Body corporate awarded $5,793.85 in unpaid levies, but $3,178 of its legal costs cut (NTCAT, 2026)

What happened

In 2023 the owner bought a unit in a Darwin strata-titled apartment block. Unit holders must pay the body corporate quarterly contributions to an administration fund and a sinking fund. The body corporate charges interest on arrears at 9.85 per cent, plus debt collection and recovery expenses including legal costs.

By mid 2024 the owner was more than $2,000 behind. By mid 2025 the arrears had grown to over $9,000, and on 18 July 2025 the owner paid about half of that. Around the same time the body corporate had its lawyers draw up a payment plan, and in the second half of July 2025 the owner agreed to pay off the remaining debt at $150 a week. Over the following 40 weeks the owner made only 11 of those $150 payments.

On 22 January 2026 the body corporate started these proceedings, seeking $7,899.81 in outstanding fees plus the $316 filing fee, a total of $8,215.81. That claim already included $3,981.70 in legal fees the body corporate had paid its own lawyers between May 2025 and March 2026. On 23 February 2026 the owner filed a response that began by acknowledging the debt and taking full responsibility for it, and proposed paying the whole amount off in fortnightly instalments of $316.76 over 12 months. The owner said the debt arose during genuine financial hardship, that he or she was not disputing the amount, and that he or she was closing an unprofitable cafe and looking for full-time work.

The Tribunal asked the body corporate whether it agreed to a payment plan, then ordered the parties to a compulsory conference (a private settlement meeting run by another Tribunal member), which was held on 28 April 2026. No settlement was reached. In written submissions filed on 12 May 2026 the body corporate said it would no longer agree to any payment arrangement and required the arrears to be paid in full, and it increased its claim to $15,121, including a further $4,388 in legal costs. The owner filed nothing further and did not appear at the 16 July 2026 hearing. Three days before the hearing, on 13 July 2026, the owner paid $6,204.50, which brought the amount claimed at the hearing down to $8,655.85.

What each side wanted

The body corporate asked for payment in full as a lump sum: the arrears of contributions and interest, its legal and debt recovery expenses, and reimbursement of the $316 filing fee. It argued that because the owner had already broken the 2025 private payment plan, it was reasonable to refuse a new one and to press on to a hearing. The owner, in the only material he or she filed, admitted the whole debt and asked only that it be paid by fortnightly instalments of $316.76 over about 12 months, pointing to financial hardship and to steps being taken to return to stable income.

What the tribunal decided

The Tribunal allowed the claim for $8,655.85, reduced it by $3,178.00 for legal expenses unreasonably incurred, and added $316.00 for the filing fee. It ordered the owner to pay the body corporate $5,793.85 within 30 days.

The Tribunal refused to order payment by instalments. It accepted that an instalment order made by the Tribunal would have more force than the 2025 private plan, because it could be enforced in the Local Court, but since 23 February 2026 the owner had put forward no evidence of hardship, and the $6,204.50 payment made three days before the hearing tended against the claim that he or she could not pay a lump sum.

Because the owner did not appear, the Tribunal also recorded a problem with the hearing date. The handwritten case management form made at the compulsory conference said the hearing was on 14 July 2026, while the sealed orders later issued said 16 July 2026, and those sealed orders were emailed to an address supplied by the body corporate rather than the address the owner had used. The Tribunal said that if the owner applied to set aside the decision and re-open the proceeding, it would give serious consideration to that application, and noted any such application must be filed within 28 days of the decision.

Why the tribunal decided it that way

Northern Territory body corporate levies are governed by the Unit Titles Act, the Unit Titles Scheme Act and the Unit Titles Scheme (Management Modules) Regulations. A levy is payable once it has been properly raised and notice served under Part 5 Division 1 of those Regulations. Regulation 52 allows interest on unpaid levies at the default rate fixed under section 85 of the Supreme Court Act, or a lower rate set by resolution of the body corporate; at a general meeting on 16 July 2025 this body corporate resolved to charge the Supreme Court rate, which the Tribunal accepted was 9.85 per cent. Regulation 53 lets the body corporate recover an unpaid levy as a debt. The Tribunal was satisfied the contributions, sinking fund levies and interest had been correctly calculated and that the owner was liable.

Legal costs were treated differently. Section 46 of the Unit Titles Act allows a body corporate to recover from a member, as a debt, expenditure that was "rendered necessary" by that member's wilful or negligent act or breach of the articles. Following earlier NTCAT decisions, the Tribunal held that section 46 lets a body corporate charge a defaulting owner a reasonable amount of legal and associated costs that it was reasonable to incur, and that this liability sits outside the usual costs rules in the NTCAT Act, which normally stop a winning party recovering its legal fees. The question was therefore whether each item of expenditure was both a reasonable amount and reasonably incurred.

The Tribunal allowed the $3,981.70 charged between May 2025 and March 2026, including about $1,132 inferred to be for drafting the 2025 payment plan and about $1,141 for drafting the initiating application, noting the owner had conceded that part of the claim and that the items looked reasonable on their face. It also allowed $1,210 for preparing for and attending the compulsory conference, because that gave the body corporate a chance to test the owner's offer and try to settle. It did not allow the $3,178 invoiced for preparing submissions, collating evidence and attending the hearing. The owner's default entitled the body corporate to go to a hearing but did not make it necessary. The Tribunal pointed to its statutory objectives under section 10 of the NTCAT Act to resolve disputes quickly and through settlement procedures where appropriate, and to keep costs to parties to a minimum. Because either a lump sum order or an instalment order would have to be enforced in the Local Court if the owner defaulted, going to a hearing gained the body corporate little beyond earlier payment, and any delay would largely be offset by its continuing right to charge interest. Adding that $3,178 lifted the debt from $5,477.85 to $8,655.85, an increase of about 58 per cent, which the Tribunal found unreasonable and unfair given the owner had admitted liability in full at an early stage.

On costs, the Tribunal applied sections 131 and 132(1A) of the NTCAT Act: parties generally bear their own costs, but a substantially successful party may be reimbursed the fee it paid to start the proceeding. The body corporate was substantially successful, so the $316 filing fee was allowed, on the assumption it had not already been charged as a disbursement.

What this means if you are in a similar position

If you are in a similar position, this decision shows how a Northern Territory body corporate's levies and its legal costs are looked at separately. Unpaid administration and sinking fund contributions, and interest at the rate properly resolved on by the body corporate, are recoverable as a debt once the levies have been raised and notice given. Legal and recovery costs are only recoverable to the extent the expenditure was both a reasonable amount and made necessary by the owner's default, and the Tribunal will look at each invoice rather than waving the whole file through.

The decision also shows what an early, full admission can be worth. Once the owner admitted the debt and offered instalments, the Tribunal weighed whether pressing on to a contested hearing added anything real, and treated the extra costs of doing so as unreasonable when they inflated the debt by more than half. It shows too that an offer to pay by instalments carries more weight when it is backed by evidence of the person's financial position, and that a large payment made days before a hearing can cut against a claim of inability to pay.

In disputes like this, the step most people take first is a written notice or demand that itemises exactly what is owed, the levies, the interest rate relied on and the recovery costs claimed, with a deadline to pay or to agree an arrangement. A tribunal application usually comes only after that notice has gone unanswered.

How to apply: our step-by-step guide to a NTCAT application. More decisions: NTCAT cases and strata and body corporate.

Source: The Proprietors of Unit Plan 97046 v Dunn [2026] NTCAT 8 (read the full decision). This summary was prepared from the published decision for general information. It is not legal advice, and the tribunal’s own reasons are the authoritative record.