Body Corporate 375933 v Tenancy Tribunal [2017] NZHC 1619 (13 July 2017)

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IN THE MATTER	of an application for review in accordance with Part 1 of the Judicature Amendment Act 1972
BETWEEN	BODY CORPORATE 375933 Plaintiff
AND	TENANCY TRIBUNAL First Defendant WELLINGTON WATERFRONT LUXURY APARTMENT LIMITED Second Defendant

Hearing:	5 July 2017
Counsel:	C M Stevens and A L Sweeney for Plaintiff C Anastasiou for Second Defendant
_Judgment:	_{13 July 2017}

[1] Does the Tenancy Tribunal have the jurisdiction and/or discretion to hear a dispute between a former owner and its former body corporate, where that dispute is moot? This is an application for judicial review by the Body Corporate which owns Chaffers Dock Apartments seeking to set aside a decision of the Tenancy Tribunal that it has jurisdiction to hear the complaint of a former owner of a unit in the

¹Wellington Waterfront Luxury Apartment Ltd v Body Corporate 375933 NZTT Wellington,

[3] The second defendant owned a unit at Chaffers Dock Apartments. Mr Grieve is its sole director. During the term of its ownership, the second defendant let its premises as short-stay serviced apartments. The Body Corporate says that guests at the unit were noisy, messy (in terms of the area outside the unit) and caused considerable problems for the apartment community. The Body Corporate says this unit was the only one to cause such problems, but that claim is very much debated by the second defendant.

[4] At some time during 2016, the Body Corporate formed a committee to formulate new rules for the administration of Chaffers Dock Apartments. Mr Grieve joined the committee, suspecting, he said, that his company’s unit may be the target of some of these changes. New rules were drafted that prohibited subletting. These changes proved controversial. Mr Grieve and then the Body Corporate obtained separate legal opinions with respect to the vires of the new provisions.

6pm. One of the items of business was the adoption of new rules. They were adopted subject to the sole dissenting vote of Mr Grieve on behalf of the second defendant. A resolution was also passed which provided for the chair of the Body Corporate to hold a master key to facilitate entry into all apartments within the complex. The Body Corporate says this is necessary in the case of emergency, but Mr Grieve suspects Unit 406 was the real target.

[6] On 15 December 2016, the second defendant submitted a notice of dispute to the Tenancy Tribunal. In the notice the second defendant:

(a) challenged an invoice issued to it by the Body Corporate for cleaning costs. (It is accepted by the plaintiff that this dispute is properly brought and may proceed through the Tenancy Tribunal process);

(b) sought a declaration pursuant to s 171 of the Unit Titles Act 2010 that the special general meeting was invalidly convened for failure of notice; and

(c) sought a further declaration that the amended rules and the master key resolution were ultra vires and invalid because they were inconsistent with the Unit Titles Act.

[7] Meanwhile, at some point in 2016 prior to the special general meeting, the second defendant placed Unit 406 on the market. It is common ground that by the time of the special general meeting, Unit 406 was subject to an unconditional agreement for sale and purchase. It is also common ground that the agreement settled on 1 February 2017, two weeks prior to the hearing before the Tenancy Tribunal, and the preliminary decision it issued on that day.

[8] The Body Corporate submitted to the Tenancy Tribunal that the Tribunal had no jurisdiction to consider disputes (b) and (c) outlined above because Unit 406 had been sold and the second defendant no longer held any relevant interest in those disputes. Alternatively, the second defendant argued that the notice of dispute should be transferred to the High Court so that the jurisdictional issues could be dealt with there.

[9] In a brief written decision issued the same day, the Tenancy Tribunal found that it did have jurisdiction and refused to transfer the matter to the High Court. The Tribunal reasoned:

8. Section 171 of the unit Titles Act 2010 (UTA) confirms that the Tribunal has jurisdiction to consider disputes that arise between “the owner of a principal unit or a former owner of a principal unit”.

9. The term “owner” is defined in the interpretation section, section 5 as “... the person or persons for the time being registered as proprietor of the stratum estate in the unit under the land Transfer Act 1952.

10. I have no reservation in finding that when the application was lodged with the Tribunal (15 December 2016), that the Applicant would meet the definition of ‘owner’ as defined in the UTA. Notwithstanding that there may have been an accepted offer for sale of the unit, the title would not have transferred until settlement, being 1 February 2017 (the date stated by the Respondent).

12. I can see no reason why the Applicant would no longer have standing to pursue the application. In fact, section 171 is clear, that former owners have standing to bring applications before the Tribunal.

