Body Corporate 341188 v Kelly [2015] NZHC 1647 (14 July 2015)

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UNDER	the Residential Tenancies Act 1986 and the Unit Titles Act 2010
IN THEMATTER OF	an appeal from a District Court decision of Judge BA Gibson dated 23 December 2014
BETWEEN	BODY CORPORATE NO. 341188 Appellant
AND	STEPHEN ROBERT KELLY AND FINAL HARGREAVES TRUST COMPANY LIMITED _Respondent

Hearing:	13 July 2015
Appearances:	T Bates for Appellant Respondent in Person
_Judgment:	_{14 July 2015}

This judgment was delivered by me on 14 July 2015 at 4.45 pm, pursuant to Rule 11.5 of the High

[1] The appellant is a Body Corporate comprised of the unit owners of an apartment building in St Marys Bay, Auckland. The respondents are owners of one of the residential units and owned a number of future development units (FDUs) at the material time. Mr Kelly, the first named respondent, built the apartment building but was adjudicated bankrupt and his associated companies were placed into liquidation. After release from bankruptcy Mr Kelly and the other named respondent obtained legal ownership of the residential unit and the FDUs.

[2] The Body Corporate levied the sum of $43,734.17 in respect of certain of the FDUs. The respondents did not pay the levy. The Body Corporate commenced proceedings in the Tenancy Tribunal seeking recovery of the total sum of $49,869.26 being the levies, interest at 10 per cent from 30 April 2013, collection costs and an

District Court. The appeal was lodged with the District Court at Auckland on 9 April

2014, some seven months after the decision had been issued by the Tribunal. The respondent took the time point and submitted the appeal must be dismissed as being brought out of time.

[5] Judge B A Gibson ruled that s 117 of the Residential Tenancies Act 1986 (the Act), which provided for the time to appeal was mandatory¹. An appeal had to be brought within 10 working days of the date of the decision. In this case it was not.

¹Body Corporate No. 341188 v Kelly & Anor DC Auckland CIV-2014-004-577, 23 December

[6] Having made that finding the Judge nevertheless went on to consider obiter, whether the decision of the Tribunal was correct. The Judge determined at [18]–[23] of his decision that a wider interpretation of s 121(3) of the Unit Titles Act 2010 was appropriate, which would have supported judgment being entered for the full amount claimed by the Body Corporate. However given his finding on the issue of the appeal being out of time the point was moot.

[7] The Judge also went on to consider an alternative quantum meruit argument. Again he found that a quantum meruit claim might have been available for all of the levies except in relation to a separate litigation fund for a quite separate claim by the Body Corporate against the owners of an adjoining lot involving a dispute about car parking. Again, however, the point was moot.

[8] The Body Corporate seeks to appeal to this Court. It raises two essential grounds:

1. The appeal is made upon the ground that the Learned Judge erred in law in finding that the appeal from the Tenancy Tribunal decision was filed outside the ten working day stipulation as set out in s 117(6) of the Residential Tenancies Act 1986 ...

2. ... the learned Judge erred in finding that the Body Corporate were only entitled to levies on the basis of quantum meruit, in so much as the levies related to use of the building by the Respondents but that it did not extend to levies representing the litigation costs involving a dispute over an adjacent lot and carparking rights enjoyed by the Appellant and/or its Unit Owners.

[9] The appellants seek a judgment in this Court allowing the appeal and entering judgment for the Body Corporate against the respondent in the sum of $82,297.69 plus interest and costs.

[10] Under s 119 of the Residential Tenancies Act an appeal to this Court only lies on a question of law. After discussion with counsel for the Body Corporate the question of law to be determined by this Court was settled as:

Was the District Court Judge wrong in law in finding that the appeal from the Tenancy Tribunal decision was filed out of time and so a nullity?

[11] Mr Bates accepted that the second issue raised by the notice of appeal did not involve a question of law. The finding relating to quantum meruit in the District Court was in any event, obiter. Also, as Mr Bates accepted, Judge B A Gibson had again, albeit obiter, expressed the view that a broad interpretation should be taken to s 121 of the Unit Titles Act which would have entitled the Body Corporate to recover the full amount of the levies sought before the Tenancy Tribunal without resorting to the quantum meruit point.

