Published tribunal order
Tenancy Tribunal case 9041484 — Unit Titles in Karori, Wellington
Decided 24 Apr 2024 · Published 24 Apr 2024 · Application 9041484
- Unit Titles
Order
- The Tribunal declares that the process applied by the Body Corporate in relation to the fixing the budget and levies at the 6 December 2022 AGM was flawed, and the resolution passed fixing the budget and levies was wrong.
- Body Corporate 60141 is to pay [The party] the sum of $3,300.00 immediately, being the filing fee paid to commence these proceedings.
Reasons
- The Tribunal must consider an application filed by a unit owner against the Body Corporate. Things have not gone well in relation to governance at the body corporate, as set out in the previous order of the Tribunal from 23 August 2023, and in this order below.
- This is a small body corporate, with four units. The applicant, Mr Collins, owns one of those units, that unit has an ownership interest equal to 53%. What that means is that Mr Collins gets one vote like every other principal unit owner for ordinary or special resolutions, but if any particular resolution is passed, Mr Collins could request a poll, and given his ownership interest he would succeed with ordinary resolutions at least (given ordinary resolutions need 50% of the vote to pass).
- As set out in the previous Tribunal order, Mr Collins requested that an EGM be convened, but the Chair refused to schedule one. I set out what the relevant law around requests for EGM’s was, and the hearing was then adjourned. An EGM was then convened on 13 September 2023. I can see from the minutes that the resolutions that Mr Collins wanted the Body Corporate to consider were considered (or at least they appear to have been), but Mr Collin’s was not successful in them – he was outvoted. That means those resolutions were not passed.
- Because the resolutions were not passed, then Mr Collins did not have the option of requesting a Poll (see section 99(1) of the Unit Titles Act 2010).
- While the outcome of the EGM was not what Mr Collin’s was hoping for, I am satisfied that the Body Corporate complied with the requirements of the Act, so the decision of the Body Corporate must be respected.
- The matter has now returned to the Tribunal to address the remaining issues for Mr Collins. Following discussion at the hearing today, there was one particular issue which is outstanding and of relevance. That relates to the striking of the levies and the relevant budget at the 6 December 2022 AGM.
- The minutes have been provided, and record that only two people attended that meeting, Mr Collins, and the body corporate manager. Of course, the body corporate manager has no vote, and would have been the person taking the minutes. Mr Collins challenges the accuracy of those minutes.
- In any event, the minutes do record that the annual budget was passed by majority, with “one against and wanting $42,500” – that vote against was Mr Collins. Mr Collins wanted a lower budget.
- Mr Collins states that at the meeting he requested a Poll of that vote. Mr Collins provided at the hearing today an email to the body corporate manager, Ms Walsh also dated 6 December 2022, in which he says: In regards to today’s AGM meeting, I note that when it came to increasing the budget, I voted against this motion, I’ve been requested a poll vote. You informed me that this process was not eligible for a poll vote.
- Based on Mr Collins’s evidence at the hearing today, and given the email, I accept that he did request a Poll, and it is not at all clear why that did not proceed.
- However given that Mr Collins has a 53% ownership interest, I accept that if a Poll had been undertaken, then Mr Collins would have succeeded, and that means that the outcome from the resolution for the budget and the levies is that it would not have been passed. The end result of that would have been that the body corporate would have needed to return to the grindstone, and ideally work together to determine what the budget and levies for the coming year would be, and then a further vote on that would have been necessary, and hopefully, if the parties had previously reached an agreement, then the vote would pass.
- The end result is that if the vote in 2022 was wrongly passed, then that must mean that any levies that were collected based on that would also have been improperly invoiced. But ultimately the levies were invoiced, and as I noted at the hearing today, all unit owners would have been in the same position, having paid levies based on their contribution calculated from the budget. If Mr Collin’s was right, then that means all unit owners would have paid more than they needed to.
- I am advised today that the next AGM is planned for the next month, which is timely. But one of the particular concerns that Mr Collins had was that money was raised for roofing works, that have not proceeded, and so the money raised is in the body corporate’s bank accounts. In practice, that means there is a credit held by the body corporate concerning those funds that have been raised from all unit owners, and no doubt at the next AGM in the next month or so, the body corporate will work out what needs to happen with those credits, in determining the funding for the body corporate over the coming year.
- However, it is fair that the Tribunal issue a declaration confirming the deficiency with how the budget and levies were approved in 2022, and that is declared above.
- Otherwise Mr Collins has been successful in his application to the Tribunal, meaning he is entitled to be reimbursed the filing fee paid to commence this proceeding, which is $3,300. I record for the avoidance of doubt, that because Mr Collins has been the successful party, when funds are raised in to pay the filing fee, no contribution should be sought from Mr Collins for that.