13. For those reasons, I am satisfied that the Applicant does have standing to bring the application.

[10] In light of that clear finding, the Tribunal also considered that transfer to the

[11] The plaintiff seeks an order setting aside the Tenancy Tribunal’s decision in which it refused (effectively) to strike out claims (b) and (c) of the second defendant for mootness. The Tribunal abides as is usual. The second defendant submits that the Tenancy Tribunal should be left to complete its task. Mr Anastasiou accepts that there is a mootness issue to be confronted, but his first line of defence is that mootness is a matter for the discretion for the Tribunal alone and is best left to be dealt with at the conclusion of the Tribunal’s hearing rather than pre-emptively in this forum. The Tribunal was correct, he submitted, to refuse to pre-emptively dismiss claims (b) and (c).

[12] At the hearing, it was generally accepted that claims (b) and (c) were moot. However, there is a hint in Mr Anastasiou’s submissions that this may not be so: he refers to a “live dispute” about breach of contract. He gave no details.

[13] Mr Stevens suggested that the Tenancy Tribunal proceedings were an early attempt by the second defendant to air this vires question as a preliminary step to bringing ordinary proceedings against the Body Corporate for breach of contract. He suggested that Mr Grieve was preparing the ground for an argument in the ordinary Courts that he was forced out of Chaffers Dock Apartments and out of business, by the ultra vires rule changes.

[14] It has long been the case that the Courts (at least) will not answer “purely abstract questions in anticipation of an actual controversy”,³whether in future negotiations or court action. This principle was reiterated relatively recently in Omaha Beach Residents Society Inc v Townsend Brokers,⁴in which the plaintiff sought clarification of the effect of a restrictive covenant. O’Regan P found:⁵

[T]he 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.

[15] Although both cases occurred in the context of a formal application for declaratory relief under the Declaratory Judgments Act 1908, the principle is broadly applicable and referable to the use of scarce court time, as well as the limited role of the courts in our system of law and government, a subject to which I will return below.

[16] There is no reason, in my view, to consider that the Tenancy Tribunal is in any different position to the ordinary courts in the respects described by McCarthy P and O’Regan P. Mr Grieve’s claim to the Tenancy Tribunal must be taken at face value. Since there are no other extant proceedings between these parties, the claims (b) and (c) lodged by the second defendant in this case, can only be taken to be moot.

(1) Except as provided in this section, a Tenancy Tribunal (a Tribunal) constituted under section 67 of the Residential Tenancies Act 1986 has jurisdiction to hear and determine all disputes arising between any persons of the kind listed in subsection (2) in relation to a unit title development (a unit title dispute).

³_{New Zealand Insurance Co Ltd v Prudential Assurance Co
Ltd [1976] 1 NZLR 84 (CA) at [85].}

⁴Omaha Beach Residents Society Inc v Townsend Brokers [2010] NZCA 413; [2011] NZRMA 1.

1986 that apply to a Tenancy Tribunal by virtue of section 176 of this Act, a Tenancy Tribunal may, in relation to a unit title dispute within its jurisdiction under this section, do any of the following:

(a) order any party to do anything necessary to remedy a breach by that party of an obligation arising under this Act, the body corporate operational rules, or any agreement that is binding on the party and relevant to the unit title dispute:

(b) order any party to refrain from doing anything that would constitute a breach of an obligation arising under this Act, the body corporate operational rules, or any agreement that is binding on the party and relevant to the unit title dispute:

(c) make any supplementary orders of a consequential or ancillary nature necessary to exercise or perfect the exercise of any of its jurisdiction.

(a) to make an order requiring any person or body to pay any sum, or to do any work to a value, or otherwise incur expenditure, in excess of $50,000; or

(b) to hear a dispute relating to the application of insurance money under section 136(4); or

[18] On its face this section gives the Tenancy Tribunal jurisdiction to hear “all disputes” between a body corporate and “former owner”. After 1 February 2017, the second defendant was a former owner in a dispute with its former Body Corporate with respect to claims (b) and (c) above. However, it does not follow that the inclusion of “former owners” in the statute means the Tribunal must hear moot cases involving former owners. Mootness is a separate question.

[19] The Tenancy Tribunal thus erred when it concluded that the issue raised by the plaintiff may be resolved simply by reading ss 171(1) and (2)(a) and (d). Having concluded that the parties before it met the description in s 171, the Tribunal had still to decide whether the dispute between the parties was moot, and then whether it could hear the case.

[20] The leading decision in New Zealand on the question of mootness is that of the Supreme Court in R v Gordon-Smith.⁶That case related to the availability to the defence of jury vetting information that had been seen by the Crown. The trial Judge ruled that the defence should have access to the same information made available to the prosecution. Ms Gordon-Smith was thus provided with that information.

