Published tribunal order
Tenancy Tribunal case 4377180 — Exemplary damages
Decided 2 Nov 2023 · Published 2 Nov 2023 · Application 4377180
- Exemplary damages
Party names are redacted in the official published order.
Order
- An application for suppression has been made in this case, and the Tribunal orders suppression of the tenant’s name and identifying details.
- Jennifer Hendrichson As Trustee For The Olive Branch Trust must pay [The tenant/s] $5,484.44 immediately, calculated as shown in table below:
- 44 Total award $5,484.44 Total payable by Landlord to Tenant $5,484.44
- The tenant’s application for compensation and/or exemplary damages for the other alleged breaches by the landlord is dismissed.
- The landlord’s application is dismissed.
Reasons
- Both parties attended the hearing which I held at North Shore on 6 October 2022. Background
- I previously held a directions conference with the parties and issued directions including a referral to mediation on 28 March 2023.
- The parties attended mediation on 20 April. The mediator’s order records that the tenancy ended on 28 October 2022; that the bond of $380.00 would be paid to the tenant because the landlord had no claims against it; and that the tenant’s claims for compensation and exemplary damages would be referred to the Tribunal for hearing.
- In my directions order I provided a timeframe for the parties to provide their submissions and evidence. I have considered all the documentary evidence they have provided in addition to the oral evidence they each gave at the hearing which includes the landlord’s photographic and video evidence.
- The tenant confirmed that she did not require additional time to provide photographic evidence from her USB stick since that evidence related to the issue of the premises being unlawful residential premises. I will refer to that later.
- The other evidence on the USB stick was relevant to a criminal proceeding between her and another of the landlord’s tenants. The Tribunal has no jurisdiction to consider that issue – see paragraph 5 of the directions order dated 28 March 2023.
- The landlord confirmed that she had no claims against the tenant that required adjudication. Her cross application was a defence to the tenant’s claims against her.
- The tenancy started on 5 May 2021. The premises are a studio which the landlord has previously leased as AirBNB accommodation and on occasion has rented to other tenants.
- The studio is a large room with a screened off sleeping area. It has cooking facilities but no stove. There are benchtop cooking appliances. The bathroom is separate from the dwelling accessed from the deck which runs between the studio and the adjacent bathroom.
- When the landlord gave notice to terminate the tenancy, the tenant raised multiple claims against her. The relationship between the landlord and tenant, already strained, became difficult indeed.
- At the hearing, the tenant frequently interjected when the landlord was giving evidence, accusing her repeatedly of being a ‘horrifying liar’ and ‘the cruellest woman she has ever dealt with’. She said she had ‘gone out of her way to investigate this woman’.
- The vehemence with which the tenant has pursued the landlord was distracting at times, but it has not affected the Tribunal’s assessment of the tenant’s claims. I can confirm that the Tribunal has taken its time to make this decision and has not been swayed by the tenant’s subjective observations.
- The Tribunal’s role is to assess the evidence objectively and that is what it has done. Issues
- As detailed in the directions order dated 28 March 2023 and later confirmed by the tenant in her submissions, the issues to be determined are these: •Were the premises unlawful residential premises? If so, should the tenant receive a full refund of her rent ($29,640.00)? •Did the landlord fail to ensure that the premises complied with the Healthy Homes Standards (HHS) and with all requirements relating to health and safety? If not, should the tenant be awarded exemplary damages? •Should the Tribunal award exemplary damages for the landlord’s failure to ensure the bond was lodged in time? •Should the tenant be refunded ambulance costs? •Did the landlord breach the tenant’s quiet enjoyment? If so, should the tenant be awarded compensation? •Did the landlord fail to provide the premises in a reasonable state of repair? •Was the tenancy agreement unlawful? If so, what is the remedy? Legal considerations Unlawful premises
- Section 78A of the Residential Tenancies Act 1986 (RTA) sets out the orders the Tribunal may make if it determines or declares that the premises are, or were at any material time, unlawful residential premises.
- If there is such a finding, the Tribunal may order the refund or all or some of the rent paid taking into account the nature of the premises and what is fair. Compensation
- The Tribunal may award compensation to a tenant for losses arising from a proven breach or breaches by the landlord of their statutory responsibilities. Compensation is generally awarded for actual losses and sometimes for less tangible effects of proven breaches such as a loss of enjoyment of the tenancy and the accompanying stress and anxiety.
