Owners Corporation v Jones
[2025] VMC 10
•8 July 2025
IN THE MAGISTRATES’ COURT OF VICTORIA
AT MELBOURNE
CIVIL DIVISION
Case No. MAG-CI-230231448
| OWNERS CORPORATION PLAN NO. RP013206 V LEONIE MICHELLE JONES | Plaintiff / Respondent Defendant / Applicant |
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MAGISTRATE: | Magistrate M A Hoare |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 19 May 2025 |
DATE OF DECISION: | 8 July 2025 |
CASE MAY BE CITED AS: | Owners Corporation v Jones |
MEDIUM NEUTRAL CITATION: |
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APPLICATION – Re-hearing – ‘Recovery of money owed to the owners corporation by a lot owner’ – Jurisdiction of the Magistrates’ Court – Statutory interpretation Owners Corporations Act 2006 (Vic) ss 1, 18, 30, 31, 32, Part 11, Division 1, Magistrates’ Court Act 1989 (Vic) ss 100(1), 110.
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APPEARANCES: | COUNSEL | SOLICITORS |
| For the Plaintiff / Respondent | Mr L Magowan | Tisher Liner FC Law |
| For the Defendant / Applicant | Mr N Jones | Law Ink Pty Ltd |
HER HONOUR:
INTRODUCTION
Ms Leonie Jones, the applicant / defendant (Jones), makes application seeking to set aside a previous default judgment of the Court and for re-hearing.
Jones, is a lot owner within the meaning of the Owners Corporations Act 2006 (Vic) (OCA) of a lot on registered Plan of Subdivision No. RP013206. The respondent / plaintiff is the Owners Corporation (OC) of the Plan, an OC within the meaning of the OCA.[1]
[1]Owners Corporations Act 2006 (Vic) (‘OCA’) pt 1, s 3.
In the application, Jones raised a matter of broader importance to OCs and lot owners related to jurisdiction of the Magistrates’ Court. The same jurisdiction question arises in a number of matters presently before the Court.
In Owners Corporation Plan No. 000675 v Buckley,[2] this Court was asked to decide whether the Magistrates’ Court has jurisdiction to hear and determine claims by OCs recover money owed to the OC by a lot owner upon a final fee notice under the OCA.
[2] [2024] VMC 12 (‘Buckley’).
In Buckley, the Magistrate agreed with the lot owner that the Court did not have such jurisdiction as a matter of statutory interpretation.
In the present case, the issues for determination were:
a) Whether default judgment was entered regularly or irregularly (separate to the jurisdiction question);
b) Whether the applicant has shown she has an arguable defence to the proceeding (separate to the jurisdiction question);
c) Whether the present application (being a further application for re-hearing) is an abuse of process (separate to the jurisdiction question);
d) Whether the lot owner waived her right to challenge the Court’s jurisdiction;
e) Whether Parliament intended that VCAT has exclusive jurisdiction regarding recovery of money owed by a lot owner as a matter of statutory construction of the OCA; or, the Magistrates’ Court has concurrent jurisdiction to hear and decide such claims brought by OCs under s 100(1) of the Magistrates’ Court Act 1989 (Vic) (MCA) and s 30 of the OCA (the jurisdiction question).
I shall first deal with the merits of the re-hearing application itself and the abuse of process arguments before turning to the jurisdiction question. The application proceeded in the usual way, upon summons and affidavits and by way of oral argument and submissions.
PROCEDURAL HISTORY
It is necessary to set out the procedural history in some detail.
By complaint dated 9 October 2023, the OC commenced the proceeding against Jones and claimed, upon a final fee notice issued under s 32 of the OCA, the sum of $11,880.18 (comprising outstanding fees, levies, interest and charges owing) plus costs and interest from the date the proceeding was commenced.
On 19 January 2024, the Court granted the OC’s application to dispense with personal service of the complaint and made orders for substituted service.
On 23 February 2024, the Court granted the OC’s application for default judgment and made orders on the claim plus interest and costs.
On 22 May 2024, Jones filed an application for re-hearing (the first application) together with a brief affidavit affirmed 22 May 2024 (the first Jones affidavit).
Pausing here, at the time of filing of the first application, Jones was self-represented. The first Jones affidavit comprised a single hand-written paragraph. It deposed to the date ranges of four successive periods of management of the OC and stated that each had ‘been communicated to on multiple occasions not limited to OC fees, part payments and outstanding [sic] and with the exception of 1 x registered post I have not received OC/Court details’.
On 19 June 2024, the Court ordered that Jones file a further and better affidavit in support of the first application deposing to the merits of any defence she might have in response to the OC’s statement of claim.
On 10 July 2024, the application was struck out by a Magistrate due to the non-appearance of Jones on that date and the lack of any further supporting affidavit having been filed by her.
Thereafter, the OC commenced enforcement proceedings upon the default judgment and on 7 November 2024, the Supreme Court issued a warrant of seizure and sale.
On 24 April 2025, Jones filed the present application for re-hearing (the second application) together with an affidavit sworn 20 April 2025 (the second Jones affidavit). Additionally, Jones’s solicitor, Mr Mermelstein (Mermelstein) filed two affidavits in support sworn 14 April 2025 (the first Mermelstein affidavit) and 12 May 2025 (the second Mermelstein affidavit).
Pausing here, in the second Jones affidavit, Jones deposed to her non-attendance at Court on 10 July 2024, her lack of awareness of Court processes and of the requirements to refute the OC’s claim. She stated also:
I was in a psychological mess and did not know how to help myself I had escaped to Queensland and could not face the challenge of attending court let alone presenting coherent arguments because of the huge anxiety that overwhelmingly I could not face my declining mental health let alone address issues that were crippling me I was suffering from anxiety and depression which severely impaired my ability to manage day-to-day tasks I experienced amount loss of appetite, composure and self-confidence leading me emotionally incapacitated while I had diligently prepared several legitimate claims against the owners corporation the prospect of developing A defence appeared overwhelming.
With respect to any defence to the OC’s claim, the second Jones affidavit stated:
My debt to the [OC] is a small claim. The [OC] has had three different managers in a short period … I raised issues with [managers of the OC] about the correctness of fee invoices issued to me. My understanding is that the ‘benefit principle’ applies and that I should not have been charged for certain items for which I receive no benefit. Neither manager applied. … Proceedings at VCAT are ongoing…
The first Mermelstein affidavit stated that Jones relied upon Buckley to assert that the Court did not have jurisdiction to make the orders of 23 February 2024.
The second Mermelstein affidavit exhibited correspondence of Jones’s treating psychologist, Dr Ho, dated 11 May 2025. Dr Ho reported that Jones was being treated and managed for depression and anxiety upon her GP’s referral under a mental health care plan dated 26 February 2025. Dr Ho opined that she concurred with the GP’s diagnoses. Dr Ho went on to observe that Jones showed symptoms associated with severe anxiety and depression which was in the context of an apparent breakdown in November 2023 leading to voluntary in-patient admission.
