Published tribunal order
Tenancy Tribunal case 9050804 — Leaks in Birkdale, Auckland
Decided 19 May 2025 · Published 19 May 2025 · Application 9050804
- Leaks
- Unit Titles
Order
1
- [The party] and Hong Lin must pay Body Corporate 187230 $20,282.41 immediately, calculated as follows: DescriptionsApplicant Levies$8,484,32 Costs: Legal Body Corporate $9,665.90 $920.00 Interest to 9 April 2025 Filing Fee $712.19 $500.00 1 This order replaces the order issued in this matter on 11 April 2025, which has been recalled and reissued due to a typographical error in the calculation of the amount to be paid by the unit holders to the Body Corporate.
- The application for [The party] for a rehearing of 9050804 (Tribunal decision dated 17 December 2024) is dismissed.
Reasons
- [The party] and Hong Lin are the joint owners of Unit/Flat 1, 61 Birkdale Rd, Birkdale, Auckland (the unit). I refer to them in this decision as the applicants.
- The Body Corporate was represented today by Counsel, Mr Baker and Ms Donovan.
- The background to this matter is as follows: a. On 14 February 2024, [The party] filed an application against the Body Corporate, alleging a breach by the Body Corporate of its duties (I refer to this as the applicant’s application) 2 . b. On 14 May 2024, the Body Corporate filed an application against the applicants for unpaid levies in respect of the unit. c. On 5 July 2024, there was a lengthy case management conference held with respect to the applicant’s application. Orders were made for more information to be provided by the parties and the issues were summarised. I reminded the parties then that: “The parties should be aware that the obligation they carry is to prove what they say. Expert reports, videos, photos and documents are often useful evidence to assist the Tribunal in determining what took place. Ms Wu mentioned she is able to rely on expert evidence and it would therefore be useful, for example, for her to call that party as a witness.” d. On 2 August 2024, Adjudicator Maher heard the application for levies and made an order that the applicants were to pay $11,810.61 for levies, costs and interest. e. On 2 August 2024, the applicants applied for a rehearing of the levies application and on 25 September 2024, their application was upheld. When Adjudicator Maher upheld the application for a rehearing, she directed the application be set down before me, as the adjudicator hearing the applicant’s application. f. On 16 December 2024, the applicant’s application came before me. I was not informed about the other proceedings. So I did not hear the levies application then. 2 For present purposes, even though the application was only filed by Ms Wu, given her submission that Hong Lim had also filed the application, I treat the application as having been filed by both owners. g. On 17 December 2024, I issued a decision dismissing the applicant’s application. I found the claim had not been proven. h. The applicants then applied for a rehearing and on 23 December I set down that application for a rehearing.
- Before me now are: a. The application for a rehearing of the applicant’s application. b. The Body Corporate’s application for levies, interest and costs.
- I deal first with the application for a rehearing of the applicant’s application and then with the Body Corporate’s application. The applicant’s application for a rehearing
- At issue in the applicant’s application was whether faulty stormwater drains caused damage to the applicant’s unit and if so, whether the responsibility to maintain those drains was that of the Body Corporate. This also raised the question of whether the stormwater drains serviced more than one unit.
- As a result of what they claimed to be the Body Corporate’s failure, the applicants claimed remediation losses and other costs such as loss of rental and legal costs.
- The Body Corporate’s position was: a. It accepts it had responsibility to maintain the stormwater drains only where they service more than one unit. b. It says that the water ingress and flooding incidents were caused by blocked gutters or downpipes on the applicant’s property, draining to a soakhole located to the rear of her property, which has likewise blocked, causing the water to back up and then flood the applicant’s property. c. It also claims that inadequate water proofing on the applicant’s unit has caused the damage she claims to have suffered. d. It says the damage that was sustained to the property has all occurred in the downstairs unit. This was not consented as a separate residential area. It was consented only for a rumpus and a garage. It therefore says this is an unconsented area.
