Body Corporate for the Sunshine Towers v Keevers [2018] QMC 7

MAGISTRATES COURT OF QUEENSLAND CITATION: PARTIES: FILE NO/S: DIVISION: PROCEEDING: ORIGINATING COURT: DELIVERED ON: DELIVERED AT: Body Corporate for the Sunshine Towers CTS 17038 v. Keevers [2018] QMC 7 BODY CORPORATE FOR THE SUNSHINE TOWERS CTS 17038 (Plaintiff) v SUZANNE LYN KEEVERS (Defendant) 2438 of 2017 Civil Interlocutory Application Brisbane 24 May 2018 Brisbane HEARING DATE: 5 March 2018 MAGISTRATE: Magistrate Hay ORDER: 1. The plaintiff’s claim is dismissed. 2. That within 14 days of the publication of these reasons the parties are to file and serve written submissions on the issue of costs, if not agreed. CATCHWORDS: BODY CORPORATE AND COMMUNITY MANAGEMENT ACT – UNPAID LEVIES – DEFECTIVE LEVY NOTICE - Entitlement to recover levies, penalty interest and recovery costs where notices are defective – Quantum of levies resolved and reasonableness of Recovery Costs claimed. CASES: Prins v The Body Corporate for the Wave [2012] QDC 066 Ramzy v Body Corporate for GC3 CTS 383 396[2012] QDC 397 Body Corporate for Sunseeker Apartments CTS 618 v Jasen [2012] QDC 51 The Body Corporate for 399 Woolcock Street CTS 34700 [2013] QCATA 55 -- 1 of 15 -- 2 COUNSEL: B Kidston for the Applicant Plaintiff SOLICITORS: Mahoney Lawyers for the Plaintiff Raymond Murphy Lawyers for the Defendant [1] The applicant, a body corporate, applies for summary judgment against the defendant, a lot owner. It claims for monies owning arising from unpaid body corporate levies and associated penalty interest and recovery costs. [2] The key issues for me to determine on the summary judgment application1 are: 1. whether the defendant has no real prospect of successfully defending all or a part of the claim; and 2. whether there is a need for a trial of the claim or part of the claim. [3] It is not disputed that the plaintiff’s claim is governed by the provisions of the Body Corporate and Community Management Act 1997 (Qld) (the ‘BCCM Act’) together with the Body Corporate and Community Management (Accommodation Module) Regulation 2008 (the ‘BCCM Regs’). [4] The defendant resists the summary judgment application on the basis that, as a consequence of discrepancies on the levy notices, she was unable to ascertain the true state of her indebtedness and therefore remains uncertain as to whether the plaintiff is entitled to some or all of the outstanding levies claimed, and by association, the penalty interest and recovery costs claimed. [5] Further the defendant says that, in any event, the recovery costs claimed are unreasonable having regard to discrepancies in the levy notices rendered under s. 140 of the BCCM Regs and the amount of the levies recoverable under s. 139 of the BCCM Regs. It was conceded in submissions for the defendant that, after having failed to ascertain the state of the accounts by 2016, the defendant in effect gave up and made no further payments despite remaining a lot owner with an ongoing statutory obligation to pay the levies struck as they fell due. [6] The plaintiff concedes that the levy notices issued to the defendant do not accurately reflect the defendant’s outstanding balances. It says that the schedule attached to its Amended Statement of claim does.2 [7] It is clear that the inaccurate levy notices rendered by the plaintiff has caused the defendant’s state of confusion and, ultimately, lead to her non-compliance with her payment obligations. [8] Importantly, it is not disputed that the plaintiff’s cause of action properly rests in its entitlement to the contributions levied and rendered payable under s. 139 of the BCCM 1 Rule 292 Uniform Civil Procedure Rules 1999 (Qld) 2 The Amended Statement of Claim was filed, with leave of the court, on 15 February 2018: 2 weeks prior to the hearing of this application. It should be noted that when originally filed on 10 May 2017 and served, the Statement of Claim referred to a Schedule, but did not include it: Court doc # 2 and Affidavit of Defendant filed 28 February 2018 at paragraph 5. -- 2 of 15 -- 3 Regs rather than on the amounts notified in the levy notices issued under s. 140 of the BCCM Regs. [9] It is clear that, as a lot owner, the defendant is required to pay any contributions levied in accordance with s. 139 of the BCCM Regs and, if she fails to do so, she will be exposed to penalty interest on the outstanding amounts and the recovery costs reasonably incurred by the plaintiff in pursuing the unpaid sums. As such the defendant has not raised a defence to cause of action upon which she is sued but rather disputes the quantum of the claim. The quantum of claim can be determined summarily on the evidence before me without the need for a trial. So much was conceded by the defendant’s solicitor in submissions before me and, indeed, appears to be the parties’ preferred approach on this application.3 [10] As such, having regard to the matters set out in paragraph 2 above, I note that the defendant does not dispute: 