The OC opposed the second application and relied broadly on three grounds:
a) The second application was an abuse of process which ought be dismissed with costs.
b) Jones had waived her right to challenge the jurisdiction of the Court having submitted to it in making the first application.
c) Buckley was decided incorrectly and ought not be followed.
LEGISLATION AND RE-HEARINGS
Applications for re-hearing are governed by the MCA as well as the Magistrates’ Court General Civil Procedure Rules 2020 (the Rules).
Section 110(1) of the MCA provides that if a final order is made by the Court in a civil proceeding against a person who did not appear in the proceeding, that person may, subject to and in accordance with the Rules, apply to the Court for an order that the order be set aside and that the proceeding be re-heard.
Section 110(5) of the MCA provides that if an applicant under this section fails to appear at the time fixed for the hearing of the application and the application is struck out, the applicant can re-apply only if the applicant first obtains the leave of the Court.
Rule 46.08(3) of the Rules provides that if an application is struck out because the applicant failed to appear at the time fixed for hearing of the application, a further application for re-hearing is taken to be an application for leave to re-apply under section 110(5) of the MCA.
Question 1: Whether default judgment was entered regularly or irregularly?
Judgments regularly obtained are not generally set aside unless the party seeking to aside the judgment has a meritorious case.[3]
[3] Wilson v Magistrates’ Court of Victoria [2001] VSC 290 [15].
Putting to one side the jurisdiction question, parties appeared to accept the OC’s default judgment obtained under rule 21.02(a) of the Rules was regularly obtained. The complaint was validly served pursuant to the Court’s orders for substituted service made 19 January 2024, which was evidenced by an affidavit of service dated 23 February 2024.
Question 2: Whether default judgment ought to be set aside?
I turn firstly to Jones’s non-appearance at the hearing of the first application.
Based on the second Jones affidavit and second Mermelstein affidavit, including the exhibited opinion of Dr Ho, I am satisfied on the evidence before the Court that Jones had seriously compromised mental health from and beyond at least November 2023. I consider that evidence is a sound basis to explain:
a) the delay of about three months between the default judgment order and the filing of the first application; and
b) Jones’s failure to either appear on 10 July 2024 or attend to the filing of a further and better affidavit although given an opportunity by the Court to do so.
Next, I turn now to the merits of the application to set aside the default judgment (again, leaving to one side the jurisdiction question).
In summary, the OC submitted that the application must be refused because the second Jones affidavit: did not depose to any defence to the claim; did not dispute her indebtedness to the OC; and there was no evidence of a defence on the merits.[4]
[4] Plaintiff submissions [2], [9], [12].
I must reject that submission for the following reasons.
Whilst Jones had acknowledged indebtedness to the OC in the sense of deposing to ‘my debt’ in the first Jones affidavit, it was also plain that she was in dispute with the OC on various grounds including as to:
a) In the first and second Jones affidavits, disputing and taking issue with each successive manager of the OC as to correctness of OC fees, part payments and outstanding [sic]’;
b) In the second Jones affidavit, asserting that the ‘benefit principle’ applied[5] to the calculation of amounts claimed by the OC such that she had been erroneously charged for items for which she received no benefit; and
c) In the second Jones affidavit, asserting that her dispute with the OC is the subject of proceedings at VCAT, which are ongoing.
[5] See s 28(2) of the OCA. The so-called ‘benefit principle’ provides that lot owners of lots that benefit more pay more (as regards calculation of levies and fees). See Owners Corporation PS407621Y v Grundl (Owners Corporations) (2017) VCAT 1150.
Because of these matters, I am satisfied that Jones does have an arguable defence or at least some prospects of success in defending the OC’s claim. In these circumstances, the appropriate course, had she proceeded to file a notice of defence to the OC’s statement of claim, would have been to either strike out or stay the proceeding in this Court. That would allow the ‘OC dispute’ matters raised by her to be heard and determined at VCAT being the accepted specialist forum for disputes between OCs and lot owners under Division 1 of Part 11 – OC disputes – Applications to VCAT.
Next, in submitting the application ought to be refused, the OC contended it would suffer specific prejudice if that occurred. That was because enforcement proceedings were commenced and a warrant of seizure and sale was now attached to the title of Jones’s lot. There were costs consequences and expenses for the OC.
Whilst that may be so, that is outweighed in my view by the prejudice and potential for injustice to the lot owner, which is most substantial given the consequences of there being a caveat on her property and given she has raised disputes that are squarely ‘OC disputes’ under Division 1 of Part 11.
Moreover, as the OC did not challenge the assertion that VCAT proceedings are on foot, therefore the OC must be taken to be on notice that Jones was in dispute with it over the calculation of fees and levies.
It would be a substantial injustice to allow a judgment to stand – and to be enforced – when there is an arguable defence and the amounts sought to be recovered are disputed. That is further amplified by the matters set out in the second Jones affidavit relating to the reasons for Jones’s non-appearance on 10 July 2024.
Question 3: Whether the second application is an abuse of process?
The OC submitted that the bringing of the second re-hearing application is an abuse of process because her case was doomed to fail, given the acknowledgement of the debt and the lack of any arguable defence.
In support of that proposition, the OC relied upon the authorities of Guss v Magistrates’ Court of Victoria[6] and Stragan & Co Pty Ltd v Christodolou & Ors.[7]
[6] [1998] 2 VR 113.
[7] [2002] VSC 78.
To my mind, those cases are distinguishable from the present case given the reasons for Jones’s non-appearance and the circumstances of the strike out order of the first application. Therefore, essentially for the reasons already stated with respect to Question 2, I must reject that submission.
Section 110(5) of the MCA clearly establishes that an applicant who fails to appear at the time fixed for the hearing of the application may re-apply with leave of the Court.
For reasons stated, that leave is granted.
Moreover, as stated, the OC’s submissions simply do not address the fact that Jones has, as already found on the face of the first and second Jones affidavits, raised arguable defences to the statement of claim and/or, she is in dispute with the OC at VCAT.
The OC further submitted that reliance upon the Buckley decision was ‘not new evidence’ nor a ‘new legal argument’ in the sense that the subject legislative provisions of the OCA are of long-standing. Thus, it would have been open to Jones as a lot owner to make the same arguments as the lot owner did in Buckley.
It is not necessary to deal with this argument because of my findings that Jones has shown – separate to any jurisdiction arguments – an arguable defence or, a defence on the merits.
Question 4: Whether the lot owner waived her right to challenge the Court’s jurisdiction?
In reliance on various authorities, it was submitted by the OC that Jones, having made the first application, waived her right to object to jurisdiction.[8]
[8] Plaintiff submissions [19]-[21].
To my mind, it is not necessary to decide that point given my findings that leave ought to be granted – and is granted – for the second application for reasons separate to the jurisdiction question.
I turn now to the jurisdiction question.
Question 5: Whether Parliament intended that VCAT has exclusive jurisdiction regarding recovery of money owed by a lot owner as a matter of statutory construction of the OCA; or, the Magistrates’ Court has concurrent jurisdiction to hear and decide such claims brought by OCs under s 100(1) of the MCA and s 30 of the OCA.
