Published tribunal order
Tenancy Tribunal case 9059824 — Cleanliness in Waipori Falls, Outram
Decided 4 Mar 2025 · Published 4 Mar 2025 · Application 9059824
- Cleanliness
- Unit Titles
Order
- By way of declaration, the resolution passed by Body Corporate 23599 at the 2 July 2024 EGM that “a one-off special levy of $354.87 per Utility Interest (i.e., $11,710.65) be made forthwith in equal shares” is invalid and of no effect.
- Body Corporate 23599 must reimburse the $500.00 Tribunal filing fee to [The party] immediately.
Reasons
- Both parties attended the hearing. The body corporate was represented by its chairperson Pam Murray and committee member Geoffrey Cole. Mr Murphy attended in person.
- Mr Murphy applies for a reversal of the 2 July 2024 EGM resolution (and subsequent monies levied) in which the body corporate decided ‘’that, a one-off special levy of $354.87 per Utility Interest (i.e., $11,710.65) be made forthwith in equal shares’’.
- The levy was to cover the cost of repairs to the sewage system in relation to an invoice from Drain Cleaning Otago.
- Section 121 (1) Unit Titles Act 2010 (‘UTA’) states that a body corporate may determine from time to time the amounts to be raised for each fund and impose levies on the owners of principal units to establish and maintain each fund. Subsection (2) provides that the levies must be calculated...in the case of the operating account, long-term maintenance fund, and any contingency fund, in proportion to each unit owner’s utility interest.
- In Wu v BC 366611 [2014] NZSC 137 the Supreme Court considered a similar provision under s15(2)(c) the Unit Titles Act 1972 which provides that the body corporate shall raise amounts (to fund for administrative expenses sufficient in the opinion of the body corporate for the control, management, and administration of the common property, and for the payment of any insurance premiums, rent, and repairs and the discharge of any other obligations of the body corporate) so determined by levying contributions on the proprietors in proportion to the unit entitlement of their respective units.
- The Supreme Court Wu, at [94], held that the UTA provision only allows levying under s 15 in proportion to a proprietor’s unit entitlement.
- Therefore, the body corporate’s decision reached at the 2 July 2024 EGM to raise the special levy to pay for the cost of repairs to the sewage system “in equal shares” rather than “in proportion to each unit owner’s utility interest” is ultra vires and invalid.
- The body corporate simply had no power to raise the remedial levy otherwise than in proportion to the unit owners’ utility interests.
- Any perceived inequality in the raising of levies in the manner prescribed by section 121(2) UTA 2010 is a matter to be addressed by way of a reassessment of ownership and/or utility interest under section 41 UTA 2010. It was not for the body corporate to raise the remedial levy in equal proportion across the board in the manner that it did.
- It was also in order for the body corporate to consider charging expenses to one or more units under section 126 UTA 2010 if it considers appropriate. But that is beyond the scope of the matter before the Tribunal presently.
- At this juncture, it is appropriate that I make an order by way of declaration that the manner of raising the levy is incorrect and make a decision setting aside that resolution passed by the body corporate.
- It will be for the body corporate to call another meeting to rectify the error and raise the remedial levy in the correct proportion to each unit owner’s utility interest.
- Mr Murphy is successful in his claim for relief at the Tenancy Tribunal. He is accordingly entitled to reimbursement of the filing fee from the body corporate.