What was the outcome of Tenancy Tribunal case 9050544?

The tribunal order states: Body Corporate 175615 must pay Elizabeth Kate Reid and Nicholas Daniel

How much money was awarded in case 9050544?

Filing Fee: $250.00 awarded to landlord; Immediately Being: A. Costs: $3,250.00 awarded to landlord

What type of tenancy dispute was case 9050544?

The primary dispute was Unit Titles.

Where can I read the official tribunal order for case 9050544?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/10719931-UTA_Tribunal_Order.pdf.

What was the outcome of Tenancy Tribunal case 9050544?

The tribunal order states: Body Corporate 175615 must pay Elizabeth Kate Reid and Nicholas Daniel

How much money was awarded in case 9050544?

Filing Fee: $250.00 awarded to landlord; Immediately Being: A. Costs: $3,250.00 awarded to landlord

What type of tenancy dispute was case 9050544?

The primary dispute was Unit Titles.

Where can I read the official tribunal order for case 9050544?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/10719931-UTA_Tribunal_Order.pdf.

Auckland, Auckland Tenancy Tribunal Case 9050544 — Unit Titles

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Order

Claims and awards in Tenancy Tribunal application 9050544. Amounts reconciled from the published order (claims sum and net total). Verify on MoJ.
Claim	Landlord	Tenant	Reason
immediately being: a. Costs	$3,250.00		immediately being: a. Costs
b. 50% of filing fee	$250.00		b. 50% of filing fee

Body Corporate 175615 must pay Elizabeth Kate Reid and Nicholas Daniel Vaudrey $3,500.00 immediately being: a. Costs - $3,250.00 b. 50% of filing fee - $250.00

Body Corporate 175615 must pay Carol Moorcroft and Harold Moorcroft as Trustees of Woodlands Trust $3,500.00 immediately being: a. Costs - $3,250.00 b. 50% of filing fee - $250.00

Reasons

On 22 July 2024, the Tribunal made the following Orders by consent: “The resolution of the Body Corporate dated 11 January 2024 that, “by ordinary resolution... the Body Corporate adopt the on charge legal advice of Court One for Units 2E, 2F and 1E” and the resolution of the Body Corporate on 6 October 2023 that, “by ordinary resolution... the Body Corporate manager be authorised to recover debts from expenditure for the benefit of a unit or units in accordance with Section 126 of the Act where it determines on behalf of the Body Corporate that one or more of the units has benefited from such expenditure substantially more than the other units”, are set aside. Within 7 days of the date of this Order, the Body Corporate will raise a levy pursuant to s.121 UTA against all unit owners on a utility interest basis, to meet the costs of the remediation work at issue in these proceedings, in terms of the Q Construction tender, or any variation of it agreed by the Body Corporate committee. The levy raised under Order 2 will be due for payment within 1 month of the date it is raised. Within 1 week of the date on which payment of the levy is due, the committee will consider whether it can proceed with the construction contract and will take all reasonable steps toward ensuring that the work can begin as soon as the contractor is available.”

Costs are sought by the applicant.

Counsel for the applicants was directed to file a costs memorandum within 7 days of the date of the Order, with the respondent to file a memorandum 7 days thereafter. Those Memoranda have been filed and considered.

Should costs be awarded?

There are two distinct bases for awards of costs in proceedings under the Unit Titles Act 2010 (“UTA”).

Legal costs, as a cost incurred by a Body Corporate in recovering levies, are claimable under s.124(2), which provides that: “(2) The amount of any unpaid levy, together with any reasonable costs incurred in collecting the levy, is recoverable as a debt due to the body corporate by the person who was the unit owner at the time the levy became payable or by the person who is the unit owner at the time the proceedings are instituted.”

That provision effectively provides for recovery of legal costs on an indemnity basis. The authorities make it clear that the role of the Tribunal in assessing such claims is only to consider the reasonableness of the charges.

For instance, the approach the Tribunal should take when considering such costs claims has been outlined by the District Court in Body Corporate 45131 v 88 CHI Ltd as follows: 1 a.the relevant test is as set out in section 124(2) of the Unit Titles Act – the Body Corporate is entitled to recover “any reasonable costs incurred in collecting the levy”; and b.solicitor and client costs are a category of costs that can be recovered under this provision; and c.the task is to assess the reasonableness of the solicitor and client costs that are claimed.

Useful considerations in assessing the reasonableness of the costs claimed were identified as: a. was the work that was done was reasonably necessary; b. was the amount charged for work that was reasonably necessary, reasonable; c. in both instances the NZLS Rules and Rule 9 in particular are prime reference points when assessing reasonableness; d. test the analysis against other available reference points.

These proceedings do not involve recovery of levies. The applicants’ costs claims must therefore be determined under the Tribunal’s general costs jurisdiction, provided by s.102 Residential Tenancies Act 1989 (“RTA”).

