Over the past year, a series of Magistrates’ Court decisions has upended common practice in owners corporation levy recovery. These rulings confirm that such disputes must now be brought exclusively in VCAT, reshaping the jurisdictional landscape in Victoria.
Background
Over the past twelve months, a sequence of significant decisions[1] rendered by the Magistrates’ Court of Victoria have resulted in a dramatically reconfigured system of jurisdiction with respect to owners corporation fee recovery disputes. In fact, these decisions have gone so far as, not only clarifying an issue that had hitherto not been ‘a matter of reported judicial determination prior to the decision of Buckley.’[2] Specifically, these decisions dealt with preconceptions that owners corporations might pursue unpaid owners corporation fees in either the Magistrates’ Court or the Victorian Civil and Administrative Tribunal (VCAT). However, the decisions in question have instead suggested that VCAT retains exclusive jurisdiction over owners corporations’ claims against lot owners for unpaid levies.
Owners Corporation v Buckley [3]
The Catalyst
The 2024 Buckley decision was the first rendered by the Magistrates’ Court (Magistrate Greenway presiding) amongst this list of four which sought to clearly address the statutory basis of jurisdiction for owners corporations’ money recovery claims against lot owners and arose after the defendant, Buckley (a lot owner), challenged the Magistrates’ Court to award costs against the owners corporation following a settlement of outstanding fees. The Court in Buckley examined sections 30(1) and 30(2) of the Owners Corporation Act 2006 (Vic) (‘OCA’) and considered in the first instance that, notwithstanding that section 30(1) confers on owners corporations a general right to recover money by way of a ‘court of competent jurisdiction’. However, notwithstanding the foregoing, the Court further considered that section 30(2) provides that ‘Sections 31 and 32 and Division 1 of Part 11 apply to the recovery of money owed to the owners corporation by a lot owner.’ Relevantly, Div 1 of Pt 11 specifically vests original jurisdiction over such disputes in VCAT, which the Court held to constitute an implied ouster.
Notwithstanding the general presumption against ousters, in consideration of these provisions, the Court assessed that the combined effect of section 30(2) and Div 1 of Pt 11 of the OCA clearly override any possible effects of section 30(1) and the Magistrates’ Court Act. Consequently, the Court found that critical steps taking place as a precursor to such an action (including fee notices, final notices etc), result in the owners corporation to bring proceedings in VCAT alone. As such, the Court concluded that the Magistrates’ Court lacked the necessary jurisdiction to preside over such a debt recovery action, irrespective of decades of contradictory practice.
Following the Buckley decision, successive Magistrates’ Court decisions have further expounded on its findings and solidified its significant consideration that exclusive jurisdiction rests with VCAT, all presided over by Magistrate Hoare.
Buckley Principle Upheld
Owners Corporation v Jones; [4] Owners Corporation v Miller; [5] Owners Corporation v Nguyen & Ors [6]
In Jones, Magistrate Hoare considered an application to set aside a default judgement for outstanding owners corporation levies, with counsel for the plaintiff-owners corporation contending that the court retained jurisdiction by operation of the Magistrates’ Court Act, an argument rejected by the Court who, echoing the decision in Buckley, found that the function of the OCA is to confine proceedings for the recovery of unpaid fees against lot owners to VCAT. As such, the Court considered that it lacked the jurisdiction and upheld the finding in Buckley that ‘when the Owners Corporation is recovering money owed by a lot owner (as opposed to any other debtor) s 31, 32 and Division 1 of Part 11 apply.’[7] Similarly, in Miller, the question of jurisdiction was contested by the lot owner, in response to which Magistrate Hoare doubled down: proceedings for the recovery of unpaid owners corporation levies by lot owners must be brought in VCAT. Finally, in Nguyen, Magistrate Hoare delivered his decision on the same day as Miller, and further upheld the reasoning in Buckley and found that the Magistrates’ Court lacked jurisdiction.
Implications and Conclusion
The decision in Buckley is consequential and has unambiguously fixed VCAT as the exclusive venue and jurisdiction in which owners corporations may seek the recovery of unpaid owners corporation levies. As such, solicitors and owners corporations alike ought to be on notice that attempts to ‘shop’ for a court to hear such proceedings could conceivably see actions struck out, cause delays, waste costs, and, as in Jones, risk possible injustice to lot owners, including a risk of improper enforcement until such a time as the jurisdiction is determined. Additionally, VCAT’s exclusive jurisdiction over such recovery proceedings carries with it greater protections and rights to lot owners as a result of VCAT considering the conduct of parties (including acts or omissions) and the impact on all lot owners, as well as more flexible cost regimes. Moreover, in spite of VCAT’s inception to provide a streamlined and efficient tribunal for dispute resolution in contrast to Chapter III courts, VCAT has, for some time, experienced notorious backlogs and delays which will only be exacerbated by confining owners corporation fee recovery to its jurisdiction, ironically resulting in further delays and relief for owners corporations.
