The Owners Of Strata Plan 58041 v Temelkovski (No.2) and Temelkovski v The Owners Of Strata Plan 58041
[2015] FCCA 1252
•15 May 2015
FEDERAL CIRCUIT COURT OF AUSTRALIA
| THE OWNERS OF STRATA PLAN 58041 v TEMELKOVSKI (No.2) and TEMELKOVSKI v THE OWNERS OF STRATA PLAN 58041 | [2015] FCCA 1252 |
| Catchwords: COSTS – Application to vary costs order pursuant to s.229 of the Strata Schemes Management Act 1996 (NSW) (SSM Act) – whether s.229 of the SSM Act should be applied in circumstances where the respondent would contribute one-fifth of the costs of the applicant by reason of her being a lot owner of the strata plan. |
| Legislation: Judiciary Act 1903 (Cth), ss.79, 79(1) |
| John Robertson & Co Ltd (In Liq) v Ferguson Transformers Pty Ltd (1973) 129 CLR 65 Sahade v Owners Corporation SP 62022 [2013] NSWSC 1791 The Owners – Strata Plan No 70798 v Bakante Constructions Pty Ltd [2014] NSWCA 410 The Owners of Strata Plan 58041 v Temelkovski [2014] FCCA 2962 |
| Applicant: | THE OWNERS OF STRATA PLAN 58041 |
| Respondent: | ZORA TEMELKOVSKI |
| File Number: | SYG 2967 of 2012 |
| Applicant: | ZORA TEMELKOVSKI |
| Respondent: | THE OWNERS OF STRATA PLAN 58041 |
| File Number: | SYG 1078 of 2014 |
| Judgment of: | Judge Manousaridis |
| Hearing date: | Decided on the papers |
| Date of Last Submission: | 13 January 2015 |
| Delivered at: | Sydney |
| Delivered on: | 15 May 2015 |
REPRESENTATION
SYG 2967 of 2012
| Solicitors for the Applicant: | Mr M Chenoweth of O'Neill Partners |
| Solicitors for the Respondent: | Mr K Harkness of K M Harkness & Co |
| Solicitors for the Trustee: | Ms S Nash of Sally Nash & Co |
SYG 1078 of 2014
| Solicitors for the Applicant: | Mr K Harkness of K M Harkness & Co |
| Solicitors for the Respondent: | Mr M Chenoweth of O'Neill Partners |
| Solicitors for the Trustee: | Ms S Nash of Sally Nash & Co |
ORDERS
In proceedings SYG2967/2012:
Pursuant to order 6 of the orders made on 19 December 2014, order 5 is set aside and is replaced by the following order:
The respondent and the trustee each bear her and his own costs of the application for review and, pursuant to s.229 of the Strata Schemes Management Act 1996 (NSW), the applicant pay its own costs of the application for review with such costs to be paid from contributions levied on all lots exclusive of Lot 2.
In proceedings SYG1078/2014:
Subject to order 2, the applicant (Ms Temelkovski) and the trustee bear her and his own costs of the application for annulment and, pursuant to s.229 of the Strata Schemes Management Act 1996 (NSW), the respondent (The Owners of Strata Plan 58041) pay its own costs of the application for annulment with such costs to be paid from contributions levied on all lots exclusive of Lot 2.
The parties have liberty to apply within fourteen days to vary or set aside order 1.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYG 2967 of 2012
| THE OWNERS OF STRATA PLAN 58041 |
Applicant
And
| ZORA TEMELKOVSKI |
Respondent
SYG 1078 of 2014
| ZORA TEMELKOVSKI |
Applicant
And
| THE OWNERS OF STRATA PLAN 58041 |
Respondent
REASONS FOR JUDGMENT
Introduction
On 19 December 2014 I delivered my reasons for judgment in The Owners of Strata Plan 58041 v Temelkovski[1] and made orders setting aside the sequestration order made against the respondent (Ms Temelkovski) and dismissing the creditor’s petition filed by the applicant (Strata Owners). I also made an order that, subject to any application by a party seeking otherwise, “the applicant, the respondent, and the trustee each bear its, her, and his own costs of the application for review”.
[1] [2014] FCCA 2962
Ms Temelkovski’s application to vary the costs order
Ms Temelkovski has applied for an order to vary the costs order I made on 19 December 2014. Ms Temelkovski seeks to vary the order as follows:[2]
The Applicant, the respondent, and the trustee each bear its, her, and his own costs of all proceedings in this Court including of the application for review and that, pursuant to section 229 of the Strata Schemes Management Act 1996 (NSW) all such costs of the applicant (that is, of the Owners of Strata Plan 58041) be paid from contributions levied on all lots exclusive of Lot 2.
[2] The underline indicates the variation sought by Ms Temelkovski.
