DISTRICT COURT OF QUEENSLAND CITATION: PARTIES: FILE NO/S: D322/08 PROCEEDING: ORIGINATING COURT: Body Corporate for Sunseeker Apartments CTS 618 v Jasen [2009] QDC 162 BODY CORPORATE FOR SUNSEEKER APARTMENTS CTS 618 (Plaintiff) v CAROL DIANE JASEN (Defendant) Trial District Court Southport DELIVERED ON: 18 June 2009 DELIVERED AT: Southport HEARING DATES: 5 & 6 February 2009 JUDGE: ORDER: Newton DCJ There will be judgment for the plaintiff for the following: a) Levies $34,295.85 Interest on Pre-24 May 2002 levies $7,046.98 Interest on levies imposed after 24 May 2002 by-law $20,403.93 Recovery Costs $41,445.91 SUB-TOTAL $103,192.67 b) Interest on recovery costs in Claim $3,599.55 c) On going legal fees in accordance with section 97 of the 1997 Module (s143 of the 2008 Module) to be assessed. LEGISLATION: Body Corporate and Community Management Act 1997, ss 150 & 152 Body Corporate and Community Management (Accommodation Module) Regulation 1997, ss 93, 94, 95, 97 & 98 Property Law Act 1974 s 84 CASES: Clarke v Japan Machines (Australia) Pty Ltd [1984] 1 QdR 404 Fox v Jolley [1916] 1 AC 1 Barnes v Queensland National Bank Ltd (1906) 3 CLR 925 Ex Parte Whelan[1985] 1 QdR 500
CATCHWORDS: COUNSEL: SOLICITORS: 2 REAL PROPERTY STRATA TITLE MANAGEMENT AND CONTROL BODY CORPORATE POWERS DUTIES AND LIABILITIES action by body corporate for unpaid levies, interest and recovery fees. Ms S.M. McNeil for the plaintiff No appearance for the defendant Short Punch & Greatorix for the plaintiff No appearance for the defendant [1] The Body Corporate for Sunseeker Apartments in Port Douglas ( Sunseeker ) claims from Carol Jasen, in an action for debt, unpaid levies, interest and recovery fees. [2] The plaintiff is a body corporate created under the Body Corporate and Community Management Act 1997 ( BCCMA ) constituted by the various owners of the lots in a community titles scheme. [3] The defendant is an owner of one of the lots (Lot 6) in the community titles scheme for which the plaintiff was established. There are 10 lots in the scheme. [4] The plaintiff claims $103,192.67 for unpaid body corporate levies, penalty interest and recovery fees in accordance with both BCCMA and the Body Corporate and Community Management (Accommodation Module) Regulation 1997. 1 [5] The plaintiff s claim relates to the period 1 April 1999 to 4 August 2008 during which some 38 levy notices were issued on Ms Jasen by Body Corporate Services ( BCS ), the manager of the Body Corporate. The levy notices conveyed the following information: (a) administrative and sinking fund levies had been levied on Ms Jasen as a lot owner; (b) the due date for the payment of the levies; (c) that there was at the commencement of each levy period, outstanding levies; (d) that interest was accruing on outstanding levies; (e) that recovery costs (legal fees) were being incurred by the plaintiff; 1 And the 2008 counterpart.
