Owners Corporation v Buckley
[2024] VMC 12
•3 October 2024
IN THE MAGISTRATES’ COURT OF VICTORIA
AT MELBOURNE
Case No. MAG-CI-230180998
| OWNERS CORPORATION PLAN NO. 000675 | Plaintiff |
| v | |
| HELEN JOY BUCKLEY | Defendant |
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MAGISTRATE: | Magistrate T. W. GREENWAY |
WHERE HELD: | Melbourne Magistrates’ Court |
DATE OF HEARING: | 24 September 2024 |
DATE OF DECISION: | 3 October 2024 |
CASE MAY BE CITED AS: | Owners Corporation v Buckley |
MEDIUM NEUTRAL CITATION: | [2024] VMC 12 |
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STATUTORY INTERPRETATION – Owners Corporation Act 2006 (Vic) – Final fee notice and s 32 – Jurisdiction of the Magistrates’ Court – Operation of ss 30(1) and (2) – Part 11 and Jurisdiction of the Victorian Administrative Tribunal.
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APPEARANCES: | COUNSEL | SOLICITORS |
| For the Plaintiff | Mr. O. Chan | LFS Lawyers |
| For the Respondent | Ms. Buckley | Self-represented |
HIS HONOUR:
Introduction
In this proceeding, the plaintiff is an owners corporation[1] managing the property situate at 13 The Esplanade, St Kilda, Victoria (Property). The defendant, Ms Buckley (Buckley), is the registered proprietor of Lot 63, otherwise known as Flat 63 in the Property.
[1] created by registered plan of subdivision 000675 and s 28 of the Subdivision Act 1988.
The Owners Corporation claims[2] unpaid fees and levies against Buckley by reason of a final fee notice[3] made under s 32 of the Owners Corporation Act 2006 (Act). In July 2024, Buckley settled the unpaid amounts. Consequently, the Owners Corporation seeks its costs of the proceeding.
[2] by complaint dated 1 August 2023.
[3] dated 15 June 2023.
Buckley disputes any liability for costs, contending that proceedings for the “recovery of money owed to an owners corporation by a lot owner” must be brought before the Victorian Civil and Administrative Tribunal. To support this conclusion, Buckley relies on an interpretation of the Act, whereby s 30(1) must be read subject to s 30(2).
The Owners Corporation submits that this Court has jurisdiction, either by operation of s 30 of the Act, or s 100 of the Magistrates’ Court Act 1989.
As the dispute involves an issue of statutory construction, it is necessary to set out the applicable provisions of the Act and the brief facts of the dispute.
Facts and Legislative Framework
The main purposes of the Act are:
(a) to provide for the management, powers and functions of owners corporations; and
(b) to provide for appropriate mechanisms for the resolution of disputes relating to owners corporations; and
(c) to amend the Subdivision Act 1988 in relation to the creation of owners corporations.[4]
[4]section 1 of the Act.
One of the key responsibilities of an owners corporation is the management and administration of common property. This encompasses tasks such as providing maintenance and undertaking repairs. To fulfill these duties, an owners corporation may levy annual fees, typically calculated based on the lot liability of individual lot owners. In turn, lot owners are responsible for paying any outstanding fees or charges associated with their specific lot.[5]
[5] section 28 of the Act.
At a general meeting in September 2022, the Owners Corporation resolved to strike levies, fees and charges in respect of the Property.
The Act expressly states that an owners corporation may commence legal proceedings to recover outstanding monies. Section 30 of the Act provides as follows:
(1) Subject to subsection (2), an owners corporation may recover any money owed to the owners corporation in any court of competent jurisdiction as a debt due to the owners corporation.
(2) Sections 31 and 32 and Division 1 of Part 11 apply to the recovery of money owed to the owners corporation by a lot owner.
The power of an owners corporation to commence legal proceedings is outlined in s 18 of the Act:
(1) Subject to subsection (2), an owners corporation must not commence any legal proceeding unless it is authorised by special resolution to do so.