- In Birch v Otautahi Community Housing Trust [2020] NZDC 17667 the District Court confirmed that the Tribunal must consider the following factors when deciding to award compensation: •The nature of the breach; •The duration of the breach; and •The effect of the breach on the party. Exemplary damages
- Exemplary damages are different. They are designed to punish and to deter. They are like a fine. In Auckland City Council v Blundell [1986] NZLR 732 the Court of Appeal (Cooke P) said: Exemplary and punitive [damages] are different words for the same thing. The damages are exemplary because they are meant to teach an example to the guilty officer and others. They are punitive because they are meant to punish. They are like a fine, though they go to the citizen who has been the victim of conduct.
- Exemplary damages are awarded at the Tribunal’s discretion when one party has proved that the other party has committed a defined unlawful act. If that is proven, and before the Tribunal may award exemplary damages, it must take account of the factors set out in section 109 RTA.
- In Birch v Otautahi Community Housing Trust (referred to above) the Court said this: In considering whether an order of exemplary damages should be made, the Tribunal must first look at the intention of the person against whom the order is sought. As the Tribunal in Chief Executive, ex parte Edmondson v Walls TT548/92 said: Before an award of exemplary damages can be made the threshold question for the Tribunal to answer is whether the unlawful act has been committed ‘intentionally’. In my view negligence does not equate to intention, and for the Tribunal to be satisfied that a party has ‘intentionally’ committed an unlawful act evidence must exist which would justify the Tribunal in coming to the conclusion that the party committing the unlawful act has in fact turned his or her mind to the act and deliberately set about to commit it. If the Tribunal considers that the person against whom the order is sought has committed the unlawful act intentionally, the Tribunal must then consider whether it would be just to require that person to pay exemplary damages, taking into account: •The intention of the person; •The effect of the unlawful act; •The interests of the party against whom the unlawful act was committed; and •The public interest. Were the premises unlawful residential premises? If so, should the tenant receive a full refund of her rent ($29,640.00)?
- The landlord accepted that the premises were unlawful residential premises because they did not have the required Council consents for use as residential tenancy premises, having previously been rented (mostly) as AirBNB accommodation.
- The landlord said she had had to ‘decommission’ the premises because the bathroom had no complying water and drainage systems.
- The landlord said the tenant’s complaints only came about after she served notice to terminate the tenancy.
- The tenant described the premises in the most dramatic terms. She alleged that she could have been burned to death and that she contracted bronchitis that had weakened her immune system.. She referred to her time at the premises as ‘the most abusive time in her life’.
- The Tribunal’s objective observation of the evidence produced is that the premises were not in the state the tenant alleged. Although non-compliant for use as residential tenancy premises (and therefore unlawful) the unit generally appeared tidy and functional.
- The tenant remained at the premises for 1.5 years. These issues came to the fore once notice to terminate the tenancy was given.
- The tenant should receive some refund of rent, but her application to have the whole of her rent refunded is unrealistic.
- Having assessed the oral and documentary evidence, I order the landlord to refund 10% of the rent paid by the tenant because the premises were unlawful residential premises. That take account of the section 78A(4)(b) RTA considerations – the nature of the premises and what is fair. Did the landlord fail to ensure that the premises complied with the Healthy Homes Standards (HHS) and with all requirements relating to health and safety? If not, should the tenant be awarded exemplary damages?
- The tenant alleged that there were no smoke alarms and therefore no fire protection; no insulation; the premises were cold and mouldy; and the premises were not HHS compliant.
- The landlord accepted that there were no smoke alarms at the start of the tenancy, though the Fire Service later installed one.
- The landlord said the premises were insulated under the floor but not in the ceiling. She accepted that the ventilation extraction fan was not working and was not repaired..
- The landlord said the drains were not blocked (apart from on one occasion) and the tenant never mentioned any problem with mould or bronchitis until 2 September 2022, two months before the tenancy ended. She denied the tenant’s allegation that there was a smell of gas.
- I find that the premises were not HHS compliant.. And the failure to ensure a working smoke alarm at the start of the tenancy was a serious breach by the landlord.
- I find that the criteria for exemplary damages to be awarded are met. For the combined breaches by the landlord of her section 45 RTA responsibilities including the failure to ensure the provision of a compliant smoke alarm at the start of the tenancy I award the tenant exemplary damages of $1,500.00. Should the Tribunal award exemplary damages for the landlord’s failure to ensure the bond was lodged on time?
