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Prins v The Body Corporate for the Wave CTS 36237[2013] QDC 66

Prins v The Body Corporate for the Wave CTS 36237[2013] QDC 66

[2013] QDC 66

DISTRICT COURT

APPELLATE JURISDICTION

JUDGE ROBIN QC

No 556 of 2012

HENDIRK PRINS AND SOKHOM PRINS

Appellants

and

 

THE BODY CORPORATE FOR THE WAVE CTS 36237

Respondent

SOUTHPORT 

DATE 25/03/2013

ORDER

CATCHWORDS

Body Corporate and Community Management (Accommodation Module) Regulation 2008 s 42, 143

Uniform Civil Procedure Rules 16, 772, 774, 785

Appeal by defendants against separate judgment for recovery of costs in successful claim for body corporate levies – respondent body corporate seeks dismissal of appeal for failure to provide security for costs (as ordered by the Magistrate) – whether its application should be adjourned until after bankruptcy petition based on this judgment – whether retrospective authorisation by lot owners of body corporate proceedings was possible – whether “recovery costs” were a “body corporate debt” – related appeals stayed as futile

HIS HONOUR: Appeal 556 of 2012 has been brought by Hendrik and Sokhom Prins against a Magistrates Court judgment for $150,000, being the top limit of that Court's jurisdiction, for “recovery costs” which the respondent body corporate successfully sought in respect of body corporate levies that had been sued for in the same Magistrates Court proceeding. That was for levies of some $5,514.42.

It is clearly vital in modern social conditions to have rather draconian measures in place to ensure prompt payment of body corporate levies for the efficient operation of body corporates and indeed, the peace of mind of lot owners in them whose lives will be a misery if they cannot rely on their fellow owners to get the body corporate in funds to enable it to attend to its responsibilities.

As part and parcel of that, there are penal interest provisions coming into force if prompt payment is not made. The consequence of those was that in the Magistrates Court proceeding a summary judgment for $12,847.08 was entered by a Magistrate, who is not the one whose judgment is under appeal.

His Honour inherited the matter because the claim for recovery costs was appreciated to be relatively complicated and deserving of consideration at a trial. The matter was set down for five days. On the fourth day, Dr Prins who was conducting the matter, left the court, leaving the Magistrate with a folder of material to consider which his Honour did consider.

His departure followed a direction being given by the Magistrate that put strict, very strict limits on the time be allowed for cross-examination of the remaining witnesses and perhaps presentation of the defendant's case.

One aspect of that case, as I understand it, was that the body corporate ought to have given more appropriate and fuller consideration to assertions by the appellants that there were mitigating circumstances telling in favour of indulgences being granted to them in respect of payment of levies.

One of the complaints that has been made in this court today is that the body corporate or its management committee never came to grips with issues involving the appellants’ bruited impecuniosity in consequences of the GFC and associated events, but left the decision making to a management company.

The respondent body corporate has issued two bankruptcy notices, the first based on the summary judgment amount and second based on the one $150,000 judgment for recovery costs. Any hope of proceeding to achieve a sequestration order in respect of the former has been frustrated by the obtaining, in the Magistrates Court, of an order for payment of the judgment amount by instalments. The other bankruptcy notice has resulted in an application which I am told is returnable on the 3rd of April.

Dr Prins began today's hearing by seeking an adjournment of the respondent's application filed on the 26th of February which is calculated to bring to a head this appeal and also two others which I am about to mention, before the 3rd of April. He also sought (presumably) to adjourn his own "cross-application" returnable today. Oddly, it seeks dismissal for want of prosecution of the respondent's opposition to the appeals, there having been non-prosecution in the sense that the requirements of the practice direction for an outline of argument to be filed remained unfulfilled. The same criticism can't be directed at Dr Prins who, it's conceded, has launched all of the appeals in time and prosecuted them with sufficient expedition, subject only to what's about to be said in relation to the failure to provide security for costs of appeal D556 of 2012.

The adjournment, against the stance taken by Mr Frigo, counsel for the respondent body corporate, was sought on the basis that there have been multiple pronouncements by judicial officers that the arguments sought to be advanced in the appeal are not promising and the like. The court is told today that the strong likelihood is that there'll be a sequestration order next week, in which scenario it is said to be silly to spend hours of court time today on proceedings that may be brought to an end by the trustee in bankruptcy.