1. the plaintiff’s entitlement to contributions levied under s. 139 of the BCCM Regs, but rather the accuracy of the amounts notified under s. 140 of the BCCM Regs; 2. the plaintiff’s entitlement to charge penalty interest on unpaid levies, but rather whether it had been properly accrued on the defendant’s account; 3. the plaintiff’s entitlement to recovery costs generally, but rather whether those costs were reasonably incurred in the circumstances. Pleadings issues [11] The amended defence4 seeks to withdraw admissions made in the defence on the basis “At the first available opportunity, the defendant will seek leave of the Court to put to one side the defence filed by the defendant on 23/06/2017”. No such application has been made, and the defendant solicitor in submissions today has indicated that no such application will be made. Despite this, the plaintiff has been prepared to argue its application as though the amended defence is the appropriate pleading. It does not rely upon the admissions and deemed admissions contained in the defence filed 23 June 2017.5 [12] At paragraph 7 of the Amended Defence it is pleaded that on 10 November 2014 the defendant “intended” to make a payment in the sum of $1,270.06. However evidence in support of the pleaded allegation is: 1. not addressed in the defendant’s affidavit filed 28 February 2018 nor is it supported by any documentary evidence e.g. the defendant’s bank statements showing any payments made on either 10 November 2014 or 5 May 2015;6 2. inconsistent with any amounts owing at the relevant times.7 [13] It is agreed that defendant made the payments as detailed in columns Q and R of Schedule 1 of the Amended Statement of Claim.8 3 Rule 658 of the Uniform Civil Procedure Rules 1999 4 Filed 21 February 2018 pursuant to this Court’s directions made on 5 February 2018 5 The defendant filed her first version of the Defence on 26 June 2017. At that time she was a self-represented litigant. 6 Affidavit of Raymond Charles Murphy filed 5 February 2018 at paragraphs 4 - 6 7 Based on the evidence before the court and the matters set out in the Chronology herein 8 As per submissions made by the solicitor for the defendant. See also paragraph 5A of the Amended Statement of Claim and paragraph 7 of the Amended Defence. -- 3 of 15 -- 4 Chronology [14] On 21 April 2010 the plaintiff held an extraordinary general meeting at which it was resolved9 that: 1. in accordance with s. 142(2) of the BCCM Regs, the body corporate could impose penalty interest of 2.5% “on all contributions and contribution instalments not paid by the relevant payment dates fixed in notices of contributions and given to owners.” [my emphasis] [15] On 25 September 2014 the plaintiff held its 2014 AGM. No quorum was reached, so the meeting was adjourned to 2 October 2014 where it was resolved by ordinary resolution to: 1. levy each lot the total sum of $871.50 for financial year 2014/15 for its administrative fund10 and its sinking fund11 (the ‘2014-2015 contributions’);12 2. pre-issue levy notices for the next two levy periods, namely 01/07/15 – 30/09/15 and 01/10/15 – 31/12/15, levying each lot a total per quarter of $214.51;13 3. apply a penalty of 2.5% simple interest on all unpaid contributions. [16] The contribution notice errors started from the first notice that relates to the levies sued for in these proceedings. Notice of the 4th Quarter 2014 contribution ‘date for payment’ and therefore the associated discount period under s. 141 of the BCCM Regs was not given until 14 October 2014 (the ‘First Notice’).14 [17] The defendant did not make any payment on the First Notice. [18] On or about 12 November 2014 the defendant received the Second Notice15 restating the 4th Quarter 2014 contribution and setting out 1st Quarter 2015 contribution.16 By this time the 4th Quarter 2014 contribution was overdue, even allowing for the discrepancy between the due date on the first notice and the discount date notified. [19] On 18 November 2014 the defendant paid the sum of $3,834.63 purportedly for the 2 outstanding quarters.17 However when the defendant paid these two quarters in full on 18 November 2014, she only paid the discounted amount for both quarters, rather than paying the full amount for the 4th Quarter 2014 contribution of $2,389.57 and the discounted amount for the 1st Quarter 2015 contribution of $1,923.05. In other words provided the levied amounts were lawfully enforceable, the defendant’s payment of $3,834.63 on 18 November 2014 was short by $477.95.18 9 Affidavit of Brian Robert Uy filed 22 December 2017, Exhibit BRU-14 10 in the sum of $791.20 11 in the sum of $80.30 12 Affidavit of Brian Robert Uy filed 22 December 2017 at [11] – [13]. See also Exhibit BYU – 5, motions 3 and 4 13 Broken down as $198.45 per quarter for the administrative fund and $16.06 per quarter for the sinking fund. 14 Affidavit of Defendant at paragraph 2, Exhibit SLK-1 at p1/78. Relevantly the First Notice was issued 13 days after the ‘date for payment’ nominated in the written notice. Accordingly the First Notice contravened s. 140 (1)(c) of the BCCM Regs and rendered ineffectual the discount period to be calculated. 