(2) If a matter is within the civil jurisdictional limit of the Magistrates’ Court and an owners corporation is authorised to do so by ordinary resolution, the owners corporation may commence any legal proceeding in –
a. the Magistrates’ Court; or
b. VCAT or any other tribunal; or
c. a court of another State or a Territory that corresponds to the Magistrates’ Court.
The definition of a ‘fee notice’ is provided by s 31 of the Act:
(1) The owners corporation must give notice to a lot owner in the approved form of any fees and charges due and payable by the lot owner to the owners corporation (the fee notice).
(2) The fee notice must –
a. state that the lot owner has an obligation to pay the fees and charges within 28 days after the date of the notice; and
b. (if applicable) state that interest at the rate specified in the notice will be payable in respect of any overdue fees and charges; and
c. Includes details of the dispute resolution process that applies under the rules in respect of disputed fees and charges.
Section 32 of the Act then deals with final notices as follows:
(1) If the money owing is not paid within 28 after the date of the fee notice, the owners corporation may give a final notice in the approved form to the lot owner.
(2) The final notice must –
a. state that the lot owner has an obligation to pay the overdue fees and charges and interest immediately; and
b. (if applicable) state –
i. the interest that is payable in respect of the overdue fees and charges at the date of the final notice; and
ii. the amount of interest that will accrue daily until the payment of the overdue fees and charges; and
c. state that the owners corporation intends to take action under Part 11 to recover the amount due if the overdue fees and charges and interest owing are not paid within 28 days after the date the final notice is given.
Note
Section 163(2) provides that an application to VCAT by the owners corporation for an order requiring a lot owner to pay an amount payable by the lot owner to the owners corporation can only be made if the amount is not paid within 28 days after the final notice is given under section 32.
On 15 June 2023, the Owners Corporation sent a Final Fee Notice to Buckley. The Final Fee Notice said the following:
Notice is hereby given by the Owners Corporation Plan of Subdivision 675 pursuant to Section 30 & 32 of The Owners Corporations Act 2006, that the following overdue fees, charges and interest are due and payable immediately. If payment is not received within 28 days of the date of this Notice the Owners Corporation intends to take action under Part 11 of the Owners Corporations Act 2006 to recover the amount due. This includes applying to the Victorian Civil and Administrative Tribunal (VCAT) or a court of competent jurisdiction seeking an order requiring you to pay. [emphasis in original]
The Final Fee Notice contained a table of outstanding fees and charges totalling $4,685.37.
Part 11 Division 1 of the Act is entitled “Applications to VCAT – Division 1 – Owners corporation disputes”. Section 162 of the Act relevantly provides:
162 VCAT may hear and determine disputes
VCAT may hear and determine a dispute or other matter arising under this Act or the regulations or the rules of an owners corporation that affects an owners corporation (an owners corporation dispute) including a dispute or matter relating to –
(a) …
(b) an alleged breach by a lot owner or an occupier of a lot of an obligation imposed on that person by this Act or the regulations or the rules of the owners corporation; or
Section 163 of the Act outlines the parties granted standing to apply to VCAT for the resolution of an owners corporation dispute, including a lot owner and the owners corporation. Notably, s 163(2) of the Act specifies a time period that must elapse before an owners corporation can initiate recovery proceedings against a lot owner. It states:
An application to VCAT by the owners corporation for an order requiring a lot owner to pay an amount payable by the lot owner to the owners corporation can only be made if the amount is not paid within 28 days after the final notice is given under section 32.
Relevant to this dispute, VCAT may make any order it considers fair, including:
(a) …
(b) …
(c) an order for the payment of a sum of money –
(i) found to be owing by one party to another party;
(ii) by way of damages (including exemplary damages and damages in the nature of interest):
(iii) by way of restitution; …[6]
[6] s 165 of the Act.
