Directors of rmc have breached the s.24 tribunal order to hand over management

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    It depends on the bank but most would keep records for at least 6 years. Your difficulty is if the bank account is not in the name of the RMC in which case a court or the FTT would not have the jurisdiction to order statements to be issued to a 3rd party. That is likely to be the directors argument, they have already mentioned a “composite account”. It may be better to request an order that the RMC and its agent produces to the manager all accounting records including cash books or equivalent, supporting documents etc relating to the RMC. “Supporting documents” could be interpreted to include bank statements if they are specific to the RMC.

    Comment


      1. The RMC is trustee of the Trust account into which all the service charges and ground rents were paid and the Directors can be held personally liable if they have breached any of the Trustee Acts or the Companies Act and they have not accounted properly for the service charge fund.

      According to the ICAEW even if the service charge money is paid to the managing agent the RMC is still legally liable. Tech 03/11

      APPENDIX B: POINTS ON WHICH LEGAL OPINION HAS BEEN OBTAINED
      1. What are the consequences of service charge monies’ being held on trust?

        (a) Who is or are the trustees?

        The legal payee is the trustee. The legal payee will be the RMC if it is ‘the landlord or other person to whom any such charges are payable by those tenants ... under the terms of their leases’ as defined in s42(1), LTA 1987. The legal payee is the landlord even if the service charges are physically paid to another person, for example a managing agent.

        (b) does the existence of an express, implied or statutory trust establish the service charge fund as a separate entity?

        The trust fund is a pool of money: it has no separate legal personality.

        (c) does the existence of an express, implied or statutory trust result in the company’s having the ability to ‘deploy’ but not the ability to ‘enjoy’ service charge monies?

        Yes. The company does have the ability to ‘deploy’ but not to ‘enjoy’ the funds under its control.
      2. " If the funds for more than one property are kept in the same bank account by a landlord or agent, that too must be a trust or client account. If the funds for more than one property are kept in a single account, a schedule of all balances therein will be needed (ideally bank statements for each balance would be capable of being generated by the bank itself) and a check made to ensure the bank recognises all relevant accounts as ring fenced."

      3. Administration errors or incorrect use of the service charge fund would mean the board of directors fall foul of the Trustee Act and the Companies Acts and can be held personally liable. Obtaining the transaction history of the trust account is the most important because this will evidence the extent of the Directors service charge arrears and because the RMC is trustee then I assume the court can order them to hand it over.

      4. The Director at the s.305 meeting said he did not receive service charge demands and, his case was that if he did not receive demands he has no arrears. He is trying to use the 18 month rule (section 20B) to avoid paying them. I have obtained email confirmation from the previous property manager (he know works for a different agent) and he confirmed by email that service charge demands were sent to the Directors.

      5. The previous Managing Agent has confirmed by email that they set up two bank accounts and confirmed the bank account numbers which did not include the trust account. I have obtained email confirmation from the previous property manager that all three bank accounts had separate account numbers and cheque books. This confirms the previous Managing Agent does not use a "composite account" and he is just trying to avoid disclosing the trust bank account. It is clear the Directors ran the trust account which enabled them to withhold their service charges. I have all three separate bank account numbers anyway so they cannot deny this.

      6, On 28.04.21 the solicitor confirmed by email that the Company accountants had now been prepared the 2018 and 2019 accounts and these would be circulated to the members and approved signed and filed at Companies House (by last week). That did not happen of course so, I contacted the Company accountant who said they had not prepared the accounts and the matter was still outstanding - confirmed by email. The solicitor had lied, the accountants have not been contacted.

      7. You will see the difficulty - the Director's tactic is to promise to comply, so it is perceived that he has behaved reasonably but in truth, with no intention to deliver. It is trying to get this over to the Tribunal and to get them to understand the dishonest characters because to date theTribunal have been wilfully blind to their misconduct.

      8. I cannot see how the Directors can keep denying they run the trust account when the previous managing agent has confirmed in an email he set up only two accounts and he confirmed the bank account numbers. How do I get the Tribunal to recognise that the Directors are misleading them? The Directors have lied persistently to the Tribunal, the appointed manager and the RICS. Lying can also be indirect, through vagueness and omission of material information of which they are also guilty.