(f) 3 that Ms Jasen was required to bring her outstanding balance up to date to avoid being in arrears. [6] Sunseeker alleges that Ms Jasen has failed to make payment on any of the 38 levy notices issued on her. Indeed, the plaintiff complains that by her refusal to abide by her financial commitments, Ms Jasen has prevented the Body Corporate from properly attending to its obligation to maintain and manage the common property of the community titles scheme and has placed a greater and unfair financial liability on other lot owners. [7] The bases upon which the levies were issued are as follows: (i) In relation to the unpaid body corporate levies (for both administrative fund and sinking fund) the plaintiff is, pursuant to section 93 of the Accommodation Module, required to fix (by way of ordinary resolutions and budgets for a financial year) the contributions to be levied on the owner of each lot for a financial year. Unpaid levies, the plaintiff contends, total $34,295.85; 2 (ii) In relation to penalty interest, the plaintiff, pursuant to section 96 of the Accommodation Module may, by passing an ordinary resolution, fix a penalty to be paid by a lot owner if levies are not paid by the due date. The maximum rate of interest able to be charged is 2.5% per month on any outstanding balance. On 24 May 2002, Sunseeker at its AGM passed an ordinary resolution that penalty interest be levied on lot owners for late payments. 3 On levies not paid by the due date (from 1 July 2002) Sunseeker levied Ms Jasen penalty interest for overdue levies. Penalty interest claimed $20,403.93. 4 (iii) In relation to recovery the plaintiff is, pursuant to section 97(1)(c) of the Accommodation Module, able to recover as a debt any costs reasonably incurred by Sunseeker in recovering the levies and penalty interest. The plaintiff 2 Paragraph 9(a) of the Sixth Amended Statement of Claim. 3 Document 7 of exhibit 1 the Court Book page 5 of the minutes of the AGM; Paragraph 8(c) of the Sixth Amended Statement of Claim. 4 Paragraph 9(b) of the Sixth Amended Statement of Claim.
4 claims to have incurred legal fees (between September 2003 and August 2008) 5 in issuing proceedings and pursuing litigation for recovery through to the trial. Recovery costs claimed total $41,445.95. 6 [8] Section 97 of the Accommodation Module provides that the plaintiff may recover each of the amounts claimed as a debt. [9] Section 94 of the Accommodation Module provides that the plaintiff must give written notice to the defendant of the amount of the contribution levied, the amount currently required to be paid, the due date for payment, any discount to which an owner might be entitled for early payment, any penalty to which the owner is liable for each month payment is in arrears and if the lot holder is in arrears, the amount that they are in arrears. 7 All of this information is set out in the levy notices. [10] Recovery of the relevant amounts as debts is enlivened at the date by which payment of the relevant amount is due. 8 THE LEGISLATION [11] Section 93 of the BCCA (Accommodation Module) 1997 provides that: 93 Contributions to be levied on owners [SM, s95] (1) The body corporate must, by ordinary resolution (a) fix, on the basis of its budgets for a financial year, the contributions to be levied on the owner of each lot for the financial year; and (b) decide the number of instalments in which the contributions are to be paid; and (c) fix the date on or before which payment of each instalment is required. (2) If a liability arises for which no provision, or inadequate provision, has been made in the budget, the body corporate must, by ordinary resolution 5 Paragraph 9(c) of the Sixth Amended Statement of Claim and document 29 of exhibit 1. 6 Paragraph 9(c) of the Sixth Amended Statement of Claim. 7 Section 94(1)(a)-(f) of the Accommodation Module. 8 Section 97 of the Accommodation Module (1997).
5 (a) fix a special contribution to be levied on the owner of each lot towards the liability; and (b) decide whether the contribution is to be paid in a single amount or in instalments and, if in instalments, the number of instalments; and (c) fix the date on or before which payment of the single amount or each instalment is required. (3) Also, the committee may fix an interim contribution to be levied on the owner of each lot before the owner is levied contributions fixed on the basis of the body corporate s budgets for a financial year. (4) The amount of a contribution mentioned in subsection (3) (a) must subsequently be set off against the liability to pay contributions mentioned in subsection (1); and (b) must be calculated on the basis of the level of contributions applying for the scheme for the previous financial year; and (c) must relate, as closely as practicable, to the period from the end of the previous financial year to 30 days after the annual general meeting. (5) The contributions levied on the owner of each lot (other than contributions payable for insurance and any other matter for which, under the Act or this regulation 9 the liability attaching to each lot is calculated other than on the basis of the lot s contribution schedule lot entitlement) must be proportionate to the contribution schedule lot entitlement of the lot. [12] Section 94 of the module provides that: Notice of contribution payable [SM, s 96] (1) At least 30 days before the payment of a contribution, or instalment of a contribution, is required, the body corporate must give the owner of each lot written notice of (a) the total amount of the contribution levied on the owner; and 9 See for example - section 126 (Insurance of common property and body corporate assets). section 129 (Premium). section 130 (Improvements affecting premium).
