What was the outcome of Tenancy Tribunal case 9044004?

The tribunal order states: Thomas Morgan must pay Body Corporate 44345, $28,212.16 immediately,

How much money was awarded in case 9044004?

Individual award amounts are in the official MoJ PDF. Claim amounts appear on this page when claims and net totals reconcile.

What type of tenancy dispute was case 9044004?

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

Where can I read the official tribunal order for case 9044004?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/10113480-UTA_Tribunal_Order.pdf.

What was the outcome of Tenancy Tribunal case 9044004?

The tribunal order states: Thomas Morgan must pay Body Corporate 44345, $28,212.16 immediately,

How much money was awarded in case 9044004?

Individual award amounts are in the official MoJ PDF. Claim amounts appear on this page when claims and net totals reconcile.

What type of tenancy dispute was case 9044004?

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

Where can I read the official tribunal order for case 9044004?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/10113480-UTA_Tribunal_Order.pdf.

Berhampore, Wellington Tenancy Tribunal Case 9044004 — Mould & damp

Order

Thomas Morgan must pay Body Corporate 44345, $28,212.16 immediately, calculated as follows: DescriptionsApplicant Levies$19,521.17 Collection costs$6,052.50 Interest$2,138.49 Filing Fee$500.00 Total award$28,212.16 Total payable by Unit Owner to Body Corporate $28,212.16
The tenants application against the Body Corporate is dismissed.

Reasons

The Tribunal must consider applications filed by both the Body Corporate seeking levies raised for building works and other associated costs, and the Unit Owner in effect defending the levies claim on the basis he should not have to pay for the levies raised, and seeking other orders around the building works project.
A hearing was convened in Wellington on 21 March 2024. Representing the Body Corporate was Mr Dempsey, Mr Morgan the Unit Owner was also in attendance.

BACKGROUND

The background can be summarised as follows.
The unit titled complex is located in Berhampore, Wellington, and comprises 12 separate residential units. Mr Morgan owns one of those units, being unit 3.
There is no dispute that some windows are in poor condition, and that replacement was needed, although Mr Morgan’s position is that other windows in the complex did not require urgent replacement.
The window replacement was considered at the 2020 AGM given concerns around weathertightness. Quotes were obtained.
An EGM was convened on 17 June 2021. At that EGM motions were carried approving the replacement of “all windows to be replaced with wooden joinery” and that $18,000.00 per unit be raised by way of a special levy to fund that replacement, to be paid in instalments.
Invoices were raised, but Mr Morgan has not paid any of those invoices.
I note at this time that the window replacement project proceeded between October 2021 and September 2023. Other than some minor work needed to complete the replacement, all windows in the complex have been replaced other than in Mr Morgan’s unit.
At an EGM on 20 December 2021, the Body Corporate resolved to raise $2,500.00 by way of a special levy for car park repairs.
An AGM was convened on 14 July 2022. Mr Morgan attended that meeting, but as he was not financial, he had no entitlement for his vote to be counted.
I can see that Mr Morgan has made a range of complaints around this dispute, including to the Police, Fire and Emergency New Zealand and the Wellington City Council.
The Body Corporate has filed a claim with the Tribunal seeking an order that the Unit Owner be required to pay the outstanding levies, and also interest and collection costs. That is application 9044004.
The Unit Owner has also filed an application. Largely the application is in defence of the levies claim, where Mr Morgan consider he should not be required to pay the levies, and I will set out his reasoning below. Mr Morgan also seeks other orders around the window works. The Unit Owner’s claim is application 9050844.
As above, a hearing was convened on 21 March 2024 where both matters were heard.

