The Owners Unit Plan No 1565 v Ruff (Civil Dispute)

[2018] ACAT 31

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

THE OWNERS – UNIT PLAN NO 1565 v RUFF (Civil Dispute) [2018] ACAT 31

XD 318/2016

Catchwords:              CIVIL DISPUTE – unpaid levies – owners corporation incurred expenses when taking action to recover unpaid levies – whether it was reasonable for the relevant owners corporation to incur the expenses claimed – whether it is reasonable for the second or third arrears letters to be double the price of the first arrears letter – whether the amount for a fixed charge to commence legal action is reasonable

Legislation cited:      Unit Titles Management Act 2011 s 31

Cases cited:The Owners – Unit Plan No 3182 v Black and Anor [2018] ACAT 6

Tribunal:                   Senior Member H Robinson

Date of Orders:  20 March 2018

Date of Reasons for Decision:         20 March 2018

AUSTRALIAN CAPITAL TERRITORY  )

CIVIL & ADMINISTRATIVE TRIBUNAL       )          XD 318/2016

BETWEEN:

THE OWNERS – UNIT PLAN NO 1565

Applicant

AND:

PHILIP JOHN RUFF

Respondent

TRIBUNAL:             Senior Member H Robinson

DATE:20 March 2018

ORDER

The Tribunal orders that:

1. Within 28 days the respondent pay the applicant the amount of $1,123.40.

………………………………..

Senior Member H Robinson

REASONS FOR DECISION

1. These reasons are supplementary to the Tribunal’s reasons in The Owners – Unit Plan No 3182 v Black and Anor [2018] ACAT 6 (Black).

2. The respondent was ordered to pay the applicant the sum of $3,784.64 for unpaid levies, interest and the application fee. Additionally, the applicant claimed the following expenses:

Arrears final warning	$110.00
Arrears letter (3rd reminder)	$110.00
Commence legal action	$500.00
Demand letter	$37.40.00
Issue debt application	$396.00
Additional service fee	$77.00
ACAT judgment assessment hearing	$220.00
Phone/email demand	$33.00
Total	$1,483.40

1. The applicant noted that paralegal staff, amongst others, undertook significant work for which no payment was sought.

2. Taking into account the guiding principles outlined in Black, the Tribunal accepts that it was reasonable for the corporation to:

   (a)engage an agent to make investigations to take steps to recover the debt; and

   (b)issue proceedings.

3. The next question is whether the amount of the expenses was reasonable. Three items stand out.

4. The applicant’s agent sent a second and third arrears letter, charged at $110.00 each. Based on the information before the Tribunal, that amount appears to be double the amount typically charged for a first arrears letter. The applicants sought to explain the increase by reference to the ‘additional work’ and fact checking associated with a second arrears letter. We accept this to a point – although generally a form letter, the arrears letter still needs to be customised and debts calculated and confirmed. Still, the Tribunal had little evidence before it that demonstrates that it is reasonable to increase the charge for a second or third arrears letter to the significant amount argued for in this case. In short, the Tribunal does not consider the extra work sufficiently onerous so as to justify doubling the amount charged. Each arrears letter will be allowed at $55.00.

5. The second issue is an additional fixed charge of $500.00 for the commencement of legal action. We understand that this is a fee charged by the management company once a matter is referred to an agent for legal or collection action. The evidence does not disclose how the amount is arrived at, for example hourly rate or some other calculation. What the evidence does show is that much of the work charged for involves requesting updates, receiving updates and reporting back to the unit corporation to obtain instructions and then convey those instructions. This kind of work is not onerous and the Tribunal considers the charge of $500.00 is not reasonable. The Tribunal would allow an amount of $250.00.

6. Otherwise, the legal costs claimed for issuing the debt application, default judgment, and assessment hearings are allowable for the same reasons as those in Black.

7. The Tribunal therefore allows the sum of $1,123.40 for expenses under section 31 of the Unit Titles (Management) Act 2011 in this matter.

   ………………………………..

   Senior Member H Robinson