Another Costs Recovery By Law Goes Up in Smoke
The Owners – Strata Plan No. 77109 v Gokani-Robins Pty Ltd [2023] NSWCATAP 82
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Quick Read
This 2023 decision by the NCAT Appeal Panel is about a dispute in a Bella Vista strata title building about attempts to recover fire callout charges from a strata owner under a by law. The strata building made a costs recovery by law that allowed it do things and charge strata owners if they didn’t comply with strata laws and its by laws. The by law also allowed the strata building to recover the charges as if they were strata levies. When the strata building sued a strata owner for $19,740 in fire callout charges and other costs, the strata owner said the costs recovery by law was invalid. The key issues in the case were about how s 136(2) about inconsistency and s 139(1) about harshness, unconscionability or oppressiveness operated in relation to the costs recovery by law. After considering the by law and the key decisions in Coopers Case, White’s Case and the B&G Trading Case the NCAT Appeal Panel decided that the by law was not inconsistent with strata and other laws, but that it was harsh, unconscionable or oppressive under s 139(1) because it allowed the strata building to create strata owner debts for things and amounts without reasonable controls and because characterising the debt as if it was a strata levy diminished strata owners’ voting rights. The NCAT Appeal Panel also confirmed that a by law can be invalidated as at an earlier date, effectively backdating things. The decision is another example of costs recovery by laws in NSW strata buildings being invalidated, effectively making them unreliable ways to pass costs onto strata owners.
Implications
The key implications of this strata case are as follows.
There are 2 bases for NCAT to invalidate by laws under s 150: it is outside by law making powers; and/or; it is harsh, unconscionable or oppressive.
If parts of a by law are inconsistent with another law under s 136, they are non operative but the by law is not automatically invalid.
A costs recovery by law is not inconsistent with other laws about debt recovery litigation like the Civil Procedure Act 2005 and the Local Court Act 2007.
The lack of processes to ensure liabilities under a costs recovery by law are fairly created make the by law harsh, unconscionable or oppressive under s 139(1).