Published tribunal order
Tenancy Tribunal case 9036181 — Unit Titles in Te Aro, Wellington
Decided 31 Oct 2023 · Published 31 Oct 2023 · Application 9036181
Mixed / unclear
- Unit Titles
Order
- Michael David McIntyre must pay Body Corporate 80146 the sum of $13,020.60 immediately, being representation costs.
Reasons
- The Tribunal has before it an application for costs filed by the Body Corporate, and that is the subject of this decision.
- The background in this case is now involved, particularly as the costs issue is concerned, but for context I summarise the procedural history as follows: a. On 25 November 2022 the Tribunal issued a decision finding largely in favour of the Body Corporate. The Body Corporate had applied for costs, and the Tribunal ordered only that the filing fee be paid by the respondent unit owner. In short the Tribunal missed considering the application for representation costs. b. The Body Corporate applied for a rehearing on the basis that the Tribunal had not considered the application for representation costs. The application was marginally late. c. On 4 January 2023 I issued a decision accepting the late lodged application for rehearing. d. The Unit Owner applied for a rehearing on the basis that they wanted to be heard on the question of whether the late review application from the Body Corporate could be accepted. e. The Tribunal ordered a recall of the 4 January 2023 decision, to allow the Unit Owner to be properly heard on the matter. f. A hearing was convened on 12 July 2023 where I heard from the representatives from both parties. On 15 September 2023 I issued a decision which again accepted the late application for rehearing. In that order I noted:
- Both parties have already filed submissions in relation to the costs claim, and I presume those submissions remain current. However in the event either representative wishes to file any further submission in writing, I set timetabling for that as follows: a. Any further submission for the Body Corporate to be filed by 25 September 2023. b. Any further submission for the Unit Owner to be filed by 2 October 2023. c. Any concluding submission for the Body Corporate to be filed by 9 October 2023.
- If neither party has any further submission to make on the costs claim and quantum, I will consider the matter based on submissions already filed. Either way the costs claim will be considered from here on the papers. g. Neither representative filed further submissions. I will therefore now proceed to consider the costs claim based on the submissions already filed. BODY CORPORATE’S POSITION
- I summarise the Body Corporate’s position as follows: a. Having been successful, the Body Corporate is entitled to reasonable solicitor client costs. b. It was accepted however that the award of costs is discretionary for the Tribunal taking into account the relevant factors with reference to the approach of the High Court in Holden v Architectural Finishes Ltd [1997] 3 NZLR. c. In this case the Body Corporate has been substantially successful. d. While the legal issues were not complex, the arguments presented by the Unit Owner lacked substance. e. The issues were important for the parties. f. The Body Corporate had made a number of attempts to settle the matter directly with the Unit Owner. g. The total costs incurred were $21,701.00, but the applicant submits that a contribution of 70% would be reasonable, that is $15,190.70. UNIT OWNER’S POSITION
- I summarise the Unit Owners position as follows: a. The order of costs is not mandatory, but discretionary for the Tribunal. b. The Unit Owner accepts the general legal approach to costs set out by the applicant. c. The dispute should have been resolved by way of mediation. d. The approach from the Body Corporate has been adversarial. e. Mr McIntyre had taken on voluntarily the cost of recladding his unit, so that was not funded by the Body Corporate. f. Most of the goods on common property had been removed prior to the hearing. g. Specific time recording of attendances to the Body Corporate have not been provided. h. Given the level of success, and as the matter should have been mediated, it was submitted either no, or lower end costs should be ordered.
ANALYSIS
- The parties agree on the general legal principals around costs orders in the Tribunal.
- The Unit Titles Act 2010 (UTA) applies, however the UTA refers to the Residential Tenancies Act 1986 (RTA) for the mechanical provisions around disputes, and the costs provisions that are found in the RTA will apply. I note however that the general approach taken in the UTA is that costs incurred from any breach by a Unit Owner, should be paid by the unit owner, see for example section 126 and 127. Where levies are concerned, the body corporate can recover all reasonable costs associated with recovery of the outstanding levies and interest (section 124(2)).
- Section 102 of the Residential Tenancies Act 1986 (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 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.
- Taking those factors into consideration: a. The length of the hearing was fairly standard for a complex unit title dispute, but it also involved a number of procedural steps, including working to settle the dispute with the Unit Owner in advance of the hearing. b. The dispute did not relate to a money claim particularly, but I agree with the Body Corporate that the matters at stake were important for both parties nevertheless. c. In my assessment the legal and factual complexity would be in the moderate category. I am not persuaded that this dispute could have been resolved at mediation. My impression was that the parties had entrenched views in relation to what is a rights based dispute. I doubt a mediation would have successfully resolved the dispute. d. Some of the arguments advanced for the Unit Owner were not compelling, but they were not in the category of being manifestly unreasonable arguments, they were reasonable to have been advanced. I also consider that the Body Corporate has been open to settle the dispute, and in fact made offers of settlement that were not accepted. e. The Body Corporate obtained substantial success.
- Taking the above matters into consideration, I have concluded that an order of 60% of the actual costs would be a reasonable order in this case, being $13,020.60.