Wright v The Owners - Units Plan No 14
[2021] ACAT 77
•17 August 2021
ACT CIVIL & ADMINISTRATIVE TRIBUNAL
WRIGHT v THE OWNERS – UNITS PLAN NO 14 (Appeal) [2021] ACAT 77
AA 36/2020 (XD 1323/2019)
Catchwords: APPEAL – civil dispute – owners corporation seeking payment of arrears in levies and other charges – expenses incurred due to a wilful or negligent act or omission of a member of the corporation – double reasonableness test – where a party claims payment of unpaid levies and expenses in the original proceedings and expenses in the appeal proceedings – application of proportionality test to cumulative expenses that have been claimed in the proceedings – application of reasonableness test to moderate any excessive claims by an owners corporation – where the appeal tribunal finds certain costs claimed by the owners corporation was not reasonable expenditure – appeal dismissed
Legislation cited: ACT Civil and Administrative Tribunal Act 2008 ss 6, 7, 18, 32, 48, 79, 82
Court Procedures Act 2004 s 5A
Legislation Act 2001 ss 126, 140
Unit Titles (Management) Act 2011 ss 31, 80
Cases cited:ACN 120 452 744 Pty Ltd v Newham Business Brokers Pty Ltd & Anor [2021] ACAT 37
Bailey v Marinoff [1971] HCA 49
Bleyer v Google Inc [2014] NSWSC 897
B & T Constructions (ACT) Pty Ltd v Construction Occupations Registrar and the Owners – Units Plan 3324 [2013] ACTSC 219
Community Title Scheme No X v SV & HF [2018] ACAT 72
Corby v The Owners Corporation – Units Plan No 1035 [2019] ACAT 45
Excel Intelligent Pty Ltd v Thomson [2018] ACAT 4
Ford v The Owners Units Plan 259 [2012] ACAT 59
Giusida Pty Ltd v Commissioner for ACT Revenue [2016] ACTSC 275
In the Matter of AB [2018] ACAT 18
In the matter of Ruling Tribunal Section 31 of the Unit Titles (Management) Act 2011 [2017] ACAT 56
Keen v Telstra Corporation Limited(No 2) [2006] FCA 930
Kloska v National Jewish Association [2009] ACAT 8
Lazarus v Azize & Ors [2015] ACTSC 344
Proprietors Units Plan No 52 v Gold (1993) 44 FCR 123
Re Gold (A Bankrupt); Gold v The Proprietors –Units Plan No 52 and Anor [1996] FCA 1274
Sanderson as Liquidator of Sakr Nominees Pty Ltd (In Liquidation) v Sakr [2017] NSWCA 38
Tam v Du [2019] ACAT 94
The Owners – Strata Plan 36131 v Dimitriou (2009) 74 NSWLR 370
The Owners – Units Plan No 3182 v Black & Anor [2018] ACAT 6
The Owners – Units Plan 3788 v Black & Anor [2018] ACAT 24
The Owners – Units Plan 638 v Carroll [2018] ACAT 25
The Owners Units Plan No 3609 v Chen [2018] ACAT 26
The Owners – Units Plan 546 v Donnelly & Anor [2018] ACAT 27
The Owners – Units Plan No 3802 v Ilhan [2018] ACAT 28
The Owners – Units Plan 371 v Nabua & Anor [2018] ACAT 29The Owners – Units Plan No. 666 v Quaid & Anor [2020] ACAT 87
The Owners – Units Plan 3492 v Robson & Anor [2018] ACAT 30
The Owners – Unit Plan No 1565 v Ruff [2018] ACAT 31
The Owners – Units Plan No 2983 v Silvano [2020] ACAT 4
The Owners – Unit Plan No 3964 v Wang [2018] ACAT 32
Tribunal:Acting Presidential Member Prof. P Spender
Date of Orders: 17 August 2021
Date of Reasons for Decision: 17 August 2021
AUSTRALIAN CAPITAL TERRITORY )
CIVIL & ADMINISTRATIVE TRIBUNAL ) AA 36/2020
BETWEEN:
MATTHEW WHEELER HANDFORD WRIGHT
Appellant
AND:
THE OWNERS UNITS PLAN NO 14
Respondent
APPEAL TRIBUNAL: Acting Presidential Member Prof. P Spender
DATE:17 August 2021
ORDER
The Tribunal orders that:
1.The appeal is dismissed.
2.Within 30 days of today’s date, the appellant will pay the respondent the sum of $32,700.00 comprising:
(a)$4,886.64 unpaid levies and other charges; and
(b)$695.87 interest; and
(c)$19,417.49 for expenses pursuant to section 31 of the Unit Titles (Management) Act 2001 for proceedings XD 1323/2019; and
(d)$7,700 for expenses pursuant to section 31 of the Unit Titles (Management) Act 2001 for proceedings AA 36/2020.
………………………………..
Acting Presidential Member Prof. P Spender
REASONS FOR DECISION
Introduction and background
1.The reasons below explain why the Tribunal has made the orders set out above. In the reasons below, a reference to ‘ACAT’ or ‘tribunal’ refers to the ACT Civil and Administrative Tribunal generally, whereas ‘Tribunal’ or ‘Appeal Tribunal’ refers to the current panel. When referring to the first instance decision, the Tribunal uses the expression ‘Original Tribunal’, ‘Senior Member’, ‘original proceedings’ or the ‘first instance’ proceedings/decision. The appellant and the respondent to the appeal are referred to intermittently as ‘Mr Wright’ and the ‘Owners Corporation’ or ‘OC’ respectively.
2.This matter concerns commercial premises at Fyshwick, ACT, where Mr Wright is the owner of unit 2 in Units Plan No. 14 from which he runs his business. For many years there has been tension between Mr Wright and the Owners Corporation (OC). The proceedings at first instance in XD 1323/2019 were commenced on 23 September 2019 by the OC against Mr Wright for unpaid levies. On 6 October 2020 a Senior Member (the Original Tribunal) made a decision (the Original Decision) and delivered oral reasons where she ordered that the appellant pay the respondent the sum of $25,000 comprising:
(a)$4,886.64 for unpaid levies and other charges;
(b)$695.87 interest to date and
(c)$19,417.49 expenses under section 31 Unit Titles (Management) Act 2011 (UTM Act).
What must be established on the appeal?
3.This matter concerns an appeal from the Original Decision that was filed on 28 October 2020.
4.Orders were made on 30 November 2020 in the appellate proceedings which state that the appeal was to be conducted by way of review of the original decision pursuant to section 82 of the ACT Civil and Administrative Tribunal Act 2008 (the ACAT Act). Pursuant to section 79(3) of the ACAT Act, a party to the original application may, by application, appeal the decision to the tribunal on a question of fact or law.
5.The case law has interpreted section 79(3) of the ACAT Act to mean that the appellant must show an error of fact or law in the decision under appeal and that the error affected the result.[1] In Excel Intelligent Pty Ltd v Thomson,[2] the tribunal distilled some important principles[3] that were discussed by Burns J in B & T Constructions (ACT) Pty Ltd v Construction Occupations Registrar and the Owners – Units Plan 3324.[4] The principles are stated as follows (with some paraphrasing to apply the principles to the present context):
(a)An appeal tribunal must determine whether the decision appealed against is wrong because … an original tribunal fell into an error of law, made a finding of fact that is clearly wrong or exercised a discretion on a wrong principle or in a way that is clearly wrong.