- The background facts are set out comprehensively in the decision of 17 December 2024, and I do not repeat them here. Essentially, there were two flooding incidents and the applicants contended that the flooding arose as a result of the Body Corporate failing in its duty to maintain the stormwater drains.
- I found that the applicants had failed to discharge the burden of proof.
- At the commencement of the hearing, I informed Ms Wu that this was her opportunity to present all submissions she wished to make in relation to the application. As with the prior hearings, she had the assistance of an interpreter.
- In the application for a rehearing, the applicants claim that: Witnesses not called to give evidence a) In my order, I had noted there was no expert witness called to give evidence as to their opinion why the damage occurred. b) Ms Wu now claims she had two key witnesses ready to give evidence that day and she submits that the “tribunal did not call these witnesses”. The witnesses were Peter Jiang from API Property Service and Ren Zhang, a facility manager from a “Council-affiliated charity”, familiar with public drainage systems. Ms Wu claims that they could have given evidence that the root cause of the issue was the Body Corporate’s failure to maintain the stormwater drains and that the drains were servicing more than one unit. She submitted that Mr Jiang had told her verbally that the stormwater drain under her property served two units. She accepted he did not say this in his written report. She said during the hearing that Mr Zhang provided no written report, but that he is an experienced employee at Auckland Council and could give evidence about the stormwater drains. She accepted that she had not raised with me during the hearing that she wanted to call either witness. She said: “I thought the Court would call them”. By “call”, she meant telephone. These were therefore witnesses that she did not bring to the hearing, nor advise me that she intended to call as witnesses, despite me having raised this very issue in the case management conference. New evidence c) Ms Wu claims there is now new evidence, not available at the prior hearing, that proves her claim. In her written application for a rehearing, she put the argument as follows: “After the hearing, further analysis of City Council drainage blueprints, ULS Reports and CKL Memo revealed critical evidence:
- The underground stormwater pipes serving my property are blocked, damaged, or abandoned, which prevents proper water drainage.
- My property’s three downpipes (DPs) are fully functional; however, water cannot drain due to the blocked underground pipes.
- The lack of soakholes or manholes, as noted in the ULS Report and CKL Memo, exacerbates the issue. If no adequate capture of drive way runoff and the current downpipes lack capacity, upgrading them would be the Body Corporate’s responsibility under the Unit Titles Act. Supporting Evidence: •Exhibit A: ULS Report — Confirmation of damaged and disconnected underground pipes with photos (1-4) •Exhibit B (1&2): Photographic and video evidence showing pooling water at the base of my property due to drainage failure. •Exhibit C: City Council Drainage Blueprints — Indicating the underground stormwater system’s layout. •Exhibit D: CKL Memo states the current.” d) The focus of this aspect of her submissions during the hearing related to other allegedly “new evidence”. This new evidence was: • Item D 26, 3 a property assessment report from “DY Homes NZ Ltd”, which says the southern driveway’s drainage system serves both units, making it part of the shared infrastructure maintained by the Body Corporate. The author of the report was described by Ms Wu as a developer. The report is dated 3 March 2025, so it post-dates the hearing. • Item D 27 and item D 28, being invoices from Jack Property Maintenance Ltd relating to water-proofing works and upgrading downpipes that were undertaken in 2011 by the prior owner. There was no explanation as to why these could not have been obtained previously. • Item D 29, being Ms Wu’s own “overview” of a visit SW Drainage paid to her property. She submitted that she had not had a report from SW Drainage so produced her own summary of its visit. This is not an independent report, it is simply a document prepared by Ms Wu to bolster her case. Legal Invoices e) Ms Wu had claimed legal costs. Even though I did not uphold her claim, I had noted in my decision that some of the attendances were for unrelated work. 3 This and the following documents were all handed up during the application for a rehearing. Even had I upheld the claim, there would have been that problem with the invoices. f) Ms Wu submits that her then lawyer put her wrong and gave her advice about subdividing the property work which she says “was never my intention”. She therefore disagrees with the comments I made about the legal costs and says they should be paid by the Body Corporate. Rectification of stormwater issues were temporary measures only. g) THL Design Group Ltd had recommended installing an underground tank in the front yard, to collect water and release it slowly, so as to prevent or mitigate inundation. h) Ms Wu proceeded to install this tank but Ms Wu has had issues with the tank, which she claims solved the issue but has created new problems. i) She therefore disagrees with the suggestion in the decision that the tank appeared to have resolved the issue. Financial Losses j) In the decision, I had stated: As to the losses claimed, there were many deficiencies with the amounts claimed. There was no accounting for the $55,000 Ms Wu received, there were no deductions for betterment, the downstairs area should not be tenanted anyway (it is only consented for a garage and rumpus), there were legal costs claimed for other work, to name but a few concerns. The claims for damages were grossly overstated. k) Ms Wu disagrees with the decision and now says her costs sought are only $39,246.60 and that that amount therefore takes into accounts the insurance compensation she received. This was not how she presented the case during the hearing. The position of the Body Corporate on Ms Wu’s application for a rehearing.