RELEVANT LEGAL CONSIDERATIONS

The relevant law that applies is found in the Unit Titles Act 2010 (UTA), but the law as it relates to the Tribunal’s processes and procedures is found within the Residential Tenancies Act 1986 (“RTA”).
With any claim before the Tenancy Tribunal, the Tribunal applies the usual civil law standards and expectations.
That includes a requirement that the party bringing the claim (the applicant for each application), establish their claims “on the balance of probabilities”. The balance of probabilities means more likely than un-likely, or in mathematical terms, has a fractionally more than 50% likelihood. The Tribunal does not need to be certain or very sure about any claim, only that what is claimed is likely.
This obligation carried by the applicant is referred to as the “burden of proof”. Independent witnesses, corroborating documents and photographs are an important part of discharging this burden.
As noted by the District Court in Kaipo v Clarke & McCarthy (DC) TT233/02, in practical terms this means that: ... [L]ike anyone who brings an application before a Tribunal or Court, it is incumbent upon the applicant to provide the evidence necessary to prove the case. If the applicant fails to do that, then their application will be dismissed whether it has merit or not because it is up to the applicant to provide the necessary evidence. It is not up to the other parties, and it is certainly not up to the Tribunal to extract evidence.

UNIT OWNERS APPLICATION

While the Unit Owners claim was filed second, it is sensible that I begin by considering this claim first, because if the Unit Owner succeeds in his claims, that will influence the question of whether he is liable for the claimed levies.
I summarise Mr Morgan’s submissions presented at the hearing as follows: a. The Body Corporate is not well run. b. At the 2021 AGM there was insufficient information presented to the unit owners around how the windows would be replaced, so the vote was taken on a “simplistic” basis. There was no technical information around what a wood or aluminium replacement would involve. c. The windows do not need urgent replacement, Mr Morgan’s windows are in reasonably good order. d. Mr Morgan considers that his views in the body corporate are not accepted, and he will often be outvoted by the majority. e. The Body Corporate has not replaced all rotten timber around the windows when the work has been done. f. The works have been glossed over to be a double glazing project, and some owners have been swayed by getting double glazed windows. g. Because the money would not be used for the purpose for what it was required, the claim from the Body Corporate is fraudulent. h. The Body Corporate chair will be personally liable for faulty works. i. The Unit Owner should not be responsible for work that will not be suitable or fit for purpose. j. There is another wooden option in a quote the Unit Owner has received, which would be a better option. It could be that UPVC would be a better option. Mr Morgan would be agreeable to that option. k. The windows in Mr Morgan’s unit are currently fit for purpose. l. The glass has been replaced, the windows that open have been fully replaced. For the windows that don’t open, the glass has been replaced with an insert. m. If the Body Corporate are not intending to do the work that was approved, then they are acting fraudulently. n. The work that has been done on the windows is of a poor standard. o. The requirements of any vote have not been met. p. The Body Corporate should provide the details of the contractors. q. Compensation should be paid by the Body Corporate. r. The Tribunal should make a work order around the work that should be completed. s. The Tribunal should order $30,000.00 to be paid to Mr Morgan. t. The Tribunal should order that the windows be replaced with UPVC windows. u. The Tribunal should order the filing fee Mr Morgan paid be reimbursed. v. The contract for the windows to his unit should be cancelled. w. Mr Morgan seeks the Tribunal to address all the point on his three page statement attached to his claim.
In response Mr Dempsey submitted that: a. It is disputed that the Body Corporate has not kept Mr Morgan up to date. At the time of the 2021 EGM a quote was provided from the French Door Factory, and circulated to the unit owners. b. The unit owners were kept abreast of the works. c. All unit owners were invited to a question and answer sessions with the contractor, and the contractor would have addressed any questions from owners then. d. A window report was circulated in advance of the 2022. e. The contractor was refused access by Mr Morgan to come into his unit to undertake measurements of his unit. f. While some units did not require urgent work to the windows, others did. g. There is no evidence of Mr Morgan voting under duress. h. It was originally envisaged a full window replacement be undertaken, ultimately the decision was made to replace framing that was no longer fit for purpose. i. The decisions around what has happened with the windows have been properly considered and passed by the Body Corporate. j. The information requested by Mr Morgan is with the auditors, and will be provided following that process, but the Body Corporate considered that Mr Morgan has vexatiously challenged contactors, and therefore a specific email address was set up for Mr Morgan to forward any questions to. k. It is rejected that there is any fraud.
In response and conclusion Mr Morgan submitted that: a. It is a small body corporate, and many unit owners do not understand professional issues or due process. b. Owners were not asked if they could afford the works, and Mr Morgan advised that he had advised he would be unable to afford any contribution. c. The French Door Company was not the contractor for the works, it was ‘the Double Glazing Guys’ which were “the same outfit”. d. It is difficult to assess whether timber is rotting, hence all of it should have been removed. e. Not many people in this body corporate have legal training and understood the difference between the quotes and what has later occurred. f. Because the contractor would not return Mr Morgan’s calls means they would be “cowboys”.
At the hearing Mr Morgan referred to his written claim requesting that I address all the points in it. I have copied this at appendix 1 for reference.

