Chen Chew Chua v The Owners - Strata Plan No. 40301

Judgment 1By statement of claim filed in the Local Court on 1 February 2012, The Owners - Strata Plan No 40301 (the Owners) sued Chen Chew Chua. The Owners claimed levies allegedly due under s 78 of the Strata Schemes Management Act 1996 (the Act), plus interest and costs, pursuant to s 79 and s 80 of the Act. The levies were claimed in relation to a property owned by Mr Chua, being lot 55 in Strata Plan 40301, also known as 55/301 Castlereagh St, Sydney. The Owners originally sought levies in the sum of $28,419.95, which amount was reduced at the time of hearing to $11,112.80. 2The Defence, filed in the Local Court and dated 9 July 2012, stated that: "... the Defendant has received no notification of annual or extraordinary general meetings called by the Plaintiff or its compulsory strata manager and the Defendant was not served with or received any information, resolutions or notices including notices, information and resolutions regarding the striking of strata levies and/or their amount from the Plaintiff or its compulsory manager prior to the commencement of these proceedings." 3The proceedings were heard at the Local Court Downing Centre by Magistrate Townsden, as he then was, over two days, on 8 February 2013 and 8 April 2013. Judgment for the Owners in the sum of $11,112.80 plus interest and s 80 expenses was entered on 24 April 2013. 4By amended summons, filed in this Court on 24 June 2013, Mr Chua seeks leave to have the decision of Magistrate Townsden set aside and a verdict in his favour entered. The grounds of appeal upon which Mr Chen relies are that: (1)The Magistrate erred in finding against the weight of evidence and/or in the absence of direct evidence that the special levy notices were sent to the Plaintiff by post or at all; (2)The Magistrate erred in finding that the section 118 certificate had the lot owner's address for service as Unit 55; (3)The Magistrate failed to take into account and/or properly take into account all of the evidence concerning the address contained on the 118 certificate and/or the sending of the special levies; (4)The Magistrate erred in accepting the evidence of Jamie Howard; (5)The Magistrate erred in failing to provide adequate reasons for accepting the evidence of Jamie Howard and/or failed to take into account all of the factors/submissions against the acceptance of the evidence of Jamie Howard. 5Some of these ground would seem to raise matters of mixed law and fact and thus require leave. However, in the result I have not found it necessary to explore the question whether such leave should be given. 6The issues arose against the background of a finding by the Magistrate, not challenged here, that s 78 of the Act required the Strata Manager of the Defendant here to send notices informing lot owners of any special levies. It was accepted that this did not require the Strata Manager to prove that the lot owner in fact received such a notice but rather simply prove service. Section 236 of the Act provides:- (3) Service where address is included in strata roll If an address for the service of notices on a person is recorded in the strata roll, a document may be served on the person: (a) by post at that address, or (b) by leaving it at that address with some person apparently of or above the age of 16 years. (4) Service on owner of lot A document may be served on the owner of a lot: (a) personally, or (b) by post at the address of the lot, or (c) by leaving it on a part of the lot that is the owner's place of residence or business (otherwise than on a part of the lot provided for the accommodation of a vehicle or as a storeroom), or (d) by leaving it in a place provided on the parcel for receiving mail posted to the lot, or (e) in any manner authorised by the by-laws for the service of notices on owners. 7Section 118 is also relevant. It requires that a lot owner give to the body corporate notice of that interest and to specify an address for service of notices. 8The contract pursuant to which Mr Chen acquired the unit was dated 10 May 2010. Mr Chen gave evidence that he purchased the unit on 11 June 2010. In the circumstances it seems likely that 11 June was the date of settlement of the transaction. 9Mr Sisinni, a solicitor who acted on Mr Chen's behalf on the purchase of the unit but who was unable to find his file, gave evidence that, although he had no recollection of having done so, given the fact that Mr Chen did not intend to live in the unit, he would as a matter of course have notified Mr Chen's address as his business address and not the lot address in the strata plan. 10Ground 1 The Magistrate erred in finding against the weight of evidence and/or in the absence of direct evidence that the special levy notices were sent to the Plaintiff by post or at all; 11The magistrate's finding that is the subject of this ground was simply:- Although there is a lack of corroborating material, I would accept the evidence of Mr Howard that the notice was probably sent by post to Unit 55. 12(The issue of whether, if the notice was sent, it was sent to Unit 55 can most conveniently be left until I deal with Ground 2.) 