- The Body Corporate says: a) It is unusual for a party to contend on are hearing to contend the applicant had witnesses they wanted to call but to then not call that witness. b) None of the “new evidence” is new evidence at all. Item 27 and 28 predate the hearing. Item 26 is evidence Ms Wu has sourced later. Item 29 is her own written summary. None of that is new evidence. c) The question of legal costs is only relevant had I determined in her favour on the application. d) Ms Wu is essentially just saying she disagrees with the decision. That is not grounds for a rehearing. Relevant Law
- Section 105(1) Residential Tenancies Act 1986 (the RTA) provides that the Tribunal has the power to order a rehearing where “a substantial wrong or miscarriage of justice has or may have occurred or is likely to occur”.
- Usually the party applying for the rehearing must show that something went wrong with the Tribunal’s procedure, for example, that they did not receive notice of the hearing or they were not able to properly present their case. A rehearing may also be granted where there is new evidence that was not reasonably available at the first hearing, if it could have affected the outcome.
- The District Court has held that if the Tribunal was simply wrong in its findings of fact, or its application of the law, this is not sufficient to establish a miscarriage of justice: a rehearing is not an alternative to an appeal. Furthermore, a rehearing will not be granted just because a party is unhappy with the decision, or to give them a second opportunity to present their case all over again to another adjudicator.
- In Wellington City Council v McMillan (DC Wellington, MA 70/02, 17 June 2002), a decision of the District Court that is binding on me, the learned Judge referred to the different criteria that are applicable to appeals from the Tribunal to the District Court and then stated: "[18] By contrast, by virtue of the specific terms of section 105, an application for a rehearing can only succeed if the applicant shows that a substantial wrong or miscarriage of justice has or may have occurred or is likely to have occurred. These are strong words which set a high standard. They most obviously apply...to cases of procedural error e.g. a hearing which takes place in the absence of a party who has not been given notice of it; the improper admission or rejection of evidence; misconduct by the adjudicator or by one of the parties or a witness... [19] In my view, however, the words do not cover a complaint that the Tribunal was merely mistaken or wrong in its findings of fact or in its application of the law. There are two reasons for this. First the strength of the language in s105 is such that something more than a mere wrong decision must be shown. The section does not speak of a decision being wrong but of a substantial wrong or miscarriage of justice occurring. This implies an obvious injustice, not merely an erroneous decision. [20] Secondly, if a mere erroneous decision is enough, whether the error is factual or legal or both, it would enable parties to in effect appeal any decision twice: once to the very Tribunal which made it by way of an application for rehearing, and then again to the District Court against the grant or refusal of the application for rehearing. Not only does that offend against the general hierarchical nature of the appeal system, it would also make the time limit for filing [a] notice of appeal against an original decision nugatory".
