What was the outcome of Tenancy Tribunal case 9038064?

The tribunal order states: The hearing is adjourned.

How much money was awarded in case 9038064?

Verified claim lines are listed on this page.

What type of tenancy dispute was case 9038064?

The primary dispute was Mould & damp. Related themes: Leaks, Unit Titles.

Where can I read the official tribunal order for case 9038064?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/10478375-Tribunal_Order.pdf.

What was the outcome of Tenancy Tribunal case 9038064?

The tribunal order states: The hearing is adjourned.

How much money was awarded in case 9038064?

Verified claim lines are listed on this page.

What type of tenancy dispute was case 9038064?

The primary dispute was Mould & damp. Related themes: Leaks, Unit Titles.

Where can I read the official tribunal order for case 9038064?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/10478375-Tribunal_Order.pdf.

Wellington Central, Wellington Tenancy Tribunal Case 9038064 — Mould & damp

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Wellington Central, Wellington Tenancy Tribunal Case 9038064 — Mould & damp | TenantCheck

Order

The hearing is adjourned.
The dispute from Mr Kennedy in relation to the EQC payment has been settled.

Reasons

The Tribunal must consider applications filed by the Body Corporate against two unit owners, and a combined application from those two unit owners against the Body Corporate. As will be explained below, there are currently related proceedings in the High Court and Court of Appeal. Pleasingly some of the claims have been addressed for the parties during this Tribunal hearing (the EQC payment for Mr Kennedy, and the payment of some outstanding levies). However the remaining claims in the Tribunal are adjourned, given there are currently matters before the senior courts, it is appropriate to let those hearings take their course first. They may well see a resolution of all or some of the claims before the Tribunal currently.

BACKGROUND

I will only set out the background very briefly for context.
The premises are a large unit titled complex in Wellington, comprising a mixture of commercial and residential units (I understand 43 units in total).
Unfortunately, like too many buildings in New Zealand this is a leaky building. That has resulted in the Body Corporate needing to undertake a range of high- value work to the roof and envelope of the building. I will not detail it here, but over the course of that work, the Unit Owners have had various disputes with the Body Corporate, including but not limited to the window replacement, kitchen replacement in Mr Kennedy’s unit and a litigation levy.
Mr Kennedy and Ms Bjors have commenced various proceedings in the High Court, and the substantive claim is yet to be heard there. But I have been provided with the current claim 1 which is broad, including a breach of statutory duty, negligence, and nuisance.
But as far as these proceedings are concerned, the Body Corporate filed its claims against the Unit Owners in early September 2022. We had a number of case conferences leading to the Unit Owners filing a joint application, and as above there have been High Court proceedings commenced.
We proceeded to a hearing in Wellington on 19 June 2024. In attendance was Mr Mahuta-Coyle representing the Body Corporate, Mr Phillips representing Phillips Property Rentals Ltd, and Mr Kennedy and Ms Bjors.

