The real, ongoing legalised robbery of flat/unit/apartment owners in Victoria, Part III: The fraudulent process of electing “Commissars”.
by tonytran2015 (Melbourne, Australia).
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#parasite, #body corporate, #owners corporation, #robbery, #over-price maintenance, #inefficient repairs,
Australia is fast becoming MORE CORRUPT (Ranking 7 falling down to 13 from 1995 to 2022, https://www.transparency.org/en/cpi/1995). Fishes rot from their heads. Body Corporate Legislations rob from unit owners to give their lifetime savings/investments to Managing Corporations and colluding treacherous (Managing) Committee Members. The problems have become serious in the two Australian States of Queensland, and ofVictoria (Do-not-buy-dwelling-units-in-australia-victoria , Don’t trust laws on Communal Housing in the State of Victoria, Australia.The horror of living in Communal Housing: How laws makers scrambled the laws in Victoria, Australia, Part 1.The-real-ongoing-legalised-robbery-of-flat-unit-apartment-owners-in-victoria-australia, The real, ongoing legalised robbery of flat/unit/apartment owners in Victoria, Part II: The Benefit Principle and derelict buildings).
1. The background
In the 1980, there were many flats/units/apartments built and sold in Melbourne, Australia. People bought them for living in or for investment (renting to someones who want live there). The advantage of living in flats/units/apartments are lower (shared) costs of maintenance of roofs, walls, foundation, common properties and services (water, electrical, telephone). The set (collection) of unit owners in a block or few related blocks is called an Owners Corporation (OC). Its old name was Body Corporate. More details are given in the previous articles The real, ongoing legalised robbery of flat/unit/apartment owners in Victoria, Australia, The real, ongoing legalised robbery of flat/unit/apartment owners in Victoria, Part II: The Benefit Principle and derelict buildings
Then in 2021 the Victorian government amended Owners Corporations Act 2006 (OCA) giving sweeping power to Committees. Too much power for Committee members (called here “Commissars”) and the unjustifiable secrecy of their works undemine financial interests of lot owners. It also promotes the collusion between Management Corporations and “Commissars” to over-charge unit owners by over-priced contracts while colluding Commissars still claim to represent the interests of lot owners.
That is a familiar theme in non-democratic regimes. Yet the failed system is still being repeatedly promoted by the State government of Victoria: The management is not by people bearing the financial burden but by organized coordinated “Commissars” working in collusion with Managers to hijack Communal budgets to award over-priced servicing contracts to their aquaintance. Unit owners owning more than one unit in any Owners Corporation would fare more badly against coordinated hijackers in elections for Committee positions (Unless each multi-unit owner goes at length to have proxies appointed to act in coordination on his behalf).
The Victorian State government let the mortal, corruptible “Commissars” and Manager decide on the spending for maintenance: Unfortunately, Committee members are corruptible and are more likely to award over-priced contracts to their acquaintance service providers (for kick-backs).
A flawed model of management had been set up and its relevant Litigation service had sprung up within a year.
Giving sweeping power to Committee and Manager while having lax enforcement of Owners Corporation Act 2006 and the unregulated practice of claiming confidentiality on everything by Committees in Victoria have created a perfect ground to breed corruption (kickbacks to Committees and Managers) and financial frauds against unit owners.
Transparency.org gave Australia ranking of 18 in its corruption perception index for 2021 (https://www.transparency.org/en/cpi/2021).
The protection of the unit owners could be hemmed in if they failed to “‘follow established procedures.’” It’s the process that’s the punishment. In other words, the bureaucrats make the rules, whether or not they’re in law or not. And if you violate those rules, there are consequences,
The faulty model of managing OC with the Civil and Administrative Tribunal will surely be the major cause for the dysfuntion of many OC’s in Victoria.
2. Managers and Committees switch roles to avoid responsibility and abuse power.
Although Managers hold themselves out as managing specialists, in practice they pretend to be dumb, incapable, knowing no service providers, and only do solely Administrator works for the corrupt, (fraudulently or otherwise) elected Committees.
Service providers are all supplied by the corrupt “Commissars” of Committees then approved by the Managers (not the other way around, as expected by unit owners and any reasonable person). So Managers don’t have to reveal any hidden connections to selected service providers (which were supplied by the Committees) and OC Act doesn’t require Committees to reveal their commissions and connections to the selected service providers. So Managers and their colluding Committees switched their roles and escaped the legal requirements from OCA.
122 Duties of manager: (1) A manager— (d) must take reasonable steps to ensure that any goods or services procured by the manager on behalf of the owners corporation are procured at competitive prices and on competitive terms; and …(f) before a contract is entered into
122A Manager must disclose beneficial relationship with supplier.