SUBMISSIONS BY THE LOT OWNER
Jones submitted that Buckley correctly decided the position with respect to the jurisdiction of this Court to hear and decide actions by OCs to recover money from lot owners upon a final fee notice.
A proper construction of the OCA was that only VCAT was able to deal with OC claims to recover money from lot owners and the Court lacked jurisdiction.
It was also said that either the default judgment was entered irregularly (because the Court lacked jurisdiction) and therefore must be set aside and the proceeding struck out. In the alternative, if entered regularly, then the default judgment must still be set aside and the proceeding struck out for lack of jurisdiction.
SUBMISSIONS BY THE OC
The OC submitted that most significantly, the lot owner owed a debt to the OC as pleaded in the Statement of Claim, namely: ‘By reason of the forgoing the Defendant is indebted to the Plaintiffs in the sum of $11,666.04 as at the date of the Final Fee Notice’.[9] The sum of $11,666.04 was, incontrovertibly, a debt or liquidated demand owed to the OC by the lot owner in respect of which the OC had been granted default judgment under rule 21.02(a)(i) of the Rules upon proof of valid service.
[9] Paragraph 19 of the SOC dated 9 October 2023.
Thus, the lot owner’s application seeks to deprive this Court of its express jurisdiction conferred by s 100(1)(a) of the MCA with respect to hearing and determining causes of action for debts or liquidated demands.
Importantly, the lot owner in effect, seeks to overturn a procedure that has existed in the State of Victoria since the OCA was enacted, that Act now being on its 20th revision. The relevant provision (s 30) had been unchanged over those 20 revisions.
The OC further submitted that nowhere in the OCA is the Court’s express jurisdiction abrogated. That is the consequence of the Buckley statutory construction of s 30 (and related provisions).
To do so was to offend a fundamental principle of statutory construction, namely that the presumption that a statute does not restrict access to the Court, such as by withdrawing or limiting a conferral of jurisdiction, unless the withdrawal or limitation of conferral of jurisdiction is ‘clear and unmistakeable’.[10]
[10]Shergold v Tanner (2002) 209 CLR 126 [34] (‘Shergold’).
Further, or alternatively, it was submitted that the Buckley construction of s 30 is a misconstruction, in that the words ‘Subject to subsection (2)’ as contained s 30(1) simply allowed for two distinct paths open to OCs to recover money owed.[11]
[11] Plaintiff submissions [32].
Moreover, there was no clear basis to pursue a ‘debt’ by way of application to VCAT under the types of disputes set out in s 162.
Finally, in terms of extrinsic materials available to aid in the interpretation of legislation as permitted by s 35 of the ILA, the Court’s attention was drawn to fact that information is contained on the Consumer Affairs Victoria website which provides that:
An OC can:
a) charge penalty interest on money owing if this is authorised by resolution. …
b) take action to recover debts in the Magistrates’ Court of Victoria or at the Victorian Civil and Administrative Tribunal (VCAT) (emphasis added).[12]
[12] Consumer Affairs Victoria, Fees – owners corporations (Web Page) Late payment of fees and charges.
According to the OC, the significance of that in the OC legislative scheme was that the director of Consumer Affairs was responsible for enforcement of the OCA.
I reject that submission as having no merit for the following reasons.
Firstly, it is misconceived to say that the director has responsibility for enforcement. The director’s powers in Division 2 of Part 10 of the OCA are limited to receiving complaints and referrals to conciliation.
Secondly, whilst the list of extrinsic materials in s 35(2) of the ILA is not exhaustive, I am not persuaded that information contained on a website falls within, or is analogous to the types of reports and instruments contained in that provision.
Pausing here, I will return to consider the approved notices which are published by the director on the Consumer Affairs Website later in these reasons.
Thirdly, there is in any event no doubt that an OC does have power to recover debts in a general sense in the Magistrates’ Court in accordance with ss 18 and 30(1) of the OCA, a matter to which I will return.
LEGISLATIVE FRAMEWORK OF THE OCA
The purposes of the OCA are contained in s 1 which include (a) to provide for the management, powers and functions of OCs; and (b) to provide for appropriate mechanisms for the resolution of disputes relating to OCs.
OCs are created and regulated by the OCA and have powers conferred by s 6.
Part 3 ‘Financial Management’, Division 1 ‘Financial powers’ contains the OC’s powers to calculate and set fees and charges payable by lot owners which are based on a lot owner’s lot liability and/or lot entitlement.[13] The time for payment is a matter for the OCs determination.
[13]OCA (n 1) ss 23, 23A and 24.
The obligation of the lot owner to pay outstanding fees and charges arises under s 28(1). Subject to some other provisions, s 28(2) provides that a lot owner is not liable to pay or contribute to OC funds, a proportion of any amount required to discharge a liability of the OC exceeding the lot owner's lot liability.
As for the power of an OC to commence legal proceedings, s 18(2) provides that if a matter is within the civil jurisdictional limit of the Magistrates' Court and, if authorised to do so by ordinary resolution, the OC may commence any legal proceeding in (a) the Magistrates’ Court; or (b) VCAT …
The provision central to the jurisdiction question is s 30 which is headed ‘Recovery of money owed’ and provides:
(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.
Also central to the dispute are the provisions referred to in s 30(2) that apply to recovery of money owed to the OC by a lot owner.
Those are: firstly, the fee notice provisions being ss 31 and 32; and secondly, Division 1 ‘Owners corporation disputes’ contained in Part 11 which is headed ‘Applications to VCAT’.
A fee notice under s 31(1) in approved form must be given to a lot owner by the OC. The fee notice must inform a lot owner that: outstanding fees are due within 28 days of the notice; interest may apply; and it must also include dispute resolution information applicable under the rules of the OC.
A final notice under s 32(1) in approved form may be given to a lot owner if money owing is not paid 28 days after the date of the fee notice. There are requirements regarding information to be provided in the final notice including: confirming the obligation to pay the overdue fees and charges and interest immediately.
Additionally, s 32(2)(c) requires that the final notice inform the lot owner of the following: that the OC ‘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’ of the final notice being given’.
The fee notice provisions contain two key differences. Firstly, the fee notice is mandated to be given by the OC, whereas the final notice may be, but is not required to be given (subject to an important proviso to which I will return). Secondly, the final notice must notify the lot owner of the OC’s intention to ‘take action under Part 11’.
I now turn to the provisions contained in Division 1 of Part 11.
Under Division 1, an OC dispute includes: ‘an alleged breach by a lot owner … of an obligation imposed on that person by this Act or the regulations or the rules of the OC’.[14] An application regarding such a dispute may be brought either by a lot owner or the OC.[15]
[14]OCA (n 1) s 162(b).
[15] Ibid s 163(1)(b)-(c).
