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Body Corporate for Natchez CTS21238 v Leet[2021] QMC 9

Body Corporate for Natchez CTS21238 v Leet[2021] QMC 9

MAGISTRATES COURTS OF QUEENSLAND

CITATION:

Body Corporate for Natchez CTS21238 v Leet [2021] QMC 9

PARTIES:

BODY CORPORATE FOR NATCHEZ CTS 21238

(Plaintiff)

v

WILLIAM ALEXANDER LEET

(Defendant)

FILE NO/S:

BRISBANE M1019/21

PROCEEDING:

Request for default judgment 

ORIGINATING COURT:

Magistrates Court, Brisbane

DELIVERED ON:

6 December 2021 

DELIVERED AT:

Brisbane (on the papers)

HEARING DATE:

12 November 2021

MAGISTRATE:

Springer B (Acting Magistrate)

ORDER:

Judgment for the plaintiff in the sum of $

SOLICITORS:

 

Background

  1. [1]
    By Claim filed on the 21 May 2021 the plaintiff claims payment for unpaid contributions and recovery costs as a debt pursuant to s.166(1)(a) and (c) respectively of the Body Corporate and Community Management (Standard Module) Regulation 2020. This proceeding is the later of two proceedings involving the parties and deals with similar issues.
  2. [2]
    The Claim document (“the Claim”) does not specify the amount sought but refers the reader to the sum pleaded in paragraph 17(a), (b) and 17(c) of the Statement of Claim. Paragraph 17 of the Statement of Claim includes the following:
    1. (a)
      $2,440.47 the contributions
    2. (b)
      $5,673.51 for recovery costs incurred in pursuing the 2020 proceeding, and
    3. (c)
      $5,274.04 for recovery costs incurred in enforcing the 2020 Judgment and new contributions that have fallen due since the filing of the 2020 proceeding.
  3. [3]
    The Claim alleges that the defendant is indebted to the plaintiff for the sum $12,498.56.  There appears to be an error in the totalling of those three amounts.  On my calculation, the figure is $13,388.02. 
  4. [4]
    In the Statement of Claim in paragraph 19 the plaintiff pleads: “The Defendant is and remains liable to the plaintiff for future contributions and recovery costs as the (sic) for due and payable”.
  5. [5]
    The plaintiff filed an application for substituted service and, on 8 July 2021, an order was granted. 
  6. [6]
    By Request for default judgment dated 4 August 2021 the plaintiff sought the sum of $12,498.56 comprising the amount claimed and no other amounts.  No payments are recorded as having been made.
  7. [7]
    Default judgment was not granted and the matter was referred to a Magistrate.  Subsequently the matter came before me in the Civil Applications List on 11 November 2021.
  8. [8]
    Mr Williams, a principal lawyer of MBA Lawyers appeared on behalf of the plaintiff.  The defendant has not filed a Notice of Intention to Defend and did not appear.  Although written submissions had been filed on two separate occasions (23 September 2021 and 1 October 2021) in the attempt to have default judgment entered in this proceeding, I was asked to disregard those. Further written submissions were provided and oral submissions made on 11 November 2021.  Those submissions include a Table which is replicated in the Appendix to these reasons. To facilitate referring to specific items, I have added numbering of the lines.   
  9. [9]
    In the submissions provided, the plaintiff refers to the defendant owing $21,338.62, as at the date of the hearing for default judgment.  That comprises a combination of contributions issued by the plaintiff and recovery fees incurred by Collect Success and MBA Lawyers as well as the amount of the judgment in an earlier proceeding between the parties - Claim Number 1856/20 (the 2020 proceeding).

The 2020 proceeding

  1. [10]
    The current proceeding needs to be considered in relation to the 2020 proceeding.  In that, there had been a successful application for substituted service in 2020 and legal fees associated with that were incurred. 
  2. [11]
    Judgment in that proceeding was entered on 28 January 2021 for the sum of $3,289.18 (which included filing costs of $249.15). No professional costs are included in that judgment. Subsequently, enforcement proceedings were taken in relation to that file and the costs of those are now being sought in the current proceeding.

