It is necessary to start with the observation that an owners corporation is a creature of statute not a legal person. In short that means that an owners corporation has the powers given to it in the Owners Corporation Act 2006 (“OC Act”)
In December 2021 amendments were made to the OC Act one of which was s18(2) below:
If a matter is within the civil jurisdictional limit of the Magistrates’ Court and an owners corporation is authorised to do so by ordinary resolution, the owners corporation may commence any legal proceeding in—
(a) the Magistrates’ Court; or
In simple English an owners corporation can commence action in the Magistrates’ Court by ordinary resolution.
The question arises can fee recovery be commenced in the Magistrates’ Court on this basis?
This was considered in Owners Corporation v Buckley [2024] VMC 12 (3 October 2024) (“Buckley”).
Fee Recovery must follow a specific process laid down in the OC Act at s 30.
S 30(1) states that an owners corporation may recover money in any court of competent jurisdiction subject to s 31 and s 32 which cover fee notices (“Fee Notice Regime”).
Fees cannot be recovered unless the Fee Notice Regime is followed.
The recovery issue arises because s 32(2)(c) states that the fee notice must:
state that the owners corporation intends to take action under Part 11 to recover the amount due if the overdue fees and charges and interest owing are not paid within 28 days after the date the final notice is given.
Part 11 of the OC Act makes no reference to the Magistrates’ Court.
Magistrate Greenway made the following statement in his judgement at [38]
The effect of s 32(2)(c) and s 163(2) is that fee recovery proceedings against lot owners may only be commenced in VCAT if the amount remains outstanding 28 days after the notice has been given. As Division 1 of Part 11 refers exclusively to VCAT and the orders it may make, it simply cannot follow that the Magistrates’ Court has concurrent jurisdiction.
Magistrate Greenway also made the statement at [41] addressed the reliance on s 100(1)© of the Magistrates’ Court Act as follows:
I now turn to the alternate reliance on s 100(1)(c)of the Magistrates’ Court Act. That does not take the matter further. I consider the jurisdiction conferred by this section is broadly equivalent to s 30(1) of the Act. Applying the ‘specific over general’ rule of construction, s 30(2) should prevail of both s 30(1) and s 100(1)(c) of the Magistrates’ Court Act.
The conclusion is that fee recovery that relies on the Fee Notice Regime cannot be commenced in the Magistrates’ Court. However, this does not restrict other actions by an owners corporation in the Magistrates’ court. If this topic raises question for you please contact David McKenzie for further information.