- The landlord accepted that she did not lodge the bond until the end of the tenancy once the tenant has expressed concern about it.
- The landlord said she had had 4 previous tenants with tenancies between 6 months and 1 year, having advertised the premises locally.
- Failing to lodge a bond within the statutory time frame (23-working days after receiving it) is an unlawful act – see section 19(2) RTA.
- Again, I find that the criteria for awarding exemplary damages are met. The bond is the tenant’s money, and the tenant is entitled to the assurance that it is protected by an independent body – the Bond Centre. It was against the tenant’s interests (and the public interest) for the landlord not to have lodged the bond within the statutory time frame.
- I award the tenant exemplary damages of $500.00 for this breach by the landlord.
Should the tenant be refunded ambulance costs?
- The tenant alleges that she required ambulance transport during the night for bronchitis the result of living in the cold and mouldy premises.
- The landlord said that her enquiries established that the tenant had mental health issues (which the tenant denies) that were the reason for the ambulance taking her to hospital.
- It was clear to the Tribunal that there was a complicated background to the tenant’s need for ambulance treatment. The evidence is not sufficient for the Tribunal to conclude that the ambulance transport was a direct result of any landlord breach.
- I dismiss the tenant’s claim for reimbursement of ambulance transport costs. Did the landlord breach the tenant’s quiet enjoyment? If so, should the tenant be awarded compensation?
- The tenant alleges that the landlord often entered her premises which were never locked. The landlord denied that. She agreed that she went into the studio to turn off lights after the tenant was taken away by ambulance in the middle of the night.
- Objectively viewed, that was not unreasonable in the circumstances.
- The second issue concerned the installation of security cameras by the landlord.
- The landlord said that the tenant was invading the privacy of another of her tenants as well as her privacy. She said once the cameras were installed, all the shouting and abuse by the tenant stopped.
- The landlord said that the cameras only captured her own premises.
- I viewed the video evidence produced. It had limited evidential value. It showed the tenant using bad language towards another of the landlord’s tenants and making rude gestures as well as the tenant filming the other tenant’s premises.
- But what it also showed was that the security cameras captured a part of the tenant’s premises, the deck area that led to her bathroom.. I accept the tenant’s observation that the landlord’s security camera clearly showed every movement by her onto the deck and into the bathroom.
- I find that the landlord did breach the tenant’s quiet enjoyment and privacy by the installation of the security cameras. For this breach, I award the tenant compensation of $500.00 taking account of the factors set out in Birch referred to above. Did the landlord fail to provide the premises in a reasonable state of repair?
- This issue is similar to, but also different from, the tenant’s claim that the premises were unlawful residential premises.
- The tenant alleges that the premises were not provided in a reasonable state of repair and that the landlord failed to maintain them.
- While unlawful residential premises, I find that the premises were provided in a reasonable state of repair. The landlord’s evidence included invoices for work done at the premises, letters from her AirBNB clients, and photos.
- The evidence does not establish a failure to provide and maintain the premises in a reasonable state of repair for which the Tribunal would separately award either compensation or exemplary damages.
- I dismiss this part of the tenant’s application. Was the tenancy agreement unlawful? If so, what is the remedy?
- The tenancy agreement did not comply with all the statutory requirements for tenancy agreements. The landlord accepted that.
- The tenant alleged that it was not a legally binding agreement, but it was, despite its deficiencies.
- The tenant made allegations about the landlord altering the agreement, but they were vague and denied by the landlord.
- The Tribunal does not award any further compensation or exemplary damages so far as the deficient tenancy agreement is concerned. The deficiencies, while important to acknowledge, were technical breaches. The tenancy lasted 1.5 years. No issues were raised until near the end of the tenancy.
- The tenant has not proved any loss or consequence that the Tribunal needs to address by way of an order given the broader context of this tenancy Result
- The landlord will pay the tenant $5,484.44 comprising a rent refund of $2,964.00, exemplary damages of $2,250.00, and compensation of $500.00. The landlord will also pay the tenant’s Tribunal filing fee of $20.44. Name suppression
- The landlord did not seek a name suppression order. The tenant applied for a name suppression order. I make an order suppressing the tenant’s name and identifying details as her application is mostly successful in regards to the issues raised, if not the amount sought - see section 95A RTA.