Published tribunal order
Tenancy Tribunal case 9076784 — Unit Titles in Mount Albert, Auckland
Decided 16 Jul 2026 · Published 16 Jul 2026 · Application 9076784
- Unit Titles
- Costs
Order
Ko & Shieh Company Limited must pay Body Corporate 401803 $13,956.68 immediately, calculated as follows: DescriptionsApplicantRespondent PBB collection costs$13,537.18 Credit applied to PBB invoice 029387 $414.00 Costs: hearing attendance (1 hour)$333.50 Filing Fee$500.00 Total Total award in favour of the body corporate $14,370.68 $13,956.68 $414.00
Reasons
- Both parties attended the hearing on 28 April 2026. Further written submissions were invited of the parties which have since been filed.
- The body corporate has applied on 11 February 2026 for payment of collection costs on overdue levies, further costs incurred in the proceedings and the Tribunal filing fee from the unit owner.
Has the Unit Owner paid the levies on time?
- 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 dates for the 1 June 2022 to 31 May 2023 levies to be paid by instalments on 1 January 2023, 2 February 2023, 1 March 2023, 1 April 2023, and 1 May 2023 but the unit owner has not paid their levies totalling $1,532.55 by those due dates. See section 124(1) Unit Titles Act 2010.
- The body corporate has also fixed the due dates for building remediation levies struck on the 30 August 20222 annual general meeting to be paid by instalments on 1 December 2022, 1 January 2023, 1 February 2023, 1 March 2023, 1 April 2023, 1 May 2023 and 1 June 2023 but the unit owner has not paid their levies totalling $42,325.08 by those due dates.
- On 4 September 2023, the body corporate instructed Price Baker Berridge (PBB) to recover the overdue levies, interest and costs from the unit owner.
- That instruction includes gathering together by the body corporate manager of all of the information required to formulate a claim, namely, all of the minutes, all of the levy statements, all system notes relating to contact with the owner, copies of any other relevant body corporate resolutions or issues that need to be known by the Legal Executive and fielding queries from the owner including telephone and email attendances.
- Upon receipt of the instructions mentioned above, PBB reviewed all supporting documents and sent a demand letter on 5 September 2023 by email and post to the unit owner.
- The body corporate later entered into a payment agreement with the unit owner as per the payment plan agreement letter dated 1 May 2024. The repayment plan required: a. regular monthly instalments of $8,000.00; and b. strict payment of all future levies as they fell due, being an express and critical condition.
- While the unit owner made regular instalment payments, the ledger shows that levies due after 1 May 2024 were not paid on time and instead accumulated until later lump-sum clearance in April 2025, constituting ongoing breaches of the repayment plan.
- As a result of these defaults, PBB was required to: a. monitor and re-engage with the unit owner; b. extend and recalibrate the repayment arrangement; and c. undertake additional enforcement/debt collection work.
- On 10 April 2025, PBB emailed the unit owner to advise that the outstanding balance was $16,819.37 consisting of outstanding 1 April 2025 levies of $10,280.18, interest on unpaid levies of $410.27 (as at 10 April 2025) and PBB’s legal and collection costs of $6,128.92.
- Following the body corporate’s “Notice of Levies Due in May 2025” issued on 2/04/2025, the unit owner paid $11,377.37 on 20 April 2025; this cleared all the overdue levies and interest, as well as the 10 th instalment of the 01/06/2024 to 31/05/2025 levies of $636.55 due on 1 May 2025.
- On 7 May 2025, the unit owner proposed to pay $2,000.00 in satisfaction of the claimed s 124 costs, asserting that this amount represented what they considered to be reasonable, with the balance to be waived. The body corporate rejected that proposal.
- On 4 June 2025, PBB provided full time records to the unit owner and the body corporate offered to cap recovery at $6,128.92 if payment was made by 6 June 2025.
- On 18 June 2025, the unit owner disputed liability for s 124 costs, asserting that such costs are only recoverable once proceedings are commenced.
- On 11 February 2026, a Tenancy Tribunal application was submitted as payment for the costs was not made.
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.
- The body corporate initially sought full solicitor/client costs under section 124 UTA of $13,537.18 and costs to attend the hearing in these proceedings.
- After the viva voce hearing, counsel for the body corporate reviewed their time sheets based on a number of queries raised by the unit owner. Entries in PBB’s time records disputed by the unit owner have been highlighted in different colours based on these reasons for dispute: (a) Green highlight – administrative tasks (b) Yellow highlight – insufficient time record narration (c) Red highlight – costs incurred due to errors caused by the Body Corporate or
PBB
(d) Blue highlight – attendances not related to debt collection against the unit
- The body corporate accepted and credited $414.00 against PBB invoices towards PBB attendances which were unrelated to the Tribunal proceedings and recovery of collection costs and an attendance of $30.00 by Briar Dobson on 13 May 2025 relating to payment of the 1 May 2025 levy that had already been paid by the unit owner.