Dr Prins showed no interest whatever in undertaking to this court, if there should be such an adjournment, that there will be no reliance in the Federal Magistrate Court on the 3rd of April on the pendency of District Court appeals as a factor in determining the way in which the Federal Magistrate ought to deal with the bankruptcy proceeding. It seems patent to me that the appellants’ desire and interest is to have these appeals still pending next week when, at least if I were the Federal Magistrate, I would have most serious misgivings about making any sequestration order based on the challenged judgment for $150,000.

The second appeal is D597 of 2012 and the third appeal D11 of 2013. The former is an appeal against the refusal of a Magistrate to stay the 19th of October 2012 judgment for $150,000. Mr Frigo tendered and I'll mark Exhibit 1, a photocopy of a sealed application of the Prins in the Magistrates Court which sought a stay of enforcement of that judgment "pending outcome of the appeal of the appellant filed and served on 15 November 2012 against that judgment". There's a quirk about this particular application which Dr Prins drafted as one in the District Court. It would have been sensible enough to apply to the District Court for a stay. He tells me it was the registry's doing that the heading was changed so that the application was made in the Magistrates Court, and indeed that's how it was dealt with, a stay being refused in the event.

Who was the Magistrate there, Mr-----

MR FRIGO: Kilmartin.

HIS HONOUR: The Magistrate was the third Magistrate involved in this saga. His Honour was also the judicial officer who made the decision in the most recent appeal on the 11th of January this year; that allowed an application by the plaintiff, being the respondent body corporate and required the appellants to provide security for the costs of the appeal in the amount of $40,000, that to be attended to within 14 days by the order. In the event that the security was not provided within the time ordered, this appeal was to be stayed.

The terms of the order mean that it is indeed stayed, at least from the point of view of anything being done in it by the appellants. That consideration may be sufficient to dispose of their cross-application.

I find it extraordinary to encounter an order of that kind, which is unprecedented, in my experience, which I must confess is limited to orders of that kind being made by the appeal Court. That is, indeed, the way Griffiths CJ saw such matters in Deep Creek Gold Dredging Co. v. Gympie Quartz Crushing Battery Co (1897) 8 QLJ 131 noted in the annotated UCPR published by Lexus Nexus under rule 772. The following annotation indicates that the practise is that applications are made to the Court of Appeal. Reference to rule 772, however, establishes that an order that an appellant give security may be made by the Court of Appeal "or the court that made the decision appealed from". That rule by rule 785 is applicable in present circumstances as if this court were the Court of Appeal; his Honour thus, in terms of the rule, had jurisdiction to make the order that he did.

In my respectful opinion, the rule ought to be revisited; it gives a most unsatisfactory appearance to things, if a judicial officer whose decision is appealed, is asked to and is in a position to make an order for security for costs that may stifle the appeal. That's clearly what Griffith CJ had in mind. Circumstances alter cases and I may say, although the appeal against the order of 11 January 2013 is not before me today, if required to consider making that order, I might well have made it. My assessment of this situation is that it's the appellants’ inadequately explained determination not to pay the body corporate levies which the second Magistrate, as I shall call his Honour, noted in his reasons, apparently developed at some certain point that has led to the incredible blowing out of the amounts of money involved in this whole saga. It's outstanding to think that the $150,000 represented by the judgment is but part of the recovery costs which a court hearing evidence about it, considered justified to pursue body corporate levies for $5,514.42 . Five days turned out to be too short a time for the parties to litigate the recovery cost issues in the ways that collectively they did.

The body corporate which here represents the innocent lot owners who pay their levies on time. It seems to me that if the body corporate was to face the appeal it was reasonable for it to do so having some security in place for its costs, should the appeal fail, which it rather seems those judicial officers have who given any thought to it expected to happen.

The principal relief which the body corporate seeks now is dismissal of Appeal 556 under rule 774 which provides, and I quote, "If the appellant has been ordered to give security for costs of an appeal and the security has not been given as required by the order -

  1. (a)
    The appeal is stayed so far as it concerns steps to be taken by the appellant unless the Court of Appeal otherwise orders, and;
  1. (b)
    The Court of Appeal or the court may on the respondent's application dismiss the appeal".