Next, in determining an OC dispute, s 165(1) provides that VCAT may make any order it considers fair including one or more of the following:
(c)(i) an order for the payment of a sum of money found to be owing by one party to another party;
(ca) an order requiring a lot owner to pay to the OC reasonable costs incurred by the OC in recovering an unpaid amount from the lot owner (other than costs in the proceeding);
Under s 165(4), VCAT’s power to award costs under s 109 of the VCAT Act 1998 (Vic) (VA) is not affected.
Finally, mandatory considerations apply to the making of an order by VCAT in an OC dispute under s 167(1) of the OCA. These are:
(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.
JURISDICTION AND THE MAGISTRATES’ COURT ACT
For present purposes, the Court’s civil jurisdiction is conferred by s 100(1)(a) of the MCA with respect to hearing and determining of ‘… any cause of action for damages or a debt or a liquidated demand if the amount claimed is within the jurisdictional limit …’
CONSIDERATION
It is plain that recovery by an OC of money owed by a lot owner is an OC dispute, thus, a matter that VCAT has jurisdiction to hear and decide.
To reiterate, therefore, the jurisdiction question, is this: whether Parliament intended that VCAT has exclusive jurisdiction regarding the recovery of money owed by a lot owner as a matter of statutory construction of the OCA; or, whether the Magistrates’ Court has concurrent jurisdiction to hear and decide such claims under s 100(1) of the MCA and s 30 of the OCA.
Somewhat surprisingly, although the OCA has been in operation for some twenty years, the jurisdiction question was not a matter of reported judicial determination prior to the decision of Buckley.
Of course, the interests of justice are generally served by consistency of decision-making where identical questions arise. However, decisions of judicial officers are not binding upon other judicial officers of the same Court.
Buckley was not the subject of appeal. Notwithstanding this, the OC contends it was decided incorrectly and seeks to have the jurisdiction question fully ventilated in each of the cases presently before the Court. It should be stated that, unlike in Buckley, the Court has had the considerable benefit of detailed submissions of Counsel and fully developed arguments.
There was no challenge to the correctness of the principles of statutory interpretation enunciated in Buckley as follows:
The starting point for determining the meaning of a statutory provision is its text, considered in light of its context and purpose.
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.Where the words of a statute are plain and unambiguous, they should be given their ordinary and grammatical meaning.
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.
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.
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.
Finally, where two statutes are the product of the one legislature, there is a general presumption that there is no contradiction between them.[16][16]Buckley (n 2) [27]-[33].
Applying those principles of statutory interpretation with respect to s 30, his Honour said:
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.[17]
[17] Ibid [36].
Then, at a later point, his Honour went on to say:
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.[18]
[18] Ibid [38]-[39].
As for reliance by the OC upon s 100(1) of the MCA, his Honour was not persuaded that took the jurisdiction question further. That was said to be because the Court’s general jurisdiction conferred by s 100(1) was broadly equivalent to s 30(1) of the OCA. Applying the ‘specific over general’ rule of construction, s 30(2) should prevail over both s 30(1) and s 100(1) of the MCA.[19]
[19] Ibid [41].
Whilst the correctness of the principles of statutory interpretation set out in Buckley was not disputed, it was said nevertheless that the resulting analysis led to a consequence which offended an important presumption of statutory construction. The presumption was that legislation is not to be interpreted to withdraw or limit a conferral of jurisdiction on Courts, unless the implication appears clearly and unmistakably.[20]
[20] (1932) 47 CLR 121 [134] (‘Magrath’), per Dixon J cited in Pearce, Dennis C Pearce, Statutory Interpretation in Australia (Lexis Nexus, 10th ed, 2023) [5.58]-[5.59] (‘Pearce’).
Although the presumption enunciated by Dixon J in Magrath & Ors. v Goldsbrough referred to the power of superior courts,[21] there is little doubt the presumption extends to inferior courts. Herzfeld & Prince in the text Interpretation[22] provide the following helpful commentary as to operation of the presumption:
It is presumed that when a legislature confers jurisdiction on or grants power to a court, it takes the court as it finds it. In the absence of expressed words or reasonably plain intendment to the contrary, a conferral of jurisdiction or grant of power does not exclude or alter the usual procedure of the court or the ordinary incidents of its jurisdiction ... This presumption is not limited to superior courts. It can be applied even to inferior courts of limited jurisdiction created by statute where the question is whether a newly conferred jurisdiction or newly granted power is to be subject to the court's ordinary procedure and other ordinary incidents of its jurisdiction …[23]
[21] Ibid.
[22] Perry Herzfeld and Thomas Prince, Interpretation (Thomas Reuters Australia, 2nd ed, 2020) [9.670].
[23] Ibid [9.680].
An example of the presumption applying to an inferior court’s jurisdiction was the South Australian case of Integrated Waste Services Pty Ltd v Harvey & Anor[24] in which Mullighan J held that clear words would be needed to oust the jurisdiction of the Magistrates’ Court conferred by the Magistrates’ Court Act 1991 (SA Act).[25] Harvey concerned jurisdiction regarding certain summary offences (which s 9 of the SA Act granted jurisdiction to hear), in circumstances where another piece of legislation, namely the Environment, Resources and Development Court Act 1993 (SA) established a different court (the ERD Court) and granted to it jurisdiction to hear summary offences. Section 7 of the ERD Act used language such as “the [ERD] court will deal”. Despite that, the court held that such words were not sufficiently clear as to exclude jurisdiction of the Magistrates’ Court.[26]
[24] [1999] SASC 82 (‘Harvey’).
[25]Magistrates’ Court Act 1991 (SA) (‘SA Act’).
[26]Harvey (n 24) [8].
Whilst that case concerned criminal rather than civil jurisdiction, there is no suggestion in the authorities to say that the presumption operates differently.
Here, the OC maintains that the OCA’s grant of powers upon VCAT did not exclude or alter the Magistrates’ Court’s ‘ordinary incidents of jurisdiction’, namely, determining causes of action for debts or liquidated demands.
Certainly, the OCA (first enacted in 2006) contains no express words regarding a withdrawal or alteration of the Court’s civil jurisdiction conferred by s 100(1) of the MCA (first enacted in 1989).
In Shergold v Tanner,[27] the plurality stated that the presumption against ouster of jurisdiction (per Dixon J in Magrath) reflected general principles regarding implied repeal of an earlier statute. The plurality endorsed the following explanation of Gaudron J in Saraswati v The Queen:
It is a basic rule of construction that, in the absence of express words, an earlier statutory provision is not repealed, altered or derogated from by a later provision unless an intention to that effect is necessarily to be implied. There must be very strong grounds to support that implication, for there is a general presumption that the legislature intended that both provisions should operate and that, to the extent that they would otherwise overlap, one should be read as subject to the other: see Butler v Attorney-General (Vict).[28]
[27]Shergold (n 10) [34].
[28] (1961) 106 CLR 268 (‘Butler’).
Also, in Shergold, the plurality then referred to the analysis in Butler as follows:
In Butler, Kitto J expressed the question as being whether the two items of legislation could stand or live together. In the same case, Fullagar J spoke of "contrariety", Taylor J of "direct conflict", and Windeyer J asked whether the two statutes were clearly and indisputably contradictory displaying such repugnancy that they could not be reconciled. Later, in Travinto Nominees Pty Ltd v Vlattas, Gibbs J used the expression "could stand together" (citations omitted).[29]
[29] Ibid [6].