[21] In the Court of Appeal, that finding of the trial Judge was reversed. But that reversal had no practical impact on Ms Gordon-Smith since she had received the benefit at trial of full disclosure, but was convicted. For her, the issue was moot. Ms Gordon-Smith nonetheless appealed to the Supreme Court. The decision primarily focussed on the existence of the jurisdiction, rarely exercised, for an appellate court to hear a moot case, to which I return below. However, the Court

The Court’s primary responsibility is to determine live controversies between citizens and to develop the law of New Zealand in that context.

[22] All of the further cases identified by the parties⁸in various ways reflect (for the most part in obiter) the ordinary courts’ discomfort with proceeding to hear moot cases. To trawl through them would simply be repetitive.

[23] Mr Anastasiou submitted that none of the cases had addressed the matter pre- emptively in the manner advanced here by the plaintiff. In all cases, he submitted, the Court had fully heard the merits before making general comments on the mootness question.

[24] This is not quite right. One of the better expositions on the subject at High

_{Court level was that of Hugh Williams J in Maddever v Umarewa School
Board of}

⁸Maddever v Umarewa School Board of Trustees [1993] 2 NZLR 478 (HC); Strand v Bays Music

Centre Inc [2013] NZHC 1870, [2013] NZAR 1068; Body Corporate 324525 v Stent [2016] NZHC 2442; Banks v Grey District Council [2003] NZCA 308; [2004] 2 NZLR 19 (CA); Simpson v Whakatane District Court (No 2) [2005] NZHC 210; [2006] NZAR 247; Turner v Pickering [1976] 1 NZLR 129; Omaha Beach Residents’ Society Inc v Townsend Brooker Limited above n 4; New Zealand Insurance Co Limited v Prudential Assurance Co Limited above n 3; Body Corporate 166208 v Temple 88

Trustees.⁹There, the School Board and the principal applied to stay, dismiss or strike-out a judicial review application in respect of the treatment of a child at a school. The application was made under the then applicable rules because the child was no longer at the school, had suffered no particular punishment, and the principal against whom the allegations were levelled, had also left the school. The application was thus pre-emptive. The Judge said:¹⁰

There is no doubt that it is competent for the Court to strike-out judicial review proceedings if it is inevitable that any remedy would be refused even if some procedural error were established.

[25] The Judge then took the firm view that refusal to grant relief was inevitable in this case. First, in his view, the relief sought was futile – that is it would make no difference to any party. He then said:¹¹

This case can also be approached on the basis of the related doctrine mootness. The mootness doctrine is really the doctrine of standing set in a timeframe: the requisite personal interest that must exist at the commencement of the litigation (standing) must continue throughout its existence (mootness). Thus because an actual controversy must exist at all stages of the proceedings a case is moot when the issues presented are no longer live.

[22] It is a well recognised common law principle that it is contrary to public policy for the Courts to entertain proceedings where there is no actual outstanding issue in existence between the parties. The Courts are not, in general terms, available to provide a free or subsidised opinion service to the public. Court time is a precious commodity, and cannot sensibly be spent on deciding matters that only have academic interest, or which prove a point of opinion rather than resolve a dispute.

[28] The starting point then, is that in general, courts will not hear moot cases. Where it is inevitable that (for, among other things, reasons of mootness) relief

would be declined, a proceeding may be pre-emptively dismissed, stayed or struck out.

[29] There is no provision in the Unit Titles Act giving the Tribunal the power to strike-out, stay or dismiss claims, as there is in the High Court Rules. And the Tribunal has no inherent jurisdiction to stay or dismiss claims. I was not referred to any cases where a tribunal had refused to hear a claim or dispute on the basis that it was moot. However, the principles expressed above are of general application. Mootness is a principle of law in itself and is not an adjunct to the law of strike-out, stay or dismissal. Because it is a general principle of the common law, the Tribunal

was bound to apply it, notwithstanding the lack of explicit statutory basis to do so.¹³

[30] Moreover, the power to refuse to hear a claim on the basis of mootness must be understood as an aspect of the implicit and necessary power of a tribunal to regulate its own procedure. It must be open to a Tribunal to refuse to hear a case that cannot possibly succeed on any view of it. A respondent in the Tribunal should not be required to defend a claim that has no prospects of success; and nor should such a respondent be required to apply to the High Court for relief, which would be necessary if the Tribunal could not itself refuse to hear cases.

[31] The case of Gordon-Smith makes clear that the Courts have the discretion to hear moot cases in exceptional circumstances where there is public interest in doing so. In that case, McGrath J said:

[15] In 1999, in R v Secretary of State for the Home Department, ex parte Salem, the House of Lords departed from the view that it would invariably be an improper exercise of appellate authority to hear appeals in relation to questions that have become moot. Speaking for all members, Lord Slynn said:

“... in a cause where there is an issue involving a public authority as to a question of public law, your Lordships have a discretion to hear the appeal even if by the time the appeal reaches the House there is no longer a lis to be decided which will directly affect the rights and obligations of the parties inter se ...