The current proceeding 

Contributions claimed specifically

  1. [12]
    The current proceeding claims contributions in the sum of $2440.07.  The periods to which those contributions relate are later than the 2020 proceeding and it is pleaded that contribution notices had been issued and were unpaid at the date the proceedings were commenced.  Paragraph 8 of the Statement of Claim identifies three periods for which payment of contributions had not been received by the due date:
  1. (a)
    1 September 2020 to 31 December 2020
  1. (b)
    1 January 2021 to 30 April 2021
  1. (c)
    1 May 2021 to 31 August 2021.
  1. [13]
    In Bendigo and Adelaide Bank Ltd v Patel & Ors [2018] QDC 84 at paragraph [7] McGill DCJ said:

On a default judgment under r 283 what matters is whether the relief claimed in the claim and statement of claim amounts to a debt or liquidated claim.  If it does and the claim and statement of claim have been served in accordance with the rules, and no notice of intention to defend has been filed, judgment is to be given under r. 283.  It is not for a registrar to query the merits of the claim, or for that matter for them to be queried by a magistrate on reference from a registrar.  …”

  1. [14]
    In relation to the Claim, only the contributions are a debt or liquidated demand.  For those, there should be no consideration of the merits – see McGill DCJ in Bendigo Bank). The amount of the contributions pleaded as owing in the current proceeding is $2440.07 (see items 4, 5, 6, 10, 11, 12, 17, 18 and 19 of the Table in Part A of the Appendix).  

Contributions not sought specifically in Claim

  1. [15]
    The Body Corporate and Community Management (Standard Module) Regulation 2020 by section 166(1) facilitates pursuit of unpaid contributions which, under the Regulation, are a statutory debt.
  2. [16]
    Although not separated within paragraph 17(c) of the Statement of Claim, the plaintiff seeks the sum of $5274.04 for recovery costs “incurred in enforcing the 2020 Judgment and new contributions that have fallen due since the filing of the 2020 proceeding”.  
  3. [17]
    Thus, the plaintiff attempts to have a judgment in the current proceeding include contributions that were not specifically claimed in the Claim or able to be discerned on a combined reading of the Claim with the Statement of Claim. Those contributions, as identified in the latest submissions provided, are for the period 1 September 2021 to 31 December 2021 and total $848.20 (Items 26, 27 and 28 of the Table).  That attempt is based on paragraph 19 of the Statement of Claim set out above.  
  4. [18]
    The plaintiff submitted that Rule 658 of the Uniform Civil Procedure Rules (UCPR) assisted it.  That provides:

658 General 

  1. (1)
    The court may, at any stage of a proceeding, on the application of a party, make any order, including a judgment, that the nature of the case requires. 
  2. (2)
    The court may make the order even if there is no claim for relief extending to the order in the originating process, statement of claim, counterclaim or similar document.
  1. [19]
    That appears in Chapter 16 with the chapter heading of “Orders”.   It is couched in very wide terms.    
  2. [20]
    The plaintiff also submitted that it could rely on rule 288, which reads:

288 Judgment by default—other claims

  1. (1)
    This rule applies if a defendant is in default and the plaintiff is not entitled to apply for judgment under rule 283, 284, 285 or 286.
  2. (2)
    The plaintiff may apply to the court for a judgment.
  3. (3)
    On the application, the court may give the judgment it considers is justified on the pleadings even if the judgment was not claimed.
  1. [21]
    In my view, rule 288 does not assist the plaintiff in this matter.  Sub-rule (1) refers to where the plaintiff “is not entitled to apply for judgment under rule 283, 284, 285 or 286”.  The plaintiff would be entitled to proceed under rule 283 for the debt, either alone or with rule 284 for unliquidated damages.  Rule 287 dealing with “mixed claims” which allows a combination of claims referred to in rule 283 and 284 (among others). 
  2. [22]
    A party is entitled to know the case against him or her.  That is the role of pleadings.  It is difficult to see how the defendant, Mr Leet, could know about the later contributions being claimed without them being specifically pleaded. The defendant cannot be expected to guess at what any unspecified contributions might relate to, or the nature of them.  He may have legitimate reasons to contest those later contributions, and he would be denied the opportunity to do so when he has had no notice they are being pursued in legal proceedings. 
  3. [23]
    Rule 5 of the UCPR states that the purpose of the Rules is “to facilitate the just and expeditious resolution of the real issues in civil proceedings at a minimum of expense”.  However, in my view, reliance on that does not override the need for at the defendant to be able to know the case against him.  Nor, in my view, does Rule 658 over-ride the general position that a party is entitled to know the nature of the case against him or her
  4. [24]
    To the extent that the plaintiff seeks to include within the judgment amount contributions, being Items 26, 27 and 28 of the Table, they do not form part of the judgment to be entered. 