BODY CORPORATES CLAIM

I will address the Body Corporate’s claims as follows: Levies
The Body Corporate sought orders requiring the Unit Owners to pay levies raised under section 126, that they pay the cost of the window remediation to their units, and secondly, a levy to raise funds for current litigation in the High Court, and Court of Appeal. 1 Fourth amended statement of claim
The Unit Owners advised me that the night prior (18 June 2024), that they paid the litigation levies in full, but did so under protest. The Unit Owners disagree with these levies so still wish to have them challenged.
But there is also the dispute around the windows, and the Unit Owners dispute those levies too. The Unit Owners consider that: a. The levies have not been properly raised, but if they were; b. The Body Corporate was wrong to raise these levies, with reference to the High Court decision of Body Corporate s73368 v Rosalind Kay Otway and others [2017] NZHC 3265. The Unit Owners consider that their situation is distinguished from Otway, given the joinery in Otway was within the building envelope for those unit owners, whereas their windows are simply external windows on the outside of the building.
For its part, the Body Corporate considers that Otway would support these unit owners being liable for the remediation costs to those windows.
There is also a dispute in relation to levies raised to repair a kitchen in Mr Kennedy and Ms Bjors unit.
While Mr Kennedy considers that the work on the windows in his units is substandard, that is not a defence to the claim from the Body Corporate. The Unit Owner’s position is that it is the Body Corporate’s responsibility to maintain the windows which includes the replacement cost. The Unit Owners cannot have it both ways. If their position is that the work was substandard, then that is for the Body Corporate to address, and the Unit Owners should approach any request for that work in the usual way with maintenance requests at the Body Corporate.
As I explained in the hearing, it is appropriate to let the proceedings in the High Court and Court of Appeal take their course. Having considered the claims before the senior courts, it is clear to me that there is considerable overlap, so much so the Tribunal proceeding should be paused.
Mr Mahuta-Coyle submitted that the Body Corporate may seek to cross-apply in the High Court concerning the levies. That seems to me sensible given the overlap.
In any event I express no view as to the levies claims (including the claim for recovery of the costs incurred in recovery of the levy). Those claims must be adjourned to allow the High Court and Court of Appeal proceedings to conclude. It may well be that matters are resolved there, but if there are any matters to be adjudicated, I can pick those up at a future hearing.
I record for completeness an undertaking made by the Unit Owners, to continue paying the litigation levies pending the applications in the senior courts being determined. Interest
The Body Corporate seeks an order that the Unit Owners pay interest on the outstanding levies for both the remediation and levy claims, on a straight-line basis. Mr Mahuta-Coyle pointed the Tribunal to the resolution of the Body Corporate approving interest. I note it is clear in the Unit Titles Act 2010 (UTA) that a Body Corporate can charge interest on the late payment of debts up to 10%.
In any event, the Unit Owners dispute the interest claim for these reasons: a. There have been failures with the accounting. Mr Phillips referred to a statement from 1 January 2016 to 21 May 2021 which shows that payments are being received, but the payments are then later apportioned to debts subsequently. b. Mr Kennedy submits that the Body Corporate has passed a resolution in 2022 which gave a discretion around interest charges, and notes that some units are charged interest and others are not. These unit owners consider that in the circumstances of this case they should not be charged interest, particularly given the disruption to their units. c. Mr Phillips advised that he is concerned at how the accounts are managed and the financial management of the Body Corporate.
Again it is appropriate that these claims be adjourned, because I accept that the outcome of the applications in the senior courts may decide these matters, or at least result in findings that will materially impact the outcome of these claims. Costs
Finally the Body Corporate has claimed costs. As I explained today, costs are normally only considered once we know who the winning party will be, so it is much too premature to hear from the parties on costs.