It seems to me, distilling these principles, that the following considerations apply to the jurisdiction question:
i.whether the legislature intended both statutes (s 100(1) of the MCA and provisions of the OCA, in particular, s 30) to stand or live together or whether there is such repugnancy or contrariety that they could not be reconciled;
ii.whether the OCA provisions contain a clear and unmistakeable implication to alter or remove the Court’s jurisdiction;
iii.whether the requisite ‘very strong grounds’ exist to infer that the Court’s jurisdiction to hear and decide ‘debt and liquidated demand’ claims under s 100(1) of the MCA is altered, or derogated from, by the OCA.[30]
[30] See also Ferdinands v Commissioner for Public Employment [2006] HCA 5; 225 CLR 130 per Gleeson J [4].
Having set out those additional principles, I return to the text of the OCA.
Certainly, it was incontrovertible that – under ss 18(2)(a) and 30(1) – an OC has a general power to recover any money owed to the OC, in any court of competent jurisdiction as a debt due to the OC. Specifically, such a cause of action may be commenced by an OC in the Magistrates’ Court,[31] upon being authorised to do so by ordinary resolution.
[31] Provided the claim does not exceed the jurisdictional limit of $100,000.
The OC submits that it is plain from s 18 that it may proceed in this Court against a lot owner for money owed. That is because s 18(2) provides that, 'if a matter is within the civil jurisdictional limit of the Magistrates' Court and an [OC] is authorised to do so by ordinary resolution, the [OC] may commence any legal proceeding in (a) the Magistrates' Court…' (emphasis added).
I reject that submission with respect to s 18. The purpose of s 18 (as substituted by Act No 4 of 2021) was to reduce the burden for an OC regarding authorisation to litigate. Whereas formerly a special resolution was required to authorise an OC to bring litigation, under the amendment, a special resolution was required to bring litigation, subject to subsection (2). Section 18(2) meant that an ordinary (not a special) resolution was required to bring litigation under the Magistrates' Court jurisdictional limit, or at VCAT.
Moreover, that construction offends established principles of statutory construction as it considers the text of s 18(2) in isolation from its context in the OCA more broadly and all of the provisions, in particular s 30(2) and Division 1 of Part 11.
As stated, there is no question that an OC may litigate in the Magistrates’ Court to recover money owed to the OC by contractors or service providers or other third-party debtors (as his Honour found in Buckley).[32]
[32]Buckley (n 2) [36].
The OC argued that, in the same way, it could bring a recovery action in the Magistrates’ Court for money owed by a lot owner (while acknowledging that the notice provisions apply). That was because Parliament intended the two statutes to work harmoniously together and, in no way, had derogated from the jurisdiction under s 100(1) of the MCA.
Pausing, as for s 100(1) of the MCA, a preliminary issue arises with respect to the jurisdiction question. That is, whether ‘recovery of money owed’ by a lot owner under the OCA is, or ought properly be, construed as a ‘debt or liquidated demand’.
Under the OCA statutory regime, the basis for recovery by an OC of money owed by a lot owner arises this way:
a) The OC has exercised statutory functions and powers under Part 2 of the OCA.
b) The OC has levied lot owners with fees and charges, the setting of which must be based on the lot liability and lot entitlement of the lot owner under ss 23, 23A and 24; and has determined the times for payment of such fees and charges.
c) Lot liability is a defined term under in s 3 and means a number specified in the plan as the lot liability for that lot, expressing the proportion of the administrative and general expenses of the OC which the lot owner is obliged to pay.
d) Lot entitlement is also defined in s 3 and means a number specified in the plan as the lot entitlement for that lot, expressing the extent of the lot owner's interest in any common property affected by the OC.
e) The obligation of the lot owner to pay such fees and charges arises under s 28(1).
f) The OC is empowered to charge (or waive) interest, if money is outstanding after the due date and authorised by resolution at a general meeting, under s 29.
g) The OC is authorised by ordinary resolution under s 18(2) to commence proceedings (subject to the notice provisions).
The fact that the recovery of money owed by the lot owner arises under statute is not, of itself, inconsistent with the Court’s jurisdiction under s 100(1) to determine debt and liquidated demand claims.
A ‘debt’ is ‘a liquidated sum in money presently due, owing and payable by one person, called the debtor, to another person, called the creditor’.[33] The nature of a ‘liquidated sum’ is said to be: whenever the amount to which the plaintiff is entitled … can be ascertained by calculation or fixed by any scale of charges or positive data it is … liquidated.[34]
[33] Rothwells Ltd v Nommack (No 100) Pty Ltd [1990] 2 Qd R 85 [86] cited by Randall AsJ in AMD Resources Ltd v TRS Management Pty Ltd [2021] VSC 202 [86]-[89].
[34] Spain v Union Steamship Co of New Zealand Ltd [1923] HCA 21; (1923) 32 CLR 138 at [142] by quoting from the then current edition of Odgers on Pleading cited by Randall AsJ in AMD Resources Ltd v TRS Management Pty Ltd [2021] VSC 202 [86]-[89].
Under the OCA, the provisions set out above provide a mechanism to calculate or ascertain a specific amount that is due and payable by a lot owner. Accordingly, that amount is a liquidated sum and is thus a debt within the scope of s 100(1) of the MCA.
Accordingly, to that extent, no contrariety arises in the bringing of a cause of action to recover money owed by a lot owner under the OCA in the Magistrates’ Court.
I turn now to construction of s 30 and to examine the intended inter-relationship of ss 30(1) and 30(2). As for interpretation of the phrase ‘subject to’, the following commentary is instructive:
The effect of the provision was correctly described by Cooke J in Harding v Coburn [1976] 2 NZLR 577 at 582 as being ‘a standard way of making clear which provision is to govern in the event of conflict. It throws no light, however, on whether there would in truth be a conflict without it’. See also Megarry J in C & J Clark Ltd v Inland Revenue Commissioners [1973] 1 WLR 905 at 911: ‘Where there is no clash, the phrase does nothing: if there is collision, the phrase shows what is to prevail. The phrase provides no warranty of universal collision.’[35]
[35] Pearce (n 20) [12.4].
It was submitted there simply was no clash or collision arising between s 30(1) and s 30(2). That was because each subsection could – and ought – be construed without the words ‘subject to’.
I reject that argument. On a plain reading of the text of s 30, by reason of the words ‘subject to subsection 2’, the OC’s general power to recover any money in a court as a debt due to the OC under s 30(1), is altered or bound by – or conditional upon – the application of other legislative provisions within the OCA and specifically, the provisions referred to in s 30(2) as being applicable.
Thus, the potential for collision within s 30 arises due to the very requirement that when recovering money owed by a lot owner (as opposed to a third-party debtor), there are additional specific legislative requirements that apply, namely: the notice provisions of ss 31 and 32 and Division 1 of Part 11.
