Recovering OC levies from lot owners? Better not issue in the Magistrates' Court!
Owners Corporation: 09 January 2025
Author: Deborah Andronaco & Priscilla Chengabraydoo - Our People
In a recent decision of Owners Corporation v Buckley, Magistrate T Greenway clarified the appropriate jurisdiction for recovery of monies owed to an Owners Corporation, including fees, levies and costs and determined that that the Magistrates’ Court is not the correct forum, rather, the jurisdiction lies solely with the Victorian Civil and Administrative Tribunal (VCAT).
The implications of this are that an Owners Corporation can no longer recover unpaid fees and levies from lot owners in the Magistrates’ Court.
Overview
In Owners Corporation v Buckley, the Owners Corporation as plaintiff claimed unpaid fees against the defendant, Ms Buckley, by reason of a final notice issues under section 32 of the Owners Corporation Act 2006 (Vic) (the Act).
Ms Buckley argued that any disputes relating to sections 30 and 32 can only be brought before VCAT. Conversely, the Owners Corporation contended that the Magistrates’ Court also had jurisdiction to hear these matters, in addition to VCAT.
The Owners Corporation relied upon s 30(1) of the Act, which provides that an Owners Corporation could recover monies owed to it in any court of competent jurisdiction. Conversely, Ms Buckley relied upon s 30(2) which dealt more specifically with the recovery of monies by the Owners Corporation owed to it by a lot owner – which Ms Buckley was.
Strict Interpretation?
Section 30 of the Act relevantly provides:
Recovery of money owed
(1) Subject to subsection (2), an owners corporation may recover any money owed to the owners corporation in any court of competent jurisdiction as a debt due to the owners corporation.
(2) Sections 31 and 32 and Division 1 of Part 11 apply to the recovery of money owed to the owners corporation by a lot owner.
Ms Buckley’s argument was a fairly technical one – one which Magistrate Greenway ultimately agreed with. She relied upon a stricter interpretation of the Act, whereby s 30(1) must be read alongside30(2). Subsection (2) essentially differentiates between monies owed to an Owners Corporation generally, and monies owed to an Owners Corporation by lot owners.
Subsection (2) further provides that monies owed by lot owners are subject to the application of sections 31 and 32 and Division 1 of Part 11 of the Act, meaning that the criteria provided in each of these sections must be met in order for an Owners Corporation to recover monies from its lot owners.
In making his decision, Magistrate Greenway relied upon established principles of statutory interpretation. This includes looking to the ordinary meaning of words within an act, the purposes of the section and the Act.
Part 11 of the Act is relevantly titled ‘Applications to VCAT’. Division 1 of Part 11 of the Act exclusively deals with VCAT and the disputes it can hear and orders it can make.
Magistrate Greenway therefore concluded that the wording of section 30 and the reference to Division 1 of Part 11 were clear, unambiguous and should be afforded their ordinary meaning.
Conclusion
Ultimately, Magistrate Greenway found that the Magistrates’ Court does not have jurisdiction when it comes to an Owners Corporation recovering unpaid fees and levies including monies owed to it by a lot owner pursuant to a s 32 final fee notice.
Accordingly, it follows that VCAT is the only forum available to Owners Corporations when attempting to recover levies, fees and costs from lot owners.
At Aitken Partners, our Owners Corporation Team is equipped with the skills and experience necessary to assist Owners Corporations, lot owners and managers to navigate their way through their rights and obligations pursuant to the Owners Corporations Act 2006, Owners Corporations Regulations 2018 and other relevant legislation to reach their desired outcome.
For any Owners Corporation queries, please contact Deborah Andronaco, Special Counsel, on 03 8600 6027 or dandronaco@aitken.com.au.