15 Affidavit of Defendant at paragraph 2, Exhibit SLK-1 at p2/78 16 Standard levy for the period 01/01/015 – 31/03/15. See line 2 of Schedule 1 to the Amended Statement of Claim. This notice also restated the 4th Quarter 2014 contribution. 17 i.e. 4th quarter 2014 and 1st quarter 2015 18 Affidavit of Defendant at paragraphs 9 and 10 -- 4 of 15 -- 5 [20] The defendant says that the Second Notice was confusing: “I was not informed of the significance of the loss of discount if payments are not made by the due date and the manner that payments would be treated.[sic] The details in that notice were misleading as to payment and consequences of payment because on the face of it I could pay the “due date” and avail myself of the discounted amount. In fact I made a payment of $3,834.63 on 18 November 2014.”19 The difficulty with this evidence is that it ignores the fact that: 1. the due date stated for the 4th Quarter 2014 contribution on both the First Notice and the Second Notice was 1 October 2014, so clearly it had passed by the time the payment was made by the defendant; and 2. both the First and Second Notices stated “Interest at the rate of 30% per annum (2.5% per month) is payable on overdue levies”. [21] The effect of the defendant’s error was that the $477.95 arrears from the First Notice was carried forward and interest began to accumulate.20 In her affidavit the defendant raises the legitimate complaint of being denied of the benefit of the discount and the consequent interest and recovery costs accrued due to the plaintiff’s non-compliance with the requirements of ss. 140(1)(c), 140(1)(d) and 141(1) of the BCCM Regs. 21 I will address this issue later in these reasons.22 [22] On or about 4 February 201523 the defendant received the Third Notice 24 claiming: 1. the sum of $477.95 outstanding from the 1st Quarter 2015 contribution; 2. the 2nd Quarter 2015 contribution; 3. a Special levy.25 [23] On 7 March 2015 the defendant made two part payments on the Third Notice, namely: 1. the sum of $477.95, being the arrears declared on the Third Notice arising from the 1st Quarter 2015 contribution, but paid no money towards the standard levy for the period 01/04/15 – 30/06/15, i.e. the 2nd Quarter 2015 contribution (leaving the amount of $2,403.80 owing for the 2nd Quarter 2015 contribution (or $1,923.05 if paid by 1 April 2015). 2. the sum of $230.55 being the full amount of the Special levy. [24] On 1 April 2015: 1. the discount for the 2nd Quarter 2015 contribution lapsed; 19 Affidavit of Defendant at paragraph 10 20 at the rate of 2.5% per month or 30% per annum, as noted on the bottom of the contribution notices (although not notified in an actual claimed sum in the body of the notices) 21 The defendant also raised this, albeit rather opaquely, in her Amended Defence filed 21 February 2018 at paragraphs 6 and 9 22 See under the headings ‘Conclusion re quantum’; ‘Penalty Interest’ and ‘Recovery Costs’ 23 Affidavit of Defendant at paragraph 2, Exhibit SLK-1 at p3/78. I place no evidentiary weight on the recreated invoice dated 10 February 2015 referred to in paragraph 23(a) of the affidavit of Brian Robert Uy filed 22 December 2017. 24 Standard levy for the period 01/04/015 – 30/06/15. See line 4 of Schedule 1 to the Amended Statement of Claim. This notice also specified the Special Levy and restated the 1st Quarter 2015 contribution by describing $477.95 of it as unpaid (i.e. by applying the monies paid on 18 November 2014 to the undiscounted sum for the 4th Quarter 2014, thereby leaving arrears of $477.95 on the 1st Quarter 2015 contribution) 25 Per Motion 2 resolved at the EGM held on 21/01/15. Affidavit of Defendant at paragraph 2, Exhibit SLK-1 at p 3/78. Aside from the s. 140 Notice, there is no evidence before the Court of the minutes of this EGM or the resolutions passed at it. -- 5 of 15 -- 6 2. the defendant made a further part payment of $700.00 against the 2nd Quarter 2015 contribution leaving the undiscounted sum of $1,703.80 owing, not including interest that would begin to accrue on the balance at a rate of 2.5% per month.26 [25] On 4 May 2015 the defendant made a further part payment of $500.00 against the 2nd Quarter 2015 contribution leaving the undiscounted sum of $1,203.80 owing, not including accrued interest, provided the levies rendered were correct. [26] On or about 11 May 201527 the defendant received the Fourth Notice, claiming: 1. the sum of $1,257.25 outstanding from the 2st Quarter 2015 contribution; 2. reclaiming the $230.55 Special levy claimed in the Third Notice; 3. the 3nd Quarter 2015 contribution. [27] I accept the defendant’s contention that this notice was confusing and misleading, particularly given that the special levy had already been paid,28 and the amount claimed as outstanding for the 2nd Quarter 