Recovery costs

  1. [25]
    As noted, this proceeding involves a ‘mixed claim’ contemplated in Rule 287. The Statement of Claim seeks in the current proceeding recovery costs incurred in pursuing the 2020 proceeding.  In my view, there is no impediment to that course. 
  2. [26]
    In Ramzy v Body Corporate for GC3 CTS 38396 & Anor [2012] QDC 397 referring to his earlier decision in Body Corporate for Sunseeker Apartments CTS 618 v Jasen [2012] QDC 51), McGill DCJ opined that the entitlement to recover costs under the Regulation “is an entitlement which excludes the ordinary rules in relation to costs, including the power or discretion to award costs on the indemnity basis, and provides a basis of assessment which is different from the indemnity basis”.   
  1. [27]
    At paragraph [74] of Ramzy, His Honour said that where the plaintiff seeks to recover costs, other than legal costs in the traditional sense, it was necessary for that party “to prove at the trial what costs of this kind had in fact been incurred and that they were reasonably incurred and reasonable in amount”.  He determined that issue ought to have been decided in the trial.  Here, of course, there has been no trial.  
  2. [28]
    Recovery costs are not ‘costs’ in the sense of ‘costs of a proceeding’.  Accordingly, in my view, a plaintiff is not required to have them awarded in the proceeding to which the costs relate.  No issue estoppel arises.  
  3. [29]
    In relation to the recovery costs for the 2020 proceeding, there is one amount for $5673.51 in paragraph 17(b) of the Statement of Claim for pursuing that proceeding.  Further in paragraph 17(c) of the Statement of Claim the plaintiff seeks recovery costs incurred in enforcing the 2020 judgment.  
  4. [30]
    The plaintiff has incurred reasonable recovery costs, as charged by Collect Success Pty Ltd and by MBA Lawyers. The reasonableness of them needs to be determined. The recovery costs of Collect Success and MBA Lawyers are considered separately. 
  5. [31]
    The onus is on a body corporate to prove that the costs and disbursements it claims have been reasonably incurred and reasonable in amount.  The costs and disbursements cannot be made reasonable by agreement between the body corporate and its legal practitioners and, equally in my view, a collection agency: see Body Corporate for Sunseeker Apartments CTS 618 v Jasen [2012] QDC 51 at [36] (adopting Hodgson JA in Owners of Strata Plan 31631 v Dimitrou [2009] NSWCA 27).

Collect Success recovery costs

  1. [32]
    I have considered the affidavit of Liat Walker, a director of Collect Success Pty Ltd and decided the question of that entity’s costs.  Collect Success is, according to Ms Walker, “a company that specialises in assisting bodies corporate and strata managers in recovering unpaid body corporate levies”.  
  2. [33]
    In an affidavit by Ms Walker of Collect Success, there are exhibited 10 invoices issued prior to the commencement of his proceeding.  Eight of those are marked as exhibit LKW-1.  The earliest two of those are not included in the Table. Two further invoices are marked LKW-4. The invoices indicate a charge-out rate of $320.00 which are charged in three-minute intervals. 
  3. [34]
    In my view, the description provided by the Liat Walker of the steps taken do not appear unreasonable, although opinions may differ on the need for Collect Success to seek further instructions from the Body Corporate rather than simply await further instructions.  However, in my view the hourly rate is excessive for the type of steps performed.  While at the top-end of what I would regard as reasonable for work done by an entity that is a collection agency, the figure of $250 per hour is allowed as reasonable.  I note that is the same rate as charged out for a para-legal at MBA Lawyers. 
  4. [35]
    I have set out in Part D of the Appendix the basis for my calculation of the recovery costs allowed for Collect Success Pty Ltd’s charges, namely $3801.71.

