| JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA LOCATION : PERTH CITATION : GOLOTA -v- THE OWNERS OF PARKHILL STRATA PLAN 10528 [2014] WADC 68 CORAM : REGISTRAR KINGSLEY HEARD : 8 APRIL 2014 DELIVERED : 20 MAY 2014 FILE NO/S : CIV 3494 of 2013 BETWEEN : TATIANA GOLOTA Plaintiff
AND
THE OWNERS OF PARKHILL STRATA PLAN 10528
Defendant
Catchwords: Practice - Application to transfer proceedings from Magistrates Court to District Court - Turns on own facts Legislation: Nil Result: Application dismissed
Representation: Counsel:
Plaintiff : Mr S Singh
Defendant : Mr H M O'Sullivan
Solicitors:
Plaintiff : Magister Legal
Defendant : SRB Legal
Case(s) referred to in judgment(s):
British Anzani (Felixstowe) Ltd v International Marine Management (UK) Ltd [1979] 2 All ER 1063
Enviro Constructions Australia Pty Ltd v Mandurah Homes Pty Ltd [2013] WADC 163
Forrester v Clarke [2012] WASC 3
Maersk Australia Pty Ltd v Rebelo Nominees Pty Ltd [2008] WADC 81
1 REGISTRAR KINGSLEY: The plaintiff (Golota) has brought an application pursuant to s 39 Magistrates Court (Civil Proceedings) Act 2004 (MCCP Act) seeking an order that general procedure claim PER/GCLM/12094/2012 in which the defendant (Parkhill) is the claimant and Golota is the defendant be transferred to the District Court of Western Australia.
2 Section 39(4) MCCP Act states that a superior court may make an order that all or part of a case be transferred to the superior court if the court is satisfied that all or part of the case is within its jurisdiction and; Background 3 Parkhill is a strata company incorporated pursuant to s 31(1) Strata Titles Act1985 (STA). Parkhill was incorporated for the benefit of the owners of Strata Plan 10528. One of those owners is Golota. 4 Parkhill brought a general procedure claim in July 2012 claiming the sum of $33,367 being contributions levied by Parkhill on Golota. Parkhill also sought interest on the outstanding contributions. 5 The summary of facts on the general procedure claim show that pursuant to s 36(1) STA, Parkhill had the obligation to, establish a fund for administrative expenses of the strata company, determine from time to time the amounts to be raised, and raise those amounts by levy of contributions on the proprietors of lots. Under s 36(2) STA, Parkhill had discretion to establish a reserve fund to meet contingent expenses of the strata company. At annual general meetings held in 2009, 2010 and 2011, Parkhill resolved to raise amounts for the purposes of the administrative fund and for the purposes of a reserve fund. Parkhill alleges that, despite demand, Golota has failed to pay the overdue contributions and interest on the contributions. 6 On 29 October 2013 Golota filed a writ of summons in the District Court claiming damages for the ingress of water into her strata unit in or about August 2011. Golota alleges breaches of the STA, alternatively breaches of statutory duty under the Occupier's Liability Act 1985, or alternatively damages in negligence. On 4 November 2013, in the Magistrates Court, Golota filed a statement of defence to Parkhill's general procedure claim, and filed a counterclaim in the Magistrates Court setting out, in effect, the same claim as had already been commenced in the District Court. However in the Magistrates Court the counterclaim of Golota is quantified at $258,000. 7 On the face of it the counterclaim by Golota in the Magistrates Court is outside the Magistrates Court's jurisdiction. However s 39(4) MCCP Act provides that there remains a discretion to transfer an action to the superior court. For the following reasons I am not satisfied that I should exercise my discretion to transfer the Magistrates Court's case to the District Court. 8 The Magistrates Court's claim is one by Parkhill, as a strata company, for unpaid contributions levied in relation to an administration fund and reserve fund of the strata company. That claim is a simple claim for the recovery of a debt, the amount of which is within the jurisdiction of the Magistrates Court. In the Magistrates Court, Golota merely denies the accuracy of the amounts levied and consequently the interest thereon. 9 However Golota then says she is entitled to a set off against the claim of Parkhill and that the set off exceeds Parkhill's claim, and jurisdiction of the Magistrates Court. Golota, in her defence, also says she has commenced proceedings in the District Court for this part of the claim. 10 Thus Golota's defence simply puts Parkhill to proof of its claim. It would appear there is no denial that some monies are owing, but Parkhill is required to prove those amounts. That issue may well be proved to the satisfaction of a magistrate on a summary judgment application. If proved Parkhill can obtain judgment against Golota to the extent that the magistrate finds as to the quantum of unpaid levies. 