Published tribunal order
Tenancy Tribunal case 9036162 — Unit Titles in Flat Bush, Auckland
Decided 31 Jul 2024 · Published 31 Jul 2024 · Application 9036162
Mixed / unclear
- Unit Titles
Order
of 5 April 2024 was incorrect and should have been recorded as $600.23. For clarity, the Body Corporate was entitled to penalty interest as per order of 31 May 2023 of $230.82 and additional penalty interest of $600.23 making a total of penalty interest of $831.05
- Body Corporate 362260 must pay costs of $9,085.00 to Huan Zhao by 5pm on the 15 August 2024.
Reasons
- There is extensive history of dispute between the Body Corporate and the applicant which has been detailed in my previous decisions.
- This claim by the owner arose from a pre settlement disclosure statement that was provided to her, which Ms Zhao claimed was incorrect in so far that it included items that she disputed liability for.
- There have been two substantive determinations in this matter (31 May 2023 and 5 April 2024) on the 31 May 2023 I made the following orders.
- Ms Zhao is liable to the Body Corporate 362260 for the following amounts: • $230.82 penalty interest • $132.25 Invoice 30088 attendances passing TT order to solicitors for enforcement. • $845.89- Professional Services – Jennifer G Connell 7/11/2018
- Ms Zhao is also liable to pay the Body Corporate 362260 scale costs to be determined by the Registrar for High Court proceedings as ordered by the High Court on the 4 April 2019.
- Ms Zhao is liable to pay the Body Corporate 362260 the reasonable costs incurred by Body Corporate in defending Appeal proceedings filed by Ms Zhao in the High Court and Court of Appeal.
- Ms Zhao is not liable for legal fees incurred by the Body Corporate 362260 (invoice dated 31 July 2020 Jennifer Connell and Associates for $1973.00) in defending proceedings in the Disputes Tribunal, nor for the costs of the Body Corporate attending or travelling to that hearing.
- Ms Zhao is not liable for legal fees or disbursements incurred by the Body Corporate 362260 in invoice dated 6 April 2022 from Jennifer Connell and Associates for $5,898.00.
- The Body Corporate should recalculate Ms. Zhao’s statement of account taking into account the above orders and advise her immediately of the amounts outstanding. 1
- On the 5 April 2024, I made the following orders.
- Ms Zhao is liable to the Body Corporate for the penalty interest calculation levies due 30 April 2017 to 5 September 2018 of $831.05 and the penalty interest charged on the LA Fire system on charges of $185.46, are correct and are owed by Ms Zhao.
- Ms Zhao is liable to the Body Corporate for $12.45 courier charge, the balance of $109.28 owed for the LA Fire Systems and the balance of $34.50 owed for the LA Fire Systems invoice.
- Ms Zhao is liable to the Body Corporate for the Body Corporate’s costs of defending Ms Zhao’s filing of the appeal in High Court; (subsequently struck out) and Ms Zhao’s filing of the appeal in the Court of Appeal (subsequently abandoned) of $1150.00.
- The costs of these proceedings are reserved. Counsel are to advise the Tribunal by no later than 5pm on 10 April 2024; whether they have been able to agree on costs. If no agreement is made the Tribunal will set timetabling orders for submissions to be filed. 2
- As Counsel were unable to agree on costs this decision answers the remaining two issues: a) Was the $230.00 awarded in order dated 31 May 2023 also included in penalty interest calculation of the $831.05 in order dated 5 April 2024? b) Is party entitled to legal costs? 1 TT9036162, 31 May 2023 2 TT9036162, 5 April 2024 Was the $230.82 awarded in order 31 May 2023 also included in penalty interest calculation of the $831.05 awarded on 5 April 2024?
- The short answer to this is yes. Mr McConnell’s calculation included the $230.82 interest that I had already awarded on 31 May 2023 and therefore I should have only made my subsequent order for $600.23, this amount being the $831.05 less the $230.82 already awarded. Is either party entitled to legal costs? If so, how much?
- Section 171 Unit Titles Act 2010 gives the Tenancy Tribunal jurisdiction to determine disputes between the body corporate and the unit owners. Section102(2)(b) Residential Tenancies Act 1986 allows the Tribunal to award costs when any party is represented by Counsel in any proceedings. Background to the adjournment on the 4 September 2023.
