Investigative Journalism and Learning Hub - CHU Insurance and Arthur J. Gallagher Insurance Broker took four years to take action about SP52948 legal claims for Solicitor Adrian Mueller

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From: SP52948 owner
To: info_nsw@chu.com.au
CC: Arthur J. Gallagher Insurance Broker
Subject: CONFIDENTIAL INQUIRY: Legal claims by Strata Scheme in 2012 and 2013
Date: 30/08/13 21:53

To whom it may concern,

At this stage this is confidential and very sensitive information.
Please act responsibly.

I spoke to member of your staff (I think lady named Vadyja, spelling might be incorrect?) on 26 August 2013. My call was in relation to obtaining details of an insurance claim that the Strata Manager Mr. Peter Bone (Raine & Horne Strata Epping) through Gallagher Broking Services [name redacted] finalized in amount of $10,517.02 on 4 June 2013.

The Strata Manager and the current Executive Committee failed to disclose any information about it to 218 owners so far. This is criminally negligent action, especially since the "incident date" is 16 June 2012 (a year old). Last time, on the day of the EC meeting on 28 August 2013 (two days ago) I attempted to obtain details in an email sent to all members of the Executive Committee and the Strata Manager. No response was received.

Without going into too much details, the Strata Manager and the Executive Committee committed many serious breaches of law and various actions are in process to sort it out. For the last two years, I have engaged in serious CTTT cases, and after lot of investigative work (I have over 3,000 pages of evidence and documents), the evidence against corrupt
Raine & Horne Strata Epping and the Executive Committee is finally becoming rock-solid. Some of the issues with Raine & Horne Strata (more details in the two PDF attachments):

Firstly, let it be known that the practice of false minutes of meetings or resolutions that are created in non-compliant (illegal) manner is not unique to our complex. Raine & Horne Strata was involved in another case in relation to a special resolution that they tried to revoke in illegal manner last year and LOST. In that case they also engaged an expensive Solicitor (Bannerman), and lost nevertheless:

BEGIN QUOTE
Owners Corp SP 37466 v Loombah Investments Pty Ltd [2012]
NSWCTTT 182 (1 May 2012) SCS 11/51344

STRATA SCHEME: SP 37466
PREMISES:      “...” Lindfield NSW 2070
APPELLANT:     Owners Corporation Strata Plan 37466
               Raine & Horne Strata
RESPONDENT:    Loombah Investments Pty Ltd
HEARING:       23 February 2012 at Sydney
APPLICATION:   Appeal
APPEARANCES:   Mr Bannerman on behalf of appellants
               Mr Cunio on behalf of the respondents
ORDERS:        Appeal dismissed
END QUOTE

Among other cases, previous manager Mr. John Fry was investigated for alleged poor maintenance: Archbold & McGuire v Owners Corporation [2003] NSWCTTT 10 (21 January 2003) but there was not sufficient evidence to dismiss him from duties in that complex as it was seen as too drastic outcome of the findings.

More actions are initiated by me to ensure that compliance with the law and contracts are enforced in our complex in the future.

The ACCC enforces the Competition and Consumer Act 2010 (old Trade Practices Act), a law which, among other things, imposes on sellers a "statutory condition" that goods and services must be "fit for their intended purpose". When they aren't, it breaks the deal between the seller and the consumer.

Among the others, here are the non-compliance issues that have been persistent in professional misconduct by the strata managers and the staff at Raine & Horne Strata Epping (that was reported to their senior managers last week to verify if the company is really serious about fixing the problems):

1. ITSM Strata Management Agreement number 2671 that was signed by Mr. Keith Jones and Mrs. Maureen McDonald on behalf of the Strata Plan on 16 June 1999 and never changed or reviewed since then:

Clause 7.1
The Strata Manager will comply with the Act (SSMA 1996), the Agents Act and Regulations including Rules of Conduct, as well as the Code of Conduct of the Institute of Strata Title Management.

2. The following breaches of the SCA Code of Ethics by Raine & Horne Strata Epping:

Failure to comply with the SCA 1.2 i.
Failure to comply with the SCA 1.3 i. to xi. inclusive
Failure to comply with the SCA 2.1 e.
Failure to comply with the SCA 2.1 j.

