What was Tenancy Tribunal case 4453805 about?

The tribunal order states: No suppression orders apply around publication of this decision.

How much money was awarded in case 4453805?

Verified claim lines are listed on this page.

What type of tenancy dispute was case 4453805?

The primary dispute was Mould & damp. Related themes: Healthy homes, Exemplary damages.

Where can I read the official tribunal order for case 4453805?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/9317623-Tribunal_Order_Redacted.pdf.

What was Tenancy Tribunal case 4453805 about?

The tribunal order states: No suppression orders apply around publication of this decision.

How much money was awarded in case 4453805?

Verified claim lines are listed on this page.

What type of tenancy dispute was case 4453805?

The primary dispute was Mould & damp. Related themes: Healthy homes, Exemplary damages.

Where can I read the official tribunal order for case 4453805?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/9317623-Tribunal_Order_Redacted.pdf.

New Zealand Tenancy Tribunal Case 4453805 — Mould & damp

Order

No suppression orders apply around publication of this decision.
Property Management Wellington Limited Karl Davis must pay The Chief Executive, Ministry of Business, Innovation, and Employment $2,000 immediately, being exemplary damages for failing to comply with an improvement notice.

Reasons

The Tribunal must consider an application filed by the Chief Executive of the Ministry of Business, Innovation and Employment (CE), seeking an order that the respondent pay exemplary damages for failing to comply with an improvement notice, being a breach of section 126J of the Residential Tenancies Act 1986 (RTA).
The RTA provides a range of powers to the CE to ensure that the tenancy system in New Zealand is compliant with the statutory and other legal expectations between tenants and landlords. These powers are exercised under delegated authority by the MBIE Tenancy Compliance Investigation Team (TCIT). It is within the context of engagement between TCIT and the landlord that this current dispute arises.
The evidence is that in October 2021 officers from TCIT requested the landlord to provide the five most recent tenancy agreements. The file indicates a difficult time in getting those agreements, but they were ultimately provided by 13 December 2021.
After reviewing information provided by the landlord, the TCIT investigator, Mr Holmes, issued an improvement notice on 18 January 2022. The notice was issued in relation to the five specific tenancies, and “All other affected tenancy agreements across the portfolio”. The notice records:
1.I, MARTY HOLMES being an Investigator ("the Officer") within the Tenancy Compliance and Investigation Team at the Ministry of Business, Innovation and Employment, delegated by the Chief Executive, reasonably believe that you have contravened or likely contravened the following provisions under the Residential Tenancies Act 1986 (the Act), regulations made under the Act, or a tenancy agreement.
1.1.Section 13A(1CA)(b) - Contents of tenancy agreements - no Healthy Homes current compliance statement
1.2.Section 24(1)(d) & (e) of the Act - Rent increases - rent reviews within 12 months
1.3.Section 608(2) of the Act - Tenant must exercise right to renew or extend tenancy not later than 28 days before expiry- requiring more than 28 days' notice
1.4.Section 48(3) of the Act- Landlords right of entry - notice of no less than 4 hours
2The nature and extent of the contravention or likely contravention of the Act, regulations made under the Act, or a tenancy agreement (as listed in section 2.1 of this notice) are:
2.1.There are no Healthy Homes compliance statements included in the tenancy agreements provided, that details the rental properties current levels of compliance in regards to heating, ventilation, draught stopping and moisture ingress and drainage.
2.2.Clause 9 of the 'Terms' in the tenancy agreements states that rent reviews cannot be undertaken within 180 days of the start of the tenancy or a previous rent increase. Rent must not be increased within 12 months of the start date of the tenancy or the last increase.
2.3.Clause 40 of the 'Terms' in the tenancy agreements requires the tenant to provide at least 60 days' notice prior to the end of the fixed term tenancy of their intention to vacate or renew the tenancy. Tenants must exercise this right no later than 28 days before the expiry of the agreement.
2.4.Clause 40 of the 'Terms' in the tenancy agreements also states the landlord has authority to enter the property to show prospective tenants by giving no less than 4 hours' notice. The landlord may enter at any reasonable time to show prospective tenants but only with prior consent of the tenant.
Recommendations for compliance
1. The steps that I recommend you take to comply with the provisions of the Act, regulations made under the Act, or a tenancy agreement are:
1.1.Provide current tenants with a Healthy Homes Standards compliance statement showing the current level of compliance of their rental property
1.2.Include a Healthy Homes Standards compliance statement in any new tenancy agreements
1.3.Advise all affected tenants of the changes to the terms of their current tenancy agreements relating to clauses 9 and 40
1.4.Update the terms of any new tenancy agreements to reflect current legislative requirements relating to the relevant sections of the Act listed in section 2.1
2.If you can remedy the contravention properly by taking different steps, you do not have to take the recommended steps noted above. You do however need to remedy the breach(s).
The notice required that the landlord remedy the contravention by 15 February 2022.
Importantly, the notice concluded by setting out the objections process: Under section 126M of the Act, you may file an objection to this improvement notice with the Tenancy Tribunal within 28 days after the date the improvement notice was served on you. The Tenancy Tribunal may confirm, vary, or rescind the improvement notice as it sees fit.
On 19 and 28 January 2022 Mr Holmes emailed reminders to the Landlord that evidence needed to be provided to show that the landlord had actioned the improvement notice.
No objection to the notice was filed by the landlord under section 126M.
On 1 December 2022 MBIE filed an application with the Tribunal, which is the subject of this decision, seeking exemplary damages for failing to comply with the improvement notice.

