Published tribunal order
Tenancy Tribunal case 4476961 — Rent arrears at 37 Harts Creek Lane, Northwood, Christchurch 8051
Decided 4 Dec 2023 · Published 4 Dec 2023 · Application 4476961
Landlord favoured
- Rent arrears
Order
- Neil George Cameron and Angela Marye Cameron must pay Peter Lindsay Randle costs in the sum of $10,020.44 immediately.
- Enforcement of this order is stayed in accordance with the order of the District Court made on 16 October 2023 under the tenants’ appeal CIV – 2023 – 009 - 002320.
Reasons
- Costs were determined on the papers.
- On 10 July 2023, the Tribunal awarded the landlord $52,943 rent arrears and dismissed the tenants’ cross application.
- The tenants applied for a rehearing and on 21 August 2023 the Tribunal dismissed that application.
- The tenants have appealed the Tribunal’s decision on the landlord’s rent arrears claim and the District Court has directed that the Tribunal should determine the landlord’s claim for costs, but enforcement of any costs order should be stayed, on terms, pending the outcome of the appeal.
- Counsel for the parties have filed submissions on the landlord’s costs claim for which I thank them. Law
- Section 102 of the Residential Tenancies Act 1986 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 the following 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.
- Costs are in the discretion of the Tribunal as to whether they are awarded at all and if they awarded, in what amount. Where costs are awarded, the Tribunal must consider what is reasonable in amount payable for the steps that were reasonably taken.
- Costs usually follow the event meaning that the loser usually pays the winner’s costs. Discussion and Decision
- This case began with the landlord’s application for rent arrears. That would not normally require legal assistance. There was a tenancy agreement and there is no dispute about the agreed weekly rent, how long the tenants occupied the premises, or the amount of rent paid by the tenants.
- The claim was for $53,000 and the landlord was aware that the claim would be disputed. And disputed it was, vigorously. The tenants said that after the initial expected period of the tenancy, they did not have any liability to pay rent. They also said that their liability for rent was settled by agreement.
- A substantial quantity of documents was produced and affidavits and submissions. The tenants’ submissions were detailed. The tenants’ “Statement in Reply” ran to 26 pages. The hearing took just over half a day.
- The tenants appealed the Tribunal’s decision and applied for a rehearing. Following a short hearing, that application was dismissed. The tenants are proceeding with their appeal.
- Both sides appear to be well resourced, and both instructed senior lawyers to act for them. The landlord’s position was simple, but they had to deal with a defence that relied on detailed evidence and required them to give it close consideration.
- The landlord claims costs in the sum of $23,752. That breaks down into $19,332 for the main application and $4,420 for the rehearing application. They say, in effect, that the rehearing application was misconceived and so the tenants should pay their costs in relation to it on an indemnity basis. They claim 70% of their actual costs in relation to the main application.
- The tenants point out that the landlord has not provided any breakdown of how their costs claim has been calculated such as how much time was spent or what steps were taken, by whom and at what hourly rate. That is a valid point but the way I intend approaching the claim makes that kind of information unnecessary.
- The Tribunal can have regard to the District Court scale of costs as a guide and often does. In this case I think it should be the starting point. This is litigation that is comparable to litigation in the District Court. There are, of course, some differences, and I will come to them. I must also bear in mind that costs in this Tribunal should be proportionate to the amount in issue. The same principle is applied in the courts, but it is especially important in this Tribunal because of its purpose as a speedy, efficient and inexpensive forum for resolving disputes.
- The tenants submit that the appropriate District Court scale of costs for this case is 1A. I disagree. In my view it is more appropriately category 2 that should apply. It was not straightforward and able to be conducted by counsel considered junior. These are proceedings of average complexity requiring counsel of skill and experience considered average. The parties, in fact, instructed counsel of skill and experience well above average. I will consider the appropriate band below. In my view the hearing was comparable to a simplified trial in the District Court.
- The landlord’s lawyers were required to do the following: • Take instructions and prepare and file the application • Consider and take instructions on the tenants’ application. • Consider and take instructions on the tenants’ response statement. • Consider the documents and agree a hearing bundle. • Prepare the landlord’s affidavit and submissions. • Prepare for the hearing. • Attend the hearing. • Consider the tenants’ rehearing application. • Attend the rehearing hearing.
- The landlord’s lawyers have had to attend to some other things, but these are the main steps in the proceedings.
- Looking at the District Court Rules, the best comparison with the steps referred to there are as follows noting the appropriate band and time allocation in days or part days. • Statement of claim – Band A – 0.75 • Documents (combining production and inspection of documents) – Band B – 1.75 • Preparation – Band B – 1.25 • Hearing – band B – 1 • Rehearing – Band A (Preparation and attendance at Judicial conference) – 0.5
- The total time allocation is 5.25 and at the $1,910 recovery rate produces total costs of $10,027.5.
- The tenants’ counsel makes the point that the landlord failed to provide a written tenancy agreement as he was required to do under the Act. That failure, he says, created uncertainty in relation to the tenants’ liability for rent. One could add to that the landlord’s failure along the way to confirm the tenants’ continuing liability for rent. I found that this did not have any legal effect on the tenants’ continuing liability, but I agree that it was unhelpful. I note that the tenants could have made their position clear as well but didn’t.
- I would have been minded to reduce the costs because the landlord opened the door for this litigation to some extent but there are countervailing factors. One such is the tenants’ cross application which was misconceived. This case was always going to have to be tried. There was no shortcut. The Tribunal has no power to order security for costs and Thompson Wentworth was never eligible to be a party. Another is the rehearing application. There were no grounds for it and it was a strange thing for the tenants to apply for a rehearing when they made it very clear that they did not want this case heard by the Tribunal, let alone reheard by it.
- As I have noted above, there have been other things that the landlord’s lawyers have had to spend time on and charge the landlord for in relation to this case and they have not been included in the costs calculation.
- Standing back and looking at an award of costs in the sum of $10,000 in relation to the nature of the case, the time required, and the sum of money involved, it seems to me that it is about right. It represents just over 40% of the landlord’s actual costs and therefore it is just within the usual range of 40% to 70%. That is not a rule, and the basis on which the landlord’s lawyers charge the landlord is between them. If the percentage had been below 40%, the reasonable costs to award would prevail.
- I have awarded the filing fee.