11 This does not mean that Golota must immediately pay that judgment sum as there are provisions under the MCCP Act (s 9(6)(e)) and the Civil Judgments Enforcement Act2004 to stay the execution of the judgment obtained by Parkhill. 12 Golota claims she is entitled to a set off against Parkhill's claim. Notwithstanding the quantification in the counterclaim lodged in the Magistrates Court, it is clear Golota's claim, both in this court and the Magistrates Court, is a claim for unliquidated damages. 13 The question is whether Golota's counterclaim in the Magistrates Court constitutes an equitable set off. It is still the law that, for there to be an equitable set off, the set off must impeach the title of the legal demand (Maersk Australia Pty Ltd v Rebelo Nominees Pty Ltd [2008] WADC 81, Forrester v Clarke [2012] WASC 3). 14 In support of the submission that there is an equitable set off, Golota's counsel cited British Anzani (Felixstowe) Ltd v International Marine Management (UK) Ltd [1979] 2 All ER 1063 in support. In the British Anzani case the plaintiff landlord leased to the defendant tenant a warehouse and the lease contained no covenant by the landlord to repair. The warehouse became unusable and the defendant tenant claimed damages and refused to pay rent. 15 The plaintiff landlord issued a writ for possession and unpaid rent. The defendant claimed that the rental owing was subject to a set off with respect to the counterclaim for damages. Golota's counsel relies on the argument in British Anzani that there could be a set off against a landlord's claim, for rent as equity had never refused to interfere to protect a tenant whose landlord was bringing proceedings based on non-payment of rent, if the tenant had a bona fide cross-claim for unliquidated damages against the landlord. However to rely on the doctrine of equitable set off the defendant tenant had to show that their counterclaim was so directly or closely connected with the plaintiff landlord's claim as to go to the foundation of that claim, in other words the defendant tenant's claim had to impeach the claim of the plaintiff landlord. 16 In this matter the claim by Parkhill in the Magistrates Court is a claim under the STA for unpaid contributions to benefit the unit holders of the strata company as a whole, not just Golota. Parkhill's claim is a statutory levy pursuant to the STA. That levy is not for the benefit of a single unit holder. Accordingly in my opinion there is no such direct or close connection of the set off to Parkhill's claim so as to go to the foundation of Parkhill's claim or to impeach that claim. In my opinion there is no equitable set off in relation to Golota's claim in the Magistrates Court. 17 Finally in essence there is nothing to transfer. A claim already exists by Golota in the District Court. Parkhill's counsel categorised the Magistrates Court's counterclaim as an abuse of process, submitting that the real purpose of the counterclaim is to delay Parkhill's claim with respect to unpaid strata levies. 18 I am not prepared to find that Golota's counterclaim is an abuse of process. Section 3 MCCP Act defines a claim, which includes a counterclaim (s 9(1) MCCP Act), as a claim made to the Magistrates Court. In Enviro Constructions Australia Pty Ltd v Mandurah Homes Pty Ltd [2013] WADC 163 I was of the opinion that the word' made' in s 3 MCCP Act does not import any concept of a future contemplated claim. Thus, when considering applications pursuant to s 39(4) MCCP Act, only claims that are presently lodged in the Magistrates Court may be considered. In my opinion it was necessary for Golota to make the claim notwithstanding that the District Court proceedings had been already instituted so that there was the jurisdictional basis to bring a claim under s 39. 19 In the end I am of the opinion that this is not a matter upon which I should exercise my discretion. The claim by Parkhill in the Magistrates Court is a simple debt recovery claim and it is amenable to the summary processes available in the Magistrates Court. Golota has an existing action in the District Court. In my opinion the counterclaim in the Magistrates Court is not an equitable set off as to Parkhill's claim. Should Parkhill obtain judgment in the Magistrates Court there are remedies available to Golota as to enforcement by Parkhill. Accordingly the application by Golota is refused. 20 Having heard the counsel on the issue of costs on the application, the order for costs is the plaintiff to pay the defendant's costs, including any costs reserved, to be taxed in any event.
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