WHEN IS A DISPUTE NOT A DISPUTE?

In Body Corporate 375933 v Tenancy Tribunal [2017] HCNZ 1619, the High Court considered whether the Tenancy Tribunal had jurisdiction and/or discretion to hear a dispute between a former owner and its former body corporate where the dispute is moot.

The question arose in the context of an application for judicial review by Body Corporate 375933, the body corporate for the Chaffers Dock Apartments. The Body Corporate sought to set aside an interim decision of the Tenancy Tribunal that it had jurisdiction to hear a claim brought by a former owner in the Chaffers Dock Apartments, Wellington Waterfront Luxury Apartment Limited (“WWLA”), the second defendant in the High Court proceedings.

WWLA owned a unit in the Chaffers Dock Apartments. The unit was used as a short-stay serviced apartment. The Body Corporate alleged that guests staying in the unit were noisy, messy, and caused problems for other owners and occupiers in the complex. The Body Corporate sought to change its operational rules to prohibit sub-letting.

At an extraordinary general meeting (“EGM”), the Body Corporate passed resolutions adopting amended operational rules which included the prohibition on sub-letting, and authorising the chairperson to hold a master key for every unit in the complex. WWLA voted against these resolutions. WWLA subsequently made a claim in the Tenancy Tribunal challenging an invoice (a separate issue), and the resolutions on the basis that notice of the EGM was not properly given, and that the amended rules and master key resolution were ultra vires because they were inconsistent with the Unit Titles Act 2010.

At the same time, WWLA was in the processing of selling its unit. The unit was on the market before the EGM, and at the time of the EGM it was the subject of an unconditional agreement for sale and purchase. The agreement settled after the claim was made and before the Tenancy Tribunal made its interim decision on jurisdiction.

The Body Corporate’s position was that the Tenancy Tirbunal had no jurisdiction because the claims relating to the resolutions were moot – WWLA had no relevant interest in the outcome of its claim in relation to the resolutions having sold the unit.

The High Court held that the Courts will not answer purely abstract (moot) questions. Reference was made to the Court of Appeal’s decision in Omaha Beach Residents Society Inc v Townsend Brokers [2011] NZRMA 1 at [46] where it was held that “the courts will normally decline as a matter of discretion to issue a declaration in a case in which the factual context is either hypothetical or a prediction of future events.” In the present case, where there were no other extant proceedings, WWLA’s claims were considered to be moot.

The Court recognised that on the face it, the Tenancy Tribunal has jurisdiction to hear disputes between a former owner and a body corporate under section 171 of the UTA. The issue of mootness is, however, a separate question – one which the Tribunal failed to consider. The Court concluded that while the Tenancy Tribunal does not have the power to strike-out or dismiss claims, mootness is a principle of common law that the Tribunal is bound to apply, notwithstanding the lack of explicit statutory basis to do so.

In its decision, the Court found that the Tenancy Tribunal did not have jurisdiction to hear a moot case. And, even if it did, the claims made by WWLA were not of sufficient public interest as to justify the exercise of any discretion. The Tenancy Tribunal’s decision was set aside and orders issued for WWLA’s claims to be dismissed.

Source: Glaister Ennor
Tim Jones, Property
Paul McKendrick, Litigation & Dispute Resolution
Vicki Toan, Resource Management

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