What was the outcome of Tenancy Tribunal case 9044524?

The tribunal order states: This Xiao Dong Zhou must pay Body Corporate 401803 $43,358.03 immediately,

How much money was awarded in case 9044524?

Verified claim lines are listed on this page.

What type of tenancy dispute was case 9044524?

The primary dispute was Unit Titles.

Where can I read the official tribunal order for case 9044524?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/9261464-UTA_Tribunal_Order.pdf.

What was the outcome of Tenancy Tribunal case 9044524?

The tribunal order states: This Xiao Dong Zhou must pay Body Corporate 401803 $43,358.03 immediately,

How much money was awarded in case 9044524?

Verified claim lines are listed on this page.

What type of tenancy dispute was case 9044524?

The primary dispute was Unit Titles.

Where can I read the official tribunal order for case 9044524?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/9261464-UTA_Tribunal_Order.pdf.

St Lukes, Auckland Tenancy Tribunal Case 9044524 — Unit Titles

Order

This Xiao Dong Zhou must pay Body Corporate 401803 $43,358.03 immediately, 1 calculated as follows: DescriptionsApplicant Respondent Filing Fee Levies Body Corporate administrative fees Legal Costs $500.00 $36,615.80 $200.00 $4503.54 Total interest Total Payable $1,538.69 $43,358.03

Reasons

Both parties attended the hearing.
The Body Corporate has applied for recovery of unpaid levies, interest, costs and the filing fee from the unit owner. 1 This order corrects a typo in the earlier order dated 3.8.23 which was recalled for that purpose. It is now re-issued and the order dated 3.8.23 no longer applies.
The owner sought an adjournment of the hearing.

Should an adjournment be granted?

Prior to the hearing today, the owner made an application to adjourn. This was declined but the owner advanced further grounds at the hearing today in support of her repeated request for an adjournment.
Most of the application relates to unpaid remediation levies. The relevant resolutions were passed at an August 2022 EGM. The owner says the completion date of the works has been extended a number of times and that the levies were meant to be the total amount for completion of the work. She says the work has not however been completed and that more cost is involved. The matter has caused significant upset to her as she feels her life is on hold, waiting for the work to be completed.
She wants an adjournment until after the next AGM, to be held on 29 August 2023. She claims she only received the Body Corporate’s submissions for the hearing today a few days ago, however she accepted she was served with the application itself.
I decline the further request to adjourn the matter. The owner has had adequate time to prepare a reply to the application. Further, the levies relate to an historic resolution, which was duly passed and has not been challenged by the owner by way of any formal process. The fact she does not agree with the resolution and is upset the work is taking longer to complete and could be more expensive are not grounds to adjourn the matter today.
The owner will need to voice her concerns about ongoing costs and delays at the upcoming AGM. That is the appropriate venue for her to raise those matters.

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 the unit owner's share has been calculated according to their utility interest.
Most of the levies relate to remediation works, as noted above. The owner voted against those levies at the EGM, but the resolution was passed anyway and the levies are due and payable. Indeed, the owner even said at the hearing today that she has always said she would pay the levies. Her issue is she wants to first know what the final completion date /overall cost will be.
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 s 128 Unit Titles Act 2010.
The Body Corporate has resolved to charge interest at 10% per annum on unpaid levies. The Body Corporate has proved the amount of interest owing from the due date to the hearing date.

Is the Unit owner liable for costs?