13Putting that aside, there are a number of issues that arise in connection with this finding. Firstly, Mr Howard did not in terms say that the notice was probably posted. Secondly, no one was called to say that he or she saw the notices posted. Thirdly, his Honour made no attempt to deal with the limits of the evidence that was given. Fourthly, despite the foregoing, there was a deal of material both in the form of unchallenged evidence from Mr Howard and common experience supporting the conclusion that the notices were sent to the Plaintiff by post. Fifthly, while Mr Chen said that he did not receive the notice, that is understandable if it was sent to Lot 55. Sixthly, apart from that evidence from Mr Chen, there was no evidence that the notice was not sent. 14Mr Howard was a Strata Manager employed by Strata Partners Pty Ltd, a company that for a period of some 14 months encompassing the relevant time had been appointed by the Consumer, Trader and Tenancy Tribunal as the Managing Agent of Strata Plan 40301. Within Strata Partners Pty Ltd, he had responsibility for the affairs of SP 403031. His evidence included the following:- Our standard business practice is that all levy notices are printed and posted on the same day or, at the latest, on the following business day. The reason this occurs is: a)They are automatically generated by the software the Company uses... b)As all levy notices for each and every lot in the strata scheme is generated at the same time, they are posted at the same time... The reason this occurs is because it is more time and cost efficient to send out each and every notice at the same time. c)As interest runs on unpaid strata levies it is important to issue and post all levy notices to each lot owner at the same time... As lot owners 12 and 32 received levy notices, I am certain that levy notices for each and every lot in the strata scheme would have been generated on the same date as these notices... [and] been posted either the same day the levy notice was generated or the next business day... I ensure that all mail that is to be sent on a particular day for a particular strata scheme that the Company is the managing agent for: a)Is correctly addressed b)Has the correct amount of postage paid c)Is physically posted by dropping a bundle of mail into the nearby post box. 15In cross-examination, Mr Howard said that after levy notices were printed he checked them but it would have been the office junior who placed the notices into envelopes. There was no challenge to Mr Howard's evidence of the office system and at most very limited challenge to his evidence of his own actions. 16Given that the evidence took the form that I have described, his Honour's reference to "the evidence of Mr Howard that the notice was probably sent by post" was not strictly accurate. However as that was the effect or tenor of Mr Howard's evidence the infelicity of expression provides no basis on which to allow the appeal. 17As I have indicated, there was virtually no evidence that the special levy notice was not sent by post and in light of the evidence to which reference has been made and the logic of the proposition that there would have been some sort of system, this ground fails. Ground 2 The Magistrate erred in finding that the section 118 certificate had the lot owner's address for service as Unit 55; 18His Honour recorded that there appeared to be no dispute that the relevant strata roll did have as Mr Chen's address Lot 55, 301 Castlereagh St, Sydney. The issue was whether that address was contained in the s 118 notice sent after Mr Chen's purchase of the lot. 19Neither the original nor a copy of the s 118 notice was in evidence. Mr Howard explained that his organisation did not have these because any such notices had, pursuant to orders of the Consumer, Trader and Tenancy Tribunal, been handed to the Body Corporate in around April 2011. In June 2011 the Tribunal appointed another entity as managing agent of the Body Corporate. A Mr Terrell of that organisation gave evidence that he had searched the records and was unable to locate any s 118 or other written notice advising as to where levy notices should be sent. 20Mr Howard gave evidence to the effect, inter alia, that he had seen the s 118 notice and caused the address 55/301 Castlereagh St to be inserted in the strata roll from that document. 21There was also evidence as to an exchange of emails between a Mr Lim, who was the secretary of the Owners Corporation at the time of the proceedings and Mr Howard. In one of those emails, dated 3 September 2010 Mr Howard remarked:- We have been advised via a section 118 certificate that Chen Chew Chua is the new owner of Suite 55 and their mailing address is at Suite 55. 223 September 2010 was but some 16 weeks after the date of the contract whereby Mr Chen agreed to purchase the property and well before any issue arose between the parties or concerning Mr Chew's payment of levies. There was no challenge as to the authenticity of the email exchange. 23In findings not themselves the subject of dispute his Honour observed that there was no evidence casting any doubt as to the authenticity of the email exchange and the email quoted demonstrates that at least someone in Mr Howard's office, if not Mr Howard, had viewed the s 118 certificate and noted that Mr Chew's mailing address had been filled out as being Unit 55. His Honour also observed that the email wholly corroborated the evidence of Mr Howard 24Mr Howard's evidence and credibility was the subject of considerable challenge and certainly some of his answers are not easily accepted. However, whatever conclusion be reached in relation to Mr Howard's evidence, in the circumstances of this case the email exchange provides compelling evidence as to the contents of the s 118 certificate. This ground fails. Grounds 3 and 4 The Magistrate failed to take into account and/or properly take into account all of the evidence concerning the address contained on the 118 certificate and/or the sending of the special levies; The Magistrate erred in accepting the evidence of Jamie Howard; 25In light of what I have said in dealing with other grounds, there is no need to deal with these grounds separately. This approach accords substantially with that taken by counsel for the Plaintiff on the hearing of the appeal. Ground 5 The Magistrate erred in failing to provide adequate reasons for accepting the evidence of Jamie Howard and/or failed to take into account all of the factors/submissions against the acceptance of the evidence of Jamie Howard. 26In written submissions advanced in the Court below, it was contended on behalf of the Defendant that:- 19. The defendant submits that the only evidence before the court that the special levy notices were served and served on the address said to have been listed on a s 118 notice allegedly provided by the Defendant is the evidence of strata manager Jamie Howard ("Howard") which it's submitted the Court would not accept and/or could not be satisfied on balance with to find the notices were served. [sic] 20. The Defendant submits the evidence of Howard could not be considered reliable or credible and that Howard was an evasive witness who gave inconsistent evidence with a disregard at times to whether the evidence was accurate and was simply interested in giving self-serving evidence in support of the plaintiff's case and even when confronted inconsistencies in his own evidence, would still not make appropriate concessions, etc. 21 A selection of some of the evidence of Howard in cross-examination to support the submissions made above at paragraphs 19 and 20 is as follows: (a)He admitted his admin assistant prints out the levy notices (p 17/35) (b)Admitted admin staff sent out the notices (p 17/45) (c)Did not keep copies of the notices (p 18/20) (d)Said the levy notices were contained on the computer (p 19/10) (e)Could not explain why copies of the notices could not be produced (p 30/5) (f)Stated he sighted the 118 notice based on an email he sent (p 22/45) (g)Agreed that the email did not state he sighted the 118 notice (p 24/45) (h)Agrees that he is relying on his two plus year recollection in giving evidence that he sighted the 118 notice (p 25/20) (i)Maintained that he can recall viewing the particular 118 notice despite agreeing he has seen hundreds of 118 notices since (p 25). This despite not being able to recall who sent it to him or how it was received (p 26/27) (j)Gave evidence that admin staff entered the address on the database (p 27/40), then gave evidence he entered the address on the database (p 28), then could not give an answer as to who did it and stated "I'll go with my assistant" (p 28/45) (k)Gave evidence that he could recall the notices sent to the Defendant but could not name other lot owners who were sent notices that he recalls viewing (p 29) (l)Would not concede errors could have been made in entering the address on the 118 notice in the database (p 31, 32) (m)Gave evidence that his assistant could not have made an error (p 32/40) (n)Denied giving evidence earlier in the proceedings that he sighted the 118 notice (p 33/15) despite his evidence at (p 22/45) (o)Agreed the office junior would physically send out the special levy notices (p 34/5) (p)Gave evidence that the Defendant paid a particular levy notice but then agreed he could not say who paid the levy (see p 45) but would still not agree his evidence in paragraph 35 of his statement that the defendant paid the levy was not correct (p 45/15) 22. The above is simply a sample and the defendant relies on the cross-examination in its entirety. 27It is fair to say that the magistrate dealt with few of these criticisms. He identified a dispute as to what was contained in the s 118 Notice and went on to refer to the evidence of the Defendant's solicitor who would have sent the s 118 Notice to the Plaintiff. The Magistrate recounted Mr Sisisinni's evidence that he would, as a matter of course, have notified the Defendant's address as one other than the Lot address in the Strata Plan but that he was unable to locate most of the relevant documents. The magistrate went on:- This evidence should be contrasted to that of Jamie Howard, the strata manager employed by the Strata Partners. Under cross-examination he is asked the following questions - p 22, line 45 of the transcript: "Q. In these proceedings, is it your evidence that in respect of 118 notices concerning the defendant, it is your evidence that you sighted the 118 notice? A. That, that's in my email, yes. Q, Do you recall what that was? A: The email was dated September. Q. Do you when (as said) that was? A. The email is dated in September. Q. So it is your evidence that the email disclosed that you sighted the 118 notice, is that your evidence? A. Yes. Q. Are you sure about that? A. Yes. Later, I asked the following questions - p 24, line 35: Q: You gave evidence earlier, Sir, that you had reference to your email, that's in September 2010. Do you have an independent recollection or are you relying on what you saw in that email? A. No I have recollection. I wouldn't have. I do recall with everything with this scheme that I spent time before. I answered each email so I did sight the information in regards to Lot 55. (Set forth as transcribed.) He was then questioned as to why he had an independent recollection given the number of properties he had management of and having regard to the lapse of time. At p 25, line 35, he is asked the following questions: Q. In the hundreds, so you saw over 100 118 notices in 2010, correct? A. Correct. But I don't have what the value of the fact that this was a compulsory appointment that I sighted and spent more care on it. RSG CHECK QUOTE Later, under cross-examination, Mr Howard gave evidence that he had checked the notices prior to them being sent out. At p 29, he was asked the following questions: Q. Well, do you remember seeing the special levy notices sent to Mr Chua? A. Well, the levy notices were printed on the day and they were all sent on the day. Q. Are you going to tell us you remember the particular one sent to the defendant, do you recall that one as well, do you? A. Actually, I recall a few of them, yes, and that was one of them. Later, at p 35, he is asked: "Who actually sent the invoices?" He stated the accounts team printed the notices and an officer junior would place a notice in a envelope. 28After referring to the lack of supporting documentation on both sides, his Honour then referred to and recounted the terms of the most significant email which as a matter of convenience, I might repeat:- We have been advised via a section 118 certificate that Chen Chew Chua is the new owner of Suite 55 and their mailing address is at Suite 55. 29His Honour continued: There is no evidence casting any doubt as to the authenticity of this correspondence. Indeed, the evidence of the defendant is that Ms Chen was indeed the previous owner of Unit 55 and in fact had paid levies. This evidence wholly corroborates the evidence of Mr Howard. At the very least, the email demonstrates that someone within Mr Howard's office, if not Mr Howard, had viewed the s 118 certificate and noted that the mailing address had been filled out as being Unit 55 for the defendant Mr Chua. This contradicts the evidence of Mr Chua's solicitor who admittedly had no independent recollection of what address he had put in the certificate. In all the circumstances, I am satisfied that the strata roll correctly had the owners' address for service as being Unit 55 which was probably updated by reference to the s 118 certificate. Although there is a lack of corroborating material, I would accept the evidence of Mr Howard that the notice was probably sent by post to Unit 55. In those circumstances, the fact that such notice was not received by Mr Chen, cannot be the fault of the plaintiff. 30These remarks make it clear that the magistrate relied on Mr Howard's evidence. Before he did so and given that the attack on Mr Howard's credibility was not unreasonable, it behove the magistrate to consider and deal with that attack - Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 at 257, 280; Reliance Financial Services (NSW) Pty Ltd v Abdallah [2013] NSWCA 125 at [99]. 31I have said that the attack on Mr Howard's credibility was not unreasonable. It is unnecessary for me to detail all of the evidence leading to that conclusion but the following demonstrates the basis for it. (The emphasis is mine.) 32In his affidavit Mr Howard said:- 14...From my experience in strata management, The Records are updated in the following manner shortly after an owner completes his or her purchase of a unit in the strata scheme ... 16.Details pertaining to Lot 55 show the owner as Chen Chew Chua and that address of 55/301 Castlereagh Street, Sydney NSW is entered for purposes ... I did not make those entries in the Records. 18.In around June 2010 someone on behalf of Strata Partners Pty Ltd entered the address details shown in the Schedule next to lot 55 into the electronic database forming part of the Records. RSH MORE 20.... The strata roll is updated by trained staff when Section 118 Notices are received. ... From my experience as a strata managing agent I know that the electronic database is updated shortly after notice is received. 24.... After receipt of this email (dated 3 September 2010 from Chris Lim) I immediately checked the Records maintained by the Company. During this process I sighted the section 118 notice that was received by (sic) Lot 55. 25.... The database forming part of the Records maintained by the Company were changed in September 2010, shortly after I located the s118 notice form the Defendant. ... A copy of the strata roll ... shows that the database was modified on 14 September 2010. My email of 3 September indicates that I found the section 118 notice received by the Company with respect to lot 55. 26.I understand that the section 118 notice cannot be found, but I clearly remember seeing it ... 35.... I have formed the view that the Defendant must have received levy notices ... From examining the Records, those notices would have been sent to 55/301 Castlereagh Street, Sydney NSW 2000 as this is the address that I entered into the database in or around September 2010 after locating the section 118 notice for lot 55. 40.The reason that I know the address for the levy notice would be 55/301 Castlereagh Street, Sydney NSW 2000 is because this is the address I caused to be entered into the database forming part of the Records on or around 14 September 2010 after sighting the section 118 notice ... 33In oral evidence he said:- That on the majority of occasions it would be his assistant who entered the details in the database - T17.6 It would have been his assistant who entered the change of address (in this case) in the database - T27.8 It was his assistant as standard part of the practice; It would have been his assistant as he could recall - T28.7 He could not recall who physically entered the information into the database - T29.1 34On the topic of sighting the s 118 notice, Mr Howard said:- He clearly remembers seeing it - Affdt para 26 (See also para 24) He pulled the s 118 notice out of the file, read it on his desk, and then typed up the email. He did not remember how he received the s 118 notice. He recalls a few of the s 118 notices received and that with which this case is concerned was one of them. 35Evidence from Mr Howard dealing with the email of 3 September 2010 included the following:- 25. My email of 3 September 2010 indicates that I found the section 118 notice received by the company with respect to lot 55. Q. In these proceedings, is it your evidence that in respect to the 118 notice concerning the defendant, is it your evidence that you sighted that 118 notice? A. That's in my email, yes. - T22 He is sure that the email discloses that he sighted the 118 notice - T23.2 Q. (Taken to the email) Is that to say you sighted the 118 notices? A. I would have sighted it and I did - T24 He said that he remembered sighting the notice, adding that because his firm had been compulsorily appointed to the scheme he spent more time on it, including time before he answered each email. - T24-5 He recalls sighting this particular s 118 notice even though he would have seen hundreds of s 118 notices in the course of a year - T25, 27 36This summary of the evidence reveals a number of inconsistencies or discrepancies. (1)Firstly, the practice adverted to in paragraphs 14 and 20 of Mr Howard's affidavit of entries being made shortly after a purchase would not seem to have been followed if, as paragraph 25 asserts, the database was modified on 14 September 2010. (2) Secondly, there seems to be inconsistency between the statements that it was in June 2010 that the database was updated and the statement in paragraph 25 that this occurred in September 2010. (3)Thirdly, there is inconsistency between statement in paragraph 35 of Mr Howard's affidavit that he entered the address in the database and other statements as to who made the entries or how they came to be made. (4)Mr Howard's statements that his email of 3 September indicates that he found or saw the s 118 notice is not borne out by the terms of the email. 37To these one may add the inconsistency adverted to in paragraph 19(p) of the Defendant's submissions in the Court below - an inconsistency which is borne out by the transcript. 38There is at least one other feature of Mr Howard's evidence that is unusual. Even if he gave more attention to the subject strata plan than in cases where his firm was not compulsorily appointed, it is still somewhat surprising that he would remember for some 2 years the terms of one particular notice and one which would not seem to have any peculiar features among hundreds of others. 39Given the totality of these matters it was wrong for the magistrate to rely on Mr Howard's evidence without providing reasons for doing so. 40Consequently this ground 5 should be upheld. Conclusion 41Although I have found error on the part of the magistrate, it does not follow that the judgment of the Local Court should be set aside. The decision of the Court of Appeal in Thaina Town (On Goulburn) Pty Ltd v City of Sydney Council (2007) 71 NSWLR 230 makes it clear that the cost of legal disputation should be minimised where possible and s 75A of the Supreme Court Act 1970 provides that an appeal to this Court is by way of rehearing. Of course, these statements must be approached against the background that in general and in this case it is in the Local Court, and not this Court, that witnesses will have given their evidence. Given the inconsistencies in it and the magistrate's failure to critically examine the evidence of Mr Howard, I would not feel entitled to rely on the latter's evidence concerning a matter that was significantly in dispute. 42However, as I have said, the challenge to the posting of the special levy notices fails and the email exchange provides compelling evidence as to the contents of the s 118 certificate. In these circumstances, there is no reason to doubt the correctness of the magistrate's ultimate decision and no reason to remit the matter for further hearing. The appeal to this Court should be dismissed. It follows that the Plaintiff in this Court should pay the Defendant's costs.