Warren v Body Corporate for Buon Vista
[2002] QDC 371
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- Warren v Body Corporate for Buon Vista[2002] QDC 371
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Warren v Body Corporate for Buon Vista[2002] QDC 371
Warren v Body Corporate for Buon Vista[2002] QDC 371
[2002] QDC 371
DISTRICT COURT
APPELLATE JURISDICTION
JUDGE ROBIN QC
Appeal No 98 of 2002
IAN CAMPBELL WARRENFirst Applicant/Appellant
and
FLORENCE BURNETT WARRENSecond Applicant/Appellant
and
ALEXIA MARGARET WARRENThird Applicant/Appellant
and
BODY CORPORATE FOR BUON VISTA
COMMUNITY TITLES SCHEME 14325Respondent
BRISBANE
DATE 20/02/2002
ORDER
CATCHWORDS: | Appeal from Magistrate to District Court - leave to appeal sought - on application by body corporate plaintiff under UCPR r 171 and/or r 292, defendant ordered to pay body corporate's costs and expenses (including solicitor and own client costs) incurred in recovering levies to be assessed by the Registrar under r 684 and interest - important point justifying leave said to be inconsistency of body corporate resolution authorising such costs with Part 4A of the Queensland Law Society Act 1952 (client agreements) for: purposes of s 142(1) of the Body Corporate and Community Management Act 1997 - leave to appeal refused - applicant showed no right to challenge amount of costs paid by body corporate - in any event, application for leave considered premature until assessment had taken place. |
HIS HONOUR: This is an application for leave to appeal against a Magistrate's decision of 14 December 2001 which gave judgment for the plaintiff:
"For the whole of the body corporate costs and expenses (including solicitor and own client costs), incurred in recovering levies and moneys duly levied upon the owner of the body corporate pursuant to the Body Corporate and Community Management Act 1997 to be assessed by the Registrar pursuant to Rule 684, Uniform Civil Procedure Rules, plus interest in accordance with the Supreme Court Act 1995. Costs of the assessment to the plaintiff in any event."
Reference to Rule 684 suggests it is dealing with assessment of costs which one would ordinarily read as costs of a proceeding in a Court.
The form of the judgment is somewhat unusual in my experience of judgments pronounced in the Magistrates Court in not identifying a monetary sum to be paid to the successful party by the unsuccessful one, but rather leaving all matters of quantification to the Registrar. Ordinarily, Magistrates quantify costs. There seems to be no reason why the task cannot be entrusted to the Registrar as was done here.
The application on which the Magistrate made the order was in terms under Rule 171 based on the plaintiff's contention that the defence disclosed no reasonable defence. It may have, in some way, turned into a summary judgment application under Rule 292 which refers to the defendant having no reasonable prospect of successfully defending. To an extent the considerations may be similar.
It is convenient to note at this point some confusion as to whether the third defendant only, who is a solicitor, had been served or, rather all defendants. The three of them are owners of a lot in Buon Vista Community Title Scheme 14325. Service seems to have occurred on the third defendant at her office and some mention seems to have been made of an issue as to whether all defendants have been served.
It seems to be inevitable that all should be regarded as having been served with the claim. The defence that was filed in the Magistrates Court is on behalf of all the defendants.
Ms Warren's principal affidavit in the course of 179 and three additional paragraphs asserts that only the third defendant was served with the relevant application and that the first and second defendants have not been, even though their address for service was identical with hers, indeed at her office according to the notice of intention to defend.
It is the case that the application which the Magistrate dealt with refers to the defence of the "defendant" (singular) being struck out and an order being sought that the "defendant" (singular) be ordered to pay the plaintiff's costs on an indemnity basis.
The application indicates that it was to be served on "Ms Lexie Anne Warren" which may be the third defendant's professional title but is not her name in the proceedings.
In the circumstances, it is somewhat difficult to regard the application as having been brought against the first and second defendants and I think it is probably the right approach to regard the Magistrate (who also in his endorsements appears to have adopted the singular "defendant") to have been contemplating an order against the third defendant only. Since the three defendants had a common defence there is nothing inconsistent in the reference in his comments to "the defendants' defence".
While it seems to me the first and second defendants may not be the subjects of any judgment, the third defendant is. The background is a curious situation in which the defendants claim an inability to understand what levies the body corporate has made which they have to pay. The assertion is made that if notifications of levies are sent to them, they go astray and that difficulties are encountered in ascertaining what those levies are.
Those seem to me, on the face of things, unusual assertions and one would think if different inquiries of the Body Corporate or its manager are unavailing the information could be ascertained from fellow lot owners. As things stand now all levies have been paid and what concerns the third defendant, and perhaps particularly because she is a professional person, is the prospect of a judgment being recorded against her when the registrar makes the assessment contemplated by the Magistrate's order.
When that assessment occurs she may face the prospect of legal fees for the body corporate's solicitors collection activities which, as to their amount, loom large in comparison with the amount of the levies. Regrettably, in almost every instance one can think of, anybody faced with having to pay legal costs makes such a judgment about them.
One of the reasons why leave is sought is that there is no judgment amount which demonstrates a right to appeal. The likelihood is, notwithstanding what I said about legal fees, that if matters proceed in the Magistrates Court the judgment amount will be less than the statutory benchmark for an appeal as of right.
