Karmarkar v Manda

[2018] NZHC 2081

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV 2017-404-2182

[2018] NZHC 2081

BETWEEN

MADHAV HARI KARMARKAR

Appellant

AND

SHASHIDHAR MANDA

Respondent

Hearing:	4 July 2018
Appearances:	M H Karmarkar, in person, Appellant S A Keall for Respondent
Judgment:	15 August 2018

JUDGMENT OF VAN BOHEMEN J

This judgment was delivered by me on 15 August 2018 at 11.30am Pursuant to Rule 11.5 of the High Court Rules

…………………………

Registrar/Deputy Registrar

Solicitors/Parties:             M K Karmarkar (Appellant), Auckland

Nicholls Law Ltd, Auckland

Counsel:  S A Keall

KARMARKAR v MANDA [2018] NZHC 2081 [15 August 2018]

[1]                  Madhav Hari Karmarkar appeals a decision of Judge Hinton in the Auckland District Court.1 In that decision, the District Court upheld a decision of the Tenancy Tribunal that the tenancy for a residential establishment that Mr Karmarkar operates in Mount Roskill is a boarding house tenancy under the Residential Tenancies Act 1986. The effect of this decision is that Mr Karmarkar cannot recover monies he says are owed to him by Shasidhar Manda for non-payment of rent because Mr Manda has complied with the rental payment and notice requirements for a boarding house tenancy under the Residential Tenancies Act. Mr Karmarkar says the Tenancy Tribunal and the District Court were wrong in concluding that the tenancy agreement for his establishment is a boarding house tenancy agreement.

[2]                  In legal terms, Mr Karmarkar’s appeal in this case is identical to another appeal by Mr Karmarkar I dismissed earlier this year with respect to a different residential establishment.2 I heard that appeal on 20 March 2018 after the present proceeding had been filed. The present proceeding was not brought to my attention during the earlier hearing. Had I been aware of it, I would have ordered that the two proceedings be heard together.

Relevant facts

[3]                  The property in question in the current appeal is at 34 White Swan Road, Mount Roskill, Auckland. Mr Karmarkar asserted that the tenants lived there as flatmates and shared responsibility for the allotment of bedrooms and the use and care of common areas. These and other matters were set out in an annexure to a tenancy agreement which Mr Karmarkar asserted Mr Manda had agreed to by email exchange prior to moving in. The tenancy agreement was stated to be a fixed term starting on  7 November 2016 and ending on 15 April 2017.

[4]                  Despite the appearance of a communal flatting situation, the reality was different. Mr Manda came to the property later in November 2017 after answering a Trade Me advertisement on 17 November 2016. After email exchanges with Mr Karmarkar’s agent, Mr Manda met the agent at the property where he was shown a

1      Karmarkar v Manda [2017] NZDC 20851.

2      Karmarkar v Pendem [2018] NZHC 693.

room which he was to share with others whom he had not met before. The room had its own lock. Mr Manda was charged rent and a bond on an individual room / bed basis.

[5]                  Mr Manda moved into the house on 19 November 2016. However, he was not happy with the facilities at the property. On 25 January 2017,  he sent an email to  Mr Karmarkar’s agent giving “vacant notice” of his intention to leave by 28 January 2017. He paid two weeks rent in advance and vacated the premises.

[6]                  Mr Karmarkar brought a claim in the Tenancy Tribunal against Mr Manda and the other tenants for rent arrears for the balance of the term of the alleged fixed term agreement. The Tribunal found against Mr Karmarkar on the basis the dwelling had been tenanted as a boarding house in terms of the Residential Tenancies Act and that Mr Manda had given sufficient notice in accordance with s 66V of the Act.

[7]                  Mr Karmarkar appealed that decision to the District Court where Judge Hinton upheld the Tribunal’s decision that Mr Karmarkar was operating a boarding house under a boarding house tenancy agreement. Judge Hinton also held that Mr Manda had never signed nor explicitly agreed to a fixed term tenancy agreement.

Relevant law

[8]                  In my earlier decision, I reviewed Part 2A of the Residential Tenancies Act and relevant District Court decisions in order to determine what constitutes a boarding house tenancy under the Act. There have been no further High Court decisions since that decision and I declined Mr Karmarkar’s application for leave to appeal.3 Accordingly, my earlier decision remains the most recent authority on the question raised in this appeal and I apply it to the current proceeding.

[9]                  In my earlier decision, I held that it was possible to make sense of the definitions of “boarding house”, “boarding house tenancy”, and “boarding room” in s 66B of the Residential Tenancies Act by asking the following questions:4

3      Karmarkar v Pendem [2018] NZHC 1110.

4      Karmarkar v Pendem [2018] NZHC 693 at [34] – [35].

(a)Does the house contain one or more bedrooms along with facilities for communal use by the tenants?

(b)Is the house occupied or intended to be occupied by six or more tenants?

(c)Is the tenancy intended to, or does in fact, last for 28 days or more?

(d)Are tenants granted exclusive rights to occupy particular bedrooms, whether that occupancy is for single or shared use?

(e)Does the right to occupy a particular bedroom derive from the tenancy agreement between the individual tenant and the landlord rather than from a collective decision of the tenants?