A further apparent difference in language arises between the two subsections of s 30. The phrase ‘recovery of money owed to the OC’ in subsection (1) is replicated in s 30(2). Yet, the accompanying phrase ‘as a debt due’ appears only in s 30(1) and is not contained in s 30(2) with respect to recovery of money owed by a lot owner.
In one sense, the eschewing of the words ‘as a debt due’ in s 30(2) may not be of great weight in terms of an assumption of legislative intent (especially as s 30(2) is specific and s 30(1) is general).
Yet, the High Court has confirmed that the primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute and that the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed.[36] Thus, the process of construction must always begin by examining the context of the provision that is being construed. Context should be regarded in its widest sense.[37]
[36]Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 [69].
[37] SZTAL v Minister for Immigration and Border Protection [2017] HCA 34; (2017) 347 ALR 405; 91 ALJR 936 [14] per Kiefel CJ, Nettle and Gordon JJ.
Applying those principles, the absence of the words ‘as a debt due’ in s 30(2) may be significant in the broader context of the OCA as a whole.
Returning to the language of s 30(2), it is necessary to examine closely the provisions stated to apply to the recovery of money owed by a lot owner.
It is clear the OC accepts some aspects of s 30(2) apply to recovery of money owed by a lot owner when coming to this Court, namely, the notice provisions of ss 31 and 32. That is evident from the notices being pleaded in the statement of claim.
Thus, to this point, it appears that a harmonious reading of s 30(2) and the Court’s general jurisdiction under the MCA is achievable by reason of the OC giving a fee notice to the lot owner (and, optionally, a final notice – a matter to which I will return), prior to the commencement of proceedings.
Pausing, in Buckley, his Honour was not taken to extrinsic materials by the parties and did not consider them to be of assistance. However, in my view, the Explanatory Memorandum (EM) and the Second Reading speech (Second Reading)[38] provide some guidance relevant to the jurisdiction question.[39]
[38] Victoria, Parliamentary Debates, Legislative Assembly, 20 July 2006 (Hansard) (‘Second Reading’), Explanatory Memorandum, Owners Corporations Bill (‘EM’), Buckley (n 2) [34].
[39]Interpretation of Legislation Act 1984 (Vic), s 35(b) (‘ILA’).
Clause 30 of the EM confirms the OC’s general right of recovery of money owed in a court of competent jurisdiction. Where recovery is for money owed by lot owners, that is ‘subject to’ the application of the specific procedure in the fee notice provisions for money owed by lot owners (emphasis added).[40]
[40]EM (n 38) 5, 30.
Again, the language of cl 30 – in referring to a ‘specific procedure in the fee notice provisions’ applying to recovery of money owed by lot owner – arguably supports the OC’s contention that s 30(2) is capable of standing harmoniously with the general jurisdiction under s 100(1) of the MCA.
Again, it was said that construction was correct because it accorded with principles of statutory interpretation (s 30(1) being dominant or general, whereas s 30(2) was subordinate).
However, importantly, the OC’s construction of s 30(2) requires that – in litigating in the Magistrates’ Court for recovery of money owed by the lot owner – either some provisions referred to in s 30(2) do not apply, or they do apply, but in a selective sense. I refer to subsection 32(2)(c) as well as to provisions within Division 1 of Part 11 (‘Applications to VCAT’).
It is at this point, therefore, that the potential conflict, repugnancy or contrariety referred to Shergold, arises such that the two statues may not be capable of being reconciled for the purposes of the Magistrates’ Court having concurrent jurisdiction with respect to recovery of money owed by lot owners.
In MA 46 Pty Ltd v Paglia Properties Pty Ltd,[41] Delaney J had to consider an apparent intersection of rights of parties under two different legislative regimes. His Honour described the task helpfully as follows:
To determine whether there is an inconsistency requires a comparison of the actual language of each statute to see whether they stand together or whether the later statute has abrogated the earlier statute. When comparing two intersecting statutory provisions it is to be assumed that Parliament normally intends both statutes to work harmoniously together so that each operates within its respective field of application; this position is only displaced by clear and unmistakeable implication. It is with these principles in mind that the question of the asserted inconsistency … is to be approached (omitting citations).[42]
[41] [2020] VSC 695; 64 VR 88.
[42] Ibid [83].
Accordingly, I turn now to consider the language and construction of subsection 32(2)(c) as well as provisions within Division 1 of Part 11; and, to examine whether or not harmony is able to be achieved in the sense referred to by Delaney J.
In my view, there are four matters that potentially displace the presumption that the statutes were intended to work together (such that the Magistrates’ Court has concurrent jurisdiction), with respect to recovery of money owed by lot owners. I consider those matters to be:
I. The requirements that the final notice be in approved form and inform the lot owner of the OC’s intention to ‘take action under Part 11’ if fees remain unpaid after 28 days.
II. The requirement that Division 1 of Part 11 applies to the recovery of money owed by a lot owner pursuant to s 30(2).
III. Under Division 1 of Part 11, the operation of s 165(1) and the considerations contained in s 167(1) including fairness, oppressiveness, prejudice and discrimination.
IV. Under Division 1 of Part 11, the requirement under s 165(4) that ‘VCAT’s power to award costs under s 109 of the VCAT Act 1998 is not affected’.
I now turn to each of those matters in turn.
I. The requirements that the final notice be in approved form and inform the lot owner of the OC’s intention to ‘take action under Part 11’ if fees remain unpaid after 28 days
The fact that lot owners must be informed that the OC will take action under Part 11 (which is headed ‘Applications to VCAT’); yet find themselves defending actions in the Magistrates’ Court is contradictory and difficult to reconcile.
Final notices must be in approved forms. Pursuant to s 200 of the OCA, the Director of Consumer Affairs must approve and publish each approved form.
The approved form of the final notice (published on the Consumer Affairs website) states: ‘If payment is not received within 28 days after the date this final notice is given, 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) seeking an order requiring you to pay’ (emphasis added).
The fact that the approved form (as currently published) states that taking action under Part 11 ‘includes applying to VCAT’ is indicative of no more than the uncertainty that has existed for lot owners for the past twenty years and led to the jurisdiction question before the Court now. It also is at odds with the language of the Note contained at the foot of s 32 in the OCA (the Note).
Clause 32 of the EM does not assist as it simply confirms the final notice must inform the lot owner that the OC intends ‘to take action under Part 11’ to recover the amount due if the overdue fees, charges and interest owing are not paid within 28 days.
Returning to the text of the OCA, the Note at the foot of s 32 states that s 163(2) provides that an application to VCAT by the OC for an order requiring a lot owner to pay an amount payable by the lot owner to the OC can only be made if the amount is not paid within 28 days after the final notice is given under s 32 (emphasis added).
A note at the foot of a provision forms part of the Act if the Act was passed after 1 January 2001.[43]
[43]ILA (n 39) s 36(3A).
Here, the Note expressly articulates the link between the operation of s 32 and applications to VCAT. Importantly, the Note does not state an alternative such as ‘or a court of competent jurisdiction’.
