Published tribunal order
Tenancy Tribunal case 9071164 — Unit Titles in Pipitea, Wellington
Decided 3 Mar 2026 · Published 3 Mar 2026 · Application 9071164
- Unit Titles
- Ordinary Levy
- Costs
- Interest
Order
- Luke Hoani Siuai Fiso, Emma Elizabeth Jane Wright must pay Body Corporate 541058 $19,637.38 immediately, calculated as follows: Descriptions Ordinary Levy$7,688.57 Costs: Debt Collection$632.50 Filing Fee$500.00 Costs: s124 Legal Costs$9,689.63 Interest: to 11 February 2026$1,126.68 Total award$19,637.38
Reasons
- Both parties attended hearings on 20 November 2025 and 11 February 2026.
- The body corporate has applied for recovery of unpaid levies, interest, costs and the filing fee from the unit owner.
- 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.
- However, there were discrepancies and inconsistencies in the amounts the body corporate has claimed was owing, as set out in the Tribunal Order dated 20 November 2025. The Body Corporate’s solicitor could not explain the discrepancies or inconsistencies at the first hearing, so the matter was adjourned.
- The body corporate provided explanation as to the inconsistencies, which were largely caused by the body corporate including debt collection costs (s124 charges) within the amount claimed for levies. I remain of the view that the amount claimed for levies should be clearly and concisely identified by the body corporate. Debt collection costs are a separate head of claim and should be itemised as such. More significantly, if the body corporate cannot provide a clear and consistent explanation and breakdown of the amount owed, how can the unit owner and Tribunal understand the amount that is claimed? This unit owner repeatedly requested a clear breakdown and statement of the debt and sought to understand how the claim was formulated.
- Even at the second hearing, the body corporate was seeking payment of a “debt” of $8,321.07 comprising levies and debt collection charges. Counsel’s memorandum dated 10 February 2026 did not provide a breakdown between outstanding levies or debt collection costs of the body corporate.
- The documentary evidence establishes that the amount owing for levies to the date of hearing is $7,688.57.
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 the due date to the hearing date.
- The unit owner submitted that the Tribunal has a discretion to reduce the amount of interest debt in circumstances where the body corporate’s delays in responding and providing information regarding the debt has contributed to non-payment.
- The Tribunal does not have any such discretion. I have reviewed the calculations provided by the body corporate and I am satisfied that the interest claim has been proved.
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.
- The assessment of reasonableness of costs in connection with a contractual indemnity for reasonable solicitor and client costs was discussed extensively in Exuberant Ltd v Quinovic Management Limited 1 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. 2
- In Body Corporate 45131 v 88 CHI Ltd the Court summarised the legal framework as follows: 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”. b. solicitor and client costs are a category of costs that can be recovered under this provision. c. the task is to assess the reasonableness of the solicitor and client costs that are claimed. 3
- The Court then reviewed the method to be applied in assessing the reasonableness of the solicitor and client costs, concluding: ... 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. 1 [2021] NZ HC 3533 2 CIV 2022 – 096 – 000494 [2023] NZDC 9036 3 Body Corporate 45131 v 88 CHI Ltd CIV 2022 – 096 – 000494 [2023] NZDC 9036, at paragraph [5]
- Costs were also considered in Body Corporate 346799 v Guierard. 4 The body corporate argued that the Tribunal had, in purportedly relying on Exuberant, wrongly focused on the reduction of the solicitor client costs which were claimed. It argued that the Tribunal failed to undertake the basic exercise of assessing the reasonableness of the costs on an objective basis.
- His Honour Judge Clark confirmed that the starting point is that s124 provides a statutory acceptance that solicitor/client costs can be granted “as of right”. His Honour emphasised that a scale costs regime is different to the situation under s124 UTA.
- In this case, the Body Corporate seeks debt collection costs of $632.50 and legal costs of $12,622.13. (That is the total of items 3 to 5 at table 5 of Counsel memorandum of 10 February 2026).