[10]              I held that if the answer to all of those questions is “yes”, the tenancy is a boarding house tenancy and the rest of the provisions of Part 2A of the Residential Tenancies Act apply.

[11]I am satisfied that the answer to all these questions in the current case is “yes”:

(a)It was common ground at all phases of the proceeding that the house had both bedrooms and facilities such as kitchen, dining room and bathrooms for communal use;

(b)Judge Hinton, whose factual findings were not challenged on appeal, held there were six bedrooms in the house with at least nine tenants at the time Mr Manda moved in;

(c)Mr Manda moved in on 19 November 2016 and gave notice on 28 January 2017 so the tenancy lasted well in excess of 28 days;

(d)Judge Hinton found that Mr Manda was assigned a room, which had a lock;

(e)Mr Manda was shown his assigned room by Mr Karmarkar’s agent; there was no evidence of any discussion of room allocation with other tenants.

[12]              It follows that the tenancy was a boarding house tenancy and the decisions of the Tenancy Tribunal and the District Court were correct.

[13]              As already noted, this is the second appeal Mr Karmarkar has brought to the High Court on the same legal point. I am aware Mr Karmarkar has brought other claims to the Tenancy Tribunal and the District Court arguing essentially the same proposition that he made in the appeals before me: that it is open to him and his tenants to agree to a fixed term tenancy even if the tenancy comes with in the definition of a boarding house tenancy in Part 2A of the Residential Tenancies Act.

[14]              As I have said to Mr Karmarkar at both hearings before me, whether or not a tenancy is a boarding house tenancy or a fixed term tenancy is a legal question to be determined in accordance with the definitions of “boarding house”, “boarding house tenancy”,  and  “boarding  room”  in  s  66B  of  the  Residential  Tenancies  Act.   Mr Karmarkar cannot craft his way around those definitions and the rest of Part 2A of the Residential Tenancies Act by emphasising the intentions of the parties. Moreover, I doubt that Mr Karmarkar’s tenants share his intention to be bound to fixed term agreements.

[15]In any event. as I said in my earlier decision: 5

[29] … The fact that parties may have intended a particular outcome cannot override the statute. It is the intention of the legislature that must be the driving consideration, particularly where the purpose of the legislation is remedial in the sense noted by Judge Broadmore in Platinum Rentals in his quotation of the Minister’s second reading speech: to provide protections for some of the most vulnerable in New Zealand – those who live in boarding houses. It would be an odd result to make the application of such legislation contingent on the intention of the parties when there is an inherent imbalance in the bargaining power of the two parties to the agreement.

[16]              It is apparent that many of Mr Karmarkar’s tenants are vulnerable in the sense described by the Minister for Housing during the second reading of what became Part

5      Karmarkar v Pendem [2018] NZHC 693.

2A of the Residential Tenancies Act. They are newly arrived migrants with little familiarity with New Zealand, often with few resources and low levels of income, who seek basic accommodation in facilities of the kind operated by Mr Karmarkar. They are precisely the kinds of vulnerable persons to whom Part 2A of the Residential Tenancies Act was intended to provide protection.

[17]                Mr Karmarkar must accept the reality of the legislation and desist from efforts to circumvent it. Should he bring a further claim based on essentially the same argument, the claim would be vulnerable to strike out as an abuse of process for seeking to re-litigate a question already been decided by a competent court.

Result

[18]The appeal is dismissed.

Costs

[19]              Mr Keall initially agreed to act for Mr Manda on a pro bono basis. Mr Keall informed the Court he had recorded costs incurred in preparing for the hearing and on that basis invited the Court to award costs against Mr Karmarkar on an indemnity basis as a disincentive to Mr Karmarkar pursing similar claims in the future while representing himself.  However, Mr Keall acknowledged that he had also assured  Mr Manda he would not charge him in the event Mr Karmarkar’s appeal was upheld.

[20]              While Mr Keall’s submission is inventive, I do not consider I can award costs in those circumstances. Rule 14.2(f) of the High Court Rules 2016 provides:

An award of costs should not exceed the costs incurred by the party claiming costs.

[21]As the Court of Appeal stated in Joint Action Funding v Eichelbaum:6

[27]     The principle set out in r 14.2(f) is significant … . It places a cap     on a permissible award of costs by reference to “the costs incurred by the party claiming costs”. It reflects the long-standing principle that the function of an award of costs is partial indemnity, not reward or (except in unusual circumstances) punishment.

6      Joint Action Funding v Eichelbaum [2017] NZCA 249, [2017] 2 NZLR 70, (2017) 23 PRNZ 551.

…

[41] We therefore consider that the natural meaning of the phrase “costs actually incurred”, and thus “cost incurred”, envisages invoices rendered for legal services provided by a legal practitioner to a litigant.

[22]              Mr Manda has not incurred costs and has not been invoiced for any costs in relation to this proceeding. Accordingly, I am not able to award costs in favour of Mr Manda and against Mr Karmarkar.

[23]              If,  however,  Mr   Manda   incurred   any   disbursements   in   defending   Mr Karmarkar’s  claim  and  subsequent  appeals,   they   are   recoverable   from   Mr Karmarkar.

G J van Bohemen J