Gannon v The Owners - Strata Plan No 14403

In Gannon v The Owners - Strata Plan No 14403, the Court of Appeal reviewed the decision of the Local Court which had ordered the payment of unpaid levies and associated recovery costs by the respondent to the appellant. The Local Court had ruled that the appellant, as a body corporate, was entitled to recover unpaid levies as a "special levy" under section 76(4) of the Strata Schemes Management Act 1996 (SSM Act) and had also ordered the respondent to pay the costs of recovery under section 80(1) of the SSM Act. The respondent appealed the decision, arguing that the Local Court erred in upholding the levy and in awarding the recovery expenses.

The primary legal issue before the Court of Appeal was whether the Local Court correctly exercised its discretion under section 76(4) of the SSM Act in ordering the special levy and under section 80(1) of the SSM Act in awarding the recovery costs. The Court of Appeal considered whether the evidence before the Local Court was sufficient to establish that the special levy was necessary and that the costs awarded were reasonable. In its reasoning, the Court of Appeal held that the Local Court did not err in upholding the special levy as it was necessary for the owners corporation to meet an immediate expense that it could not cover from its funds. Additionally, the Court of Appeal found that the evidence was sufficient to allow the Local Court to award the recovery costs, even though it was based on an estimate, as the proper course for determining the exact amount of costs was for the parties to file affidavit evidence and submissions in the Local Court.

Consequently, the Court of Appeal dismissed the appeal and upheld the decision of the Local Court. The orders made by the Local Court regarding the payment of the special levy and the recovery costs were affirmed. The Court of Appeal also noted that the parties were permitted to file further evidence and submissions as to the quantum of the recovery costs in the Local Court.