      Comment


        There is no question that the RMC and the directors have a duty to account for trust monies. If you have paid service charge monies on account, you are entitled to know what has happened to those monies. If you have evidence that there were separate bank accounts obviously you should produce it at the FTT hearing. The directors are obviously devious characters and the more evidence you can obtain must help your cause. Just try to separate actual evidence from assumptions. The more facts which you can produce to the FTT and the more damaging the FTT decisions to the directors must work in your favour. Let the directors try to argue that they do not need to pay service charge contributions due to the 18 month rule, it is absurd, they cannot say that they were unaware of charges in their position. Well done for your perseverance, the comments from the previous agent and the accountant assist you enormously.

        Comment


          Can you explain what is meant by the sentence ..... Any “language” that could later be used against the Company should not be included in the minutes.

          “The minutes should be recorded accurately and in a way that accurately reflects the actions and wishes of the members of the board of directors. Any language that could later be used against the company should not be included in the minutes.”

          Comment


            The minutes should be an accurate summary of what happened at the meeting. It was of course a meeting of members not a meeting of directors. It is difficult to understand what is meant by the last sentence, you should ask for an explanation. How can language be used against the Company? Even the views of an individual member cannot be used against the Company, only facts supported by evidence can be used against it,

            Comment


              Thank you

              I am proposing to make note of the solicitor (acting as proxy) language - he told me to shut up on a number of occasions and told me I was confused, called me "dear" as a patronising put down and told me I talked rubbish. He came to the meeting to disrupt and sabotage so I was planning to make note of that.

              I will need the minutes as evidence to be used against the Company when it goes to court so wanted to be sure I was following the correct protocol.

              Comment


                Table A at article 40, states

                40. "No business shall be transacted at any meeting unless a quorum is present. Two persons entitled to vote upon the business to be transacted, each being a member or a proxy for a member or a duly authorised representative of a corporation, shall be a quorum."

                There are three members of the RMC two Directors and myself. - Table A basically says if the Directors do not play ball I have no right to call a meeting because I alone can't make up the quorum required. The Tribunal Manager was present but has no authority to vote.

                In a private company with a small number of shareholders, everyone knows who owns how many shares, so the Members would have to rely on a chairman/Director to declare a resolution lost or won flexibly.

                The Meeting was scheduled for 11am, the Directors joined the meeting to sabotage and disrupt it at 11.07am and departed at 11.09am and then re-attended at 12.35pm to again sabotage and disrupt.

                1. The resolutions 1-6 were passed after the Directors departed at 11.09am and they re- attended at resolution 7.
                2. By leaving the meeting at 11.09am can it be acquiesced that the Directors have renounced their vote for resolutions 1-6?.
                3. Does Table A article 40 still apply if the member has had no option but to call the meeting under s.305 CA 2006.
                4. The Articles for the RMC clearly is not working for all members what can be done about this? The Directors will do nothing to amend it because it serves them alone.
                5. The Directors re-attended at Resolutions 8-11 which were debated and they voted "No"
                6. The Directors made an offered to again instruct the Previous Manager to handover the management information to the Appointed Manager and as Chair I accepted, but it was only lip service because the Director has done nothing about it and if he had any intention to assist he would have done it in the last 12 months to comply to the Tribunal Order.
                7. I understand the law requires minutes recording certain resolutions to be sent to Companies House within 15 days after it has been passed. Does this apply to ordinary resolutions and the breaches team?
                8. Is there anything in the Companies Act that would override the Mem and Arts (in relation to the Quorum) in the case of a private company with a small number of shareholders.

                Comment


                  TABLE A
                  Article 81c When the office of a Director should be vacated under Article 81 (Suffering from a Mental disorder) Can Article 61 apply to the same Director ?

                  Can the Director instruct a proxy if she is not in right mind. There is a contradiction - surely Article 61 should not apply if Article 81 is relevant.

