Tenancy Tribunal Orders Unit Owners to Pay Body Corporate Unpaid Levies and Costs

OUTCOME: Allowed

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[2026] NZTT 9070404

TENANCY TRIBUNAL AT REMOTE LOCATION | TE TARAIPIUNARA RETIHANGA

APPLICANT: [redacted] [NAME]

RESPONDENT: [redacted] [NAME]

[NAME]: [NAME]/[ADDRESS], [POSTCODE]

ORDER

1. The [NAME] must pay [NAME] $21,0250.00 (including GST) immediately, by way of costs.

Reasons:

1. An Order was made dated 10 March 2026 requiring the [NAME] to pay outstanding levies and interest.

2. The parties were asked to file submissions on costs within 21 days of the date of that Order, for a decision on the papers. No submissions were filed by either party and a costs order was issued on 9 April 2026. It transpired that the parties had not been served with the 10 March Order. I stayed the 9 April costs Order to give the parties the opportunity to file costs submissions.

3. Both have done so and those submissions have been considered. The submission from the [NAME] contains details of fees and supporting records not available when the previous costs order was made.

4. The 10 March Order noted: “[63] Pursuant to section 124 UTA, the [NAME] is entitled to recover any reasonable costs incurred by it in collecting unpaid levies as a debt due by the owner to the [NAME]. [64] In accordance with the judgments (of the District Court and Court of Appeal respectively) in [NAME] 162791 v [NAME] DC Auckland, CIV2014-004-

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0120, 24 June 2014 and [NAME] 162791 v [NAME] [2015] NZCA 185, the Tribunal must order that the reasonable costs incurred by the [NAME] in recovering the levies, objectively assessed, be paid by a defaulting [NAME]. [65] The costs payable by the respondents should only be those directly related to recovery of the levies. The costs of these proceedings have been increased by consideration of arguments relating to whether the claim was precluded by the Limitation Act 2010 and issues about the application of BC funds, as noted in this decision. [66] My preliminary view is that costs incurred in addressing those additional issues should not be included in the costs awarded under s.124. In each case decisions of the [NAME], to delay bringing an application for recovery of the levies and in commingling into the Scheme review unrelated expenditure on the additional works, have contributed to the need to address issues ancillary to recovery of the levies.”

What costs can be claimed? 5. The [NAME]’s submission claims $29,556.46 (which excludes fees of

$715.50 incurred in connection with the District Court appeal) in legal costs to and including the hearing. That claim is supported by fees invoices issued to the [NAME] and time records.

6. Legal costs incurred by a [NAME] in recovering levies, are claimable under s.124(2) UTA, which provides that:

“(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 [NAME] by the person who was the [NAME] at the time the levy became payable or by the person who is the [NAME] at the time the proceedings are instituted.”

7. That provision effectively provides for recovery of legal costs incurred in collecting levies, on an indemnity basis. The authorities make it clear that the role of the Tribunal in assessing such claims is only to consider the reasonableness of the charges.

8. Costs incurred other than those incurred in collecting levies, must be considered under the Tribunal’s general costs jurisdiction, provided by s.102(3) Residential Tenancies Act 1989 (“RTA”).

9. Section 102(3)(b) RTA provides that in proceedings such as these, where a party is represented by counsel, “…the Tribunal may order a party to pay—(b) to another party, the reasonable costs of that other party in connection with the proceedings.”

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10. In connection with s102(3) RTA costs, the following extract from Residential Tenancy Law in [NAME]. [NAME] (2018 [COMPANY]), was cited with approval by the District Court in BC346799 v [NAME] 1:

“An award of costs for counsel is usually a reasonable contribution to legal costs, not full costs. The usual range is 40 to 70% of actual costs and factors to consider include the party’s success, length of hearing, amount involved, importance of the issues, complexity, urgency, time for effective preparation, any unnecessary steps, arguments without substance, abuse of process, poor presentation, whether hearing time was lengthened by a party’s conduct and, for guidance purposes the District Court’s scale of costs.”

11.As signalled in the substantive order, costs were incurred (for the apportionment see paragraph 12):

a. in recovering the unpaid levies – recoverable under s.124(2) UTA ($12,500.00.00);

b. in determining the [NAME]’ claim that recovery of the levies was prevented by operation of the Limitation Act – claimable under s.102(3) RTA ($7,050.00) ; and

c. in determining the [NAME]’ claim that the levies were not recoverable due to misapplication of the levies and/ or that the [NAME] should be compensated for misapplication of funds held in the long term maintenance fund towards works outside the long term maintenance plan – claimable under s102(3) RTA ($10,000.00).

12. [NAME] assesses the costs related to the Limitation Act argument at $7,027.08. I assess the costs connected with the misapplication argument at $10,000.00, significantly higher due to the need to review the scheme reconciliation, project costs and calculation of levies, of some complexity.

Should costs be awarded?

Levy recovery costs

13. The approach the Tribunal should take when considering recovery costs claims has been outlined by the District Court in [NAME] [NAME] [NAME] [COMPANY] as follows:2

a. the relevant test is as set out in section 124(2) of the [NAME] – the [NAME] 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

1 BC346799 v [NAME] [2020] NZDC 3669 2 [NAME] [NAME] [NAME] [COMPANY] 2022 – 096 – 000494 [2023] NZDC 9036, at paragraph [5].