2015 contribution was, without explanation, $53.45 more than previously notified. If attributable to interest then that should have been disclosed in in the ‘Int/Disc’ column of the invoice, but it was not.29 It would also suggest that interest was erroneously charged on the Special levy, despite it having already been paid. In oral submissions before me, the plaintiff’s counsel readily conceded that the invoices rendered had “remaining balance issues”. [28] On 4 June 2015 the defendant made two part payments on the Fourth Notice, namely: 1. the sum of $1,431.55 and 2. the sum of $230.55 in payment of the Special Levy, despite having already paid it.30 [29] The effect of these two part payments was that the sum paid of $1,662.10 was attributed against the balance of the 2nd Quarter 2015 contribution (including the interest of $53.45) leaving $404.85 to be set off against the 3nd Quarter 2015 contribution amount of $2,403.80 (or $1,923.05 if paid by 1 July 2015). [30] In short provided the levies notified were consistent with those resolved by ordinary resolution, as at 4 June 2015 the defendant owed the plaintiff the undiscounted sum of $1,998.95 on the 3rd Quarter 2015 contribution (or $1,518.20 if paid by 1 July 2015). [31] On or about 23 June 2015 the defendant received the Fifth Notice claiming $321.77 arising from an unpaid portion of the 2nd Quarter 2015 contribution including interest in the sum of $15.32, despite this contribution having been paid in full.31 26 Amended Statement of Claim, Schedule 1, column H and J, line 4 27 Affidavit of Defendant at paragraph 2, Exhibit SLK-1 at p4/78. I place no evidentiary weight on the recreated invoices for the 2nd or 3rd Quarter 2015 contributions dated 1 April 2015 and 1 June 2015 referred to in paragraphs 23(b) and 23(c) of the affidavit of Brian Robert Uy filed 22 December 2017. 28 See paragraph [23] above 29 Amended Statement of Claim, Schedule 1, column H and J, line 2. However there is a discrepancy between the Interest period in column I, which is for the 1st Quarter contribution period, and the differential being applied to the unpaid portion of the 2nd Quarter 2015 contribution. 30 See paragraph [23] above 31 See paragraph [29] above -- 6 of 15 -- 7 [32] Understandably the unsatisfactory disclosure on the notices caused further confusion in the mind of the defendant, who believed that she should have been in credit by the end of June 2015.32 “That resulted in TCM Strata emailing to me 3 separate reconstructions of the 4 February and 11 May notices on 29 and 30 June 2015… did not resolve the underlying fact that at that time I had made payments of $5,743.13 and should have been in credit at that time.” I accept that the defendant’s confusion was genuine and was, in large part, caused by the content of the notices she had received from the plaintiff. Based on those notices it is clear that as at 30 June 2015 the plaintiff maintained that the defendant continued to owe the undiscounted sum of $1,998.95 on the 3rd Quarter 2015 contribution (or $1,518.20 if paid by 1 July 2015).33 [33] On or about 26 August 201534 the defendant received the Sixth Notice claiming: 1. the sum of $337.10 from the 2st Quarter 2015 contribution the plaintiff alleged was outstanding on the Fifth Notice (which now included and additional $15.33 in interest); 2. the sum of $2,463.89 from the 3rd Quarter 2015 contribution (including $60.09 in interest) 3. the 4th Quarter 2015 contribution. [34] In summary, as at 26 August 2015 the plaintiff claimed the undiscounted sum of $5,204.79 was owing, or $4,724.04 was owed if paid by 1 October 2015. [35] Based on my reconciliation of the notices and the amounts paid as set out herein, I find that, provided the notified levies were consistent with the levies resolved by ordinary resolution, as at 26 August 2015 the defendant owed the sum of $4,462.84 plus interest (or $3,982.09 if paid by 1 October 2015) broken down as follows: 1. $1,998.95 for the unpaid, undiscounted portion of the 3rd Quarter 015 contribution plus interest thereon of $60.09; 2. $2,403.80 for the 4th Quarter 2015 contribution (or $1,923.05 if paid by 1 October 2015) [36] On 7 and 18 September 2015 respectively the defendant made two part payments totalling $4,724.04 in reduction of the contributions owing.35 Based on my calculations outlined in the preceding paragraph, if the notified levies were correct, the defendant had brought her account with the plaintiff up to date and was, in fact, $741.95 in credit. [37] On 10 September 2015 the plaintiff held its 2015 AGM and: 1. a motion to levy each lot the total sum of $945.80 per annum for its administrative fund was defeated; 2. it was resolved by ordinary resolution to: (a) levy each lot the total sum of $80.30 for its sinking fund (the ‘2015-2016 sinking fund contributions’);36 32 Affidavit of Defendant at paragraphs 12 and 13. 