What was the outcome of Tenancy Tribunal case 9052824?

The tribunal order states: The application is dismissed.

How much money was awarded in case 9052824?

Verified claim lines are listed on this page.

What type of tenancy dispute was case 9052824?

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

Where can I read the official tribunal order for case 9052824?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/13199861-Tribunal_Order.pdf.

What was the outcome of Tenancy Tribunal case 9052824?

The tribunal order states: The application is dismissed.

How much money was awarded in case 9052824?

Verified claim lines are listed on this page.

What type of tenancy dispute was case 9052824?

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

Where can I read the official tribunal order for case 9052824?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/13199861-Tribunal_Order.pdf.

Lake Tekapo, Lake Tekapo Tenancy Tribunal Case 9052824 — Mould

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Reasons

Mr Luxon and Mr Bryant attended a hearing by video. They represent the applicant unit owners.

Counsel (Mr Baker and Mr McFadyen) represented the Body Corporate at the hearing.

Mr Luxon and Mr Bryant’s entities have applied for reimbursement of a special levy raised by the Body Corporate for repairs at the development. 1 1 There applicant and submissions are set out in detail in a Statement of Claim document dated 21-3- 2024

The applicants acknowledge that the Body Corporate properly raised the levy. They have paid the levy, following Orders by the Tribunal.

The applicants do not dispute that the repairs were required. Rather, they claim that they are not liable for the special levy because they did not benefit from the repairs. They say that the repairs substantially benefitted other unit owners in the development. The applicants rely on s126 Unit Titles Act 2010 (UTA).

The applicants have also confirmed 2 that this is not an application for minority relief under s210 UTA and does not relate to any specific resolution passed at a General Meeting of the Body Corporate.

The Body Corporate disputes the application. It says that the applicants misunderstand s126 in that, there is no requirement on the Body Corporate to apportion the repair costs. The Body Corporate also says that this application is misguided because s126 does not enable unit owners to seek reimbursement of the levy they have paid, but which they claim was substantially for the benefit of other owners. Background

The units in this Body Corporate are a mix of multi-unit blocks and standalone dwellings.

On 23 May 2019 the Body Corporate obtained a preliminary report from Hampton Jones in relation to reported weathertightness issues to a number of units. The report referred to the units in blocks. Blocks numbered 400 and 800 were deemed high risk of having weathertightness issues. The 200 and 600 blocks were identified as medium risk, and the remaining blocks were low risk.

The applicant’s units are stand alone dwellings and were deemed to be low risk of water ingress. The applicants claim that they bought these units specifically because they were aware of potential water ingress issues with the construction methodology and materials of other units.

On 10 February 2020, the Body Corporate Committee resolved to raise a levy to remediate the watertightness and structural issues identified in the Hampton Jones report. The Committee had delegated authority which was received at the Body Corporate’s Annual General Meeting dated 25 May 2019.

On 15 February 2021, the Body Corporate Committee, resolved to ratify and confirm the special levy, but only to the extent of $200,000.00. The levies were raised on the basis of utility interest under s121 UTA and payable by virtue of s124 UTA. 2 Submission dated 6 May 2025.

While the applicants now accept that the levies were validly raised, they did not pay the invoices when issued. The Body Corporate made applications to the Tribunal for payment of the levies. The Tribunal found in favour of the Body Corporate. 3

In defence to the claim for the payment of levies, these applicants argued that they should not have to pay the levy because the Body Corporate should have used s126 UTA to claim the cost of repairs from affected unit owners. In that application, the Tribunal noted: The Body Corporate had an obligation to carry out repairs and raised levies for that purpose. Section 126 provides the Body Corporate with the power to reallocate the costs if certain criteria are met. It does not provide a defence to payment of the levies in the first instance.

The applicants then made this application on 26 April 2024, claiming reimbursement of the levy on the basis that the Body Corporate has failed to reapportion the levies to those unit owners that received a substantial benefit from the repairs. 4

Res Judicata?

The Body Corporate raised a preliminary issue of whether this application has been determined by the previous claims for outstanding levies.

There is clear overlap between the two applications. However, the first applications did not consider or determine whether the Body Corporate was required to reapportion the repair costs.

This issue was explored at the hearing, and Counsel for the Body Corporate accepted that the Tribunal could determine this application. Section 126 Unit Titles Act

The issues before me are: a. Does s126 UTA create an obligation on a Body Corporate to apportion repair costs to those owners who seek a substantial benefit from repair work? b. Does s126 UTA allow unit owners to recover from the Body Corporate, if they have paid a levy for work which was substantially for the benefit of other unit owners? 3 See NZTT [2022] 9033781 4 For the purposes of this application, I do not need to decide whether other unit owners received a substantially greater benefit from the repairs than these applicants. For completeness, I note that I did not receive evidence in relation to benefit, other than an acknowledgement that only some units had physical work carried out on them.

