Jetz Luxury Homes Pty Ltd v The Owners - Strata Plan No. 89564

[2021] NSWCATCD 133

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:	Jetz Luxury Homes Pty Ltd v The Owners - Strata Plan No. 89564 [2021] NSWCATCD 133
Hearing dates:	On the papers
Date of orders:	5 November 2021
Decision date:	05 November 2021
Jurisdiction:	Consumer and Commercial Division
Before:	G Blake AM SC, Senior Member
Decision:	(1)   The proceedings are dismissed.
Catchwords:	LAND LAW — Strata title — Owners corporation — Whether the applicant is liable to the respondent for charges relating to unpaid contributions
Legislation Cited:	Strata Schemes Management Act 2015 (NSW)
Cases Cited:	Nil
Texts Cited:	Nil
Category:	Principal judgment
Parties:	Jetz Luxury Homes Pty Ltd (Applicant) The Owners - Strata Plan No 15599 (Respondent)
Representation:	A Attard (Applicant) N Stephenson (Strata manager) (Respondent)
File Number(s):	SC 21/29521
Publication restriction:	Nil

REASONS FOR DECISION

Overview

1. In these proceedings the applicant, Jetz Luxury Homes Pty Ltd, who is the owners of lots 1 to 3, seeks relief against the respondent, The Owners - Strata Plan No 89564, which is the owners corporation responsible for the management of the strata scheme related to strata plan no 89564 (SP89564) under the Strata Schemes Management Act 2015 (NSW) (SSM Act) in respect of five amounts totalling $2,551.67 it has been charged by the respondent.

2. I have decided to make an order that the proceedings should be dismissed.

The background

3. SP89564, which was registered on 23 August 2016, is comprised by 11 lots and common property, and is a residential development at Leichhardt.

4. At all relevant times Bright & Duggan Pty Ltd (B&D) has been the strata managing agent of the respondent.

5. The registered by-laws for SP89564 relevantly include the following by-law:

“24 Service of Documents on Owner of Lot by Owners Corporation

A document may be served on the owner of a lot by electronic means if the person has given the owners corporation an e-mail address for the service of notices and the document is sent to that address.”

6. On 1 October 2019, the respondent held its annual general meeting (the 1 October 2019 AGM). The minutes of the 1 October 2019 AGM (the 1 October 2019 AGM minutes) relevantly record that the respondent resolved:

1. contributions are to be payable in regular periodic instalments including payments to the administrative fund and the capital works fund on 1 June 2020 and 1 September 2020 (resolution 7);

2. to authorise the strata managing agent to take various actions for the purpose of collecting levy contributions including to issue arrears notices, to obtain legal advice and/or retain legal representation on its behalf, and to commence court proceedings against any lot owner in relation to all matters arising out of the recovery of levy contributions and the recovery of other debts, including penalties, interest, legal and other costs (resolution 8).

7. On 20 April 2020, B&D issued the following three levy notices addressed to the applicant at 3/283-285 Parramatta Road, Leichhardt claiming a total of $1,737.32 which was due on 1 June 2020 (the 20 April 2020 levy notices):

1. in respect of lot 1 claiming $959.33, being $187.50 and $71.83 for the administrative fund and the capital works fund for the period from 1 June 2020 to 31 August 2020 respectively and $700.00 for “Garage Door” on 1 September 2019;

2. in respect of lot 2 claiming $432.22, being $312.50 and $119.72 for the administrative fund and the capital works fund for the period from 1 June 2020 to 31 August 2020 respectively;

3. in respect of lot 3 claiming $432.22, being $250.00 and $95.77 for the administrative fund and the capital works fund for the period from 1 June 2020 to 31 August 2020 respectively.

8. On 28 October 2020, the respondent, which was represented by Grace Lawyers Pty Ltd (Grace), commenced proceedings 20220/00308228 in the Local Court of New South Wales against the applicant (the Local Court proceedings) by filing a statement of claim in which it claimed a total of $2,38.99 as follows:

1. unpaid contributions for lot 1: $2,134.49;

2. interest on pursuant to s 85 of the SSM Act to 26 October 2020 at a rate of 10% and continuing until judgement: $14.70;

3. court filing fees: $105.00;

4. service fees: $69.00;

5. solicitor's fees: $415.80.

