Body Corporate for Hamilton Grove CTS 2541 v Benson [2025] QMC 32

MAGISTRATE COURT OF QUEENSLAND CITATION: Body Corporate for Hamilton Grove CTS 2541 v Benson [2025] QMC 32 PARTIES: BODY CORPORATE FOR HAMILTON GROVE CTS 2541 (Plaintiff in M85680/24) BODY CORPORATE FOR ALGESTER GARDENS CTS 23859 (Plaintiff in M4175/25) V ASHLEIGH DIANNA BENSON (Defendant in M85680/24) DANIEL NOEL FRIEL (Defendant in M4175/25) FILE NO/S M85680/24; M4175/25 DIVISION: Civil PROCEEDING: Claim ORIGINATING COURT: Maroochydore DEVIVERED ON: 17 December 2025 DELIVERED AT: Maroochydore HEARING DATE: 8 December 2025 JUDGE: Magistrate Madsen ORDERS: 1. In respect of each proceeding, I therefore order: (a) In respect of the Friel Claim, I assess the costs in the amount of $1,905.00. (b) In respect of the Benson Claim, I assess the costs in the amount of $1,783.00. CATCHWORDS: REAL PROPERTY – STRATA AND RELATED TITLES – MANAGEMENT AND CONTROL – BODY CORPORATE: POWERS, DUTIES AND LIABILITIES – GENERAL – where the Body Corporate plaintiff filed a claim against a Lot Owner defendant for unpaid contributions, interests and recovery costs – where the defendant has failed to file a defence – where the plaintiff was awarded default judgment conditional on assessment -- 1 of 6 -- 2 – where the plaintiff sought that the assessment be listed for oral submissions with respect to recovery costs – whether the recovery costs are reasonably incurred COUNSEL: R Varshney for the Plaintiff SOLICITORS: Herd Law for the Plaintiff [1] By referral, the Registrar has referred the assessment of the “reasonable” recovery costs of two Magistrates Court claims involving solicitors who act for 2 Body corporates. [2] The Two assessments, at the request of the solicitor, were listed for oral argument before a Magistrate, and heard together at the same time. These types of assessments are typically listed before a Magistrate as “on the paper matters”, therefore an oral argument was unusual. However, the subject matter of each assessment was not unusual. They are not complicated matters – the law is relatively clear, the assessment process is a matter for each individual Magistrate who considers each assessment on its merits typically. [3] Counsel appeared for the Applicant in each matter. These reasons relate to both assessments. There are two claims: (a) Body Corporate for Hamilton Grove CTS 2541 v Ashleigh Dianna Benson.1 (b) Body Corporate for Algester Gardens CTS 23869 v Daniel Noel Friel.2 [4] Two Conditional Judgments have been obtained for the recovery costs to be assessed.3 [5] Two Affidavits have been filed by the Plaintiffs setting out the costs sought to be recovered.4 [6] The statements of claim sought: (a) In respect of the Friel claim: (i) $3,141.27 as a debt due and owing for unpaid levy contributions up to and including 30 June 2025; and (ii) $1,214.35 as a debt due and owing for recovery costs owing up to and including 19 March 2025, calculated on an indemnity basis pursuant to by-law 12 of the By-Laws for the Scheme and section 166 of the Standard Module; or (iii) Further recovery costs from 20 March 2025. (b) In respect of the Benson Claim: (i) $4,136.32 as a debt due and owing for unpaid levy contributions up to and including 31 March 2025; and 1 M85680/24 (“The Benson Claim”). 2 M4175/25 (“The Friel Claim”). 3 10 September 2025 for the Friel Claim, and 27 August 2025 for the Friel Claim. 4 Both By Kym Marie Herd on 26 August 2025 in respect of the Benson Claim, and on 5 September 2025 in respect of the Friel Claim. Collectively “The Affidavits.”. -- 2 of 6 -- 3 (ii) $1,958.94 as a debt due and owing for recovery costs owing up to and including 10 December 2024, calculated on an indemnity basis pursuant to section 166 of the Standard Module; or (iii) further recovery costs from the date of filing. The Law [7] It is well settled that a Magistrate ought to determine the recovery costs which are not legal costs. [8] The overriding question when considering recovery costs payable under the regulation is whether the costs were reasonably incurred and reasonable in amount.5 [9] In determining such a question, it remains relevant to consider whether those costs bear a reasonable relationship to the value and importance of the subject matter in issue.6 That the parties have made an agreement between them as to the costs and disbursements cannot of itself make them reasonable.7 [10] The onus is on the body corporate, and the defendant is to be given the benefit of the doubt.8 The reasonableness of the recovery costs requires scrutiny of the individual items claimed and that a global assessment will not suffice.9 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.10 [11] It appears that the practice of having a Magistrate consider the legal and professional costs is preferred.11 In saying that his