6 (b) the amount of the contribution, or instalment of contribution, of which payment is currently required; and (c) the date (the date for payment ) on or before which the contribution, or instalment of contribution, must be paid; and (d) any discount to which the owner is entitled for payment of the contribution, or instalment of contribution, by the date for payment; and (e) any penalty to which the owner is liable for each month payment is in arrears; and (f) if the owner is in arrears in payment of a contribution or penalty the arrears. (2) The written notice under subsection (1) may also include notice about an amount payable by a lot owner to the body corporate for (a) a specially contracted service enjoyed by the owner; or (b) an exclusive use or special right over common property enjoyed by the owner. (3) A written notice under this section may be served on a lot owner at the lot owner s address for service, or in the way directed by the lot owner. [13] Section 95 of the module provides that: Discounts for timely payment [SM, s 97] (1) The body corporate may, by ordinary resolution, fix a discount to be given to owners of lots if a contribution, or an instalment of a contribution, is received by the body corporate by the date for payment fixed in notices of contribution given to the owners. (2) The discount cannot be more than 20% of the amount to be paid. Example Suppose that a contribution of $100 is payable in 4 instalments of $25 and the body corporate has fixed a discount of 10% for payment by the date for payment in the notices of contribution given to the owners an account requiring payment of an instalment of $25 by 31 March is given to the owner of a lot the instalment is paid on 25 March. In this case, the owner is entitled to a discount of $2.50 on the instalment.
7 [14] Section 96 of the module provides that: Penalties for late payment [SM, s 98] (1) The body corporate may, by ordinary resolution, fix a penalty to be paid by owners of lots if a contribution, or instalment of contribution, is not received by the body corporate by the date for payment fixed in notices of contribution given to the owners. (2) The penalty must consist of simple interest at a stated rate (of not more than 2.5%) for each month the contribution or instalment is in arrears. Example Suppose that a contribution of $400 is payable in 4 instalments of $100 and the body corporate has fixed a penalty interest rate of 2% per month an account requiring payment of an instalment of $100 by 31 March is given to the owner of a lot the instalment is not paid until 27 June. In this case, the instalment has been in arrears for 2 months and a penalty of $4 is Payable. [15] The Schedule Dictionary to the Accommodation Module Regulation provides for the definition of a body corporate debt : Body corporate debt means a following amount owed by a lot owner to the body corporate (a) a contribution or instalment of a contribution; (b) a penalty for not paying a contribution or instalment of a contribution by the date for payment; (c) another amount associated with the ownership of a lot. [16] Section 97 10 of the module provides for the recovery by the body corporate from a lot owner for unpaid levies as a debt. The section provides (relevantly): Section 97: Payment and Recovery of Body Corporate Debts 1. If a contribution or contribution instalment is not paid by the date for payment, the body corporate may recover each of the following amounts as a debt- (a) the amount of the contribution or instalment; (b) any penalty for not paying the contribution or instalment; 10 Payment and recovery of body corporate debts ; s 143 of the 2008 Module.
