Published tribunal order
Tenancy Tribunal case 4330386 — Tenancy dispute at 349 Port Hills Road, Hillsborough, Christchurch 8022
Decided 27 Mar 2024 · Published 27 Mar 2024 · Application 4330386
Tenant favoured
Order
- Russel Byfield must pay Paul Kenneth Barlow costs in the sum of $10,335.71 immediately.
Reasons
- This order had been made on the papers after considering counsels’ written submissions.
- I accept the principles counsel have referred to in their submissions. The overriding principle is that costs are in the decision maker’s discretion.
- Section 102 of the Residential Tenancies Act 1986 (the Act) sets out the circumstances where the Tribunal can award costs. Sections 102(2) and (3) provide that that where any of the parties is represented by counsel, the Tribunal may order a party to pay the reasonable costs of another party.
- In French v Ryan (DC Auckland, CIV-2012-004-000711, 29 November 2012) the District Court held the Tribunal can consider the costs that would have been awarded under the appropriate category in the District Court Rules 2009. In Holden v Architectural Finishes Ltd [1997] 3 NZLR 143, the High Court held that ‘reasonable costs’ means a reasonable contribution and not a mere gesture. It considered that a contribution in the range of 40% to 70% would likely satisfy this requirement.
- In David Blair Ltd v Hawkins Arms & Engineering Ltd (1988) PRNZ 162 the High Court outlined several relevant factors in assessing costs: a. the length of the hearing, b. the amount of money involved, c. the importance of the issues d. the legal and factual complexities, e. the amount of time required for effective preparation, f. the likely or actual costs incurred.
- Other factors that may be relevant include: the conduct of the parties, the degree of success, whether unnecessary steps or technical points were taken, and whether arguments lacked substance.
- The starting point is that the tenant was substantially successful in his application. The landlord was almost entirely unsuccessful. Costs generally follow the event which means that, subject to any countervailing features, the tenant should be entitled to an award of costs against the landlord.
- Counsel for the landlord has submitted that there are reasons why that should not be the case or why the costs should be limited in some way. I don’t accept that. I am of the clear view that the tenant should be awarded his reasonable costs.
- The landlord made the tenant a Calderbank offer of $15,000 on 5 September 2023. That came after hearings on four separate days and three weeks before the final half day hearing on 26 September. It therefore came very late in the piece and would have a minimal effect on costs at most.
- The offer exceeded the award to the tenant disregarding costs. It is well short of the sum of the substantive award and the costs that the tenant must pay the Legal Services Agency. As well, the tenant did not know at the time how much he would have to pay back and so he could not properly consider the merits of the offer. For these reasons the tenant acted reasonably in not accepting the offer. I find, therefore, that it should be disregarded.
- I agree that this case took longer than it should have. But I do not put any blame on the tenant for that. He did claim the replacement cost of his belongings and I found against that approach. The parties were also put to the trouble of considering individual items and I took a broad-brush approach. But I do not accept that the tenant was unreasonable in putting forward his claim as he did. His approach was arguable and ultimately the claim was successful to some extent. It is important to keep in mind that the claim arose from the landlord’s wrongdoing.
- The landlord claims that he has acted in good faith. I make no comment on that save to say that, in my view, that is irrelevant to my decision on costs. The landlord lost and he lost by a large margin. A party’s motivations could be a reason to increase costs, but I do not see why they should affect an award of reasonable costs.
- In my view, the comparable District Court scale of costs to consider is 2B with a simplified trial. There were aspects of the case that made it closer to a full trial, including the number of documents that were produced.
- The hearing covered three days in total (measured in half days). Scale 2B results in costs in the sum of $11,460 (2 x 3 x $1,910) for the hearing days alone. Preparation would add another $2,450. Given the extent of the statements and documents it is arguable that costs should be recoverable for those in addition.
- In any case, the scale costs well exceed the costs that the tenant claims.
- As a rule, a party would not recover more than 70% of their actual costs. But scale costs would normally be awarded in full subject to the indemnity principle. Awarding the tenant the claimed costs would not offend that principle because the claimed costs are the costs that the tenant is required to repay to the Legal Services Agency.
- One could say that if the claimed costs are awarded in full, the tenant is recovering his costs in full. But the actual costs are greater than the claimed costs because the Legal Services Agency is bearing some of them. If a successful party is in the fortunate position of being liable to pay only the scale costs, that is not a reason to reduce the costs awarded below the scale costs. The scale costs already represent a contribution to standard solicitor/client costs.
- I am satisfied that in all the circumstances it is reasonable to award the tenant the costs as claimed, and I have done so.