(b)Ordinarily, if there has been no further evidence admitted or no relevant change in law, an appellant tribunal in entertaining an appeal … can exercise its appellate powers only if satisfied that there was an error on the part of the original tribunal below.
(c)The appeal tribunal will give proper allowance to the advantage of the original tribunal who saw and heard the witnesses, so that, ordinarily, facts found based on the assessment of witnesses will not lightly be overturned.
(d)The appeal tribunal is obliged to conduct a real review of the reasons of the original tribunal.
(e)Once error below has been found (after making proper allowance for the advantages of the original tribunal), the appeal tribunal can substitute its own decision based on the facts and the law as they now stand.[5]
[1] Tam v Du [2019] ACAT 94 at [22], citing Giusida Pty Ltd v Commissioner for ACT Revenue [2016] ACTSC 275 at [29]–[39]; Excel Intelligent Pty Ltd v Thomson [2018] ACAT 4 at [46]–[55]; In the Matter of AB [2018] ACAT 18 at [41] as stated in ACN 120 452 744 Pty Ltd v Newham Business Brokers Pty Ltd & Anor [2021] ACAT 37 at [4]
[2] [2018] ACAT 4
[3] [2018] ACAT 4 at [53]
[4] [2013] ACTSC 219 at [13] ff
[5] Excel Intelligent Pty Ltd v Thomson [2018] ACAT 4 at [53]
6.These principles have guided the Appeal Tribunal when reviewing the first instance decision and reaching its conclusion. The Appeal Tribunal has concluded that the appeal should be dismissed because the appellant did not demonstrate an error of fact or law in the reasoning of the Original Tribunal or that the Original Tribunal exercised a discretion on a wrong principle or in a way that is clearly wrong. The appeal is therefore dismissed, and the Appeal Tribunal has ordered the appellant to pay the sum of $7700 for the respondents’ expenses in the appeal proceedings pursuant to section 31 of the UTM Act. This is discussed below.
Grounds of appeal
7.As stated above, Mr Wright, who was the respondent in the original proceedings, lodged an application for appeal of the Original Decision on 28 October 2020.
8.In the grounds of appeal, the appellant pointed to various discrepancies in the figures that “were not dealt with” and sought the following orders.
· Set aside $4886.64 unpaid levies These should be calculated correctly.
· Set aside $774.59 in interest. The figures will change when the outstanding levies are correct.
· Set aside the $19338.71 expenses under section 31 [UTM Act] very unfair.[6]
[6] Application for appeal filed 28 October 2020
9.The application for appeal also referred to some “unconscionable conduct” that was alleged about a member of the executive committee who was a witness in the proceedings at first instance.
10.As stated above, orders were made for the conduct of the appeal on 30 November 2020, which required the appellant to provide submissions regarding the alleged errors of fact, law or discretion in the Original Decision which affected the decision. Pursuant to this order, the appellant filed submissions on 18 January 2021 which made the following additional allegations:[7]
[2] challenging the amount of $666 which was charged to the appellant by the respondent on 23 October 2015;
[3] the original letters of demand were sent to the wrong address;
[5] the minutes of the 2019 AGM were not included in the bundle of evidence provided to the appellant;
[6] the minutes of the 2020 AGM are not an accurate record of the proceedings;
[7] the forwarding of invoices for outstanding fees intimidated the appellant and constituted a breach of the Managers Code of Conduct under the UTM Act;
[8] the respondent has not supplied receipts for the levies paid in the past and has not supplied itemised accounts or tax invoices.
[7] The paragraph number refers to the paragraph numbering of the appellant’s submissions dated 18 January 2021
11.The respondent filed a response to the list of errors on 9 February 2021. The respondent denied most of the allegations as not constituting an error of fact or law. In that response it made the following arguments, which correspond with the paragraphs set out in the preceding paragraph referring to the appellant’s submissions filed 18 January 2021:
#[2] The respondent admitted that the sum of $666 was charged to the appellant’s owner ledger on 16 April 2015 and said that this amount represented expenses associated with the preparation and filing of a debt application to ACAT on 15 April 2015 and was charged in accordance with section 31 of the UTM Act.
#[3] The respondent also admitted that the Senior Member had erred in finding that the collections company had issued all letters of demand to the appellant at his address for service nominated on the corporate register and said that two of the five letters of demand were issued to the appellant at his address for service nominated on the corporate register, while the remaining three demands were issued to the appellant at the subject unit, where he conducts his business and the respondent denied that the error was material and denied that the error warrants the appeal being allowed.
#[4] The respondent denied that the notice of the 2018 AGM was not delivered to the appellant and said that the notice was delivered by placing the notice in his letterbox at his address for service recorded on the corporate register and denied that any of the allegations contained in this paragraph constitute an error of fact or law.
#[5] The respondent said that the minutes of the 2019 AGM are not relevant because the respondent is not seeking to recover any levies struck at the 2019 AGM.
#[6] The respondents said that the minutes of the 2020 AGM are not relevant because the respondent is not seeking to recover any levies struck at that 2020 AGM.
#[7] The respondent admitted that the invoices were sent to the appellant but denies that they were intended to intimidate the appellant.
#[8] The respondent denied that the strata manager had refused to supply receipts for the levies paid and has not supplied itemised accounts or tax invoices.
12.In its submissions dated 8 February 2021, the respondent distilled the grounds of appeal into the following alleged errors:
(1) the figures were incorrect in the orders made by the Original Tribunal;
(2) the appellant was not informed about a charge of $666;
(3) letters of demand were sent to the wrong address;
(4) failure to receive the notice of the 2018 AGM;
(5) failure to adduce minutes of 2019 AGM;
(6) failure to adduce minutes of 2020 AGM;
(7) unfounded and inflated invoices;
(8) failure to supply receipts, itemised accounts and copy of invoices;
(9) inconsistent figures.
The Tribunal adopts this numbering in its discussion of the grounds of appeal below.
13.A hearing was held in the appeal on 26 February 2021. Further submissions were ordered at that hearing and these were provided by the parties on 5 March 2021 by the appellant and 22 March 2021 by the respondent.
Grounds of appeal 1-8
14.The Appeal Tribunal concludes that no errors of fact, law or discretion are demonstrated by the alleged errors 1 to 8.
15.Regarding alleged error 1, the orders that were made on 6 October 2020 were incorrect but the Original Tribunal issued corrected orders on 15 October 2020. The Appeal Tribunal considers that no errors of fact, law or discretion have been demonstrated by the appellant in relation to orders 1 and 2 of the corrected orders issued on 15 October 2020. The Appeal Tribunal will discuss order number 3 of the corrected orders issued on 15 October 2020 below.
16.Regarding alleged error 2, the Original Tribunal stated as follows:
The proceedings in 2015.