The OC answers the apparent conflict in taking action in the Magistrates’ Court, contrary to that prescribed stated intention in this way (in addition to the argument referred to previously that s 30(2) is subordinate to s 30(1)).
It was said that the giving of a final notice under s 32 was not a mandated step; thus, it was not required before commencing recovery action in the Magistrates’ Court for money owed against a lot owner. Further, s 162 provides that VCAT may hear and decide OC disputes.
However, this submission is misconceived. The word ‘may’ is used in s 162 in the permissive sense with respect the grant of VCAT’s powers by the legislature. Also, the contention does not address the apparent contradiction that – although the final notice is not a mandated step (unless commencing at VCAT) – s 30(2) states that ss 31 and 32 and Division 1 of Part 11 ‘applies’ to recovery of money owed by a lot owner.
Pausing here, reliance upon the word ‘may’ in ss 32 and 162 in support of the OC’s construction of s 30 – absent consideration of the whole of the OCA and of the provisions in Division 1 of Part 11 – is at odds with modern principles of statutory construction regarding context and purpose to which I have already referred.
To reiterate, and as the plurality observed in SZTAL v Minister for Immigration and Border Protection:[44]
The starting point for the ascertainment of the meaning of a statutory provision is the text of the statute whilst, at the same time, regard is had to its context and purpose. Context should be regarded at this first stage and not at some later stage and it should be regarded in its widest sense. This is not to deny the importance of the natural and ordinary meaning of a word, namely how it is ordinarily understood in discourse, to the process of construction. Considerations of context and purpose simply recognise that, understood in its statutory, historical or other context, some other meaning of a word may be suggested, and so too, if its ordinary meaning is not consistent with the statutory purpose, that meaning must be rejected (emphasis added).
[44] [2017] HCA 34; (2017) 347 ALR 405; 91 ALJR 936 [14] per Kiefel CJ, Nettle and Gordon JJ.
Yet it was said that the language of the OCA was nevertheless insufficiently clear and unmistakeable to displace the presumption against ousting the Court’s jurisdiction to hear and decide an OC’s claim for recovery of money owed by a lot owner.
I am of the view that the legislative requirement that the OC inform the lot owner of an intention by way of the final notice to ‘take action under Part 11’ which is headed ‘Applications to VCAT’ is directly contradictory to then initiating a complaint in the Magistrates’ Court.
An OC seeking to remedy this practically may opt to add a sentence such as: ‘This includes applying to VCAT or a court of competent jurisdiction seeking an order requiring you to pay’. However, for an OC to amend or add to the wording of the approved form has the consequence that it is no longer the approved form under the OCA and is contrary to the Note, s 163(2) and, arguably, the legislative regime as a whole under Division 1 of Part 11.
Next, I turn to a further inherent conflict that is not easily reconciled with the OC’s construction of s 30. A consequence of the OC’s interpretation is this. Because a final notice does not have to be given, the OC could sue a lot owner in the Magistrates’ Court for money owed as soon as 28 days elapsed on a s 31 fee notice (and, indeed, at any time after any final fee notice was issued). Whereas, in contrast, a VCAT application to recover money cannot be initiated – by ss 32 and 163(2) – until after 28 days had elapsed on the final notice.
To my mind, that consequence appears repugnant to a purposive reading of the OCA which was intended to under s 1 ‘create “appropriate mechanisms” for the resolution of disputes’. Moreover, the need for clarity and for parties to know where they stand was emphasised by the Attorney-General in the Second Reading Speech as follows:
In keeping with this scheme, the process for collection of owners corporation fees from lot owners is clearly set out in the bill, so that all parties will know where they stand. There will be a mandatory 28-day notice upon failure to pay fees. A second and final 28-day notice is discretionary, but the owners corporation cannot go to VCAT unless this final notice is given (emphasis added).[45]
[45]Second Reading (n 38) 2489.
The requirements of s 32(2)(c) and 163(2) are thus very difficult to reconcile with the Magistrates’ Court having concurrent jurisdiction where recovery is sought of money owed by the lot owner.
II. The requirement that Division 1 of Part 11 applies to the recovery of money owed by a lot owner pursuant to s 30(2)
The heading to Part 11 is ‘Applications to VCAT’. Headings to Parts of Acts form part of the Act.[46] Pursuant to s 30(2), Division 1 of Part 11 applies to the recovery of money owed to a lot owner.
[46]ILA (n 39) s 36(1).
Within Division 1, numerous provisions refer to the powers (and parameters to powers) of VCAT as follows: s 162 VCAT may hear and determine … ; s 163 Who may apply to VCAT …; s 164 VCAT may dismiss … ; s 165 what orders can VCAT make … ; s 166 If VCAT determines …, VCAT may make an order … ; s 167 What must VCAT consider … ; and so on.
Accordingly, the only possible construction of s 30 as urged by the OC is that all the provisions within Division 1 apply to a proceeding in the Magistrates’ Court, as though the reference to VCAT in all these instances is to be interchangeable with the Court.
Although the EM is an aid only, the EM is silent regarding the prospect of such a course being adopted by a court of competent jurisdiction. For example, cl 162 confirms the jurisdiction of VCAT to hear and determine ‘an owners corporation dispute’ as defined within the clause.[47] Clause 163 refers to who may apply to VCAT in relation to an OC dispute and so on.
[47]EM (n 38) 22, 162.
As stated previously, the purpose under s 1(b) of the OCA is to provide for appropriate mechanisms for the resolution of disputes relating to OCs.
The Attorney-General identified in the Second Reading one issue as ‘critical’ to all OCs which was the need for a comprehensive dispute resolution system and then went onto say:
Dispute resolution options are limited to services available for resolving neighbourhood disputes, or, if a dispute relates to the OCA, regulations or rules, applying for a formal order from the Magistrates’ Court. These options are too limited for the diverse range of disputes and parties operating in today’s complex owners corporation environment.[48]
[48]Second Reading (n 38) 2488.
Reference by the Attorney-General to ‘the diverse range of disputes’ in the OC environment and to the obtaining of a formal order from the Magistrates’ Court being ‘too limited’ is highly significant in the present context. The Second Reading articulates explicitly the legislature’s awareness of the multiplicity of statutory bases upon which, in combination, money may be owed by a lot owner or may be the subject of dispute.
Again, examining the text of the provisions with Division 1 of Part 11, the breach of the obligation of the lot owner to pay money owed is, as stated, a dispute that VCAT may hear and decide. However, the task of VCAT is expressed very broadly in s 162 as follows: to 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 – … (b) an alleged breach by a lot owner … of an obligation imposed on that person … to pay money owed.
Again, this much broader expression of the task of VCAT is, to my mind, consistent with the language in s 30(2) in which the words ‘as a debt’ do not appear in connection with recovery of money owed by a lot owner (although they do in s 30(1) to recovery of money owed by third-party debtors).
For these reasons, having regard to the express and unambiguous language contained in Division 1 of Part 11 (including but not limited to the heading), these provisions point to a clear and unmistakeable implication to alter or remove the Court’s jurisdiction with respect to recovery of money owed by lot owners.