9. On 11 November 2020, the applicant commenced proceedings SC 20/47200 in the Tribunal against the respondent (the SC 20/47200 proceedings) by filing a strata schemes application in which it sought the following orders:

“1. A Key be provided to the electrical switch room.

2. A levy of $700 charged to Lot 1, for garage door removed.

3. All fees relating to interest and body corporate costs for charging outstanding levies removed.

4. All fees relating to court costs and solicitors fee removed.”

10. On 23 April 2021, the Tribunal in the SC 20/47200 proceedings:

1. made the following orders (the 23 April 2021 orders):

“1. On or before 7 May 2021 the respondent is to provide the applicant with a key to the switchboard room.

2. On or before 7 May 2021 the respondent is to remove from the applicant's levy account the charge of $700.00 said to relate to a garage, imposed on 1 September 2020,

3. The applicant may apply to have the matter relisted for further hearing in the event that these orders are not complied with.”

2. made the following notation:

“THE TRIBUNAL NOTES the removal of the $700 charge may have further implications for the proceedings in the Local Court brought by the respondent against the applicant and in relation to further charges appearing on the applicant's levy account after April 2020.”

11. On or shortly after 30 June 2021, the respondent issued the statement in respect of lot 1 to the applicant for the period from 1 September 2019 to 30 June 2021 (the 1 September 2019 to 30 June 2021 lot 1 statement) which includes the following six debit entries:

“01/09/19 … Garage Door … 700.00”

“20/08/20 … Arrears Notice Fee … 198.00”

“25/09/20 … Instruct Solicitor… 198.00”

“08/10/20 … Grace#128194 … 60.50”

“02/12/20 … Grace#128171 … 1,187.45”

“02/12/20 … Grace#128180 … 907.72”

The history of the proceedings

12. On 7 July 2021, the applicant commenced proceedings SC 21/29521 against the respondent by filing a renewal of proceedings application in which it stated it is seeking:

1. the renewal of orders 1 and 2 of the 23 April 2021 orders.

2. an order that it does not have to pay $2,551.67 to the respondent.

13. On 26 August 2021, the Tribunal made consent orders for the provision of a key to the switchboard room to the applicant, the filing of evidence and submissions by parties in respect of the remaining five disputed amounts in the 1 September 2019 to 30 June 2021 lot 1 statement, and for the hearing on the papers of the question of whether the applicant is obligated to pay those amounts to the respondent (the 26 August 2021 orders).

The hearing on the papers

14. The respondent has relied on a bundle of documents which was received by the Tribunal on 16 September 2021, I have admitted into evidence (Ex R1), and comprises:

1. the letter dated 8 September 2021 of Nick Stephenson, senior strata manager of B&D (the 8 September 2021 letter);

2. the statement in respect of lot 1 for the period from 1 September 2019 to 31 August 2020;

3. the statement in respect of lot 1 for the period from 1 September 2020 to 31 August 2021;

4. the by-laws of SP89564;

5. the 1 October 2019 AGM minutes;

6. the minutes of the meeting of the strata committee of the respondent held on 2 October 2019;

7. the minutes of the annual general meeting of the respondent held on 19 November 2020;

8. the minutes of the meeting of the strata committee of the respondent held on 19 November 2020;

9. ss 85 and 86 of the SSM Act;

10. the strata manager agency agreement dated 19 November 2020 between the respondent and B&D commencing on 6 January 2021 for a term of 24 months.

15. The applicant has relied on a bundle of documents which was received by the Tribunal on 8 October 2021, I have admitted into evidence (Ex A1), and comprises:

1. the letter dated 6 October 2021 of Alfred Attard;

2. the statement of facts dated 27 August 2021 (the 27 August 2021 statement) and the documents marked together as attachment A:

1. the 1 September 2019 to 30 June 2021 lot 1 statement;

2. the statement in respect of lot 2 for the period from 1 September 2019 to 30 June 2021 issued by the respondent to the applicant;

3. the statement in respect of lot 3 for the period from 1 September 2019 to 30 June 2021 issued by the respondent to the applicant.

The issues

16. The issue that arises for decision is whether the applicant is liable to the respondent for the five disputed amounts in the 1 September 2019 to 30 June 2021 lot 1 statement.