- I record the following background relating to the adjournment on the 4 September to give context. On the 31 May 2023 I directed the outstanding issues were to be set down for a half day hearing with me at a date and time to be advised to the parties. This matter was set down for the 4 September 2023 and the parties were notified by notice of hearing dated 21 June 2023.
- My directions in respect of the hearing on the 4 September 2023 as set out in my decision of the 31 May were: I have been able to determine some of the claims, but there are some that are some costs still in dispute Accordingly, I have set the matter down for a further half day before me. I expect that the Body Corporate will amend the Current Owner Account to reflect my decision and provide that to Ms Zhao within 20 working days of this decision. I expect the Body Corporate to file a memorandum at least 10 days before the next hearing setting out the claimed costs that relate to Ms Zhao’s appeal against the Body Corporate that was struck out in the High Court and the abandoned appeal in the Court of Appeal. The memorandum should detail how those costs are made up, time spent, by whom and hourly rates. Counsel should also refer me to the scale costs for those proceedings. Counsel for Ms Zhao is to file a memorandum in response 5 days before the hearing. Both parties are to file a memorandum five days before the next hearing, in addition to the ones detailed above, addressing the following issues: a) What charged costs are in dispute, and their position in respect of each of those costs. b) Their position in respect of the costs of these proceedings. 3
- The hearing was to be resumed on the 4 September 2023, Mr Ahern, Counsel for Ms Zhao filed two memorandum of submissions before the hearing, one on the 5 July and the other on the 31 August 2023 4 , which I summarise below: •That the Body Corporate had failed to properly account to amend the current owner account to take into account my determinations of the 31 May 2023 in that it did not deduct all of the amounts owing and had now included other disputed amounts which had not been properly determined. •That the Body Corporate had failed to comply with the Tribunals directions to file and memorandum of the claimed costs relating to Ms Zhao’s appeal and the costs of the proceedings •That the only matters that appeared still in dispute are the $12.45, $109.28 and $34.50. and the penalty interest (which could not be calculated because the Body Corporate had failed to recalculate the current owners account).
- At the hearing on the 4 September Mr Ahern attended for Ms Zhao, and Mr Allan for the Body Corporate. Mr Allan sought an adjournment. I granted that adjournment but noted that costs would be awarded against the body corporate at the end of the proceedings. Mr Ahern and Ms Zhou were not notified of Mr Allan’s intention to seek an adjournment at today’s hearing before the hearing. I consider it appropriate to award costs for Mr Ahern’s attendance but will make a final determination on the level and quantum of costs at the next hearing. 5 The party’s submissions on costs.
- Before making this determination, I have received extensive submissions and a bundle of case law that they rely on from each party. I confirm that I have read each party’s submissions and the relevant case law before making this costs determination. The Applicant’s submissions
- Mr Ahern seeks cost of $2450.00 for the preparation and attendance at the adjourned hearing 4 September 2023 and $11,809.00 for the remainder. These costs are the full costs charged to his client Ms Zhao. Mr Ahern submissions are set out fully in submissions dated 15 May 2024 and 31 May 2024 6 . I summarise Mr Ahern’s submissions as: i) Ms Zhao has been the successful party having been successful in having $13,700 (out of the $15,000.00 queried). 3 TT9036162, 31 May 2023 paragraphs 57-62. 4 Memorandum of Counsel for the Applicant dated 5 July 2023 and 31 August 2023. 5 TT TT9036162, 4 September 2023. 6 Memorandum of Counsel for the Applicant submissions in respect of costs dated 15 May 2024 and 31 May 2024. ii) That the costs incurred are reasonable for the work that has been necessary to be undertaken to make the claims and attend the hearings. iii) That the Respondent’s actions in failing to comply with the Tribunal’s directions has led to delay and further cost. iv) That the Respondent failed to notify the Applicant within sufficient time that it would be seeking an adjournment of the hearing of the 4 September, leading to the Applicant incurring cost of travel, hearing time and preparation. v) That the length of time between hearings rendered the preparation for the 4 September nugatory. vi) That the Respondent has failed to engage in mediation when asked and that the Respondent should have accepted reasonable offers of settlement made by the Applicant but failed to do so. The Respondent’s submissions
- The Respondent’s submissions are dated 23 May 2024, and can be summarised as: 7 i) That both parties have been successful and therefore costs should lie where they fall. ii) That if the Tribunal is minded to award the Applicant costs then the Tribunal should only award costs for the balance of the proceedings (not including the adjournment of the 4 September) of $3,342.50 which represents a reasonable contribution based on scale costs. i) That if costs are to be awarded for the adjournment on the 4 September that an award of $477.50 or alternatively $980.00 should be made as that relates to time spent in hearing and in travel time. That the preparation time in drafting submissions for the 4 September would have minimised further work needed for the further substantive hearing. ii) That Mr Allan nor his firm were ever asked to attend mediation. iii) That the Respondent could not obtain Mr Duckworth’s time records and therefore it was impossible for the Respondent to comply with the Tribunal’s orders to do so. The Respondent should not be punished for not complying when it had no lawful recourse to do so. The law.