                  Comment


                    You adjourned the meeting in order to comply with the Articles and you gave notice to the members that the meeting would proceed when it was reconvened. I consider that you had the right to do that when calling the meeting under s305.
                    Only the members may amend the Articles by special resolution, Unfortunately, you are outnumbered, so you will not succeed in changing the Articles without the agreement of other members.
                    It is only special resolutions which need to be advised to Companies House, all your resolutions were ordinary resolutions so there is no need to send a copy of the resolutions. Changes to the officers of the Company need to be advised to Companies House by completion of the standard forms.
                    Regulation 81 in Table A relates to whether or not a person is entitled to act as a director, it is different to Regulation 61 which relates to a member's right to vote and regulation 60 specifically states that a proxy form may be executed by or on behalf of the appointor, so the member's representative would have been entitled to complete the form on her behalf.

                    Comment


                      Originally posted by SHill
                      [B][I]Could you tell me if a Member of the RMC would be able to take proceedings against the Superior Freeholder for negligence. Or is it only the Directors of the RMC who could take a case to court.

                      The superior freeholder has authorised second floor tenant (Director) to allow works to knock two flats together which conflicts with the head lease
                      please put this in a new thread, so as not to complicate and have different topics on the same thread.
                      Yes, i know its related, but freeholders make flats, freeholders sells lease for a flat, not leaseholders.( basicly )


                      Comment


                        It depends on the wording of your lease but usually you only have a contract (lease) with the RMC, which has a separate contract (lease) with the superior freeholder. So the superior freeholder would not normally have any direct obligations to you. Presumably the leaseholder pays 50% of the costs or twice as much as you.

                        There is now a manager in place, so you should ask her to deal with any disrepair.

                        Comment


                          I feel the Superior Freeholder has had a part to play in the issues at the property. The Superior Freeholder has given consent to alterations in direct contradiction to their lease and has upset the structure of the property which has left the common parts unmanaged and outside of the service charge. The balance of the shares for the RMC has been altered as a result leaving one member unable to vote. ( will always be out voted)

                          Should the Superior Freeholder have made an application to Tribunal to vary Clause X & XII in their lease if they intended to give consent to the alterations in breach of the terms of the lease?

                          Their action has had a direct impact on my property as a result both in value and quiet enjoyment.

                          Comment


                            The Directors at Tribunal have won their arguement that they personally have no obligation to handover information to the Appointed manager in line with the S.24 order because they argue the RMC is the Redpondent. !!!

                            If the Directors are not responsible who is?

                            I deliberately named the Directors along side the RMC on the S.24 application to Tribunal to make them responsible for the order. The Appointed manager named the Directors on her application for the further Directions but the Judge has accepted that the RMC is the Respondent not the Directors. Is that really correct!!!!

                            The Tribunal has been negligent if they have Appointed a manager who is unable to enforce the Directors to handover the service charge information - it makes the Order null and void and a complete waste of time. What is the next step for this conundrum ?

                            Comment


                              Another issue at Tribunal was the Respondent’s lawyer did not provide the Appointed Manager or myself with a copy of his statement prior to the hearing. We received a copy three days later. He won all his arguments because the Appointed manager was unaware of these prior to the hearing so was not able to prepare her defence. This is a breach of the Tribunal rules and the Directions have been made in the Respondents favour as a result.
                              I want to make a complaint to the Tribunal about this because it was an unlevel playing field and it was as if the Appointed Manager had been put in a ring with a lion with no sword. It was painful to watch my success at Tribunal to get a manager appointed wash down the plug hole. She is a manager not a lawyer and was completely out of her depth but at my expense unfortunately.
                              I was not expected to speak just listen. The Respondent requested I be exclude from proceedings as the Appointed Manager is the Applicant now. The judge said I could be a witness.

                              I am wondering if I can tell the Tribunal that I will be representing the manager for proceedings - are there any rules against that ?

                              I am the only one who can challenge the Directors lies. The Appointed manager has no information or history at the building.

                              Comment


                                If the terms of your lease are no longer fair, you can apply to the FTT to change them.

                                Comment

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