WITNESS EVIDENCE

Mr Holmes provided a written statement in advance of the hearing, in large measure setting out the background to the investigation and events leading to the improvement notice being issued, and then matters following. Mr Holmes statement was taken as read, however Mr Relph did have some questions for Mr Holmes which the investigator responded to as follows.
Mr Relph asked if it would have been fair and reasonable for the Investigator to get in contact with the director of the landlord company, to advise that the information had not been provided. Mr Holmes advised that in this case it would not be reasonable, because Mr Relph had directed that Mr Davis deal with the Investigator, so that is where the line of communication fell.
Mr Holmes confirmed that he was aware that Mr Relph was a director, and Mr Davis an employee.
Mr Holmes confirmed it was not common practice to deal with directors, normally they would deal with the relevant employee. APPLICANT’S CASE
The Applicant was represented by Mr Miller, who spoke to written submissions provided at the hearing. I summarise Mr Miller’s submissions as follows: a.Section 126H provides the CE with the power to issue improvement notices. b.Communications were with Mr Davis who had the appropriate authority to act for the respondent, even if the communication had not been with the director. c.The Respondent had failed to comply with the improvement notice. d.The Respondent has committed an unlawful act, and exemplary damages should be ordered. e.Exemplary damages should be ordered, as it is an order to deter and punish. f.It is understood this is the first application for breach of an improvement notice. g.Consideration of the factors in section 109 supports circumstances in which exemplary damages should be ordered. i.The Respondent was well aware of its obligation to comply with the improvement notice. ii.It would be in the public interest to make the requested order, particularly given this is an established landlord. h.An order at the higher end of the scale would be indicated. i.There is an ability in the RTA for a person who receives an improvement notice to file an objection, and in this case no such objection was filed.
During the course of the hearing I invited Mr Holmes to clarify the issues he saw in the notices, which Mr Holmes responded to, as follows: a.In relation to the rent review clause, MBIE’s position is that it is misleading. b.Tenants had the ability to decide if they would end the tenancy up to 28 days prior to the end of the tenancy, but the tenancy agreement requires “at least 60 days notice”. Further the tenancy agreement would allow the landlord to enter with 4 hours’ notice. c.In relation to 4 hours of notice, that related to the showing of the premises to prospective tenants, Mr Holmes states the RTA does not give a notice period, and looks to reasonableness, whereas this clause is a contract to permit inspections on 4 hours’ notice. RESPONDENT’S CASE
The Respondent company is represented by Mr Relph. I summarise Mr Relph’s submissions as follows: a.The request for information was received, and an employee directed to respond. b.It is disputed that any further communication was received from Mr Holmes. c.The landlord disputes that Mr Holmes assessment of the claimed breaches was correct. d.The Landlord had made the necessary changes by 15 February 2022 for any new tenancies, but accepted that there was no backdating of the 600 odd tenancies under which the problem clauses would relate. e.The HHS statement is a separate document that is provided to the tenants, and Mr Holmes was advised of that fact. Mr Holmes original request was only for the tenancy agreement, hence he was not provided with the HHS addendum. f.Rent increases were correctly set out, where it referred to section 24, and also refer to a situation where there is substantial improvement in the premises, and that is verbally explained to the tenants. g.Some of the conditions are verbally explained to the tenants. h.The tenancy contracts would have expired at the time the improvement notices were issued, and all tenancies are renewed. i.No rent increases were applied for any of the 600 tenancies where similar tenancy agreements arose. j.In relation to clause 40, the end of tenancy notice, again Mr Relph advised that they tell the tenant verbally that they would only like the tenant to give an indication within 60 days what they do, to that extent the clause in the agreement was not mandatory. k.In relation to the notice of entry, Mr Relph submitted that the tenants are already aware that prospective tenants will be shown through the premises because they gave notice ending the tenancy, so the four hours is just additional notice over and above the general notice that the tenants would have had given their notice ending the tenancy. l.It would be “near impossible” to update the 600 odd tenants of any issues with their tenancy agreement. m.No objection to the notice was given, because the landlord had taken the information in the notice and made changes to the subsequent tenancy agreements.