The Body Corporate claims the sum of $4,043.54 for legal costs in relation to this matter. The unit owner does not challenge the quantum of these costs, but nevertheless the Tribunal must independently assess whether they are payable.
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 judgments (of the District Court and Court of Appeal respectively) in Body Corporate 162791 v Cheah 2 and Body Corporate 162791 v Gilbert, 3 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.
As was accurately stated by the District Court recently in Body Corporate 45131 v 88 CHI Ltd, 4 the basics of the relevant legal framework are: a) the relevant test is as set out in section 124(2) of the Unit Titles Act – the body corporate is entitled to recover “any reasonable costs incurred in collecting the levy”; and b) solicitor and client costs are a category of costs that can be recovered under this provision; and c) the task is to assess the reasonableness of the solicitor and client costs that are claimed.
Having set out that framework, the District Court then went on to review the relevant method to be applied in assessing the reasonableness of the solicitor client costs, concluding: 5 ... the essential method is as follows: a) first, ask whether the work that was done was reasonably necessary; 2 DC Auckland, CIV2014-004-0120, 24 June 2014. 3 [2015] NZCA 185. 4 CIV 2022 – 096 – 000494 [2023] NZDC 9036, at paragraph [5]. 5 At [6], citing Exuberant Ltd v Quinovic Property Management Limited [2021] NZHC 3533 and other authorities. b) second, ask whether the amount charged for the reasonably necessary work was reasonable; c) in both instances the NZLS Rules and Rule 9 in particular are prime reference points when assessing reasonableness; d) third, test the analysis against other available reference points.
At para [8], the District Court stated: 6 I make the following observations from the discussions on the cases and having regard to the way in which the methodology has been applied in the cases: (a) the exercise the adjudicator or the judge is engaged in is an objective one. The adjudicator or the judge must make a principled assessment of reasonableness against stated criteria; (b) the adjudicator or the judge must do the work required by the methodology, and in particular grapple with the available information on the specific tasks that were undertaken by the lawyers, and the amounts that were charged for them; (c) when doing that, the adjudicator or the judge must test the work and the invoicing against the realities of the legal market that we have, not an idealised or hypothetical standard; (d) the Rule 9 considerations are helpful in providing some structure to this assessment. Time expended is one of these factors but it is not the only factor; (e) if an adjustment to actual solicitor client costs is made, this should be explained with some specificity by identifying tasks that were seen to be unnecessary, or the necessary steps that were seen to have been overcharged in some way.
The Tribunal adopts the above observations as to the way in which the methodology ought to be applied in this case. Indeed, the Tribunal has no choice in that matter, because the District Court is a higher authority. Analysis and application of the law
Applying the methodology endorsed by the District Court and set out above, I have viewed the time records associated with the legal costs that are claimed. I note that the Body Corporate also submitted a copy of the relevant terms of engagement letter from its solicitors, which set out the range of change out rates for those who would be working on the matter. The terms of engagement does not set out an estimate of costs.
These documents show that: a) the work undertaken was likely similar to other applications of this nature, but still need to be checked and completed carefully, b) to save cost, various aspects of the work were undertaken and charged out by staff at very reasonable lower charge out rates, d) there appeared to be no double up between staff, and e) there were no unnecessary attendances. 6 Footnotes from the quote omitted.
Even although the work might be regarded as somewhat formulaic, consistent with similar applications of this nature made before the Tribunal, I am satisfied that all of these steps that were undertaken are required to ensure the information is correct and the relevant material completed correctly with respect to this particular case. Just because the application might be regarded as generic or similar to many other applications does not mean a rigorous approach should not be taken to ensuring that the documentation is completed correctly.
I find that the billing records disclose no inefficiencies or any inappropriate recording of time.
In relation to the rule 9.1 factors, the Body Corporate submits the total amount of the invoice is similar to the same amounts charged by it for similar work. The Body Corporate says the invoice has only recently been invoiced but there has been no challenge to the invoice itself.
Whether or not there is a conditional fee agreement in place is a rule 9.1 consideration I am required to take into account. I consider that this entails assessing whether or not the client will be required to pay the full amount of the invoices claimed, in the event the applicant is unsuccessful in claiming those costs today. The Body Corporate says there is no conditional fee agreement in place and therefore that the invoice will be paid regardless of the outcome of this application.
Finally, taking a “standing back assessment”, I am of the view that the legal costs that have been charged would, in this case, be within the standard commercial range for this sort of work.
For the foregoing reasons, I find that the actual solicitor and client costs are, in the circumstances of this case, reasonable costs incurred in collecting the levies and can therefore be recovered from the Unit Owner. I also find that the additional fee of $400 plus GST for the work spent preparing for and attending the hearing today is in this case reasonable for the work required. This sum must also be paid. The total payable for legal costs is therefore $4,503.54.
The Body Corporate also claims $508.75, being the Body Corporate Secretary debt collection charges of the specialist firm, Auckland Property Management. Once again, the Unit Owner does not challenge the quantum of this amount.
The sum claimed relates to three invoices, each of which contains the narration “debt administration fees”. According to the Body Corporate, they relate to sending out demands and reminders. Some of those communications were provided to the Tribunal.
The Body Corporate submits that the debt administration fee of $172.50 has been resolved in the general meeting minutes, but that in any event, such charges are not required to be resolved under the Act as they are an expense incurred by the Body Corporate in recovering the debt against the Respondent and are required to be paid as part of the current proceedings pursuant to s 124 and the Act.
The Body Corporate further submits: The work completed in respect to the abovementioned charges include monitoring payment of levies, noting and checking default by the Respondent, and drafting and sending reminder notices to provide the Respondent with ample opportunity to pay the overdue amounts. Each reminder sent requires the same monitoring process. The charge includes all incidental communications with the Respondent, processing and monitoring payments made.
I need to be satisfied that the fees are reasonable. I am not satisfied, based on the evidence provided in this case, that the administrative costs incurred are all reasonable. It needs to be born in mind that these are not legal costs, relating to work undertaken by solicitors, which would then be performed at hourly commercial rates of solicitors. Rather, they are, as noted on the invoices, simply administrative costs associated with sending out demands, by a specialist firm which has already been engaged, for a fee, to carry out its role for the Body Corporate.
I agree with the Body Corporate that a fee can be charged but I find that based on the material submitted in this case, a more reasonable fee for this work is $200 in total.
The Unit Owner must therefore pay $200 for the Body Corporate administrative work.
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 9044524 — Unit Titles in St Lukes, Auckland

At a glance

Tenancy Tribunal case 9044524 — Unit Titles in St Lukes, Auckland

At a glance

Claims & awards

Order

Reasons

Should an adjournment be granted?

Does the Unit Owner owe the levies claimed?

Is the Unit owner liable for interest?

Is the Unit owner liable for costs?

Topics & place

Residential Tenancies Act sections

Key findings

Frequently asked questions

Claims & awards

Order

Reasons

Should an adjournment be granted?

Does the Unit Owner owe the levies claimed?

Is the Unit owner liable for interest?

Is the Unit owner liable for costs?

Topics & place

Residential Tenancies Act sections

Key findings

Frequently asked questions