Published tribunal order
Tenancy Tribunal case 9047524 — Tenancy dispute in Te Aro, Wellington
Decided 23 Jul 2024 · Published 23 Jul 2024 · Application 9047524
Landlord favoured
- Costs
- Interest
- Unit Titles
Order
- Leeanne Frances Fisher must pay Body Corporate 85172 $18,087.45 immediately, calculated as follows: DescriptionsApplicantRespondent Section 124 & 127 costs including GST and disbursements $16,553.54 Appearance at hearing ($200.00 per hour x 1 hour plus GST) $230.00 Filing Fee$500.00 Interest: 1 October 2021 to 19 October 2023 $803.91 Total award$18,087.45 Total payable by Respondent to Applicant $18,087.45
Reasons
- The hearing was held by teleconference. Mr MacFadyen attended as the representative for the Body Corporate. Ms Fisher attended as the Unit Owner along with her legal counsel, Mr Dean.
- The Body Corporate has applied for recovery of unpaid levies, interest, costs and the filing fee from the Unit Owner.
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 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. See section 124(1) Unit Titles Act 2010. The Body corporate has provided records to prove the amount claimed.
- Since filing the application, the Unit Owner has paid her levies.
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 section 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 1 October 2021 to 19 October 2023.
Is the Unit Owner liable for costs?
- 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 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.
- More recently, the District Court in Body Corporate 85928 v Sherry [2022] NZDC 11535, Body Corporate 45131 v 88 Chi Limited [2023] NZDC 9036 and Body Corporate 346799 v Gueirard & Vu [2023] NZDC 19645 endorsed the body corporate’s recovery of full solicitor/client costs under section 124 UTA.
- In this instance, the Body Corporate has provided a breakdown of costs incurred. I am satisfied that the costs ordered above are reasonable.
- The costs awarded include the costs incurred for the enforcement of the Tribunal’s previous order on Application 9030841.
- The Unit Owner expressed frustration at what she saw as deficiencies in the operation of the Body Corporate. That is not a defence to the Unit Owner’s obligation to pay the levies when they fall due.
- The Unit Owner disputes the additional collection and legal costs as unreasonable and unfair. She considered the matter was resolved once full payment of the judgement debt and enforcement costs were paid and the property was withdrawn from sale.
- The Body Corporate representative explained that the further costs sought do not include costs in the previous Tenancy Tribunal Order itself or scale costs awarded up to and included in the Sale Order sealed by the High Court at Wellington on 7 June 2023. The costs were incurred by the Body Corporate for the period of 15 September 2021 to 14 November 2023, in bringing statutorily authorised proceedings for the recovery of the Tribunal Order sum.
- I find that am not prevented by the fact that the property was withdrawn from sale from hearing and determining the Body Corporate’s amended claim concerning the issue of the costs claimed.
- Having reviewed again the communications and supporting evidence I am satisfied due process was completed and the costs claimed are reasonable and a consequence of the Unit Owner’s failure to pay body corporate levies as due.
- The need for subsequent Tribunal activity and resulting cost was a direct consequence of the Unit Owner’s failure to remedy the debt at that time and she should have been aware that further costs would follow.
- Following the judgments of the District Court and Court of Appeal set out above, the Tribunal must order that the reasonable costs incurred by the Body Corporate in recovering the levies be paid by a defaulting Unit Owner.
- The Tribunal should order the full legal costs reasonably incurred for levy recovery. That means the Tribunal has limited scope to reduce costs. For the Tribunal to reduce costs, the costs sought must be demonstrably unreasonable.
- The work that costs are claimed for in this case was reasonably necessary. The amount the Body Corporate’s law firm charged for the necessary work was reasonable in that it could not be criticised as excessive in terms of the New Zealand Law Society rules of conduct.
- Even although the work might be regarded as somewhat formulaic, I am satisfied that all 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.
- In reviewing the time sheets in light of the work required, the costs charged are not “clearly exorbitant”. The costs are not demonstrably unreasonable.
- I find that there were no inefficiencies or any inappropriate recording of time.
- I am of the view that the legal costs that have been charged are reasonable. Therefore, the full solicitor client costs should be awarded.
- Having been satisfied that the costs charged by counsel for the Body Corporate are reasonable and actually incurred in collecting the unpaid levy, I do not have any discretion to waive any of those costs in favour of defaulting Unit Owner.
- As 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.