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.

1. 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.
2. 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”.
3. In relation to Section 80(1) the plaintiff submits;
1. 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 due date.
2. 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.
3. 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.
4. 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 issued.
5. 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.
6. 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.

4. 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.

5. 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.

6. 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.

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Ian Duncan

Argyle Law