Flat Chat Strata Forum Strata Committees Current Page

  • Creator
    Topic
  • #8542
    HappyNow
    Flatchatter

      Update to my post a couple of months ago regarding an EC member claiming their legal costs through the Owners Corporation Liability Insurance after a ‘slapping’ incident.  They chose (rather than to have an AVO against them) to sign an undertaking to the court which acted in the same way as an AVO.  They then claimed their legal fees under Office Bearers Liability Insurance even though the EC, the OC and the Strata Managers stated in an AGM this was a private matter between 2 owners.

      Since escalating the matter to the insurance company, I then took the matter to the Financial Ombusdman Service

      Letter received from Financial Ombudsman Service dated 5th Nov 2012

      Dispute involves Office Bearers Liability Cover with XXX and conflict with EC Member.  EC Member sought reimbursement for legal fees from XXX insurance under Office Bearers Liability Policy.  I have disagreed with insurer’s decision to indemnify EC Member.

      FOS Jurisdiction state – may only consider a dispute in relation to a General Insurance Policy that is:
      a) Retail General Insurance Policy
      b) Residential Strata Title Insurance Product
      c) Small Business Insurance Product
      d) Medical indemnity insurance Product

      Residentail Strata Title Insurance Product means a policy insuring the body corporate of a strata title or company title building which is wholly occupied for residentail or small business purposes including:
      a) Strata Building
      b) Common Contents
      c) Personal Accident or Sickness for voluntary workers in or about the strata building or common property and excludes
      a) Professional Indemnity
      b) Public Liability
      c) Workers Compensation.

      THIS DOES NOT EXTEND TO DISPUTES INVOLVING OFFICE BEARER’S LIABILITY COVER.  WHILE THE DEFINITION DOES NOT STIPULATE IT, OFFICE BEARER LIABILITY IS SIMILAR IN NATURE TO THE EXCLUDED COVERS (SEE ABOVE)

      From the information provided, it appears?? that your dispute is only about the Office Bearers Liability Policy with XXX Insurance.  As a result, we are not able to consider your dispute.



      So, from what I ascertain from this, if you are an Office Bearer of a Strata then you are beyond reproach? 

      Does this mean an Office Bearer committing any sort of fraud including but not limited to Financial fraud will not be liable for any redress from the Financial Ombudsman or any other body?

      If that is the case, we are completely exposed in regards the levies and payments being made and approved by the Executive Committee.

      JT:  Should sonething be done regarding this loophole?

      If there is a loophole, it must be closed forthwith I believe

    Viewing 5 replies - 1 through 5 (of 5 total)
    • Author
      Replies
    • #17138
      HappyNow
      Flatchatter
      Chat-starter

        Havent seen any feedback on this question.  Is there a loophole in the Office Bearers Liability Insurance?

        #17141
        Whale
        Flatchatter

          You probably haven’t received any other replies (as yet) because like me, some readers may be confused about how it became necessary for you to take the matter to the Financial Ombudsman Service (FOS) in the first place (?).

          How was it that the Owners Corporation’s (O/C) Insurers accepted the Claim of an individual when its Clients resolved at an AGM to regard the incident as a private matter, particularly as the Strata Manager who would customarily be the Insurers “Agent” was a party to that resolution? Who signed for the Insured Party on the Claim?

          Unlikely as it may be, the O/C may have wished to settle the Claim itself, so again I’m confused about how it eventuated that the O/C’s Insurers accepted the Claim without any prior discussions with its Client or with its “Agent”.

          What is the progress of the Claim at this point, because even though the authority of the FOS doesn’t assist, it has stated that it disagrees with the Insurers decision to indemnify the Claimant?

          Sorry for more questions as opposed to answers, but as I said to begin with, I’m confused about how the Claim was accepted in the first place.

          #17156
          HappyNow
          Flatchatter
          Chat-starter

            Hi Whale,

            thanks for the response. The reason this was escalated to the FOS is that the O/C in the person of the Executive Committee, has consistently refused to explain the circumstances of the claim. No documents have been filed in the correspondence file, other than a note from the Strata Manager stating that the office bearer in question instructed that all correspondence be redirected to her personally,so that nothing would appear in O/C correspondence.