- There has been much litigation on the cost proceedings in unit title cases. The legal principles arising from those case can be summarised as follows. a. Costs are to be awarded to the successful party. This is also generally expressed as costs follow the event, which is the normal civil litigation rule about costs. In other words, if you win, you should be awarded costs. b. The costs awarded must be reasonable.
Who is the successful party?
7 Memorandum of Counsel for Respondent submissions as to costs dated 23 May 2024.
- The Applicant says in her counsel’s memorandum of submissions 8 :
- The applicant submits that she was clearly the successful party. While not all matters sought to be removed from the owners account were deleted, overall she was plainly clearly successful. By having removed from her owners account over $13,700 of debits (in relation to total debits challenged of approximately $15,000), that is clearly success.
- This amounted to total debit entries in excess of $14,000. In its decision the tribunal determined that the debits of $2432.89, $3402.71, $1973 and $5898 (totalling over $13,700) were not matters that the applicant was properly liable for. In their place, the Tribunal did determine a liability of $1100.
- By any view, successfully removing over $12,600 of debits in the face of a complete attempt from the respondent claiming that they were all proper debits, must mean that the applicant was overall the successful party.
- In this regard the court can take guidance from the decision in Weaver v Auckland Council [2017] NZCA 330. In commenting on its decision in Bond Cargo Limited V Chilcott (2000) 316 PRNZ 869 – the court commented at [23] “success or failure in this context is better assessed by a realistic appraisal of the end result rather than by focusing on who initiated what step, and the extent to which that step succeeded or failed.” While the court indicated that such an approach may not be appropriate in a damages claim, in a claim similar to the current, it is appropriate. In circumstances where the dispute sits around various matters and potential liability for those matters (as by analogy was the position in Bond Cargo Limited), it is appropriate to look at the end result. The end result here is that the applicant has been successful in removing a substantial quantum of debits in her owners account. The fact that some of those debits were not removed does not detract from this success.
- Put differently, what would the position of the applicant have been had no application been made. She would be liable for more than $13,000 of debits that have now been removed.
- The Respondent submits in its memorandum, 9 When both parties in a proceeding have varying degrees of success, as has occurred in this case, the usual principle is that costs will lie where they fall. The Court of Appeal has held that where parties have both had degrees of success, the courts should not focus too closely on the question of which party has failed and which has succeeded. Instead, a party's success or failure is better assessed by a realistic appraisal of the end result rather than focusing on the extent to which that step succeeded or failed. Packing In Ltd (in liq) v Chilcott (2003) 16 PRNZ 869 (CA) at [5] - [6]. The applicant quotes the same case at paragraph 22 of its costs memorandum. Yet, the applicant asserts that the 'end result' is that "the applicant has been successful in 8 Memorandum of Counsel for the Applicant submissions as to costs dated 15 May 2024. 9 Memorandum of Counsel for the Respondent submissions as to costs dated 23 May 2024. removing a substantial quantum of debits in her owner's account. The applicant appears to contradict the Court of Appeal, asserting that the fact that some of those debits were not removed does not detract from or undermine this alleged success. In taking this view, the applicant is clearly not looking at the 'end result' wholistically, but at the end result from a perspective. A realistic, objective appraisal of the end result in this case is that while the applicant was successful in removing some debits from her owners account, she nevertheless still owes a debt to the respondent and was found to be liable to pay the respondent's costs in the High Court and Court of Appeal proceedings. A summary of the applicant and respondent's successes is attached as Appendix A. Focusing the end results alone, the applicant has only had 1 success in this Tribunal, whilst the respondent has had a total of 3 successes. In counting quantity alone, the respondent has actually had more successes than the applicant. Taking quantum into account, the applicant has reduced the debits in her owners account by $13,706.60. However, as discussed below, the applicant still owes the respondent a total of $3,230.61, made up as follows: a. $2,080.61 made up of unpaid body corporate levies, penalty interest and charges as awarded by this Tribunal, b. Court of Appeal costs of $1,150.00, and c. High Court costs yet to be quantified and sealed. Taking the High Court costs to be awarded to the respondent into account, the difference in quantum would be less than $10,000. The applicant clearly cannot be said to be the 'successful' party when the difference in quantum is so insignificant. If the principles set out above and by the Court of Appeal are followed correctly, there are plainly no 'successful' or 'unsuccessful' parties as claimed by the applicant; merely, both parties have had a degree of success and the varying individual degrees are not relevant in determining costs.