ANALYSIS

It is necessary to summarise the legal obligations that arise in relation to the works that are the subject of this dispute. The starting point for determining the respective obligations of a unit owner and body corporate, is the UTA.
Section 84 of the UTA sets out the “Powers and duties of Body Corporate[s]” which refers to specific sections in the Act, including section 138. Section 138 relates to the body corporate’s duties for repair and maintenance, and confirms that: The Body Corporate must repair and maintain— (a) the common property; and (b) any assets designed for use in connection with the common property; and (c) any other assets owned by the Body Corporate; and (d) any building elements and infrastructure that relate to or serve more than 1 unit. [Adjudicators emphasis]
The terms ‘building elements’ is defined in the interpretation section (section 5) as follows building elements includes the external and internal components of any part of a building or land on a unit plan that are necessary to the structural integrity of the building, the exterior aesthetics of the building, or the health and safety of persons who occupy or use the building and including, without limitation, the roof, balconies, decks, cladding systems, foundations systems (including all horizontal slab structures between adjoining units or underneath the lowest level of the building), retaining walls, and any other walls or other features for the support of the building
Accordingly then, section 138 would apply to confirm that the responsibility for maintaining any building element would fall to the Body Corporate, providing that the building element “relate[s] to or serve[s] more than 1 unit”.
To put this another way, if the building element relates to or serves more than 1 unit then the Body Corporate will be responsible for its maintenance, otherwise the responsibility for any maintenance will fall to the individual Unit Owner. Determining whether a building element relates to or serves more than one Unit Owner, will always be a question of fact.
The courts have considered various appeals over the years, where it has needed to consider the extent of body Corporate obligations. In the High Court judgment of Wheeldon v Body Corporate 342525 [2015] NZHC 884 1 , the High Court confirmed: [84] I accept that, typically, it may be more natural to talk of building elements within private property “relating to” other units or common property than of them “serving” such property and that the word “serve” typically is more naturally associated with infrastructure in the nature of pipes, wires, ducts etc. However, there may be building elements best described as serving more than one unit and infrastructure best described as relating to more than one unit and I would not preclude such a construction. [85] Having regard to the purposes in s 3, I accept Mr Allan’s submission that Harrison J’s approach means that s 138(1)(d) will be satisfied if the relevant building element or infrastructure: (a) naturally attaches to another unit (as in physically adjoining units); or (b) is causally relevant to another unit whether physically or economically (as in non-adjoining units) ; or 1 The High Court decision confirmed in the Court of Appeal judgment of Wheeldon v Body Corporate 342525 [2018] NZCA 20. (c) is referable to another unit whether physically or economically (as in both adjoining and non-adjoining units); or (d) is concerned with another unit whether physically or economically. [86] I would add to this that the inclusion of aesthetics in the definition of “building elements” and the emphasis on “integrity of the development” in s 3 means, in my view, that the economic relationship to which Mr Allan refers should include those factors, which inevitably reflect in value. [87] As indicated, the present case engages both issues of building elements and infrastructure.
I have no reservation in concluding that remediation required to the windows in this complex, would be work to building elements, as the windows relate to the structural integrity of the building, exterior aesthetics and also impacts the health and safety of the occupants living in the premises.
To be fair, the fact that the windows comprise building elements that fall within the responsibility of the Body Corporate, is not seriously challenged by Mr Morgan. The real question is whether the costs for remediation can be passed from the Body Corporate to Mr Morgan.
In the High Court decision of Body Corporate 198245 v Wong [2012] NZHC, the Court needed to consider a case where there were water leaks effecting both common property and individual units. The body corporate in that case sought orders that the levies raised for the repairs be paid by particular body corporate members. Those unit owners opposed the claim, on the basis that given they did not receive any direct benefit from the works, and on that basis should not need to contribute to the costs. The respondent’s position was that the works should be charged to the relevant unit owners who would receive a benefit, under section 33 of the legislation that applied at that time, which is the equivalent of the current section 126. The High Court did not accept that argument, confirming that for the purpose of funding the works, that weathertightness issues are interrelated for the entire building. Justice Ellis confirmed at paragraph 70 that: (a) the weathertightness of the entire building is interlinked and indivisible; (b) the proprietors all have a mutual interest in ensuring