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c. the task is to assess the reasonableness of the solicitor and client costs that are claimed.

14. Useful considerations in assessing the reasonableness of the costs claimed were identified as:

a. was the work that was done reasonably necessary; b. was the amount charged for work that was reasonably necessary,

reasonable; c. in both instances the NZLS Rules and Rule 9 in particular are prime

reference points when assessing reasonableness; d. test the analysis against other available reference points.

Was the work that was done reasonably necessary?

15. This application was filed on 18 July 2025. 16. The costs claimed are for attendances from 14 May 2025. They begin with the

gathering and collating the information required to prepare the application and file it. They do not include the costs for earlier attempts at recovery.

17. The application and associated work was necessary. Thereafter, excluding the attendances related to the ancillary issues noted, the work was reasonably necessary to recover the unpaid levies.

Was the amount charged for work that was reasonably necessary, reasonable? 18. While $12,500.00 represents a significant fee for recovery of a levy of this

amount: a. the need to adjourn the initial hearing because the [NAME] had not

responded or prepared, added to the costs; b. the claim was made against a history of extensive and difficult litigation,

reasonably adding to the costs of preparation and evidence presentation. 19. Other reference points for assessing whether amounts charged are reasonable,

are Rule 9.1 Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008 and District Court Scale costs.

20.The more relevant Rule 9.1 considerations are:

“(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:

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(f) the complexity of the matter and the difficulty or novelty of the questions involved”

21. A review of the invoices and time records against those criteria, does not give rise to a concern that the charges for necessary work were unreasonable.

22. The District Court 2B scale costs for filing the claim, evidence and submissions, preparation for and attendance at 2 hearings and a case conference, would suggest an award of around $11,500.00.

23. Following that assessment, I find that the [NAME] is entitled to recover levy recovery costs of $12,500.00 under s.124(2) UTA.

Limitation and Misapplication claims 24. Both these claims were decided in favour of the [NAME]. Costs follow

the event. 25. The decisions taken by the [NAME]:

a. not to earlier pursue recovery of the unpaid levies through Tribunal application; and

b. incorrectly including the cost of additional works in the scheme reconciliation and applying BC funds to additional works outside the long term maintenance plan;

gave rise to legitimate issues for the [NAME] to raise. 26. The issues were of moderate complexity and were not subject to urgency. The

proceedings to determine those issues were not conducted by either party in a way that unreasonably added to the cost.

27. In those circumstances I find that a reasonable contribution by the [NAME] would be 50% of the [NAME]’s actual costs.

28. That gives a total costs award of $12,500.00 + $8,525.00 ($7,050,.00 + $10,00.00 x 50%) = $21,025.00.

29. Stepping back and looking at that total costs award against the whole of the proceedings, the amount awarded represents: a. around 71% of actual costs and: b. almost 2 x scale costs.

30. Over 50% of the total costs are available on an indemnity basis, (which is not the content of scale costs). The total award is within, but at the top end of the accepted range of contribution to actual total costs per [NAME].

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31. In the circumstances of this case, those relativities seem to me appropriate.

[NAME] 28 May 2026

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Please read carefully:

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Rehearings:

You may make an application to the Tenancy Tribunal for a rehearing. Such an application must be made within five working days of the order and must be lodged at the Court where the dispute was heard.

The only ground for a rehearing of an application is that a substantial wrong or miscarriage of justice has or may have occurred or is likely to occur. Being unhappy or dissatisfied with the decision is not a ground for a rehearing. (See ‘Right of Appeal’ below).

Right of Appeal:

If you are dissatisfied with the decision of the Tenancy Tribunal, you may appeal to the District Court. You only have 10 working days after the date of the decision to lodge a notice of appeal.

However, you may not appeal to the District Court:

1. Against an interim order made by the Tribunal. 2. Against an order, or the failure to make an order, for the payment of money where the

amount that would be in dispute on appeal is less than $1,000. 3. Against a work order, or the failure to make a work order, where the value of the work

that would be in dispute on appeal is less than $1,000.

There is a $200.00 filing fee payable at the time of filing the appeal.

Enforcement:

Where the Tribunal made an order that needs to be enforced then the party seeking enforcement should contact the Collections Office of the District Court on [PHONE] or go to www.justice.govt.nz/fines/civil-debt for forms and information.

Notice to a party ordered to pay money or vacate premises, etc:

Failure to comply with any order may result in substantial additional costs for enforcement. It may also involve being ordered to appear in the District Court for an examination of your means or seizure of your property.

http://www.justice.govt.nz/fines/civil-debt

10. In connection with s102(3) RTA costs, the following extract from Residential Tenancy Law in [NAME]. [NAME] (2018 [COMPANY]), was cited with approval by the District Court in BC346799 v [NAME] � BC346799 v [NAME] [2020] NZDC 3669 : Levy recovery costs 13. The approach the Tribunal should take when considering recovery costs claims has been outlined by the District Court in [NAME] [NAME] [NAME] [COMPANY] as follows: