Published tribunal order
Tenancy Tribunal case 9050844 — Unit Titles in Berhampore, Wellington
Decided 16 Sept 2024 · Published 16 Sept 2024 · Application 9050844
Landlord favoured
- Unit Titles
Order
- The second application for rehearing filed by Thomas Phipps Morgan is dismissed.
- Thomas Phipps Morgan must pay Body Corporate 44345 the sum of $14,741.00 immediately, being an order for costs.
Reasons
- The Tribunal must consider an application for costs filed by the Body Corporate, and also a second application for rehearing filed by the Unit Owner.
BACKGROUND
- For the purpose of this costs decision, I will summarise the background briefly as follows: a. The premises are unit titled premises, and fall within the Unit Titles Act 2010 (UTA). b. The windows at the complex required remediation/replacement. A work programme for this was approved by the Body Corporate, and levies were raised accordingly. Mr Morgan disagrees with the extent of the work needed, and declined to pay the levies raised. c. On 31 May 2023 the Body Corporate filed an application with the Tribunal seeking to recover the claimed levies. d. On 14 February 2024 Mr Morgan filed his own application with the Tribunal, seeking orders in relation to the window works. e. A hearing was convened on 21 March 2024. A decision was issued that same day. The Body Corporate’s application was successful, with Mr Morgan being ordered to pay $28,212.16. All of Mr Morgan’s applications were dismissed. I will refer to this as the ‘substantive’ hearing or decision. f. Mr Morgan filed an application for rehearing, setting out 26 grounds on which he considered a rehearing should be granted. Following a telephone hearing to consider the rehearing request, an order was issued dated 14 June 2024 declining the rehearing request. In that order timetabling was issued for the filing of submissions on costs. g. On 19 June 2024 Mr Morgan filed a second application for rehearing. h. Both parties have subsequently filed submissions on the costs claim, which are the subject of this decision. Second application for rehearing
- Mr Morgan filed a second application for rehearing on wide-ranging grounds, including errors and omissions in the substantive and first rehearing hearing. Mr Morgan states that there is further evidence he could produce, and in short the Tribunal’s decision was flawed. The second application for rehearing is very extensive and traverses some 10 pages.
- Mr Morgan advises that he is not seeking a further hearing in relation to this second rehearing application. Mr Morgan states: No rehearing application hearing is sought with this rehearing application and new evidence will be sought for a rehearing as described below.
- I will consider this second application on the papers. Body Corporate’s case around costs
- In relation to the costs claim, the Body Corporate submitted: a. Having succeeded in the substantive and rehearing disputes, the Body Corporate is entitled to a costs order. b. The relevant legal principles were summarised. c. The Body Corporate has resolved that all costs should be charged back to the relevant unit owner. d. The total solicitor-client costs have been $14,741.00 (including GST). e. In addition to the work to recover the levies, the Body Corporate needed to respond to the serious allegations made by Mr Morgan, including allegations of fraud and deceit. Mr Morgan has further increased the complexity of the matter with his rehearing request, including 26 grounds argued in that application.
- In their response submission, the Body Corporate submitted: a. The costs claimed are those costs incurred by the Body Corporate in the substantive and rehearing disputes. b. The costs in relation to Mr Baker’s work has already been claimed as costs prior to the hearing and considered in the substantive decision. c. In relation to the costs being inflated, Mr Dempsey states: It is respectfully submitted the legal costs claimed in the applicant’s cost submissions have not been inflated, as the respondent has alleged in his cost submissions. A large portion of the legal costs claimed is attributable to the applicant’s lawyers having to respond to extensive correspondence and requests for information from the respondent, which is reflected in the timelines annexed to the applicant’s cost submissions. Unit Owner’s case around costs
- In response to the Body Corporate’s claim, Mr Morgan submitted: a. The costs should be declined, particularly in relation to the window dispute. b. Costs incurred by Mr Baker should not be ordered, because Mr Baker had ended his period of acting for the Body Corporate prior to the hearing. c. The costs have been inflated given the work undertaken by the Body Corporates legal representative.
