2 year and 2 month rule no longer applies to recovery of levy arrears in Queensland

21 August 2018

As you are aware, the 2017 decision of Mount Saint John Industrial Park CTS v Superior Stairs & Joinery Pty Ltd, precluded a body corporate from pursuing levies older than 2 years and 2 months under the limitation period set by s145(2) of the Body Corporate and Community Management (Standard Module) Regulation 2008. Section 145(2) states that “…If the amount of a contribution or contribution instalment has been outstanding for 2 years, the body corporate must, within 2 months from the end of the 2-year period, start proceedings to recover the amount…

The decision was recently overturned by the Queensland Supreme Court in the decision of Body Corporate for Mount Saint John Industrial Park v Superior Stairs & Joinery Pty Ltd – [2018].

The Court concluded that “…the purpose and effect of s145(2) of the Regulations is to compel a body corporate to bring a proceedings, rather than to impose a time limit, for the benefit of the defendant, upon any proceedings which a body corporate might see fit to commence.” The Court further stated that: “…Section 145(2) is engaged only where … an amount is owed, rather than where an amount is claimed to be owed. …It is yet more difficult to see the purpose of a limitation period being imposed where the defendant has no defence on the merits“.

Ultimately, it was held that s145(2) does not imply a limitation period.

Based on the above decision, a body corporate is no longer statute barred from pursuing levies older than 2 years and 2 months.

This article was written by Rebecca Jaffe, Partner and Rachel Doubleday, Paralegal.

Rebecca Jaffe

P: +61 3 8644 3530

E: rjaffe@hwle.com.au

Subscribe to HWL Ebsworth Publications and Events

HWL Ebsworth regularly publishes articles and newsletters to keep our clients up to date on the latest legal developments and what this means for your business.

To receive these updates via email, please complete the subscription form and indicate which areas of law you would like to receive information on.

Contact us