Published tribunal order
Tenancy Tribunal case 9048004 — Tenancy dispute in New Lynn, Auckland
Decided 21 Mar 2024 · Published 21 Mar 2024 · Application 9048004
Landlord favoured
- Costs
- Unit Titles
Order
- Thompson Rose Investments Limited must pay Body Corporate 472616 $1,455.00 immediately, calculated as follows: DescriptionsApplicantRespondent Legal costs & filing fee$1,156.00 Appearance at the hearing ($260.00 per hour plus GST) $299.00 Total award$1,455.00 Total payable by Respondent to Applicant $1,455.00
Reasons
- A hearing was held by teleconference on 6 March 2024. Mr Grobler appeared as Counsel for the Body Corporate and Ms Thompson attended for the Unit Owner.
- The Body Corporate originally applied for recovery of unpaid levies, interest, costs and the filing fee from the Unit Owner.
- Since filing the application, the Unit Owner has paid the outstanding levies.
- The Body Corporate seeks the remaining legal costs including the filing fee and attendance at the hearing.
- The matter was briefly adjourned for the Unit Owner to provide a copy of communications referred to during the hearing. Upon receipt of this information, the hearing was closed.
Is the Unit Owner liable for costs?
- Pursuant to section 124 Unit Titles Act 2010, 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.
- Ms Thompson outlined the background to the dispute. She says they were in communication with the Body Corporate regarding the invoices due and made reference to their email of 5 December 2023. In this email they confirmed payment of $399.37 made on 30 November 2023 for MQ Parent unit #25 and payment of $7,760.06 made on 1 December 2023 for MQ1 apartment #806, as per the statement balance at 30 September 2023. However, they noted they would pay the remaining levy following an upcoming EGM which Mr Glen Kwok (Director) previously advised would be held to address the significant increase for the June – Sept 2023 levy. They disputed the legal fees incurred with lodging the Tenancy Tribunal application, as they did not consider all reasonable efforts were made to contact them before incurring significant additional costs. They expected a phone call or txt to be the “next step, or first step” to be completed before engaging lawyers to file an application.
- Ms Thompson further submitted that a follow up email was sent on 3 March 2024 as no response had been received with regard to the legal fee dispute.
- In response, Counsel for the Body Corporate, argued that the costs incurred were reasonable. Counsel noted that there had been a number of invoices outstanding since 20 August 2022 and that if it were not for the proceedings the Unit Owner would not have paid. Counsel further noted that the Body Corporate had responded to the Unit Owner’s email of 5 December 2023 by email on 4 January 2024.
- I find that the Unit Owner was aware or ought to have been aware of the overdue levies. Ultimately, the onus remains on the Unit Owner to pay levies when due.
- I am satisfied that all invoices and communication in respect of the levies and charges were sent to the Unit Owner’s nominated address registered with the Body Corporate.
- The Body Corporate instructed Pidgeon Judd to file proceedings in the Tenancy Tribunal to recover levy arears, interest, and costs from the respondent. But before doing so, in an attempt to give the Unit Owner a final opportunity to make payment, thereby avoiding these proceedings, the Body Corporate administration wrote to the Unit Owner on 27 June 2023 placing them on notice that proceedings would be pursued if the debt were not settled, thereby incurring a further cost of $500.00 filing fee and other expenditure necessary to recover the debt. No payment was received. As at the date that the application was filed, being 19 October 2023, a total amount of $6,226.35 was owing.
- The fact remains that the Unit Owner has defaulted in payment of those levies that fell due at the material time. The provisions of the UTA are clear and the Unit Owner was not entitled to withhold payment of these properly raised levies.
- I am unable to accept the Unit Owner’s submissions as the basis not to accede to the Body Corporate’s claim for legal fees.
- I accept the submission of counsel for the Body Corporate that the Unit Owner’s email request of 5 December 2023 was made after this application was filed and was properly seen as made in the context of this litigation before the Tribunal. That being so, the resulting costs are incurred in connection with a Tribunal claim to recover the levy and recoverable under section 124.
- The Tribunal has no discretion to waive the reasonable solicitor-client’s costs incurred by the Body Corporate (when proved) in pursuing this claim before the Tribunal.
- Counsel has provided a breakdown of the costs incurred and I am satisfied that the costs ordered are reasonable.
- As the Body Corporate has succeeded with the claim, I have also reimbursed the filing fee. Section 176(1) Unit Titles Act 2010 and section 102(4) Residential Tenancies Act 1986.