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Posted 11 February 2015
Category: Levy Recovery
The NSW Court of Appeal’s decision in Chua v The Owners – Strata Plan No 40301  NSWCA 306 (27 August 2014) highlights the importance to a successful levy recovery of being able to prove that a strata manager sent a levy notice for a special levy to the lot owner.
The Strata Schemes Management Act 1996 distinguishes between regular periodic levies (usually the quarterly levies for the administrative and sinking funds) and special levies (usually for one off or unexpected expenses). A lot owner’s liability for regular periodic levies arises as soon as the general meeting raises the levies and does not depend on a levy notice being sent out to the lot owner. So an owners corporation can recover an unpaid regular periodic levy even if a levy notice has not been sent. On the other hand, a lot owner’s liability for a special levy only arises if a levy notice for the special levy is sent to the lot owner. So an owners corporation can only recover an unpaid special levy if a levy notice has been sent to the lot owner.
In Chua’s case, not surprisingly, the lot owner denied receiving the levy notice for the disputed special levy. So the strata manager had to give evidence of his office’s procedure for sending out levy notices because the strata manager could not give specific evidence that the levy notice for the disputed special levy was actually sent. There was also evidence from two other lot owners that they had received their levy notices for the special levy. The lot owner did not seriously challenge any of this evidence, so the Court was able to accept that the levy notice for the special levy had been sent to the lot owner. The Court ordered the lot owner to pay the special levy.
Some implications from this case for strata managers are:
***The information contained in this article is general information only and not legal advice. The currency, accuracy and completeness of this article (and its contents) should be checked by obtaining independent legal advice before you take any action or otherwise rely upon its contents in any way.