Where Strata Levy Recovery Expenses Issues Began
The Owners – Strata Plan No. 9438 v Sachs & Brunck [2000] NSW Local Court
GoStrata’s CaseWatch is a short, sharp and easy-to-understand review of important and interesting Court and Tribunal decisions affecting Australian strata title stakeholders.
Quick Read
This 2000 decision by the NSW Local Court is about a dispute about getting strata levy recovery expenses from a strata owner who hadn’t paid on time. After getting a judgement for overdue strata levies and costs, the strata building incurred more legal expenses fighting an application to set it aside and more strata levies and interest became due. So, in a second legal action, the strata building claimed the extra legal costs and the key issues became whether recovery expenses and further interest could be recovered in separate legal actions from the original strata levy claim and whether legal expenses that were higher than Court scale costs could be claimed. The Local Court decided that claims for strata levies, interest and recovery expenses could be split and that s 80 contemplated the recoverable expenses could exceed Court scale allowed costs and did not have to be reasonable [although in this case it believed they were]. So, although this decision wasn’t binding, it was the first time strata levy recovery costs were considered in NSW and began a legal debate for and against unlimited recovery expenses in a series of Court decisions that continue today.
Implications
The key implications of this strata case are as follows.
Strata buildings can recover expenses at the same time as strata levies and interest, if known.
But strata buildings can also recover expenses in later legal actions. Sometimes, that’s the only way due to procedural and timing limitations.
S 80 allows recovery of the difference between Court scale or ordered costs and the actual legal costs.
Recoverable expenses under s 80 are not limited to legal costs.