Legal Costs Recoverable by Bodies Corporate: Two Recent NTCAT Decisions That Provide Clarity
By Ward Keller | April 2025
Author | Senior Associate, Alecia Howland
As a solicitor representing bodies corporate in the Northern Territory, I am often asked whether legal costs incurred in levy recovery proceedings under the Unit Titles Act 1975 (NT) can be claimed from the lot owner. Thanks to two recent decisions of the Northern Territory Civil and Administrative Tribunal (NTCAT), we now have confirmation that the answer is yes—where those costs meet the statutory test, they are recoverable.
Both cases—The Proprietors of Unit Plan 2009/027 v Ogle and The Proprietors of Unit Plan 97/023 v Potter—involved long-standing arrears and frustrated attempts by body corporate managers to collect outstanding levies before finally engaging our firm to take legal action. In both instances, the initial Tribunal decisions allowed for recovery of basic filing and service fees only but declined to award the legal fees incurred by the applicants. We successfully sought review of both decisions.
Why these cases matter?
The key statutory provision in both matters was section 46 of the Unit Titles Act 1975 (NT), which provides that where a body corporate incurs expenditure due to a breach by a lot owner (such as non-payment of levies), it may recover that expenditure from the owner as a debt.
The Tribunal, on review, accepted our submissions that legal costs—such as the cost of issuing letters of demand, drafting applications, and liaising with the Tribunal—are indeed “expenditure” for the purposes of section 46. This interpretation aligns with established authority, including Federal Court decisions, which confirm that recoverable “expenditure” includes legal costs where they are necessary and reasonable in the circumstances.
Importantly, the Tribunal confirmed that:
- Legal costs are not limited to court-assessed taxation amounts. Instead, the focus is on the actual expenditure reasonably incurred by the body corporate.
- Engaging a solicitor was found to satisfy the test of reasonable necessity, not merely being optional or convenient following the applicant’s submissions that engaging lawyers was not hasty or irresponsible given the history of arrears. In both cases, body corporate managers had made repeated attempts to collect the arrears, including issuing multiple notices over a 12-month period, before engaging legal representation.
The outcomes
In both Ogle and Potter, the Tribunal awarded the legal costs of the original proceeding and the costs of the review application itself. These costs are now recoverable from the lot owner over and above the original debt.
This recovery of legal fees can be distinguished from the Tribunal’s usual approach under section 131 of the Northern Territory Civil and Administrative Tribunal Act, which typically requires parties to bear their own costs in Tribunal proceedings
Practical implications for NT bodies corporate
These decisions provide much-needed clarity and confidence to bodies corporate and their managers across the Territory. When facing ongoing levy arrears, bodies corporate do not need to absorb the legal costs of enforcement proceedings—provided those costs are necessary and reasonable, they can be recovered directly from the non-compliant lot owner under section 46.
Each case should still be assessed on its individual merits. However, these decisions recognize the commercial reality faced by bodies corporate: unpaid levies impact all owners, and it is appropriate for the corporation to pursue arrears—including through legal channels—and to recover the costs of doing so.
If you have levy recovery issues or are unsure how best to approach a non-paying lot owner, please contact us for specific advice tailored to your circumstances.