- Simply disagreeing with the decision is therefore not grounds for a rehearing. 4 A rehearing will not be granted just because a party is unhappy with the decision, to give a party a second opportunity to present their case, or as an alternative to an appeal.
- As to whether evidence is “new”, the High Court has confirmed that it is not a miscarriage of justice to decline a rehearing just because evidence was not considered at the original hearing, when that evidence could have been produced at the original hearing. 5
- Finally, there does not need to be an actual miscarriage of justice of a substantial wrong, only the potential for that. 6 Analysis New evidence
- None of the so-called new evidence that Ms Wu wants to introduce is new. It is either evidence that was available in the sense it predates the hearing of the application (the 2011 invoices) or is evidence she has simply chosen to obtain later to bolster her case, for eg, the report of DY Homes. She could have got that report for the hearing, but did not do so. D29 is just her own written summary of events she has observed. It was not evidence she could not have obtained previously.
- With respect to her written application for a rehearing, the “new evidence” she referred to there was not new. Ms Wu told me it had all been submitted prior to the hearing on 16 December 2024. Her submissions simply invite me to take a further view of that evidence.
- As such, her submissions are an attempt to have me revisit the case and suggest to me the grounds of her application are in reality an attempt to relitigate the matter because she disagrees with the outcome. Witnesses not called to give evidence
- As noted in my decision, it is for the party bringing their claim to prove it. In Kaipo v Clarke & McCarthy (DC) TT233/02, the Court said: ... [L]ike anyone who brings an application before a Tribunal or Court, it is incumbent upon the applicant to provide the evidence necessary to prove the case. If the applicant fails to do that, then their application will be dismissed whether it has merit or not 4 Yogeswaran v Doubletree Properties Ltd [2021] NZDC 15704 5 Angelo v Lehr [2022] NZHC 3033 6 Ward and Knight-Ward v Taitau [2021] NZDC 975 because it is up to the applicant to provide the necessary evidence. It is not up to the other parties, and it is certainly not up to the Tribunal to extract evidence.
- Ms Wu did not call any witnesses. She did not even say she wanted to call any witness. She had the assistance of an interpreter and could have asked if she was unclear. The Tribunal certainly had no request to telephone any witness and did not even have a written report from Mr Zhang, so no way of knowing that Ms Wu was relying on his evidence. She was present for the entire hearing and had her expectation been that a call would be placed to these parties I would have expected her to raise it. She did not.
- The fact that she has simply not called all evidence she wished to rely on does not amount to the possibility of a miscarriage of justice in my view. It was ultimately her responsible to conduct her case and call the evidence she wanted to rely on. She did not do that. The legal invoices, rectification of stormwater issues were temporary measures only and the financial losses
- I deal with these three submissions together because they are all squarely in the category of disagreement by Ms Wu with the outcome and an attempt to re-argue the matters already dealt with.
- That is not within the purview of a rehearing application. Ms Wu’s disagreement with my findings is not a ground for rehearing.
- It is clear to me from the content of her submissions that she is simply unhappy with the findings I have made and has applied for a rehearing on that basis. My finding on the application for a rehearing
- The application for a rehearing is dismissed, for the foregoing reasons.
- I now deal with the Body Corporate application. The Body Corporate’s application
- The application relates to unpaid levies of $8,484.32, which were not paid by the applicants. The applicants do not dispute the quantum of the unpaid levies; they say they had not paid them pending the outcome of their own application.
- The Body Corporate is also seeking: a) Interest on the outstanding levies at 10%, being $712.19. b) Debt recovery fees of $920. c) Legal costs of $10,585.90 d) Legal costs of attending at the hearing on a time spent basis. e) Filing fee of $500.
Do the applicants 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 the applicant’s share has been calculated according to their utility interest.
- The Body Corporate fixed the due date for the levy to be paid, and the applicants have not paid by that date. The levy amount is accepted by the applicants. The Body Corporate has provided records to prove the amount claimed and ordered above.
