Tenantcheck Insights · Case study
Tenancy Tribunal case 5185232 — Unit Titles
Decided 5 Apr 2026 · Published 5 Apr 2026 · Application 5185232
- Unit Titles
Party names are redacted in the official published order. This page summarises the dispute only — not individual identities.
At a glance
Key facts from the published tribunal order.
Adjudicator
J Setefano
Claims & awards
What this tenancy cost at tribunal — claim, category, amount, and party awarded, with reconciled net total.
No individual claim amounts were reconciled for this order. View the official Ministry of Justice PDF for full detail.
Order
- The respondent’s application for legal costs is declined.
Reasons
- This decision addresses the respondent’s application for an award of legal costs following the Tribunal’s decision dated 15 December 2025 dismissing the proceeding for want of jurisdiction.
- The respondent seeks recovery of actual legal costs of $20,634 plus GST, or alternatively a contribution of 70% of those costs, in the amount of $14,443.80.
- The applicant did not file submissions in response on costs, despite being given the opportunity to do so. Jurisdiction to Determine Costs
- Although the substantive application was dismissed for want of jurisdiction, the Tribunal retains jurisdiction to determine the issue of costs arising from the proceeding. This is an incidental power necessary to give effect to the Tribunal’s processes and orders.
- The Tribunal’s jurisdiction to award costs is governed by section 102 of the Residential Tenancies Act 1986 (“the Act”). Relevant Legal Framework
- The Tenancy Tribunal is a low-cost jurisdiction. Section 102(1) of the Act reflects the general rule that each party is responsible for their own legal costs.
- Tribunal may depart from that position only in limited circumstances. Under section 102(2), the Tribunal may order costs where it is satisfied that a party has caused another party to incur unnecessary expense by conduct that is frivolous, vexatious, or otherwise improper.
- The threshold is high. Costs are not awarded simply because a party is unsuccessful. This principle is well established in Kumar v Capper [1991] RTHNZ 2 and Cuzens v Ward [2010] RTHNZ 12.
- In Cuzens v Ward [2010] RTHNZ 12 at [16]–[17], the Tribunal confirmed that costs are awarded sparingly and only where justified by the conduct of the parties. Relevant considerations include the nature and complexity of the issues, the importance of the matter, the conduct of the parties, and whether unnecessary costs were caused, with reference to Holden v Agricultural Fisheries Ltd (1997) 10 PRNZ 675.
- Even where the statutory threshold is met, any award is limited to a reasonable contribution to costs rather than full indemnity: Borlase v Davies [1995] RTHNZ 11. Consideration of Authorities Relied on by the Respondent
- The respondent relies on a number of authorities in support of the application for costs, including Kumar v Capper [1991] RTHNZ 2, Nixon v Palotti [1999] RTHNZ 16, and Cuzens v Ward [2010] RTHNZ 12. I accept that these authorities accurately set out the applicable principles governing the award of costs in the Tribunal.
- Those authorities confirm that costs may be awarded where proceedings are frivolous, vexatious, or ought not to have been brought, but also emphasise that such awards are exceptional and discretionary.
- The respondent also relies on Borlase v Davies [1995] RTHNZ 11 and Cuzens v Ward in support of an award of a reasonable contribution to costs. That principle is correct but arises only if the statutory threshold in section 102(2) is first satisfied.
- The respondent refers to Holden v Agricultural Fisheries Ltd (1997) 10 PRNZ 675 and Wondergem v Shaw [2003] RTHNZ 11 regarding factors relevant to the exercise of discretion. Those factors are relevant but do not displace the requirement that there be conduct meeting the statutory threshold.
- The respondent submits that the application ought not to have been brought. The authorities relied upon contemplate situations where claims are clearly untenable, abusive, or pursued for improper purposes. Whether that threshold is met must be assessed on the facts of this case.
- The respondent further relies on Norrie v Time3 Global Limited [2016] NZHC 2712 and Body Corporate Administration Ltd v Mehta (No 4) [2013] NZHC 213. These authorities concern costs principles in the High Court and are of limited assistance in the Tenancy Tribunal context, which is governed by the specific statutory regime in section 102. They do not alter the threshold required before costs may be awarded.