- In his concluding submission, Mr Morgan submitted: a. The whole proceedings were an abuse of process. b. The Body Corporate has not engaged with him properly. c. The legal fees claim should have been waived by the Body Corporate.
ANALYSIS
The second application for rehearing
- On 19 June 2024 Mr Morgan filed a second application for rehearing. I have considered that application, and find that this second application must be declined for these reasons.
- It is plain that what Mr Morgan is seeking to do, is to challenge the Tribunal’s assessment of the facts and law, as set out in the Tribunal’s order from 21 March 2024. That decision is binding on the parties and was the subject of appeal rights. The law is clear, if Mr Morgan is seeking to challenge the Tribunal’s assessment of the facts or law, then a rehearing is not the appropriate mechanism for that, Mr Morgan needed to appeal to the District Court.
- I recognise that Mr Morgan is now out of time to appeal the substantive decision, and the High Court has confirmed that late appeals cannot be considered. Certainly that places the Unit Owner in a difficult position, but that is not a reason I could accept a rehearing to achieve what should otherwise be a challenge at appeal.
- It is arguable that the Tribunal has no jurisdiction to consider a rehearing of a rehearing. I note the previous decision of Salt v Monk, TT 638/00, 14 May 2001, in which the adjudicator determined: Flowing on from the finding of lack of jurisdiction set out immediately above it would seem that the Tribunal probably has no jurisdiction to consider an application for re-hearing a previous re-hearing decision. Once the Tribunal has made a decision, be it granting a rehearing or refusing to grant a re- hearing, then it would seem to be effectively “functus officio” and unable to hear the matter again. In other words it seems that a party who has been involved in a re-hearing application would be able to argue “issue estoppel” if the other party sought to have the Tribunal re-examine the matter. Indeed the Tenancy Tribunal in the Dunedin decision of Anderson v Jensen (TT 438, 439/00, 5.12.00) found “that there is no jurisdiction to order a re- hearing of a re-hearing ... ”. Therefore on both grounds set out above the Tribunal concludes that it has no jurisdiction to hear the re- hearing application filed on 7 December 2000 and dismisses it.
- It is well-settled law that a party to a proceeding must bring all of their claim and potential arguments in the first instance, they cannot simply file new applications when matters could have been argued within the original application. This is the rule of Henderson v Henderson.
- As an example, in Cooney v Housing New Zealand Corporation, [2017] NZHC 2678, there had been two rehearing applications and an appeal concerning the same issue of HNZ not taking steps to discover the source of noise disturbance.
- The Tenancy Tribunal decided that no responsibility for the noises lay with the landlord, the application was dismissed. Mr Cooney then sought a rehearing, this was considered and rejected – he wanted to use the rehearing as an opportunity to call witnesses and better respond to HNZ’s response. Mr Cooney then made a fresh application, and was heard on this and it was dismissed as it traversed the same matters as the substantive hearing. He then unsuccessfully sought a rehearing of the second application, but the Tribunal noted that the application was by then out of time and presented nothing to suggest that the absence of a rehearing would result in a substantial wrong or miscarriage of justice. Then, Mr Cooney filed an appeal to the DC, he later withdrew that appeal. At the HC level, HNZ applied to strike out the proceedings. The HC said the application to strike out is well founded, it concluded: [17] The authorities are clear that a party must bring all of their case at the initial hearing. Having conducted a truncated hearing, it is not open to a party to seek to relitigate the matter by bringing a fuller case.5Rule 15.1(1)(d) of the High Court Rules 2016 provides that a proceeding may be struck out if it is an abuse of process. One recognised head of abuse is when a party seeks to relitigate matters already determined. That is the case here.
- Even if I were to consider a second rehearing request on the basis of new evidence, Mr Morgan has not convinced me that this further evidence could not have been presented earlier with due diligence on his part.
- Finally, any application for rehearing needed to be filed within 5 day of the order sought to be reheard. Mr Morgan is well outside that 5 day period in his second rehearing request as it relates to the substantive order from 21 March 2024. I can see no basis to extend my discretion to accept his late application for rehearing for the reasons set out above.
