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Topic
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Recently, the ExCo of my block engaged and instructed lawyers to act on their behalf in relation to a building matter. They have not bothered to inform the Owners Corporation and the matter has been kept off ExCo meetings and is therefore not minuted (although I am sure there are emails about it). I found out about it by accident and want to know how much was spent on legal fees.
Our strata manager is being very cagey and has said he will have to refer it to the ExCo for instructions.
Do I invoke section 37 or Section 108 for this? I would prefer Section 37 as Section 108 would require my making a 1 hour journey to the strata manager office and paying them for the pain of going through their records in their office.
So really, I want to use section 37 – can I, as a member of the Owners Corporation?
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Even though as an Owner, you’re a member of the Owners Corporation (O/C) of your Plan, Clause 37 really relates to applications made by the Executive Committee (E/C) on behalf of the O/C as an entity; that’s why it requires advice of an E/C nominee to whom the requested information may be delivered.
Clause 108 is the appropriate option, and there’s absolutely no reason why your written request under this provision could not precisely specify the record that you wish to inspect.
By the way, the E/C cannot itself authorise expenditure on legal services if the estimated cost of those exceeds is the lesser of $1,000/Lot or $12,500.
That’s weird. Not surprising, but weird.
An EC member can’t unilaterally instruct lawyers on behalf of the OC without the authority of the EC, i.e. a resolution of the EC. You would expect to see the proposed resolution on an EC agenda, with notice given, and then a resolution of the EC minuted etc. etc. The only exception to that might be if it were really urgent, say you were trying to get an interim order.
So on its face it raises questions about whether there has been any authority to instruct the lawyers, in which case who is responsible for the lawyer’s bill. It looks like the strata manager has paid the bill, but I would be asking him why.
How much was paid, because Whale is correct re how much the EC can authorise re legal expenditure.
When we have sought legal advice we have been really careful to pass the correct resolution and delegations, so it is absolutely clear. We backed that up with a further resolution at the AGM.
If the EC member has been purporting to give instructions on behalf of the OC, then they can’t claim privilege, because you are part of the OC.
nyonyakay – in my opinion (non legal) despite the fact that the Executive Committee Member concerned may claim legal privilege over the items you want to inspect, as Scotty said he/she’s only in possession of those consequent to legal advice sought and obtained on behalf of the Owners Corporation (O/C).
In those circumstances, the information obtainable under Cl 108 also covers anything that’s “required to be kept under Division 2”, and that includes (at Cl 105) “any property (including records) of the owners corporation” that’s held by a “person” (like your E/C Member) where the E/C has required that person to hand-over that property/records.
So I believe you could inspect whatever records the E/C Member may have as those are the property of the O/C, but only if the Secretary of the E/C has serviced a Notice on him/her to make those records available; and that’s a possible barrier.
So Cl 108 is the best approach, but advise the Strata Manager in writing about what records you wish to inspect and if that leads to a dead-end, and your attempts at mediation with the E/C remain frustrated because it and/or the Member and/or the Strata Manager won’t cooperate, then you could lodge an Application with the NSW Consumer, Trader, and Tenancy Tribunal (CTTT) seeking an Order for the provision of the records you seek under Cl 156.
In addition to the records, like Scotty I’m as concerned about the process whereby the E/C Member instructed Lawyers to act on behalf of the O/C. Was there an E/C Meeting to make that decision, are there Minutes of that Meeting, and did the Lawyers’ estimate of costs exceed the limit imposed under the Regulation?