Published tribunal order
Tenancy Tribunal case 9049984 — Unit Titles in Te Aro, Wellington
Decided 15 Aug 2025 · Published 15 Aug 2025 · Application 9049984
Mixed / unclear
- Unit Titles
Order
- Body Corporate 85659 must pay Manjit Kaur Singh the sum of $6,779.00 immediately, calculated as follows: Costs$6,279.00 Filing fee$500.00 Total payable by Body Corporate$6,779.00
Reasons
- Firstly, I thank the parties for their patience in awaiting this costs decision.
- The Tribunal had an application from the Body Corporate, seeking orders for the payment of money from the Unit Owner. The Unit Owner presented a defence under the Limitation Act, in short that the application was out of time so should be dismissed. A hearing was convened and then adjourned in relation to that late lodgement matter. A hearing was then scheduled for 14 November 2024 where arguments around the Limitation Act defence were to be heard. The day prior to the hearing the application was withdrawn by the Body Corporate.
- The Unit Owner was represented by counsel and has now seeks costs, which is the subject of this order.
- I note that directions for the filing of submissions on the cost claim were made, and the costs application was considered on the papers.
UNIT OWNERS CASE
- Submissions for the Unit Owner were filed by Mr Grace, which I summarise as follows: a. The original application was determined wholly in the Unit Owners’ favour, given the Body Corporate withdrew its application. b. The usual approach is for costs to be awarded in the range of 40 to 70%, where an award of 60% is considered to be average. c. The actual costs incurred were $10,465.00, already at a reduced rate. d. There were complexities in the issue before the Tribunal, particularly the issues around the Limitation Act defence and the claims’ late filing. e. An increased order should be granted, given offers had been made to settle that were unreasonably rejected by the Body Corporate. f. Given the late withdrawal (the day prior to the hearing), work had already been undertaken to prepare; the withdrawal should have been communicated well prior to when it was. g. It is accepted that indemnity costs would not be warranted, but costs at 85% should be ordered in the circumstances, being $8,895.25. h. (In response to the Body Corporates’ submission summarised below), the Body Corporate was well aware of the Unit Owners’ case. i. The complexity of scale costs has been understated by the Body Corporate. j. It remains disputed that the original claim from the Body Corporate was reasonable. k. The Body Corporate could have elected to be legally represented if it wished to do so.
BODY CORPORATES CASE
- The Body Corporate’s case in relation to costs can be summarised as follows: a. The costs claimed are not reasonable. b. The Body Corporate attempted to keep costs down by self-representing. c. The Body Corporate as a whole is already out of pocket, needing to cover the levies which it was claiming from the Unit Owner. d. The withdrawn was made on the basis that the Body Corporate did not wish to face the technical arguments of Counsel for the Unit Owner. e. The Tribunal must apply a substantial merits and justice approach (section 85 of the Residential Tenancies Act 1986 (RTA)). f. The Tribunal should adopt an objective assessment, taking into account matters such as the length and complexity of this matter, and costs that might be ordered in the District Court. g. Costs are limited to situations where there has been representation at the hearing, not just legal advice. h. Scale costs would amount to some $3,342.50, or if that approach was not accepted, 40% of the actual costs would be more reasonable. i. Increased costs are not indicated. There has been no vexatiousness or abuse of process. j. The settlement offers were not reasonable.
ANALYSIS
- While this is a Unit Titles Act claim, the administrative provisions regarding the operation of the Tenancy Tribunal are found in the RTA, and within that statute, section 102 relates to costs.
- Section 102(2) confirms that the Tribunal “may make an order” where “any of the parties was presented by counsel”, as is the case here. The Unit Owner was represented by Mr Grace. 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, and that is well settled in case law. 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, 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 the above factors into consideration, my assessment is as follows: a. The overall length of the proceedings was reasonably long, and it included two hearings that were set down for a total of 5 hours. The fact the second hearing did not proceed is irrelevant. As Mr Grace has noted, the withdrawal was at the last minute, so the preparation was no doubt completed, and time for the hearing allocated (and lost). I note that the first hearing was adjourned at the request of the Body Corporate so they could submit further evidence. b. The sum of money involved is well over the level of the costs claimed, and the costs would be proportionate to the risk for the Unit Owner. c. The legal and factual complexity is in my view, moderate. The defence to the claim was a legal defence, but it was not an overly complex issue, but reasonably required a legal representative to present. d. I have not seen evidence that the Unit Owner advanced arguments lacking legal substance. Of course no decision was ultimately made on whether the Limitation Act would apply. e. The degree of success achieved by the Unit Owner was a complete success, there was no success for the Body Corporate.
- I have considered the parties submissions around costs, as summarised above.
- My decision is that costs should be awarded at 60% of the maximum level. I consider the background is largely ordinary, I cannot see overwhelming factors which would argue for a higher or lower order. Mr Grace referred to a costs order at 60% of the cost incurred as being an ‘average’ order, and I agree with that. I find that is the level of costs required in this case.