- I have also considered Law and Others v Body Corporate 406198 NZTT Auckland 9023361. In that case, costs were awarded where the applicants acted wilfully and pursued claims with no reasonable prospect of success, thereby causing unnecessary expense. That case is distinguishable. Here, the applicant’s claim, although unsuccessful on jurisdiction, involved a genuine dispute and cannot be characterised as wilfully unmeritorious.
- I have further considered Stent v Body Corporate 324525 NZDC 14716. That decision affirms the general principle that parties ordinarily bear their own costs unless a statutory exception applies. That principle supports the approach required under section 102 of the Act.
- Accordingly, while I accept the respondent’s authorities accurately state the applicable legal principles, they do not establish that the statutory threshold for an award of costs is met in this case. Assessment of the Respondent’s Application
- The respondent submits that the applicant knew or ought to have known that the arrangement fell within the exclusion in section 5(1)(n) of the Act and that the proceeding therefore ought not to have been brought.
- I accept that the respondent incurred legal costs in defending the application, including preparing submissions and attending the jurisdictional hearing.
- However, the incurring of costs, even substantial costs, does not in itself justify an award under section 102. The focus must be on whether the applicant’s conduct caused unnecessary expense within the meaning of the Act. Whether the Statutory Threshold is Met
- The critical question is whether the applicant’s conduct can properly be characterised as frivolous, vexatious, or otherwise improper, or whether it caused unnecessary expense within the meaning of section 102(2).
- The Tribunal determined that it lacked jurisdiction because the arrangement was a family accommodation arrangement excluded by section 5(1)(n) of the Act. However, that conclusion does not, of itself, establish that the application was improperly brought.
- The applicant relied on a signed document described as a “Rent Agreement”, asserted a lower agreed rent, and advanced a case that payments made at a higher level were linked to an expectation of building equity in the property. While those assertions were not accepted as determinative of jurisdiction, they were not inherently untenable.
- There was also a genuine dispute as to the nature of the arrangement, including competing documentation and differing accounts of the agreement between the parties. The existence of such disputes weighs against a finding that the claim was frivolous or vexatious.
- The fact that the applicant did not file further submissions on jurisdiction, while noted, does not of itself establish improper conduct or that the proceeding should never have been brought.
- Importantly, this was a preliminary jurisdictional determination. The Tribunal made no findings on the substantive merits of the applicant’s claims. In those circumstances, caution is required before characterising the bringing of the claim as improper.
- I am not satisfied on the evidence before me that the applicant acted in bad faith, or that the proceeding was brought for an improper purpose, or that it was so lacking in merit as to meet the high threshold required under section 102(2).
- While the respondent submits that the applicant “must have known” that the arrangement fell outside the Act, that submission overstates the position. Questions of jurisdiction under section 5(1)(n), particularly involving trust-owned property and family arrangements, can involve nuanced factual and legal assessment, as recognised in Herbert v Scott [2014] NZHC 1137.
- In those circumstances, I am not satisfied that the applicant’s conduct caused “unnecessary expense” in the sense contemplated by section 102(2). Rather, the costs incurred were a consequence of defending a claim that ultimately failed on jurisdictional grounds, which is insufficient to justify a costs award. Effect of Legal Representation and Quantum Sought
- Both parties were represented by counsel. However, as confirmed in Kumar v Capper [1991] RTHNZ 2 and Cuzens v Ward [2010] RTHNZ 12, representation alone does not justify an award of costs.
- The respondent’s claim for actual costs exceeding $20,000 is significant. Even if the statutory threshold had been met, the Tribunal would only award a reasonable contribution, not full indemnity costs. However, given my findings above, it is not necessary to determine quantum. Conclusion
- The Tribunal remains a low-cost jurisdiction where parties are expected to bear their own legal costs except in clear cases of improper conduct.
- This is not such a case. While the respondent was successful on the jurisdictional issue, the applicant’s claim cannot be characterised as frivolous, vexatious, or improperly brought to the high standard required by section 102(2) of the Act.
- The respondent’s application for legal costs is declined. Name Suppression
- The existing suppression orders otherwise remain in force.