Fire Rectification – Questions in relation to CBC proposal

From: Peter Zunker
Date: 6 April 2015 2:17:45 pm AEST
To: Randy Edwards

INWARDS CORRESPONDENCE – CBC

Randall

The committee of Notre Dame are currently undertaking a complete review of the proposals before the lotholders of Notre Dame. We are in the process of resolving ALL issues that you have raised in regards to the Brookfield Johnson Control proposal before lotholders at the adjourned meeting of Note Dame.

In relation to the  Community Body Corporate (CBC) proposal for fire rectification, we have reviewed the documents attached to the notice of General meeting dated 30th March 2015 called Fire Services Rectification Agreement and Fire Services Management Agreement. Both documents are similar in construction, and therefore have the same questions surrounding them.

  1. Questions relating to both documents

In relation to these questions, Buildings mean Notre Dame (A Block), Oxford Cambridge (B & C Block) Canterbury Westminster (D & E Block) Duhig (F Block) Kensington Sandringham (G & H Block).

  1. THE EXECUTIVE COMMITTEE

The executive committee of the Community Body Corporate (CBC) has extensive powers under both agreements. Under Mixed Use Section 185 4) states

(4) If there are more than 3 members of the body corporate, the executive committee consists of—

(a) the chairperson, secretary and treasurer; and

(b) the number of other members (not more than 4) determined by the body corporate.

 

It is therefore possible that at the very least, if determined by the CBC, that the executive committee could consist of just 3 people. Those 3 people will have significant powers under the agreements. Being clause 4.2 a) and 4.4 which determine how money is raised from each Building under the agreements.

The executive committee will determine the way the buildings pay the specific and shared costs. This includes obtaining the funds from buildings before the amounts are actually incurred.

It is possible that under these agreements that you are proposing, that Notre Dame lotholders will have less control over their own funds than whoever forms the majority of the executive committee – potentially 2 people who are not even involved with Notre Dame. Under these agreements Notre Dame is abdicating their decision making power to a group called the executive committee of the CBC.

A1.1. Can you advise who the Executive Committee consists of currently?

A1.2. How these persons represent the interest of Notre Dame, when Notre Dame may not have even voted for them to be in the Executive Committee.

 

  1. PROTECTION FOR THE CBC

The CBC is protected from being under breach under numerous clauses in the agreement, being 2.3 and 2.4 and 3.2.

Any one engaged by the CBC to perform services for a Building will also not be dealing directly with a Building.

A.2.1. What is the protection for the Building’s that sign up for this agreement that they will receive value for money. How will a Building enforce its contractual rights against a 3rd party that actually performs services for the building? For instance

  1. Does the CBC proposal allow for the transfer of warranties to the buildings for any contracts entered into on the building’s behalf?

 

  1. Does the CBC proposal have a survivability clause for warranties in the event the agreement is terminated?

 

3.. Does the CBC proposal require the building’s review and approval of any agreements that the CBC intends to enter into prior to the agreement being executed.

 

Both Agreements have no end date, no limit on the amount that can be incurred by the executive committee on behalf of Buildings and do not nominate who will undertake the services on behalf of buildings.

  1. REQUIREMENTS TO SEEK BEST POSSIBLE PRICE IN OBTAINING SERVICES

Under clause 2.5 the CBC must:

(a) call tenders as appropriate for the design and specification and carrying out of Rectification Works;

A.3.1 When will the CBC call for tenders as appropriate, and who determines what is appropriate?

 

  1. Questions in relation to Fire Services Rectification Agreement
  2. PAYING FOR THE WORKS

The possible mechanisms that the executive committee could use to fund the fire rectification works for buildings are to

  • Require the building  to pay for its costs that it is incurring
  • Require other buildings in the agreement to contribute to the costs by prepaying their expected costs
  • Use the sinking fund money in the CBC (which is everyone’s money)
  • Impose a levy on all the buildings (even those not signed up for the agreement)

B.1.1 What happens if the money runs out in the CBC and there is not enough to complete the fire rectification works that the CBC has signed up for?

B.1.2  If any of the buildings at the end of the works program, are fined by the QFES for non-completion, will the CBC be paying this fine?

B.1.3 How do you know each Building signed up for this agreement can fund the works that the CBC is expecting them to pay?

B.1.4 What is the sequence of building works proposed? I.e is Duhig the first building to commence fire rectification works?

B1.5 Has the first building that will have the fire rectification works undertaken, raised the money to pay for the rectification works?

As suggested to you previously, each building should have engaged the contractors for fire rectification directly, thus avoiding this intertwining of each building’s financial affairs. There can be adverse consequences to what you/CBC are proposing that have not been addressed.

B.2 DEFINITION OF RECTIFICATION REQUIREMENT UNDER THE AGREEMENT.

means a notice or other communication from QFES or any other person specifying requirements, including works that have to be carried out and plant and equipment that has to be acquired and installed in Cathedral Place, to ensure that the fire services in Cathedral Place or specifically in a Parcel comply with the law and requirements of the QFES and other relevant Authorities.

 

B.2.1. Who is “any other person” in this definition of Rectification requirement? And why was the agreement not specified to state who this “any other person” is? This is a very broad term.

Rather than having no end date, this agreement for each building could be constructed to be terminated the first business day after the agreed fire compliance certifier is satisfied that

  1. a) the work is completed and
  2. b) is considered meeting all relevant fire codes that have been enacted by the statutory body that govern the precinct in which the BUP is located and
  3. c) signs the relevant certification declaring certification has been achieved
  1. Questions in relation to Fire Services Agreement
  2. WHAT IS ADDITIONAL SERVICES

 

Defined to mean-  ANY services that all the parties agree in writing to include in the Services.

 

All of the other problems that have been identified with these agreements will apply to any of the additional services that are incorporated into the Fire Services Agreement.

It is possible that the buildings could lose complete control of their budgets, depending on what additional services are agreed to.

Once agreed to, the agreement cannot be reversed unless both the CBC and the Building agree.

C.1.1.  What is the purpose of this clause for additional services? The way this clause is constructed, other services that have nothing to do with Fire can be incorporated into this agreement.

C.1.2. Who will give permission for an additional service to be included; this is not specified in the agreement

We look forward to your comments in relation to each of these items raised. We also note that the adjourned meeting for Notre Dame Body Corporate is likely to be on the 15th April 2015, so a timely response to inform lot holders of your position would be appreciated.

Peter Zunker

Treasurer

Notre Dame Body Corporate