33 Paragraphs [30] – [31] herein 34 Affidavit of Defendant at paragraph 2, Exhibit SLK-1 at p. 6/78. I place no evidentiary weight on the recreated invoice for the 4th Quarter 2015 contribution dated 1 September 2015 referred to in paragraphs 23(d) of the affidavit of Brian Robert Uy filed 22 December 2017. 35 Amended Statement of Claim, Schedule 1 columns Q and R 36 Affidavit of Brian Robert Uy filed 22 December 2017 at [14] – [16]. NB. [15](a)(ii) refers to ‘$80.30 for the 2016-2017 financial year’ but Exhibit BRU-7 at p.109/302 states the special levy period is ‘1 October 2015 to 31 December 2015’ and the date payable is ‘1 October 2015’. -- 7 of 15 -- 8 (b) pre-issue levy notices for the next two levy periods, namely 01/07/16 – 30/09/16 and 01/10/16 – 31/12/16, levying each lot a total per quarter of $20.08 for the sinking fund;37 (c) apply a penalty of 2.5% simple interest on all unpaid contributions. (d) levy each lot the sum of $90.47 for legal fees (‘the 2015-2016 special levy’); [38] The defendant concedes that between 19 September 2015 and 7 June 2017 she made no further payments for contributions levied against her in respect of the lot.38 [39] On or about 19 October 201539 the defendant received the Seventh Notice claiming: 1. $84.96 in unpaid sinking fund levies from the 4th Quarter 2015 contribution; 2. a Special levy.40 [40] The Seventh Notice claimed the sum of $1,079.87 was payable and no discount applicable. Given my finding that the defendant was in credit at that time, prima facie only the sum of $253.23 was owing at the time the Seventh Notice was issued. Therefore the plaintiff had no entitlement to accrue further interest at that point: 1. because the 4th Quarter 2015 contribution had already been paid in full; and 2. when the credit of $741.95 is correctly applied against the Special levy it left the sum of $253.23 that was not payable until 19 November 2015. [41] On or about 24 November 201541 the defendant received the Eighth Notice claiming: 1. $84.96 in unpaid sinking fund levies from the 4th Quarter 2015 contribution claimed in the Sixth Notice together with interest of $2.12; 2. the Special levy claimed in the Sixth Notice; 3. 1st Quarter 2016 contributions. [42] The Eighth Notice claimed the sum of $1,302.82 was payable, if not paid by 1 January 2016. For the reasons already set out above, prima facie the actual amount payable, if not paid by 1 January 2016, was $474.06 broken down as: 1. The balance of the Special levy in the sum of $253.23; 2. The 1st Quarter 2016 contributions; 3. Interest on those amounts. [43] The defendant made no payments in respect of the Eighth Notice. [44] I reject the plaintiff’s evidence42 that no penalty interest had been charged to the defendant until 20 February 2016. The contention is contrary to the documentary evidence referred to above and is inconsistent with way in which the amounts paid by the defendant were applied by the plaintiff. Further, it is evident on the plaintiff’s own 37 For the sinking fund only. See Exhibit BRU-7, motion 4. 38 Affidavit of Defendant at paragraphs 20 – 21. 39 Affidavit of Defendant at paragraph 2, Exhibit SLK-1 at p. 7/78. 40 Per Motion 17 resolved at the 2015 AGM. See also affidavit of Brian Robert Uy filed 22 December 2017, Exhibit ‘BRU-7’ 41 Affidavit of Defendant at paragraph 2, Exhibit SLK-1 at p. 8/78. See also affidavit of Brian Robert Uy filed 22 December 2017 at paragraph 23(e) 42 Affidavit of Brian Robert Uy filed 22 December 2017 at paragraph 28. -- 8 of 15 -- 9 pleadings that penalty interest totalling $348.15 was offset against the defendant’s payments up until 24 November 2015.43 [45] On or about 14 January 2016 the plaintiff caused a notice of arrears to be sent to the defendant. It is referred to in the body of the Ninth Notice. 44 [46] On or about 20 January 201645 the defendant received the Ninth Notice claiming: 1. $84.96 in unpaid sinking fund levies from the 4th Quarter 2015 contribution claimed in the Sixth Notice together with interest of $6.35; 2. the Special levy claimed in the Sixth Notice; 3. 1st Quarter 2016 contributions; 4. Recovery costs of $5.03 for an arrears notice dated 14/01/16. [47] Prima facie the actual amounts payable under the Ninth Notice, if not paid by 20 February 2016, were: 1. The balance of the Special levy in the in sum of $253.23; 2. The 1st Quarter 2016 contributions; 3. Interest. [48] The defendant made no payments in respect of the Ninth Notice. [49] On 18 January 2016 the plaintiff held an extraordinary general meeting (2016 EGM). 