The respondent disputes costs relating to an ACAT matter number 1404 of 2015. The respondent says,
The applicant filed a debt application against me. I was not informed of this either by telephone or in writing. I was only sent the reminder notice. I am inquiring what the debt application [is], 1405_15 debt application for $660? And subsequently Jan Brown [sic] has used my levy payments to cover the costs of this action taken against me. I received NOTHING…
…from the tribunal, only the bill from Jan Brown [sic].
As a general rule, judgments or orders which have been formally recorded or entered can only be varied or discharged on appeal. Here I am quoting from a decision of Bailey v Marinoff of the High Court in 1971:
Once an order disposing of a proceeding has been perfected by being drawn up as the record of a court, that proceeding apart from any specific and relevant statutory provision is at an end in that court and is in its substance… beyond recall by that court.[8]
In some circumstances, of course, an order may be set aside or varied, but any application to vary the order must be made in those proceedings. The applicant did not make any application or any relevant application that I’m aware of in matter number 1404 of 2015. This tribunal in these proceedings has no jurisdiction to consider proceeding 1404 of 2015.[9]
[8] Bailey v Marinoff [1971] HCA 49 at [1] per Barwick CJ
[9] Transcript of original proceedings 6 October 2020 page 6
17.Insofar as the $666 constituted part of earlier expenses under section 31 of the UTM Act that had been incurred by the respondent in proceedings in ACAT in XD 1404/2015, the Original Tribunal’s reasoning was as follows.
18.Regarding the costs of the ACAT application in 2015, Mr Wright said the following during the first instance proceedings:
[T]hose three charges were charged unfairly and I received nothing from ACAT, so why would they charge $666? I received absolutely nothing from ACAT and Jan Browne only had to pick up the telephone and make a phone call and say, ‘What’s going on?’ and I would have told her the thing’s being contested in court.
So why was I – why was I dragged off to ACAT when the thing is being contested in court?
…
these were completely unnecessary those charges and it was a lack of communication on her part that caused them.
…
I wanted it dealt with in the 2015 AGM… and Jan Browne refused to deal with them and ever since she’s just been adding the charges. I’ve refused to pay them and that’s why there’s been arrears.[10]
…
all of my evidence there and those receipts were for levies that were due on a certain date and those payments were made for the exact amount of those levies. I did not pay for those arrears because those arrears consisted of that application fee, those other letters and all the other interests and extra charges and I refuse to play the game because she refused to deal with it in 2015.[11]
…
And that is what I paid when I paid those receipts, I paid the receipted amounts of the amount of the levies. No amount of interest or amount of ACAT fees or whatever. I paid for the levies ... I didn’t pay the arrears because the arrears were what I was disputing right from the start.[12]
…
The only reason I stopped making payments was because my payments were being misdirected into paying bills that I didn’t believe that I owed. That’s why I stopped making payments and I wanted it finalised in court before I made payments again. I’m quite happy to make payments… [f]or my levies.[13]
[10] Transcript of original proceedings 31 July 2020 pages 27-29
[11] Transcript of original proceedings 31 July 2020 page 35
[12] Transcript of original proceedings 31 July 2020 page 35
[13] Transcript of original proceedings 31 July 2020 page 45
19.In her oral reasons for decision on 6 October 2020 the Original Tribunal stated:
In relation to 2015, the evidence and the documents that I’ve received shows that CCA, Collection Corp Australia, were engaged to collect arrears. On 25 March 2015, Collection Corp Australia send a notice of commencement of legal action to Mr Wright.
On 15 April, they filed an application at ACAT, which became 1404 of 2015, and the legal expenses for that work was $488.40. The other expenses would have been incurred; that is, the usual filing fee and interest. The charge was $666, per the ledger and at the time that the Collection Corp filed the application, arrears were $1,518.
In all the circumstances, I am satisfied that … the $66[6] in costs from 2015 were properly charged.[14]
[14] Transcript of original proceedings on 6 October 2020 page 9
20.The Appeal Tribunal considers that the Original Tribunal’s reasoning regarding the lack of jurisdiction after the entry of judgment in XD 1404/2015 and her finding that the OC’s claim for a sum that included $666 for expenses in the earlier proceedings was properly charged is sound. The ‘allocation’ by the OC of the amount of $666 to the amount of $2,711.40 (that was paid by the appellant to the OC 15 days after the 2015 ACAT proceedings had commenced) was appropriate.[15] No error of fact, law or discretion is demonstrated by this approach.
[15] Transcript of original proceedings on 6 October 2020 pages 9-10
21.Regarding alleged errors 3 and 4, the Original Tribunal’s reasoning was as follows:
Service of notices.
At all material times, the corporate register showed the respondent’s address for service as … Collie Street, Fyshwick. Ms Brown [sic] says she provided a notice of AGM to Mr Wright as follows: 2015, notice and the minutes were both posted; 2016 AGM, notice and minutes were both posted; 2017 AGM, notice was hand-delivered to Mr Wright’s letterbox at the complex and the minutes were posted; 2018, both the notice and the minutes were hand-delivered to the letterbox.
Ms Brown [sic] says that no letter was ever returned undelivered. Mr Wright says he did not receive the notice for the AGM in two years. That is 2016, where it was posted, and 2018, when it was hand-delivered to his letterbox. Ms [Capezio] in her statement to the tribunal says, ‘Historically there have always been problems with the post at the unit and it has been ascertained that his postal address was insecure’.
The tribunal [has] prepared a list of correspondence sent by the [Owners Corporation] or sent by Ms Brown [sic] or the previous manager to Mr Wright regarding levies… . The tribunal accepts Mr Wright’s evidence that some correspondence was not received, but there is also evidence that some correspondence was received.
For instance, … a number of documents that originated with the managers were copied into his documents… I have placed those into a document and that is document A, his evidential material.
Importantly, the [O]wners [C]orporation is required to send notices to… Collie Street because the respondent has supplied that address as his address for services. The tribunal is satisfied that the [Owners Corporation] sent the documents as contained in the list that I have prepared and that satisfaction is on the balance of probabilities, accepting that at times a document may not have been received.[16]
[16] Transcript of original proceedings 6 October 2020 pages 5-6
22.The appellant has not demonstrated an error of fact, law or discretion. The finding on the balance of probabilities that the OC sent the relevant documents is sound.
23.Regarding alleged errors 5 and 6, the Appeal Tribunal agrees with the respondent’s submission that the minutes of the 2019 and 2020 AGM are not relevant to the current proceedings because the OC does not seek to recover any levies struck at either of the 2019 or 2020 AGMs. Regarding alleged error 7, the Appeal Tribunal finds no evidence that the issuing of invoices by the OC was intended to intimidate the appellant. Regarding alleged error 8, the respondent provided ample evidence of itemised accounts and tax invoices that were issued to the appellant.[17] Therefore, in relation to alleged errors 7 and 8 the Appeal Tribunal finds no error of fact, law or discretion.
