RSS Feed

How a hard-line approach to Tribunal claims can end up hurting you

Wednesday, April 21, 2021

On the awarding of legal costs by the Tenancy Tribunal

RE: Thomas and other v Novus Vita Limited [2021] NZTT Wellington 4266110, 4266355

The basis of the Tenancy Tribunal is for parties in a dispute to achieve a just outcome swiftly and inexpensively. Lawyers do not generally get involved and as such, the Tribunal isn’t often concerned with issues relating to the award of legal costs. In saying that, s102 of the Residential Tenancies Act (the RTA) does give some scope for it to do so in limited circumstances.

In Thomas, the tenants are awarded $1,000 as a reasonable contribution towards a $5,766.10 legal fee they have had to incur in relation to the proceedings. As tenancy laws become increasingly complex, it is not entirely unfathomable for the legal profession to interact with Tribunal cases going forward. Unpacking the adjudicator's reasoning to award costs in this instance could prove to be helpful for both landlords and tenants. 



This cross-application dispute addresses several issues. For the purpose of this piece, we will only concern ourselves with those facts that are to do with the award of legal costs.

  • Tenants are young first-time renters;
  • The landlord’s applications include an allegation of thief and financial gain from an illegal sublet, monetary claim in excess of $50K plus an unspecified amount for exemplary damage and compensation for emotional damage;
  • On top of being landlords and tenants, the parties were also, for some time, neighbours and the boundaries of the both types of relationships were often blurred in the parties' interactions with each other; and
  • The landlord is largely unsuccessful with the majority of her substantive claims.
The law 

Without much specificity, s102 loosely provides a pathway for the Tribunal to award reasonable costs to a party that is represented by counsel in connection to the proceedings. While Adjudicator Lash acknowledges the limitation of the RTA (being 'silent as to the parameters of the Tribunal's discretion in awarding costs'), she is explicit about being guided by the prevailing practice of the District and High Court that is for the unsuccessful party to make a reasonable contribution to the successful party's costs. She goes on to reference the 'shopping list' of factors in Holden v Architectural Finishes Ltd [1997] 3 NZLR 143 that the Courts have relied on in determining costs. 

The analysis and outcome

The first question the adjudicator asks herself is whether it was reasonable for the tenants to instruct counsel. She considers the quantum and seriousness of the landlord’s claims, the tenants’ youth and inexperience and the emotional impact the dispute has had on both parties and answers the question in the affirmative. Given that the landlord is ‘not successful in the majority of her substantive applications against the tenants’, the adjudicator is in a position to consider whether cost should be awarded and if so, how much?

She outlines the common law principle that the party ‘seeking costs based on actual costs must establish that the costs incurred are reasonable rather than excessive.’ The tenants incurred a total of $5,766.10 in legal fees. She goes on to cite a leading text on the matter indicating most awards fall within the 40-70% range of actual costs.

Applying the test from Holden, the adjudicator considers: 

  • Length of hearing: 1.5 days
  • Sum of money involved: $50K or more is substantial for young tenants;
  • Importance of issues: all allegations and claims made were sufficiently serious as to have significant consequences on the other party;
  • Legal and factual complexity: the dispute involves several legal issues and disputed facts;
  • Whether arguments lacking substance were advanced: while the Tribunal has no jurisdiction to preside over the landlord’s allegation of thief, the adjudicator acknowledges that the landlord did have some evidential basis for all claims;
  • Degree of success achieved by parties: the landlord was mostly unsuccessful in her applications.
and arrived at the conclusion that though solicitor-client costs are seldom awarded, in this instance it would be appropriate for the landlord to contribute $1,000 (less than 20%) towards the tenant's legal bill. 



Though we cannot say for sure, the language of the order would suggest that had the landlord taken a softer stand in relation to her counter-claims, excluded the allegation of thief (which the Tribunal had no jurisdiction to preside over anyway) and had conducted her relationship with the tenant in a strictly professional manner (i.e. that of a landlord and tenant only without asking for/expecting personal favours throughout the tenancy) then perhaps the Tribunal would be less inclined to find a reasonable basis for the tenants to instruct counsel and therefore removing the issue of costs all together. 



Recent Posts


asbestos HHS boarding house investor twg report housing package rent arrears extractor fan off the plan warm up new zealand landlord property maintenance Question and answer development government advice business bond principal and interest watercare finance relationship trust tenancy issues cash-flow airbnb clnz letting fee property management election2020 tenancy tribunal kiwibuild cgt capital gain khh RTAA 2019 market cat inspection anti-social behaviour RBNZ heater covid-19 brightline income water bill investment strategy DTI Must knows Investor story Property (Relationships) Act short-term rental banking smoke alarm meth contamination interest rates wins p lab shower dome minor dwelling management personal growth Level 4 recycling equity retaliatory notice house prices buying market rent television fixed-term tenancy damage rent increase Must know worksafe rta reform heat pump barfoot and thompson legal cost ask an expert holiday house sale and purchas commerce commission daikin Sponsored post Landlording wealth creation property re agent HHGA CoreLogic equity yield rent control Gluckman beginner investor maintenance education negotiation parry v inglis Market report interest only nzpif structure rta How to bankruptcy shortland chartered accountants winz election 2017 sublease housing affordability tenant Q&A Editor's Choice mortgage termination initio quiet enjoyment scotney williams debt enforcement first home buying Jeff Bezos trademe interest deductibility bond form buying rules tax mindset tenancy services rent ird Holler Case study Guest blog ocr Tribunal case study anz Standards New Zealand financial advisers act ventilation buyer's agent rtaa2020 reserve bank will return sale and purchase rental market bad tenant property cycle apia unitary plan CCC early termination building renovation HSWA LIM positive cash flow meth gluckman report insulation property value robert kiyosaki insurance data security auckland trespass TCIT housing bubble warren buffett privacy partners productivity rental wof ring-fencing skill shortage heating Investment tip property apprentice Kris Pedersen Mortgages and Insurance legal opes partners lvr auckland council subdivision letting speculator


Introducing Our Partners
Principal Sponsor - Kris Pedersen Mortgages & Insurance logo Gold Sponsor - Barfoot & Thompson logo Gold Sponsor - CoreLogic logo Property Apprentice logo The Insulation Warehouse logo The Renovation Team logo The New Zealand Property Investors' Federation logo