by Katrina Brown | Feb 28, 2013 | Body Corporate Law, Levy Arrears and Litigation, Strata/Community Living
A Body Corporate’s legal and mercantile costs associated with recovering outstanding body corporate debts (defined broadly as, outstanding levies, interest and recovery costs) from an owner, are distinct from legal costs incurred in association with a dispute with an owner as to any other matter (such as a property dispute, an application to the Commissioner, etc.). A successful Body Corporate in levy litigation can recover, as a matter of Law, “reasonable costs” associated with the action. What constitutes “reasonable”, and how the costs remain associated with a lot (as distinct from an individual owner) is currently on appeal in our appeal in the matter of 399 Woolcock (see the Nautilus Law Group website for further discussion).
Nautilus acts for bodies corporate from Port Douglas to Coolangatta for a broad range of matters, including building disputes, management rights and levy litigation. We have been asked previously whether legal fees incurred in association with a Body Corporate’s action/defence in matters with specific owners can be claimed as “reasonable costs” in levy litigation pleadings (in circumstances in which the owner has existing levy arrearages).
The answer is the same – no. Legal fees associated with separate proceedings; need to be recovered in such separate actions.
For example, Section 145 of the Body Corporate and Community Management (Standard Module) Regulation 2008 (“the Regulations”) provides that if a contribution is not paid by an owner, the Body Corporate may recover:
1. The contribution;
2. Penalty interest (if any); and
3. Recovery costs incurred in recovering the contribution and interest (if any).
These three amounts combined are defined as a body corporate debt.
A contribution is an amount to be levied on owners within the Body Corporate which has been fixed on the basis of a budget and passed by ordinary resolution. Penalty interest is the interest which has been resolved by the Committee pursuant to Section 144 of the Regulations or is stipulated within a By-Law. Recovery costs are the costs the Body Corporate incurs when attempting to recover the outstanding body corporate debt.
If a Body Corporate is seeking to recovery an amount that does not fall within the definition of a body corporate debt, this amount would be plead as a separate cause of action and cannot be classified as “recovery costs.”
The legal costs your Body Corporate may incur to make or defend a dispute (other than a debt recovery action) against an owner, must seek those costs to be awarded by the Court or Tribunal hearing the dispute.
If your Body Corporate currently has a dispute with an owner, and is unsure as to how to apply the costs, contact our team on (07) 5574 3560 or email us info@nautiluslaw.com.au to discuss your questions regarding skip traces.
Our solicitors service Port Douglas, Cairns, Townsville, Mackay, the Sunshine Coast and the Gold Coast and consultations can be arranged personally, by skype or by telephone. We thank you for considering Nautilus Law Group.
Submitted by: Katrina E. Brown BA JD ATIA TEP SSA
by Katrina Brown | Feb 26, 2013 | Body Corporate Law, Levy Arrears and Litigation, Strata/Community Living
Yes, absolutely. Body Corporate and Community Management Act 1997 permits Queensland bodies corporate to charge 2.5% interest per month, in other words 30% per annum, on overdue strata levies due by an owner to the bodies corporate.
On occasion, in defense of legal proceedings issued against an owner, our opposing legal colleagues and/or the owners themselves will plead that the right to 30% interest is “unconscionable” and/or “illegal.” This position is premised on a misunderstanding as to Queensland body corporate law generally, as well as the nature of the compensation intended to be rectified by the claim to 30% interest.
A body corporate, unlike a supplier of credit to a customer, is unable to “reject” an owner based on credit scores or other poor credit history. The body corporate is not permitted to discriminate against an owner, or even to consider disentitling an owner to access to body corporate assets merely because an owner does not pay his/her/its contributions of body corporate expenses.
Further, unlike a commercial supplier of credit, a body corporate does not have access to investors or funding outside of the body corporate, except in limited circumstances and is legislatively restricted to the level of debt/asset ratio permitted to access in order to fund costs from banks and other lenders.
The 30% interest is intended to not only penalise an owner, but to compensate the body corporate for the costs associated with a default by an owner to service his/her/its obligations.
Purchasers into body corporate properties must consider that the body corporate is not the purchaser’s future personal lender. The body corporate is under no obligation to finance an owner’s costs associated with membership in the body corporate, and whilst payment plans may be acceptable in many circumstances – the right of the body corporate to reject payment plans is reserved because the body corporate is responsible for all owners, and is not obligated to any one member.
At Nautilus, we often hear of stories of financial distress by owners, and our hearts go out to these owners. However, we similarly appreciate that the failure of one owner, can threaten the stability of many others, as well as the financial viability of the body corporate as a whole. We do attempt to negotiate suitable payment arrangements with our body corporate clients, but for regularly delinquent owners and/or owners with longstanding debts – the likelihood of successfully negotiating payment plans (in lieu of other more aggressive collection mechanisms) is often limited.
Our best advice to owners is this – if your bank will extend your mortgage – they will generally do so at rates substantially lesser than 30% per annum – give this a go before falling into arrears. If you do not, cannot, or refuse to – the body corporate is left with no other option but to commence proceedings, and the right to claim 30% interest follows.
If you have any questions about levy recovery litigation, enforcement of body corporate judgments, mortgagee actions on body corporate properties, please do not hesitate to contact Nautilus to arrange a consultation with one of our team members.
We welcome you to contact our team on (07) 5574 3560 or email us info@nautiluslaw.com.au. Thank you for considering Nautilus Law Group.
Submitted by: Katrina Brown, BA JD ATIA TEP SSA, Commercial and Property Lawyer
Katrina@nautiluslaw.com.au
by Katrina Brown | Feb 22, 2013 | Body Corporate Law, Levy Arrears and Litigation, Strata/Community Living
Can an owner refuse to pay strata levies because the owner has a dispute with the Body Corporate?
Short answer: No!
An owner’s obligation to pay strata levies is independent of any other matter between the owner and the body corporate. Therefore, if an owner refuses to pay his/her/its strata levies – the owner will become non-financial, and incur interest at 30% (or such lesser rate set by the body corporate). Following from being a “non-financial” member, the owner will also lose the right to vote at meetings and act on the Committee.
If an owner disputes a decision, action or inaction of a body corporate, he/she/it must lodge the complaint with the body corporate and seek clarification or remedy from the dispute. If not resolved at this level, the owner may seek to gather support from other owners to call an extraordinary general meeting. If this is not possible (in other words, the owner cannot generate sufficient interest from other owners), the owner may submit an Application for the matter to be decided by the Body Corporate Commissioner, or in limited circumstances, may lodge proceedings in the Magistrates or Supreme Court (depending on the type of complaint and parties involved – such as an insurance dispute over repairs, wherein the dispute relates to an insurer of a body corporate).
Further, even if the owner claims the body corporate owes him/her/it money for something (such as repairs the owner claims to have been made relating to “common property” or damages associated with “common property), the owner must continue to pay strata levies as and when they fall due, and take action against the body corporate separately.
If the owner refuses to settle his/her/its strata levy obligations, the owner will suffer not only the loss of standing as a financial member, but also incur interest and potentially mercantile and/or legal fees associated with recovery proceedings. Unlike a commercial dispute between creditors and suppliers, there is no right reserved to the owner to “set off” obligations due between the parties.
If you are having problems with mounting body corporate strata levy balances in your Scheme, and are seeking progressive and assertive legal representatives, please contact the team at Nautilus to arrange a no-obligation consultation. Our solicitors service the Eastern Queensland region, from Port Douglas to Coolangatta. We invite you to contact our Body Corporate Team by telephone on 07 5574 3560 or
by email.
Submitted by: Katrina Brown, BA JD ATIA TEP SSA, Commercial and Property Lawyer
by Katrina Brown | Feb 19, 2013 | Commercial Law
Did you know that electronic marketing (for example, SMS and/or email campaigns) can result in spam penalties of $220,000 per day? Developments in technology have increased the ways in which businesses can communicate with existing or potential customers. The risk of inadvertent spam violations is real and realised, but accommodation of legislative requirements is easily achieved with minimal planning.
The Spam Act 2003 (Cth) (‘the Act’) prohibits the sending of commercial electronic messages (spam) unless certain conditions are complied with.
The Act provides the following at section 16:
“A person must not send or cause to be sent a commercial electronic message (including SMS or email) that has an Australian link and is not a designated commercial electronic message, unless the recipient has consented to doing so.”
An electronic message is defined in section 5 as:
“(1) For the purposes of this Act, an electronic message is a message sent:
(a) using:
(i) an internet carriage service; or
(ii) any other listed carriage service; and
(b) to an electronic address in connection with:
(i) an e-mail account; or
(ii) an instant messaging account; or
(iii) a telephone account; or
(iv) a similar account.”
As such, an electronic message includes, primarily, messages sent by email and SMS. Section 6 of the Act defines further a “commercial electronic message”:
“(1) For the purposes of this Act, a commercial electronic message is an electronic message, where, having regard to:
(a) the content of the message; and
(b) the way in which the message is presented; and
(c) the content that can be located using the links, telephone numbers or contact information (if any) set out in the message;
it would be concluded that the purpose, or one of the purposes, of the message is:
(d) to offer to supply goods or services; or
(e) to advertise or promote goods or services; or
(f) to advertise or promote a supplier, or prospective supplier, of goods or services; or
(g) to offer to supply land or an interest in land; or
(h) to advertise or promote land or an interest in land; or
(i) to advertise or promote a supplier, or prospective supplier, of land or an interest in land; or
(j) to offer to provide a business opportunity or investment opportunity; or
(k) to advertise or promote a business opportunity or investment opportunity; or
(l) to advertise or promote a provider, or prospective provider, of a business opportunity (m) to assist or enable a person,
by a deception, to dishonestly obtain property belonging to another person; or
(n) to assist or enable a person, by a deception, to dishonestly obtain a financial advantage from another person; or
(o) to assist or enable a person to dishonestly obtain a gain from another person; or
(p) a purpose specified in the regulations.”
The Act provides at section 16 above that a commercial electronic message does not contravene the spam act if it is a “designated commercial message”. A designated commercial message is defined in section Schedule 1 as an electronic message that:
1. Contains factual information only;
2. Is from a government body, political party or charity; or
3. Is from an educational institution.
Most commercial electronic messages will fall outside the definition of a “designated commercial message” for the reason that its primary intent is to market goods or services to an existing or prospective customer.
It seems then that senders of commercial electronic messages must rely on the last element of section 16: “…unless the recipient has consented to doing so.” This means that if the recipient of the commercial message has consented to receiving the message, then the sending of the commercial electronic message does not contravene the provisions of the Act.
The Act provides as section 2 that consent can be given expressly, or implied:
“For the purposes of this Act, consent means:
(a) express consent; or
(b) consent that can reasonably be inferred from:
(i) the conduct; and
(ii) the business and other relationships;
of the individual or organisation concerned.”
Express consent applies where a person has specifically requested messages from you, such as if they have subscribed to your electronic advertising mailing list, or they ticked a box consenting to receive messages from you, or they have personally requested these messages be sent by you.
Inferred consent can be established from an existing relationship. Assuming that no express consent has been given, consent can be inferred in a number of situations. Some examples provided by the Australian Communications and Media Authority (“the ACMA”) are:
1. When purchasing the goods, an email address was provided with a general expectation that there will be follow-up
communication;
2. Where the email address was provided for day-to-day transactions it may be used for additional communications (such
as notification of related services or products);
3. Where the contact details were supplied by way of online registration of a product or warranty;
4. When the email address has been conspicuously published – where an email is published (such as advertised on a
website) there is deemed consent to emails being sent relating to the employment or business of the person publishing
the email address. This means that if an electrician is posting their email address online, you are welcome to send them
commercial messages regarding electrical products. This applies unless there is something stated near the email
address that specifies that no spam is to be sent; and
5. Where a business card is given with an email address, with the expectation that messages would be sent. However, if
the card is provided in the course of business, then they cannot be deemed to have consented to messages that are
unrelated to their employment or business.
