New Zealand Law Society - Challenging a Tenancy Tribunal decision

Challenging a Tenancy Tribunal decision

By Joshua Pietras

The Tenancy Tribunal (“the Tribunal”) is an unfamiliar forum for most civil litigators. This is most likely due to the prohibition on legal counsel in all Tribunal proceedings, except where the amount in dispute exceeds $6,000.00.

However, the Tribunal is also the most popular judicial forum in New Zealand. The Tribunal hears approximately 20,000 cases each year, more than any other Tribunal including the Disputes Tribunal. This arguably makes it the most common interface with the justice system for many citizens.

Unsurprisingly, there has been a large number of challenges made against Tribunal decisions. In fact, in 2019, there were 100 appeals from the Tribunal to the District Court.

The Tribunal does not just hear disputes between tenants and landlords. It also has jurisdiction to hear disputes between unit owners and body corporates under the Unit Titles Act 2010. In all cases, the Tribunal can award damages of up to $50,000.00.

Due to the Tribunal’s broad jurisdiction, all civil litigators should have a general understanding on how to challenge a Tenancy Tribunal decision.

There are two ways that a party can challenge a Tribunal decision:

  1. Apply to the Tribunal for a rehearing; or
  2. Appeal the Tribunal’s decision to the District Court.

This article will discuss these two options in more detail, with reference to recent case studies.

Rehearing

Grounds for rehearing

The Tribunal may order a rehearing on the ground that a substantial wrong or miscarriage of justice has occurred.

The words “substantial wrong or miscarriage of justice” set a high threshold for a rehearing. A rehearing will not be granted just because one party believes the Tribunal was wrong in its findings of facts or in its application of the law. It will usually require a party to point to some procedural unfairness with the way the hearing was conducted.

Some examples of when a rehearing may be granted include:

  • Where an Adjudicator has improperly admitted or rejected evidence;
  • Excessive intervention by the Adjudicator;
  • Misconduct by one of the parties;
  • Misconduct by a witness;
  • Where a party has not had an opportunity to cross-examine a key witness;
  • The availability of new evidence in certain circumstances; and
  • Where a party has not received notice of the hearing.

Timeframe

A party must apply for a rehearing within 5 working days of the Tribunal’s decision being issued. This timeframe is strict, and the Tribunal will not normally indulge requests for an extension.

Where a rehearing is excluded

It will not always be possible to seek a rehearing for every type of dispute that comes before the Tribunal.

In Pandey v Keralan & Co Trust [2019] NZTT Palmerston North 4160041 the tenant applied for a market rent review under section 25 of the Residential Tenancies Act 1986, alleging that the landlord’s purported rent increase from $180.00 to $250.00 per week was unlawful because it exceeded the market rent by a substantial amount.

At the first hearing, the Tribunal found that the tenant had failed to prove that the new rental figure “exceeded the market rent by a substantial amount”. This was because the landlord had produced a market valuation by a property manager who was familiar with the building, together with MBIE rental statistics. As a result, the tenant’s application was dismissed.

The tenant immediately applied for a rehearing on several grounds, one of which was that the landlord’s market rental valuation was defective because it had been based on a different unit within the same building.

The Adjudicator decided to grant a rehearing, but in doing so, overlooked the fact that section 105(6) of the Residential Tenancies Act 1986 expressly prohibits a rehearing of any market rent review application.

After this matter was brought to the Adjudicator’s attention, the Tribunal agreed that it did not have jurisdiction to order a rehearing on this ground alone. Accordingly, the tenant’s challenge to market rent review was dismissed.

Appeals

Grounds for Appeal

Where a party disagrees with the Tribunal’s decision, the most appropriate way of challenging the decision will be to file an appeal in the District Court.

Section 117 of the Residential Tenancies Act provides that a party can appeal the decision of the Tribunal (including a decision to grant or refuse a rehearing) to the District Court if:

  1. The order is a final order and not an interim order;
  2. Where the appeal is against a money order, the amount in dispute is $1,000.00 or more;
  3. Where the appeal is against a work order or failure to make a work order, the value of the work in dispute is more than $1,000.00.

Most Tribunal decisions will require one party to pay a certain sum of money to the other party.

However, the right to appeal will not be affected by a deduction of any amounts awarded under a counterclaim.

For instance, in Stewart v Bland [1994] DCR 417 the District Court found that the adjudicator’s award of $950 could be appealed against because it comprised an award of $1,440 to the landlord less an award of $490 on the tenant’s counterclaim.

There is an automatic right of appeal against all other non-monetary orders, such as a possession and termination order.

Timeframe

Appeals must be filed in the District Court where the hearing was held within 10 working days of the date of the Tribunal’s decision. Again, the timeframe for lodging an appeal is strict and extensions will not be granted unless there are exceptional circumstances.