- The unit owner disputes the reasonableness of the legal and collection costs levied. Given that all outstanding levies had been cleared as at 30 April 2025, the unit owner submits that the body corporate did not have a right to claim collection costs pursuant to sections 124 or 127 UTA.
- The unit owner submits that the body corporate’s position that the failure to pay section 124 costs meant it was required to incur reasonable costs to collect that expense (i.e. section 124 costs) is fundamentally flawed.
- The unit owner maintains that they did not commit a wilful or negligent act or omission, or any breach of the UTA, or body corporate operational rules, or regulations. The unit owner says that their position (disputing the full legal costs) was reasonable and lawful. The unit owner acknowledged they were liable for section 124 costs, but disputed the full amount sought by the body corporate.
- The unit owner identified concerns with PBB invoices, sought further breakdown of their costs, seeking clarity as to their “reasonableness”. The unit owner says that such conduct in seeking narrations from the body corporate and disputing the reasonableness of section 124 costs sought (and not the liability) cannot be characterised as a wilful or negligent act, or an omission or breach.
- The unit owner argues that administrative tasks do not fall under the categorisation “legal costs” as they do not require legal skill to complete.
- However, section 124(2) does not refer to legal costs; rather, it addresses costs (which would include legal costs). Reasonable administrative tasks incurred in the recovery of the outstanding levies fall under reasonable costs under section 124(2) and are recoverable in full from the unit owner as a debt owing to the Body Corporate. They are tasks that a lawyer reasonably charges a client for, and that is the test for recoverability.
- The unit owner disputes the yellow highlighted lines as the narrations are short or not detailed enough. Many of these time transactions include either a name only or a name with a short description.
- Considering counsel’s written submissions, I accept counsel’s explanation of PBB’s time records with the WIP code (work in progress/fee code) included. The time transactions with name narrations relate either to emails from (EF), emails to (ET), or telephone calls with (TEL) the named individuals.
- In Body Corporate 346799 v Gueirard & Vu [2023] NZDC 19645, Judge Clark determined narrations that are brief and lacking detail can still be consistent with the work and tasks that needed to be completed. While the narrations could have included subjects for the discussions, the attendances were still legitimately incurred and therefore recoverable.
- I accept counsel’s submission that several attendances with the narration “checking”, “discussions”, “attendance”, “preparation”, “review and edit” in majority are recorded by Clinton Baker, the partner on file, and relate to minor and reasonable supervisory attendances for the authors acting on the file.
- I accept an attendance of $25.00 by Ashleigh Donovan on 11 June 2025 related to the 1 May 2025 levy. The attendance was a phone call with the Body Corporate chairperson and involved an update regarding the outstanding costs owed by the unit owner. As this attendance was only for the defaulting unit, the amount charged is reasonable.
- I accept counsel’s explanations regarding the blue highlights. Apart from the Body Corporate’s credit of $360.00 plus GST (being $414.00) to invoice 029387, I find that all further attendances are reasonable in the recovery of the outstanding levies and further recovery of the collection costs.
- Further legal fees and attendances have since been incurred by the body corporate solicitors in filing these legal proceedings leading up to the hearing before me in April 2026.
- I reiterate that almost all of the initial sum of $13,537.18 claimed by PBB to be payable by the unit owner pursuant to section 124 UTA. Only $414.00 of PBB invoices towards their attendances were unrelated to the Tribunal proceedings and recovery of collection costs which had not been paid by the unit owner. This credit is now applied against the principal costs claimed; the credited amount constitutes only 3% of the total PBB invoices claimed.
- Payment of those reasonable charges by the unit owner would have avoided these proceedings and filing of the claim at the Tribunal.
- Following the line of authorities set out at [20] and [21] above, I consider that the body corporate is entitled to recover the sum of $13,537.18, less $414.00, as reasonable costs incurred by it in collecting unpaid levies as a statutory debt due by the unit owner.
- The reasonableness of the legal and collection costs is viewed on a solicitor-client basis. Consequently, there the solicitor has reasonably charged their client (the body corporate) those costs for collecting the overdue levies are also due and payable by the unit owner pursuant to section 124 UTA.
- It was therefore in order for Price Baker Berridge to insists on payment of sum of $13,537.18 (or the majority of that sum) because they were reasonably and actually incurred on a solicitor-client basis. The subsequent credit and concession by the body corporate of $414.00 does not materially affect the body corporate’s position and demand for payment of PBB’s costs.
- In the alternative, the legal costs incurred in in filing these proceedings to collect the legal fees are also payable by the unit owner, pursuant to section 127 UTA.
