts\/86"}],"collection":[{"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/users\/1074"}],"replies":[{"embeddable":true,"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/comments?post=86"}],"version-history":[{"count":1,"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/posts\/86\/revisions"}],"predecessor-version":[{"id":87,"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/posts\/86\/revisions\/87"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/media\/88"}],"wp:attachment":[{"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/media?parent=86"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/categories?post=86"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/theonsitemanager.com.au\/news\/wp-json\/wp\/v2\/tags?post=86"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}