Tenant ordered to pay landlord's costs after unsuccessful claim

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[2025] NZTT 4479347, 4485205

TENANCY TRIBUNAL - Manukau

APPLICANT: [redacted]

Tenant

RESPONDENT: [redacted]

Landlord

TENANCY ADDRESS: [ADDRESS], [POSTCODE]

ORDER

[NAME] must pay [NAME] costs of $9,399.88 immediately.

Reasons:

1. On 7 September 2023 the Tribunal made an order for possession of the premises to the landlord and rent arrears of $9,480.00; the tenant’s claim was dismissed for want of prosecution.

2. I reserved the issue of costs for the proceedings; the landlord was represented by counsel in the proceedings.

3. On 2 February 2024, the landlord’s counsel filed submissions seeking costs. Reply submissions were invited but no submissions have been filed by the tenant.

4. I now issue my decision on costs, on the papers, as follows.

5. The general principle is costs follow the event.

6. As the landlord has been wholly successful in their claim against the tenant, there will be an order for the tenant to pay costs to the landlord.

7. Sections 102(2) and 102(3)(b) of the Residential Tenancies Act 1986 (RTA) provides that the Tribunal can order the unsuccessful party to pay reasonable costs to the other party in connection with the proceedings where parties are represented by counsel.

8. The issue is what are ‘reasonable costs’ in the circumstances.

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9. In the Tenancy Tribunal there is no schedule as to costs and so the Tribunal traditionally relies on common law case authorities that outline the principles as to awards of costs.

10.Prior to the introduction of schedules the District Court and High Court the courts awarded a reasonable contribution to costs based on a “shopping list” of factors – for example the length of the hearing, the amount involved, the importance of the issues, legal and factual complexity, urgency, preparation time, any unnecessary steps, arguments lacking substance, unnecessarily technical points taken, degree of success and conduct of the parties – see [NAME] [1997] 3 NZLR at 148-149.

11. In [NAME] the court stated “…a court [or Tribunal] should not forget the ultimate question or overlook the principles which underlie. There is wood as well as the trees. The ultimate question always remains: What is a reasonable contribution in these particular circumstances?”

12.The leading text by Grinlinton Residential Tenancies (4th edition, 2012) at para 8.3.5 states:

The Tribunal may also order a party to pay the reasonable costs of any other party to the proceedings … The general principles that are applied by the courts on the quantum of costs, may also be applied by the Tribunal referring to the factors set out in Holden v Architectural Finishes Ltd [1997] 3 NZLR 143 at 148 – 149. What is considered “reasonable contribution” to a successful party’s costs will depend on many factors, but there is authority that a figure of 60 percent is regarded as the average, with most awards falling within the range of 40-70 per cent of actual costs ([NAME] v Architectural Finishes Ltd at 149-150).

13.Further to the issue of costs assessment, the District Court in French v Ryan DC Auckland CIV-2012-004-711, 29 November 2012 held that in assessing costs in the Tenancy Tribunal it may also be appropriate to consider the equivalent scale costs which would apply under the District Court Rules (‘DCR’). In that case, a vacated damages claim was categorised as 1A for costs purposes under DCR.

14.In this case, the landlord incurred legal costs of $23,000. The landlord’s actual costs included the landlord’s counsel voluntarily reducing the fees charged in the sum of $2,885 as compared with the cost of actual time recorded on file. In addition, counsel states that junior counsel who attended hearings did not charge his time.

15.Counsel for the landlord submits that an order for the tenant to pay indemnity or at least increased costs under District Court Rules 14.6 is appropriate for these reasons:

a) where the party has contributed unnecessarily to the time or expense of the proceeding or step in the proceeding.

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b) where the party has taken or pursued an unnecessary step or an argument that lacks merit.

c) where the party has acted vexatiously, frivolously, improperly, or unnecessarily in commencing, continuing, or defending a proceeding or a step in a proceeding.

16.The tenant made many serious and highly prejudicial allegations, including some with potentially criminal law ramifications, without providing adequate supporting evidence to justify them and failed to take reasonable steps to prosecute the claims.

17.Counsel also submits that it is reasonably inferred that the tenant brought her claims without an intention to genuinely prosecute them.

18.The sums of money involved were considerable; the tenant’s claim comprises $24,550 in identified exemplary damages, unspecified additional damages of at least $900, and a refund of rent as at the end of October 2022 of approximately $41,520 (minus an unspecified Air BnB amount), for a total claim of at least $66,970.

