Body Corp for Q1 v BERNAL - [2018] FCCA 2897

FEDERAL CIRCUIT COURT OF AUSTRALIA

BODY CORP FOR Q1 v BERNAL

[2018] FCCA 2897

Catchwords:
BANKRUPTCY – Creditor’s Petition – costs.

HOME AND COMMERCIAL UNITS – Body Corporate Fees – proceedings to recover unpaid contributions – recovery costs – test for assessment of.

COSTS – Assessment – recovery for costs in respect of proceedings to recover unpaid body corporate contributions – test on assessment.

Legislation:

Bankruptcy Act 1966
Body Corporate and Community Management (Standard Module) Regulations 2008, reg.145

Federal Circuit Court (Bankruptcy) Rules 2006

Cases cited:

Body Corporate for Sunseeker Apartments CTS 618 v Jasen [2012] QDC 51

O’Mara Constructions Proprietary Limited v Avery (2006) 230 ALR 581

Owners of Strata Plan No 36131 v Dimitriou (2009) 24 NSWLR 370

Applicant:

BODY CORPORATE FOR Q1 CTS 34498

Respondent:

JEMI-PRINCE LOPEZ BERNAL

File Number:

BRG 317 of 2018

Judgment of:

Judge Jarrett

Hearing date:

26 July 2018

Date of Last Submission:

26 July 2018

Delivered at:

Brisbane

Delivered on:

26 July 2018

REPRESENTATION

Counsel for the Applicant:

Mr N.J. Derrington

Solicitors for the Applicant:

Holman Webb Lawyers

Solicitors for the Respondent:

Nelson McKinnon Lawyers

ORDERS

The application be dismissed.
The respondent pay the applicant’s costs of and incidental to the proceeding, to be agreed, or taxed on the footing that the applicant is entitled to all costs of and incidental to the proceeding that have been reasonably incurred, of a reasonable amount.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT BRISBANE

BRG 317 of 2018

BODY CORPORATE FOR Q1 CTS 34498

Applicant

And

JEMI-PRINCE LOPEZ BERNAL

Respondent

REASONS FOR JUDGMENT

The outcome in these proceedings that is in dispute is the form of the costs order that ought to be made. The proceedings take the form of a creditor’s petition. The parties are agreed that it ought to be dismissed. The petitioning creditor seeks an order that the respondent pay the applicant’s costs of and incidental to the proceeding to be agreed or taxed on the footing that the applicant is entitled to all costs of and incidental to the proceeding that have been reasonably incurred of a reasonable amount. The respondent says that the order ought to be that the respondent pay the applicant’s costs of and incidental to the proceeding, I expect perhaps, to be taxed and paid in accordance with the Federal Circuit Court (Bankruptcy) Rules 2006. At its heart the dispute is about, it seems, whether the costs ought to be taxed on what I might call a solicitor and client basis or a party and party basis.
The petitioning creditor has a special place in the scheme of land ownership in this state. It is a body corporate and was in these proceedings seeking to pursue the enforcement of a debt to which it was entitled by reg.145 of the Body Corporate and Community Management (Standard Module) Regulations 2008. By reg.145(1):
(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…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2018] FCCA 2897
Decision Date: 26 July 2018

CaseChat Overview and Summary

In the matter of *Body Corp for Q1 v BERNAL*, heard before Judge Jarrett in the Supreme Court of Queensland, the dispute concerned the recovery of costs associated with proceedings to recover unpaid body corporate contributions. The body corporate sought to recover these costs from the respondent, BERNAL.

The central legal issue before the Court was the appropriate test for assessing the recovery of costs incurred by a body corporate in proceedings to recover unpaid body corporate contributions. This involved determining the scope and nature of costs that could be legitimately claimed in such circumstances.

Judge Jarrett applied the principles governing the recovery of costs in litigation, particularly in the context of statutory schemes for body corporate management. The Court considered the reasonableness and necessity of the costs incurred by the body corporate in pursuing the recovery action. The assessment focused on whether the costs were directly attributable to the recovery of the unpaid contributions and whether they were incurred in a manner that a prudent litigant would adopt. The Court affirmed that while bodies corporate are entitled to recover their costs, these costs must be assessed on a case-by-case basis, demonstrating their direct link to the recovery efforts and their overall reasonableness.

Orders