- Section 127 Unit Titles Act 2010 provides as follows: Recovery of money expended where person at fault (1) This section applies if the body corporate does any repair, work, or act that it is required or authorised to do, by or under this Act, or by or under any other Act, and the repair, work, or act was rendered necessary by reason of any wilful or negligent act or omission on the part of, or any breach of the Act, the body corporate operational rules, or any regulations by, any unit owner or his or her tenant, lessee, licensee, or invitee. (2) Any expense incurred by the body corporate in doing the repair, work, or act, together with any reasonable costs incurred in collecting the expense, is recoverable as a debt due to the body corporate (less any amount already paid) by the person who was the unit owner at the time the expense became payable or by the person who is the unit owner at the time proceedings are instituted.
- Following BC 170989 v Aquila Holdings Ltd [2020] NZHC 758 at [75]), the elements needed for s 127 costs to be recoverable are when: (a) There is an act by the Body Corporate; (b) The Body Corporate must be required or authorised to do the act under the UTA or some other Act; (c) The act must be rendered necessary by reason of any wilful or negligent act or omission by specified persons; (d) Those persons must be a unit owner, or his or her or its tenant, lessee, licensee, or invitee
- Applying section 127 Unit Titles Act 2020, I am satisfied that the Body Corporate is entitled to recover from the unit owner legal costs incurred in filing and prosecuting these proceedings to recover the payment of sum of $13,537.18 (or the majority of that sum) as an “expense” incurred by the body corporate in doing an “act” that was rendered necessary by reason of “wilful or negligent act or omission” on the part of the unit owner in refusing and failing to pay the aforesaid collection costs.
- Judge Harrison in Body Corporate 331094 v Smith [2015] NZDC 17745, held legal fees incurred in pursuing payment of costs incurred in recovering outstanding levies were recoverable under s 127 of the Act. It was also noted that costs might equally be sought pursuant to s 124, on the basis that the costs of recovering the overstanding levy is itself part of the debt, with all that the Body Corporate is doing pursuing payment of the balance of the debt.
- I am satisfied from the timesheets appended by PBB solicitors that the collection costs ordered in the table above including for counsel’s attendance at the hearing, and solicitor/client costs in filing and prosecuting these proceedings are reasonable.
- I do not accept the unit owner’s submission that it was unreasonable for administrative tasks to be charged out at solicitor rates. The material issue is whether or not tasks to liaise with the unit owner to pursue outstanding levies have actually been undertaken by PBB. It is not a question of whether administrative tasks can be carried out more cheaply at the lowest rate, with the benefit of hindsight.
- On the contrary, I consider that it would be unreasonable for other members of the body corporate to carry the costs of solicitors’ tasks in pursuing outstanding levies if costs were not awarded against the defaulting unit owner on an indemnity basis.
- Where tasks such as banking and billing have been carried out by staff solicitors and other personnel of the law firm, the charges incurred in carrying out the tasks remain payable by the unit owner pursuant to sections 124 and 127 UTA.
- Contrary to the unit owner’s submission, I find that section 124 of the Unit Titles Act 2010 authorises levy recovery on a “pay now and argue later” basis, recognising that bodies corporate rely on levies in order to fund collective interests and remedial costs and other owners must subsidise short-paid levies.
- In Singh v Body Corporate 207650 [2018] NZHC 1932, involving a levy summary judgment on appeal from the District Court, Hinton J endorsed the position of District Court Judge Harrison at [22] and [43] on the “pay now and argue later” principle.
- In this case, the initial levies outstanding comprises a substantial amount of over $40,000, which must be met by others for as long as the unit owner does not pay.
- Having been satisfied that the costs charged by counsel for the body corporate are reasonable on a solicitor-client basis, I do not have any discretion to waive any of those costs (less the $414 credit applied).
- In the upshot, sections 124 and 127 UTA prescribe 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.
- Under section 85 Residential Tenancies Act 1986, 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.
- The Supreme Court n Gilbert v Body Corporate 162791 [2016] NZSC 61 [BC42] at paragraph [78] held that the UTA costs recovery provisions (and this would includes s127) provided for reasonable solicitor/client costs to be recovered. In this regard, section 127 of the UTA does not differentiate between costs of legal representation or other expenses incurred by a body corporate for doing work due solely to the at-fault-party’s actions.
- I therefore award the body corporate $13,956.68 which includes legal costs, hearing attendance, 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.
- Finally, I address the unit owner’s submission regarding a purported counterclaim. The unit owner says: The Respondent has counterclaimed $32,220.50 in damages to compensate for the loss it has suffered as a result of the Applicant’s unlawful conduct. The Respondent continues to seek adjudication of this matter with the Tribunal and would be grateful for further directions in relation to the counterclaim.
- There is nothing before me to indicate that a counterclaim has been lodged, or a filing fee paid for such a counterclaim, apart from the above submission in the unit owner’s memorandum that a counterclaim has been made.
- In any event, the hearing before me was only in relation to the body corporate’s claim for collection costs on overdue levies, further costs incurred in the proceedings and the Tribunal filing fee from the unit owner. I therefore only address and determine the body corporate’s claims filed herein.
- Any counterclaim by the unit owner should be lodged separately and upon the filing fee being paid, the new proceedings can be adjudicated in due course.