that the building as a whole is weathertight and kept in good repair. In the absence of expert evidence on the point,14 it can reasonably be assumed that if part of the building is not weathertight then that would adversely affect the saleability and value of all units, regardless of whether they themselves are in fact leaky; (c) each of the owners bought into the building as a whole, not just their individual unit; (d) each owner must be taken to have bought into the building knowing, and on the basis, of the division between common and private property in the unit plan and knowing of their responsibility to contribute to the maintenance and repair of the common property as so defined; (e) the sharing of common property repair costs on a unit entitlement basis necessarily contemplates that there may be an element of disproportionality and that prospect must also be taken to have been accepted when each owner bought into the Ridge.
More recently, and applying the current statutory scheme, are the line of cases in the Otway dispute, particularly the decision from the High Court 2 and Court of Appeal. 3 Justice Woolford in the High Court accepted that that: a. Like the finding in Body Corporate 198245 v Wong, weathertightness of the building is interlinked and indivisible. b. If part of the building is leaking, it affects the whole of the complex as it relates to saleability and value.
I also note the High Court decision of Body Corporate 199380 v Cook & Anor [2018] NZHC 1244. In that case the Court discussed the impact of Otway, and confirmed that the Court did not support recovery against particular unit owners under section 126, when the issue was weathertightness that would potentially impact the wider complex: [87] Some important lessons can be drawn from the approach followed in Otway. First, Woodford J considered the scope of recovery of repair costs under both sections 126 and 138(4) – as well as under s 127 which was held not to apply. While that may have been the consequence of the way the body corporate put its case, the decision shows that by considering recovery under the various tools under the Act, rather than just on the basis of title, fuller account can be taken of the causes of the damage and, therefore, of the bases on which costs can be allocated. For example, a number of the reasons identified by Woolford J for deciding the major costs should remain with the body corporate rather than borne by individual unit owners – such as the role of the deck and underlying membrane in ensuring the overall weathertightness of the building and the interest of all unit owners in maintaining that weathertightness – might well have been applicable in the present case.
As noted in the commentary to section 126 by Westlaw (on-line), in relation to the Cook decision: The first principle was that the owner of the unit should bear the cost of repair to the unit. However where the issue dealt with 2 Body Corporate s73368 v Otway [2017] NZHC 3265. 3 Body Corporate S73368 v Otway [2018] NZCA 612. weathertightness, it was reasonable and “fair” to conclude that other unit owners should reasonably bear a cost in so far as the other units in the development were protected. Further, where the repair benefited the building generally (and not some unit owners more than others), then all unit owners should contribute on the basis of payment of their apportioned utility interest.
In summary therefore, when work is needed to a building element like windows, the obligation to undertake any necessary work is solely with the Body Corporate, and all unit owners in the complex are required to pay for the works calculated based on their respective unit entitlement.
The question then becomes how the levies for works are raised. Section 84 of the UTA sets out the powers and duties of the body corporate, and that includes the power to raise funds for the operation of the complex.
In this case I have reviewed the documentation filed by the parties, and I have seen nothing unusual in how these levies have been raised. Further the management of the complex based on those papers seems to be very good. The issues around window replacement have been on the radar of the Body Corporate since 2020, work was undertaken to look at options, which culminated in the Body Corporate voting in 2021 to raise $18,000.00 from each unit owner to pay for those works. That was a power the body corporate had, and Mr Morgan has not identified any areas where the Body Corporate has failed to comply with the strict processes around the raising of the levy in the UTA.
I am not at all attracted to the inference Mr Morgan presented at the hearing, along the lines that the other Body Corporate members did not understanding or having the ability to understand what they were voting on.
At the end of the day what matters is that a (significant) majority of the vote at the meeting was to raise $18,000.00 for the window works.
As I indicated at the hearing, the Tribunal will not interfere with merits of decisions that the Body Corporate make. I note the High Court decision of Singh v Boutique Body Corporates Limited [2019] NZHC 1707(1). That was a dispute between a unit owner (Ms Singh) in relation to weathertightness remediation. The High Court noted: [42] Given the strong policy of not interfering with the exercise of voting powers so long as jurisdiction and eligibility requirements are met and the case is not within s 210, there is no basis for holding that one owner owes a duty of care to other owners when voting in a general meeting. The consequence is that the owners generally must take the consequences of decisions in general meeting for better or worse. If the body corporate makes a botch of matters, the owners may be worse off and may face increased levies to put matters right, but they will not have recourse against the body corporate or each other. So, in this case Ms Singh can have no claim against the body corporate or her fellow owners for their decisions in general meeting, including any major decisions under cl 3.4 of the scheme. That includes decisions to raise scheme levies.