122B Manager must disclose commission, payment or
OC Act 2006 (Vic., Aust)
Many OC Managers have already relied on this loop hole in the OC Act to redefine their activities to mostly administrative tasks, leaving aside building and facility services as extra works.
The most inexperienced unknowledgeable meekest persons are elected as Chairperson and committee. This strata manager rules them absolutely and always maintains the ‘committee’ instructs and approves all the maintenance reports….
… You’ve got Owners Corporation management, you’ve got building management and facility management, so especially for the larger properties, you have a dedicated building manager, and then an Owners Corporation manager as well. For a lot of the smaller properties, there won’t be a full time or even a part time building manager but you do have an Owners Corporation Manager.
This leads to an unaswered question: If there was an accident caused by a building defect of an OC having only a Manager (conforming to the requirements of OC Act), would the Manager or the OC be responsible?
3. The mortal fights to control Committees in Victoria, Australia.
Owing to the large amounts of money involved, there are professional Committee Members who get into Management Committer only to sell their souls to treacherous Management Corporations to receive some kickbacks from Service Providers.
Elections have become corrupt, such as quotted in the following actual minute of AGM meeting in Melbourne, Australia, in April 2022 (The case is on going so identifying details still have to be masked (https://survivaltricks.wordpress.com/2023/03/15/fact-check-can-you-criticise-the-conduct-of-the-courts-or-of-a-judge-abc-news/)):
Members voted on the election of each nominee for the committee, voting results are as
- To elect Mr A, Lot 1, 2, 3, 4
Motion ‘to elect’, Motion Denied By Majority of Votes Cast (note: ‘supplement summary of votes’
records a more detailed summary of the votes that were cast)
Minutes of the Annual General Meeting:
HELD: April 2022, by Managing Corporation (for Property Address: … Melbourne).
For Section 12.4 the following eligible votes were counted:
- To elect Mr A of Lot 1, 2, 3, 4
Motion ‘to elect’, Moved by: 3 votes, Against: 4 votes, Motion Denied
Supplement Summary of Votes, by Managing Corporation (for Property Address: … Melbourne).
Why was that election claimed to be fraudulent?
Although OC Act contains no section to specifying the election required in Section 100, Consumers Affairs Victoria (CAV), the OC Act regulator, had given a sample “rule” for the elections of committee, if by ballot:
• Voting will be recorded by either:
o Every lot owner or member recording his or her vote by striking out every name on the ballot paper except the name of the candidate for whom he or she wishes to vote; or
o Every lot owner or member recording his or her vote by placing a number beside each candidate in order of preference.
• Each lot owner shall be required to sign his or her ballot paper.
• The lot owner or member shall then go to the secretary to have his or her name recorded as having voted and, when directed, place the ballot paper into the ballot box.
• Immediately after the close of the poll the secretary shall unlock the ballot box and ascertain the number of votes for each candidate and shall declare the candidates who polled the most votes to be elected.https://www.consumer.vic.gov.au/library/forms/housing-and-accommodation/owners-corporations/sample-rule-for-a-ballot-to-elect-a-committee.doc
And here is the ballot paper for committee election:
https://www.consumer.vic.gov.au/library/forms/housing-and-accommodation/owners-corporations/sample-ballot-paper-election-of-committee-members.doc from https://www.consumer.vic.gov.au/housing/owners-corporations/meetings-and-committees
This is significant for two reasons:
1. It’s been issued by the OC Act regulator – CAV.
2. There can only be votes FOR a candidate(s), not votes AGAINST a candidate(s).
Note that “election” of Committee members is described in Section 100 of OC Act, and is NOT “motions to elect”. Section 89 of OC Act only applies to resolutions for motions and not to election.
The vote-counting method used by Victorian Electoral Commission (vec.vic.gov.au) is also given below for reference.
Proportional vote counting: Proportional representation is a way of counting votes in an election when there is more than one person to be elected, https://www.vec.vic.gov.au/voting/how-voting-works/counting-votes
4. There were also other causes to reject the above “election”.
The election did NOT proceed according to the agenda of the Annual General Meeting. There was a bait and switch in its Agenda.
2.2. Assessment of Quorum & Entitlement to vote (a member whose fees are unpaid is not entitled to vote)
12.1. The Owners elect a Committee, Chair Person and Secretary
12.2. To execute the Instrument of Delegation appointing the committee and affix the common
12.3. The Owners elect a Grievance Committee
Minutes of AGM:
2.2. Manager was authorized to take the minutes. It was resolved that voting will be by verbal
indication, and to set a procedure for voting at this meeting whereby voters who are silent on a motion will be considered to have cast their vote in agreement with those voters who have verbalised their vote, but only where all votes verbalised for a motion are in agreement with one another. Aaron noted that if anyone is not in agreement with the other members who state their vote in relation to any particular motion, to make sure they verbalise their vote at the time so that their alternative
vote can be recorded.