46 It was resolved by ordinary resolution to: 1. levy each lot the total sum of $776.99 for its administrative fund (the ‘2015-2016 administrative fund contributions’);47 2. pre-issue levy notices for the next two levy periods, namely 01/07/16 – 30/09/16 and 01/10/16 – 31/12/16, levying each lot a total per quarter of $115.79 for the administrative fund; 3. apply a penalty of 2.5% simple interest on all unpaid contributions. [50] On or about 16 February 201648 the defendant received the Tenth Notice: 1. restating the matters set out in the Ninth Notice with increased interest; 2. claiming the 2nd Quarter 2016 contributions. [51] The defendant made no payments in respect of the Tenth Notice. [52] On 29 April 2016 the plaintiff sent a second arrears notice to the defendant.49 [53] On or about 17 May 201650 the defendant received the Eleventh Notice: 43 Amended Statement of Claim, Schedule 1 columns H – J, lines 1 - 10 44 Affidavit of Brian Robert Uy filed 22 December 2017 Exhibit BRU-12 at page 261/296 45 Affidavit of Defendant at paragraph 2, Exhibit SLK-1 at p. 9/78. See also affidavit of Brian Robert Uy filed 22 December 2017 at paragraph 23(f) and Exhibit BRU-12 at p. 270 (261/296) 46 Affidavit of Brian Robert Uy filed 22 December 2017 at [17] – [19]. See also Exhibit BRU-9 at pp. 133 - 138 (124/296 – 129/296) 47 Affidavit of Brian Robert Uy filed 22 December 2017, Exhibit BRU-9, motion 2. 48 Affidavit of Defendant at paragraph 2, Exhibit SLK-1 at pp. 10/78 & 11/78. See also affidavit of Brian Robert Uy filed 22 December 2017 at paragraph 23(g) 49 The second arrears notice is not in evidence before the Court. However it is referred to in the body of the Eleventh Notice. See footnote below for that notice. 50 Affidavit of Defendant at paragraph 2, Exhibit SLK-1 at p. 12/78 (missing the second page of the notice). See also affidavit of Brian Robert Uy filed 22 December 2017 at paragraph 23(h) and Exhibit BRU-12 at pp. 273 – 274 (264/296 – 265/296) -- 9 of 15 -- 10 1. restating the matters set out in the Tenth Notice with increased interest; 2. claiming additional recovery costs for 1 further arrears notice;51 3. claiming the 3rd Quarter 2016 contributions. [54] The defendant made no payments in respect of the Eleventh Notice. [55] On 31 May 2016 the plaintiff sent a third arrears notice to the defendant.52 [56] On or about 17 August 201653 the defendant received the Twelfth Notice: 1. restating the matters set out in the Eleventh Notice with increased interest; 2. claiming additional recovery costs for a further arrears notices54 as well as a final notice;55 3. claiming the 4th Quarter 2016 contributions. [57] The defendant made no payments in respect of the Twelfth Notice. [58] On 30 September 2016 the plaintiff held its 2016 AGM. It was resolved by ordinary resolution to: 1. levy each lot the total sum of $754.94 for financial year 2016/17 for its administrative fund56 and its sinking fund57 (the ‘2016-2017 contributions’);58 2. pre-issue levy notices for the next two levy periods, namely 01/07/17 – 30/09/17 and 01/10/17 – 31/12/17, levying each lot a total per quarter of $241.61;59 3. apply a penalty of 2.5% simple interest on all unpaid contributions 4. levy each lot the sum of $187.79 to restore the administrative fund’s negative balance (‘the 2016-2017 special levy’)60 [59] On or about 17 November 201661 the defendant received the Thirteenth Notice: 1. restating the matters set out in the Twelfth Notice with increased interest; 2. claiming the 1st Quarter 2017 contributions; 3. claiming the 2016-2017 special levy. [60] The defendant made no payments in respect of the Thirteenth Notice. [61] On or about 17 February 201762 the defendant received the Fourteenth Notice: 1. restating the matters set out in the Thirteenth Notice with increased interest; 51 Dated 27/04/16 52 The third arrears notice is not in evidence before the Court. However it is referred to in the body of the Twelfth Notice. See footnote below for that notice. 53 Affidavit of Defendant at paragraph 2, Exhibit SLK-1 at pp. 13/78 - 15/78. See also affidavit of Brian Robert Uy filed 22 December 2017 at paragraph 23(i) 54 Dated 31/05/16 55 Dated 31/05/16: (which appears to be double dipping given it is the same date as the last arrears notice. See footnote immediately above) 56 in the sum of $674.64 57 in the sum of $80.30 58 Affidavit of Brian Robert Uy filed 22 December 2017 at [20] – [22]. See also Exhibit BYU-11, motions 3 and 4 59 Broken down as $221.53 per quarter for the administrative fund and $20.08 per quarter for the sinking fund. 60 Affidavit of Brian Robert Uy filed 22 December 2017, Exhibit BYU-11, motion 11 61 Affidavit of Defendant at paragraph 2, Exhibit SLK-1 at pp. 16/78 - 18/78. See also affidavit of Brian Robert Uy filed 22 December 2017 at paragraph 23(j) 62 Affidavit of Defendant at paragraph 2, Exhibit SLK-1 at pp. 19/78 - 21/78. See also affidavit of Brian Robert Uy filed 22 December 2017 at paragraph 23(k) -- 10 of 15 -- 11 2. claiming the 2nd Quarter 2017 contributions. [62] The defendant made no payments in respect of the Fourteenth Notice. [63] On or about 16 May 201763 the defendant received the Fifteenth Notice: 1. restating the matters set out in the Fourteenth Notice with increased interest; 2. claiming the 3rd Quarter 2017 contributions. [64] The defendant made no payments in respect of the Fifteenth Notice. [65] On 10 May 2017 the plaintiff commenced these legal proceedings. [66] On 27 May 2017 the defendant was personally served with these legal proceedings.64 [67] On 8 June 2017 and 9 June 2017 the defendant made two part payments in the sums of $1,500 and $350 respectively. 