17. Before considering this issue it is convenient to set out the applicable provisions of the SSM Act, and summarise the evidence and submissions of the parties.

18. In the 27 August 2021 statement the applicant has given evidence and made submissions about four other charges and the filing fee for the renewal of proceedings application and sought additional orders that were not referred to by the Tribunal in the 26 August 2021 orders. I have not dealt with these charges, the filing fee and the additional orders because they were not included in these consent orders.

The applicable provisions of the SSM Act

19. Part 5 Division 2 (ss 79-91) contains provisions dealing with contributions by owners. Section 83 deals with the levying of contributions, and relevantly provides:

83 Levying of contributions

(1) An owners corporation levies a contribution required to be paid to the administrative fund or capital works fund by an owner of a lot by giving the owner written notice of the contribution payable.

(2) Contributions levied by an owners corporation must be levied in respect of each lot and are payable (subject to this section and section 82) by the owners in shares proportional to the unit entitlements of their respective lots.

…

20. Section 85 deals with interest, discounts on contributions and payment plans, and relevantly provides:

85 Interest, discounts on contributions and payment plans

(1) A contribution, if not paid when it becomes due and payable, bears until paid simple interest at an annual rate of 10% or, if the regulations provide for another rate, that other rate.

(2) Interest is not payable if the contribution is paid not later than one month after it becomes due and payable.

…

21. Part 14 (ss 256-276A) contains provisions dealing with miscellaneous matters. Section 263 deals with the service of documents by an owners corporation and others, and relevantly provides:

263 Service of documents by owners corporation and others

(1) Application of section This section applies to a notice or other document required or authorised under this Act … to be given by … an owners corporation … or a strata managing agent and is subject to the other provisions of this Act.

(2) Service on occupier of lot A notice or other document may be given to the occupier of a lot—

(a) by post at the address of the lot, or

(b) by leaving it at the address of the lot with a person apparently of or above the age of 16 years.

(3) Service where address is included in strata roll If an address for the service of notices on a person is recorded in the strata roll or has been notified in a tenancy notice, a document may be given to the person—

(a) in the case of a postal address, by post at that address, or

(b) by leaving it at that address with a person apparently of or above the age of 16 years, or

(c) in the case of an email address, by email to an email address specified for the service of documents.

(4) Service on owner of lot A document may be given to the owner of a lot in accordance with subsection (3) or if no address for service is recorded on the strata roll—

(a) personally, or

(b) by post at the address of the lot, or

(c) by leaving it on a part of the lot that is the owner’s place of residence or business (otherwise than on a part of the lot provided for the accommodation of a vehicle or as a storeroom), or

(d) by leaving it in a place provided on the parcel for receiving mail posted to the lot, or

(e) in any other manner authorised by the by-laws for the service of notices on owners.

…

The evidence of the parties

The evidence of the respondent

22. The relevant evidence of the respondent has been included in the background of this decision.

The evidence of the applicant

23. The 27 August 2021 statement relevantly includes the following evidence:

“11. As we know during 2020 there was COVID restrictions in place in Australia and NSW.

i. The Respondent's Strata Agent staff were working from home rather than from their offices.

ii. The applicant had changed its email address May 2020 which it had communicated to the Respondents Chairperson and Strata Manager Mr. Nick Stephenson.

iii. The Respondent's Strata agent (NS) had not passed on the change of the applicants email to the accounts department of Bright-Duggan which were working from home due to COVID restrictions.

12. On receipt of the Statement of Claim referred to in Paragraph 10 above the applicant made contact immediately on November 2, 2020 with the solicitors acting for the Respondent.

The email that was sent was as follows:

"Dear Danal Radman,

We confirm receipt of a Statement of Claim dated filed 28 Oct 20 claiming an amount of $2,134.49 plus interest and court costs. We called your office today but no clerks were available to discuss the claim.

So that we may respond to the claim can you please provide how the costs have been made up please. As we have paid all levies that have been received to date, and we are very surprised considering we have constant discussions with Nick Stephenson and not once in any conversation has it been raised that our company is behind in levies due.

Should your company try to obtain automatic judgement we will use this email as proof we have tried to find out what the costs relate to .......”

