The Owners - Units Plan No 60 v Adam (Civil Dispute)

[2019] ACAT 7

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

THE OWNERS – UNITS PLAN NO 60 v ADAM (Civil Dispute) [2019] ACAT 7

XD 785/2018

Catchwords:                CIVIL DISPUTE – recovery of unpaid unit titles levies – costs under section 31 Unit Titles (Management) Act 2011

Legislation cited:        Unit Titles (Management) Act 2011 s 31

Cases cited:In the matter of Ruling Tribunal Section 31 of the Unit Titles (Management) Act 2011[2017] ACAT 56

The Owners – Units Plan No 3182 v Black & Anor [2018] ACAT 6

Tribunal:Senior Member J Lennard

Date of Orders:  17 January 2019

Date of Reasons for Decision:     17 January 2019

AUSTRALIAN CAPITAL TERRITORY  )

CIVIL & ADMINISTRATIVE TRIBUNAL       )          XD 785/2018

BETWEEN:

THE OWNERS – UNITS PLAN NO 60

Applicant

AND:

OSMAN ADAM

Respondent

TRIBUNAL:Senior Member J Lennard

DATE:17 January 2019

ORDER

The Tribunal orders that:

1.The respondent shall pay to the applicant, within 14 days of the date of this order, the amount of $7,166.01.

………………………………..

Senior Member J Lennard

REASONS FOR DECISION

1.The Owners – Units Plans No 60 in the ACT (UP 60) made an application on 30 July 2018 for the payment of outstanding levies in relation to unit number 2. The respondent is a proprietor of unit number 2 in UP 60.

2.The application included a claim for payment of costs incurred by UP 60 in pursuing the collection of the debt, pursuant to section 31 of the Unit Titles (Management) Act 2011 (Act).

3.Section 31 of the Act provides that if an owners corporation for a units plan has in carrying out its functions incurred an expense that is necessary because of a breach of the rules by a member of the corporation, the amount spent is recoverable by the owners corporation from the member as a debt. ‘Expense’ includes a reasonable legal expense reasonably incurred including the legal expense relating to a proceeding in the ACT Civil and Administrative Tribunal (ACAT).

4.The ACT Civil and Administrative Ruling Tribunal, sitting in In the matter of Ruling Tribunal Section 31 of the Unit Titles (Management) Act 2011, determined that legal professional costs and disbursements, company title and similar searches, filing and hearing fees and administrative costs (for example, charges for the owners corporation managing agent and a collections agency) incurred in bringing Tribunal proceedings to recover unpaid unit title levies are ‘expenses’ for the purposes of section 31 of the Act, if it was reasonable for the owners corporation to incur expenses of the type described and the amount of each component of the expenses sought is reasonable.[1]

[1]In the matter of Ruling Tribunal Section 31 of the Unit Titles (Management) Act 2011[2017] ACAT 56

5.The debt claimed by UP 60 totals $7,166.01 and is made up as follows:

(a)balance of levies in claim – $602.93;

(b)expenses and amended claim – $791.40;

(c)interest to 23 November 2018 at the statutory rate – $181.68;

(d)ACAT filing fee – $300;

(e)costs of attending the mediation on 11 September 2018 – $220;

(f)witness expenses – Chris Evans – $250;

(g)witness expenses – Brittany Lynch – $420;

(h)legal expenses of preparation for and attendance at the hearing – $4,400.

6.The Tribunal received written submissions from the applicant and the respondent, oral evidence from the applicant and two witnesses called by the applicant, as well as oral evidence from the respondent. It was evident during the course of the hearing that the respondent did not appreciate the nature of the administrative costs claimed, and that the respondent disputed liability to pay many of those administrative costs on the basis that he had entered into an oral agreement with the applicant for payment of the outstanding levies at a rate of $500 a month. The respondent asserted that in the circumstances of the existence of such an alleged oral agreement it was unreasonable for the applicant to pursue him for the debt. On the basis of the evidence provided by both the respondent and the witness Chris Evans for the applicant, I am satisfied that no such agreement had ever been arrived at. I further note that given that quarterly levies were being added to the outstanding debt, the payment of $500 a month would not have reduced the amount of levies owed to zero for an inordinate amount of time.

7.The expenses claimed by the applicant fall squarely within the type of expenses outlined by the Ruling Tribunal; that is, legal professional costs and disbursements, filing and hearing fees, and administrative costs incurred in bringing Tribunal proceedings to recover unpaid unit title levies. I find, in accordance with the principles laid down in The Owners – Units Plan No 3182 v Black and Anor[2] (Black) that the type of expenses claimed were reasonably incurred by the applicant in collecting the unpaid levies.

[2] [2018] ACAT 6

8.The witness costs claimed are legitimate expenses reasonably incurred, in the circumstances where the respondent argued that the collection process was not necessary in light of the alleged agreement. Mr Evans was called by the applicant to rebut the claim that there was a repayment agreement in place. Ms Lynch’s evidence corroborated that of Mr Evans, as well as providing information as to the history of arrears by the respondent. I am satisfied on the evidence before me that the witness expenses claimed were reasonably incurred. The respondent submitted that the amount was excessive, but this is not supported by the evidence. I am satisfied that the witness expenses claimed were reasonable as to amount.

9.The respondent submitted that nevertheless the quantum claimed was unreasonable. The applicant’s legal representative gave evidence as to the amount of work undertaken by both the strata manager and his office, and in written submissions indicated that the legal work undertaken was in excess of 32 hours, the preparation of witness statements took in excess of three hours, no charge has been made for scanning, printing and photocopying costs, and that no claim was made for travelling or accommodation costs by the applicant’s legal team. I am satisfied on the basis of the written submissions that the witnesses received compensation for the time spent attending the hearing. I have noted above that the evidence of these witnesses was necessary to rebut the claim of the respondent in relation to the alleged payment agreement.

10.I find that the quantum of expenses claimed is reasonable in accordance with the principles laid down in Black, and that the type of expenses claimed were reasonably incurred by the applicant in collecting the unpaid levies. Thus the claim by the applicant satisfies the ‘double reasonableness’ test: the expenses are reasonably incurred in the collection of the unpaid levies and the amounts claimed are reasonable.

………………………………..

Senior Member J Lennard

HEARING DETAILS

FILE NUMBER:	XD 785/2018
PARTIES, APPLICANT:	The Owners – Units Plan No 60
PARTIES, RESPONDENT:	Osman Adam
COUNSEL APPEARING, APPLICANT	N/A
COUNSEL APPEARING, RESPONDENT	N/A
SOLICITORS FOR APPLICANT	CCA Legal
SOLICITORS FOR RESPONDENT	N/A
TRIBUNAL MEMBERS:	Senior Member J Lennard
DATES OF HEARING:	23 November 2018