Are the applicants 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 proven the amount of interest owing from the due date to the hearing date.
- The applicants must pay the amount sought for interest, ordered above.
Are the applicants liable for costs?
- The Body Corporate claims legal costs and Body Corporate debt recovery costs.
- The applicants dispute the costs for reasons which include: a) They allege the time records show Mr Baker unnecessarily worked on their matter and they were charged $600 per hour for his attendances (3.5 hours in total). b) They allege that the time spent in the hearings should only be the time that relates to the Body Corporate’s application and not their own application. c) They allege they only received a few emails from the Body Corporate and they challenge the quantum of the amount that is now charged.
- A memorandum was supplied by the Body Corporate which included all time sheets corroborating the time recorded and the relevant terms of engagement.
- The time records and submissions of the Body Corporate show there is a level of duplication in that Mr Baker, whose hourly rate is $600 per hour, has spent 3.5 hours of time in supervising Ms Donovan, as she learns the work involved in Tenancy Tribunal Applications. His hourly rate is much higher than the hourly rates of solicitors who the Tribunal routinely sees performing work of this nature.
- The information supplied shows that there were resolutions at Annual General Meetings regarding the debt recovery regime that applies when Unit Holders do not pay their levies. Relevant law
- Body Corporate administration charges are approved by way of resolution recorded in minutes of the Body Corporate. Further, in any event, these costs are recoverable as a debt due pursuant to s 124 of the UTA if they amount to “reasonable costs”.
- In accordance with judgments (of the District Court and Court of Appeal respectively) in Body Corporate 162791 v Cheah 7 and Body Corporate 162791 v Gilbert, 8 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.
- The assessment of reasonableness of costs in connection with a contractual indemnity for reasonable solicitor and client costs was discussed in Exuberant Ltd v Quinovic Management Limited 9 and, in the context of s 124 of the UTA, in Body Corporate 45131 v 88 CHI Ltd, where the approach taken in Exuberant was adopted and applied. 10
- The District Court in Body Corporate 45131 v 88 CHI Ltd summarised the relevant legal framework as: 11 a) the relevant test is as set out in section 124(2) of the Unit Titles Act – the body corporate is entitled to recover “any reasonable costs incurred in collecting the levy”; and b) solicitor and client costs are a category of costs that can be recovered under this provision; and c) the task is to assess the reasonableness of the solicitor and client costs that are claimed.
- Having set out that framework, the Court reviewed the relevant method to be applied in assessing the reasonableness of the costs, concluding: 12 ... the essential method is as follows: a) first, ask whether the work that was done was reasonably necessary; b) second, ask whether the amount charged for the reasonably necessary work was reasonable; c) in both instances the NZLS Rules and Rule 9 in particular are prime reference points when assessing reasonableness; d) third, test the analysis against other available reference points.
- At para [8], the Court observed: 13 I make the following observations from the discussions on the cases and having regard to the way in which the methodology has been applied in the cases: 7 DC Auckland, CIV2014-004-0120, 24 June 2014. 8 [2015] NZCA 185. 9 [2021] NZ HC 3533. 10 CIV 2022 – 096 – 000494 [2023] NZDC 9036, at paragraph [5]. 11 Body Corporate 45131 v 88 CHI Ltd CIV 2022 – 096 – 000494 [2023] NZDC 9036, at paragraph [5]. 12 At [6], citing Exuberant Ltd v Quinovic Property Management Limited [2021] NZHC 3533 and other authorities. 13 Footnotes from the quote omitted. (a) the exercise the adjudicator or the judge is engaged in is an objective one. The adjudicator or the judge must make a principled assessment of reasonableness against stated criteria; (b) the adjudicator or the judge must do the work required by the methodology, and in particular grapple with the available information on the specific tasks that were undertaken by the lawyers, and the amounts that were charged for them; (c) when doing that, the adjudicator or the judge must test the work and the invoicing against the realities of the legal market that we have, not an idealised or hypothetical standard; (d) the Rule 9 considerations are helpful in providing some structure to this assessment. Time expended is one of these factors but it is not the only factor; (e) if an adjustment to actual solicitor client costs is made, this should be explained with some specificity by identifying tasks that were seen to be unnecessary, or the necessary steps that were seen to have been overcharged in some way. Analysis 48I deal first with the legal costs that are claimed and then with the Body Corporate costs.
