The following is a submission put to the Assessor sitting in the Local
Court at North Sydney on a
number of occasions. It was held on each occasion that Section 80 imposed a
liability upon the debtor to pay the costs of the creditor in addition to the
scale professional costs laid down in the courts rules. The ruling was qualified on each occasion by
saying that each case depended upon the facts. The facts in each case were
simply that the debtor owed strata levies, legal action was taken and the
levies were found to be owing. While the decision of the Assessor may not be
binding upon other Assessors it is certainly persuasive.
SUBMISSION IN RELATION TO COSTS
CLAIMED PURSUANT TO SECTION 80 STRATA SCHEMES MANAGEMENT ACT 1996.
- The Plaintiff claims from the
Defendant legal costs incurred by the Plaintiff which were in excess of
the scale fees allowed under the Local Court (Civil Claims) Act 1970.
- Section 80 (1) of the Strata Schemes Management Act
1996 states ; An
owners corporation may recover as a debt a contribution not paid at the
end of one month after it becomes due and payable, together with any
interest payable and the expenses of the owners corporation incurred in
recovering those amounts.
- In relation to Section 80(1)
the plaintiff submits;
- It is a broad all encompassing
provision which allows every additional expense of the Owners
Corporation to be recovered from a proprietor where the Owners
Corporation is put to expense
in recovering levies and interest not paid within 1 month of the
- The expenses referred
to take priority over the provisions relating to costs in the Local Courts (Civil Claims) Act
1970 because of the express terms of the section. The section
distinguishes the levies, interest and expenses individually as
items which can be sued for.
- The reference to expenses refers to any and all expenses
incurred and is not limited to the scale costs available as of right (in
accordance with the relevant rules of court) where legal action is taken.
If expenses was meant to be
confined to the costs available
under the rules of court there would be no point in making any
reference to expenses which could be recovered as they would
automatically be added to the judgment debt as the court process evolved.
- Expenses clearly refers to something
which can be sued for and which
can be included in an original statement of claim. Therefore it is distinguished
from court scale fees which become payable after a statement of claim has been
- Expenses clearly refers to a situation
where the Owners Corporation has not recovered money spent (including
legal fees which were greater than the scale court costs) when
it was necessary to take
legal action to recover levies.
- Expenses incurred by the Owners
Corporation could only be determined and
assessed after the recovery action has been completed, all court scale costs recovered and all legal fees received from legal
firms and/or commercial agents have been received. The amount by which
the Owners Corporation has been
put to expense is what is authorised for recovery from the proprietor.
- The Court must decide whether
S80(1) extends the costs which can be recovered from a defendant in the
particular case of strata levy recoveries or whether the Local Court Act
and Rules is the sole basis for costs to be recovered.
- If the court finds that Section
80(1) does not allow the recovery of all legal costs listed in the two
Memorandums of Costs and Expenses,
it is further submitted that Section 80(1) should be construed more
narrowly to allow the costs which
are not part of the legal process, but still expenses incurred in
recovering unpaid levies.
- Over the past two years in the
North Sydney Local Court, the Assessor has held that Section 80 does allow the recovery
of all costs incurred by the Owners Corporation over and above those
allowed in the Local Courts (Civil Claims) Act 1970.