UNIT OWNERS CLAIMS

Compensation and damages

Mr Phillips submitted that his claim relates to losses from a failure of the Body Corporate to maintain the building and claims $100,000 for that. That relates to his property being empty for about one year including loss of rent around 2019 and 2020 which include costs for. a. Loss of rent b. Replacement of lights c. Legal costs d. Surveyor e. Property management costs f. Leak consumables g. Testing for mould h. Damage to chattels i. Bank interest j. A disputed legal cost invoice from the Body Corporate k. Personal suffering or stress.
I asked what the legal basis for making this order would be. Mr Phillips advised there has been a failure to maintain the building based on the information that was known to the Body Corporate. In particular there has been a statutory duty breach, negligence, nuisance, breach of quiet enjoyment, and abuse of process on the part of the Body Corporate as well as acting in bad faith.
Mr Mahuta-Coyle objected to this claim being considered today, given it had not been set out earlier. Mr Mahuta-Coyle also submitted that claim is almost identical to Mr Kennedy’s claim that is before the High Court, and that this should be heard there. Mr Phillips disputes that the claims are identical, and states the claim relates to a different unit.
I consider that both parties are correct to a degree. Mr Phillips is correct in that he is not a party to the High Court proceeding and the claims for his unit are not before the High Court. To that extent, his claim cannot be determined by the High Court proceeding for Mr Kennedy and Ms Bjors. But I am also minded that Mr Kennedy’s claim is before the court and he is a co-applicant in the Unit Owners claim, and furthermore, it is very likely that the High Court will make findings that would be important if not binding as it relates to Mr Phillips unit.
In the circumstances, it is sensible that this claim be adjourned also, pending the High Court proceeding. EQC Payment
Mr Kennedy seeks orders in relation to an EQC payment that the Body Corporate received for his units. Mr Kennedy seeks the following: ...to ask the Body Corporate to please produce all the documents that they have their control regarding the filing of an EQC claim on behalf of all owners in 2013 and 2016. This would include all communications with the EQC, bank-records regarding payment of the EQC funds, and show that these payments were kept in a separate account. Lastly, the communications to all owners as these funds were being paid out. Any funds paid to owners should be distinguishable from the original insurance award.
The Body Corporate’s position is that it holds the funds from EQC of $1,823.33, and are happy to pay it as confirmed in emails with Mr Kennedy from June 2021, but that Mr Kennedy has refused to accept it unless further information was provided.
Following the lunch break today, Mr Mahuta-Coyle provided information from the insurance loss assessor showing the amounts assessed for EQC purposes, and we established that there was a reduction of $200 per unit, being the EQC excess. Therefore the decision to refund $1,823.33 looked correct. On that basis Mr Kennedy confirmed that settled his dispute on this claim.
It was agreed that the payment will now be made into Mr Kennedy’s account, and if there are any problems with that, the Body Corporate will contact Mr Kennedy to get the account details for the $1,823.33 to be paid. Proceedings improperly brought
Mr Kennedy also claims that the proceedings were improperly brought by the Body Corporate.
Mr Mahuta-Coyle submitted that the proceedings were properly brought, and it was only last night that the levies claimed were paid.
As I explained today, I am not persuaded that it could be said the Body Corporate’s claim was improperly brought, because as a minimum the Body Corporate have had the levies paid, albeit under duress. I have seen nothing unusual in terms of this claim, which on the face of it is an everyday levies claim we see in the Tribunal. Certainly, there is complexity around the background and facts, but putting that to one side, I have seen nothing to suggest the claim was raised out of spite or in a retaliatory way.
Beyond that, any claim about the actions of the Body Corporate will be addressed in the High Court, and to that extent I am satisfied there is nothing I can adjudicate here.

HEARING ADJOURNED

The hearing is now adjourned. If necessary the parties can request another hearing in the Tribunal, which should be before myself. As noted above, that should be after the senior court proceedings have concluded. In the event matters are settled or resolved / determined, I request the parties notify the Tribunal that their application can be withdrawn.

Order

The hearing is adjourned.
The dispute from Mr Kennedy in relation to the EQC payment has been settled.

Reasons

The Tribunal must consider applications filed by the Body Corporate against two unit owners, and a combined application from those two unit owners against the Body Corporate. As will be explained below, there are currently related proceedings in the High Court and Court of Appeal. Pleasingly some of the claims have been addressed for the parties during this Tribunal hearing (the EQC payment for Mr Kennedy, and the payment of some outstanding levies). However the remaining claims in the Tribunal are adjourned, given there are currently matters before the senior courts, it is appropriate to let those hearings take their course first. They may well see a resolution of all or some of the claims before the Tribunal currently.

BACKGROUND

I will only set out the background very briefly for context.
The premises are a large unit titled complex in Wellington, comprising a mixture of commercial and residential units (I understand 43 units in total).
Unfortunately, like too many buildings in New Zealand this is a leaky building. That has resulted in the Body Corporate needing to undertake a range of high- value work to the roof and envelope of the building. I will not detail it here, but over the course of that work, the Unit Owners have had various disputes with the Body Corporate, including but not limited to the window replacement, kitchen replacement in Mr Kennedy’s unit and a litigation levy.
Mr Kennedy and Ms Bjors have commenced various proceedings in the High Court, and the substantive claim is yet to be heard there. But I have been provided with the current claim 1 which is broad, including a breach of statutory duty, negligence, and nuisance.
But as far as these proceedings are concerned, the Body Corporate filed its claims against the Unit Owners in early September 2022. We had a number of case conferences leading to the Unit Owners filing a joint application, and as above there have been High Court proceedings commenced.
We proceeded to a hearing in Wellington on 19 June 2024. In attendance was Mr Mahuta-Coyle representing the Body Corporate, Mr Phillips representing Phillips Property Rentals Ltd, and Mr Kennedy and Ms Bjors.