19.I accept that the tenant’s claims alone justified counsel’s involvement to advise and represent the landlord.

20.I do not consider however that the circumstances of the case have reached the threshold for an award of indemnity costs. I consider that a reasonable contribution of about 40% of actual costs appropriate and in line with DCR scale costs on a 2B basis.

21.DCR category 2B relates to proceedings of average complexity requiring counsel of skill and experience considered average. The daily rate for category 2B is $1,910.00 per day – see schedule 5 of DCR. Having considered all the elements of the scale this matter would have required 1 day in total – that is, costs would equal $1,910.00 if this matter had been held in the District Court.

22.I am satisfied that the DCR form an appropriate check and balance regarding the issue of costs to be awarded; I consider that the costs awarded in the Tenancy Tribunal ought to be no more than an award had the matter been heard in the District Court given the hierarchical nature of the court system. For example, costs awarded in the District Court are not higher than costs awarded in the High Court.

23.In the upshot, I consider that the proceedings before me should be categorised as “2B” for costs purposes under DCR and on which basis the equivalent scale costs would be for these steps taken by counsel for the landlord:

1 preparing statement of claim of $2,865.00

2 preparing statement of defence of $1,910.00

9.12 preparation – written submission of $1,910.00

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9.13 preparation of bundle for hearing of $764.00

9.14 appearance at the hearing of $1,910.00

2 x Tribunal filing fees of $40.88.

24.The total costs awarded in favour of the landlord is therefore $9,399.88 being reasonable costs calculated pursuant to DCR 2B scale and the filing fees of the proceedings.

[NAME]

12 March 2024 [reissued on 15 May 2025]

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Please read carefully: Visit justice.govt.nz/tribunals/tenancy/rehearings-appeals for more information on rehearings and appeals.

Rehearings You can apply for a rehearing if you believe that a substantial wrong or miscarriage of justice has happened. For example: • you did not get the letter telling you the date of the hearing, or • the adjudicator improperly admitted or rejected evidence, or • new evidence, relating to the original application, has become available.

You must give reasons and evidence to support your application for a rehearing. A rehearing will not be granted just because you disagree with the decision. You must apply within five working days of the decision using the Application for Rehearing form: justice.govt.nz/assets/Documents/Forms/TT-Application-for-rehearing.pdf

Right of Appeal Both the landlord and the tenant can file an appeal. You should file your appeal at the District Court where the original hearing took place. The cost for an appeal is $200. You must apply within 10 working days after the decision is issued using this Appeal to the District Court form: justice.govt.nz/tribunals/tenancy/rehearings-appeals

Grounds for an appeal You can appeal if you think the decision was wrong, but not because you don’t like the decision. For some cases, there’ll be no right to appeal. For example, you can’t appeal: • against an interim order • a final order for the payment of less than $1000 • a final order to undertake work worth less than $1000.

Enforcement Where the Tribunal made an order about money or property this is called a civil debt. The Ministry of Justice Collections Team can assist with enforcing civil debt. You can contact the collections team on [PHONE] or go to 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.

If you require further help or information regarding this matter, visit tenancy.govt.nz/disputes/enforcing- decisions or phone Tenancy Services on [PHONE].

Mēna ka hiahia koe ki ētahi atu awhina, kōrero ranei mo tēnei take, haere ki tenei ipurangi tenancy.govt.nz/disputes/enforcing-decisions, waea atu ki Ratonga Takirua ma runga [PHONE] ranei.

https://www.justice.govt.nz/tribunals/tenancy/rehearings-appeals https://www.justice.govt.nz/assets/Documents/Forms/TT-Application-for-rehearing.pdf https://www.justice.govt.nz/tribunals/tenancy/rehearings-appeals/ https://www.justice.govt.nz/fines/about-civil-debt/ https://www.tenancy.govt.nz/disputes/enforcing-decisions https://www.tenancy.govt.nz/disputes/enforcing-decisions http://www.tenancy.govt.nz/disputes/enforcing-decisions/

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A manaomia nisi faamatalaga poo se fesoasoani, e uiga i lau mataupu, asiasi ifo le matou aupega tafailagi: tenancy.govt.nz/disputes/enforcing-decisions, pe fesootai mai le Tenancy Services i le numera [PHONE].