65 [68] On 13 June 2017 and 14 June 2017 the defendant made two further part payments in the sums of $250 and $1,000 respectively. 66 [69] On 23 June 2017 the defendant filed her Notice of Intention to Defend in these proceedings. [70] On 3 July 2017 the defendant made one final payment in the sum of $600. 67 [71] On 20 July 2017 the defendant filed her Defence in these proceedings. [72] On or about 18 August 201768 the defendant received the Sixteenth Notice. [73] On 31 October 2017 the plaintiff held its 2017 AGM.69 It was resolved by ordinary resolution to: 1. levy each lot the total sum of $754.94 for financial year 2016/17 for its administrative fund70 and its sinking fund71 (the ‘2017-2018 contributions’); 2. pre-issue levy notices for the next two levy periods, namely 01/07/17 – 30/09/17 and 01/10/17 – 31/12/17, levying each lot a total per quarter of $241.61; 3. apply a penalty of 2.5% simple interest on all unpaid contributions 4. levy each lot the sum of $571.79 to upgrade the lifts (‘the 2017-2018 special levy’).72 63 Affidavit of Defendant at paragraph 2, Exhibit SLK-1 at pp. 22/78 - 24/78. See also affidavit of Brian Robert Uy filed 22 December 2017 at paragraph 23(l) 64 Affidavit of John Vitanza filed 3 July 2017, Court doc no. 7. 65 Amended Statement of Claim, Schedule 1 columns Q and R 66 Amended Statement of Claim, Schedule 1 columns Q and R 67 Amended Statement of Claim, Schedule 1 columns Q and R 68 Affidavit of Defendant at paragraph 2, Exhibit SLK-1 at pp. 25/78 - 27/78. 69 See affidavit of Samantha Jane Remington filed by leave on 5 March 2018 at [5] – [8]. See also Exhibit SJR- 2 70 in the sum of $710.99. See affidavit of Samantha Jane Remington filed by leave on 5 March 2018, Exhibit SJR-2, motion 3 71 in the sum of $80.30. See affidavit of Samantha Jane Remington filed by leave on 5 March 2018, Exhibit SJR-2, motion 4 72 See affidavit of Samantha Jane Remington filed by leave on 5 March 2018, Exhibit SJR-2, motion 12 -- 11 of 15 -- 12 [74] On or about 16 November 201773 the defendant received the Seventeenth Notice. Conclusion re. Quantum [75] Section 139 of the BCCM Regs relevantly provides that: 1. the body corporate must, by ordinary resolution: (a) fix the contributions to levied on the owner of each lot; (b) decide the number of the instalments in which they are to be paid; (c) fix the date on, or before, which the payment of each instalment is to be paid; (d) if a liability arises for which no, or no adequate, provision has been made in the budget; (i) fix a special contribution to be levied; (ii) decide whether it is to be payable by instalments; (iii) fix the date/s for payment of the special contribution either by way of single payment or instalment. 2. The committee may also fix interim contributions to be levied, provided they are: (a) based on the amounts budgeted for; and (b) set off against the amounts to be levied pursuant to the ordinary resolutions above; (c) related, as closely as practicable, to the period from the end of the previous financial year to 2 months after the proposed date of the AGM. [76] As is apparent from the above chronology even on the plaintiff’s own case, it has misapplied the defendant’s payments against the amounts it says it was entitled to levy against her. [77] Further, when the levied amounts claimed by the plaintiff in these proceedings are compared against those amounts resolved at the various annual and extraordinary general meetings, it is apparent that the amounts claimed by the notices under s. 140 of the BCCM Regs exceed the levies resolved by ordinary resolution.74 There is nothing on the evidence to suggest that the amounts levied were ‘interim levies’ contemplated under s. 139(3) of the BCCM Regs. Even if they were, the amounts levied fall outside of the parameters set for interim levies capable of being rendered by the committee under s. 139(4) of the BCCM Regs. [78] For these reasons I find that the quantum of the levies the plaintiff was lawfully entitled to strike in respect of lot 20 between 1 July 2014 and 30 June 2018 was $4,084.85.75 A breakdown of that calculation is attached and marked Schedule A to this decision. Penalty Interest [79] Penalty interest can only be charged if it has been approved by ‘ordinary resolution’76 at a body corporate meeting.77 The plaintiff was entitled to charge penalty interest on outstanding levies pursuant to the ordinary resolutions passed at the EGM held on 21 73 Affidavit of Defendant at paragraph 2, Exhibit SLK-1 at pp. 28/78 - 30/78. 