BODY CORPORATES CLAIM

I will address the Body Corporate’s claims as follows: Levies
The Body Corporate sought orders requiring the Unit Owners to pay levies raised under section 126, that they pay the cost of the window remediation to their units, and secondly, a levy to raise funds for current litigation in the High Court, and Court of Appeal. 1 Fourth amended statement of claim
The Unit Owners advised me that the night prior (18 June 2024), that they paid the litigation levies in full, but did so under protest. The Unit Owners disagree with these levies so still wish to have them challenged.
But there is also the dispute around the windows, and the Unit Owners dispute those levies too. The Unit Owners consider that: a. The levies have not been properly raised, but if they were; b. The Body Corporate was wrong to raise these levies, with reference to the High Court decision of Body Corporate s73368 v Rosalind Kay Otway and others [2017] NZHC 3265. The Unit Owners consider that their situation is distinguished from Otway, given the joinery in Otway was within the building envelope for those unit owners, whereas their windows are simply external windows on the outside of the building.
For its part, the Body Corporate considers that Otway would support these unit owners being liable for the remediation costs to those windows.
There is also a dispute in relation to levies raised to repair a kitchen in Mr Kennedy and Ms Bjors unit.
While Mr Kennedy considers that the work on the windows in his units is substandard, that is not a defence to the claim from the Body Corporate. The Unit Owner’s position is that it is the Body Corporate’s responsibility to maintain the windows which includes the replacement cost. The Unit Owners cannot have it both ways. If their position is that the work was substandard, then that is for the Body Corporate to address, and the Unit Owners should approach any request for that work in the usual way with maintenance requests at the Body Corporate.
As I explained in the hearing, it is appropriate to let the proceedings in the High Court and Court of Appeal take their course. Having considered the claims before the senior courts, it is clear to me that there is considerable overlap, so much so the Tribunal proceeding should be paused.
Mr Mahuta-Coyle submitted that the Body Corporate may seek to cross-apply in the High Court concerning the levies. That seems to me sensible given the overlap.
In any event I express no view as to the levies claims (including the claim for recovery of the costs incurred in recovery of the levy). Those claims must be adjourned to allow the High Court and Court of Appeal proceedings to conclude. It may well be that matters are resolved there, but if there are any matters to be adjudicated, I can pick those up at a future hearing.
I record for completeness an undertaking made by the Unit Owners, to continue paying the litigation levies pending the applications in the senior courts being determined. Interest
The Body Corporate seeks an order that the Unit Owners pay interest on the outstanding levies for both the remediation and levy claims, on a straight-line basis. Mr Mahuta-Coyle pointed the Tribunal to the resolution of the Body Corporate approving interest. I note it is clear in the Unit Titles Act 2010 (UTA) that a Body Corporate can charge interest on the late payment of debts up to 10%.
In any event, the Unit Owners dispute the interest claim for these reasons: a. There have been failures with the accounting. Mr Phillips referred to a statement from 1 January 2016 to 21 May 2021 which shows that payments are being received, but the payments are then later apportioned to debts subsequently. b. Mr Kennedy submits that the Body Corporate has passed a resolution in 2022 which gave a discretion around interest charges, and notes that some units are charged interest and others are not. These unit owners consider that in the circumstances of this case they should not be charged interest, particularly given the disruption to their units. c. Mr Phillips advised that he is concerned at how the accounts are managed and the financial management of the Body Corporate.
Again it is appropriate that these claims be adjourned, because I accept that the outcome of the applications in the senior courts may decide these matters, or at least result in findings that will materially impact the outcome of these claims. Costs
Finally the Body Corporate has claimed costs. As I explained today, costs are normally only considered once we know who the winning party will be, so it is much too premature to hear from the parties on costs.