Section 102(3)(b) RTA provides that in proceedings such as these, where the parties are represented by counsel, “...the Tribunal may order a party to pay— (b) to another party, the reasonable costs of that other party in connection with the proceedings.”

Assessing “..the reasonable costs of the other party in connection with the proceedings” is a different exercise than assessing whether costs which a Body Corporate is able to recover on indemnity basis under s.124 UTA, are reasonable.

First, costs follow the event. 1 Body Corporate 45131 v 88 CHI Ltd CIV 2022 – 096 – 000494 [2023] NZDC 9036, at paragraph [5].

Should costs be awarded?

The substantive Order found that the Body Corporate had followed an unlawful process in seeking to recover the costs of the remediation work from the unit owners, in advance of that work being carried out.

The costs of the proceedings were mitigated by the Body Corporate’s acknowledgement, at the outset of the hearing, that it had followed an unlawful process and would immediately institute a proper process for having the remediation work carried out and would raise a s.121 levy to meet the costs in the first instance.

The Tribunal declined the unit owners’ request to determine, in advance of the work being carried out and the costs being incurred, whether the Body Corporate could disproportionately recover those cost from them under s.126 UTA.

Counsel for the Body Corporate says that costs should lie where they fall as the unit owners’ request for that determination was declined. He says that was the only substantive issue requiring determination, as it was not necessary for the unit owners to have pursued the other matters addressed in the Order to a hearing, because: a. the charges made against the unit owners had been reversed before the hearing; b. the Body Corporate was always prepared to complete the remediation work; c. the work had not been unduly delayed and could not be undertaken before a levy was raised to meet the cost.

The unit owners substantively achieved the outcomes they had applied for, by having the resolutions requiring they meet the repair costs set aside and having a correct process put in place for the repair work to be undertaken and funded.

Those outcomes were not in place before the hearing. That justified their having filed and pursued these proceedings to the point of the consent Order being made.

It is proper to regard the unit owners as having been successful in the proceedings and they should be awarded their reasonable costs under s.102(3)(b). What constitutes the applicants’ reasonable costs?

When it comes to assessing the contribution that should be made, the following extract from Residential Tenancy Law in New Zealand - S. Benson (2018 Thompson Reuters NZ Limited), was cited with approval by the District Court in BC346799 v Ikeda 2 : “A party is represented by counsel (that is, a lawyer). An award of costs for counsel is usually a reasonable contribution to legal costs, not full costs. The usual range is 40 to 70% 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, whether hearing time was lengthened by a party’s conduct and, for guidance purposes the District Court’s scale of costs.”

Those considerations largely mirror those outlined in Holden v Architectural Finishers Ltd 3 .

The Unit owners’ actual costs are evidenced by the following invoices: Reid and Vaudrey a. Inv-025546 dated 13.12.23 – “reviewing minutes and drafting opinion” - $1,455.00; b. Inv-025848 – “attending EGM, drafting and filing Tribunal proceedings” - $3,865.00. c. Inv-026794 dated 29.07.24 – “meeting with you to prepare for the hearing, reviewing body corporate’s submissions, drafting submissions in response, attending Tenancy Tribunal hearing, drafting costs submissions and incidental attendances” - $3,737.75. Moorcroft Trust d. Inv-025849 dated 29.2.24 – “drafting and filing Tenancy Tribunal claim” (includes filing fee) - $2,887.00 e. Inv-026795 dated 29.07.24 – “reviewing body corporate’s submissions drafting submissions in response, attendance at tribunal hearing, drafting costs submissions and incidental attendances” - $3,660.13.

Counsel for the unit owners says the Tribunal can be confident there is no duplication of legal costs as when submissions were prepared, half of the time incurred was attributed to each applicant.

The total claimed is $15,504.88 (including GST). The filing fee, though included in those costs, is separately recoverable (s.102(4)).

It seems clear from the invoices provided that the costs claimed, include attendances for preparation of a legal opinion and attendance at an 2 [2020] NZDC 3669 3 [1997] 3 NZLR 143 extraordinary general meeting of the Body Corporate prior to the instigation of these proceedings. The question then arises, as to which of the costs claimed, were “incurred in connection with the proceedings.”

In Ikeda (above) at paragraph 7, the court noted, “I am of the view therefore that the word “proceedings” in s.102 encompasses the application to the Tribunal, any interlocutory matters that are dealt with by the Tribunal, preparation for the hearing and the actual hearing before the adjudicator, as being the proceeding that is amenable to a costs order”

I find that the costs encompassed by invoice 025546 and the part of invoice 025848 that relate to opinion drafting and attendance at the EGM, should not be included in the award, as they are not costs incurred in connection with the proceedings.