8 (c) any costs (recovery costs) reasonably incurred by the body corporate in recovering the amount. 2. If the amount of a contribution or contribution instalment has been outstanding for 2 years, the body corporate must, within 2 months from the end of the 2 year period, start proceedings to recover the amount. [17] Thus, section 97 of the Module enables the body corporate to recover as a debt, any or all of the matters particularised in section 97(1)(a) to (c) of the Regulation. They are not mutually exclusive and the recovery of one of either (a), (b) or (c) is not dependant on recovery of the others. [18] The requirement to commence proceedings no later than two months from the end of a two year period during which levies are outstanding commenced operation on 1 December 2003. Prior to this date there was no requirement to issue proceedings within a specific time period, it was simply open to the body corporate to recover the monies as a debt. 11 ADMINISTRATIVE AND SINKING FUND LEVIES [19] Section 98 of the Module 12 requires a body corporate to establish and keep an administrative fund and a sinking fund. The sole source of such funds are contributions from the lot owners of the community titles scheme according to their respective lot entitlements. [20] Section 47(2) of BCCMA provides that the lot owner s share of amounts levied by the body corporate is to be calculated by the contribution schedule lot entitlement, unless the extent of the lot owner s obligation to contribute a levy for a particular purpose is specifically otherwise provided for in the Act. [21] Section 150 of the Act provides for the financial management of the community titles scheme by the body corporate as follows: Section 150; Financial Management Arrangements (1) Subject to section 151, the financial management arrangements applying to a community titles scheme are those stated in the regulation module applying to the scheme. 11 See Body Corporate and Community Management (Accommodation Module) Regulation 1997 reprint no.2 for pre 1 December 2003 requirements, and reprint no.3 for post 1 December 2003 requirements.
9 (2) Without limiting subsection (1), the regulation module applying to a community titles scheme may provide for financial arrangements about the following (a) the budget of the body corporate; (b) levying lot owners for contributions, including contributions of an interim nature for the period from the end of a financial year to 30 days after the annual general meeting for the next financial year; (c) discounts and penalties relating to the payment of contributions; (d) recovery of unpaid contributions; (e) funds to be kept by the body corporate; (f) powers and restrictions relating to borrowing; (g) application of amounts in funds; (h) spending limitations applying to the body corporate, and spending limitations applying to the committee for the body corporate; (i) keeping accounts and preparing statements of accounts; (j) auditing of statements of accounts by an auditor. (3) To avoid doubt, it is declared that the financial management arrangements contained in a regulation module applying to a community titles scheme may impose obligations and limitations on both the body corporate (including the committee for the body corporate) and lot owners. [22] Section 152 of the Act provides for the body corporate s duties about common property. The section says relevantly: Section 152: Body Corporate s duties about common property etc: (1) The body corporate for a community titles scheme must (a) administer, manage and control the common property and body corporate assets reasonably and for the benefit of lot owners; and (b) comply with the obligations with regard to common 12 Section 144 of the 2008 Module.
(2) 10 property and body corporate assets imposed under the regulation module applying to the scheme. DISPUTE RESOLUTION PROCESS [23] Chapter 6 of BCCMA provides for a dispute resolution process in the event of a dispute between a lot owner and the body corporate. 13 This process does not apply to disputes relating to unpaid levies which must be resolved through proceedings. 14 The matters raised by Ms Jasen in paragraph 5 of the Defence (the alleged incorrect calculation of interest and the alleged unlawful levying of the defendant for letting agent fees) maybe resolved under Chapter 6. PLEADINGS [24] It is admitted on the pleadings that: (a) the plaintiff is a body corporate duly constituted according to the Body Corporate and Community Management Act Qld 1997, capable of suing and being sued; (b) the defendant is a natural person, and owner of Lot 6 in the building known as Sunseeker Holiday Apartments (the scheme) located at 7 Garrick Street, Port Douglas; (c) the plaintiff is entitled, pursuant to section 93 of the Body Corporate and Community Management (Accommodation Module) Regulation 1997, to fix, on the basis of annual budgets the contribution towards the payment of body corporate expenses on each lot owner in the scheme; (d) the plaintiff, during the relevant financial years of 1998/99 and 2007/08, fixed by ordinary resolution on the basis of budgets, contributions to be levied on the owners of each lot within the scheme; (e) from April 1999 the plaintiff did in fact, levy administrative and sinking fund levies on lot owners in the scheme, including the defendant; 13 Section 227(1)(b). 14 Section 97(2).