RELEVANT STATUTORY PROVISIONS

The relevant provisions of the RTA which relate to improvement notices, as far as this dispute is concerned, are as follows:
Section 126H provides the CE (MBIE) with the ability to issue improvement notices: 126H Power to issue improvement notices (1) This section applies if the chief executive reasonably believes that a person— (a) is contravening a provision of this Act, of regulations made under this Act, or of a tenancy agreement; or (b) is likely to contravene a provision of this Act, of regulations made under this Act, or of a tenancy agreement. (2) The chief executive may issue an improvement notice requiring the person to— (a) remedy the contravention; or (b) prevent a likely contravention from occurring; or (c) remedy the things or activities causing the contravention or likely to cause a contravention.
Section 126I then sets out the content required in an improvement notice: 126I Content of improvement notices (1) An improvement notice must state— (a) that the chief executive believes the person— (i) is contravening a provision of this Act, of regulations made under this Act, or of a tenancy agreement; or (ii) is likely to contravene a provision of this Act, of regulations made under this Act, or of a tenancy agreement; and (b) the provision the chief executive believes is being, or is likely to be, contravened; and (c) briefly, how the provision is being, or is likely to be, contravened; and (d) a reasonable period within which the person is required to remedy— (i) the contravention or likely contravention; or (ii) the things or activities causing the contravention or likely to cause a contravention. (2) An improvement notice may include recommendations concerning— (a) the measures that could be taken to remedy the contravention, or prevent the likely contravention, to which the notice relates: (b) the things or activities causing the contravention, or likely to cause a contravention, to which the notice relates.
Section 126J then addressing the situation of the party failing to comply with an improvement notice: 126J Compliance with improvement notice (1) A failure to comply with an improvement notice is an unlawful act. (2) It is not an unlawful act to fail to comply with recommendations in an improvement notice.
The RTA also sets out a process upon which a landlord can object to an improvement notice, that is found at section 126M, which holds: 126M Objection to improvement notice (1) A person who has been issued with an improvement notice may file an objection with the Tribunal. (2) An objection must be filed with the Tribunal within 28 days after the date on which the improvement notice was served on the person. (3) In determining the objection, the Tribunal must consider— (a) whether the person has failed, or is likely to fail, to comply with a specified provision of this Act, of regulations made under this Act, or of a tenancy agreement; and (b) the nature and extent of the failure or likely failure to comply with the provision; and (c) the nature and extent of any loss suffered by any other party to the tenancy agreement as a result of the failure or likely failure to comply with the provision. (4) The Tribunal may confirm, vary, or rescind the improvement notice as the Tribunal thinks fit.

