BackgroundDr and Mrs Prins, the owners of a luxury apartment at The Wave on the Gold Coast, fell behind with their levies owing approximately $5500.00. It has been reported that they wanted to enter into a payment plan but no agreement was reached and the Body Corporate commenced legal action to recover the debt.
The owners defended the legal action and were self represented. It appears that the matter continued for some time and the legal costs and associated fees ballooned to extraordinary amounts. Owners at The Wave were quite rightly concerned at the consequences of possibly losing the battle. The Prins declared bankruptcy in April 2013 by which time the recovery costs had risen to close to $350,000.00.
In mid 2013, Westpac took over the possession of the Unit and they apparently took the view that the responsibility for the recovery costs was not their responsibility. Westpac certainly had a good moral argument. Why should they be saddled with the costs that they had no control over?
The matter continued to escalate which was of great concern to owners bearing in mind that they were up against a giant bank with huge resources. Some owners became so nervous about the possible outcome that they favoured a negotiated settlement of the recovery costs.
The Latest NewsThe most recent development in the long running saga is that Westpac’s appeal was dismissed on 11 April 2014. See the Supreme Court ruling. The Court ruled that recovery costs associated with pursuing outstanding levies are a debt that attaches to the Lot.
SSKB (Stewart Silver King and Burns) has sent out a newsletter welcoming the decision and congratulating the Body Corporate for the Wave. However, there are surely no winners here.
Approximately $450,000.00 spent to recover a debt of approximately $5500.00???? Onlookers can be excused for thinking that something must be seriously wrong with the legal system particularly bearing in mind that there may still be avenues of appeal for Westpac and there could be more twists to the tale.
I can certainly understand the Body Corporate for the Wave taking legal action to recover a debt but if it takes 450,000.00 to get to this stage in attempting to recover a small debt then you would have to wonder about the way in which this was handled.
The recovery of Body Corporate Levies is a big problem for Bodies Corporate. The process can be time consuming for Committee members who are unpaid and some lawyers are getting plenty of business as a result.
I am currently dealing with a levy recovery issue at another Body Corporate. The matter will be going to conciliation soon and I will be reporting on the outcome. However one thing is certain. There is no way we will be spending $450,000.00 to recover the outstanding debt (I hope!).