In summation, the decisions in and following Buckley constitute a significant realignment of jurisdiction in Victorian owners corporation disputes for unpaid fees. Such a shift not only clarifies a significant source of ambiguity, but further highlights a need for careful statutory analysis by solicitors with respect to jurisdictional questions, particularly with complex and ostensibly contradictory legislation.
Appendix: Relevant Statutory Provisions
A Owners Corporation Act 2006 (Vic)
Section 18 – Power to Commence Legal Proceeding
(1) Subject to subsection (2), an owners corporation must not commence any legal proceeding unless it is authorised by special resolution to do so.
(2) If a matter is within the civil jurisdictional limit of the Magistrates’ Court and an owners corporation is authorised to do so by ordinary resolution, the owners corporation may commence any legal proceeding in—
(a) the Magistrates’ Court; or
(b) VCAT or any other tribunal; or
(c) a court of another State or a Territory that corresponds to the Magistrates’ Court.
Section 30 – Recovery of Money Owed
(1) Subject to subsection (2), an owners corporation may recover any money owed to the owners corporation in any court of competent jurisdiction as a debt due to the owners corporation.
(2) Sections 31 and 32 and Division 1 of Part 11 apply to the recovery of money owed to the owners corporation by a lot owner.
Part 11, Division 1 – Applications to VCAT
Section 162 – VCAT May Hear and Determine Disputes
VCAT may hear and determine a dispute or other matter arising under this Act or the regulations or the rules of an owners corporation that affects an owners corporation (an owners corporation dispute) including a dispute or matter relating to—
(a) the operation of an owners corporation; or
(b) an alleged breach by a lot owner or an occupier of a lot of an obligation imposed on that person by this Act or the regulations or the rules of the owners corporation; or
(c) the exercise of a function by a manager in respect of the owners corporation; or
(d) a term of a contract of appointment of the manager of an owners corporation, including whether a term is fair; or
(e) the disposal by an owners corporation of goods abandoned on the common property.
Section 163(2)
An application to VCAT by the owners corporation for an order requiring a lot owner to pay an amount payable by the lot owner to the owners corporation can only be made if the amount is not paid within 28 days after the final notice is given under section 32.
Section 167 – What Must VCAT Consider?
(1) VCAT in making an order must consider the following—
(a) the conduct of the parties;
(b) an act or omission or proposed act or omission by a party;
(c) the impact of a resolution or proposed resolution on the lot owners as a whole;
(d) whether a resolution or proposed resolution is oppressive to, unfairly prejudicial to or unfairly discriminates against, a lot owner or lot owners;
(e) any other matter VCAT thinks relevant.
B Magistrates’ Court Act 1989 (Vic)
Section 100(1) – Extent of Jurisdiction
(1) The Court has jurisdiction, subject to subsection (2)—
(a) to hear and determine any cause of action for damages or a debt or a liquidated demand if the amount claimed is within the jurisdictional limit; and
(b) to hear and determine any claim for equitable relief if the value of the relief sought is within the jurisdictional limit; and
(c) to hear and determine, with the consent in writing of the parties—
(i) any cause of action for damages or a debt or a liquidated demand, irrespective of the amount claimed; and
(ii) any claim for equitable relief, irrespective of the value of the relief sought; and
(ca) to hear and determine applications made under section 57B of the Victorian Civil and Administrative Tribunal Act 1998 ; and
(d) to hear and determine any other cause of action if the Court is given jurisdiction to do so by or under any Act other than this Act.
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[1] Owners Corporation v Buckley [2024] VMC 12; Owners Corporation v Jones [2025] VMC 10; Owners Corporation v Miller [2025] VMC 11; Owners Corporation v Nguyen & Ors [2025] VMC 12.
[2] Miller at [44].
[3] [2024] VMC 12.
[4] [2025] VMC 10.
[5] [2025] VMC 11.
[6] [2025] VMC 12.
[7] Buckley at [39].