13. At 7:29 pm on November 2, 2020 an email was received from the Respondents Strata Manager (NS) which was as follows:

“Hi Alfred

Attached is your ledger card.

Regards”

14. I have recreated a summary table showing charges that were made on the ledger from 20/04/20 -30/09/20 with Units 1, 2 & 3 adjacent to each other below, and I excluded the garage door charge. The were as follows:

Source Document Attachment A

TABLE 1
Date	Type	Details	Lot 1	Lot 2	Lot 3
20/4/20	Admin Fund	1/6/20- 31/8/20	187.50	312.50	250.00
20/4/20	Capital	1/6/20- 31/8/20	71.83	119.72	95.77
30/6/20	Over due Interest	Interest to 30/6/20	2.13	3.55	2.85
6/7/20	Other	Arrears Notice	16.50	16.50	16.50
20/7/20	Admin Fund	1/6/20- 31/8/20	202.50	337.50	270.00
20/7/20	Capital	1/9/20- 30/11/20	70.90	118.16	94.53
23/7/20	Other	Arrears Notice	33.00	33.00	33.00
31/7/20	Over due Interest	Interest to 30/7/20	2.20	3.67	2.93
31/8/20	Over due Interest	Interest to 31/8/20	2.20	3.67	2.93
30/9/20	Over due Interest	Interest to 30/9/20	4.38	7.30	5.85
$593.14	$955.57	$774.36

15. All Levies were being paid up to April 2020 refer Source Document Attachment A – A5.

16. No Levies were being provided to the applicant from May 2020-November 2020 refer paragraph 11 above re email communication.

…

19. I refer back to Paragraph 14 in which it is confirmed that Lots 1,2 & 3 had outstanding levies only for April - Sept 20 Lot 1 $593.14.

…

24. On July 1, 2021, I received an email from the respondent which included a summary of levy charges from 1 /9/19 - 27/04/2021, so that the applicant could confirm that the respondent removed the Garage door charges.

25. The respondent had removed the garage door charges but added further charges for legal expenses which it had not raised at the NCAT claim SC20/47200.”

The submissions of the parties

The submissions of the respondent

24. In the 8 September 2021 letter the respondent makes the following submissions:

“The five (5) charges that Mr Attard is requesting reimbursement for are a result of the non-paid quarterly levies for the following periods:

1 June 2020 - 31 August 2020

1 September 2020- 30 November 2020

These payments were not made and as such recovery was made in accordance with motion 6 of the attached minutes along the sections of the strata schemes management act. The amounts are due and payable by Jetz Luxury Homes.”

The submissions of the applicant

25. In the 27 August 2021 statement the applicant makes the following submissions:

“REASONS FOR REMOVAL OF CHARGES

29. The respondent has not provided a copy of invoices relating to charges made and has only provided copies of minutes of meeting.

30. Arrears Notice Fees

Arrears notice fee of …, $198.00 against Lot 1 … were unwarranted and not consistent with charges that were being made against the other lots owned by the applicant, and further the only reason the applicant Levy were not paid was that the applicant had not been forwarded the Levy Notices refer to paragraph 11 in relation to communication and COVID restriction during 2020.

…

31.1 Instruct Solicitor and Grace Solicitor Fees

Instruct Solicitor of $198.00, Grace Legal $60.50, Grace $1,187.45, Grace $907.72, …. were fees that were unwarranted …. The Respondent only claimed outstanding Levies from Lot 1, in its Local Court Proceedings refer paragraph 10 above.

The only difference between Lot 1 outstanding Levy and Lot 2 & 3 was a dispute about an illegal charge of $700.00 for an alleged repair of a garage door which was in fact a charge for an electrician to turn the common power circuit breaker back on all of which was not the applicant's responsibility as was found by this Tribunal SC20/47200 and Orders issued.

…

ORDER SOUGHT

LEVY CHARGES

That the Tribunal Order that the Respondent remove the charges referred to above ….”

Consideration

26. The applicant has not tendered in evidence the arrears notices dated on or about 7 July 2020 and 23 July 2020, and the three levy notices issued on 20 July 2020 (the 20 July 2020 levy notices). The respondent has not tendered in evidence the arrears notice for which charged a fee of $198.00 on 20 August 2020, its instructions provided to Grace for which charged a fee of $198.00 on 25 September 2020, and the three tax invoices of Grace. The absence of these documents has made the determination of the issue that arises for decision more difficult.

