Have requested shareholder meeting and it is being continually declined

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  • eagle2
    replied
    If the directors have offered to pay for the D&O insurance, I suggest that you accept their offer and quit whilst you are ahead.

    No solicitor or any other adviser is able to give anyone, with 100% confidence, a statement of how a Tribunal will determine a case. If you have studied previous FTT decisions, you will have noticed that they are inconsistent.

    How much are the charges by the Company Secretary? Are they included within the management agreement?

    Please consider the advice in #5, you are bringing an action against the management company which has no assets and minimal income, if you “win”, you will create a deficit within the company which would need to be recovered from the members, which includes yourself.

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  • Milly26
    replied
    njs889333,

    sweeper clause they are trying to rely on is " Professional fees" to justify a company secretary for just three flats! Its a nonsense!

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  • Milly26
    replied
    eagle2,

    Success....the D&O liability insurance is NOT recoverable form the Lease and nor are any other company expenses....solicitor confirmed this. Yes CH filing fee of £12.00 can be paid but there is no obligation in AOA as a member of leaseholder to pay company expenses which are being charged by Directors for their own best interest and NOT the company..its called conflict of Directors interests

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  • Milly26
    replied
    Absolutely...I have taken legal advice and been advised that I am not liable for D&O insurance …..I have pushed back on this and finally they have admitted they should not have invoiced me for this......as for company secretary again being told...GOLDEN RULE ..not in lease and NOT recoverable....also RICS states can not rely on wide sweeper clause to recover what is NOT in the lease

    leaseholder64,

    Directors are making uninformed decisions and gut instinct is are colluding with devious unregulated property manager ...
    Competent..yes in their own interest competent! One Directors husband is a company secretary solicitor so she is taking advice from him! God help us!!!
    I dont have a target...just trying to abide by lease terms...which they want to work in their own interests..not company or mine!

    njs889333,

    Thank you...yes lease is with a solicitor...they have read it...they state...no provision in lease for company expenses..and since 2015 I have been pushing back where I have from directors stated in writing...we will pay for it ourselves!

    eagle2,

    The Directors have stated they will be paying for it themselves!

    Gordon999,

    Ever wise Gordon....this is not a social housing situation however interesting that you mention this? Thank you

    Leave a comment:


  • njs889333
    replied
    Originally posted by Milly26 View Post

    The lease makes no provision for a company secretary nor does AOA state this and D&O Liability insurance is mandatory so I am not paying it!
    I agree with what you are saying, but strongly advise you make sure your Service Charge is paid fully up to date if considering making an FTT application.

    You must also ensure that no clause will allow the payment of company secretary fees and D&O insurance, this includes any sweeping up clause that they will argue allows such charges. Have you had the lease fully examined regarding provision for these charges?

    I agree totally that these charges should not be part of the Service Charge and are company expenses, you haven't mentioned in your previous posts but how are the Statutory accounts of the company filed?

    My experience is that it is the MA that ensures D&O insurance is taken out and this is when they are providing the Company Secretary role!

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  • leaseholder64
    replied
    You need to be pragmatic. Even if not strictly fundable, D&O insurance may be necessary for you to get competent directors on board You are going after the wrong target if that is your main target.

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  • Milly26
    replied
    The lease makes no provision for a company secretary nor does AOA state this and D&O Liability insurance is mandatory so I am not paying it!

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  • eagle2
    replied
    The FTT does not disallow D&O insurance as a matter of course therefore it cannot consider this expenditure to be unreasonable.

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  • njs889333
    replied
    Originally posted by eagle2 View Post
    The FTT has allowed D & O insurance as a reasonable service charge expense in the past. If the directors are not being remunerated, you cannot expect them to pay for the insurance.
    eagle2 the information you present is not accurate in my opinion. The FTT has at times allowed the cost of Company Secretary or D&O insurance to be part of the service charges, this is certainly not down to reasonableness, but whether the lease allows it. It may very well be reasonable, but if the lease does not make provision for it then it will not be allowed as part of the Service Charge.

    The OP has stated that previous FTT decisions have been looked at, what I would recommend is looking at cases that have gone before the UT and can therefore be argued as creating a precedent.


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  • eagle2
    replied
    You would not be saying that it is in the Company’s interests not to have a Company Secretary if the Company receives late payment fines and is threatened to be struck off the register or the Company fails to receive a legal notice because it went to a residential address instead of the Company Secretary’s office.

    The 2006 Act has given smaller companies the option to decide whether or not they wish to appoint a Company Secretary. Many Companies have decided to retain a Company Secretary and the FTT will not consider that to be unreasonable.


    Any sundry income should be credited to the service charges and therefore deducted from the expenditure.

    The FTT has allowed D & O insurance as a reasonable service charge expense in the past. If the directors are not being remunerated, you cannot expect them to pay for the insurance.

    I do not understand what you are trying to achieve here, you are in a minority yet you seem to be intent on incurring costs for the Company which cannot be recovered other than from the members or leaseholders ie the same 3 individuals including yourself.

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  • Milly26
    replied
    As for a company secretary...the whole point of the 2006 Act is to assist small companies and remove the need for a secretary. It would be in the best interests of the company NOT to have one..

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  • Milly26
    replied
    If a company is receiving an income via the ground rent or sub letting fees then the company fees can be recovered from this pot of monies and not the service charges.

    I have been now told by a solicitor - from the horses mouth that D*O liability insurance is not recoverable from the lease and the directors have to pay for this themselves.

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  • eagle2
    replied
    It is a question of reasonableness.

    If there is a Company involved, it may not be able to avoid some expenses such as filing fees and holding company meetings. The amounts are usually small and they are not worth challenging.

    Whilst a Company is no longer required to have a Company Secretary, it does not mean that it is unreasonable to appoint one. Someone has to deal with legal notices and filing obligations.

    D & O insurance and accountancy are reasonable expenses and they can only be challenged if the amounts are unreasonable.

    The sort of company expenses which can be challenged are late filing fees which can normally be avoided especially if there is a Company Secretary appointed.

    Please read post 5 above, even if you succeed, the members will ultimately bear the cost. So if the Company is not being run properly, it is better for the members to act collectively and change the directors or the MA.

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  • andydd
    replied
    Originally posted by eagle2 View Post
    There is usually a "catch all" clause within older leases which would cover these items if not specifically mentioned. The FTT is unlikely to regard this expenditure as unreasonable.
    I disagree with that assumption. ...as mentioned most FTTs require actual references and a vague catch all will not suffice.

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  • Milly26
    replied
    eagle2,

    I have just been reading through a number of FTT previous court cases and my lease....the judges clearly state in many cases that unless the lease makes it clear and unambiguous reference to an item then it is not chargeable...and I got some legal input which stated whilst the limited company has been set up to front the lease so to speak. the company expenses are not recoverable from the lease such as D*O liability insurance, filing fees etc and since 2008 a company secretary is no longer required by small companies....these sweeper clause can not be interpreted widely and they will be open to context and meaning so whilst a shareholder may need to consider some company expenses I agree however that does not give a company carte blanche to go spending service charges on unnecessary and unreasonable company expenses.

    Leave a comment:

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