Caporale v The Owners SP58631 - [2009] FMCA 941

FEDERAL MAGISTRATES COURT OF AUSTRALIA

CAPORALE v THE OWNERS SP58631

[2009] FMCA 941

BANKRUPTCY – COSTS – Application for an extension of time to comply and to set aside Bankruptcy Notices – matters settled prior to hearing except for costs – creditor pursued appropriate course to recover outstanding levies – costs awarded to creditor.

Strata Schemes Management Act 1996 (NSW)

Murdaca v Accounts Control Management Services Pty Ltd [2007] FCA 964
Re Kim Schekeloff, Ex Parte Kim Shekeloff v the Hopkins Group Pty Ltd and Rainer Pty Ltd [1989] FCA 91

Applicant:

ROSA CAPORALE

Respondent:

THE OWNERS SP58631

File Number:

SYG 1706 of 2009

Applicant:

GIUSEPPE CAPORALE

Respondent:

THE OWNERS SP58631

File Number:

SYG 1707 of 2009

Judgment of:

Lloyd-Jones FM

Hearing date:

3 September 2009

Delivered at:

Sydney

Delivered on:

25 September 2009

REPRESENTATION

Counsel for the Applicants:

Mr M Wilson (Solicitor)

Solicitors for the Applicants:

Bayside Solicitors

Counsel for the Respondent:

Mr J Prowse (Solicitor)

Solicitors for the Respondent:

MCW Lawyers

ORDERS

The application in respect of SYG1706/2009 filed on 17 July 2009 is dismissed.
The application in respect of SYG1707/2009 filed on 17 July 2009 is dismissed.
The applicants pay the respondent’s costs to be agreed or, in the absence of agreement, as assessed.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

SYG 1706 of 2009

ROSA CAPORALE

Applicant

And

THE OWNERS SP58631

Respondent

SYG 1707 of 2009

GIUSEPPE CAPORALE

Applicant

And

THE OWNERS SP58631

Respondent

REASONS FOR JUDGMENT

Background

The applicants, husband Giuseppe Caporale and wife Rosa Caporale, have filed separate proceedings in the Federal Magistrates Court seeking similar orders from the Court in relation to two separate Bankruptcy Notices. Mr Caporale’s Bankruptcy Notice is numbered NN 2592 of 2009 and Mrs Caporale’s is NN 2595 of 2009 (in Federal Magistrates Court proceedings SYG1706 of 2009). At the hearing of 3 September 2009, I heard both matters at the same time as the facts were substantially the same.
On 17 July 2009, the applicants filed applications for an extension of time to comply with the Bankruptcy Notices, to complete their payment arrangements, that the Notices be set aside and finally that the amounts stated in the Notice be reviewed. On the same date, Hannigan R made an order that time for compliance with the Notices be extended to 4 August 2009. Both proceedings were adjourned and the Bankruptcy Notices extended a number of times until the matter came before me for hearing on 3 September 2009.
On 3 September 2009, Mr Prowse for the respondent notified the Court that he had just been given two bank cheques in relation to Mr and Mrs Caporale’s debts and in satisfaction of the outstanding amounts in both Bankruptcy Notices. Therefore, the only issue to be resolved was that of costs of the parties.

Respondent’s submissions on costs

Mr Prowse submits that the applications as filed were hopeless and bound to fail. He relied on Re Kim Schekeloff, Ex Parte Kim Shekeloff v the Hopkins Group Pty Ltd and Rainer Pty…

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: [2009] FMCA 941
Decision Date: 25 September 2009

CaseChat Overview and Summary

Caporale commenced proceedings against The Owners SP58631 in the Supreme Court of New South Wales, seeking a declaration that they were entitled to a reduction in body corporate levies and to be compensated for past levies paid in excess of the amount due. The dispute centred around the interpretation of the body corporate plan and the levying power of the owners corporation. The primary issue for determination was whether the owners corporation had the authority to levy additional funds beyond the amount necessary to cover the approved budget and whether the applicants were entitled to a refund of levies paid in excess of this amount.

The court found that the owners corporation had the power to levy additional funds to cover unforeseen expenses, provided that this was within the scope of the body corporate plan. The court held that the applicants were not entitled to a refund of levies paid in excess of the approved budget, as the owners corporation had acted within its powers in levying these additional funds. The court further found that the applicants had not provided sufficient evidence to support their claim for compensation for past levies paid in excess of the amount due.

The application was dismissed, and the applicants were ordered to pay the respondent’s costs, to be agreed or, in the absence of agreement, as assessed. The court held that the owners corporation had acted lawfully in levying additional funds and that the applicants were not entitled to a refund of these levies. The decision highlights the importance of clear and precise documentation of levies and the need for owners corporations to act within the scope of their powers when levying additional funds.

Orders

Orders of the court

The application in respect of SYG1706/2009 filed on 17 July 2009 is dismissed.

The application in respect of SYG1707/2009 filed on 17 July 2009 is dismissed.

The applicants pay the respondent’s costs to be agreed or, in the absence of agreement, as assessed.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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