(f) (g) (h) 11 the defendant has, during her time as a lot owner, received levy notices sent to her by the plaintiff; the plaintiff has made written demands on the defendant for payment of the levies alleged to be outstanding; and the defendant has not paid the entire amount demanded by the plaintiff. [25] The defendant s case may be summarised as follows: (i) Ms Jasen does not admit that she received the notices six weeks prior to the due date for payment; (ii) Ms Jasen denies that she is liable to pay the plaintiff the amount of levies said to be outstanding on the basis that the levy notices: incorrectly calculate interest said to be owed by her; include levies referable to amounts paid by the body corporate for letting agent fees; (iii) Ms Jasen denies that she is obliged to pay the plaintiff any amount with respect to unpaid sinking fund or administrative fund levies on the basis that such liability only accrues once the plaintiff has sent the defendant a levy notice which correctly sets out the amount of levies lawfully owed by her. Ms Jasen says that she has raised with the plaintiff, on numerous occasions, the errors in the levy notices and the plaintiff has failed and/or refused to amend the levy notices; (iv) Ms Jasen denies that she is indebted to the plaintiff for penalty interest; and (v) Ms Jasen denies that she owes Sunseeker any amount with respect to Short Punch & Greatorix legal fees. [26] The issues to be determined have been identified by Counsel for the plaintiff: (a) the calculation and recovery of the penalty interest; (b) the issue relating to letting agent s fees and whether the levies struck on Ms Jasen for the relevant period have included any amount for letting fees; (c) the effect of any incorrect amounts stated in the levy notices on the validity of the notices;
(d) (e) 12 whether the entitlement of a body corporate to recover levies for administrative and sinking funds is enlived upon: the failure to pay the levies by the due date as set out in section 97 of the Accommodation Module; or by issuing a notice that complies with the matters set out in Section 94 of the Accommodation Module; and whether the court has jurisdiction to determine the matters raised by the defendant having regard to the exclusive dispute resolution process provided for in Chapter 6 of BCCMA. LETTING AGENTS FEES [27] Mr Besley testified that he is a director of Latitude 16 Pty Ltd which company owns the management and caretaking rights of the scheme and the letting rights. There are two separate agreements. In relation to the letting agreement no levies are issued by the body corporate. Latitude 16 has separate agreements with seven of the ten lot owners in relation to letting those lots. The levy notices issued on Ms Jasen contain no component in relation to letting agents fees. [28] The AGM minutes of the plaintiff contain a number of budgets, none of which for the relevant period between 1997 and 2008 contain any reference to letting agent fees. [29] It was the evidence of both Mr Besley and Mr Verevis (the manager of the body corporate) that the body corporate does not include, in administrative and sinking fund levies, any amount relating to letting agent fees. 15 EFFECT OF ANY INCORRECT INTEREST AMOUNTS IN LEVY NOTICES ON VALIDITY OF NOTICES [30] Ms Jasen s case is that she is not required to pay the sums claimed in the levy notices because of alleged defects in the calculation of interest in the levy notices. [31] Ms Griffiths, who is employed by Body Corporate Services, testified that, from examining the defendant s statement of account and the levy notices and from her own recollection of the matter, on and from 1 August 2002 Ms Jasen was charged 15 The Act requires that there by a written agreement in relation to the letting rights for the scheme. See, in this regard, document 22 in exhibit 1.