74 See Schedule A to this decision for a breakdown of the amounts resolved v. the amounts levied 75 This does not include the special levy referred to in Schedule A as the ‘14/15 Special Levy’, as there is no evidence before the Court of either that meeting or the resolutions made at that meeting 76 As that term is defined in the BCCM Act. See also s. 108 of the BCCM Act. 77 Section 142 of the BCCM Regs -- 12 of 15 -- 13 April 2010 as well as the 2014 AGM, 2015AGM, 2016 EGM and AGM together with the 2017 AGM. 78 [80] In view of my findings that the amounts levied exceeded the levies resolved, and noting that as at 18 November 2014 the defendant had paid $3,834.63, putting her account into credit,79 I conclude that the defendant was not in default and, therefore, the plaintiff is not entitled to any penalty interest. Recovery Costs [81] Recovery costs claimed by a body corporate are a ‘body corporate debt’ within the meaning of that term as defined in the dictionary in the BCCM Regs.80 A decision of a court or tribunal is not required before they become a ‘body corporate debt’. The term ‘recovery costs’ is not limited to legal costs incurred. If a lot owner fails to pay a debt81 and debt recovery proceedings are commenced by the body corporate, the onus is on the body corporate to prove that the recovery costs claimed are reasonable. 82 [82] For the reasons outlined above, I have concluded that at no point was the defendant in arrears. The accounting errors made by the plaintiff are the root cause of the confusion concerning the state of the defendant’s account. Accordingly, I conclude that the recovery costs were not reasonably incurred. As such they are not recoverable. CONCLUSION [83] The defendant’s confusion over the state of the plaintiff’s accounts and invoice was justified. She was right to conclude that she was in credit on her account. Indeed as is apparent from Schedule A attached, the plaintiff was in credit from her first payment on 18 November 2014. Not only does the plaintiff in fact owe the defendant $11,744.42, 83 she has also been denied the benefit of the early payment discounts that should have been afforded to her account. [84] For these reasons I dismiss the plaintiff’s claim, in its entirety. [85] I direct that within 14 days of the publication of these reasons the parties are to file and serve written submissions and supporting material, if any, on the issue of costs, if not agreed. 78 See the chronology above 79 See chronology above and Schedule A attached 80 Section 143 of the BCCM Regs 81 such as contributions levied pursuant to s. 139 of the BCCM Regs 82 Ramzy v Body Corporate for GC3 CTS 383 396 [2012] QDC 397 at [28], [29] and [71] and Body Corporate for Sunseeker Apartments CTS 618 v Jasen [2012] QDC 51 at [23], dealing with the same provisions under the BCCM Regs. See also Prins v The Body Corporate for the Wave [2013] QDC 066 at page 13 and The Body Corporate for 399 Woolcock Street CTS 34700 v Sexton & Ors [2013] QCATA 55 at [11] – [18]. 83 For levies over charged up to and including 30 June 2018: See schedule A attached -- 13 of 15 -- Sunshine Tower Community CTS v Keevers M2438 of 2017 SCHEDULE A Levy period Levy description Amount resolved Amount levied Total amount paid Running Balance As at… 2014/2015 at 2014 AGM 01/07/14 - 30/09/14 Admin Fund $197.15 Sinking Fund $20.00 01/10/14 - 31/12/14 Admin Fund $197.15 $2,168.65 Sinking Fund $20.08 $220.88 01/01/15 - 31/03/15 Admin Fund $198.45 $2,182.95 Sinking Fund $20.07 $220.85 $3,834.63 18.11.14 01/04/15 - 30/06/15 14/15 Special levy (EGM 21/1/15)* $288.20 Admin Fund $198.45 $2,182.95 Sinking Fund $20.07 $220.85 $1,908.50 07.03.15 - 04.05.15 $871.42 $7,485.33 $5,743.13 -$4,871.71 2015/2016 at 2014 AGM, 2015 AGM & 2016 EMG 01/07/15 - 30/09/15 Admin Fund $198.45 $2,182.95 Sinking Fund $20.08 $220.85 $1,662.10 04.06.15 01/10/15 - 31/12/15 Admin Fund $198.45 $2,182.95 Sinking Fund $20.08 $220.85 15/16 Special levy $90.47 $995.18 $4,724.04 07.09.15 - 18.09.15 01/01/16 - 31/03/16 Admin Fund $190.04 $2,090.44 Sinking Fund $20.07 $220.83 01/04/16 - 30/06/16 Admin Fund $190.04 $2,090.45 Sinking Fund $20.07 $220.83 $947.75 $10,425.33 $12,129.27 -$10,310.10 2016/2017 at 2015 AGM, 2016 EMG & 2016 AGM 01/07/16 - 30/09/16 Admin Fund $115.79 $1,273.70 Sinking Fund $20.08** $220.83 01/10/16 - 31/12/16 Admin Fund $115.79 $1,273.70 Sinking Fund $20.08* $220.83 16/17 Special levy $187.79 $2,054.64 01/01/17 - 31/03/17 Admin Fund $221.53 $2,436.84 Sinking Fund $20.08 $220.91 -- 14 of 15 -- 2 of 2 01/04/17 - 30/06/17 Admin Fund $221.53 $2,436.84 Sinking Fund $20.08 $220.91 $902.59 $10,359.20 2017/2018 at 2016 AGM & 2017 AGM 01/07/17 - 30/09/17 Admin Fund $221.53 $2,436.84 Sinking Fund $20.08 $220.91 $3,700.00 08.06.17 - 03.07.17 01/10/17 - 31/12/17 Admin Fund $221.53 $2,436.84 Sinking Fund $20.08 $220.91 17/18 Special levy $571.79 01/01/18- 31/03/18 Admin Fund $133.97 $1,473.68 Sinking Fund $20.07 $220.77 01/04/18 - 30/06/18 Admin Fund $133.97 Sinking Fund $20.07 $1,363.09 $7,009.95 TOTAL $4,084.85 $35,279.81 $15,829.27 -$11,744.42 * Aside from the s. 140 Notice, there is no evidence before the Court of the minutes of this EGM or the resolutions. Therefore this levy has been disallowed ** discrepancy of $0.01 between pre-issued amt resolved at 2016 EMG ($20.08) and subsequent minutes at 2016 AGM ($20.07) -- 15 of 15 --