Published tribunal order
Tenancy Tribunal case 9058664 — Unit Titles in Burbush, Hamilton
Decided 2 Apr 2025 · Published 2 Apr 2025 · Application 9058664
Mixed / unclear
- Unit Titles
Order
- Joseph Rajend Prasad, Caitlin Prasad must pay Body Corporate 467784 $41,475.77 immediately, calculated as follows: DescriptionsApplicantRespondent Unpaid levies to 31 January 2025 Interest on unpaid levies to 31 January 2025 Interest from 01 February 2025 to 02 April 2025 Body Corporate legal costs Reimbursement of filing fee $26,143.68 $2,755.14 $439.20 $11.637.75 $500.00 Total award$41,475.77
Reasons
- Mr Gibbons appeared for the Body Corporate, accompanied by Mrs Kennedy, the chairperson of the Body Corporate committee. Mr Prasad appeared for the owner.
- The Body Corporate has applied for recovery of unpaid levies, interest, costs, and the filing fee from the unit owner.
- On 20 October 2023, the unit owner filed an application seeking to challenge their levies obligation. The dispute concerned the interpretation of a Deed of Settlement (“DOS”) entered into by the parties on or about February / March 2021 regarding levies. On 15 August 2024, the Tribunal dismissed the owners claim. (NZTT 9048164).
- At the hearing, the Body Corporate sought to raise a levies claim. However, the Tribunal declined to address the claim as the Body Corporate had not filed an application.
- The owner sought a rehearing, which was declined.
- On 23 September 2024, the Body Corporate filed a claim for unpaid levies of $63,291.43, interest of $3,499.19 as of 31 January 2025, costs, and reimbursement of the filing fee.
- The application was set down for a remote hearing on 02 December 2024. On that date, the hearing was adjourned for an in-person hearing.
- In the adjournment order, the Tribunal directed the Body Corporate to produce evidence confirming that it had instructed Mr Gibbons to act in these matters and had resolved to pursue these claims against the owner.
- Both parties have filed submissions for this hearing. Mr Prasad for the owner on 22 November 2024. The Body Corporate on 22 November 2024 and 12 February 2025. Mr Prasad also provided further written submissions at the hearing. The Body Corporate reviewed these submissions and wished the matter to proceed without delay.
- The Body Corporate has produced a statement from Ms Kennedy setting out details of the claim. Ms Kennedy confirmed that since the filing of the application, the owner had settled $40,000.00 of the debt, leaving an outstanding balance of $26,143.68, with interest of $2,775.14 as of to 31 January 2025.
- Mr Gibbons stated that interest on the unpaid levies accrues at the rate of $7. 32 per day.
- The previous adjudicator also directed that details of any legal costs sought be provided at the hearing, as opposed to being dealt with on the papers. In this case the legal costs claimed by the Body Corporate total $11,701.25.
- As directed the Body Corporate has provided minutes of an extra ordinary general meeting (“EGM”) held on 27 June 2023 in which they state a resolution was passed instructing Mr Gibbons to act in these matters and confirming that the BC wished to pursue Mr Prasad for unpaid levies. Owner’s submissions
- At paragraph [5] of the owner’s submissions dated 22 November 2024, Mr Prasad stated: “5. The Respondents file their submissions in three parts. a. Firstly, that the Parties entered into a Deed of Settlement. This Deed of Settlement expired on 31 May 2022 and the Parties subsequently agreed to extend this Deed of Settlement to 31 May 2023. The Respondents will establish the basis for this extension and say that if the Deed of Settlement in its entirety was extended then the Body Corporate is bound by the terms as negotiated in that Deed of Settlement. b. Secondly the Respondents will further claim that upon expiry of the Deed of Settlement on 31 May 20243 the Body Corporate must revert back to the single levy system as directed by a previous Tribunal Order on 21 February 2021. c. Finally, the Respondents will establish and counterclaim that all levies up to 31 May 2023 must be raised as per the Deed of Settlement and that by further failing to connect PU24’s utilities to the Body Corporate network is a breach of the Tribunal order dated 21 February 2021 and still continues to operate a dual levy system. The Respondents claim that the raising of levies contrary to the explicit terms as stated in the Deed of Settlement is ultra vires. Simply put the Body Corporate is acting beyond its power and is doing so without the required legal authority.”
- The owner argues that the levies claim has arisen out of a deed of amendment to the DOS which has not been recorded in writing and was not legally valid.
- The owner submits the Body Corporate is not entitled to claim the portion of the levies relating to utilities, as it has yet to actually provide the utilities in question.
