Undertakings to the Commissioner’s Office
05 May 2016
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We have been involved in several matters recently which indicate a changing of the standard process inside the Commissioner’s Office.
It seems that when an application is lodged that seeks an interim order preventing the committee from doing something, the Commissioner’s Office will place a call to the body corporate manager asking them to arrange an urgent undertaking from the committee which aims to stop the action that the application relates to.
This request is seemingly usually followed by statements intimating that an interim order may follow if that undertaking is not provided by a set timeframe (sometimes as quickly as the same day). Requests like this can place both bodies corporate and body corporate managers in a stressful, and difficult situation because they may only realise an application has been lodged when they receive the phone call from the Commissioner’s Office.
There are a few issues that you need to think about when you get one of these phone calls.
The first is that we think it is very dangerous for a committee to give an undertaking not to do something without actually reviewing the material to which the undertaking sought relates. The committee should ask for a copy of the application before giving any undertaking.
The second relates to any committee’s ability to give an undertaking. This is on two fronts:
- We all know that a committee regulated by the Standard Module cannot act on a resolution until seven days after that resolution is sent to owners. In our view, a committee regulated by the Standard Module simply cannot lawfully give an undertaking in these circumstances until that time has elapsed.
- Subject to what the undertaking relates to, it may be a restricted issue for the committee. A simple example is that a committee is required to implement the lawful decisions of the body corporate. If a decision was made at a general meeting, arguably the committee could not then give a binding undertaking not to proceed with implementing that decision as it is a restricted issue.
The final issue is more of a legal nature. If the committee is minded to give an undertaking, what does it say? Who does it favour? Who can rely on it? What rights are the committee waiving? What liability or risks may then accrue for the Body Corporate? That is where we can help.
If you get one of these requests and don’t know where to turn, we can help urgently.