- The Applicant says in reply 10 That (the respondents) appendix does not correctly reflect what was in dispute and the outcome. In support of its attempt to establish success on its part, the respondent’s appendix includes 2 items that are in fact not success for the respondent. The proper removal of those items then more clearly demonstrates the outcome and what is the success of the applicant. The 2 matters incorrectly included are; a. As to the first section being the applicant’s liability to pay costs of the High Court Proceedings. This was not part of the applicant’s claim and was never in dispute. There was no debit amount in the owner’s statement for this and at no time did the applicant seek any relief in this regard. All the Tribunal did was note, as accepted by the applicant, that she was liable for these. It was not 10 Memorandum of Counsel for the Applicant in reply to Respondent’s submissions as to costs dated 31 May 2024. therefore a matter of determination by the Tribunal and is irrelevant on the issue of success. b. The last section – levies of $7,916.22 – is a mystery to the applicant. This was never part of the applicant’s claim. These levies were part of the earlier proceeding and had been paid long before this proceeding was issued. Using therefore the respondent’s Appendix, but amended to correctly reflect the outcome, the applicant was successful in having removed from her owners account debits of $13,706.60. She was unsuccessful in having removed $2357.55. it is submitted that this, even when considered on its own, clearly leaves the applicant as the successful party. Before addressing other matters which the applicant says are also relevant to the issue of determining success, the Tribunal is asked to look at this from a wider perspective. The applicant had added to her owners account substantial debits, exceeding $13,000, that the respondent simply resisted and refused to remove. She has had to go through 2 hearings to get orders from the Tribunal that these items be removed. She has been completely successful in that regard. The fact that she was not successful in having removed items that comprise approximately 10% of the items removed does not undermine that success. It is no different to a party that brings a claim on different causes of action. The party may succeed on some and not on others. But where it succeeds, it will correctly be regarded as being successful. There would be an absence of success if the outcome truly lift the parties largely equal in terms of their final positions. That clearly is not the case here. In addition, however the applicant submits that the Tribunal, in looking at the issue of success, is also entitled to look at the overall conduct of the parties in their approach to this proceeding. Analysis
- Both parties have referred me to the Court of Appeal’s determination in Packing In Limited (in liquidation) formerly known as Bond Cargo Limited v Laurence George Chilcott and Peter Charles Chatfield. 11 In this case the Applicant (Bond) had applied to the High Court for orders that 14 allegedly voidable transactions should not be set aside. Bond was successful in having 11 of those transactions not set aside and failed on three. This resulted in Bond having to pay the liquidators of the respondent $51,374.17. The transactions set aside were worth $60,970.79. The Master made a costs award of $35,320.00 against Bond as well saying: “As a result of the judgement that I have issued the liquidator (of the Respondent) is entitled demand payment for the sum that represented the 11 Packing In Limited (in liquidation) formerly known as Bond Cargo Limited v Laurence George Chilcott and Peter Charles Chatfield CA, CA 33/03 [24 June 2023], transactions that I set aside from the plaintiff. It is for that reason, that I conclude that the liquidator is the party who has been successful.” 12
- Bond appealed the costs decision on the basis that it had been successful on 11/14 transactions and that it had reduced its liability by over half of the amount sought by the respondents. The Court of Appeal agreed with Bond saying: “In a case such as the present, where in broad terms each party has had similar success, we do not consider it helpful to focus too closely on the question which party has failed, and which has succeeded. Costs in a case such as this should be based on the premise that the approximately equal success and failure attended the efforts of both sides. To that starting point should be added issues such as how much time was spent on each transaction or group of transactions in issue and any other matters which can be reasonably be side to bear on the court’s ultimate discretion on the subject costs. In the end as in all costs matters the Court must endeavour to do justice to both sides being in mine all material features of the case.” 13 (own emphasis added)