Honour McGill J said it was open to order that the costs be assessed, but that this should follow a conclusion that the conduct of the proceedings had been reasonable.12 [12] Regulation 156 and 166 of the Regulations provides that the Body Corporate may recover “any costs (“recovery costs”) reasonably incurred by the Body corporate in recovering the amount.” [13] The costs payable are limited to those reasonably payable and reasonable in amount.13 The onus lies on the Body Corporate to establish that the legal costs were reasonably incurred & reasonable in amount, with the Owner (here, the Defendant) being given the benefit of any doubt.14 In establishing those matters the Body Corporate (here, the Plaintiff) cannot rely upon assertions of reasonableness by its lawyer, but rather must prove primary facts to establish a proper foundation for any contention.15 5 Jorgensen v Body Corporate for Cairns Central Plaza Apartments [2020] QDC 300 at [107]. 6 Ibid. 7 Owners of Strata Plan 36131 v Dimitriou [2009] NSWCA 27. 8 Body Corporate for Sunseeker Apartments v Jasen [2012] QDC 051 at [43]. 9 Thompson v Body Corporate for Arila Lodge [2017] QDC 134 at [48]. 10 Body Corporate for Sunseeker Apartments CTS 618 v Jasen [2012] QDC 51 as summarised by his Honour in Ramzy v Body Corporate for GC3 CTS 38396 & Anor [2012] QDC 397 where his Honour at paragraph 23 - 45 considered the entitlement to recover costs under the regulation, including, the public policy considerations; Thompson v Body Corporate for Arila Lodge [2017] QDC 134 at [29]. 11 Body Corporate for Pinehaven 1 CTS 3175 v Mackenzie [2021] QMC 8 at [27]-[29] a practice urged upon by the Magistrate. 12 See Ramzy v Body Corporate for GC3 CTS 38396 & Anor [2012] QDC 397 at [75]. 13 Body Corporate for Sunseeker v Jasen [2012] QDC 051 at [43]. 14 See Thompson v Body Corporate for Arila Lodge [2017] QDC 134 at [29]. 15 Ibid at [39]. -- 3 of 6 -- 4 [14] Hence the statements made by the solicitor,16 even allowing for what has been said about the paralegal and the director and the limiting of fees and reduction in hourly rate, are of limited utility. In my view, it would ordinarily be good practice for firms who do recovery work to agree with their clients to have their costs assessed by a cost’s assessor, and it is my understanding a number of law firms do this as a rule. [15] In considering “reasonable” recovery costs, akin to indemnity costs under the Uniform Civil Procedure Rules 1999 (UCPR), the issues of proportionality, as between monies to be recovered and legal cost of recovery, is relevant. This requires by necessary implication the consideration of an element of proportionality.17 [16] In respect to “recovery costs”, in determining whether the costs are reasonably incurred and reasonable in amount, it is relevant to consider whether those costs bear a reasonable relationship to the value & importance of the subject matter in issue, here being the value of the contributions sought to be recovered.18 [17] The Plaintiff must show the costs are “reasonably incurred”. Here, the Body Corporate sought recovery of contributions and engaged lawyers to recover substantial recovery costs. The Plaintiff must also show the costs are “reasonable in amount” to consider that it is appropriate to estimate the incurred disbursements and the Professional costs that would be recoverable on the appropriate scale of costs. Discussion [18] By way of observation: (a) There is no solicitor cost agreement exhibited to the affidavits. (b) The tax invoices of the solicitor are not itemised. (c) The disbursements are reasonable in amount and appear to have been reasonably incurred.19 (d) The outstanding contributions were modest. (e) There was no complexity in either the calculation: (i) Of the interest – the court calculator was used. (ii) Of the costs – the costs were in a schedule. (f) A part payment was made in one matter but not in another. (g) There is a great deal of similarity in the content and length of the affidavits what were relied upon.20 (h) The claim and statement of claim appeared to be templates with variations for the parties names and the amount of outstanding contributions. (i) The invoices for the preparation say that the affidavit say: 16 Paragraph 6 of The Affidavits – statements of reasonableness. 17 See Amos v Monsour Legal Costs Pty Ltd [2007] QCA 235 at [29]. 18 See Jorgensen v Body Corporate for Cairns Central Plaza Apartments [2020] QDC 300 at [107]. 19 These are what they are – a skip trace was needed in one matter, there were issues about service. 