The applicant has to show that this is a matter in which the Court ought to exercise its discretion to permit an appeal when none is shown to exist as a right. What is said to be the important point is that the by-law of the body corporate under which the legal costs are claimed is one which contravenes section 142(1) of the Body Corporate and Community Management Act 1997 on the basis of inconsistency with that Act or another Act - in this case the Queensland Law Society Act 1952, in particular part 4A, relating to client agreements. By-law 12 states:
"Resolved that the body corporate approved by-law 12 (special resolution) "that an owner shall pay on demand, the whole of the body corporate's costs and expenses (including solicitor and own client costs) incurred in recovering monies and levies duly levied upon the owner of the body corporate pursuant to the Act, such amount deemed to be a liquidated debt in that this by-law be recorded on the CMS statement and lodged with the Department of Natural Resources."
I have made reference to a general understanding that in other contexts, particularly that of lender and borrower where there are similar arrangements to that set out in the by-law for a debtor to pay somebody else's legal costs, the debtor normally lacks standing to challenge the amount of those costs, more certainly if they have actually been paid.
See Jamieson v. Gosigil Pty Ltd [1983] 2 QdR 117, esp.122.
No authority has been cited to me by Mr Clutterbuck or Mr Laws but reference has been made to some remarks that fell from his Honour Judge McGill SC in Body Corporate for the Avenues Courts, 19609 v. Karraberg Pty Ltd, D375 of 1999, 24 December 1999 where his Honour said this in a proceeding somewhat similar to that which was before the Magistrate:
"Part of the amount claimed in respect of this and indeed other lots is an amount of legal fees under by-law 20 of the community management statement. An owner must pay on demand the whole of the body corporate's costs and expenses including solicitor and own client costs incurred in recovering levies or any other money that the body corporate is entitled to receive from the owner and all their good proceedings taken against the owner, such amount to be recoverable as a liquidated debt. No amounts in respect of legal fees have been claimed against lot 52 since 13 December 1998. So submissions were addressed to me on behalf of the defendant disputing the recoverability of these amounts and my only concern is that there should not be any duplication between the amounts claimed and payable on this basis and the amounts recoverable as assessed costs of the action."
I had independently tentatively reached a similar view and am willing to express my agreement with what his Honour said. In particular I express the Court's concern that there not be duplication in respect of costs in this case.
Ms Clutterbuck has at the last minute claimed to have found an instance of duplication sought to be charged against this client in respect of costs of the reply.
So far as the claim for interest is concerned, although the body corporate sought interest under a resolution (Motion Number 7 Interest on Levies) apparently passed at the AGM on 8 February 1999 which provides for penalty interest at 2.5 per cent per month to be charged on overdue levies, the Magistrate has not acted on that basis as far as interest is concerned but pursuant to section 47 of the Supreme Court Act 1995 which does not attract as generous a rate. The resolution which I referred to which passed as an ordinary resolution 7 - nil (according to the minutes which Mr Laws handed up and I marked Exhibit 1) is the one of a kind invited by section 98 of the Body Corporate and Community Management (Standard Module) Regulation 1997.
Apropos the regulation, it is interesting to note that section 96 requires the body corporate to give notice to each lot owner of contributions levied 30 days before payment is required and that pursuant to subsection (3), "A written notice under this section may be served on a lot owner at the lot owner's address for service or in the way directed by the lot owner."
Section 99 entitles the body corporate to recover contributions together with penalties as a debt if they are "not paid by the date for payment", no indication being given of an indulgence, that is, of an indulgence being permitted to a lot owner who for some reason or other did not receive the notice contemplated in section 96.
It is clear in this case the Magistrate in the circumstances did not consider that the problems raised by the applicant - by which I mean the applicant in this Court, respondent before him - as to receipt of notices created any "triable issue". Quoting r 292(2)(b), he said there was "no need for a trial". I am not prepared sitting on appeal to say that there are sufficiently strong prospects of that being shown to be wrong to justify a grant of leave to appeal. The rule should be applied in a reasonably robust fashion.
In my opinion there ought not to be such leave granted at this stage. I do not necessarily rule out that the outcome of a renewed application might be different after the Registrar has made the assessment directed by the Magistrate.
It remains to be seen what will happen on that assessment. I began by referring to rule 684; that may well invite the Registrar to embark on something like a conventional assessment of costs opening the way for the third defendant to challenge costs that are claimed but were not properly incurred or are inappropriate in amount. I form no judgment in this respect and, indeed, Mr Laws asserts that no complaint regarding amount has been made by the third defendant.
What she has been objecting to is the principle of having to pay the body corporate's legal costs at all in the circumstances, of the levies apparently now being paid in full. The defendants eventually found out what the levies were. I do not think that objection is well founded. There has been reference made this afternoon to the possibilities that might be open to a person such as the third defendant who appears to be in the invidious situation of coming under a liability to pay legal costs incurred behind her back so to speak. One would think that if it were possible to demonstrate that some improper procedure calculated to see her mulcted in costs had been engaged in, there would be procedures in the Act to permit a review of that. That is not the question for me.
I refuse the application.
...
HIS HONOUR: I think the costs for today ought to be assessed on the basis that the body corporate is responsible for half a day's costs wasted.
...
HER HONOUR: I order that the application be dismissed with costs to be assessed on the standard basis but that that occur on the basis that the matter had been concluded today before lunch.