UNIT OWNERS CLAIMS

Compensation and damages

Mr Phillips submitted that his claim relates to losses from a failure of the Body Corporate to maintain the building and claims $100,000 for that. That relates to his property being empty for about one year including loss of rent around 2019 and 2020 which include costs for. a. Loss of rent b. Replacement of lights c. Legal costs d. Surveyor e. Property management costs f. Leak consumables g. Testing for mould h. Damage to chattels i. Bank interest j. A disputed legal cost invoice from the Body Corporate k. Personal suffering or stress.
I asked what the legal basis for making this order would be. Mr Phillips advised there has been a failure to maintain the building based on the information that was known to the Body Corporate. In particular there has been a statutory duty breach, negligence, nuisance, breach of quiet enjoyment, and abuse of process on the part of the Body Corporate as well as acting in bad faith.
Mr Mahuta-Coyle objected to this claim being considered today, given it had not been set out earlier. Mr Mahuta-Coyle also submitted that claim is almost identical to Mr Kennedy’s claim that is before the High Court, and that this should be heard there. Mr Phillips disputes that the claims are identical, and states the claim relates to a different unit.
I consider that both parties are correct to a degree. Mr Phillips is correct in that he is not a party to the High Court proceeding and the claims for his unit are not before the High Court. To that extent, his claim cannot be determined by the High Court proceeding for Mr Kennedy and Ms Bjors. But I am also minded that Mr Kennedy’s claim is before the court and he is a co-applicant in the Unit Owners claim, and furthermore, it is very likely that the High Court will make findings that would be important if not binding as it relates to Mr Phillips unit.
In the circumstances, it is sensible that this claim be adjourned also, pending the High Court proceeding. EQC Payment
Mr Kennedy seeks orders in relation to an EQC payment that the Body Corporate received for his units. Mr Kennedy seeks the following: ...to ask the Body Corporate to please produce all the documents that they have their control regarding the filing of an EQC claim on behalf of all owners in 2013 and 2016. This would include all communications with the EQC, bank-records regarding payment of the EQC funds, and show that these payments were kept in a separate account. Lastly, the communications to all owners as these funds were being paid out. Any funds paid to owners should be distinguishable from the original insurance award.
The Body Corporate’s position is that it holds the funds from EQC of $1,823.33, and are happy to pay it as confirmed in emails with Mr Kennedy from June 2021, but that Mr Kennedy has refused to accept it unless further information was provided.
Following the lunch break today, Mr Mahuta-Coyle provided information from the insurance loss assessor showing the amounts assessed for EQC purposes, and we established that there was a reduction of $200 per unit, being the EQC excess. Therefore the decision to refund $1,823.33 looked correct. On that basis Mr Kennedy confirmed that settled his dispute on this claim.
It was agreed that the payment will now be made into Mr Kennedy’s account, and if there are any problems with that, the Body Corporate will contact Mr Kennedy to get the account details for the $1,823.33 to be paid. Proceedings improperly brought
Mr Kennedy also claims that the proceedings were improperly brought by the Body Corporate.
Mr Mahuta-Coyle submitted that the proceedings were properly brought, and it was only last night that the levies claimed were paid.
As I explained today, I am not persuaded that it could be said the Body Corporate’s claim was improperly brought, because as a minimum the Body Corporate have had the levies paid, albeit under duress. I have seen nothing unusual in terms of this claim, which on the face of it is an everyday levies claim we see in the Tribunal. Certainly, there is complexity around the background and facts, but putting that to one side, I have seen nothing to suggest the claim was raised out of spite or in a retaliatory way.
Beyond that, any claim about the actions of the Body Corporate will be addressed in the High Court, and to that extent I am satisfied there is nothing I can adjudicate here.

HEARING ADJOURNED

The hearing is now adjourned. If necessary the parties can request another hearing in the Tribunal, which should be before myself. As noted above, that should be after the senior court proceedings have concluded. In the event matters are settled or resolved / determined, I request the parties notify the Tribunal that their application can be withdrawn.

Tenancy Tribunal case 9038064 — Mould & damp in Wellington Central, Wellington

At a glance

Tenancy Tribunal case 9038064 — Mould & damp in Wellington Central, Wellington

At a glance

Claims & awards

Order

Reasons

BACKGROUND

BODY CORPORATES CLAIM

UNIT OWNERS CLAIMS

HEARING ADJOURNED

Topics & place

Residential Tenancies Act sections

Key findings

Frequently asked questions

Claims & awards

Order

Reasons

BACKGROUND

BODY CORPORATES CLAIM

UNIT OWNERS CLAIMS

HEARING ADJOURNED

Topics & place

Residential Tenancies Act sections

Key findings

Frequently asked questions