Ground of appeal 9 – Expenses pursuant to section 31 UTM Act – Original Proceedings
[17] See for example witness statement of Jan Browne dated 11 February 2020 pages 153-209
24.Alleged error 9 merely refers to “inconsistent figures”. Although the nature of this allegation is vague, the Appeal Tribunal assumes that this is referring to the expenses claimed under section 31 of the UTM Act. The appellant stated in his notice of appeal that this part of the orders was “very unfair”. The Original Tribunal and derivatively the Appeal Tribunal has the obligation to review the amount that was claimed for expenses by the respondent pursuant to section 31 of the UTM Act.[18] The Tribunal must “bring an independent mind to bear on whether the applicant has, prima facie, made out a case for the determination of the amounts claimed”.[19] Ideally this independent review would be assisted by the relevant party “set[ting] out their objections, such that an independent assessment can be undertaken in accordance with the double reasonableness test”.[20]
[18] The Owners – Units Plan No 3182 v Black & Anor [2018] ACAT 6 at [71] (Black)
[19] Black at [71]
[20] Black at [72]
25.As stated above, the sum of $19,417.49 was awarded by the Original Tribunal for expenses pursuant to section 31 of the UTM Act in the corrected orders dated 15 October 2020. In the transcript of the oral reasoning provided by the Senior Member on 6 October 2020, the Senior Member stated that this figure was “reasonable and reasonably incurred”.[21] The Senior Member noted that the OC had incurred costs in excess of this amount but had abandoned its costs that were in excess of this sum in order to fall within the threshold of $25,000 for civil debt applications under section 18 of the ACAT Act.[22] The evidence filed in the first instance proceeding demonstrates that the respondent’s claimed legal costs of $17,816.60 up to and including 16 June 2020.[23] However additional costs of $8,965.94 had been incurred, making a total of $23,572.14. Therefore $5,755.54 had been abandoned by the respondent in order to bring its claim for expenses within the tribunal’s jurisdictional limit of $25,000.
[21] Transcript of original proceedings 6 October 2020 page 16
[22] Transcript of original proceedings 6 October 2020 page 17
[23] Witness statement of Shelley Mulherin dated 11 February 2020; witness statement of Shelley Mulherin dated 17 June 2020; orders made by Senior Member Katavic dated 17 March 2020
26.In the appeal, the respondent claimed the separate sum of $19,164.26 for expenses pursuant to section 31 of the UTM Act incurred in the appeal. This claim will be discussed below.
27.Section 31 of the UTM Act states as follows:
Recovery of expenditure resulting from member or unit occupier’s fault
(1) This section applies if an owners corporation for a units plan has in carrying out its functions incurred an expense, or carried out work, that is necessary because of—
(a)a wilful or negligent act or omission of a member of the corporation, or an occupier of the member’s unit; or
(b)a breach of its rules by a member of the corporation, or an occupier of the member’s unit.
(2) The amount spent or the cost of the work is recoverable by the owners corporation from the member as a debt.
(3) If the owners corporation recovers an amount under subsection (2) from a member for an act, omission or breach of an occupier of the member’s unit, the member may recover the amount from the occupier as a debt.
(4) In this section:
expense, includes a reasonable legal expense reasonably incurred, including a legal expense relating to a proceeding in the ACAT.
work, carried out by an owners corporation, means maintenance or anything else the corporation is authorised under this Act to do.
Threshold question – was it wilful?
28.Section 31 of the UTM Act states that the OC must have incurred an expense “that is necessary because of – (a) a wilful or negligent act or omission of a member of the corporation”. The tribunal in Corby v The Owners Corporation – Units Plan No 1035[24] (Corby) discussed this element as follows:
It is unclear what ‘wilful’ means in section 31(1)(a). The actions of Ms Corby were purposeful acts; they were not accidental. But this does not seem enough in this context. The heading to the section refers to “expenditure resulting from member or unit occupier’s fault”. This heading is part of the Act,[25] and in working out the meaning of the provision this must be read in the context of the Act including this heading.[26] It may be therefore that the wilful act must in some way involve fault on the part of the member, such as failure to comply with a lawful obligation like the payment of general fund contributions due under section 80 of the Act.[27] [original footnotes retained]
[24] [2019] ACAT 45
[25] Legislation Act 2001 section 126(2)
[26] Legislation Act 2001 section 140
[27] [2019] ACAT 45 at [47]
29.The case law in ACAT about section 31 of the UTM Act commonly assumes that the failure to pay levies is wilful.[28] This approach conforms with the treatment of this obligation in Corby – that is, a failure to comply with the lawful obligation to pay general fund contributions under section 80 of the UTM Act.
Application of the double reasonableness test
[28] See for example the succession of ‘example’ cases that followed In the matter of Ruling Tribunal Section 31 of the Unit Titles (Management) Act 2011 [2017] ACAT 56, referred to at footnote 11 of Community Title Scheme No X v SV & HF [2018] ACAT 72; The Owners – Units Plan 638 v Carroll [2018] ACAT 25; The Owners - Unit Plan No 3964 v Wang [2018] ACAT 32; The Owners – Unit Plan No 1565 v Ruff [2018] ACAT 31; The Owners Units Plan No 3609 v Chen [2018] ACAT 26; The Owners – Units Plan No 3802 v Ilhan [2018] ACAT 28; The Owners – Units Plan 371 v Nabua & Anor [2018] ACAT 29; The Owners – Units Plan 3788 v Black & Anor [2018] ACAT 24; The Owners – Units Plan 3492 v Robson & Anor [2018] ACAT 30; The Owners – Units Plan 546 v Donnelly & Anor [2018] ACAT 27.
30.In the matter ofRuling Tribunal Section 31 of the Unit Titles (Management) Act 2011[29] (the Ruling Tribunal Case) the tribunal held that claims for expenses under section 31 of the UTM Act must satisfy the “double reasonableness test” meaning that:
…it was reasonable for the owners corporation to incur expenses of the type [claimed] … and the amount of each component of the expenses sought is reasonable.[30]
[29] [2017] ACAT 56
[30] Ruling Tribunal Case at [104]
31.In cases involving recovery proceedings in ACAT for unpaid levies, the first limb of this test is commonly articulated by the question of whether it was reasonable for the OC to incur the expense of commencing proceedings to recover a debt for unpaid levies.[31] In Black, the tribunal observed that legal costs will be reasonably incurred where:
…the expense or work must be reasonably required to recover the unpaid levies.[32]
[31] Black at [37], [39]; See also for example, The Owners - Units Plan 371 v Nabua & Anor [2018] ACAT 29; The Owners - Unit Plan No 1565 v Ruff [2018] ACAT 31; The Owners - Units Plan No. 666 v Quaid & Anor [2020] ACAT 87
[32] Black at [33]
32.A claim for expenses under section 31 of the UTM Act is not subject to the general limitation in section 48 of the ACAT Act which sets the general no costs jurisdiction of the tribunal.[33] Similarly, there is no comparable provision in the ACAT Act which prohibits the engagement of fee charging lawyers or agents without leave.