3. Failures to act in accordance with Strata Schemes Management Act 1996 and Strata Schemes Management Regulation 2010 on numerous occasions (too many to list here).

4. Failures to act in accordance with the Property Stock and Business Agents 2002. Sections 32, 41, 104, 130, 171, 207, 212 are examples of such non-compliance.

5. The strata agency even engaged in providing false, misleading, or misconstrued statements to the Department of Fair Trading and CTTT, or hid evidence at other times. That is in direct contravention of:

Crimes Act 1900 Section 315,
CTTT Act 2001 Section 71,
Strata Schemes Management Act 1996 Section 176

6. Among many failures, in April 2013, Mr. Peter Bone produced a sworn affidavit which was supposed to "show" that the Executive Committee had a valid meeting on 9 July 2012 when they "approved" the Solicitor's engagement, and that was proven to be invalid evidence at the CTTT hearing on 10 May 2013.

7. Due to lack of professional conduct and poor ethics, the financial losses to the owners corporation amount to hundreds of thousands of dollars over the last 13 years and I have all proofs of it.

In short, the Strata Manager and the Executive committee do not want owners to know about this insurance claim and many other affairs in the complex.

On 23 April 2013, a private email was received that gives very brief detail of this insurance claim (refer to the Word attachment).

That is why I, on my behalf and with proxies vested in me, decided to contact your office. Sadly, due to "privacy issues" your representative declined to provide any information. I tried to explain that any financial affair that relates to strata complex MUST be given to owners as it affects their investment and that any insurance claim certainly increases future premiums and owners have to know where their money goes. That did not help.

I also tried to contact Gallagher Broking Services early today. I left voice message for Mr. [name redacted] but did not get a call back yet.

As a first step, trying to avoid waste of your and my time, I am asking for the following documents and information:

a. What was the claim NH201212589-4 related to? In other words, which CTTT case()s) is linked to this claim?

There are interesting issues with Lot owner 3 (among the others, a Special By-Law, which approved them to obtain exclusive rights to common property at the Extraordinary General Meeting through false count of proxy votes on 24 January 2003, was requested AFTER the owner already made changes, and did not provide any evidence about public liability insurance that was imposed upon him since 2003.

b. At which legally-convened Executive Committee or general meeting the decision was made to engage legal services for Strata Plan (there are no minutes of any meeting that contain information about it and any legal expenditures above $12,500.00).

For the record, just in CTTT cases SCS 12/32675 and 12/50460, the Strata Manager and the Executive Committee illegally approved Solicitor's expenses in amount of $32,661.24. That is undeniable.

c. The name of the Solicitor who was involved in this legal defense case for owner of Lot 3 on behalf of Strata Plan (this information is also hidden from owners in the complex so far).

d. Total cost incurred in this legal defense case for owner if Lot 3 (it is logical to assume that CHU did not cover all expenses).

e. On what legal grounds does CHU (and the Strata Manager with the Executive Committee) believe that owners in the complex do not have rights to know about this (or any other) claim?

f. I also have a request to obtain full details of all other claims that the Strata Plan might have applied or received from the CHU since June 2012. In other words, has Strata Plan made any insurance claim in regards to CTTT cases SCS 12/32675 and 12/50460? If so, they are ENTIRELY ILLEGAL and I have the evidence I intend to provide to your legal team once I get your response.

Finally, I wonder if building report by Napier & Blakeley (completed in July 2012, a year ago) was ever forwarded to you as part of duty to disclose all information that might affect the insurance premiums. For the record (easy to prove my claim), this building report that highlights number of issues was never presented to owners at any meeting and was hidden from the Adjudicator at the CTTT Hearing SCS 12/32675 on 17 October 2012. In addition, two six-monthly reports for Fire Protection (January and July 2013) show the lack of proper maintenance too.

In short, there is enough evidence to initiate criminal proceedings. Before going that way, my duty is to minimize the risks and waste of money for the owners in the complex and ensure full transparency and duty of care by the Executive Committee and the Strata Manager.

I am happy to be contacted and provide evidence for cross-examination at any time.

We all need to make steps to prevent crime. Nobody is above law.

Sincerely,