- While the second application for rehearing was within 5 days of the first rehearing decision, I am not persuaded that a substantial wrong or miscarriage of justice may have arisen in relation to the first rehearing decision.
- The second application for rehearing is dismissed. Body Corporate’s application for costs
- Pursuant to section 124 UTA, the body corporate is entitled to recover any reasonable costs incurred by it in collecting unpaid levies as a debt due by the owner to the body corporate.
- In this case, there were two applications considered. The application from the Body Corporate was plainly an application for the recovery of levies, and of course, the Body Corporate was successful in that application. There was also an application from the Unit Owner, but that I find was, in reality, a collateral challenge of the decision-making of the Body Corporate leading to window decision and the levy debt being raised. The issues raised in the Unit Owner’s application was intertwined with the Body Corporate’s levies claim, and to that extent, I find Mr Morgan’s application should both be viewed as an application about the levies raised by the Body Corporate.
- As above, there is a statutory presumption that the Tribunal order costs incurred in the recovery of levies, in this case that being a claim of $14,741.00 (including GST). The invoices from the legal firm have been provided.
- In accordance with the judgments (of the District Court and Court of Appeal respectively) in Body Corporate 195681 v Cheah DC Auckland, CIV2014- 004- 0120, 24 June 2014 and Body Corporate 162791 v Gilbert [2015] NZCA 185, the Tribunal must order that the reasonable costs incurred by the body corporate in recovering the levies, objectively assessed, be paid by a defaulting unit owner.
- Mr Morgan submitted (in effect) that the costs claimed in this case were unreasonably high. The question of what reasonable costs in a levy recovery case would mean, have been considered in various decisions at appeal, such as Body Corporate 85928 v Simon Peter Sherry [2022] NZDC 11535. In that case, the Body Corporate had appealed against a decision of the Tribunal which ordered a reduction of the costs claimed in the recovery of the levy against Mr Sherry. Judge Becroft set out the relevant law as submitted by counsel (Mr Baker), as follows: [11] Those three decisions seem clearly to establish the proposition that “reasonable costs” are those reasonably incurred in the sense of reasonably related to necessary steps to be carried out, subject in the first instance to a taxation by the Law Society if complaint is made about the fees; and subject to what Mr Baker has conceded might be a residual discretion if, for instance, the charge out rate was astronomically high or work was done that was totally unreasonably related to the claim. [12] In short, Mr Baker’s view is that with respect, the Tenancy Tribunal misdirected itself in respect of s 124(2) of the Unit Titles Act 2010, that being the relevant provision in this case. [13] Mr Baker particularly draws attention to the following passage in Body Corporate 162791 v Gilbert, at para [78]: - [78] The use of the words “reasonable costs” does not compel the conclusion that the solicitor/client costs cannot be recovered. Rather, it compels the conclusion that it is only reasonable solicitor/client costs, objectively assessed, that can be recovered. [emphasis added].
- After considering the case, Judge Becroft concluded: [16] The approach must be that set out in the Court of Appeal case and the two District Court decisions counsel referred to. That is, the word “reasonable” primarily relates to the reasonableness of the costs incurred and will involve a careful check of the bill of costs presented to the Court and whether they relate to reasonably necessary steps in the proceedings. As Harrison DCJ pointed out, there are quite a number of steps that are to be required and while in the end they might be considered reasonably straightforward, they will take some time.
- In Mr Morgan’s case, I have considered the invoices provided by Mr Dempsey, and there is nothing in those invoices that gives me any measure of concern. The hourly rates charged are within a range that would be commonly seen for legal practices within New Zealand, the hours charged seem fair given the issues and steps to be addressed. Even when I step back and consider the amount of the claim ($14,741), that would also seem consistent with what I would expect to see for costs given the extent of the issues to be addressed, and within two hearings.
- The costs claimed are reasonable and are ordered in full.
- I conclude by noting that this costs order does not include the earlier costs claimed by Mr Baker. Those costs were considered and ordered within the 21 March 2024 decision. Again that decision came with a right of appeal, but I am satisfied there is no double ordering in terms of this current costs claim with Mr Bakers charges.