Time sheets have not been provided by counsel for the unit owners enabling me to specifically calculate the part of invoice 025546 that reflects costs incurred before preparing the application.

District Court scale costs are a necessary consideration. These are matters of moderate complexity. I agree with counsel for the Body Corporate that 2B scale costs would be the appropriate comparison.

Counsel for the Body Corporate submits that an appropriate calculation of scale costs would be as follows (on the basis that it should be a total award as the applications were identical and counsel represented both parties). StepTime allowance (days)Cost allowance Prepare application1.5$2,865.00 Hearing preparation1.5$2,865.00 Appearance.5$955.00 Total$6,585.00

If I allow for: a. deduction of invoice 025546; b. reduction by 50% (in the absence of more detailed evidence) of invoice 025848; and c. deduction of the filing fee; The total for the applicants’ actual costs incurred in connection with the proceedings, becomes $11,717.38. Scale costs as calculated above would then equal some 56% of those actual costs, well within the accepted range.

The evidence does not show a need to make any additional allowance for then length and complexity of the hearing. The proceedings were conducted without undue delay, obstruction or complication and the Body Corporate took a responsible approach to settling the matter when the hearing began.

Given that necessary repairs to the units were delayed while the proceedings were conducted, the matter did have some urgency.

Weighing those considerations, I am satisfied that a costs award of $3,250.00 plus 50% of the filing fee should be paid to each of the applicants, who appear to have an identical interest in the proceedings.

Counsel for the unit owners asks for a direction that the unit owners should not be required to contribute to the costs the Body Corporate has been ordered to pay. BC198900 v Bhana 4 is cited as authority. That is not a matter addressed by counsel for the Body Corporate.

The High Court in Bhana, when asked to make the same declaration said, “Without deciding the matter, I doubt the Court’s jurisdiction to do so in the context of a costs application. In the event that a levy should be imposed on either or both of the second or third defendants, however, I reserve leave to those defendants to make a further application for costs to take account of any further levy imposed. In the light of that leave, and my views on the body corporate costs already passed on, I anticipate that the parties would be able to resolve the impact of a further levy without further recourse to the Court.”

Likewise, I am unaware of the Tribunal’s jurisdiction to direct the Body Corporate to raise levies other than as prescribed by the UTA. In the event that the benefit to the unit owners of this costs award is reduced because of any levy contribution required of them, a further costs application can be made.

Order

Claims and awards in Tenancy Tribunal application 9050544. Amounts reconciled from the published order (claims sum and net total). Verify on MoJ.
Claim	Landlord	Tenant	Reason
immediately being: a. Costs	$3,250.00		immediately being: a. Costs
b. 50% of filing fee	$250.00		b. 50% of filing fee

Body Corporate 175615 must pay Elizabeth Kate Reid and Nicholas Daniel Vaudrey $3,500.00 immediately being: a. Costs - $3,250.00 b. 50% of filing fee - $250.00

Body Corporate 175615 must pay Carol Moorcroft and Harold Moorcroft as Trustees of Woodlands Trust $3,500.00 immediately being: a. Costs - $3,250.00 b. 50% of filing fee - $250.00

Reasons

Costs are sought by the applicant.

Should costs be awarded?

There are two distinct bases for awards of costs in proceedings under the Unit Titles Act 2010 (“UTA”).

First, costs follow the event. 1 Body Corporate 45131 v 88 CHI Ltd CIV 2022 – 096 – 000494 [2023] NZDC 9036, at paragraph [5].

Should costs be awarded?

Those outcomes were not in place before the hearing. That justified their having filed and pursued these proceedings to the point of the consent Order being made.

Those considerations largely mirror those outlined in Holden v Architectural Finishers Ltd 3 .

Counsel for the unit owners says the Tribunal can be confident there is no duplication of legal costs as when submissions were prepared, half of the time incurred was attributed to each applicant.

The total claimed is $15,504.88 (including GST). The filing fee, though included in those costs, is separately recoverable (s.102(4)).

Time sheets have not been provided by counsel for the unit owners enabling me to specifically calculate the part of invoice 025546 that reflects costs incurred before preparing the application.

Given that necessary repairs to the units were delayed while the proceedings were conducted, the matter did have some urgency.

Tenancy Tribunal case 9050544 — Unit Titles in Auckland, Auckland

At a glance

Tenancy Tribunal case 9050544 — Unit Titles in Auckland, Auckland

At a glance

Claims & awards

Order

Reasons

Should costs be awarded?

Should costs be awarded?

Topics & place

Residential Tenancies Act sections

Key findings

Property management

Frequently asked questions

Claims & awards

Order

Reasons

Should costs be awarded?

Should costs be awarded?

Topics & place

Residential Tenancies Act sections

Key findings

Property management

Frequently asked questions