13 penalty interest on all outstanding administrative and sinking levies dating back to 1 January 2000. Ms Jasen was not levied penalty interest on the opening balance at 1 June 1998 (being $9,192.10). [32] The plaintiff claims penalty interest in accordance with the motion passed on 24 May 2002 in the amount of $20,403.93. The evidence of Ms Griffiths and Mr Verevis is that the levy calculations recorded in the AGM minutes were correct, those calculations were then correctly entered into the computer system of Body Corporate Services and then correctly levied on Ms Jasen in the relevant levy notices. It follows then, that Ms Jasen has been put on notice of relevant levy amounts for each relevant period. [33] In Clarke v Japan Machines (Australia) Pty Ltd 16 a notice was issued pursuant to section 84(1) of the Property Law Act 1974 in relation to the non-payment of principal or interest. The notice was held to be invalid. Thomas J (as he then was) stated: Perhaps the most useful statements of criteria relevant to the question of the validity of a notice are those in Fox v Jolley [1916] 1 AC 1 to the effect that the notice ought to enable the recipient to understand with reasonable certainty what he is required to do; and by Griffith CJ in Barnes v Queensland National Bank Ltd (1906) 3 CLR 925 at 935 who said in our opinion a demand is sufficient, if it sufficiently identifies the debt of which payment is demanded, notwithstanding any error or omission in the description. Obviously a notice which materially misleads the recipient as to the nature of the debt demanded will be invalid. 17 [34] In Ex Parte Whelan 18 a notice to remedy breach of covenant was served on the tenant of a property by the landlord, pursuant to section 124 of the Property Law Act. The notice alleged arrears of rent which had been correctly calculated but which contained errors, in two headings, to works which substantiated the figures. Thomas J stated: The present notice amply satisfies the tests formulated by this Court in Clarke v Japan Machines (Australia) Pty Ltd [1984] 1 QdR 16 [1984] QdR 404. 17 Ibid at p 413. 18 [1985] 1 QdR 500.
14 404,413; An error in specification of the appropriate sum will not be the end of the matter. A question of fact and degree is involved in every case. The most relevant factors determining validity will be the extent of the error and the capacity of the notice to give the (mortgagor) a reasonable opportunity to do what he is obliged to do. 19 [35] I accept that a defect in notice is not necessarily fatal to its effect and operation. In the present case, as I have observed, the evidence supports the conclusion that Ms Jasen has been put on notice, in each levy notice, as to the relevant levy amounts for each relevant period. I am satisfied that since the issuing of proceedings Ms Jasen has had proper notice of the correct amount claimed by way of interest. Indeed, she has been provided with further time to make a payment of those amounts of which she is required to make payment. In saying this, I acknowledge that the levy notices themselves included incorrect information as to the calculation of interest. The extent of the errors have not, in my opinion, significantly affected the capacity of the notices to give Ms Jasen a reasonable opportunity to make payment of the amount levied and penalty interest claimed in respect of unpaid levies. [36] Ms Warren is the administration manager in the employ of Body Corporate Services which has responsibility to the body corporate for administration services. In her evidence Ms Warren explained how the levy notices are issued by Body Corporate Services on behalf of the plaintiff and also explained the operation of the computer system which generates the notices, how information is entered into the computer system and importantly identified the source of that information (being resolutions passed at annual general meetings of the plaintiff) and also how information is retained by the Body Corporate Services system. [37] I accept the evidence of the plaintiff s witnesses that the levy calculations as recorded in the minutes of the various annual general meetings were correct, and that those calculations were correctly entered into the computer system of Body Corporate Services. I further accept that these amounts were then correctly levied in the levy notices forwarded to Ms Jasen. REASONABLENESS OF RECOVERY COSTS 19 Ibid at p.505.