- I am satisfied that the Applicant has been the successful party in this proceeding, I say that for reasons that include: a. The claim was that the Body Corporate had provided Ms Zhao with an incorrect pre-disclosure statement that included amounts that were not owed. That claim was upheld. The pre-disclosure statement was incorrect (and in my view materially so), and therefore in that regard Ms Zhao was successful in her claim. b. The relevant monetary success of the parties. Ms Zhao was successful in challenging $13,700 out of $16,064.15 worth of debt. Effectively she was successful in 85% of the claimed amount. This amount both in nature and amount is considerably different to the Bond decision. c. Whilst Mr Allan submitted that I made declarations that Ms Zhao would be liable for any costs award made by the High Court in respect of the High Court proceedings , that did not allow the Body Corporate to simply debit Ms Zhao’s account of that amount that it owed its solicitors, it should have applied to the High Court for the costs award. d. I do not consider that Court of Appeal intended when making the statements in Bond that in any litigation where a party disputes or makes a number of claims and a party has been successful in almost all of them or vast majority then the failure in a small amount prevents them from 12 Packing In Limited (in liquidation) formerly known as Bond Cargo Limited v Laurence George Chilcott and Peter Charles Chatfield CA CA 33/03 [24 June 2023 at [4] 13 Packing In Limited (in liquidation) formerly known as Bond Cargo Limited v Laurence George Chilcott and Peter Charles Chatfield CA CA 33/03 [24 June 2023] at [5]. obtaining costs. The Court of Appeal prefixed its reasoning above with the words “ in a case such as the present”.
- In addition to being the successful party Ialso consider that it is just in the circumstances to award Ms Zhao costs for the following reasons: a. Ms Zhao’s only remedy in this case was to file proceedings. She had tried to engage with the Body Corporate Counsel about the charges who took an unwieldy position especially in respect of the fees it had paid to Mr Duckworth. Most of those fees I have determined not be payable. b. That I was alarmed by the Body Corporate charging Ms Zhao with the fee of $5,898.00 which related to proceedings that the Body Corporate was not part of. c. The Body Corporate manager refused to engage with Ms Zhao or her counsel to explain the charges. It is not lost on me that when the Body Corporate manager explained the remaining interest charges and other charges in the hearing in April this year, that his explanation was simple and easily understood and took less than an hour I am left in no doubt that had the Body Coporate simply sat down and explained the charges with Ms Zhao’s counsel, that this would have resolved many of the charges. d. That the Body Corporate failed to comply with reasonable directions/ observations of the Tribunal such as amending the current account to accurately reflect the decision of the 31 May 2023 and providing the amended current account to the Applicant. Whilst Counsel for the Respondent has noted that the direction was a ‘should’ rather than a ‘must’ it was patently clear that provision of the amended currently account would have allowed the parties (and the Tribunal to easily reconcile the outstanding issues)
What is reasonable?
- Having determined that Ms Zhao is the successful party and is therefore entitled to an award of costs, I consider what is reasonable.
- The Applicant submits that as the successful party it is entitled to indemnity costs. The Respondent disputes this and says that if costs are awarded the starting point should be scale costs as they would be applied in the District Court.
- Both parties have referenced me to a significant amount of case law on the matter.
- The High Court in Exuberant Limited v Quinovic Property Management Limited [2021] 14 has discussed the principles that assist the Court in determining reasonableness these can be summarised as: a. The Court will not become an instrument of injustice, and an order to pay actual costs, when those costs were unreasonably high, would result in such an outcome. b. The exercise is an objective one. The Court must make a principled assessment of reasonableness against stated criteria. c. Although it is ultimately for the Court to determine the relevant criteria, the criteria by which the legal profession assesses the reasonableness or otherwise of practitioners’ costs is of considerable assistance. d. Rule 9 of the NZLS Rules deals with fees and provides that a lawyer must not charge a client more than a fee that is fair and reasonable for the services provided, having regard to the interests of both the client and lawyer, and having regard to the fee factors in Rule 9. e. Scale costs could be used as a comparator when assessing reasonableness even though unlikely to be especially influential by themselves.