VCAT’s power to award costs under section 109 of the Victorian Civil and Administrative Tribunal Act 1988 is unaffected.[7]
[7] s 165(4) of the Act.
The factors that the Tribunal must take into account when making an order are set out in section 167 of the Act:
(a) the conduct of the parties;
(b) an act or omission or proposed act or omission by a party;
(c) the impact of a resolution or proposed resolution on the lot owners as a whole;
(d) whether a resolution or proposed resolution is oppressive to, unfairly prejudicial to or unfairly discriminates against, a lot owner or lot owners;
(e) any other matter VCAT thinks relevant.
On 1 August 2023, the Owners Corporation filed its Complaint against Buckley claiming the sum of $4,475.58, interest, and costs. Following a re-hearing application, Buckley filed her defence in which she stated:
The Court does not have jurisdiction in the matter. Section 30(2) and section 32 of the Owners Corporations Act 2006 are conclusive.
Buckley’s Submissions
In relation to jurisdiction, Buckley argued that the jurisdiction under s 30(1) of the Act is general, while s 30(2) of the Act is more specific. When an owners corporation claims monies owed by a lot owner, s 30(2) of the Act explicitly provides that ss 31 and 32, along with Division 1 of Part 11, apply.
Buckley further referred to the operation of s 32(2)(c) of the Act, submitting that a final notice must state that the owners corporation intends to take action under Part 11 to recover the amount due.
Since Division 1 of Part 11 explicitly refers to VCAT, it is evident that the Act intended for owners corporation disputes concerning fees to be heard by VCAT as a specialist tribunal. Additionally, any fee recovery proceedings in VCAT would be subject to the costs presumption outlined in s 109 of the Victorian Civil and Administrative Tribunal Act 1998.
Submissions on behalf of the Owners Corporation
The Owners Corporation acknowledged that disputes may be heard by the VCAT, but this was not an exclusive jurisdiction. The proper construction was that s 30(1) of the Act permits an owners corporation to bring a proceeding for the recovery of debts in any court of competent jurisdiction. Section 30(2) of the Act only imposes its specific requirement where the proceeding is brought in the VCAT.
Further, it was argued that, If Parliament intended VCAT to have exclusive jurisdiction over fee recovery matters, it would not have first stated in s 30(1) of the Act that an owners corporation may initiate proceedings in any court, only to then limit that jurisdiction solely to VCAT under s 30(2) of the Act. The structure of the provision indicates that VCAT is not the exclusive forum.
In addition, s 100(1)(a) of the Magistrates’ Court Act 1989 confers jurisdiction to hear and determine any cause of action for a debt, if the amount claimed is within the jurisdictional limit.
Applicable Legal Principles
The starting point for determining the meaning of a statutory provision is its text, considered in light of its context and purpose.[8]
[8]SZTAL v Minister for Immigration and Border Protection [2017] HCA 34; (2017) 262 CLR 362 at [14].
The primary aim of statutory interpretation is to construe the relevant provision(s) in a way that aligns with both the language and purpose of the statute as a whole.[9]
[9] Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at [69] (McHugh, Gummow, Kirby, and Hayne JJ).
Where the words of a statute are plain and unambiguous, they should be given their ordinary and grammatical meaning.[10]
[10] Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297; [1981] HCA 26
The hierarchy of provisions may also be important. For example, the phrase "subject to" is a standard means of establishing which provisions are dominant and which are subservient. The subservient provisions, therefore, operate only to the extent that they are not inconsistent with the dominant provisions.[11]
[11] Medical Council of New South Wales v Lee [2017] NSWCA 282 at [87] (Sackville AJA) citing Newcrest Mining (WA) Ltd v Commonwealth (1997) 190 CLR 513 at 580 (McHugh J).
A further relevant principle is that when a statute confers a power subject to qualifications and conditions, general expressions in the statute are to be read as subject to those qualifications and conditions.[12]
[12]Adrenaline Pty Ltd v Bathurst Regional Council (2015) NSWLR 207 at [50].