20 I was informed during the hearing there was no document management system being used. Given the similarity in the documents prepared in each proceeding, I was mildly surprised. There is no system like Leap in use apparently. -- 4 of 6 -- 5 (i) 3.3 hours preparation;21 (ii) Half an hour review and finalisation – Director;22 (iii) Postage patties and incidentals printing and telephone – regularly without itemisation $20.00.23 [19] The Solicitor’s costs on the scale basis are: (a) $1,783.00.24 (b) $1,905.00.25 [20] The Solicitor’s costs as actually incurred are: (a) $5,297.44.26 (b) $7,220.12.27 [21] Additional Costs are sought for the hearing in the sum of $1,375.00. [22] The key submission in relation to the order I should make is: 18. It is respectfully submitted that a body corporate who is seeking an award of recovery costs pursuant to one of the Modules contained in the Body Corporate and Community Management legislative regime is entitled to all the costs sought if it are able to demonstrate that such costs: (a) are costs that have actually been incurred and paid or will be required to be paid. (b) are costs that have been reasonably incurred; and (c) are costs that are reasonable in amount. 19. Costs which are incurred in the pursuit of overdue levies and interest, are paid from the administrative fund of the body corporate. Given that these costs have already been incurred and paid (or are due to be paid), it is further submitted that if these full costs are not ordered to be paid by the owner of the lot directly, then the burden of the payment of those costs will fall to the other owners within the body corporate. In all the circumstances, it would be both unjust and inequitable for those body corporate owners who have been compliant in the payment of their own body corporate levies, to have to bear the financial burden of the costs of an owner who has failed to pay levies on time and has been recalcitrant in repayment of them. [23] I don’t accept the submission that it would be unjust and inequitable for Body Corporate owners who have been compliant in the payment of their own Body Corporate levies to bear the financial burden of the course of an owner has failed to pay levies. 21 5 September 2025 for the Friel Claim. 25 August 2025 for the Benson Claim. 22 Ibid. 23 I don’t know if the cost agreement of the solicitor allows for this. The legal services has in the past issued guidance to legal practitioners about the types of charges. 24 The Benson Claim. 25 The Friel Claim. 26 The Benson Claim. 27 The Friel Claim. -- 5 of 6 -- 6 [24] The authorities, in my respectful view, do not appear to support that outcome. The stronger argument in my view, is to the effect that the legislature has allowed a body corporate to recover more than the standard costs subject to it being able to demonstrate that the costs that have been incurred are costs that have been reasonably incurred and are reasonable in amount. [25] During the hearing I observed that there were a number of options available including a QCAT proceeding where the exposure to legal costs can be avoided and the potential out-of-pocket cost minimised assuming that a body corporate chooses to engage a solicitor to do that work.28 It appears to me that most of the time and effort in these proceedings appears to relate to the proof of the solicitors’ actual costs where they departed from the standard or scale costs. [26] The legal services commission to my understanding requires solicitors to provide an estimate of the legal costs that are recoverable in litigation together with a genuine estimate of the cost to be incurred in a proceeding. I haven’t been told f that occurring in these proceedings. I haven’t been provided with such an estimate being given by the solicitor to their client. That may help inform the position about the costs being reasonable in amount in some cases. [27] There has been nothing demonstrated by the applicant in either application today for the assessment of costs to demonstrate the actual costs incurred are reasonable in amount. Although it might be said that the costs and disbursements have been reasonably incurred.29 [28] For that matter, it was completely unnecessary in my view to request an oral hearing, or for that matter, engage counsel to argue the position in respect of costs. Particularly when one considers the potential exposure of the Body Corporate to legal costs in each case having regard to the amount of the contributions that were outstanding when the proceedings were commenced. Orders [29] In respect of each proceeding, I therefore order: (a) In respect of the Friel Claim, I assess the costs in the amount of $1,905.00. (b) In respect of the Benson Claim, I assess the costs in the amount of $1,783.00. 28 I published a separate decision today where the Body Corporate Lawyer commenced proceedings in QCAT – the fee agreement in that matter set out the fees of Body Corporate recoveries. 29 Given my conclusion that the costs incurred were not reasonable in amount this question is probably moot. -- 6 of 6 --