Body Corporate Awarded Costs in Levy Recovery Dispute


SSKB, strata manager of the Body Corporate for The Wave, welcomes a Supreme Court ruling holding Westpac liable for outstanding levy recovery costs expected to be in the vicinity of $450,000.

Recently the Queensland Court of Appeal ended a lengthy legal battle between the Body Corporate for The Wave and banking giant Westpac.

Westpac, in its position as mortgagee, has been ordered to pay outstanding levies and the reasonable recovery costs to the Body Corporate for The Wave, with the total bill expected to be around $450,000.

The controversial aspect of this story is that the bulk of these costs were accumulated before Westpac took possession of the apartment.

The ruling confirms that liability for accumulated body corporate levies (including reasonable recovery costs) rests with the current lot owner, or mortgagee in possession. The liability is extended to debt and recovery costs incurred prior to the current owner coming into possession.

The Supreme Court ruling has been widely welcomed by the body corporate industry, as it provides certainty in what was previously considered a grey area of body corporate debt recovery costs.

SSKB community managers have assisted The Wave throughout the lengthy process.

SSKB Director Paul Wood said, “The legal proceedings have been long and draining on the community associated with The Wave. The Committee have always explored all options taking into account the best interest of all owners in relation to the non-payment of levies. They have handled the entire situation in a highly professional manner and I would like to congratulate the Committee and lot owners on the ruling.”

Paul adds “The decision additionally supports SSKB’s interpretation of the legislation and the processes it follows when dealing with non-payment of levies. I see it as a big tick of approval for the support and direction given by the SSKB Levy Management Team.”

Read more on how a simple case of unpaid levies escalated into a full blown legal case.

Read the full decision at the Supreme Court Library.

 



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Recent Comments

4 Comments

Mark Jeffery On May 12, 2014 | Reply

Does this mean if I am a private purchaser of a unit in a complex and the vendor has not paid levies for some time would I become liable for the unpaid levies if they were not received from the previous owner
Regards mark Jeffery

Narelle On June 3, 2014 | Reply

Hi Peter,
As court costs are deemed reasonable on a court scale, how much in recovery costs did the poor owners at the Wave have to pay overall to get back approx. $450,000? Were the only real winners out the Wave decision, the lawyers? While I appreciate owners who are in arrears place a burden on other owners, do lawyers place a far greater burden? Sadly I have and continue to follow many of the debt recovery cases and have done for a number of years and it appears it’s more an excuse used by lawyers to start proceeding – as overall the end result in loss of recovery costs, despite the win means owners they claimed to protect were in fact the real losers. In the case of the Wave, how much were the total legal fees incurred, in comparison as to what the Body Corporate for The Wave received back? It has been alleged in some online articles, but I am asking you direct to verify that the costs to the owners exceeded $1 million dollars – what were the total costs outlaid for the matter?

    SSKB On June 6, 2014 | Reply

    Hi Narelle,
    When a case of levies escalates in a manner as seen here, there are no true winners. What is sometimes forgotten, a vote was put to all owners at a General Meeting whether to proceed with legal action or not. In this case, a majority of owners voted to take legal action to recover the outstanding levies and recovery costs from this owner.

    Hopefully, as this case has set a precedent in what is considered body corporate debt, we will be less likely to see these extreme examples in the future. If the Westpac appeal had of been successful, this would have seen the owners paying 100% of the recovery costs. This certainly would not appear to be a reasonable outcome. It is not possible to provide specific details on costs in this forum without the prior consent of the body corporate. If you would like this information, I suggest you write directly to the body corporate.

    Needless to say that without this decision, owners would have faced a massive debt left by an owner who would not pay their levies and after trying for a long period not to, even after being found by the court to be in the wrong, simply went into voluntary bankruptcy.

    For a copy of the supreme court ruling, please refer to.
    http://archive.sclqld.org.au/qjudgment/2014/QCA14-073.pdf

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