1. Charges of $165.00 on 2 June 2009 and 1 March 2009 in the section 31 notice, described as "final arrears notice charge"

2. The same charges in the section 32 notice, plus an additional charge bearing the same description on 30 June 2010

1. Two charges of $165.00 on 1 October 2009 (ie $330.00), 1 April 2009, 1 May 2009 and 1 June 2009 in the section 31 notice, described as "late payment administration". These are repeated in the section 32 notice.

3. Interest has also been claimed on the various components of the $1,320.00.

4. In support of the claim, for $1,320.00 the Applicant owners corporation produced its Minutes of Annual General meeting held 19 December 2007 (the relevant resolutions in which were said to have been adopted in subsequent meetings) and the management contract between the Applicant and Ace Body Corporate Management (Springvale/Kensington).

5. The Minutes record that an ordinary resolution was passed in these terms:

"To avoid the Body Corporate from paying for individual members' breaches of rules, it was resolved that the Manager would write to the offender notifying of the breach at a cost of $165.00. If the breach was not rectified the offender would receive a second warning and so forth and $165.00 charged for each time a reminder was sent. A final notice with a further $165.00 would be sent and if not rectified within the specified time the matter would be handed to a solicitor. Therefore, only the offender paid and the other abiding members were not penalized. It was resolved to adopt this system".

1. The management contract contains in Schedule 3 a list of fees, which the Applicant has agreed to pay. Included in this schedule are:

2. "instruct debt collectors and or solicitors and generally supervise or attend any legal proceedings or hearings affecting Body Corporate - Hourly Rate (which is stated elsewhere to be $330.00)", and

"Any other services not included in this schedule - Hourly Rate".

The "final arrears notice charges" do not fall within the first two items described above, so can only fall within "other services". But if so, by including that charge in the section 31 notice the Manager has asserted that it has taken 30 minutes each time to generate on its computer the section 31 and 32 notices. That assertion is literally unbelievable.

Similarly, the Manager has asserted that it has taken 30 minutes each time to process a late payment. One struggles to understand how processing a cheque received on one day can take any longer than processing the same cheque on another day. The suggestion that it takes 30 minutes to receive a payment seems absurd.

The Resolution of 19 December 2007 is of questionable validity. It is not a resolution to enact a Rule. Section 138(1) of the Act empowers an owners corporation to make Rules about the matters listed in Schedule 1. This resolution, if expressed as Rule, would not fall within Schedule 1.

The Resolution was not to levy annual or extraordinary fees under sections 23 and 24 of the Act. As expressed, it seems to be a resolution to direct the Manager to send correspondence to lot owners or occupiers who breach Rules. I was not directed to any particular Rules, but if the Model Rules apply they do not cover the payment of fees.

In addition, to the extent that the Applicant has purported to include in its section 32 notice the fee of $165.00 which was not included in the section 31 notice, that fee is unrecoverable in this proceeding.

So, by a combination of apparent exaggeration by the Manager as encouraged by the Resolution, the Resolution itself not authorising or directing the manager to assert that the $1,320.00 is payable, and the obvious error in the section 32 notice as to the fee of $165.00, the sum of $1,320.00 is not recoverable.

I presume that the Manager has not purported to charge the $1,320.00 to the Applicant.

This leaves the balance of the claim. On the evidence presented, and in the absence of any evidence or submissions from the Respondent, I find that the balance of the claim is payable.

Accordingly I deduct from the claim in the section 32 notice $1,320.00, and the various interest charges which the manager has purported to charge on the components of the $1,320.00, and I order the respondent to pay the applicant $3211.50. The Applicant had claimed interest of $222.33 on the whole of the sum claimed in the section 32 notice, from 31 May 2010. As I have disallowed $1,320.00 of the claim, I award interest on the remaining sum, being $162.60.

I also order the Respondent to pay the Applicant's costs fixed at $450.00.