[33] Ruling Tribunal Case
33.As stated by the tribunal in Black: “[l]egal costs represent the amount a client is obliged to pay to their lawyer as the price of professional work”.[34] The Ruling Tribunal Case held that the legal costs recoverable under section 31 as ‘expenses’ are not limited to those costs that would be awarded pursuant to an assessment or taxation, but that they must meet the ‘double reasonableness’ test.[35]
[34] Black at [29]
[35] Ruling Tribunal Case at [100]
34.In the present case, the claim by the OC for expenses in the appeal was a different claim to the claim that was made in the first instance proceedings where Mr Wright was ordered to pay expenses under section 31 of the UTM Act. As stated above, in the first instance proceeding the OC filed a civil dispute application seeking to recover unpaid levies, interest and expenses from Mr Wright in the sum of $25,000. In the appeal proceedings the respondent OC sought to recover the additional expenses that it incurred in the appeal under section 31 of the UTM Act because it argued that the appeal proceeding is an entirely separate proceeding to the original proceeding. The Appeal Tribunal agrees with this reasoning and has applied this approach when upholding the orders for expenses in the original proceedings but making a separate order for expenses in the appeal proceedings. This is discussed in more detail below.
The cumulative quantum of expenses – the question of proportionality
35.The Appeal Tribunal is aware that the expenses that would be payable by the appellant as a consequence of dismissing the appeal (meaning that the sum of $19,417.49 payable for expenses in the first instance proceeding is affirmed) and awarding the sum of $19,164.26 claimed by the respondent in the appeal proceedings would have the consequence that expenses in excess of $38,000 will be payable by the appellant for unpaid levies in the sum of $4,886.64.
Proportionality – generally speaking
36.A comparison between the cumulative expenses that have been claimed in the proceedings and the outstanding levies raise the question of proportionality. The Appeal Tribunal notes there are differing views about this and that McCallum J in New South Wales Supreme Court in Bleyer v Google[36] considered that there was ample authority for the proposition that in a just allocation of finite resources, proportionality is a relevant consideration in the exercise of the court’s authority, at least in civil matters.[37]
[36] [2014] NSW 897
[37] [2014] NSW 897 at [56]
37.Considerations of proportionality are now expressly stated in section 5A of the Court Procedures Act 2004. Similarly, there is now an express provision in section 7(a)(ii) of the ACAT Act. This provision states as follows:
7 Tribunal principles
In exercising its functions under this Act, the tribunal must—
(a) seek to ensure the procedures of the tribunal—
(i)are as simple, quick, inexpensive and informal as is consistent with achieving justice; and
(ii)are implemented in a way that facilitates the resolution of the issues between the parties so that the cost to the parties and the tribunal is proportionate to the importance and complexity of the subject matter of the proceeding; …
38.However this provision was notified on 9 June 2021, becoming effective on 16 June 2021, therefore it was not operative during the hearing of the appeal in the current case. Nevertheless, the issue of proportionality has been examined in some ACAT cases.
39.In the Community Title Scheme No X v SV & HF,[38] (Community Title) the tribunal referred to the comments of Mossop AsJ in the ACT Supreme Court[39] as follows:
…the court has power, in an appropriate case, to stay or dismiss an action on the grounds that the resources of the court and the parties that will have to be expended to determine the claim are out of all proportion to the interest as stake. In my view, such disproportionality can properly be regarded as a species of abuse of process.[40]
[38] [2018] ACAT 72
[39] Lazarus v Azize & Ors [2015] ACTSC 344
[40] Community Title at [214]; Bleyer v Google Inc [2014] NSWSC 897 at [62]
40.There was no application in the present case to strike out the proceedings as disproportionate. However, as stated by the tribunal in Community Title, the broader concept of ‘proportionality’ must have some relevance to the resources that should be expended by either party, or indeed by the tribunal, in finalising large expenses claims of this kind. [41] The Tribunal stated:
The Tribunal’s objective [is] to be simple, efficient and quick.[42] It is neither proportional, nor efficient, in the context of this matter, to require additional documentation or to conduct a line by line assessment or taxation of the costs claimed. It is neither proportional, nor efficient, or even fair, to expect the parties to expend the additional time or expense of doing so.[43] [emphasis added]
[41] Community Title at [215]
[42] Citing subsections 6(a) and (b) of the ACAT Act
[43] Community Title at [215]
41.The tribunal in Black[44] also traversed the question of whether the expenses should be determined on an ad valorem basis following the approach of Brereton J of the New South Wales Supreme Court in Independent Contractor Services (Aust) Pty Limited ACN 119 186 971(in liquidation) (No 2)[45] that a percentage of total realisations was more appropriate than an hourly rate. The tribunal stated:
This ad valorem approach has a certain attractiveness, [especially where] the costs involved … exceed the debt very considerably. An approach that considers the relative proportionality of the cost of recovery of the unpaid levy would require owners corporations to take a commercial approach to debt recovery and weigh up the relative value of the levy against the costs of recovering it. On the other hand, it may perhaps result in owners also weighing the relative risks of not paying, and would likely shift some of the costs of defaulting members to paying members of the corporation. Still, whatever its merits or otherwise, this approach was overturned by the NSW Court of Appeal in Sakr Nominees.[46] In that case, their Honours were of the view that the relevant question was whether the remuneration claimed is reasonable, having regard to the evidence of work necessarily done, not whether the amount is reasonable having regard to the amount of funds available for distribution.[47] [emphasis added]
Proportionality and the double reasonableness test
[44] Black at [61] ff
[45] [2016] NSWSC 106
[46] Sanderson as Liquidator of Sakr Nominees Pty Ltd (In Liquidation) v Sakr [2017] NSWCA 38 (Sakr Nominees)
[47] Black at [62]
42.Prima facie, would a claim for expenses that appears to be disproportionate to the claim for unpaid levies satisfy the double reasonableness test? The tribunal in Community Title commented upon the potential disproportionate relationship in that case between the expenses claimed and the claim for unpaid levies. The tribunal made the following comments:
On any view, the legal expenses claimed in this matter are considerable in sum. It is quite extraordinary that two claims to recover cumulative levies of less than $1,000, on initial applications … claiming less than $3,000 cumulatively, have resulted in expenses approaching $19,000. …The costs are not self evidentially unnecessary or excessive, having regard to the kind of allegations made by the respondents, the detailed chronology and documentation submitted to address them, and the fact the expenses were incurred in the context of a one and a half day hearing of two contested applications.[48]
Reasonableness of the expenditure
[48] [2018] ACAT 72 at [203]
43.The Ruling Tribunal Case cited Proprietors Units Plan No 52 v Gold (Gold),[49] The Owners – Strata Plan 36131 v Dimitriou[50] and Ford v The Owners Units Plan 259,[51] for the proposition that the “test of reasonableness applies to moderate any excessive claims by an owners corporation.”[52] Therefore, as stated in Black:
[49] (1993) 44 FCR 123
[50] (2009) 74 NSWLR 370
[51] [2012] ACAT 59
[52] Ruling Tribunal Case at [101]
Together, these cases establish that even actions by the owners corporation that are ‘necessary’ for the recovery of unpaid levies must be done in a manner that is reasonable, having regard to the circumstances of the case and the parties, the nature of the debt, and any other relevant considerations.
Ultimately, whether any costs were reasonably necessary will depend on the individual facts of the matter. However, two observations may be usefully made.
