UOAQ plans class action over Phoenician commissions
The Phoenician saga just won’t go away. Wayne Stevens, the president Unit Owners Association of Queensland and past chairman of the Phoenician Body Corporate is calling on “anybody who has ever been in a letting pool operated by S8, Mantra, Stella or Driftcove”
to join a class action “to receive compensation for undisclosed commissions wrongly taken by the letting pool operator”.
He said in an open letter to past and present Phoenician unit owners that there would be “no cost to [unit owners] as legal fees would be paid by a third party legal funder”.
Mr Stevens said, “We have been advised by lawyers that significant claims may be available to you if you were ever in the Phoenician letting pool and undisclosed commissions were deducted from your rental returns. The key points to bear in mind are:
- This is probably your last realistic opportunity to pursue these claims;
- All legal costs would be paid by a third party who would share in any award ordered by the court to the extent of approximately 1/3rd with the remainder shared by owners who join this class action. Any funder would not agree to commit further significant funds unless they are convinced that the prospects are strong;
- You would not have to pay any of the other side’s costs if the action was unsuccessful as these would be paid by the third party funder;
- Unlike the OFT case that was based on breaches of the community title scheme laws, this action would focus on obtaining meaningful damages or other compensation for the undisclosed commissions;
- To make this happen, it is essential that a sufficient number of unit owners indicate that they will participate;
- Only owners who provide details and join in this action at no cost to them will participate in a successful claim.”
The action relates to when the Phoenician’s letting rights were held by Driftcove, an arm of accommodation company S8. Bookings for the Phoenician were done through Gold Coast Booking Centre, an S8 subsidiary, that took an undisclosed commission and passed remaining funds to Driftcove that received a disclosed commission.
Legal firm Johnson Winter & Slattery advised Mr Stevens that it understands the undisclosed commissions may not be legal and compensation could be viable in the Phoenician at Broadbeach and other buildings.
Problems between Driftcove/S8/GCBC and unit owners at the Phoenician came to a head in 2003 when the body corporate hired a private investigator to book into the resort to expose any inflated commissions. The Office of Fair Trading investigated in 2006 after receiving complaints S8 was double-dipping on fees by directing bookings to its wholesale businesses. In December 2006, S8 was bought out by MFS.
In 2007, OFT launched court action against Driftcove and Chris Scott alleging 2900 breaches of law but the case was dismissed in 2009.
The OFT followed this up by charging Mr Scott and Driftcove for alleged irregularities in accounting practices. In 2010 Mr Scott copped a $130,000 fine plus $66,000 in costs while Driftcove compensated 83 Phoenician unit owners more than $25,000 plus $215,000 costs after the Queensland Civil and Administrative Tribunal found it failed to fully disclose letting charges.
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