- I have viewed the relevant terms of engagement and the time records associated with the legal costs.
- I am satisfied that the material I have been provided with shows that: a) the legal work undertaken was likely similar to other applications of this nature, but still need to be checked and completed carefully, and b) the work has been largely undertaken and charged out by a staff member with a reasonable hourly rate.
- I consider that there is however a level of double up, being the supervisory work of Mr Baker and I consider that his hourly rate is very high for this sort of work. I note that to date, he had recorded 3.5 hours of time (or $2100 plus GST). I consider it would have been more appropriate to apply an hourly rate of $300 per hour for the work that he did. I take into account here too that a client should not have to pay for the cost of their lawyer learning the ropes. But I balance that against the fact that Ms Donnovan’s hourly rate is likely low, for that very reason.
- Whether or not there is a conditional fee agreement in place is a rule 9.1 consideration I am required to take into account. I consider that this entails assessing whether or not the Body Corporate will be required to pay the full amount of the invoice claimed, in the event the applicant is unsuccessful in claiming those costs today.
- Mr Baker advises me that there is no conditional fee agreement or arrangement in place with the client regarding payment of the legal invoice, which will be paid regardless or the outcome today.
- Ms Wu complained generally about the quantum of the legal costs, which now well exceed the amount claimed for levies. The Body Corporate further submits that there have been three Tribunal hearings now (in relation to just the levies claim), and it has been required to prepare for each hearing and appear.
- Ms Donovan advised me that there is a small component of the time claimed that relates to the applicant’s application and accepted that amount (being $250 per hour plus GST) could be deducted. There is no claim for costs by the Body Corporate in regard to the applicant’s application; there is only claim for costs regarding the Body Corporate’s levies application. So time spent on the applicant’s application cannot be charged.
- I note further, in relation to Ms Wu’s submissions that there were only a few emails, that the incurring of these costs by a unit holder generally only arises following letters of demand and follow-ups, first by the Body Corporate and then, by the Solicitors acting. The unit holder is therefore given every opportunity to pay. Given the Body Corporate is liable to pay these invoices regardless, it is undesirable that those costs might then be essentially be worn by the other unit holders, in the event they are not recoverable. There were clearly chances to pay at the various stages, to avoid the costs increasing. Ms Wu ought to have paid the levies in the first instance, given she always accepted them.
- Taking a “standing back assessment”, I am of the view that the legal costs that have been charged would, in this case, be at the high level for this sort of work and should be altered to: a) Deduct the above-mentioned $250 plus GST b) Reduce the amount claimed for the supervisory work to $300 per hour (meaning the amount claimed should be reduced by $1050 plus GST). c) Add to the amount claimed two hours work for the hearing at $250 per hour plus GST (being $575). I do not agree that Mr Baker’s rate should apply to a simple levies collection matter, but I will allow the time spent for Ms Donovan.
- The total amount to be awarded for legal costs is therefore $9,665.90. The Body Corporate charges
- In relation to the Body Corporate charges, the Body Corporate submits that it charges a set fee for every stage of the debt collection process, from monitoring compliance through to sending out reminders. I am satisfied, based on the submissions made, that they are reasonable and appropriate in the circumstances of this case. Had payment been made following these reminders then it would have avoided the need to instruct solicitors. These are costs that have been incurred by the Body Corporate Finally, I note that the filing fee is recoverable under s 176(1) Unit Titles Act 2010 and s 102(4) Residential Tenancies Act 1986.