Published tribunal order
Tenancy Tribunal case 9072804 — Unit Titles in Birkenhead, Auckland
Decided 26 Nov 2025 · Published 26 Nov 2025 · Application 9072804
- Unit Titles
- Interest
- Costs
Order
- [The party], [The party], [The party] must pay Body Corporate 177718 $3,998.35 immediately, calculated as follows: DescriptionsApplicantRespondent Interest: to 23 October 2025 $246.45 Costs: Balance of Strata Collection Costs $0.40 Costs: Legal collection costs $2,964.00 Hearing fee of 1 hour (incl GST) $287.50 Filing Fee: Application fee $500.00 Total award$3,998.35 Total payable by respondents to applicant $3,998.35
Reasons
- The applicant attended the hearing conducted remotely by video conference. The Body Corporate is represented by counsel. There was no appearance by the respondents.
- The body corporate has applied for recovery of interest, costs and the filing fee from the unit owner.
- The applicant confirmed during the hearing that the respondents paid the outstanding levies in full on 16 October 2025.
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.
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.
- I am satisfied that the collection costs ordered above including for counsel’s attendance at the hearing, solicitor/client costs and body corporate debt collection charges are reasonable.
- Pursuant to section 124 Unit Titles Act 2010 (‘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 defaulting unit owner to the body corporate.
- Section 124 UTA states: Recovery of levy (1) A body corporate must fix the date on or before which payments of levies are due. (2) The amount of any unpaid levy, together with any reasonable costs incurred in collecting the levy, is recoverable as a debt due to the body corporate by the person who was the unit owner at the time the levy became payable or by the person who is the unit owner at the time the proceedings are instituted.
- Section 128 UTA provides: Interest on money owing to body corporate (1) If a unit owner owes money to the body corporate under section 121, 124, 125, 126, or 127, interest accrues in respect of so much of the debt as remains unpaid. (2) The amount of interest charged by a body corporate in relation to any unpaid debt must not exceed 10% per annum.
- As the unit owners failed to pay the outstanding levies at the time they fell due, the outstanding levies together with interest and collection costs are recoverable as a debt due to the body corporate.
- 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.
- It is reasonable to expect full and timely compliance by all unit owners on the levies payable when they fall due otherwise a burden is carried disproportionately by those who have paid the levies on time.
- In Gilbert v Body Corporate 162791 [2016] NZSC 61, the Supreme Court affirmed the judgment of the Court of Appeal and held at [57] that section 124 is of considerable relevance in that “it indicates that those who default in the payment of levies are responsible for the costs of collection. The alternative would be to impose some or all of those costs on the other unit owners.”
- The Court of Appeal judgment in Gilbert emphasised at [78] that “section 124(2) of the Unit Titles Act provides that the amount of any unpaid levy, together with any reasonable costs incurred in collecting that levy, is recoverable as a debt due to the body corporate. The use of the words “reasonable costs” does not compel the conclusion that solicitor/client costs cannot be recovered. Rather it compels the conclusion that it is only reasonable solicitor/client costs, objectively assessed, that can be recovered.”
- In York Trustees Limited v Body Corporate Number 166208 [2017] NZDC 7961 the District Court, dealing with a cross-appeal on costs from the Tenancy Tribunal, quashed the Tribunal decision awarding only a contribution of 60 percent of the total legal costs claimed by the body corporate. DCJ Sharp held that the Tribunal misdirected itself as to the legal position in respect of reasonable solicitor/client costs and the Tribunal should have determined that the body corporate was entitled to its actual reasonable costs (on a solicitor/client basis) of $32,563.05. Notably at [22], Judge Sharp stressed that the Court of Appeal judgment in Gilbert is binding on the Tribunal (and on the District Court) in that “there is no discretion” available to the Tribunal to award anything less than the full reasonable legal costs charged by the solicitor to its client, the body corporate, when it comes to the concept of “reasonable costs incurred in collecting that levy” under section 124 UTA.
- Having been satisfied that the costs charged by counsel for the body corporate and the body corporate secretary are reasonable and actually incurred in collecting the levy, I do not have any discretion to waive any of those costs in favour of defaulting unit owners.
- Section 124 UTA prescribes a statutory debt in favour of the body corporate once levies are properly raised and payable; equally, legal and collection costs and interest become a statutory debt which accords no discretion on the Tribunal to waive or discount, despite the Tribunal exercising a substantial merits and justice jurisdiction pursuant to section 85 of the Residential Tenancies Act 1986 (‘RTA’).
- On the contrary, under section 85 RTA, the Tribunal is mandated to determine each dispute according to the general principles of the law relating to the matter, including those principles of law set out above.
- I therefore award the body corporate costs totalling $3,998.35 which includes legal costs, hearing attendance, debt collection charges, interest and the Tribunal filing fee, as set out in the table above.
- 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.