A claim for claims sake – Unit Title Disputes

by Matthew Whimp - Morrison Kent

Unit title developments can be fertile ground for (un)neighbourly disputes, some more trivial than others. A recent High Court decision (Body Corporate 375933 v Tenancy Tribunal & Anor [2017] NZHC 1619) has clarified the threshold for bringing a claim to the Tenancy Tribunal. Simply put, the claim must not be moot. If a moot claim – i.e. one where there’s no actual live controversy having real consequences for one or both parties – is brought against you, then you can argue that such a moot point cannot be heard by the Tribunal. For it is now clear that the Tribunal doesn’t have jurisdiction to decide on moot claims.

The case is a useful example for Bodies Corporate or others that find themselves facing an essentially pointless conflict. If this sounds like you, read on to get a sense of whether you’re in a similar position and so can put the moot matter to bed.

The moot point

The initial dispute brought before the Tenancy Tribunal was between a Body Corporate and a former owner of one of the units in the unit title complex. The former owner complained that new rules of the Body Corporate about residential subletting rights and emergency access to apartments were ultra vires, and that the special general meeting at which the rules were passed was invalidly convened. However, the former owner’s unit was subject to an unconditional sale and purchase agreement prior to the special general meeting and the sale was completed before the Tenancy Tribunal hearing. This meant that the rules could not affect the former owner as it had no interest in the unit, and so the relief sought would not benefit it. Essentially, it was a moot point.

The Tenancy Tribunal’s error

Nevertheless, the former owner brought its complaint to the Tenancy Tribunal and the Tribunal ruled that it had jurisdiction to hear its application. The Tribunal found this because section 171 of the Unit Titles Act states that a “former owner” may bring a claim to the Tenancy Tribunal and dismissed the Body Corporate’s argument that the claim was moot and couldn’t be heard.

The Body Corporate then brought judicial review proceedings to the High Court to challenge this decision. The question was whether the Tenancy Tribunal had jurisdiction to decide on moot claims. If not, then the High Court could order that the Tribunal’s decision be set aside.

At the High Court hearing, both parties seemed to accept that the point was moot. The High Court held that the Tenancy Tribunal erred in failing to consider mootness as a separate issue to standing. So although “former owners” can bring claims to the Tribunal per section 171 of the Act, the Tribunal must also consider whether those claims are moot and then whether it can rule on them.

The High Court’s clarification

The High Court described mootness as a “general principle of the common law”. It arises because courts exist to resolve actual and live controversies. Higher courts have refused to decide on moot cases in the past for that reason. In light of this, Williams J considered that as a starting point, in general, courts will not hear moot cases, and that the Tribunal was also bound to follow this principle. This makes sense because the Tribunal ought to spend its time hearing actual controversies and respondents should not have to defend fruitless claims.

To complicate matters, appellate courts (the High Court, Court of Appeal and Supreme Court) have from time-to-time heard moot cases. Courts have discretion to hear moot cases where there are exceptional circumstances and issues of public interest. Naturally, the former owner argued that its claims should fall into this category and should be heard even though they are moot. However, there is a high bar to be met before courts will rule on moot cases. One example is where the Supreme Court decided to rule on a moot issue of providing jury vetting information to the defence when it had been seen by the Crown. The outcome of that case would “potentially concern[…] every criminal jury trial” and so it was worthwhile for the Court to provide an opinion to shape the law. The claims brought by the former owner in this case were not of the same widespread public importance as that.

But more importantly, Williams J considered that the exception where appellate courts have discretion to hear moot cases cannot apply to tribunals. Tribunals cannot declare the law and so there would be no advisory purpose in a tribunal deciding a moot case. Therefore, the Tenancy Tribunal’s ruling on these moot issues was set aside and the Body Corporate awarded costs.

To summarise – in general, moot points will not be heard at tribunals or courts, subject only to the narrow exception where an appellate court is confronted with an issue of great public importance.

What this means for you

Think about whether your dispute is one where there’s no real live controversy to be resolved and parties with nothing to be gained from any resolution. If so, then such claims will likely not be heard by courts or tribunals. This means that respondents, such as Bodies Corporate or unit owners, should be saved from defending pointless claims at their expense.

If you would like any further information or advice please contact either the article author:  Matthew Whimp or the Morrison Kent Wellington office (04) 472-0020.



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