Tenant ordered to pay levies and costs - Tenancy Tribunal ruling

OUTCOME: Other

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[2025] NZTT 9065424

TENANCY TRIBUNAL AT REMOTE LOCATION | TE TARAIPIUNARA RETIHANGA

APPLICANT: [redacted] [NAME_1]

RESPONDENT: [redacted] [NAME_2] Owner

UNIT ADDRESS: Unit/Flat 182 G1, [ADDRESS], [ADDRESS], [POSTCODE], Citta

ORDER

1. [COMPANY_2], [NAME_2] must pay [NAME_1] $7,758.92 immediately, calculated as follows:

Descriptions Applicant Respondent

Special Levy: Roof, Invoice 0550 $2,893.80 Costs: Legal fees, including App Fee $2,946.63 Costs: Collection costs $1,041.80 Costs: Penalty interest $876.69 Total award $7,758.92 Total payable by Applicant to Respondent

$7,758.92

Reasons:

1. Both parties attended the hearing which was held by video conference on 15 May 2025. [NAME_2] represented [COMPANY_2] [NAME_2] and [NAME_3] represented [NAME_1].

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2. The [NAME_1] has applied for recovery of unpaid levies ($1,696.98 due on 28 May 2025 to be paid in advance, and special roofing levy for invoice 0550 $2,893.80), penalty interest ($876.69), legal fees ($2,946.63) and collection costs ($1,041.80) from the unit owner.

Does the Unit Owner owe the levies claimed?

3. A unit owner must pay all [NAME_1] levies and outgoings payable for the unit. See sections 80(1)(f) and 121(1) Unit Titles Act 2010.

4. The [NAME_1] has determined the levies payable and unit owner's share has been calculated according to their utility interest.

5. The [NAME_1] has fixed the due date for the levies to be paid, and the unit owner has not paid the levies by that date. Section 124(1) Unit Titles Act 2010 (the “UTA”) allows a [NAME_1] to recover unpaid levies. The [NAME_1] has provided records to prove the amount claimed.

Is the Unit owner liable for interest?

6. If a unit owner fails to pay levies by the due date, interest accrues on the unpaid balance. A [NAME_1] may charge interest up to 10% per annum. See section 128 Unit Titles Act 2010.

7. The [NAME_1] has resolved to charge interest at 10% per annum on unpaid levies. The [NAME_1] has proved the amount of interest owing from the due date to the hearing date.

Is the Unit owner liable for costs?

8. Pursuant to section 124 UTA, and as resolved at meetings of the [NAME_1], the [NAME_1] is entitled to recover any reasonable costs incurred by it in collecting unpaid levies as a debt due by the owner to the [NAME_1]. In accordance with the judgments (of the District Court and Court of Appeal respectively) in [NAME_1] 346799 v [NAME_4] Vu [2023] NZDC 19645, [NAME_1] 162791 v [NAME_5] DC Auckland, CIV2014-004-0120, 24 June 2014 and [NAME_1] 162791 v Gilbert [2015] NZCA 185, the Tribunal must order that the reasonable costs incurred by the [NAME_1] in recovering the levies, objectively assessed, be paid by a defaulting unit owner.

9. I am satisfied that the costs ordered above are reasonable.

The roofing levy

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10.The substance of this dispute revolves around collection costs relating to one roofing invoice, for $7,314.00 (Invoice 004286). This invoice was issued by the [NAME_1] on 10 November 2023.

11.This roofing invoice drew [NAME_2]’s attention in that it was very similar to another invoice that she had been provided with 17 months earlier, on 23 June 2022, and which [NAME_2] had paid on 18 October 2022. That invoice was for $7,411.52. [NAME_2] stated that to ensure she didn’t make a double payment of a considerable amount, she sought clarification about the invoice from the [NAME_1] management team. She received no response. Over the next fifteen months, give or take, [NAME_2] repeatedly approached the management team by email and by telephone for clarification as to whether this invoice was for the same purpose as the earlier invoice, but she never received a response from the management team.

12.[NAME_6] for the [NAME_1], accepts [NAME_2]’s version of events regarding this matter. She stated that during this time the management team had a very poor culture and record of communication. [NAME_6] went so far as to say that she experienced it first-hand. Ultimately the [NAME_1] saw fit to change the management team because of this dynamic.