III. Under Division 1 of Part 11, the operation of ss 165(1) and 167(1) including with respect to considerations of fairness, oppressiveness, prejudice and discrimination
Notwithstanding my stated findings regarding the language and provisions as a whole in Division 1 of Part 11, it is appropriate to deal with certain specific provisions in further detail.
In s 165(1) there is a reference to the making of orders that requires close examination. It is stated that, in determining an OC dispute, VCAT may make any order it considers fair including an order for the payment of a sum of money found to be owing by one party to another party (emphasis added).[49]
[49]OCA (n 1) s 165(1)(c)(i).
Of course, it is well-established that the grant of power to make any order that the Tribunal considers fair does not abrogate the Tribunal from an obligation to apply the law and not merely be guided by it.[50]
[50]Christ Church Grammar School v Bosnich & Anor [2010] VSC 476 [40].
To that extent, putting aside the difficulties referred to in the language overall, the requirement regarding fairness in s 165(1) causes no obvious contrariety.
Additionally, under s 167(1), in making an order regarding an OC dispute, VCAT must have regard to specific considerations including:
(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; and
(e)any other matter VCAT thinks relevant (emphasis added).
Clause 167 of the EM confirms that VCAT in making an order is required to consider the conduct of the parties, their acts or omissions, the impact of a resolution or proposed resolution on the lot owners as a whole, including whether it would be oppressive or unfairly prejudicial to, or unfairly discriminate against, a lot owner, as well as any other matter VCAT thinks relevant (emphasis added).[51]
[51]EM (n 38) 23, 167.
Of course, questions of fairness, oppressiveness and prejudicial or discriminatory conduct are not generally matters that arise for judicial consideration in a cause of action in the Magistrates’ Court for recovery of a debt or liquidated demand. Such considerations are more commonly within the remit of administrative tribunals and decision-makers.
Yet, Meringnage v Interstate Enterprises Pty Ltd[52] is authority for the proposition that because in Victoria, there is no strict separation of powers at the State level, State courts can exercise administrative power as well as State judicial power (and, conversely, State tribunals are not precluded from exercising State judicial power).
[52] [2020] VSCA 30.
Nevertheless, it seems to me that the requirement under s 167(1)(c) that VCAT must consider, in making an order, the impact of a resolution or proposed resolution ‘on the lot owners as a whole’ does create a contrariety with judicial consideration of a claim for debt or liquidated demand under s 100(1). The Court may find itself be in the unusual position of having to consider interests of non-parties (being other lot owners).
Moreover, an ordinary resolution is required to authorise the OC to bring litigation to recover money against a lot owner. Hence, if challenged, it is difficult to see how or on what basis the Magistrates’ Court would look behind the making of a resolution. To that extent, a repugnancy appears to arise to alter the Court’s jurisdiction.
IV. Under Division 1 of Part 11, the requirement under s 165(4) that ‘VCAT’s power to award costs under s 109 of the VCAT Act 1998 is not affected’
There is a fundamental difference between a judicial exercise of awarding costs and VCAT’s power to award costs under s 109 of the VA.
The principles that a Court is to apply were very helpfully articulated in Sandpiper Developments Pty Ltd v Main Beach Developments Qld Pty Ltd (No 2) by Garde J as follows (omitting citations):
The relevant principles as to costs are well known. The court has a broad discretionary power to make orders as to costs. The court’s discretion is unfettered but is exercised judicially upon facts connected with the litigation and not by reference to irrelevant or extraneous considerations. Although costs are in the discretion of the court the ordinary rule is that, in the absence of sound reasons to the contrary, a successful litigant should receive his or her costs. The purpose of an order for costs is to compensate the successful party and not to punish the unsuccessful party (emphasis added).[53]
[53] [2024] VSC 581 [5].
By contrast, the starting point with respect to costs under s 109(1) of the VA is that each party is to bear their own costs in the proceeding.
Further, the Tribunal may only order that a party pay all or part of the costs of another party in a proceeding ‘if it is satisfied that it is fair to do so’, having regard to the factors set s 109(3).
Thus, s 165(4) of the OCA would require the Magistrates’ Court to award costs in a way contrary to well-established principles governing a judicial award of costs.
In this way, the Magistrates’ Court’s jurisdiction with respect to questions of costs – arising in claim for recovery of money owed by a lot owner – is clearly and unmistakably altered and, arguably, withdrawn.
CONCLUSION
In summary, the inconsistencies or contrarieties that displace the presumption the two statutes were intended to work harmoniously – such that the Magistrates’ Court has concurrent jurisdiction (with respect to claims for recovery of money owed by the lot owner) – are these:
a) The plain language of s 30(2) - which states that ss 31 and 32 and all of the provisions of Division 1 of Part 11 (‘Applications to VCAT’) apply.
b) The express and unambiguous language contained in Division 1 of Part 11 (including but not limited to the heading).
c) The contradictory and irreconcilable practical consequences that flow from the requirements contained s 32(2)(c) combined with the content of Note at the foot of s 32 and 163(2) – when read together and in the broader context of the Act.
d) The apparent withdrawal or alteration of the Court’s costs jurisdiction with respect to OC disputes by way of the requirement under s 165(4) of the OCA that VCAT’s power to award costs under s 109 of the VA is not affected.
e) The required considerations under s 167(1) of the OCA that appear to alter the ordinary incidents of the Court’s jurisdiction.
Therefore, having examined closely the language and broader context of these provisions and upon a purposive reading of the OCA in accordance with the principles referred to previously, I conclude these matters are directly contradictory or repugnant to a conclusion that the Magistrates' Court has jurisdiction under s 100(1) of the MCA and/or under s 30(1) of the OCA with respect to recovery of money owed by a lot owner to an OC.
These matters conflict in an unreconcilable way with the purpose and intention of the legislature. They create a clear and unmistakeable inference that the Court’s broad jurisdiction to determine debts and liquidated demands is altered and derogated from with respect to claims for recovery of money owed by a lot owner under the OCA.
In other words, there is a clear and unmistakeable implication to alter or remove the Court’s jurisdiction with respect to claims for recovery of money owed by a lot owner under the OCA.
Moreover, the construction contended for by the OC has the undesirable effect of creating uncertainty and irreconcilable contradictions, and of increasing confusion for lot owners and inevitably, OCs (who are, in effect, collectives of lot owners who must make resolutions to empower litigation). These matters constitute further very strong grounds to displace the presumption that the legislature intended both statutes to operate, such that the Magistrates’ Court has concurrent jurisdiction to determine actions to recover money from lot owners under the OCA.
Finally, notwithstanding my conclusion that the Court lacks jurisdiction to hear and determine the substantive proceeding, the Court retains the authority to consider and determine questions concerning its own jurisdiction, and to make such orders as are necessary or incidental to that determination, given that the proceeding has been commenced in this Court.
I will hear from the parties as to next steps.
Magistrate M A Hoare
8 July 2025
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