15 [38] The levy notices issued to Ms Jasen include legal fees which are claimed by the plaintiff as reasonable recovery costs. These amounts may be recovered by the plaintiff as a debt. 20 The plaintiff may recover such costs as a debt without being required to particularise the details of the costs in levy notices. 21 [39] Mr George, Partner of Short Punch & Greatorix, gave evidence in relation to the legal fees issued to Ms Jasen relating to the recovery of the debt. Mr George testified that the matter had taken a lengthy period of time from the date of issuing proceedings to the trial. This was said to be mainly due to the behaviour of Ms Jasen choosing at times to be self represented, at other ill-defined periods to be legally represented, changing her solicitors, claiming periods of illness, proving difficult to be contacted and bringing about periods of general delay. Mr George referred also to several applications by the plaintiff in an attempt to serve proceedings on Ms Jasen. [40] Mr George testified that he has been the supervising Partner having the carriage of this litigation and that there have been several more junior solicitors from his firm working on the matter from time to time. [41] Of the $41,445.91 claimed by way of recovery fees, Mr George said that some $28,000 of this figure relates to professional fees, some $5000 relates to GST and the remainder relates to sundry outlays and expenses including Counsel s fees. [42] Mr George expressed the opinion that the fees claimed by the plaintiff were reasonable having regard to the difficulties encountered in the matter and having regard to his own experience in matters relating to recovery of levies by bodies corporate. Of course, it remains a matter for the court to determine whether the amount claimed by the plaintiff for recovery fees reasonably incurred is reasonable in the circumstances. However, having regard to the conduct of this litigation by Ms Jasen and the evidence of Mr George I am satisfied that the plaintiff is entitled to recover the sum claimed by way of recovery fees. [43] I accept the evidence of the witnesses called by the plaintiff and also accept that the various documents tendered in exhibits 1 and 2 (being two volumes of court books and documents admitted under s95 of the Evidence Act 1977) accurately set out the matters contained therein. Accordingly, I make the following findings: 20 Body Corporate and Community Management (Accommodation Module) Regulation 1997, s97
16 1. The plaintiff was a body corporate duly constituted pursuant to the Body Corporate and Community Management Act 1997 (Qld). 2. The defendant was at all material times, and is, the owner of Lot 6 in the Community Titles Scheme operated by the Plaintiff. 3. The Plaintiff was entitled to fix, on the basis of its annual budgets, the contribution towards the payment of Body Corporate expenses to be levied on each individual lot owner in the Scheme, including the defendant. 4. During the periods 1997 to 2008, the plaintiff fixed by the passing of an ordinary resolution, and on the basis of its budgets, contributions to be levied on the owner of each lot within the Scheme. 5. Ordinary resolutions were carried at the body corporate annual general meetings during the 1997 to 2008 period in relation to:- (a) The approval of the minutes of the previous years annual general meeting minutes. (b) The approval of statement of accounts for administration and sinking funds. (c) The approval of budgets. (d) The adoption of administration fund and sinking funds and the fixing of contributions for those funds. 6. On a quarterly basis from 1 April 1999 to 04 August 2008, on or before the commencement of each levy period, the Plaintiff in accordance with its budgets struck the relevant contributions to be levied on the defendant in accordance with her contribution for lot 6. THE PENALTY INTEREST 7. On 24 May 2002 the Plaintiff passed an ordinary motion at its annual general meeting stating the following: That a penalty of 2.5% per month on the Administrative and Sinking Fund instalments be payable if not paid by the due date for payment, as per section 96(2) of the Body Corporate and Community Management (Accommodation Module) Regulation 1997. 21 Ibid s 94
17 8. The effect of this motion was that the plaintiff was entitled to levy penalty interest on the defendant for overdue payments of administrative and sinking fund levies from 24 May 2002. 9. The defendant has not sought, through the exclusive dispute resolution process included in the Act, to dispute the motion in relation to penalty interest to be levied on lot owners. 10. From 01 August 2002 the Plaintiff, through its Body Corporate Manager Body Corporate Services Pty Ltd, commenced levying the defendant for penalty interest on administration fund and sinking fund levies that were not paid by the due date. THE LEVY NOTICES 11. Levy notices were sent to the defendant s address recorded on the body corporate s roll. 12. The levy notices were sent to the defendant for each period 6 weeks prior to the due date of each levy, for each relevant period. 13. The defendant received each levy notice at the address on the body corporate roll (being the address on the notices) for each relevant period. 14. The levy notices issued to the defendant contained the following information: (a) the amount of the administrative fund levy; (b) the amount of the sinking fund levy; (c) the due date for payment; (d) whether there was an outstanding balance, and if so, what the outstanding balance was; (e) the amount required to be paid by the defendant to bring her up to date with all payments; (f) the amount of penalty interest; and (g) the amount of any recovery fees. 15. The administration and sinking fund levies did not contain any amount (subsequently passed on the defendant) in relation to letting agent s fees. 16. The defendant was required to pay the relevant administration fund and sinking fund levies by the due date for payment.