12.1. Nominations for the committee are as follows: Mr A, for lots 1,2,3,4, Mr B for lots 5, 6…
12.2. It was resolved that rather than following the voting procedure set as pet item 2.2, the Owners
Corporation will vote on which of the committee nominee’s (set out in item 12.1) will be
elected by temporarily moving each nominee into the Zoom Waiting Room while the other
members are casting their vote on whether to elect that nominee as a member of the
committee, so that votes can be cast by those members without any direct or perceived
influence by way of the nominee being present during their vote. Voting will be via verbal
Moved by: 1, 6, 13, 18, 22, 23 & 31, Against: 0, Motion Carried
12.3. Managing Corporation (during item 12.4) proceeded to temporarily move each member to the waiting area
while the other members cast their vote on whether to elect them or not.
12.4. Members voted on the election of each nominee for the committee, voting results are as
Sections 71 and 72 of OC Act provide protection to owners against such “bait and switch” ambushes:
71 Agenda for annual general meeting
(1) The person convening an annual general meeting must prepare an Agenda setting out the matters to be dealt with at the annual general meeting.
(2) The matters to be dealt with at the annual general meeting must include—
(a) the election of a committee, if the owners corporation is to have a committee;…
72 Notice of annual general meetings
(1) The person convening an annual general meeting
must give notice in writing of the meeting to each lot owner at least 14 days before the meeting…
(2) The notice must include the following—
(a) the date, time and place of the meeting; and
(b) the Agenda for the meeting; and
(c) the text of any special resolution or unanimous resolution to be moved at the
The then Manager who conducted the AGM had transgressed both sections 71 and 72 of OC Act and the guide line issued by VAC (the regulator of OCA) for election of Committees. OC Act always applies unless the act specifically provides option to not apply it. There was no option to change election process.
Where is due process of law?
I consider it completely unimportant who in the party will vote, or how; but what is extraordinarily important is this—who will count the votes, and how. J.Stalin.
In Russian: Я считаю, что совершенно неважно, кто и как будет в партии голосовать; но вот что чрезвычайно важно, это - кто и как будет считать голоса. Said in 1923, as quoted in The Memoirs of Stalin's Former Secretary (1992) by Boris Bazhanov [Saint Petersburg] (Борис Бажанов. Воспоминания бывшего секретаря Сталина).
5. Don’t put your hope in Victorian Civil and Administrative Tribunal VCAT for any simple, low cost resolution of disputes.
The dispute on the “election” was submitted VCAT in April 2022, VCAT gave first direction hearing in Aug 2022, second direction hearing in October 2022 which ordered a 3 hour long compulsory mediation conference in April 2023
(no reason had been given for the 3 hr long compulsory mediation and the 6 months delay)
and the process is still on going. The instruction from the 2nd directional hearing reads
If a party fails to attend the conference at the allocated time, the compulsory conference will proceed in the absence of that party and orders will still be made.
Meanwhile the term of the “elected” Committee run from Feb 2022 until the following AGM sometime around March 2023.
6. Lessons learnt:
For owners against managers, owners corporations, and VCAT members. The VCAT Owners Corporation list is fully funded by the Victorian Property Fund, which in turn is funded by Real Estate Agents and Owners Corporation Managers. Consequently a ‘conflict of interest’ exists. VCAT is certainly perceived as having a bias towards managers. VCAT not only refuses to rule against managers and OC’s, but it protects them by coming down hard on any owner who dares to complain. The linked article from The Age below, is a small sample of the bias. http://www.smh.com.au/national/rip-off-body-corporate-managers-stay-registered-20130205-2dwj0.html from https://www.scribd.com/document/289533469/Self-Representing-VCAT-Owners-Corporation-List
Unit owners rely on the laws and OC Act for their protection but the Owners Corporations Act 2006 has been deliberately made in favour of Managers’ and their treacherous colluding Committees puppets while nothing can stop some sitting members of the Victorian Civil and Administrative Tribunal giving favour to Management Corporations before joining them on their retirements from VCAT. In real life VCAT had appeared to be willing to enforce the laws only against owners, but often NOT against the Managers and treacherous Committee members, the latter openly engaged in fraudulent election, with little fear of punishment, to ensure their grip on the budgets of the Owners Corporations.
One single object . . . [will merit] the endless gratitude of the society: that of restraining the judges from usurping legislation. Thomas Jefferson
Our judges are as honest as other men and not more so. They have, with others, the same passions for party, for power, and the privilege of their corps. Thomas Jefferson, Thomas Jefferson “Selected letters of Thomas Jefferson”, Lulu.com
There are certainly more problems with owning a communal dwelling in Victoria: