The only two lots in the strata scheme concerning a property in Abbotsford in Sydney are now owned by Mr and Mrs Theron.
In the Tribunal below, the body corporate constituted by these owners of the two lots ("the Appellant") made three distinct money claims against the company which had been the strata scheme managing agent (the "Respondent"). All these claims were dismissed by the Tribunal on the ground that it had no jurisdiction to determine such claims.
In this appeal, the strata scheme body corporate seeks to overturn the dismissal of one of these claims, namely a claim in the sum of $4,256.87 in respect of charges, including management fees, paid to the Respondent from the strata account since 27 February 2012.
The Tribunal below dismissed this claim because it concluded it had been lodged outside the three year limitation period for the commencement of a consumer claim. In so deciding, the Tribunal below concluded that the three year period commenced to run from 1 November 2006, being the date when it regarded the contract in relation to the strata managing agency to have been made.
The Tribunal below did not otherwise assess the merits of the claim for $4,256.87.
In our opinion, the Tribunal erred in concluding that the limitation period commenced to run from the date when the contract was made. In doing so, it erred on a question of law. As a result, in our opinion, the appeal should be allowed and the whole of the claim for $4,256 should be reconsidered by the Tribunal below.
Our reasons are set out below.
[2]
The decision at first instance
In dealing with this claim for payment of the amount of these charges, the Tribunal below arrived at the following conclusion:
"That leaves the management fees. The contract in question is one prima facie with the owners corporation and to that extent is properly brought. However there is a three year limitation period for claims in the Tribunal and the time runs from when the contract was made. (See s 7 Consumer Claims Act). The contract whose validity is challenged appears to have been made on 1 November 2006 and so is five years out of time. As a result I have no power to deal with it."
Earlier in its reasons, the Tribunal had noted that the Appellant had put arguments challenging the validity of this 2006 contract.
[3]
Grounds of appeal
One of the Appellant's grounds of appeal was that the claim was not out of time. The appellant contended that the cause of action accrued and time started to run from 27 November 2011 when a notice of termination was issued.
This ground of appeal raises a question of law, namely when did the limitation period in respect of the claim to recover these charges commence to run. Accordingly, the Appellant has a right of appeal on this ground and no leave to appeal is required: s 80(2)(b) of the Civil and Administrative Tribunal Act 2013 NSW (the Act).
[4]
The claim for $4,256.78
The Appellant claims that:
1. the agency relationship it had with the Respondent terminated on 27 February 2012 and that from that date the Respondent was no longer entitled to management fees or to incur and recover strata scheme expenses. According to the Appellant, the agency relationship, which had become an informal one, was terminated as a result of a letter it sent to the Respondent dated 27 November 2011 giving three months' notice of termination;
2. the Respondent wrongly disputed that the Appellant was entitled to terminate the agency relationship by three months' notice by claiming that the agency relationship was governed by a written contract dated 1 November 2006 which expressly provided for termination by not less than three years' written notice of termination. The Appellant refutes this on two grounds. First, it says that the document dated 1 November 2006 was never entered into by the Appellant because one of the necessary signatories never signed it. Secondly, the Appellant says that, in any event, any agency relationship existing between the Appellant and Respondent was superseded by a compulsory appointment of the Respondent as strata managing agent for a term of one year ordered by an Adjudicator on 5 January 2007;
3. after expiry of the three months notice period, whatever services the Respondent supplied and expenses it incurred, purportedly as strata managing agent, were unauthorised;
4. despite this, after 27 February 2012, the Respondent charged the Appellant for management services and expenses incurred and obtained payment for such charges from the strata bank account over which it had control. The total amount of these charges is $4,257.87. The charges are in respect of the period from 27 February 2012 to 27 November 2014;
5. the Respondent wrongfully treated the notice of termination given by the Appellant on 27 November 2014 as being the three year minimum notice required by the alleged contract of 1 November 2006.
We note that the Tribunal did not refer to the compulsory appointment of the Respondent for a term of one year by order of the Adjudicator on 5 January 2007. It did not do so because, as Mrs Theron appearing for the Appellant on the appeal accepted, the order and its potential relevance was not specifically mentioned at the hearing, although it was amongst the bundle of documents supplied by the Appellant to the Tribunal.
[5]
The limitation period issue
The limitation period applied by the Tribunal below is derived from s 7(4) of the Consumer Claims Act (the CC Act) which is in the following terms:
"(4) Limitation periods
The Tribunal does not have jurisdiction to hear and determine a consumer claim if any of the following apply:
(a) the cause of action giving rise to the claim first accrued more than 3 years before the date on which the claim is lodged,".
The Appellant's claim for the recovery of these disputed charges, as well as the other two claims, was lodged in the Tribunal on 14 August 2014.
In our opinion, no cause of action of the Appellant's relating to these disputed charges had first accrued before 14 August 2011, being the date three years prior to the date of lodgement of the claims.
No dispute about the Respondent's entitlement to charge for management fees and expenses from and after 27 February 2012 can have arisen until after the Appellant had given what it claimed was a valid notice of termination on 27 November 2011. No claim against the Respondent for the payment of the amount of a disputed charge could be made before the charge was actually made. No payment of any of these disputed charges occurred before 27 February 2012. All of these events occurred after 14 August 2011.
In these circumstances, it is not possible for the Appellant's cause of action in respect of these charges to have first accrued before 14 August 2011.
The Tribunal below erred in concluding otherwise. It seems that the Tribunal below concluded that the cause of action accrued from the date of the 2006 contract because the validity of that contract was challenged. However, the validity of that contract was only a potential obstacle to the Appellant's ability to recover the disputed charges. Invalidity of that contract was not an element of a cause of action to recover these charges, let alone the circumstance that constituted the cause of action.
[6]
Outcome of the appeal
Because of this error in respect of the limitation period, the appeal should be allowed. The merits of the claim for these disputed charges needs to be assessed at a new hearing in which the material and arguments in respect of the claim are presented. It is more appropriate that this be carried out in the Tribunal below than before the Appeal Panel.
[7]
Orders
The following orders are made:
1. Appeal allowed.
2. Set aside the orders made below in so far as it was ordered that the claim for $4,256.87 be dismissed.
3. The whole of the claim for $4,256.87 be reconsidered by the Tribunal below.
[8]
I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.
Registrar
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Decision last updated: 30 March 2015