Nature of Appeal

The courts will generally treat an appeal in the same way as a rehearing, where the court will consider for itself the issues canvassed at the original Tribunal hearing.

The courts have adopted a conservative approach when considering appeals against an order of the Tribunal.

In Housing New Zealand Corporation v Salt [2008] DCR 697 the District Court made it clear that it will only differ from the factual findings of the Tribunal if:

  1. The conclusion reached was not open on the evidence; that is, where there is no evidence to support it; or
  2. The Tribunal was plainly wrong in the conclusion it reached.

The narrow grounds for appealing a Tribunal order is demonstrated by a recent High Court decision.

Case Study: Whakatihi v Rent Assured Rotorua Ltd [2019] NZHC 2873

This case concerned an appeal against a decision of the District Court, which itself was an appeal from a previous decision of the Tribunal.

Background

Ms Whakatihi was the tenant in a property in Rotorua. The respondent, Rent Assured Rotorua Ltd, was the landlord. Ms Whakatihi had rented the property for just over one year, when the landlord issued a 90-day termination notice under s 51 of the Residential Tenancies Act.

The notice was the culmination of an ongoing dispute between Ms Whakatihi and her neighbours, which the landlord had tried to resolve unsuccessfully. Ms Whakatihi’s neighbours were also served with a 90-day termination notice, and left the property without issue.

Tribunal Decision

Ms Whakatihi’s claim before the Tribunal was that notice was unlawful because it was “motivated wholly or partly by her exercise of her right to quiet enjoyment”.

In dismissing Ms Whakatihi’s claim, the Tribunal found that the landlord had taken reasonable steps to try sort out the problems between the neighbors, and that “the notice was a last resort to end the ongoing and seemingly intractable dispute”.

The Tribunal also placed considerable reliance on two written statements from the landlord’s contractors, which confirmed that Ms Whakatihi had acted in an aggressive manner on previous occasions.

District Court Decision

On appeal, District Court Judge Mabey found that he was satisfied that the Tribunal’s ruling was correct. In His Honour’s view, there was not a hint of retaliation in the actions of the landlord, and Ms Whakatihi had not provided any evidence to show that the 90-day termination notice was “motivated wholly or in part by retaliation for her insistence on her right to quiet enjoyment."

High Court Decision

Ms Whakatihi appealed once again to the High Court. This time, her main ground of appeal was that there was simply no or insufficient evidence upon which the District Court Judge could have reached the conclusion that he did. She was also concerned with the reliance placed by both the Tribunal and the District Court on the written statements by the two contractors who were not called to give oral evidence and therefore were not cross-examined.

At the outset, Justice Fitzgerald noted that there was no dispute that the District Court had correctly applied the statutory test under s 54 of the Residential Tenancies Act. The sole issue for the appeal was whether there was no or insufficient evidence to support the findings actually reached.

After reviewing relevant case law, Justice Fitzgerald concluded that, in rare occasions, an ultimate conclusion of a fact finding body can sometimes be so unsupported – so clearly untenable – as to amount to an error of law. However, in Her Honour’s view, those circumstances did not arise in the current case.

The High Court agreed with the District Court Judge that there was ample evidence that the issue of the notice was not “motivated wholly or partly by the exercise by the tenant” of any rights under the tenancy agreement. Rather, it was issued as a last resort in the context of an ongoing and intractable dispute between two neighbors.

Finally, Justice Fitzgerald found that the Tribunal and the District Court were entitled to receive into evidence the two written statements from the landlord’s contractors. What weight the Tribunal and Judge Mabey put on those statements was entirely a matter for them.

As a result, Ms Whakatihi’s appeal was dismissed.

Conclusion

The Tribunal is New Zealand’s most popular and unpopular quasi-judicial body.

The Tribunal is the most popular forum in terms of the sheer volume of cases that come before it. It is also the most unpopular forum due to the increasing number of challenges made against its decisions.

Tribunal decisions often involve complex factual and legal issues involving questions of property rights. The right to bring a claim before the Tribunal is an important part of exercising one’s property rights, whether as a tenant, landlord, unit title owner or body corporate.

It is anticipated that the number of challenges to Tribunal decisions will continue to increase as parties come to grips with recent amendments to the Residential Tenancies Act 1986 and the Unit Titles Act 2010, and as the economy slowly recovers from the COVID-19 outbreak.

Joshua Pietras joshua.pietras@arl-lawyers.co.nz is a solicitor with Lower Hutt firm ARL Lawyers. He specialises in dispute resolution (particularly insurance, employment, debt recovery), criminal and traffic matters.

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