First, formal proceedings for debt recovery should generally not be a first resort. … Secondly, just because it is necessary to commence formal proceedings does not mean it is necessary to continue them.[53]
When are legal costs reasonable – relevance of the scale of costs?
[53] Black at [35]-[37]
44.Although the NSW Court of Appeal was amenable to the argument that costs claimed under the equivalent to section 31 of the UTM Act could be assessed by reference to the New South Wales equivalent of the scale of costs in Schedules 3 and 4 of the Court Procedures Rules (the scale of costs),[54] the Full Federal Court in Gold expressed ambivalence about this approach.[55] The Ruling Tribunal Case[56] referred to subsequent proceedings in Gold i.e. Re Gold (A Bankrupt); Gold v The Proprietors – Units Plan No 52 and Anor,[57] where Finn J of the Federal Court noted that legal costs could create a statutory debt for which a member is liable as soon as the amount of the body corporate’s expenditure has been ascertained. Finn J stated that the expenditure:
…may in fact exceed what would be allowed to the body corporate as costs recoverable from an unsuccessful defendant on a taxation. But the section is not at all concerned with what it may recover under a court order. Its concern is with the recovery of the actual expenditure incurred.[58]
[54] The Owners – Strata Plan 36131 v Dimitriou (2009) 74 NSWLR 370 at p 381(Hodgson JA) and p 402 (Handley AJA)
[55] (1993) 44 FCR 123 page 126
[56] Ruling Tribunal Case at [31]
[57] Re Gold (A Bankrupt); Gold v The Proprietors - Units Plan No 52 and Anor [1996] FCA 1274
[58] Re Gold (A Bankrupt); Gold v The Proprietors - Units Plan No 52 and Anor [1996] FCA 1274 at [33]
45.The tribunal in Black commented on question of the application of the scale of costs as follows:
We accept that the concept of ‘expenses’, as contemplated by section 31 of the UTM Act, is not constrained to scale costs, or indeed to what may be recovered in an assessment more broadly and therefore it is not appropriate that the scale be adopted in its entirety. However, we are also of the view that the scales represent a baseline for the kind of costs that would, in the usual course, be reasonable (even if greater expenses may also be reasonable).[59]
[59] Black at [67]
46.As far as the present Tribunal is aware, the scale of costs has not been adopted by the tribunal to measure section 31 of the UTM Act expenses, although it was discussed in The Owners - Units Plan No 2983 v Silvano.[60]
The award of a fixed costs order
[60] [2020] ACAT 4 at [32]-[33]
47.The tribunal in Community Title noted that a practice has developed of awarding costs in a lump sum in circumstances that warrant its exercise. The tribunal cited Rares J in Keen v Telstra Corporation Limited(No 2)[61] that fixed costs orders are appropriate in small matters which are simple and where there would be utility in the court:
…cutting the Gordian knot of protracted fights about costs which is the hallmark of this piece of litigation.’… In my opinion, it is appropriate that an amount of costs be fixed by the court so as to prevent yet further argument and delay in finalising this matter.[62]
[61] [2006] FCA 930 at [6]-[7]
[62] [2006] FCA 930 at [6]-[7]
48.The tribunal in Community Title applied Rares J’s approach to that case, stating the lump sum approach will save parties “the time, trouble, delay, expense and aggravation” of having to itemise costs and objections, as well as more effectively using the tribunal’s resources.[63]
Summary of the relevant case law on section 31 of the UTM Act
[63] Community Title at [212]
49.The tribunal must independently determine whether the OC has made out a case for the amounts claimed.[64] This review should be assisted by the opposing party setting out their objections to the claim.[65]
[64] Black at [71]
[65] Black at [72]
50.Section 31 of the UTM Act requires that the expense is necessitated by a wilful act of the member of the corporation.[66] This is commonly assumed in cases involving the failure to pay unpaid levies.
[66] Corby at [47]
51.The expenses are assessed by the application of the double reasonableness test, that is, by asking if it was reasonable for the OC to incur expenses of the type claimed (and in particular if it was reasonable for the OC to incur the expense of commencing proceedings to recover a debt for unpaid levies) and whether the amount of each component of the expenses sought is reasonable.[67]
[67]Ruling Tribunal Case at [104]
52.There is no impediment to awarding a sum for expenses that is in excess of claim.[68] The general concept of proportionality (that is, assessing the quantum of the expenses claimed relative to the unpaid levies) is not strictly relevant to section 31 of the UTM Act but the concept operates in the case law to limit the obligation of the OC to expend the additional time and expense of providing additional documentation or to conduct a line by line assessment or taxation of the costs claimed.[69] The test to be applied is reasonableness but when assessing reasonableness under the double reasonableness test the tribunal must have regard to the evidence of work necessarily done.[70]
[68] Community Title
[69] Community Title at [215]
[70] Black at [60] citing Sanderson as Liquidator of Sakr Nominees Pty Ltd (In Liquidation) v Sakr [2017] NSWCA 38
53.Although reasonableness can be measured by other means e.g. by a taxation of costs under the scale of costs in Schedules 3 and 4 of the Court Procedures Rules 2006, the scales represent a baseline for the kind of costs that would, in the usual course, be reasonable. Greater expenses may also be reasonable.
54.In applying the double reasonableness test, formal proceedings for debt recovery should generally not be a first resort.[71]
[71] Black at [37]
55.Where the liability to pay the unpaid levies is contested, when considering if the costs were unnecessary or excessive, the tribunal should have regard to, inter alia, the kind of allegations made by the respondent, the documentation that the OC needs to provide to address them and the hearing time spent on contested applications.[72]
[72] Community Title at [203]
56.The tribunal may award a lump sum for expenses to minimise incurring further costs.
Application of section 31 of the UTM Act to the proceedings generally
57.The Appeal Tribunal has applied the principles set out in the case law to the claims for expenses under section 31 of the UTM Act in the Original Proceedings and in the appeal below. Both in the Original Proceedings and in the appeal Mr Wright did not provide a systematic account of his objections to the section 31 expenses that were claimed. Overall Mr Wright’s arguments about the unpaid levies were weak and lacked substance.
Application of section 31 of the UTM Act to the Original Proceedings
Was it wilful?
58.As stated above, the case law often assumes that a failure to pay levies constitutes wilful conduct for the purposes of section 31 of the UTM Act. Therefore, the findings of fact of the Original Tribunal suffice to support this.
59.Mr Wright has not made a payment for levies since he paid $2,000 in 2018 and he was in arrears after that payment.[73]
[73] Transcript of proceedings on 6 October 2020 page 14
60.However, if it is necessary to make a finding of fact Mr Wright intended to not pay the levies, such a finding is based on the concessions made by Mr Wright during the hearing that he had not paid his levies and did not intend to do so.[74] As the respondent argued, there was nothing stopping him from paying his levies and withholding the amount that he disputed.[75] The Original Tribunal asked Mr Wright directly about the obligation to pay the levies:
Senior Member: …you know that levies have to be paid. You hadn’t paid them.
