Published tribunal order
Tenancy Tribunal case 9055404 — Property damage in Browns Bay, Auckland
Decided 31 Jan 2025 · Published 31 Jan 2025 · Application 9055404
Mixed / unclear
- Property damage
- Unit Titles
Order
- Amanda Mary Burkett must pay Body Corporate 407854 the sum of $8,107.50 (including GST) for costs immediately.
Reasons
- On 7 October 2024, the Tribunal issued a decision in relation to an application filed by Ms Burkett as a unit owner, against the Body Corporate. Ms Burkett had no degree of success. The Body Corporate was legally represented, and has claimed costs, which is the subject of this decision.
- The body corporate comprises 10 units, Ms Burkett owns one of those units.
- Ms Burkett had various concerns in relation to the operation of the complex, and filed an application with the Tribunal which came to a hearing on 7 October 2024. Ms Burkett represented herself, but the Body Corporate instructed legal counsel.
- It is relevant to summarise the claims, and the outcome from those: a. Voting when not financial. It was claimed that members were voting when not financial, but no evidence was presented supporting that. b. Governance. Wide ranging claims were made around the governance or operation of the Tribunal, but I found that no breach had been established. c. Maintenance and repairs of walls. Concern was raised around decisions on how to address issues with end walls and who should pay. I found no failing in the approach taken by the Body Corporate. d. Cost recovery for flood damage. This claim was declined, because Ms Burkett (nor anyone else) had not first proposed recovery of the costs through the usual body corporate processes. e. Approach to insurance excess. Again this was dismissed because the concerns had not been raised via the usual body corporate processes. f. Audit of accounts. No grounds were established to order the body corporate to audit the accounts. Again that can be advanced via usual decision making processes. g. Long term maintenance plan. No breach was shown in how that plan was passed. h. Obtaining updates from the committee work. This was being provided at the time of the hearing, so there was nothing further to order, but otherwise no breach had been proven. i. Lease or licence of common property. Minority relief is not available for the lease or licence of land, so an order in favour of the applicant could not be made. But I recognised that procedurally the Body Corporate should have split out the resolutions, but that was not determinative of the claim. j. Body Corporate undertaking work to Ms Burkett’s roof without her consent. This claim was not successful, because the Body Corporate did not need the unit owners consent as this was work to a building element. k. Lawn mowing costs. That claim was withdrawn. l. Objections to various (9) resolutions. No basis was found to interfere with those validly passed resolutions.
- Ms Burkett’s claim was declined. Costs were claims by the Body Corporate, and timetabling set for submissions on the costs matter.
BODY CORPORATES POSITION
- The Body Corporate seeks costs of 65% of its actual costs which were $12,476.35, meaning the Body Corporate seeks an order of $8,107.50 (including GST).
- The Body Corporate addressed the reasons why it considered costs should be ordered with reference to factors confirmed in case law as relevant, which I will address below.
UNIT OWNERS POSITION
- The Unit Owner opposes the claim for costs, submitting that cost at half of the District Court scale costs would be appropriate, being $2,865.00. I will discuss the Unit Owners’ arguments below.
ANALYSIS
- While this was a claim under the Unit Titles Act 2010 (the UTA), the UTA points to the provisions of the Residential Tenancies Act 1986 (RTA) for the operation of the Tribunal, and the costs provisions in the RTA apply (see section 176 of the UTA). 1
- 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.”
- It is unusual for a Tribunal or Court in New Zealand to award full indemnity costs against the losing party.
- 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 1 I note here that section 176(1A) confirms that if the Tribunal is considering a claim for costs, it must apply any regulations in force relating to costs, but no such regulations have been introduced, so the usual legal considerations apply. the ‘reasonable contribution’ earlier determined falls within a middle range, say 40% to 70%,there is a feeling of some comfort...
- 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.
- Similarly in the judgment of David Blair Ltd v Hawkins Arms and Engineering Ltd (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.
- In my assessment the claim for 65% of the actual costs is reasonable. I take into consideration the following factors. a. The hearing was assessed and scheduled for a full day. b. The sum claimed by the Unit Owner was some $12,000, which is above the costs that are claimed. I further note that if the Unit Owner had succeeded in her claims, then there would have been very considerable time involved for the Body Corporate in actioning any order. To that extent, the monetary claim does not accurately set out the risk faced by the Body Corporate. c. In my view, the matters presented by the Unit Owner were legally complex, beyond what I would have considered lay representatives of a Body Corporate would be expected to know or address. d. Some arguments advanced lacked substance. Had Ms Burkett obtained specialist legal advice in advance, I suspect some claims would not have been advanced. e. Ms Burkett had no degree of success. f. Given the wide ranging claims, I consider the time expended by the Body Corporates legal representatives in preparing for the hearing was unsurprising.
- Ms Burkett submitted that the Tribunal should order half of the District Court scale costs. Parliament has not elected to apply a scale regime to the Tenancy Tribunal, so there is no statutory expectation that a scale from another jurisdiction apply.
- But even if that were not the case, I do not consider the District Court scale regime would be relevant. It is normally the case that parties will need to put in a greater degree of work in preparing for and attending to a hearing in the Tribunal. That is where evidence is marshalled, the law researched, and arguments established. Normally when matters proceed on appeal, that same evidence is used, and largely the same law and arguments. It is also commonly seen that the claims and arguments advance in the District Court are whittled down.
- In the Tenancy Tribunal, when claims are over $6,000, then parties are entitled to legal representation. In this case, given the claims advanced, I would have been quite surprised if the Body Corporate did not appoint a legal representative.
- It is not a defence to a costs claim, to argue that the applicant is a lay person, and using the Tribunal process to explore and test matters. Taking a proceeding, even in a Tribunal, is an serious matter. If that results in costs being incurred, then the applicant risks bearing the cost of those. I note here that it was also open to the applicant to seek expert legal opinion at her own cost before any application is made.
- For those reasons, the application for costs is successful, the costs order is to be 65% of the actual costs incurred.