¹³Mr Stevens argued that the word “disputes” in s 171(1) requires a live controversy. That may

The discretion to hear disputes, even in the area of public law, must, however, be exercised with caution and appeals which are academic between the parties should not be heard unless there is a good reason in the public interest for doing so ...”

[16] As the passage cited from Lord Slynn’s judgment in Salem demonstrates, mootness is not a matter that deprives a court of jurisdiction to hear an appeal. Here, as already indicated, Ms Gordon-Smith, like the Crown, was a party to the Court of Appeal’s determination of the case stated appeal and has a right to apply for leave to bring an appeal to this Court. That disposes of any issue concerning jurisdiction. The question of whether this Court should hear an appeal which otherwise qualifies under statutory criteria for a grant of leave but is moot, is rather one of judicial policy. In general, appellate courts do not decide appeals where the decision will have no practical effect on the rights of parties before the court, in relation to what has been at issue between them in lower courts. This is so even where the issue has become abstract only after leave to appeal has been given. But in circumstances warranting an exception to that policy, provided the court has jurisdiction, it may exercise its discretion and hear an appeal on a moot question.

[32] The Judge went on to find that the matter was of sufficient public importance to warrant the appeal being heard despite its mootness. He said:¹⁴

Given that the issue potentially concerns every criminal jury trial, it is highly desirable that the correctness of the Court of Appeal judgment on the point be reviewed promptly.

[33] Accordingly, for reasons related to the importance of the adversarial nature of our forensic processes, the need for economical use of scarce judicial time, and the responsibility of the courts to be sensitive to their dispute resolution role in our system of Government, general advisory opinions on moot questions are not

genuinely appropriate.¹⁵But in truly exceptional cases a court may agree to hear a

moot case because there are wider interests involved and there is real utility in the development of the law.

[34] In argument before me, the parties primarily focussed on whether this exception applied in the present case. Mr Anastasiou argued bravely that the second defendant’s claim raises important questions of principle the resolution of which

_{have wider utility. These questions include, he said, the extent to
which body}

corporates can usurp vested property rights by interfering in decisions by unit owners as to whether to let their units out on short-term stay basis. That is whether the Unit Titles Act contemplates that body corporates should have a veto in that regard. Similarly, he submitted that the notice requirements for the calling of a special general meeting are also a matter of high controversy in unit title situations, and there is wide public interest in resolution of the issue of whether notice of a meeting given after the close of business could still be considered to be given on that day.

[35] However, in my view there is a more fundamental issue here. The Tenancy Tribunal is an inferior tribunal, and unless statute provides otherwise, it does not have the power to declare the law, and therefore to finally resolve issues of controversy in legal interpretation. Only the High Court and appellate Courts can do that. This means that the reasons why the higher courts may hear moot cases in exceptional circumstances – essentially to declare and clarify the law where it is in the public interest to do so – cannot apply to tribunals. So, while the higher courts have exceptional jurisdiction to hear moot cases in narrow circumstances, inferior tribunals do not. On reflection, Mr Stevens was right therefore to argue that the Tenancy Tribunal does not have jurisdiction to hear a moot case.

[36] If I am wrong about that, then it is in any case evident that the application does not raise any matter of such public importance or such ongoing controversy, the resolution of which could have such wider utility, that it was appropriate for the Tribunal to hear the matter. On the contrary, I consider the issues suggested by Mr Anastasiou to be fundamentally private law matters (even though they raise statutory interpretation questions) that may be argued if necessary in due course by parties who have “skin in the game”. These questions do not get close to the significance or utility to the orderly development of the law that was the case in

[37] I conclude that no rational Tenancy Tribunal acting within its powers could allow the applications for orders (b) and (c) to continue as they are moot and the

¹⁶R v Secretary of State for the Home Department ex parte Salem [1999] UKHL 8, [1999] 1 AC

Tribunal does not have jurisdiction to hear moot cases. If that is wrong, and the Tribunal has the same discretion as the higher courts, then there is no wider utility in providing answers to the questions of interpretation posed by Mr Anastasiou. I set aside the Tenancy Tribunal’s decision in that respect and direct the Tribunal to dismiss those applications.

[38] The plaintiff will be entitled to its costs in this Court on a Category 2B basis.

[39] Brief memoranda as to costs may be filed if necessary, but are not encouraged.

High Court of New Zealand Decisions

Body Corporate 375933 v Tenancy Tribunal [2017] NZHC 1619 (13 July 2017)