MBA Lawyers recovery costs

  1. [36]
    Recovery costs in the 2020 proceeding charged by MBA Lawyers are considered under the following headings:
  1. (a)
    issuing the Claim and Statement of Claim
  2. (b)
    the application for substituted service (c) obtaining judgment (d) enforcement steps. 
  1. [37]
    I have undertaken an assessment of the recovery costs charge by MBA Lawyers rather than refer the costs to an external legal costs assessor, thereby avoiding the additional costs that would arise from that course. I note the description of the steps typically taken for: commencing a proceeding; preparing an application for substituted service; and request for default judgment.  A partner’s time is only infrequently used, commensurate with the level of complexity of this matter.

2020 proceeding

  1. (a)
    Issuing the Claim and Statement of Claim 
  1. [38]
    The commencement of the proceeding was reasonable having regard to outstanding contributions, some of which had been outstanding for almost one year. The amount claimed by MBA Lawyers to issue the Claim and Statement of Claim is $950.00 (excluding GST and the filing fee). That is included in the figure in Item 1 of Table. The amount allowed in item 1 Scale B of the Schedule to the UCPR (the Schedule) is $719.10.  The scale figure is not overly generous, and in my view, the amount claimed as a recovery cost is reasonable.  
  1. (b)
    Application for substituted service  
  1. [39]
    The fixed fee amount claimed for the substituted service application agreed between the lawyers and the plaintiff in the 2020 proceeding is $1750 (excluding GST).  That is included in the figure in Item 8 of the Table. 
  2. [40]
    Item 12 (Applications to the Court) of the Schedule in the UCPR which would include an application for substituted service in Column B is $319.10.  I accept that the scale amount in the Schedule bears little relationship to what lawyers charge their clients. 
  3. [41]
    Despite the fixed rate for an application for substituted service agreed between the plaintiff and its solicitors, I do not regard it as reasonable, given the nature of the application.  I have reduced that by 20% ($1750 reduced to $1380 exclusive of GST).    
  1. (c)
    Obtaining default judgment  
  1. [42]
    The professional fee claimed for obtaining default judgment in the 2020 proceeding is $900.00 (more than five times the schedule fee of $167.60 for a claim up to $5000. That is included in the figure in Item 13 of the Table.  In my view, $900 is not reasonable in amount.  I reduce that by 20% to $675 (exclusive of GST). 
    1. (d)
      Enforcement steps 
  2. [43]
    In the face of ongoing non-payment of the judgment debt, it was reasonable to take enforcement action.  Item 15 of the Schedule relates to a Enforcement warrant and allows in scale B $167.60 for each of preparing and attending for issuing the warrant and registration of the warrant against the land.  The plaintiff claims $1250.00 and $400 respectively. Those amounts are included in Items 15 and 20 of the Table.  In my view, those charges are not reasonable in amount.  I reduce those amounts to $937.50 and $300 respectively, a reduction of 25%. 

The current proceeding

  1. [44]
    I am satisfied that it was reasonable for the plaintiff to issue further proceedings in 2021, given that further levies were issued since the 2020 judgment, which were not paid by the due date and remained unpaid and where the 2020 judgment remains unsatisfied.  
  2. [45]
    The current proceeding, by virtue of the amount sought, places the proceeding in Column C of Schedule 2 in the UCPR, being for amounts claimed from $5000 to $20,000.  
  3. [46]
    Recovery costs in the current proceeding are considered under the following headings:
  1. (a)
    issuing the Claim and Statement of Claim
  1. (b)
    the application for substituted service
  1. (c)
    obtaining judgment.
  1. (a)
    Issuing the Claim and Statement of Claim 
  1. [47]
    The MBA Lawyers costs for this are $950.00 (exclusive of GST).  This is included in Item 22 of the Table. This is less than scale costs in the Schedule in column C which allows for $1125.00.  The amount charged is reasonable. 
    1. (b)
      Application for substituted service   
  2. [48]
    The amount claimed for this is $1750.00. This is included in Item 24 of the Table.   Notwithstanding that a different scale applies to the current proceeding, the view I expressed about the unreasonableness of costs charged for the application for substituted service in the 2020 proceeding apply.  I reduce the amount of the costs by 20% to $1380.00.
  1. (c)
    Obtaining default judgment 
  1. [49]
    The professional fee claimed for obtaining default judgment in the 2020 proceeding is $900.00 (exclusive of GST).  This is included Item 29 of the Table. The scale figure in the Schedule is $254.10. In my view, $900 is not reasonable in amount.  I reduce that by 20% to $675 (exclusive of GST).
  2. [50]
    The Table in Part A of the Appendix includes the judgment amount from the 2020 proceeding (Item 2 in the Table).  That cannot, obviously, be incorporated within a judgment in the current proceeding.   
  3. [51]
    The Table also includes contributions for the period 1 September 2021 to 31 December 2021 in the sum of $848.20 said to be owing.  For the reasons given above, those contributions are not part of the judgment to be entered in this proceeding.