I note the court has referred to section 210 which is a claim for minority relief. However that is not available to Mr Morgan, because he in fact voted for the resolution (meaning he cannot apply for minority relief), and further any application for minority relief needed to be filed within 28 days of the disputed resolution.
What remains is that Mr Morgan does not agree with decisions made by the Body Corporate around the technical details of how the windows are replaced. The problem for Mr Morgan is that he needed to raise those concerns within the usual meeting process, and whether his concerns carried the day is for the Body Corporate to decide, not the Tribunal.
Furthermore, it would be expected that the high level decisions around starting the remediation process and raising levies are made at AGM or EGM levels. That has occurred here. Once the Body Corporate voted to raise the levies and start with the remediation, it would be expected that more ‘routine’ decisions around the remediation, of which there would have been many, would then be picked up and decided by the committee. That is precisely what the committee is for. That is the process that seems to have occurred here.
For completeness, I am not persuaded that the Body Corporate has not been open with the unit owners around the options for the work, I believe it has. I can also see there was also an opportunity for Mr Morgan to have met with the contractor, when any queries could have been raised.
Mr Morgan does not consider that the work that has been undertaken in the other units, is sufficient to meet the reasonable needs of the body corporate or to properly maintain the buildings. Mr Morgan considers that more of the windows should be replaced, or it should be replaced differently. I express no view on that, because I am not qualified to do so. But even if Mr Morgan was right, as the court in Singh has noted above, “If the body corporate makes a botch of matters, the owners may be worse off and may face increased levies to put matters right, but they will not have recourse against the body corporate or each other.”
The Tribunal would not support a unit owner refusing to pay levies for works to the premises, to see if the work was undertaken to a standard acceptable to that unit owner, and then upholding the unit owners decision not to contribute for those works after the fact. That approach would require the Tribunal to endorse all other unit owners paying for works first off, to then decide if the outstanding unit owners should be required to pay. That approach would not be supported as fair or legally correct.
Ultimately the Body Corporate is free to make whatever decisions it choses providing those decisions are lawful and comply with the UTA, and I consider they did on both accounts.
I will address the outcomes that Mr Morgan seeks as follows: a. That the request for the levy should be denied. i. There is no basis for the Tribunal to do this for the reasons above. The levies have been lawfully raised. b. Any interest relating to the levy application is sought to be denied. i. I will address this below. c. Any application for legal fees is sought to be denied. i. I will address this below. d. Any application for any other fees or charges relating to the application are sought to be denied. i. I will address this below. e. Any other levies or interest included in the application should be denied. i. I have addressed this above. f. Any information sought from the Chair to be provided as available by law. i. The Unit Owner has not identified any legal obligation that the Body Corporate has breached in relation to the information request. ii. I note also that Mr Morgan was critical that the contractors would not speak with him. Any contract for works will be between the contractor and the Body Corporate. There is no legal obligation that I know of that would require the contractors to engage with Mr Morgan in responding to his queries. g. Any costs incurred in this application are sought to be awarded from the Body Corporate. i. Because the Unit Owner has not succeeded in his application, I cannot order costs be paid to him. h. The resolving of any other relevant matter that might arise during the course of the proceedings. i. This is not a specific claim so I won’t address it further. i. A work order is sought to have the windows at 3/10 Angus Avenue replaced with aluminium double-glazed windows as agreed by the parties at the cost of the Body Corporate. i. This claim is dismissed for the reasons set out above. j. An order is sought to have the contract to replace the windows at 3/10 Angus Avenue with timber window frames cancelled. i. This claim is dismissed for the reasons set out above. k. Any other orders as sought in the on-line process for submitting this application. i. The Unit Owner has claimed $30,000.00. There would be no basis for such an order to be made, so this claim is dismissed.
The Unit Owners claim is dismissed.