- The owner submits that the EGM held on 27 June 2023 had not been conducted in accordance with the provisions of the Unit Titles Act 2010 (“UTA”) and Unit Title Regulations 2011, as they were not notified of the meeting, did not receive an agenda, and were not advised of the outcome. On that basis, they submit the meeting was ultra vires, and that no valid resolution for representation or pursuing the claim had in fact been made.
- The owner referred to the heavy redaction of the minutes, raising doubts about whether the EGM took place. The owner suggested the redactions may hide discussions related to the DOS, which should have been disclosed. The owner described the meeting as one between like-minded individuals with a common agenda, deliberately excluding them.
- The owner also challenges the Body Corporate’s charging of interest and recovery costs, stating no resolutions authorising it to do so had been passed under the UTA or Regulations. Body Corporate’s submissions
- The Body Corporate argues that all of the substantive issues raised by the owner concerning the raising of the levies were addressed in the Tribunal’s previous decision NZTT 9048164, and that the owner was attempting to revisit matters already decided.
- The Body Corporate denied that the levies had been improperly raised.
- Mr Gibbons stated that the Body Corporate does not rely on the Deed of Settlement, any amendment of the Deed, or any extensions.
- Mr Gibbons stated there was no oral extension of the Deed but acknowledged that the previous Tribunal had found the DOS to have been extended covering operational levies (excluding capital improvement levies) until 31 May 2023.
- Mr Gibbons referred to the minutes of an AGM on 20 September 2024, where the Body Corporate had resolved to instruct its manager to carry out debt control and collection including a provision charging 10% for late payment of levies. He also stated that all notices issued included references to interest.
- Mr Gibbons stated that Ms Kennedy had attended the EGM on 27 June 2023, which she confirmed. Mr Lal, another owner, was at the meeting, and also present at the hearing. Mr Gibbons acknowledged the redactions had been made for legal privilege, but maintained nonetheless that it was clear from the minutes that he had been instructed to act, and that the Body Corporate had authorised the pursuing of the unpaid levies. Mr Gibbons stated further that the owner had on several occasions acknowledged his involvement on behalf of the Body Corporate.
- Mr Gibbons stated that for a Body Corporate to meet its operational and maintenance responsibilities to all unit owners , that owners with disputes must meet first their levy obligations before seeking resolution of disputes, referred “pay now , argue later”, a principle he stated had been acknowledged by the Court.
- Mr Gibbons stated if the owner wished to pursue the Body Corporate’s compliance with the UTA and Regulations concerning the raising of levies, the conduct of meetings, charging of interest, or recovery of costs, they should file an application with the Tribunal and pay a filing fee, which they have not done. Law
- Section 80 of the Act states, subject to section 105 (rehearings) and 117 to 120 (appeals), that every order of the Tribunal shall, unless expressed to be an interim order made under section 79, be final and binding on all parties to the proceeding.
- Section 80 reflects the common law doctrine that once a matter is resolved at cannot be revisited. The principle remains good law and was referred to by the Court in Muir, Bradbury, Peebles, and Maud v Commissioner of Inland Revenue [2015] NZHC 792.
- Under section 80(1)(f) and 121(1) of the UTA a unit owner must pay all Body Corporate levies and outgoings payable for the unit.
- Under section 128 of the UTA, 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.
- Pursuant to section 124 of the 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. Decision
- Despite the owner submitting that the matters raised have not been dealt with, having reviewed the previous decision, submissions, and heard from the parties, the issues raised by the owner concerning the levies have already been addressed.
- I agree with the Body Corporate that if the owner wishes to challenge how the levies are apportioned, the conduct of Body Corporate meetings, charging of interest, recovery of costs, or any other compliance issue, they should file an application with the Tribunal and pay a filing fee.
- Despite the redacted minutes, there is sufficient evidence that Mr Gibbons was properly engaged and that the Body Corporate intends to pursue the levies claim against the owner.
- I am satisfied that the Body Corporate has properly raised the levies. The body corporate has determined the levies payable and unit owner's share has been calculated according to their utility interest.
- 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 and has provided records to prove the amount claimed.
- In this case I am satisfied the body corporate has resolved to charge interest at 10 % per annum on unpaid levies. The Body Corporate has also proved the amount of interest owing from the due date to the hearing date.
- The owner opposes legal costs and further argues that the Body Corporate maintain a fund for these purposes and that costs should be met from that. In my view the Body Corporate has been successful and is entitled to seek costs directly from the owner.
- However, the Tribunal cannot award speculative costs associated with post hearing attendances. Accordingly, I reduce the claim by 0.5 hours (see daily rate Category 1A proceedings District Court Rules 2014). I am satisfied that the balance of the costs ordered, which include hearing time, are reasonable.
- As the Body Corporate has succeeded with the claim, I have reimbursed the filing fee. Section 176(1) of the UTA and section 102(4) Residential Tenancies Act 1986.