|The Club Chairman explains why Los Claveles
owners should be concerned, 3rd June 2018
Owners who are not familiar with the background to the dispute with Wimpen Onagrup should read the Club Chairman’s letter of 22 January 2018, ‘Los Claveles, the easy to understand story’ which can be found on the owners’ website under Stop Press item number 9.
2. The Problem with Onagroup
2.1 Disregard for the Law
Onagrup continue to refuse to:
(i) honour the binding commitment they gave whereby they would accept the findings of the Law Society of Scotland arbitration case announced on 1 August 2017, and the results of their failed appeal announced on 22 February 2018.
(ii) comply with the judgement of the Arbitrator, whereby he ordered Onagrup to return all of the Club’s property including money, accounts and membership register within 28 days of the order.
The Arbitrator rejected Onagrup’s defence that the Club’s money and accounts are held in a joint account that cannot be split, and that individual Escritura owners had challenged the payment of Club expenses from the joint account. Historically, WimPen failed to advise owners that holding a joint account was against the Law of Horizontal Property. The problem that it now faces in having to split the funds into separate community accounts to comply with the law is therefore a legacy of its own negligence.
Further, the joint account contains the full amount of Club members’ maintenance fees that WimPen has collected over the years rather than just the proportion required to meet the members’ contribution to the maintenance of the common areas. If this had been done correctly, the remaining proportion of the members’ fees would have been readily available to the Club.
The Arbitrator also rejected Onagrup’s claim that Spanish data protection rules prevented them from releasing the membership register back to the Club Committee. The claim was on the basis that the Club Committee is a third party when the fact is that it is the first party and owns the register.
Enforcement of the arbitration rulings in Spain is now taking place and through this action Onagrup will be removed as the Club Administrator and the Club’s property will be returned to the Club Committee. We will advise on the timescale when this is available. In addition to this dishonourable disregard for the law, an Onagrup employee, Jane Oliphant, obtained a court order in Arona, Tenerife preventing WimPen from paying Club expenses from the joint account. Onagrup made a false claim to the court that they were unable to contact the Club Chairman to defend this action and so it was granted in his absence. When this was discovered towards the end of 2017, the Club Committee arranged for the Club’s legal representative in Spain to challenge the case, and court action is underway.
2.2 Theft of Club Property
It has only just come to light at the 2018 Club AGM that Onagrup transferred 1000+ cancelled Club weeks in 2016 to 7 different companies. These weeks belong to the Club and Onagrup’s action in transferring them and issuing ownership certificates for them without permission is regarded by the Club as theft. All delegations from the Club Committee, including sales, transfers and the issuing of certificates, were withdrawn from WimPen in July 2015. Their management contract, which expired naturally in May 2017, did not allow them to make these transactions. Investigations of this illegal activity by Onagrup and FNTC are underway to enable legal action to be taken against them.
2.3 False Accounting
The accounts produced for the 2018 joint Escritura and DOA AGM show no evidence of the income from the illegal transfer of 1000+ cancelled weeks in 2016 which Onagrup claim has been set against bad debts. This would amount to a minimum of €300k and possibly as much a €1.4m.
2.4 Illegal Control of the Development Owners Association (DOA)
Onagrup is illegally denying 85% of the owners at Los Claveles who are Club Members any say in decisions concerning the Development Owners Association which is responsible for providing all the services to run the resort. A Deed was granted in 1992 for owners who hold the Escritura for their Los Claveles property, and for members of Club Los Claveles whose Escritura is held in trust for them by the Trustee, to have voting rights in the ‘Owners Association of Los Claveles’.
Following that, a Deed of Adaptation was granted in 2000 that confirmed that Club Los Claveles is the owner of the common parts and its members have a right to vote at DOA AGMs.
Onagrup, by ensuring that their candidate Mr Barrow was elected to the Presidency, control the DOA. They refused to allow the Club Chairman, who was mandated by the 2018 Club AGM of 28th April 2018 to cast all of the Club’s 4000+ votes in the DOA AGM of 6th May 2018, to take part in the election.
This illegality is already being pursued through the action being taken in the Scottish Court of Session to force Trustee FNTC to hand over to Hutchinson. This will take time however as it will be in the Court’s time, not ours. In the meantime, the injustice will be challenged in the Spanish Court by impugning the DOA AGM of 6th May 2018. This process was started immediately after the AGM and should take no more than 3 months to conclude.
2.5 Unethical Voting Practices to Gain Control of Decision Making at the Recent Escritura AGM
It is a breach of contract as defined by the underlying constitution/statutes for Onagrup to use their own votes from the weeks they own, that they are deliberately accumulating, to award themselves a management contract. The DOA Statutes explicitly prohibit The Administrator from taking part in voting for this reason, However, Onagrup spuriously claim that the right of ownership overrides this statute. Based on this, it is fair to claim that Onagrup is not concerned about ethics and fairness, only power and control.
As a prelude to the AGM, Onagrup also mounted a similar telephone canvassing campaign, of owners, to the one they ran for the previous 2016 AGM by which they sought to gain votes for an unprecedented 6 year management contract. Canvassing for votes in this way contravenes the ethical standards for voting.
2.6 Breaching Arbitration Rules and Data Protection Laws
Mr Castro, the Managing Director of WimPen Leisure Management SA and Onagrup, and Mr Pengelly before him, have illegally misused the Club’s membership register repeatedly sending letters to owners advancing their own cause and undermining the Club Chairman and President. Given that some of these ‘communications’ took place during legal proceedings, this meant that:
* They breached data protection laws
* They are in contempt of court by breaching arbitration rules
All these instances have been reported to the Arbitrator and data protection agencies, both within the UK and Spain.
2.7 Propaganda and Control over Communications with Owners
Onagrup controls all communication with owners through the illegal use of the Members Register and the continuing illegal occupancy of the resort.
Most owners have little appreciation of the actions being undertaken by Onagrup in an attempt to seize control of decision making at the resort. All they see is how nice everything is on the surface. They are completely unaware of the manipulation that is going on to control the votes to authorize a grossly inflated refurbishment programme that will wipe out the reserve fund and lead to unaffordable increases in maintenance fees that Onagrup will push through with the control they have gained at the Escritura and DOA AGM on 6th May 2018.
They tried the same strategy at the Club AGM on 28th April when they attempted to cast 1000+ votes from cancelled Club weeks that they had illegally purloined and transferred to other companies who would vote for them. Had they succeeded, they would now be controlling the voting in all 3 of the communities and be able to push through their decisions and their plans for the future of the resort.
3. Concluding Comments
For all of the above reasons owners should be concerned about Onagrup. In addition, the mixed Escritura and Club structure which exists only at Los Claveles and Las Rosas former WimPen resorts, makes Los Claveles particularly vulnerable to takeover by Onagrup, with FNTC’s assistance. This is why comparisons with other Wimpen resorts where owners are apparently satisfied with Onagrup are not relevant. These resorts do not face the same risks that Los Claveles does, and that is why owners should be mistrustful of Onagrup and protect themselves against the hidden threat that they pose. Collaborating with Onagrup as the group opposed to the Committee is doing is exposing owners to this threat and it is the worse possible thing that anyone could do. Forewarned is forearmed, it is up to owners to take this risk seriously and protect the resort from this threat. That is what the Committee is doing, but without the active and wholehearted support of owners it may not be enough.
Chairman, Club Los Claveles