The ACMA has ruled that consent can reasonably be inferred from a relationship where a person has purchased goods or services which involve an ongoing warranty and service provisions. However, one-off purchases where there is no warranty or continuing relationship are less likely to infer consent to the receiving of commercial electronic messages.
In sum, it is important to understand how the addresses intended for the sending of commercial electronic messages are gathered by the sender. When collecting personal information from a customer it would be advisable to include an option or a “tick box” which “I consent to receiving updates about [Company] and [Company’s] products from time to time” or something of a similar nature. This rules out any propensity for the misunderstanding of implied consent and thus greatly reduces the chance of a breach of the Act occurring.
Alternatively, ACMA provides that your business may send a message to the address, requesting confirmation that messages should be sent there in future. The message should contain a 14 day period for a response to be received from the recipient. If the addressee does not respond within that time, they should be removed from the contact list.
However, even if consent is provided, a commercial electronic message must follow two further guidelines. Section 18 of the Act provides that the commercial electronic message must contain a functioning unsubscribe facility. The facility needs to be easily visible and simple to use, with wording such as “click here to unsubscribe”. The withdrawal of consent will take effect after five days and email addresses should be removed after this time. The customer should not be required to log in or create an account or go through any process to unsubscribe from the emails.
Section 17 of the Act provides that commercial electronic messages must contain details of the sender and contact details for the sender. The business that is responsible for sending the message must be easy to identify. Details which should be contained within the message are:
1. Business name;
2. Address details;
3. Email addresses;
4. Phone details; and
5. Anything that can help the recipient identify you.
A business that is found to be in breach of the Act may be subject to a Court imposed penalty of up to $220,000 for a single day’s contraventions. If, after that finding, the business contravenes the same provision, they may be subject to a penalty of up to $1.1 million.
If you are not sure whether your electronic marketing strategies comply with the provisions of the Act, or if you want more information about how to ensure compliance with the Act, we welcome you to contact our offices on (07) 5574 3560 or email info@nautiluslaw.com.au. We thank you for considering Nautilus Law Group.
by Katrina Brown | Feb 14, 2013 | Body Corporate Law, Commercial Law, Credit Management, Litigation Process
In Queensland, “where” you lodge a Claim and Statement of Claim is dictated by the Uniform Civil Procedure Rules 2001 (“UCPR”).
Queensland has three different categories of Courts, which are essentially organised in terms of the matter types which each decide, as well as the level of dollar value to be considered:
1. In the Magistrates Court for amounts up to $150,000.00;
2. In the District Court for amounts from $150,000 – $750,000.00; and
3. In the Supreme Court for an unlimited amount.
Once we determine the category of Court, we then need to decide which Registry in which to lodge your matter. Unfortunately, the decision as to which Registry is chosen, does not necessarily have any correlation to your location. The Claim and Statement of Claim should filed be in the Registry closest to one of the following:
1. The Defendant’s location; or
2. The location in which the incident or contract giving rise to the Claim took place.
Selecting a more convenient “Registry” for you, may result in an Order for Costs against you if the Defendant successfully argues you have not complied with the Rules, with the inevitable change of venue for the proceedings. Therefore, to avoid this expense, we strictly comply with the Rules in selecting the Registry.
The “Registry” grounds the location of your proceedings for the balance of the case. For instance, if you have to attend Court, you will attend the Court associated with the Registry. There are exceptions to this, and on occasion you can attend by telephone, but largely your case is tied to that Registry location.
A copy of the Claim must be served on each Defendant, each of which has 28 days from the day of service to file a defence or attend to the matter (such as payment of the debt). (Please see our Articles for discussions on Service.)
If the Claim is disputed or a Defence is filed, a copy of must be served on you. You are then provided 14 days to lodge a Reply.
If the Claim is paid in full or you no longer wish to proceed, a Notice of Discontinuance should be filed with the Court. Alternatively, if no Defence is lodged (or alternative satisfaction of your Claim made), then you may opt to lodge a Default Judgment.
If you have any questions or enquiries about lodging a Claim in Queensland, we welcome you to contact our offices on (07) 5574 3560 or email info@nautiluslaw.com.au. We thank you for considering Nautilus Law Group.
Submitted by: Nautilus Law Group