- The Body Corporate’s debt collection costs were determined by way of resolution at AGM’s. They represent a cost-effective method of attempting to recover outstanding levies, by way of reminder and follow-up correspondence. The costs of $632.50 are reasonable..
- The unit owner disputed the claim for legal fees. His submission was that the charge out rates were high, and some work was required because of the body corporate or the lawyers’ failures to provide clear explanation of the debt/claim throughout the proceeding. He also said that he had tried to reach agreement with the body corporate and to enter into a payment plan for outstanding levies.
- I must review the legal costs claim of $12,622.13 from a starting point that s124 provides for reasonable solicitor/client costs. I must consider reasonableness in light of the factors set out in the Chi decision above.
- I start with the factors listed at Rule 9.1 of the NZLS Rules, as these are fundamental to any costs assessment. Rule 9.1 provides: Reasonable fee factors
- 1 The factors to be taken into account in determining the reasonableness of a fee in respect of any service provided by a lawyer to a client include the following: (a) the time and labour expended: (b) the skill, specialised knowledge, and responsibility required to perform the services properly: (c) the importance of the matter to the client and the results achieved: (d) the urgency and circumstances in which the matter is undertaken and any time limitations imposed, including those imposed by the client: (e) the degree of risk assumed by the lawyer in undertaking the services, including the amount or value of any property involved: (f) the complexity of the matter and the difficulty or novelty of the questions involved: (g) the experience, reputation, and ability of the lawyer: 4 [2023] NZDC 19645 (h) the possibility that the acceptance of the particular retainer will preclude engagement of the lawyer by other clients: (i) whether the fee is fixed or conditional (whether in litigation or otherwise): (j) any quote or estimate of fees given by the lawyer: (k) any fee agreement (including a conditional fee agreement) entered into between the lawyer and client: (l) the reasonable costs of running a practice: (m) the fee customarily charged in the market and locality for similar legal services.
- Counsel provided full time/ledger records to the Tribunal for this matter. The records show many attendances in the nature of drafting and correspondence, as I would expect in this type of case. They also refer to checking/reviewing calculations.
- The material shows that: a. The work undertaken was similar to other applications of this nature. b. The attendances were consistent with what I would expect for this type of application. c. To save cost, various aspects of the work were undertaken and charged out by staff at various charge out rates.
- The billing records do not disclose any inappropriate recording of time. I have regard to other costs claims made to the Tribunal for these types of cases. While the fees sought are at the high end, they are within the range of fees customarily charged in the market and locality for similar legal services. In this regard, I also acknowledge the work was undertaken by a firm with specialist knowledge.
- However, I consider that the additional work required to explain the claims and clarify discrepancies amounts to duplication of work and would be customarily discounted in the market. The time records refer to checking calculations prior to the application being submitted and prior to the first hearing. If the body corporate had been able to explain the discrepancies at the first hearing, I would not have had any difficulty in awarding the costs claimed to that date.
- The discrepancies in amounts claimed over various time periods were clear to the Tribunal and had been raised by the unit owner throughout the debt recovery process. I would have expected those issues to have been identified and addressed within the attendances prior to the application and first hearing. The attendances required after the first hearing amount to duplication and are not reasonable and were not reasonably necessary. The fee for those attendances was $2,233.25, plus attendance at the second hearing.
- The costs claim is more than the outstanding levies. I also consider that in the market for legal services, a reasonable assessment of costs would customarily involve a discount of time where the debt to be recovered is less than the legal costs incurred. I acknowledge that is a lesser consideration in these circumstances where the body corporate is charged with recovering levies and there is a statutory presumption that it will recover its reasonable legal costs from the defaulting owner. However, I consider that the market would apply some proportionality between the costs incurred and the amount claimed.
- Having regard to the factors identified in 28 and 29 above, I award reasonable legal costs of $9,869.63.
- Because 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.