- In a recent decision on appeal from the Tribunal, 15 on the costs for levies cases in the District Court, his Honour made the following comments about scale costs and the reference in Exuberant. In Exuberant Judge Johnston contrasted the concept of “actual and reasonable costs” against the concept of scale costs, and observed that while having regard to scale costs as a point of references available, [he] would not expect information on scale costs to be especially influential in any assessment of reasonable costs. 16
- The Exuberant and Chi decisions that have been referenced were both decisions where there was some contractual or statutory basis for indemnity (actual costs charged by the lawyers) being imposed. That is different from the case at hand. In a very recent decision by the District Court 17 on appeal from the Tribunal, the approach on reasonableness of costs in cases where there is no contractual or statutory basis for the indemnity costs, was considered. The District Court said: If indemnity costs cannot be claimed as of right, then scale costs become an important factor to be considered as a guideline together with the wider discretionary 14 Exuberant Limited v Quinovic Property Management Limited [2021]NZHC 3533. 15 Body Corporate 45131 v 88 Chi Limited [2023] NZDC 9036 16 15 at [7(c)]. 17 Wing On So v Body Corporate 349200 [2024] NZDC 9439 [31 May 2024] factors which also need to be considered. Arguably, r 9 LACR factors may play a lessor role in this assessment. 18 Despite these urgings, in my view it is unwise to attempt to formulate a prescriptive approach. Parliament has deliberately not imposed a scale costs regime and it would be wrong to impose one on a de facto basis. A range of discretionary factors are already considered by the Tribunal in costs decisions and nothing in this judgment should be seen as changing that approach. Those factors are summarised in the text Residential Tenancy Law in New Zealand: 19 An award of costs for counsel are usually a reasonable contribution to legal costs, not full costs. The usual range is 40 to 70 per cent of actual costs and factors to consider include the party’s success, length of hearing, amount involved, importance of the issues, complexity, urgency, time for effective preparation, any unnecessary steps, arguments without substance, abuse of process, poor presentation, where the hearing time was lengthened by parties conduct and for guidance purposes, the District Court scale of costs. 20 Rather, the approach should be an objective assessment of what steps had to be undertaken for the successful party to achieve the result they have, and in doing so applying the factors listed in Residential Tenancy Law in New Zealand, using the scale costs regime as a guideline. This approach does allow flexibility and does not exclude a claim for close to indemnity costs if, in the context of what is “reasonable”, such costs can be justified. 21
- Mr Ahern submitted that reasonable costs should be the full amount charged by the Applicant he says:
- Given the matters addressed in this memorandum including; a. the significant success of the applicant; b. the actions of the BC in; i. not engaging from the outset to try and resolve matters; ii. not engaging with mediation; iii. running unmeritorious arguments (particularly in relation to the significant legal costs); iv. not filing memoranda on time; v. not disclosing to the tribunal that while it had made attempts to obtain the time records from Jennifer Connell, as at the hearing of 12 February, it is last such attempt was made on 12 July 2023; 18 Above at [107] 19 17 at [108] 20 Stewart Benson Residential Tenancy Law in New Zealand, Thomson Reuters [2018] at 9.23. 21 [17] at 109 vi. unreasonably refusing an offer to settle on 5 July 2023; vii. unreasonably refusing an offer to settle 4 April 2024 it is submitted that the tribunal should properly award costs in favour of the applicant, and given the very low level of the costs incurred, the full amount of those costs is the reasonable costs incurred. 22