Section 126 provides:

Recovery of money expended for repairs and other work (1) This section applies where the body corporate does any repair, work, or act that it is required or authorised to do, by or under this Act, or by or under any other Act, but the repair, work, or act— (a) is substantially for the benefit of 1 unit only; or (b) is substantially for the benefit of some of the units only; or (c) benefits 1 or more of the units substantially more than it benefits the others or other of them. (2) Any expense incurred by the body corporate in doing the repair, work, or act is recoverable by it as a debt in any court of competent jurisdiction (less any amount already paid) in accordance with the following: (a) so far as the repair, work, or act benefits any unit by a distinct and ascertainable amount, the owner at the time when the expense was incurred and the owner at the time when the action is instituted are jointly and severally liable for the debt; or (b) so far as the amount of the debt is not met in accordance with the provisions of paragraph (a), it must be apportioned among the units that derive a substantial benefit from the repair, work, or act rateably according to the utility interest of those units, and in the case of each of those units, the owner at the time when the expense was incurred and the owner at the time when the action is instituted are jointly and severally liable for the amount apportioned to that unit. (3) Despite subsection (2)(b), if the court considers that it would be inequitable to apportion the amount of the debt in proportion to the utility interest of the unit owners referred to in that paragraph, it may apportion that amount in relation to those units in the shares as it thinks fit, having regard to the relative benefits to those units. Applicant Position

The applicants maintain that the Body Corporate has failed in its duty to invoke s126 UTA.

They say that once the threshold of substantial benefit is met, s126 is triggered and the Body Corporate is required to reapportion the levy to those owners who received a substantial benefit. The applicants also referred extensively to the decision in Body Corporate 199380 v Cook [2018] NZHC 1244 as providing guidance for the apportionment of costs under s126.

The applicants have not tabled any resolution for consideration/voting at a meeting of the Body Corporate seeking reapportionment of the costs. Mr Luxon’s assertions throughout the hearing, were that it was “so obvious” that he should be able to recover his money. Body Corporate Position

The Body Corporate position was also succinct. It says that s126 does not create a mandatory obligation to reallocate repair costs after a levy has been raised (or to allocate repair costs before a levy is raised).

Counsel referred to the specific wording of s126(2) which provides that any expense or cost “is recoverable” from the owner who receives a substantial benefit from that work.

The Body Corporate says that “is recoverable” means that the Body Corporate can recover from the owners specified in that section, not that it must.

It also says that s126 provides a mechanism for a Body Corporate to pursue specified owners, it does not create a mechanism for aggrieved unit owners to seek reimbursement of levies already paid. Analysis & Conclusion

The wording of s126 UTA is clear. The section provides the Body Corporate with a mechanism for recovery, it does not create any obligation or duty on the Body Corporate to recover costs from particular unit owners.

Put simply “is recoverable”, cannot be read as “must recover”.

The applicants referred extensively to the decision in Body Corporate 199380 v Cook. That decision is not directly relevant to the facts of this case 5 . However, in that decision, the Court is clear, when it states at [94]: “The language of both ss 126 and 138(4) is permissive, not mandatory: the expense incurred in repairs is “recoverable” not “shall be recovered.”

Further, there is nothing in s126 which provides for, or allows, a dissatisfied owner to recover levies from the Body Corporate when repair costs have not been apportioned in the manner that owner thinks is appropriate.

The Body Corporate resolved a levy payable under s.121 and recoverable under s.124. The applicants could have tabled a resolution for reapportionment of the repair costs based on their view of benefits received by various owners or groups of owners. They have elected not to.

Had they sought a resolution and been unsuccessful, they may have had a claim for minority relief under s210 UTA. Any such claim would have had to seek reapportionment of the entire repair costs. 6 In that scenario, I am inclined to agree with Counsel for the Body Corporate that the application would be above the financial jurisdiction of this Tribunal. 5 Cook was an appeal seeking clarification of the relationship between s126 and s138 UTA. 6 There were other owners who, on Mr Luxon and Mr Bryant’s view of the case did not derive a benefit from the repairs.

In summary, the Body Corporate properly raised levies which have now been paid. Section 126 does not compel the Body Corporate to reapportion the repair costs, nor does is create a mechanism for a unit owner to bring an action against the Body Corporate. The application is dismissed.

Costs are reserved. a. The Body Corporate must make any submissions in respect of costs within 7 days (by 5pm on 12 May 2026). b. The applicants must make any submissions in reply in relation to costs by 5pm on 19 May 2026. c. I will then determine costs on the papers.

Reasons

Mr Luxon and Mr Bryant attended a hearing by video. They represent the applicant unit owners.

Counsel (Mr Baker and Mr McFadyen) represented the Body Corporate at the hearing.

The applicants acknowledge that the Body Corporate properly raised the levy. They have paid the levy, following Orders by the Tribunal.

The units in this Body Corporate are a mix of multi-unit blocks and standalone dwellings.

Res Judicata?

The Body Corporate raised a preliminary issue of whether this application has been determined by the previous claims for outstanding levies.

There is clear overlap between the two applications. However, the first applications did not consider or determine whether the Body Corporate was required to reapportion the repair costs.

This issue was explored at the hearing, and Counsel for the Body Corporate accepted that the Tribunal could determine this application. Section 126 Unit Titles Act

Section 126 provides:

The applicants maintain that the Body Corporate has failed in its duty to invoke s126 UTA.

Counsel referred to the specific wording of s126(2) which provides that any expense or cost “is recoverable” from the owner who receives a substantial benefit from that work.

The Body Corporate says that “is recoverable” means that the Body Corporate can recover from the owners specified in that section, not that it must.

Put simply “is recoverable”, cannot be read as “must recover”.

Tenancy Tribunal case 9052824 — Mould in Lake Tekapo, Lake Tekapo

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Tenancy Tribunal case 9052824 — Mould in Lake Tekapo, Lake Tekapo

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Residential Tenancies Act sections

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Claims & awards

Order

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Res Judicata?

Topics & place

Residential Tenancies Act sections

Key findings

Property management

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