            I assume that the EC or the chairman authorised the agent to proceed with the claim, but there is nothing in correspondence or EC meeting minutes referring to such authorisation.

            At the last EGM, the proposal was put forward by the EC that the matter is now closed, and that motion passed (the chairman holds an impressive portfolio of proxies).

            So I had no option but to pursue the matter with FOS in the hope of getting someone to tell the truth.

            I have no doubt that there was considerable correspondence between the O/C and the insurer, but none of this ever made it to the correspondence file.

            The claim was settled and the office bearer’s legal costs were reimbursed. The insurer has since quoted cover at a rate that makes it obvious they no longer wish to take the business.

            I don’t know where this leaves the current strata manager regarding completeness of records. I guess he can simply say ‘well, this is all I got from the original agent, take it up with them’

            For my part, we have an office bearer who used violence against an owner and an EC who, on the one hand, refused to discuss it as it was a ‘private’ matter, while on the other, they were actively working to represent it as an O/C matter in order to reward the office bearer.

            One thing that also bothers me is the clause in the insurance cover which states that office bearers will be reimbursed in cases which are ‘successfully defended’. This case, apart from not being an EC matter, was also not successfully defended by the office bearer with a court undertaking being signed yet the O/C regards it as closed.

            Fraud has taken place here, the insurance company have accepted the incorrect correspondence from the office bearer, paid the approx $1600 and closed the file.  They have awarded somone for an admitted assault on an owner.  It is the function of the FOS to open these matters and look into it and have it resolved fairly.  It is not the amount but the principle involved. The law has been broken on several occasions over this issue and the EC and office bearer have the proxies to cover their tracks. Not acceptable.

            How do I word the FOS letter to ensure they look into this?

            #17159
            Whale
            Flatchatter

              SlapShot – Sorry, but I can’t help thinking that you have a personal interest in the insurance claim and/or the individual/s concerned, and whilst I’m not suggesting that’s improper (because I don’t know the details), I must say that even a person as dogmatic as me would now let it go! After all, the claim’s been accepted and paid (and it’s not big $), and both the Owners Corporation (O/C) and its Insurers have resolved improperly or otherwise that the matter is closed.

              That said, I can understand why you’re annoyed at the underhanded and deceptive way in which your Executive Committee has behaved, and the only way that I know of to handle that in NSW is to seek the intervention of the Strata Division of the Consumer Trader and Tenancy Tribunal (CTTT) by way of Orders under S156 of the Strata Schemes Management Act (1996) for the O/C to supply all documentation to do with the Insurance Claim.

              That process involves mediation as a mandatory first step, and if unsuccessful the process escalates as you’ll see HERE, but it should result in Orders for the O/C to provide you with the documentation that you seek. 

              Once you have that documentation, and if it’s as damning as you suggest, then you could use it to yourself lobby other Owners in an effort to seek sufficient support to then requisition a General Meeting to censure the members of the Executive Committee, and to elect a new one that will better represent the Owners. 

              Other posts may assist you further, but good luck with whatever you decide to do.

              #17203
              HappyNow
              Flatchatter
              Chat-starter

                Yes your right Whale…actively interested and personally involved being the person ‘slapped’ by the EC member in the first place.  Then slapped a 2nd time when she demonstrated to the Chairman how she had slapped me the first time!  You bet I have a personal interest.  To find out she then fraudulently used OC liability insurance to pay her legal costs….well, you can imagine how I feel and why I won’t let it go.  Wrong has been done and its not acceptable.  The EC hold a seat of responsibility and they have to be held accountable.  I will heed your advice re S156 and will keep it in mind as the way the EC are going, we will end up in front of CTTT at some stage.  I just wonder how many other EC are using the Office Bearers Insurance loophole to cover their wrong doings.  Before long we will be paying the EC speeding fines  all thanks to the fact there is nothing can be done about it by the FOC – the body set up to ensure right is done and disputes legally decided. It would be nice if everyone were honest.  Thanks for all the advice though.  It won’t go astray. 

              Viewing 5 replies - 1 through 5 (of 5 total)
              • You must be logged in to reply to this topic.

              Flat Chat Strata Forum Strata Committees Current Page