[12] Further there is no jurisdiction for this Court to enter judgment in the sum sought of $82,297.69 in any event. The claim before the Tenancy Tribunal was in the total sum of $49,869.26. Section 118 of the Residential Tenancies Act limited the orders the District Court could make on appeal to:

(b) quash the order and substitute for any other order the Tribunal could have made; or

[14] I consider the appropriate course for this Court is to answer the one question of law posed. If that is determined in the appellant’s favour, the matter should be referred back to the District Court for the factual and quantum issues to be concluded.

(1) Subject to subsection (2), any party to any proceedings before the Tribunal who is dissatisfied with the decision of the Tribunal in the proceedings may appeal to a District Court against that decision.

(5) An appeal under this section shall be brought by the filing of a notice of appeal in the District Court nearest to the place at which the Tribunal sat in the proceedings to which the appeal relates.

(6) Every such notice of appeal shall be filed within 10 working days after the date of the decision to which the appeal relates.

[16] Whether the appeal was filed in the District Court within or out of time requires resolution of two issues. First, whether the appeal section is mandatory and second, if so, when is the “date of the decision” which triggers the time period within which the appeal must be filed.

[10] There are a number of District Court decisions which have held that the time limit in s 117(6) is mandatory, as is apparent from the plain reading of the statute. In Brown v Nixon [1989] DCR 97, a decision relied on by the respondent, Judge Elliott at p 101, said:

I take the view, on the basis that the provisions of s 117(6) of the Act to the effect that every notice of appeal shall be filed within 10 working days after the date of the decision to which the appeal relates are mandatory in character, akin to s 71A of the District Courts Act and if, as in Anderson v Jim Hunt & Co Ltd [1986] 1 NZLR 625, the notice was not filed within the prescribed period, then there being no provision under which the time can now be enlarged, the appeal must be struck out.

[11] To similar effect is the decision of Judge Tuohy in Wellington City Council v McMillan [2003] DCR 50 at para [9] and Grimshaw v Bell, North Shore District Court, CIV 2007-044-2566, 19 May 2008, Judge Wilson QC at [3].

[12] These decisions are plainly in accord with the mandatory nature of s 117(6) of the Act and I see no reason not to follow them.

[18] I agree with the Judge’s conclusion that the appeal must be brought within 10 working days “after the date of the decision” as s 117(6) requires and that there is no basis to extend the time beyond that 10 working day period. The section to that extent is mandatory. While r 14.6 of the District Court Rules 2009²provides the Court may extend the time prescribed for appealing if the enactment that confers the

right of appeal allows the extension or does not limit the time allocated for appeal, the Act contains no such provision extending time and expressly limits the time for appealing. If an appeal is not brought within 10 working days of the date of the decision to which it relates it is out of time and the defect cannot be cured.

[19] However, that is not an end of the matter. The real issue is when the 10 working days is triggered. The Judge accepted, on the basis of Mr Yovich’s (the Body Corporate manager) evidence, that the decision received by the Body Corporate on 27 September 2014 did not contain advice as to appeal rights.

[20] In fact Mr Yovich only saw the appeal rights for the first time on 17 April

2014 when they were provided with the costs order the Tribunal subsequently issued.

[21] While I agree with the Judge’s conclusion on the mandatory nature of s 117(6), with respect I consider he has misread the effect of the decision of Brown v Nixon.³In that case the Judge held that the effect of s 104 is that the date of decision is the date on which the Tribunal has complied with all of the mandatory requirements of s 104 which, in this case, is only when notice of rights of appeal is given.

[22] This raises the issue of the meaning to be given to the decision referred to in s 104:

(1) The Tribunal shall give its final decision in any proceedings, together with its reasons for the decision, in writing.

(2) The Tribunal shall provide both parties to the proceedings with a copy of its decision and its reasons for the decision, and with written notice of the rights of appeal (if any) against its decision, including any time limits on those rights.

[23] There a number of features of the relevant legislation which I consider inform how the Court should interpret s 104 of the Act.

(a) The nature of the disputes that generally come before the Tribunal under the Act in the first place.