- Mr Allans’s submissions counter the above points: On the issue of mediation The applicant alleges that the respondent failed to engage in or attend mediation. During the entirety of the time in which the respondent's current solicitors have been acting on this matter, no suggestion or mention of mediation was ever suggested or put forward by the applicant's solicitors. There is no mention of mediation in any of the communications between the applicant and the respondent's solicitors since September 2022. If the applicant had any intention of engaging in mediation with the respondent after September 2022, she did not communicate this to the respondent. On the Respondent’s action re the time records. Even if the time and attendance records were produced before the Tribunal, they would not have been determinative as the Court of Appeal has made very clear; the Tribunal still has to exercise its own judgment as to what is reasonable for a lawyer to have charged. Accordingly, were the records able to be obtained, they might not necessarily have been helpful. The respondent submits that the time and attendance records are not determinative of the quantity of costs for which it is liable. The applicant repeatedly 'over-reaches' in claiming that the respondent either did not take reasonable and/or proper steps to obtain the time and attendance records from JG Connell, or did not do so because it did not want to put those records to the Tribunal. For example: a. The applicant's solicitor sent an email to the respondent's solicitor on 16 February 2024, a copy of which is attached as Appendix C. In that email, the applicant made several baseless allegations, including that: i. The applicant's solicitor has not made reasonable efforts to obtain the records, ii. JG Connell did not refuse to provide those records, and iii. JG Connell had indeed provided those records to the respondent and the respondent purposely withheld those records from the Tribunal. b. The respondent has not provided any proof for those allegations. The respondent's solicitors letter in reply to those allegations dated 21 February 2024 is attached marked Appendix D. 22 Memorandum of Applicant’s counsel in respect of costs 15 May 2024. As a matter of law, it would not matter if there was one request or one hundred requests for JG Connell's time and attendance records. A firm's time and attendance records are the property of that firm. A firm are not obliged and cannot be compelled to provide them. The applicant's solicitors were made aware of this point of law in the 21 February 2024 letter, yet the applicant continues to 'over-reach' on this point. Indebtedness of applicant to respondent/ reasonableness of respondent The applicant cannot say that the respondent acted unreasonably, incurred 'substantial' further unnecessary legal costs or failed to engage in constructive settlement negotiations when it has failed, since 2021, to pay what it indisputably owes the respondent in unpaid levies and penalty interest. The applicant's conduct in this regard clearly contradicts the Unit Titles Act 201 O's 'pay now, argue later' regime. In any event, the High Court has held that where a party has had previous success against another party, it is not unreasonable for that party to reject a Calderbank offer made by the other party. The respondent had already succeeded in this Tribunal. The applicant admits this in its costs memorandum at paragraph 33. Yet, despite this Tribunal ordering the applicant to pay the respondent, she has refused and continues to refuse to do so. The respondent is entitled to take the risk of rejecting the applicant's Calderbank offer in the interests of ensuring the certainty and imprimatur of this Tribunal's determinations. Notwithstanding the above, the applicant's offer was an entirely unreasonable one. The Applicant offered for the respondent to pay the applicant costs of $2,000 while foregoing the $1,207.55 that it has since been awarded, on the basis that it would not have to pay the applicant's costs of this proceeding, even though at the time of the offer no determination had been made by this Tribunal as to costs. Even now, no determination has yet been made as to costs by this Tribunal. The applicant's offer operated entirely and unreasonably on the basis that it essentially had already been awarded costs for this proceeding. Adjournment Costs The Adjournment Costs should be calculated in reference to scale 2B in the District Court scale of costs. The respondent submits that the total costs it should be liable for is $477.50, being a quarter day allocation for item 25, appearance at hearing as principal counsel under scale 2B. The applicant should not be awarded costs of preparation as that preparation ultimately went into the March 2024 hearing and was not wasted. This accurately reflects both the appearance of Mr Ahern at the 4 September 2023 hearing and the purpose of the Tribunal's cost award against the respondent. Alternatively, if the Tribunal finds that the Adjournment Costs should be awarded on an indemnity basis, the respondent submits that the Adjournment Costs should be fixed at $980, being two hours of Mr Ahern's $490 hourly charge out rate for a 1-hour appearance and 1 hour of travel time. 23 My decision.