18 17. The due date for the payment of each levy period was the first day of the relevant period. 18. From 01 August 2002 the plaintiff, through its Body Corporate Manager Body Corporate Services levied on the defendant penalty interest for outstanding administration fund and sinking fund levies at that date. 19. Between 01 August 2002 and 04 August 2008 the plaintiff continued to levy penalty interest on the defendant. RECOVERY OF UNPAID LEVIES AS A DEBT 20. If the defendant does not pay the administration fund and sinking fund levies, and penalty interest and any recovery fees, by the due date for payment, the plaintiff my recover these amounts as a debt. RECOVERY FEES 21. The plaintiff was entitled to levy recovery fees on the defendant. Between the period September 2003 and August 2008 the plaintiff levied recovery fees on the defendant, being legal fees paid to Short Punch & Greatorix Lawyers for recovery of the administration and sinking fund levies, in addition to penalty interest. AMOUNTS CLAIMED BY THE PLAINTIFF 22. Between 01 April 1999 and 01 June 2008 the plaintiff issued levy notices to the defendant for administration fund and sinking fund levies totalling $34,295.85. 22 23. During 01 April 1999 and 01 June 2008 the defendant made two payments of $825.00 on 01 January 2000 and $215.00 on 20 June 2006. These payments were set off against previous levies owed by the defendant and levied prior to 01 April 1999. 24. During the period 01 July 2008 and 04 August 2008 the plaintiff was entitled to recover penalty interest from the defendant at a rate of 2.5% per 22 Particularised fully in paragraph 9(a) to the Sixth Amended Statement of Claim.
19 month on unpaid administration and sinking fund levies that remained unpaid by their due date. 25. The amounts set out in the Sixth Amended Statement of Claim are the penalty interest amounts sought to be recovered by the plaintiff in the sum of $20,403.93. 23 26. The plaintiff is, pursuant to s47 of the Supreme Court Act entitled to recover interest on overdue levies between the period 01 April 1999 to 01 July 2002 at the rate of 10% per annum. 27. During the period 30 September 2003 and 04 August 2008 the plaintiff was entitled to recover from the defendant as a debt recovery fees reasonably incurred in recovering unpaid levies from the defendant. These recovery fees are constituted by the fees paid by the plaintiff to Short Punch & Greatorix Lawyers. 28. The recovery fees are fees that have been reasonably incurred. 29. In attempting to recover the unpaid levies and penalty interest, the defendant has caused unnecessary delays in the litigation, and further caused a number of substituted service applications to be made by the plaintiff in its attempts to serve documents on her. 30. The requirements of the legislation has caused the plaintiff to amend the pleadings a number of times in order to comply with the time limitations in instituting proceedings for the recovery of unpaid levies. 31. The defendant, through her failure to pay levies and penalty interest, has forced the plaintiff to issue proceedings to recover the debt owed by her to it. [44] There will be judgment for the plaintiff for the following: (a) Levies $34,295.85 Interest on Pre-24 May 2002 levies $7,046.98 Interest on levies imposed after 24 May 2002 by-law $20,403.93 Recovery Costs $41.445.91 SUB-TOTAL $103,192.67 (b) Interest on recovery costs in Claim $3,599.55 (c) On going legal fees in accordance with section 97 of the Module (to be assessed). 23 Paragraph 9(b) of the Sixth Amended Statement of Claim.