BODY CORPORATE APPLICATION

The Body Corporate seeks an order that the Unit Owner pay $27,943.05, comprising: a. Levies of $19,252.06 (I have applied the amount on the statement of $19,521.17) b. Collection costs of $6,052.50 c. Interest of $2,138.49

Does the Unit Owner owe the levies claimed?

A unit owner must pay all body corporate levies and outgoings payable for the unit. See sections 80(1)(f) and 121(1) Unit Titles Act 2010.
The Body Corporate has determined the levies payable and unit owner's share has been calculated according to his utility interest. To be fair Mr Morgan has not disputed the calculations, he has disputed the basis for why he would liable to pay the levies as set out above.
I have applied the amount of the levies owing as set out on the Unit Owners most current statement.
The body corporate has fixed the due date for the levies to be paid, and the unit owner has not paid the levies by that date. See section 124(1) Unit Titles Act 2010. The body corporate has provided records to prove the amount claimed.

Is the Unit owner liable for interest?

If a unit owner fails to pay levies by the due date, interest accrues on the unpaid balance. A body corporate may charge interest up to 10% per annum. See section 128 Unit Titles Act 2010.
The body corporate has resolved to charge at that level on unpaid levies. The Body Corporate has proved the amount of interest owing, so the interest is ordered.

Is the Unit owner liable for costs?

Pursuant to section 124 UTA, and as resolved at meetings of the Body Corporate, the Body Corporate is entitled to recover any reasonable costs incurred by it in collecting unpaid levies as a debt due by the owner to the Body Corporate. In accordance with the judgments (of the District Court and Court of Appeal respectively) in Body Corporate 162791 v Cheah DC Auckland, CIV2014-004- 0120, 24 June 2014 and Body Corporate 162791 v Gilbert [2015] NZCA 185, the Tribunal must order that the reasonable costs incurred by the Body Corporate in recovering the levies, objectively assessed, be paid by a defaulting unit owner. I am satisfied that the costs ordered above are reasonable.
Because the Body Corporate has succeeded with the claim I have reimbursed the filing fee. Section 176(1) Unit Titles Act 2010 and section 102(4) Residential Tenancies Act 1986.

Tenancy Tribunal case 9044004 — Mould & damp in Berhampore, Wellington

Tenancy Tribunal case 9044004 — Mould & damp in Berhampore, Wellington

Order

Reasons

BACKGROUND

RELEVANT LEGAL CONSIDERATIONS

UNIT OWNERS APPLICATION

ANALYSIS

BODY CORPORATE APPLICATION

Does the Unit Owner owe the levies claimed?

Is the Unit owner liable for interest?

Is the Unit owner liable for costs?

Order

Reasons

BACKGROUND

RELEVANT LEGAL CONSIDERATIONS

UNIT OWNERS APPLICATION

ANALYSIS

BODY CORPORATE APPLICATION

Does the Unit Owner owe the levies claimed?

Is the Unit owner liable for interest?

Is the Unit owner liable for costs?