As noted above for Court of Appeal one here may read District Court, thanks to rule 785.

I am acutely conscious that acceding to the respondent's application involves disposing of this appeal in a peremptory or summary way without full investigation of the merits of it.

One also can hardly get out of one's mind that it concerns the relatively enormous amount of $150,000, a large tail to be attached what might be called a $5,500 dog of body corporate levies.

This court is entitled to expect some persuasive justification for an outcome which means the appellants do not get their day in court.

A couple of recent Court of Appeal decisions relied on by Mr Frigo, indicate that that may be the appropriate outcome. Mr Frigo's outline of argument refers to Thompson v Robinson [2005] QCA 387 and Bank of Queensland v Mulhern [2012] QCA 218.

In both of those cases, appellants who had not complied with orders to provide security for the costs of an appeal within the allowed time were shut out.

In the earlier case, at paragraph 13, the Court of Appeal said and I quote, “In this case, there has been a determination of the rights of the parties by the decision at first instance. Each of the parties has had his day in court. Mr Robinson has, of course, a right of appeal against that decision. The order for security did not seek to deny that right, but sought to strike a balance whereby that right of appeal would be exercised on terms under which, if the appeal were to be unsuccessful, Mr Thompson would not suffer an undue erosion of the benefit of the judgment he had obtained by the expenditure of legal costs which he could not recover from Mr Robinson. That was  an appropriate balancing of the interests of both parties. It is a balance which, unfortunately, has been upset by Mr Robinson's delay in meeting his obligations. The reason for that delay is unexplained in the sense that Mr Robinson has not satisfactorily explained why he was unable to give the security, which he is now able to give, in accordance with the terms of the order of Nase DCJ. Those terms no longer provide adequate security.”

Dr Prins has not sought further time although he has appealed against the order for security for costs. Instituting that appeal of course did not effect a stay or in any other way effect the operation of the order.

It's been made clear by the appellants that they would dispute the proposition that they had their day in court. Considerations of this general kind loom large in the comprehensive submissions which Dr Prins had ready against the possibility this court refused the application for an adjournment.

In my opinion, that application was properly refused. The court having the time on the day and its jurisdiction having been invoked, it was plainly appropriate to resolve matters in

this court if that could be done before the 3rd of April rather than embarrass proceedings then by having District Court appeals lingering on, still undetermined.

I emphasise that the appeal against the order for security for costs is not before the court today, except on an interlocutory type basis at the instance of the respondent to permit orders to be made vary on the future conduct of it; nor is the issue of refusal of a stay by the Magistrate before this court today, either, except on the same limited basis.

In respect of the other appeal, 556 of 2012 it seems to me the three main grounds that are offered are under the headings, "Unauthorised proceedings & recovery costs",  "Restrict cross of witnesses - our evidence inadmissible" and "We are self represented".

In addition, there is complaint about what's called the "fictional" "zero tolerance policy" and “payment proposals", dealt with by the Magistrate who conducted the five day hearing.

His Honour referred, as I have done, to the sensible social policy of doing everything that reasonably can be done to ensure body corporate levies are paid by lot owners.

The argument is that there is, in truth, no zero tolerance policy but that the body corporate's agent stood in the way of the body corporate giving fair consideration to the Prins' request for special treatment, given mitigating circumstances. I find this aspect very unconvincing. I can't accept it would've been beyond Dr Prins to get a sympathetic case, if he had one, to body corporate members who might’ve had a say.

So far as the unauthorised proceedings aspect is concerned, that picks up a fairly well established area of our jurisprudence which I had occasion to consider in Body Corporate for Watermark North v Ferrett & Global Management Corporation Queensland Pty Ltd [2012] QDC 223.

I determined there, on the basis of authorities, that it was open to a body corporate such as the respondent to retrospectively authorise proceedings. It's understandable that legislation to do with the operations of body corporates contains provisions to ensure that those in control of them do not waste lot owners' resources in litigation.

The inconvenience of not allowing retrospective authorisation seems to me clear. Dr Prins submitted that my earlier decision was wrong , but I'm disinclined to indulge him by deciding the same point a different way today. He's pointed to nothing that might lead me to question the earlier approach.

As to the specific issue of whether a special resolution was required as opposed to the general resolution which the body corporate managed to get at the AGM last month, there's been reference today to other authorities. The provisions that matter are the Body Corporate and Community Management (Accommodation Module) Regulation 2008, section 42 and 143. It all comes down to whether a claim for recovery costs, the amount of which is not known until there is either an agreement or a judgment for them, amount to a body corporate debt as dealt with in rule 143.

Dr Prins has referred me to numerous decisions of commissioners to the effect that recovery costs are not a body corporate debt. There is a Commercial and Consumer Tribunal decision to similar effect, Body Corporate for Liberty CTS 27241 against Alotier [2009] CCT KA 009-08.

Recognising that the Tribunal Member is now a Judge of this Court, I nevertheless find myself in agreement with and consider that considerations of comity dictate my following unless I am persuaded it is wrong, the decision in Ramzy v Body Corporate for GC3 CTS 383 396 [2012] QDC, a decision of Judge McGill's handed down on the 21st of December last year. See paragraphs 28 and 29 of the reasons.

There is also to similar effect Body Corp for Sunseeker Apartments CTS618 against Jasen [2009] QDC 162 at paragraph 38.

In my opinion there are no prospects of the appeal succeeding on that ground although I acknowledge the possibility that in an appeal from this court to the Court of Appeal, the situation may be differently assessed.

(There was a challenge to the resolution itself based on the contention that the (overwhelming) support for it was or was likely to have been achieved by a misrepresentation to the effect that the body corporate owners would in the end not be liable for the substantial legal costs authorised. The Prins or their mortgagee would end up responsible. The court heard that a commissioner declined to rule on the validity of the resolution because court proceedings were underway. I am not persuaded that the court should embark upon this collateral issue. Doubtless a formal challenge based on proper evidence, including from some lot owner(s) complaining being misled could be instituted.)

I have considered carefully the clear, written submissions regarding what might be called the shutting out from the trial of the appellants. In this general area I think have been some misunderstandings.

There was a notion expressed there that the Magistrates Court, perhaps in league with the body corporate, was anxious to get the matter completed before the continuing turning over of the meter resulted in the recovery costs exceeding the jurisdictional limit of $150,000.

The way the system works in my understanding, the body corporate as plaintiff, could've proved as great a loss as it liked, but would have to abandon any excess over the jurisdictional amount when it came to any judgment being quantified.

Of course there is the possibility of the defendants agreeing to an increased jurisdiction but there is no reason for that to happen.

I have read the Magistrate's reasons and accepting that the evidence available was limited in circumstances in which the defendants voluntarily absented themselves it seems to me he gave fair consideration to the defence case this is an observation I make in the context of the appellants being, it seems to me, annoying and troublesome opponents to litigate against, who have already jeopardised their prospects of pursuing their appeal by failing to provide security or seek extra time for doing it.

As to self-representation, once again, I have read the written argument and in the special context am not persuaded by what's said there that the Magistrate ought to have given assistance of the kind described to the defendants before him.

Dr Prins has told the court he has been an academic lawyer, indeed holds a doctorate; in some relatively arcane areas he has practised and advised. I do not think it would have been beyond him if he felt he needed advice from the Magistrate to ask for it, or to work out what the UCPR required. Self-represented litigants vary enormously in their sophistication. I am not convinced that there is any injustice in saddling these particular applicants with the consequences of the consequence of the Prins’ conduct of their defence.These circumstances are thus ones in which I'm persuaded that

It is the right thing to do to accede to the first part of body corporate's application.

The second seeks a permanent stay of the other appeals. To the extent that relief is sought under rule 774,  I am not persuaded that it is available.

Rule 16 is relied on in the alternative. For the purposes of it, an originating process includes a Notice of Appeal; see rule 8(2).

As I understand rule 16, it is something of a catchall provision which deals with situations a defendant or respondent ought not to have to face in the court. The simple basis for staying the two later appeals is that they are plainly ancillary to the major one. If, as happens this afternoon, it is dismissed, there's simply no utility in the other appeals. The stay which the Magistrate refused was only sought until determination of the appeal - which happens this afternoon.

There is no point whatever, in my view, in complaining now against an order for security for costs of an appeal which is dismissed.

The two appeals which now lack utility ought to be stayed.

The third aspect of the application seeks costs which it seems to me is uncontroversial. In the circumstances, it is unnecessary to consider the remaining parts of the application which dealt with alternative relief that might be granted, consolidating the appeals. That would seem sensible if they were to go ahead.

So, the orders are in terms of paragraphs 1, 2, and 3 of the application subject to the deletion of the words, "set aside or” in paragraph 2-----

MR FRIGO: Your Honour, the only thing I raise is that as to order number 3 relating to the costs, your Honour having determined the liability of the appellants to pay and the basis upon that payment being in accordance with the module, there's now the question of quantification. I'm instructed-----

HIS HONOUR: Well, do you want me to add “to be-----

MR FRIGO: To be assessed.

HIS HONOUR: -----to be assessed if not agreed?

MR FRIGO: Yes.

HIS HONOUR: All right. I make that amendment to paragraph 3. But they are costs, they're not recovery costs or-----

MR FRIGO: That's our argument. They're recovery costs in accordance with the module.

HIS HONOUR: Who’s going to assess them?  I don't know that it's my problem. I don’t want to assess them. I'll add “to be assessed if not agreed.”

Close

Editorial Notes

  • Published Case Name:

    Prins v The Body Corporate for the Wave CTS 36237

  • Shortened Case Name:

    Prins v The Body Corporate for the Wave CTS 36237

  • MNC:

    [2013] QDC 66

  • Court:

    QDC

  • Judge(s):

    Robin DCJ

  • Date:

    25 Mar 2013

Litigation History

EventCitation or FileDateNotes
Primary Judgment(No citation)19 Oct 2012Dr and Mrs Prins were owners of a unit in a building called "The Waves". They failed to pay body corporate levies and the body corporate sued to recover. The body corporate obtained judgment and an enforcement warrant. The body corporate obtained judgment for recovery cost of $150,000 against the Prins.
Primary Judgment[2013] QDC 6625 Mar 2013The appeal against the decision made on 19 October 2012 was dismissed: Robin QC DCJ.
Primary JudgmentSC7122/13, SC7925/13 (No citation)20 Aug 2013It was declared that Westpac as a mortgagee in possession of the lot owned by the Prins in "The Waves" were liable for the recovery costs incurred against the Prins by the body corporate.
Appeal Determined (QCA)[2014] QCA 7311 Apr 2014Appeal dismissed: Holmes JA, Fraser JA, Mullins J.

Appeal Status

Appeal Determined (QCA)

Cases Cited

Case NameFull CitationFrequency
Bank of Queensland Ltd v Mulhern [2012] QCA 218
1 citation
Body Corporate for Sunseeker Apartments CTS 618 v Jasen [2009] QDC 162
1 citation
Body Corporate for the Watermark North Community Title Schele 33520 v Ferris [2012] QDC 223
1 citation
Deep Creek Gold Dredging Co v Gympie Crushing Co (1897) 8 QLJ 131
1 citation
State v Sims [2009] CCT KA 9-08
1 citation
Thompson v Robinson [2005] QCA 387
1 citation

Cases Citing

Case NameFull CitationFrequency
ASAP Plasterers Pty Ltd v Matrix Projects (QLD) Pty Ltd [2013] QDC 2181 citation
Body Corporate for Mount Saint John Industrial Park Community Title Scheme 18632 v Superior Stairs & Joinery Pty Ltd[2019] 2 Qd R 73; [2018] QCA 1731 citation
Body Corporate for the Sunshine Towers v Keevers [2018] QMC 71 citation
Cathedral Place Community Body Corporate v The Proprietors Cathedral Village BUP 106 957 [2018] QDC 2752 citations
Jorgensen v Body Corporate For Cairns Central Plaza Apartments [2020] QDC 3002 citations
The Body Corporate La Porte D'Or v Gold Coast City Council [2013] QPEC 191 citation
1

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