- Considering the factors identified by His Honour in Wing On So v Body Corporate 349200 as a guideline, I award the Applicant the sum of $9,085.00 in costs. This takes into account the following: a. The Applicant’s degree of success addressed above. b. The delay to proceedings incurred by the Respondent seeking an adjournment of the 4 September 2023, and in particular not advising the Applicant or the Tribunal of the need for an adjournment until the date of the hearing. I consider that an amount of $2000 out of the $2490 claimed should be awarded for this adjournment. Mr Ahern, the Applicant and the Tribunal were put to considerable expense in preparing for this hearing, attending the hearing and then to hear argument on the adjournment. The adjournment was given as an indulgence to Mr Allan and his client, largely because of Mr Allan’s firm’s workload. It is appropriate that this amount is reflective of the actual costs incurred. c. The other steps that were necessary to hear this matter. Whilst there has been significant time taken to deal with this matter in the Tribunal, I do not regard the matters as particularly complex. There was an unravelling of the factual history which took time, but the legal questions that needed to be determined were not of themselves difficult or novel. Ms Zhao’s attempts to have this matter dealt with by the Body Corporate before Tribunal proceedings were taken were thwarted by what I would categorise as an uncompromising approach taken by the Body Corporate and their lawyers, which I consider was probably as a result of the extensive litigation that had occurred previous to this matter. Whilst the Body Corporate’s stance may have been understandable given the history of litigation, it prevented discourse between the owner and the Body Corporate. This was a matter that should have and could have been properly resolved by the Body Corporate reviewing their own accounts and engaging with Mr Zhao’s lawyers. Mr Ahern’s submissions as set out below were an accurate reflection of the situation. Acting reasonably and properly, the BC should at least have engaged with a view to trying to resolve those matters. When Mr Duckworth would not respond, the applicant raised her concerns directly with the committee. The committee responded by saying that she could only communicate through the lawyers. So the BC would not engage with the applicant, but neither would the body corporate lawyers. 23 Memorandum of Respondent’s counsel in respect of costs dated 24 May 2024. d. The Body Corporate should have attempted to resolve these issues with Ms Zhao and if they did the Tribunal proceedings would not have been necessary. As mentioned in my decision above I found Mr McConnell’s evidence to be easily understood, it took him less than an hour to set out the debits that remained in dispute, why this was not done earlier by the Body Corporate is beyond me. e. I also considered that the Body Corporate delayed matters in respect of needing further time to obtain the billing records of Jennifer Connell. “Mr Allan sought an adjournment today on the basis that documents, namely the billing records of Jennifer Connell that relate to the two disputed invoices dated 11 May and 24 October 2019, have not been received”. 24 Mr Ahern says that now appears that no further attempts after 4 September were made by the Body Corporate to obtain those records. Mr Allan submits that this submission is without merit, but he does not identify what steps were taken, rather he submits that as a matter of law, “it would not matter if there was one request or one hundred requests for JG Connell's time and attendance records. A firm's time and attendance records are the property of that firm.” That submission represents a substantial departure from the submissions made on the 4 September by Mr Allan, where he sought an adjournment to allow him to get those records. If his position was that the time and attendance records were never available, then he should not have requested an adjournment in an attempt to get them. If Mr Allan changed his view on this between the 4 September and February 2024, then I consider that he should have notified the Tribunal and the Applicant before that time, this may have allowed the matter to have been dealt with more expeditiously by the Tribunal. f. That the Body Corporate did not accurately amend its statement of account to reflect the decisions made in 31 May 2023, and included other items which it said that Ms Zhao was liable for without any authority. This made it extremely difficult to reconcile and calculate any penalty interest claimed. g. The respective efforts to resolve the situation without the need of Tribunal hearings. I have considered Body Corporate’s reluctance to engage in a mediation (they were invited in July 2022 and reminded by Tenancy Services as well). I consider that some of the allegations should have been able to have been seen as untenable and unmeritorious from the beginning such as the Body Corporate on charging Ms Zhao for fees it 24 Adjournment decision 4 September 2023. was charged by the Mr Duckworth in respect to litigation the Body Corporate was not involved in. h. Scale costs: Mr Allan calculated the scale costs of balance of the proceeding less the adjourned hearing of the 4 September 2024 as $3,342.50, calculated at scale 2 B of the District Court scale. This calculation was for a short course trail. Mr Ahern disputes that this is the correct scale to apply .He has calculated the scale costs at scale 2B for civil matters as $9932. I consider that assessment of the actual time and tasks required in this proceeding were more akin to Mr Ahern’s calculation. i. It would be unfair to expect an unit owner to incur a significant expense of challenging debits made by a body corporate, especially when some of those claims were unmeritorious and when the body corporate refused to engage with the owner. j. That 60% award ($7085.00 of $11,809.00 of the Applicants costs excluding the adjournment matters) is in keeping with other costs awards.