(b) Section 85 of the Act, which confirms that the Tribunal is to exercise its jurisdiction in a manner “that is most likely to ensure the fair and expeditious resolution of disputes” ...” and “is to determine each dispute “according to the general principles of the law relating to the matter and the substantial merits and justice of the case, but shall not be bound to give effect to strict legal rights or obligations or to legal forms or technicalities”.

(c) It is plainly desirable that parties are notified of the decision and appeal rights before appeal rights are engaged.

[24] Section 104 requires the Tribunal to give its decision in writing and, as well, to provide written notice of rights of appeal including any time limits as part of the decision. Against the above background, in my judgment, the wording of s 104 is consistent with the “decision” referred to in s 117 as being the written reasons for the decision and the written notice of the rights of appeal against the decision. Section

104 places an onus on the Tribunal to provide that information to the parties as part of the decision. That is consistent with the relevant Tenancy Tribunal Rules which provide at r 15:

(1) A Tenancy Adjudicator may give the decision of the Tribunal immediately after the conclusion of the hearing or may reserve the decision on any question of fact or law.

(2) If the decision is reserved, it must be given as soon as practicable, and the Tenancy Adjudicator must ensure that all documents required by section 104(2) of the Act to be given to the parties are given to them as soon as practicable.

[25] All documents required to be provided under s 104(2) extend to the written reasons and written advice of appeal rights.

[26] I am satisfied that the “date of the decision” in s 117(6) is to be interpreted as the date on which the parties received the written reasons for decision and notice of

their appeal rights for the purposes of appeal. The fact there is no ability to extend the period for filing an appeal and that otherwise the Tribunal would be able to ignore its obligations provided for in s 104 and in the Rules to provide notice of appeal rights supports such an interpretation. It also accords with the principles commonly found in the administrative law context where decisions are not regarded as given until they are communicated.

[27] For those reasons I accept that s 117(6) is to be read as providing that the notice of appeal is to be filed within 10 working days after 17 April.

[28] In the present case, however, the position is further complicated by the fact the notice of appeal was lodged on 9 April 2014, prior to the receipt of the appeal rights on 17 April 2014. Some cases have held that where an appeal is filed before the time within which it may be lodged it will be a nullity: Bridge Wholesale Acceptance Corp (Australia) Ltd v Shores⁴and the cases discussed therein.

[29] However again I consider the interpretation that best seems to advance the purposes of the Act in this case is that the phrase “within 10 working days after the date of the decision” only imposes an end date within which appeals must be lodged but does not render notices of appeal filed before the decision and rights of appeal are issued a nullity. I prefer the reasoning of Thomas J in Morton-Jones v R B & J R Knight Ltd⁵to that of Temm J in the Bridge case.

[30] In Morton-Jones Thomas J held that a notice of appeal could be lodged after the substantive judgment but before the final determination and perfection of the judgment but remain a notice of appeal for the purposes of an appeal from the decision.

[31] The words of s 117 in this case “shall be filed within 10 working days after the date of the decision” are to be construed as specifying the time before which the notice of appeal must be lodged. They do not import a commencement date. Rather

⁴_{Bridge Wholesale Acceptance Corp (Australia) Ltd v
Shores [1994] 2 NZLR 222 (HC).}

[32] Like Thomas J I consider that such an interpretation is consistent with and accords with the purpose of the Act and commonsense. The purpose of s 117 is to fix a final date by which an appeal must be filed. As noted there is a cut-off date for filing the notice of appeal, which cannot be extended. From a practical point of view the respondent is not prejudiced, it simply has advance notice of the appeal.

[33] For all those reasons and given the factual finding of the Judge that the appeal rights were not notified to the Body Corporate until 17 April 2014 I find that the appeal before the District Court was brought within time.

[34] The result is the appeal is allowed. The answer to the question of law posed is yes, the District Court Judge was wrong in law to find the appeal was filed out of time and so a nullity.

[35] The proceeding is remitted to the District Court for that Court to consider and give effect to the substantive merits of the appeal from the Tenancy Tribunal.

High Court of New Zealand Decisions

Body Corporate 341188 v Kelly [2015] NZHC 1647 (14 July 2015)