Voet v Body Corporate for Swell Apartments
[2011] QCATA 48
•8 March 2011
| CITATION: | Voet v Body Corporate for Swell Apartments [2011] QCATA 48 |
| PARTIES: | Simone Voet (Applicant/Appellant) |
| v | |
| Body Corporate for Swell Apartments (Scheme 35926) (Respondent) |
APPLICATION NUMBER: APL274-10
| MATTER TYPE: | Appeals |
HEARING DATE: On the papers
HEARD AT: Brisbane
| DECISION OF: | Justice Alan Wilson, President Peta Stilgoe, Member |
DELIVERED ON: 8 March 2011
DELIVERED AT: Brisbane
ORDERS MADE: Appeal dismissed.
| CATCHWORDS : | BODY CORPORATE – where judgment against applicant for unpaid levies, penalty interest and legal costs – where applicant sought relief from payment of penalty interest and legal costs – whether body corporate entitled to charge penalty interest – whether special circumstances to justify allowing applicant relief from penalty interest – whether body corporate can recover indemnity costs – whether, and to what extent, ability to recover costs limited by the provisions of the Legal Profession Act 2007 ADJUDICATOR’S JURISDICTION – where applicant applied for relief for payments due on unit no longer owned by her – whether a “dispute” Body Corporate and Community Management Act 1997, ss 226, 227(1)(b), Schedule 6 Body Corporate and Community Management (Accommodation Module) Regulation 2008, ss 142, 143(2), 143(5), 143(6) Legal Profession Act 2007, ss 300, 301, 328, 329, 330, 331, 332, 335(5), 335(7) Uniform Civil Procedure Rules 1999, Chapter 17A |
APPEARANCES and REPRESENTATION (if any):
This matter was heard on the papers in accordance with section 32 of the Queensland Civil and Administrative Tribunal Act 2009.
REASONS FOR DECISION
The President
I have read, and agree with, the reasons of Ms Stilgoe. I also agree that the appeal should be dismissed.
Member Stilgoe
Ms Voet has fallen on difficult times. For the last three years she has been unable to work and her sole source of income was a sickness benefit/disability pension. As a result, she was unable to meet the body corporate levies for two apartments she owned in the Swell Apartments. She sold one of the apartments in April 2009.
The Body Corporate was determined to recover all outstanding fees plus interest, and costs. Ms Voet filed an application for adjudication with the Commissioner for Body Corporate and Community Management, seeking relief from payment of the Body Corporate’s legal bills and a discount on the interest payable from 30% to 8%. On 31 August 2010, an Adjudicator dismissed her application.
She has appealed the Adjudicator’s decision to QCAT, saying that:
a) Contrary to a specific finding, the Adjudicator did have jurisdiction to order relief in relation to the costs incurred in relation to the apartment Ms Voet sold in 2009.
b) The interest charged by the body corporate was a penalty, and not a genuine pre-estimate of its damage.
c) Ms Voet was not given an opportunity to test whether the legal fees were reasonable in accordance with the Legal Profession Act 2007 (LPA).
The first of these is a question of law, and leave to appeal is unnecessary: QCAT Act s 142(3)(b). The second may be categorised the same way. The third is a mixed question of law and fact, and leave is necessary.
Jurisdiction
The Adjudicator gave this question careful consideration in the written reasons for the decision, noting:
a) Section 227(1)(b) of the Body Corporate and Community Management Act 1997 (BCCM Act) defines “dispute” as a dispute between “the body corporate … and owner or occupier of a lot included in the scheme”.
b) Schedule 6 of the BCCM Act defines “owner of a lot” as a person who “is, or is entitled to be, the registered owner of the lot”.
c) That, while the definition of “dispute” in s 227 made provision for disputes against former body corporate managers as well as current body corporate managers, there is no such provision for former owners.
Ms Voet has not provided QCAT with any submissions or authorities to demonstrate that the Adjudicator’s reasoning was incorrect.
The Adjudicator omitted to mention that the definition of “owner” in Schedule 6 of the BCCM Act is modified by s 226 when dealing with Chapter 6 of the Act (dispute resolution). Section 226 states that:
[O]wner, of a lot, means a person in the person’s capacity as the owner of the lot, and not, for example, in the person’s capacity as a service contractor or letting agent for the scheme.
The Adjudicator’s omission does not alter the conclusion, with which I agree. The Adjudicator had no jurisdiction to consider Ms Voet’s claim in relation to the unit she sold in April 2009.
Interest
The Body Corporate operates under the Body Corporate and Community Management (Accommodation Module) Regulation 2008 (the Module). Section 142 of the Module allows a body corporate to fix, by ordinary resolution, a penalty to be paid by owners if their contribution, or part of their contribution, is not received by the due date fixed in the notices given to the owners. The penalty must not be more than 2.5% per month simple interest. Section 143(1) of the Module provides that, if a contribution is not received, the body corporate may recover the amount of the contribution, any penalty for not paying on time, and any costs reasonably incurred in recovering the amount of the contribution.
The Adjudicator called for, and received, evidence of a resolution of the Body Corporate on 22 August 2007 fixing the penalty interest at the maximum rate of 2.5% per month. The Adjudicator had copies of the notices requiring contribution which clearly stated a date for payment, and the consequences for not paying on that date.
The Body Corporate is entitled to charge penalty interest pursuant to the Module. That regime overrides any general legal notions of “penalty” interest or any requirement that the penalty be a genuine pre-estimate of the Body Corporate’s losses. The validity of bodies corporate charging penalty interest has already been confirmed by the District Court in Queensland.[1] Ms Voet’s appeal in relation to interest must fail.
[1] Body Corporate for Sunseeker Apartments v Jasen [2009] QDC 162.
It is obvious that Ms Voet thinks a rate of 30% is unfair. Under s 143(6) of the Module, the Body Corporate can waive payment of a penalty if it considers there are special circumstances. That discussion involves questions of fact, not law and, therefore, is outside the scope of this appeal.[2]
Legal Fees
[2] Section 289(2) BCCM Act.
Ms Voet has enumerated eighteen reasons why she should not have to pay the Body Corporate’s legal fees. To the extent that a reason is expressed as “the Adjudicator failed to investigate”, I am not persuaded that this is a valid ground for challenge of the decision. The Adjudicator must investigate any application, but that power is limited to a requirement that the Adjudicator act quickly and with as little formality and technicality as is consistent with a fair and proper consideration of the application.[3]
[3] Section 269 BCCM Act.
Ms Voet’s only complaint in the original application was that the legal costs were not necessary, were “huge”, and could have been avoided if the Body Corporate had negotiated a settlement. The Adjudicator did investigate and consider each of these issues. Ms Voet cannot complain that the Adjudicator did not conduct wide ranging investigations about matters that were not raised in the application.
Ms Voet says that she is a third party payer pursuant to s 300 of the LPA and, therefore, she is entitled to a copy of the costs agreement between the Body Corporate and its lawyers, but has not received one; she has a right to request an itemised bill; and, a right to require an assessment of costs.
In fact, Ms Voet is a non-associated third party payer within the meaning of s 301(3) of the LPA; her obligation to pay legal fees is to the Body Corporate, not the law practice.
Ms Voet says she has not been provided with a copy of the costs agreement. As a non-associated third party payer, she is not entitled to a copy. That right is given to clients and associated third party payers.[4] It follows, therefore, that Ms Voet’s assertions that the Body Corporate is not entitled to enforce the costs agreement and that the Adjudicator did not make any determination about the costs agreement are unsustainable.
[4] Section 322 LPA.
Ms Voet says she has not been given an opportunity to set aside any costs agreement pursuant to s 328 of the LPA. Section 328(1) refers to an application by a client. Ms Voet is not a client; therefore, she has no right to make such an application.
Section 329 of the LPA (legal costs cannot be recovered unless a bill has been served) does not apply to Ms Voet’s situation. That section refers to proceedings instituted by the law practice; here, proceedings were commenced by the Body Corporate. Similarly, ss 330 (bills) and 331 (notification of a client’s rights) are not relevant to Ms Voet’s situation.
Pursuant to s 335(7) of the LPA, upon a written request to it, the law practice must have provided Ms Voet with sufficient information to allow her to consider making a costs application.
Ms Voet has provided copies of her correspondence with the Body Corporate. She tells of the many telephone calls to the law practice, none of which was returned. There was no material before the Adjudicator suggesting that Ms Voet had exercised her right under s 335(7) of the LPA by writing to the law practice requesting information.
Section 335(5) of the LPA provides that a request for an assessment of costs must be made within 12 months of the request for payment was made. Ms Voet did not make any application for an assessment of costs even though she had that opportunity. As Ms Voet has not availed herself of the right to request a costs assessment, she cannot now complain that the Adjudicator failed to make wide ranging inquiries about the legitimacy of the costs, particularly when Ms Voet made no specific submissions about these matters at the time.