The maxim generalia specialibus non derogant (general provisions do not override specific ones) applies in situations where the application of a general provision would undermine or nullify a specific provision. While this principle is typically applied to provisions within the same statute, it may also be applied by analogy to provisions in separate statutes.[13]
[13] Statutory Interpretation in Australia 10ed 2024, [4.70] and [7.26] citing Deputy Commissioner of Taxation v Dick (2007) 242 ALR 152, [121].
Finally, where two statutes are the product of the one legislature, there is a general presumption that there is no contradiction between them.[14]
[14] Ferdinands v Commissioner for Public Employment (2006) 225 CLR 130 at [48] (Gummow and Hayne JJ), citing Saraswati v R (1991) 172 CLR 1 at 17.
For completeness, I note no assistance is able to be derived from either the explanatory memorandum or the second reading speech.
Determination as to jurisdiction
Applying these principles, the interpretation advanced by Buckley should be preferred.
First, I consider the meaning of s 30 is plain and unambiguous. By s 30(1), it confers a general jurisdiction on the Magistrates’ Court to hear proceedings where ‘any monies are owed to an owners corporation’. This would include any general commercial dispute involving an owners corporation and a third-party debtor. However, where a proceeding relates to the ‘recovery of money owed to the owners corporation by a lot owner’, the conditions in s 30(2) apply.
An overview of the s 30(2) conditions was set out by Senior Member Vassie in Owners Corporation No 1 PS507443P v Iglesias:
Owners corporation fees, and interest upon them, become present debts upon which the owners corporation may sue once the following sequence of events occurs:
(a) The owners corporation sets annual fees. If they are set in accordance with lot liability, as the Owners Corporations Act requires, they are validly set and become due;
(b) The owners corporation gives a lot owner a fee notice that complies with the Act. Once it does, the fee becomes payable within 28 days after the date of the notice. The notice may state that interest at a specified rate will be payable in respect of any overdue fees;
(c) The owners corporation gives the lot owner a final fee notice that complies with the Act. Once it does, any interest to the date of the notice properly stated to be payable becomes due and continues to accrue;
(d) An elapse of 28 days after the giving of the final fee notice, without there having been payment of the overdue fees and interest, gives rise to a right in the owners corporation to commence proceedings in VCAT under Part 11 of the Act to recover the fees and the interest. [15]
[15] [2015] VCAT 558 at [16].
The effect of s 32(2)(c) and s 163(2) is that fee recovery proceedings against lot owners may only be commenced in VCAT if the amount remains outstanding 28 days after the notice has been given. As Division 1 of Part 11 refers exclusively to VCAT and the orders it may make, it simply cannot follow that the Magistrates' Court has concurrent jurisdiction.
To my mind, that submission is only open if the phrase ‘subject to sub-section (2)’ in s 30(2) is disregarded contrary to principles of statutory interpretation set out previously. Moreover, it is not that s 30(2) imposes requirements when the proceeding is brought before VCAT. Rather, when the Owners Corporation is recovering money owed by a lot owner (as opposed to any other debtor) s 31, 32, and Division 1 of Part 11 apply.
Accordingly, I must reject the Owners Corporation’s submission that s 30(2), only imposes specific requirements when the proceeding is brought before VCAT.
I now turn to the alternate reliance on s 100(1)(c) of the Magistrates’ Court Act. That does not take the matter further. I consider the jurisdiction conferred by this section is broadly equivalent to s 30(1) of the Act. Applying the ‘specific over general’ rule of construction, s 30(2) should prevail of both s 30(1) and s 100(1)(c) of the Magistrates’ Court Act.
For these reasons, I conclude that the Magistrates’ Court does not have jurisdiction where an owners corporation relies upon a final fee notice to recover a debt owing by a lot owner to the owners corporation.
MAGISTRATE GREENWAY
3 October 2024
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