Conclusion 

  1. [52]
    I have determined the hourly rate charged by Collect Success to be not reasonable, as is the quantum of some of the fees charged by MBA Lawyers. 
  2. [53]
    In the affidavit by Liat Walker of Collect Success referred to earlier in these reasons, the Court notes that the affidavit, with its exhibits, is 180 pages in length including copies of every document which is relied on to justify some action on the part of Collect Success.  It includes 19 pages in tabulated form setting out a description of the work done, the explanation for why it is said the work was reasonable, the time taken, the amount charged, GST on that amount and the total.  In a few instances, “No Charge” is recorded. 
  3. [54]
    In an affidavit by Duane Williams of MBA Lawyers filed by leave on 11 November 2021, those lawyers charged the sum of $885.00 to prepare the affidavit by Liat Walker.  In that affidavit, Mr Williams deposes to further recovery costs in the sum of $5258.00 excluding appearances at the hearing of the application before me (the additional costs affidavit).  That includes the $855.00 for the preparation of Ms Walker’s affidavit.  Those further recovery costs are not part of the judgment to be entered in the current proceeding whether they will be claimed in a further proceeding between the parties remains to be seen. 
  4. [55]
    While accepting that there is no rule of proportionality in costs compared to the amount claimed in civil litigation, the further recovery costs in this matter are examples of how costs can escalate to extraordinary amounts compared with the amount being pursued.  This is an area where legislative reform may be desirable to allow for simpler processes which do not add to costs in a significant way ort perhaps a cap on the amount that can be allowed as recovery costs.  
  5. [56]
    Judgment is to be entered for the plaintiff in the sum of $15,553.03 (including a filing fee of $249.15) calculated as set out in the Appendix to these reasons. 

APPENDIX

Part A

Item

Amount

1) MBA Lawyer’s Fees to issue Claim and Statement of Claim (less filing fee)

$1,061.12

2) Prior Judgment (for amount claimed plus filing fee)