13.Reasonableness of collection costs, legal fees and penalty interest was addressed thoroughly by His Honour D Clark in the case of [NAME_1] 346799 v [NAME_4] & Vu [2023] NZDC 19645 (“[NAME_4]”). On appeal from the Tenancy Tribunal, [NAME_4] was a case in which the Adjudicator had reduced the legal fees for one unit owner from $5,923.50 to $3,500.00 and for the second unit owner from $5,564.36 to $3,500.00. The Adjudicator’s reasons for the reduction were that the amount charged was unreasonable. The reasons given by the Adjudicator were that the claim was “run of the mill”, it would be inequitable for the appellants’ claim to include the solicitors dealing with administrative arguments and the work did not justify the involvement of two solicitors.

14. In his decision, His Honour Judge D Clark referred to the case of [NAME_1] 45131 v 88 [COMPANY_7] at [18] in which His Honour Judge Nicholls at [6] sets out a method for assessing the reasonableness of the solicitor/client costs that are claimed which 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 a prime reference point when assessing reasonableness;

d. Then, test the analysis against other available reference points.

15.His Honour found the fees charged in [NAME_4] were for work that was reasonably necessary, the amounts charged for this work were not excessive based on the hourly rate and time taken, and assessing the costs against other reference points,

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in this case comparing the costs with the Court’s scale cost, the outcome was not unreasonable. The costs were therefore not unreasonable on an objective basis, and the appeal was allowed.

16.His Honour D Clark found that in deciding [NAME_4] the Adjudicator had substituted the required objective assessment of reasonableness for his own subjective views of reasonableness.

17. In the case at hand there is no argument as to whether or not the amounts charged were reasonable for the work done; the question of reasonableness in this case turns on whether the work done was reasonably necessary. [NAME_2] says it was not; she says the work would have been wholly unnecessary if the management team had responded to her requests for clarification of the invoice in a timely manner.

18.Because the management team did not respond, [NAME_2] says it was then reasonable to withhold payment. Consequently she says, the collection costs, legal fees and penalty interest are unreasonable costs in the circumstances.

19. It is not disputed that the entirety of this dispute would probably have been avoided if the [NAME_1] management team had responded to [NAME_2]. To not respond at all despite multiple overtures over an extended period of time is unprofessional. It is a failure on the management team’s part to discharge one of their duties, that is, to communicate with unit owners.

20.However, [NAME_6] pointed out that the fees were legitimate, and [NAME_2]’s obligation to pay them did not turn on the management team meeting [NAME_2]’s request for clarification.

21.There is merit in both positions.

22.[NAME_6] also made the point that [NAME_2] could have sought clarification of the invoice at an annual general meeting, but she didn’t attend.

23.[NAME_2] stated she did not attend the annual general meetings because English is not her first language. However, in attending the annual general meeting, [NAME_2] may have made contact with another unit owner who could have clarified the nature of the two different invoices for her.

24.When I consider the two invoices I make the following observations: the two amounts were different, the dates of the invoices were significantly different and the invoice numbers were different. Any one of these factors should have been enough to distinguish the two invoices and establish sufficient reason for [NAME_2] to pay.

25.[NAME_2] has a responsibility to pay the levies raised against her. Refunds for overpayments will be available if necessary, including through the Tribunal. To simply not pay for 15 months because the [NAME_1] management team is functioning poorly is not acceptable.

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26.Given the fee was not paid, it was unavoidable that enforcement would follow.

Other levies

27.The [NAME_1] is seeking an order that the ordinary levy of $1,696.98 due on 28 May 2025 be paid in advance due to [NAME_2]’s poor record of paying levies.

28.[NAME_2] stated that she has never been late paying an ordinary levy.

29.[NAME_6] was unable to show any evidence of [NAME_2] paying an ordinary levy late. I decline to make this order.

30.One other levy is at issue in this claim. There have been two invoices each for $2,893.80, one per invoice 0431 that was issued on 31 January 2025 and one per invoice 0550 which was issued on 3 March 2025.

31.Although not disputed, it appears [NAME_2] has been waiting for confirmation that they are discreet invoices before paying the second.

32.[NAME_6] confirmed in the course of the hearing that they are discreet invoices and I order that the second of them be paid.

C Lamdin 20 May 2025

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Please read carefully:

SHOULD YOU REQUIRE ANY HELP OR INFORMATION REGARDING THIS [COMPANY_8] [PHONE].

MEHEMA HE PĀTAI TĀU E PĀ ANA KI TENEI TAKE, PĀTAI ATU KI TE [COMPANY_8] [PHONE].

AFAI E TE MANA’OMIA SE FESOASOANI E UIGA I LENEI MATAUPU FA’AMOLEMOLE IA FA’AFESO’OTAI’I LOA LE OFISA O LE [COMPANY_8] [PHONE].

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