Mr Wright: Yes.[76]
[74] See for example, Transcript of proceedings on 8 September 2020 page 68
[75] Transcript of proceedings on 8 September 2020 page 68
[76] Transcript of proceedings on 8 September 2020 page 69
61.The Appeal Tribunal concludes that the OC incurred an expense in the first instance proceedings that was necessary because of the wilful act of Mr Wright.
Application of the double reasonableness test in the Original Proceedings
Was it reasonable to commence the Original Proceedings?
62.It was reasonable for the OC to commence debt recovery action for the unpaid levies. The proceedings were not the ‘first resort’.[77] Rather, the OC gave Mr Wright a year to pay before commencing the debt recovery action.[78] The relationship between the parties was such that a negotiated outcome for payment of the levies was highly unlikely if not impossible.[79]
Was the amount of each component of the expenses sought in the Original Proceedings reasonable?
[77] Black at [37]
[78] Transcript of proceedings on 8 September 2020 page 33
[79] Transcript of proceedings on 8 September 2020 pages 47-48
63.In the first instance proceedings, the OC argued that the Original Tribunal should apply Community Title case. In that case the unpaid levies were approximately $3,000 but the expenses claimed were $19,000. The sum of $16,000 was awarded for expenses. This sum was justified because it was necessary for the OC to provide evidence and submissions rebutting various types of allegations of misconduct (including fraud and intimidation) that were made by the respondents about members of the OC.
64.In a similar way, Mr Wright in the present case raised allegations of fraud and misappropriation of funds against certain persons involved. The allegations were denied. However, the OC needed to provide evidence in support of the denials. The Original Tribunal found as follows:
Mr Wright has made a number of allegations against Ms Brown [sic], in particular allegations of financial incompeten[ce] or misconduct. For instance, he has said that she misappropriated payments, creative accounting, that she added her legal bills to his ledger, that she failed to communicate with him, including fail[ing] to answer questions that he asked regarding levies and that that failure was 11 or 12 months, that she failed to give him notices of the AGM and failed to give receipts and provide source documents when he requested.
[A]ny allegation of financial mismanagement or misappropriation is a very serious allegation. In particular, because of the industry in which Ms Brown [sic] is … engaged.[80]
[80] Transcript of proceedings 6 October 2020 page 14
65.The Original Tribunal found no evidence of misconduct or dishonest dealing by Ms Browne.[81]
[81] Transcript of proceedings 6 October 2020 page 14
66.The tribunal in Community Title stated that in assessing the reasonableness of an expenses claim where a matter is contested, one must consider the kind of allegations made by the respondent, the documentation that the OC needs to provide to address them and the hearing time spent on contested applications.[82]
[82] Community Title at [203]
67.Certainly, Mr Wright’s allegations exacerbated the costs incurred by the OC which resulted in a considerable volume of evidence being filed. For example, Ms Browne filed a witness statement that was in excess of 200 pages.[83] Although part of this evidence addressed allegations that were personal to Ms Browne, it also established the right of the OC to the unpaid levies that were claimed e.g. notices and minutes of AGMs, overdue statements etc. The Original Tribunal found that any costs solely attributable to the defence of Ms Browne were minor and incidental to the substantive proceedings and the issues of levies.[84] Having examined the relevant evidence, the Appeal Tribunal agrees with this finding of fact.
[83] Witness statement of Jan Browne dated 11 February 2020
[84] Transcript of proceedings 6 October 2020 page 15
68.As to the reasonableness of the conduct of the OC in addressing the allegations, the Appeal Tribunal notes the comments of the tribunal in Community Title:
This case illustrates the perils of making unfounded allegations of misconduct in such circumstances. Notwithstanding that the allegations made were unsubstantiated, the applicant and their agents, quite reasonably, wished to address them in reply. Not only did this detract from the real basis of the respondents’ case, it increased both the time taken to resolve this matter, and the costs that the respondents must now ultimately bear.[85]
[85] Community Title at [31]
69.The Original Tribunal made the following findings about this issue in the present case:
This is one of those unfortunate cases where relatively small debts have become very large debts as a consequence of the collection and legal expenditures. … The costs are arguably completely disproportionate to the debt itself, but I’m not convinced that the costs are disproportionate to the work undertaken to collect the debt. The actions of the applicant to recover the debt must be considered in the circumstances of the respondent’s long-term refusal to - and it was actually an express refusal - to pay his levies.[86]
[86] Transcript of proceedings on 6 October 2020 page 16
70.The Appeal Tribunal agrees with this finding and notes that the test to be applied is whether the expenses claimed are reasonable, having regard to the evidence of work necessarily done.[87] After perusing the material filed in the first instance proceedings and noting the multiple attendances that were necessitated by the proceedings – described by the solicitor acting for the OC as ‘nine court dates’[88] – and observing that the OC abandoned costs in excess of $25,000 in order the stay within the civil jurisdictional limit of ACAT, the Appeal Tribunal considers that each component of the expenses claimed by the OC under section 31 of the UTM Act was reasonable.
[87] Sakr Nominees; cited by Black at [62]
[88] Transcript of proceedings on 8 August 2020 page 72
71.The appellant has not demonstrated an error of fact, law or discretion. The appeal is therefore dismissed.
Application of section 31 of the UTM Act to the appeal
Was it wilful?
72.By filing the appeal, it is clear that the appellant was still wilfully not paying the unpaid levies. The unpaid levies component of the first instance orders is the relevant part of the Original Decision for the operation of section 31 of the UTM Act.
Application of the double reasonableness test to the appeal
73.As stated above, the respondent claimed a separate sum of $19,164.26 for expenses pursuant to section 31 of the UTM Act incurred in the appeal. This sum comprised $15,464.96 – incurred in the appellate proceedings up to the date of the hearing on 26 February 2021)[89] and a further sum of $3,699.30 – for further work performed after the hearing date on submissions which were filed in the tribunal on 22 March 2021.[90]
[89] Witness statement of Shelley Mulherin dated 26 February 2021 at [19]
[90] Witness statement Shelley Mulherin dated 22 March 2021
74.A question arises as to whether the respondent can make a separate claim for expenses incurred in the appeal (as opposed to the first instance proceeding) under section 31 of the UTM Act. The Appeal Tribunal agrees with the submissions made by the respondent on 22 March 2021 that the civil dispute application was finally determined by the Original Tribunal on 15 October 2020.[91] Subsequently the appellant filed an application for appeal on 28 October 2020. The appeal proceeding is an entirely separate proceeding to the primary proceeding. This is demonstrated by the fact that the primary proceeding was commenced by the OC filing a civil debt application, whereupon the proceeding was given a unique case number by the tribunal.[92] In contrast the appeal was commenced by the appellant filing an entirely different type of application, being an application for an appeal. The application for appeal was filed after the determination of the civil debt application whereupon the appeal was given its own unique identification number.[93]
[91] Respondent’s outline of submissions in relation to costs filed 22 March 2021 at [18]-[21]
[92] XD 1323/2019
[93] AA 36/2020
75.Section 18 of the ACAT Act provides that a civil dispute application cannot be made for an amount greater than $25,000 unless the excess is abandoned by the applicant or otherwise agreed by the respondent. As stated above, the OC in the first instance proceedings filed a civil dispute application seeking to recover unpaid contributions, interest and recovery expenses from the appellant in the sum of $25,000. The OC abandoned the excess so that its claim could be determined by the tribunal.
76.The Appeal Tribunal agrees with the submissions made by the respondent that the jurisdictional threshold in section 18 of the ACAT Act does not continue to operate in the separate appeal proceedings so as to disentitle the owners corporation from recovering its expenses in the appeal proceeding under section 31 of the UTM Act.[94]
[94] Respondent’s outline of submissions in relation to costs filed 22 March 2021 at [22]
77.The Appeal Tribunal notes that the OC also argued that section 32 of the ACAT Act might apply because the appeal lacked substance was otherwise frivolous and vexatious.[95] However, no application was filed by the respondent seeking strike out orders and it was unclear what the costs consequence would be of an order under section 32 of the ACAT Act in this case, so the Tribunal gives it no further consideration.
Was it reasonable to commence proceedings?
[95] Respondent’s outline of submissions in relation to costs filed 22 March 2021 at [48]; relying on Kloska v National Jewish Association [2009] ACAT 8 at [51]
78.In this case the first limb of the double reasonableness test is satisfied because it was necessary for the OC to respond to the appeal.
Was the amount of each component of the expenses sought in the appeal reasonable?
79.The Appeal Tribunal does not consider that all the costs claimed by the OC are reasonable. The appeal proceedings were essentially a repetition of the issues that were ventilated at first instance. Because the appeal was conducted as a review, there was no need to file fresh evidence other than evidence of the expenses incurred under section 31 of the UTM Act. Similarly the submissions repeated the first instance submissions, other than the question about whether a separate claim for expenses under section 31 of the UTM Act could be made in the appeal proceedings. This latter point was new but not complex. Following the approach that was adopted in Ford, and approved in the Ruling Tribunal Case, the Appeal Tribunal has substituted a fixed sum of $7,700 for the sum of $19,164.26 that was claimed by the OC for expenses under section 31 of the UTM Act. The components of this fixed sum are based on the reasonable expenditure that was necessarily incurred by solicitors for the OC in responding to the appeal, such as the drafting and filing of documents, communicating with the tribunal and their clients, communication with the appellant and his representative and preparing and attending hearings.
80.The details of the sum awarded for expenses under section 31 of the UTM Act for the appeal are set out in Attachment A to this decision. It is based on the time ledger in the itemised invoices sent to the OC by their legal representatives which were attached to witness statements filed in the appeal.[96] The amounts that have been allowed total $6,997.74 and this has been rounded to $7,000. GST has been added because it is payable by the respondents pursuant to the costs agreement entered into with their legal representatives.[97] The total expenses payable under section 31 UTM Act are therefore $7,700. Although the OC authorised the managing agent, Ms Browne, to charge for her appearance at the appeal hearing[98] she was not called as a witness.
Conclusion
[96] Witness statements of Shelley Mulherin dated 26 February 2021 and 22 March 2021
[97] Witness statement of Shelley Mulherin dated 26 February 2021 at [15] and page 18
[98] Witness statement of Shelley Mulherin dated 26 February 2021 at [27]
81.The appellant has not demonstrated an error of fact, law or discretion pursuant to section 79 of the ACAT Act therefore the appeal is dismissed. In order to dispose of the appeal, the Tribunal makes the following orders.
82.The Tribunal orders that:
1.The appeal is dismissed.
2.Within 30 days of today’s date, the appellant will pay the respondent the sum of $32,700.00 comprising:
(a) $4,886.64 unpaid levies and other charges; and
(b) $695.87 interest charged for order made on 6/10/20); and
(c) $19,417.49 for expenses pursuant to section 31 of the Unit Titles (Management) Act 2001 for proceedings XD 1323/2019; and
(d) $7,700 for expenses pursuant to section 31 of the Unit Titles (Management) Act 2001 for proceedings AA 36/2020.
………………………………..
Acting Presidential Member Prof. P Spender
Date(s) of hearing 26 February 2021 Appellant: Mr M Wright
Ms T Capezio, authorised representative
Solicitors for the Respondent: Ms S Hendry, McInnes Wilson Lawyers
Attachment A
Date Who performed work Description No. of Units Amount (ex. GST) 03/11/2020 Senior Associate Emails to and from Ms Browne 2 $75.36 30/11/2020 Senior Associate Telephone call in from Ms Capezio 1 $37.68 30/1/2020 Senior Associate Email out to Ms Swane 2 $75.36 30/11/202 Senior Associate Preparation for and attendance at ACAT for directions hearing 6 $226.09 30/11/2020 Senior Associate Email out to owners reporting outcome of directions hearing 4 $150.73 30/11/2020 Senior Associate Telephone call in from Ms Swane 1 $37.68 02/12/2020 Senior Associate Peruse Tribunal orders and email same to EC 1 $37.68 19/01/2021 Senior Associate Email out to Ms Swane 2 $75.36 19/01/2021 Senior Associate Examine response documents served by Mr Wright 3 $113.04 19/01/2021 Senior Associate Email out to Ms Capezio 2 $75.36 03/02/2021 Senior Associate Email out to Ms Swane 2 $75.36 05/02/2021 Senior Associate Drafting response to list of errors and submissions 35 $1,318.80 08/02/2021 Paralegal Email to Mel and EC members with amended copy of submissions for instructions 1 $19.29 08/02/2021 Paralegal Attendance at ACAT re filing outline of submissions 2 $38.58 9/02/2021 Senior Associate Email out to Ms Swane 3 $113.04 9/02/2021 Senior Associate Email out to Ms Capezio 1 $37.68 10/02/2021 Senior Associate Settling appeal index and email out to ACAT 5 $188.40 18/02/2021 Senior Associate Preparing and finalising list of authorities 10 $376.80 18/02/2021 Senior Associate Drafting and amendments to statement of Ms Mulherin 10 $376.80 19/02/2021 Paralegal Filing Respondent’s List of Authorities and Legislation at ACAT 5 $96.45 22/02/2021 Senior Associate Email out to Ms Capezio 1 $37.68 22/02/2021 Senior Associate Emails out, telephone calls and text messages to Ms Capezio and Mr Wright 2 $75.36 22/02/2021 Senior Associate Emails to clients 3 $113.04 22/02/2021 Senior Associate Email to Ms Browne (re attendance at hearing) 2 $75.36 22/02/2021 Senior Associate Email out to ACAT 1 $37.68 25/02/2021 Senior Associate Email out to EC members 3 $113.04 25/02/2021 Senior Associate Preparation for hearing 25 $942.04 22/02/2021 Senior Associate Appearance at ACAT for hearing 25 $1050 26/02/2021 Senior Associate Email out to EC members reporting outcome of hearing 6 $252 18/03/2021 Senior Associate Drafting submissions on costs 15 $630 19/03/2021 Senior Associate Drafting affidavit of Ms Mulherin 3 $126 Subtotal $6997.74 Rounded to: $7000 GST $700 Total $7700
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