$3,289.18

3) Collect Success Fees

$598.40

4) Admin Fund for 1 Sep 20 to 31 Dec 20

$497.14

5) Sinking Fund for 1 Sep 20 to 31 Dec 20

$102.06

6) Building Fund for 1 Sep 20 to 31 Dec 20

$144.47

7) Collect Success Fees

$403.37

8) MBA Lawyer’s Fees to obtain Sub Service

$1,942.36

9) Collect Success Fees

$661.00

10) Admin Fund for 1 Jan 21 to 30 Apr 21

$482.86

11) Sinking Fund for 1 Jan 21 to 30 Apr 21

$111.84

12) Building Fund for 1 Jan 21 to 30 Apr 21

$253.50

13) MBA Lawyer’s Fees for Default Judgement 

$1,007.26

14) Collect Success Fees

$476.41

15) MBA Lawyer’s Fees to issue Enforcement Warrant incl Cert copy fee

$1,404.40

16) Collect Success Fees

$455.40

17) Admin Fund for 1 May 21 to 31 Aug 21

$482.86

18) Sinking Fund for 1 May 21 to 31 Aug 21

$111.84

19) Building Fund for 1 May 21 to 31 Aug 21

$253.50

20) MBA Lawyer’s Fees to issue Writ in Land Title Fees

$635.00

21) Collect Success Fees

$449.40

22) MBA Lawyer’s Fees to issue Claim and Statement of Claim

$1,332.02

23) Collect Success Fees

$914.37

24) MBA Lawyer’s Feed to obtain Sub Service

$1,970.73

25) Collect Success Fees

$395.01

26) Admin Fund for 1 Sep 21 to 31 Dec 21

$482.86

27) Sinking Fund for 1 Sep 21 to 31 Dec 21

$111.84

28) Building Fund for 1 Sep 21 to 31 Dec 21

$253.50

29) MBA Lawyer’s Fees for Default Judgement

$1,004.92

Total owing

$21,338.62

Part B

No changes to Table amounts  

The reference to Items in this Part is a reference to the items in the Table in Part A. 

  1. Contributions to be included as part of Judgment: Items 4, 5, 6, 10, 11, 12, 17, 18 and 19 totalling $2440.37
  1. MBA Lawyers costs charged as recovery costs in Items 1 and 22 allowed as $2393.14:
  1. (a)
    Item 1 - $1061.12 (which excludes the filing fee in the 2020 proceeding, as that incorporated into the 2020 judgment amount;
  2. (b)
    Item 22 - $1332.02 (including filing fee of $249.15 in the current proceeding. 

Part B Total:   $4833.51

Part C

MBA Lawyers – Amount claimed for recovery costs reduced

The reference to Items in this Part is a reference to the items in the Table in Part A. 

  1. Item 8

Amount allowed 

$1380.00

GST

$  138.00

Disbursements (incl GST) 

  1. Item 13

$    17.26

Item 8 reduced to $1535.26.

Amount allowed 

$675.00

GST

    67.50

Disbursements (incl GST)

  1. Item 15 

$  17.26

Item 13 reduced to $759.76 

Amount allowed

$937.50

GST

$  93.75

Filing fees

$  29.40

Item 15 reduced to $1060.65

  1. Item 20

Amount allowed 

$ 300.00

 GST      

$   30.00

Disbursements (incl GST)

  1. Item 24

$ 195.00

Item 20 reduced to $525.00

Amount allowed 

$1380.00

 GST      

$  138.00

Disbursements (incl GST)

$    43.08

Item 24 reduced to $1561.08

  1. Item 29

Amount allowed 

$675.00

GST

$  67.50

Disbursements (incl GST)

$    13.56

Item 29 reduced to $756.06

Part C  Total   $6197.81

Part D

Adjustment to Collect Success figures following a reduction of $70 in the hourly rate usually charged  

  1. The reference to Items in this Part is a reference to the items in the Table in Part A. 
  2. To undertake the adjustment to the figures it was necessary to calculate the number of hours charged for using the tables included as exhibits LKW-2 and LKW-5 to Liat Walker’s affidavit, and noting that in some instances, steps were taken for which no charge was made.  
  3. The hourly rate allowed is $250.00.

Item number and related invoice date

Number of hours

Amount

allowed at $250 per hour

Add: 

  1. GST and 
  2. Disbursements

Total to be included in judgment amount

3 – 4 August 2020

1.2

$300

$30.00

$206.25

$536.25

7 – 26 August 2020

.8

$200

$20.00

$147.62

$367.62

9 – 13 October

2020

1.7

$425

$42.50

$80.85

$548.35

14 – 3 February

2021 

.9

$225

$22.50

$159.61

$407.11

16 – 3 March 2021

1.2

$300

$30.00

$33.00

$363.00

21 – 14 April 2021

1.2

$300

$32.00

$94.60

$424.60

23 – 12 May 2021

1.9

$475

47.50

$246.07

$768.57

25 – 28 June 2021

.8

$200

$20.00

$166.21

$386.12

Part D Total 

$3801.62

Amount for which judgment is to be entered: $14,832.94 (including filing fee of $249.15). 

Close

Editorial Notes

  • Published Case Name:

    Body Corporate for Natchez CTS21238 v Leet

  • Shortened Case Name:

    Body Corporate for Natchez CTS21238 v Leet

  • MNC:

    [2021] QMC 9

  • Court:

    QMC

  • Judge(s):

    Springer B (Acting Magistrate)

  • Date:

    06 Dec 2021

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

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