Tenant's Cost Claim Rejected by Tenancy Tribunal

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[2025] NZTT Wellington | Te Whanganui-a-Tara 9049904

TENANCY TRIBUNAL AT Wellington | Te Whanganui-a-Tara

APPLICANT: [redacted] Owner of a principal unit

RESPONDENT: [redacted]

ORDER

1. The application is withdrawn.

2. The application for costs is declined, costs to lay where they fall.

REASONS

1. The Tribunal has before it an application filed by a unit owners against the [NAME]. However the underlying dispute was settled prior to the hearing, so the only matter outstanding is one of costs, which is the subject of this decision.

2. The costs claim is determined on the papers.

BACKGROUND

3. The application before the Tribunal was filed on 21 December 2023 by [COMPANY] against [NAME] seeking minority relief.

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4. The premises in question are a large commercial building. There was a dispute between the applicant and the [NAME] around the calculation and raising of [NAME] charges. I will not sit out that dispute in detail here, but as I understand matters the applicant considers they were being charged amounts in excess of that which were fair and reasonable, or for which they would be liable under the UTA. An application for minority relief was filed in relation to the resolution which fixed how the charges for those [NAME] would be raised.

5. A hearing was scheduled on 27 January 2025 to consider the applicants claims.

6. On 25 January 2025, the parties filed a joint memorandum advising that they had committed to resolving the dispute directly, but recording that the only outstanding matter was one of costs. It was agreed that the cost question would be determined on the papers, and submissions were subsequently filed.

APPLICANTS POSITION

7. I summarise the position of the unit owner regarding the costs claim, as follows:

a. The dispute was settled on the basis that there was an agreement for a reconciliation of charges to be undertaken, back to 2017, and further that:

12. The Respondent has accepted the Applicant’s submissions in the originating application, in that the [NAME] has now agreed to not enforce the resolution from which the Applicant sought minority relief from and is also undertaking a full reconciliation of outgoings that have been charged to unit owners that dates back to 2017.

13. The Applicant’s basis for the claim was that the effect of the resolution would be unjust and/or inequitable which the [NAME] now acknowledges by virtue of their recent decision to not enforce it and to undertake a full reconciliation. Costs follow the event and Applicant is entitled to costs by virtue of the written commitment to remedy matters that the [NAME] has made in direct response to the application.

RESPONDENTS POSITION

8. I summarise the position regarding the [NAME], as follows:

a. Costs should lie where they fall.

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b. There was no application for costs in the original application.

c. It is not possible to establish what the costs should be, given there was no hearing so no decision made on the merits of the application.

d. There are no express or contractual provisions relating to costs such as occur here.

e. The dispute is long running, and unlikely to be resolved by the Tribunal.

f. The filing fee could not be reimbursed without a finding of success of the applicant party.

RELEVANT LEGAL CONSIDERATIONS

9. While this is a case under the Unit Titles Act 2010, the UTA confirms that the mechanical provisions around the operation of the Tenancy Tribunal, are those found in the Residential Tenancies Act 1986 (RTA). Section 102 of the RTA relates to costs. Section 102(2) confirms that the Tribunal “may make an order” where “any of the parties was presented by counsel”. Subsection 3 confirms that an order may be made to a party for “the reasonable costs of that other party in connection with the proceedings.”

10. It is unusual for a Tribunal or Court in New Zealand to award full indemnity costs against the losing party.

11.What is considered to be ‘reasonable costs’ will depend on a range of factors. In Holden v Architectural Finishes Ltd [1997] 3 NZLR 143 Justice McGechan, in his reserved costs decision, held that:

…the sum in issue is a ‘reasonable’ ‘contribution’. It is not some mere gesture. It is not some virtual payment in full. It is merely a contribution, and a reasonable one. At the outer limits, proportions of reasonable actual fees can afford some guidance. A 10% or even 20% contribution – very little indeed – may seldom qualify. A 90% or 80% contribution, virtually the total, may be regarded as likewise…if the ‘reasonable contribution’ earlier determined falls within a middle range, say 40% to 70%,there is a feeling of some comfort…

12.The High Court confirmed that when a party is represented by counsel, that the following factors are relevant to be considered when assessing costs:

a. The length of the hearing. b. The sum of money involved. c. The legal and factual complexity. d. Whether the argument lacking substance was advanced, and e. The degree of success achieved by the parties.

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13.Similarly in the judgment of [COMPANY] v [COMPANY] (No 2) [1988] 1 PRNZ 162, Tompkins J considered a costs issue where the party was represented, and held:

In addition to the length of the hearing, matters such as the amount of money involved, the importance either to the parties or generally of the issues, monetary or non monetary, the legal and factual complexities, the amount of time required for effective preparation, the number and complexity of interlocutory applications and the likely or actual solicitor and client costs incurred, may, in appropriate cases, be relevant to the exercise of the discretion.

ANALYSIS

14.The law in relation to costs orders within the Tenancy Tribunal is now well settled. In short, costs can be ordered when parties are represented by counsel as in the case here. However, the Tribunal follows the usual approach, where costs may be ordered to be paid to the successful party.

15. In this case however, neither party is strictly successful, because the Tribunal has not adjudicated the claims, and therefore has not made any finding as to whether minority relief should be granted.

16.While I can see that the parties have engaged toward a resolution of the dispute, and have even reached a point where they can move forward, that is not the same as saying the applicant has been wholly or substantially successful in their application. Parties settle disputes for very wide ranging of reasons, and not necessarily because the respondent accepts they were wrong.

17. In fact, I have seen no evidence to show that the [NAME] has accepted the resolution was unjust or inequitable for the minority, which would mean the entire minority.

18. I agree with the respondent that in the absence of finding that the applicant was successful in its claim, it would be appropriate for costs to lie where they fall.

[NAME] 13 March 2025

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Please read carefully:

SHOULD YOU REQUIRE ANY HELP OR INFORMATION REGARDING THIS [COMPANY] [PHONE].

MEHEMA HE PĀTAI TĀU E PĀ ANA KI TENEI TAKE, PĀTAI ATU KI TE [COMPANY] [PHONE].

AFAI E TE MANA’OMIA SE FESOASOANI E UIGA I LENEI MATAUPU FA’AMOLEMOLE IA FA’AFESO’OTAI’I LOA LE OFISA O LE [COMPANY] [PHONE].

Rehearings:

You may make an application to the Tenancy Tribunal for a rehearing. Such an application must be made within five working days of the order and must be lodged at the Court where the dispute was heard.

The only ground for a rehearing of an application is that a substantial wrong or miscarriage of justice has or may have occurred or is likely to occur. Being unhappy or dissatisfied with the decision is not a ground for a rehearing. (See ‘Right of Appeal’ below).

Right of Appeal:

If you are dissatisfied with the decision of the Tenancy Tribunal, you may appeal to the District Court. You only have 10 working days after the date of the decision to lodge a notice of appeal.

However, you may not appeal to the District Court:

1. Against an interim order made by the Tribunal. 2. Against an order, or the failure to make an order, for the payment of money where the

amount that would be in dispute on appeal is less than $1,000. 3. Against a work order, or the failure to make a work order, where the value of the work

that would be in dispute on appeal is less than $1,000.

There is a $200.00 filing fee payable at the time of filing the appeal.

Enforcement:

Where the Tribunal made an order that needs to be enforced then the party seeking enforcement should contact the Collections Office of the District Court on [PHONE] or go to www.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.

http://www.justice.govt.nz/fines/civil-debt