Chapter 17A of the Uniform Civil Procedure Rules 1999 (UCPR) applies to costs payable or to be assessed under an Act, the UCPR or an order of the court. The costs in dispute here do not fall into any of these categories.
The submissions refer to the decision of the New South Wales Court of Appeal in Owners of Strata Plan Number 36131 v Dimitriou[5], as authority for the proposition that “reasonable costs” can only mean standard costs, not indemnity costs. As was pointed out by the former Commercial and Consumer Tribunal in Body Corporate For Liberty CTS: 27241 v Alotier Pty Ltd And Stewart Silver King and Burns[6] the New South Wales legislation merely covered “expenses” and not “recovery costs”, and that expression was held not to include the actual legal costs and disbursements generated by the very proceedings that were brought. Accordingly, that Court’s views on whether reasonable costs can include indemnity costs are, with respect, irrelevant here.
[5] (2009) 74 NSW LR 370.
[6] [2009] CCT KA009-08 at paragraph 42.
In Body Corporate for Sunseeker Apartments CTS 618 v Jasen[7] the body corporate sought judgment for recovery costs totalling $41,445.91. That amount was constituted by the fees charged by the law practice to the body corporate. Judge Newton determined that those fees had been reasonably incurred, without requiring an assessment or an examination of the difference between standard and indemnity costs. He noted, simply:[8]
the defendant has caused unnecessary delays in the litigation and further caused a number of substituted service applications to be made by the plaintiff in its attempts to serve documents on her.
[7] [2009] QDC 162 at paragraph 28.
[8] Supra at paragraph 29.
It is implicit in His Honour’s decision that reasonable costs can include indemnity costs. The Court of Appeal in Queensland has also endorsed a Magistrate’s decision to allow the recovery of indemnity costs[9]. Ms Voet’s argument in this regard must fail.
[9]Warren v Body Corporate for Buon Vista Community Titles Scheme 14325 [2004] QCA 104.
Ms Voet further asserts that the Adjudicator failed to identify whether she had been given procedural fairness in any application for judgment. Ms Voet does not point to any lack of procedural fairness in those proceedings, nor did she appeal that decision. She cannot raise it now as a ground to set aside the obligation to pay legal costs.
The Adjudicator recorded that the amount of the levies payable by Ms Voet was not in dispute.[10] In those circumstances, there is no obligation on the Adjudicator to enquire about whether the Body Corporate had complied with its obligations under the BCCM Act, or whether the levy had been properly imposed as required under the BCCM Act.
[10] Statement of reasons, page 4.
Finally, Ms Voet complains that the Adjudicator was in error in the application of the term “reasonable”. At page 5 of the transcript, the Adjudicator says this:
However, I consider the body corporate needs to establish its right to costs by providing evidence that those costs are reasonable in amount and reasonably incurred.
That extract demonstrates that the Adjudicator correctly identified that: the onus of proof lay with the Body Corporate; the onus on the Body Corporate was to prove that the costs were reasonable.
In finding that the costs were reasonable, the Adjudicator had regard to these matters:
a) That the test is objective and should be determined according to the ordinary meaning of the word.
b) Ms Voet’s payment history.
c) That s 143(5) of the Module requires that payments be allocated to the indebtedness in a particular order.
d) That s 143(2) of the Module compels a body corporate to institute proceedings to recover unpaid levies if they have been outstanding for 2 years or more.
e) That recovery action was terminated after Ms Voet entered into a repayment arrangement and made the first payment. The Body Corporate reactivated recovery action when Ms Voet fell into arrears.
f) That Ms Voet provided no evidence of any request to waive penalty interest or costs at any time prior to lodging the application, save for one email from her brother after judgment was entered against her.
g) There was no evidence that the arrangement between the Body Corporate and the law practice was anything other than a normal commercial arrangement.
Findings of fact by a Tribunal will not usually be disturbed on appeal if the facts inferred by the Tribunal, upon which the finding is based, are capable of supporting its conclusions, and there is evidence capable of supporting any inferences underlining it.[11] These findings were reasonably open to the Adjudicator given the material filed by the parties and Ms Voet has not persuaded me that the finding should be disturbed.
[11]Dearman v Dearman (1908) 7 CLR 549 at 561; Fox v Percy (2003) 197 ALR 201 at 207, 208.
It follows that, assuming that the issues raised by Ms Voet comprised questions of law (QCAT Act s 142), her appeal should be dismissed. Insofar as any of the matters she has attempted to ventilate comprise questions of fact or of mixed fact and law, leave to appeal must be refused.
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