Ms Temelkovski’s application for a variation of the costs order is made pursuant to s.229 of the Strata Schemes Management Act 1996 (NSW) (SSM Act), which provides:
(1)This section applies to proceedings brought by one or more owners of lots against an owners corporation or by an owners corporation against one or more owners of lots (including one or more owners joined in third party proceedings).
(2)The court may order in proceedings that any money (including costs) payable by an owners corporation under an order made in the proceedings must be paid from contributions levied only in relation to such lots and in such proportions as are specified in the order.
(3)If a court makes such an order the owners corporations must, for the purpose of paying the money ordered to be paid by it, levy contributions in accordance with the terms of the order and must pay the money out of the contributions paid in accordance with that levy.
(4)Division 2 of Part 3 of Chapter 3 (section 78(2) excepted) applies to and in respect of contributions levied under this section in the same way as it applies to contributions levied under that Division.
Ms Temelkovski submits that the effect of the costs order I made on 19 December 2014 is that Ms Temelkovski would be required to pay one-fifth of the Strata Owners’ costs of the proceedings in this matter, despite my making orders setting aside the sequestration order and dismissing the creditor’s petition. Ms Temelkovski further submits that it would be unjust for her to contribute one-fifth of the costs of the Strata Owners in circumstances where she has borne her own costs in these proceedings.
Ms Temelkovski relies on Sahade v Owners Corporation SP 62022[3] in which Kunc J ordered the plaintiff and defendant proprietors to bear their own costs in circumstances where, even though the plaintiff was successful in her application for review of the Registrar-General’s decision, all parties had to deal with the consequences of an error for which none of them was responsible. Kunc J, however, found it appropriate to apply s.229 of the SSM Act to the proceedings before him:[4]
Finally, and correctly, the defendant proprietors did not object to an order that the plaintiff’s strata levies should not be applied to pay the first defendant’s costs. The Court has power to make such an order under s 229 of the Strata Schemes Management Act 1996 (NSW). However, while the Court will make no other order as to costs in these proceedings, s 229 only relates to money payable by an owners’ corporation under an order made in the proceedings. The Court will therefore order the owners’ corporation to pay its own costs of the proceedings in order to engage s 229.
[3] [2013] NSWSC 1791
[4] [2013] NSWSC 1791 at [80]
Also relevant are the following observations made by Leeming JA in The Owners – Strata Plan No 70798 v Bakante Constructions Pty Ltd[5]:
Section 229 is a specific power whose exercise impacts not merely the successful lot owner and the unsuccessful owners corporation, but (indirectly) all other lot owners. I consider that s 229 is the only means by which a lot owner with a favourable costs order can be shielded from a partial exposure to meet, by levy, the liability of the owners corporation (which is to say, I do not consider that the general power to order costs goes so far).
[5] [2014] NSWCA 410 at [95]
The Strata Owners elected not to make submissions in response to Ms Temelkovski’s application for a variation of the costs order.
Jurisdiction to make order under s.229
The Court has jurisdiction to make an order under s.229 of the SSM Act where it applies. The source of the Court’s jurisdiction is s.79(1) of the Judiciary Act 1903 (Cth) which provides:
The laws of each State or Territory, including the laws relating to procedure, evidence, and the competency of witnesses, shall, except as otherwise provided by the Constitution or the laws of the Commonwealth, be binding on all Courts exercising federal jurisdiction in that State or Territory in all cases to which they are applicable.
It has been said that s.79 “requires the assumption to be made that federal courts lie within the field of application of State laws on the topics to which it refers, at least in those cases in which the State laws are expressed to apply to courts generally”.[6] On that assumption, s.229 of the SSM Act applies to this Court because it applies to courts generally.
[6] John Robertson & Co Ltd (In Liq) v Ferguson Transformers Pty Ltd (1973) 129 CLR 65 at page 95
Should an order be made?
In my opinion, an order under s.229 of the SSM Act should be made to vary the order for costs I made on 19 December 2014. The obvious intent of the order was that the applicant would pay its own costs without seeking any contribution from Ms Temelkovski. The fulfilment of that purpose requires that I make an order under s.229 of the SSM Act.
Annulment application
In the alternative to her application to set aside the sequestration order, Ms Temelkovski applied to annul her bankruptcy. In light of the orders I made on 19 December 2014, on 25 February 2015 I dismissed the application for an annulment.
I made no order as to the costs of the annulment application. I have assumed that each party is to pay the costs of that application. I propose, however, to formalise my assumption by making the same costs order in relation to the annulment proceedings as the order I propose to make in relation to the application for review, but reserve to the parties liberty to apply within fourteen days to apply to set aside or vary such order.
Disposition
I propose to vary the orders for costs I made on 19 December 2014 in the manner substantially suggested by Ms Temelkovski.
I certify that the preceding thirteen (13) paragraphs are a true copy of the reasons for judgment of Judge Manousaridis
Associate:
Date: 15 May 2015
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