A long-running legal battle between Southport Central’s residential and commercial body corporates have cost residents dearly.
Our complex shares the Southport Central site with ‘Commercial’, three retail body corporates, and the Australia Fair western carpark.
Newsletter 12 published by the Committee on 14 August 2019, described the circumstances concerning the apportionment of expenses of running the Southport Central site which led to a dispute between the Commercial and Residential body corporates.
Commercial commenced legal proceedings against Residential after Residential refused to pay an amount that Commercial says was owed as part of a cost sharing arrangement,
Newsletter 12 said: “it is clear that around $4,000,000 is owed to Residential” and that the committee “will endeavour to keep owners updated and believe this process will result in a significant reduction in levies”.
Unfortunately, there were minimal efforts to keep owners updated.
In response to an owner’s question at the 8 June 2022 committee meeting question and answer session, a committee member told the 16 owners present that the legal claim by Commercial against Residential had ‘settled’ – neither party would pay anything to the other and that both parties would bear their own legal costs.
That advice was disputed by Mr Colin Buckley, the former chairperson, whom those present and the minutes confirm had been engaged by the committee as a consultant. The settlement issue has never been further addressed by the committee.
Committee minutes of 23 October 2023 (Voting Outside of Committee Meeting – or VOCM), said: “The matter remains unresolved and is essentially unchanged from what is described in Newsletter No 12”.
Ahead of the 25 March 2024 committee meeting, it was put to the committee:
That concluding (VOCM) statement is not true in that the Residential counterclaim was, in March 2021, reduced to $545,962.34 (a long way from the $4 million counterclaim mentioned in Newsletter 12) and implies that the proceedings are continuing, whereas there has been no progress in this proceeding for over three years and if the committee intends to advance the matter, it must first obtain an order from the court – which can be expected to incur significant legal costs.
QUESTIONS:
Why has no action been taken to advance or finalise this matter?
What are the intentions of the Committee?
The Chairman avoided addressing the above questions, saying only that the committee would “follow the legal advice it receives”.
The 10 June 2024 committee meeting minutes said in relation to item 6.1 legal claim by Commercial:
“We refer owners to committee newsletter no 12 sent to all owners on 14 August 2019 which is available in English and Chinese for downloading from the online community portal. Newsletter No 12 gives the background of the matter. Requests by Residential to Commercial to cease the legal action and resolve the issues by discussion have not been successful. The matter remains unresolved and is essentially unchanged from what is described in Newsletter No 12.
What can be concluded from the above is that the repeated advice to owners that the matter is ‘essentially unchanged from what is described in Newsletter No 12’ is false; and that owners have been intentionally misled by committees since March 2021
There is more to be said regarding this matter.
In the Queensland court system, where there has been no action in a court matter for a period of two (2) years, the matter is said to have gone “stale” and a party wishing to proceed further, must first obtain an order from the Court – at a cost. Costs to date, including those paid to Herdlaw, a barrister and a Queens (now Kings) Counsel are estimated to be in excess of $150,000, but the committee needs to clarify this!
This article does not dispute the committee decision to oppose the Commercial application, the original Residential counterclaim or the amended counterclaim, it does question why the committee has intentionally misled owners, leading us to believe that there was a prospect of recovering up to $4 million, notwithstanding the amount of the counter claim was reduced in March 2021 to $545,962.34.
Transparency in body corporate administrative and financial management should concern every owner.