27. I infer from the 27 August 2021 statement at [11] that the 20 April 2020 levy notices and other notices were sent by B&D to the applicant by email. I am satisfied that service of the 20 April 2020 levy notices and other notices by email was permitted by s 163(4)(e) of the SSM Act when read with by-law 24 of SP89564.

28. I also infer that the 20 April 2020 levy notices were received by the applicant on or shortly after 20 April 2020. In these circumstances I am satisfied that the contributions specified in these notices were liable to be paid by the applicant to the respondent pursuant to s 83(1) and (2) of the SSM Act.

29. I draw the following inferences from the 27 August 2021 statement at [11] and [14]:

1. the applicant failed to pay the 20 April 2020 levy notices on 1 June 2020 which was their due date;

2. the applicant’s failure to pay the 20 April 2020 levy notices on 1 June 2020 was not occasioned by its change of email address in May 2020;

3. interest accrued on the outstanding balance of the 20 April 2020 levy notices on 30 June 2020;

4. the arrears notice dated on or about 7 July 2020 related to the outstanding balance of the 20 April 2020 levy notices and interest accrued as at 30 June 2020 in respect of lots 1, 2 and 3. This arrears notice was not received by the applicant due to its change of email address in May 2020;

5. the 20 July 2020 levy notices were not received by the applicant due to its change of email address in May 2020;

6. the arrears notice dated on or about 23 July 2020 related to the outstanding balance of the 20 April 2020 levy notices and interest accrued as at 30 June 2020 in respect of lots 1, 2 and 3. This arrears notice was not received by the applicant due to its change of email address in May 2020;

1. interest accrued on the outstanding balance of the 20 April 2020 levy notices on 31 July 2020;

2. interest accrued on the outstanding balance of the 20 April 2020 levy notices on 31 August 2020;

3. the applicant failed to pay the 20 July 2020 levy notices on 1 September 2020 which was their due date;

4. interest accrued on the outstanding balance of the 20 April 2020 levy notices and the 20 July 2020 levy notices on 30 September 2020.

30. I am satisfied that interest accrued and became payable on the outstanding balance of the 20 April 2020 levy notices on 30 June 2020, 31 July 2020, 31 August 2020 and 30 September 2020 pursuant to s 85(1) and (2) of the SSM Act.

31. I infer that the arrears notice for which charged a fee of $198.00 on 20 August 2020 was the arrears notice dated on or about 23 July 2020. I am satisfied that B&D was entitled pursuant to resolution 8 of the 1 October 2019 AGM minutes to issue this renewal notice. This is no evidence that B&D was not entitled to charge the applicant $198.00 for the issue of this notice. The fact that this notice was not received by the applicant does not mean that the respondent was not entitled to charge for its issue. It follows that the applicant’s claim should be dismissed so far as this charge.

32. I infer that the instructions by B&D to Grace on 25 September 2020 related to the outstanding balance of the 20 April 2020 levy notices and the 20 July 2020 levy notices so far as they related to lot 1. Even though the applicant was not obliged to pay the 20 July 2020 levy notices because it had not received them, B&B was authorised pursuant to resolution 8 of the 1 October 2019 AGM minutes to instruct solicitors to take steps to recover the outstanding balance of the 20 April 2020 levy notices. This is no evidence that B&D was not entitled to charge the applicant $198.00 for the provision of instructions to Grace. It follows that the applicant’s claim should be dismissed so far as this charge.

33. I infer that the three disputed charges by Grace relate to the costs on acting on behalf of the respondent in the Local Court proceedings. I am satisfied that the applicant was liable to the respondent for the outstanding balance of the 20 April 2020 levy notices and accrued interest, and accordingly the applicant is liable to pay the reasonable fees charged by Grace. This is no evidence that the fees charged by Grace were unreasonable. It follows that the applicant’s claim should be dismissed so far as these charges.

Order

34. I make the following order:

1. the proceedings are dismissed.

**********

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.

Registrar

Decision last updated: 14 February 2022