ANALYSIS

I must decide whether exemplary damages can be ordered for a claimed failure to comply with the improvement notice.
Mr Relph submitted that the process applied by TCIT was flawed, because the Investigator had not served or made any follow-up regarding the improvement notice on the director of the company. Mr Relph states that the first he knew of the improvement notice, was 28 January 2023.
There is no reason that every communication must go to a director of a company, in this case I am satisfied that Mr Davis had been delegated authority to deal with the investigator over this matter. Based on my review of the file, I am entirely satisfied that the communications from Mr Holmes were with an officer of the Landlord company, who was authorised to engage with TCIT on this matter.
It is clear that Mr Relph was aware of the TCIT investigation into the tenancies. I note an email from Mr Relph on 14 October 2021, where Mr Relph had instructed Mr Davis to “...have the property team provide this bureaucrat with the required information”.
However, even if I were wrong in that assessment, it is clear that Mr Relph has been seized of this matter for well over a month, and even at the time of the hearing, the landlord has not complied with the improvement notice (as I will discuss further below). Therefore even if consideration was given to apply some leniency with dates on the basis of late notice, the outcome would be no different, because the landlord has not sought to remedy the breach at the first opportunity.
The RTA sets out specific provisions that apply for improvement notices, and they must be complied with strictly. I am satisfied that the notice issued by Mr Homes on 18 January 2022 did comply with the requirements for the notice under section 126I. That provision in broad requires that the notice set out the nature of the breach, but the notice can set out non-mandatory recommendations to remedy the breach, which it did.
It is important to recognise that while recommendations were made in this case, it is not an unlawful act if the Landlord elected not to follow those recommendations, the Landlord could take some other course in order to remedy the breach. So when I consider this application, I am not considering whether the Landlord failed to implement the recommendations, but whether the Landlord failed to address the four specific breaches.
In the course of this hearing, the Landlord has argued that there were in fact no breaches. While I have heard submissions and evidence on that, the problem for the landlord is that the statutory scheme anticipates that unless the landlord files an objection to the notice within 28 days under section 126M, that the breaches are deemed to have occurred. In this case the Landlord has not objected to the notice, so it is now too late for the Landlord to attempt to argue that there has not been any breach.
In any event, at the hearing I did hear from the Landlord and Mr Holmes about the claimed breaches, and what the legal expectations would be. That was relevant for two reasons. Firstly in order to make a finding on whether the improvement notice had not been complied with, I would need to consider what the landlords obligation would be, so as to measure later actions against. Secondly it would be relevant when assessing what level of exemplary damages to order. But for the reasons that follow, I consider there was merit in the Inspectors assessment of the four breach findings, and furthermore I do not accept that the Landlord has actioned the improvement notice as required. Breaches and claimed actions to remedy
There were four claimed breaches in the notice as follows: No Healthy Homes Compliance Statement
The position that MBIE take is that there was no HHS compliance statement attached to the tenancy agreement. The Landlord states that it provides a separate HHS statement, provided to the tenant at the same time as the tenancy agreement is given to the tenant. Mr Relph advised that it would seem that the HHS statement were not provided to MBIE when the tenancy agreements had been requested, because they would have thought only the tenancy agreement was being asked for – not the annexure.
Section 13A(1CA) requires the landlord to provide a statement that the landlord would comply with the HHS, and also any information prescribed by regulations under section 138B(5). That further information is set out in the Residential Tenancies (Healthy Homes Standards) Regulations 2019. Those regulations prescribe wide ranging information the landlord needed to provide around heating, insulation, ventilation, draught stopping and moisture ingress.
This specific information is not found in the signed tenancy agreements that were produced to the Investigator.
The Landlord says that information was provided to the tenants, but I have received no evidence to confirm that, other than Mr Relph’s oral assertion that was the case.
The signed tenancy agreement makes no reference to there being any annexure such as the HHS statement.
In any event, the obligation on the landlord was to “include in the tenancy agreement” that specific information. I am not persuaded that the landlord did do this.
I note that in the course of the hearing Mr Relph stated that when the information was provided to the Investigator, that HHS information was not provided because the Landlord would have only thought the Investigator wanted the ‘tenancy agreement’. If that was the case, then that shows the Landlord did not consider the HHS information to form part of the tenancy agreement, otherwise the landlord would have provided the tenancy agreement as well as the annexure comprising the whole tenancy agreement.
The Landlord’s position is that it would not have been reasonable to notify the 600 odd tenants that there had been a deficiency or breach with the tenancy agreement. I do not accept that is the case at all. It makes no difference whether the landlord had one tenant, or 600, the rules apply equally. I make the observation that the landlord’s evidence was that shortly after the improvement notice had been received, all of the tenancies held by the landlord were renewed. Presumably then, the landlord had no difficulty in renegotiating, and re-contracting with the tenants, so it is difficult to see how the landlord would have been faced with the impossible task of updating its tenants with any pre- existing problems around the tenancy agreement. This argument was made for all four of the identified breaches, and my conclusion in that regard is relevant for all of those breaches.
The landlord also submitted that it was largely irrelevant that they didn’t notify the tenants of any problems with the tenancy agreements, because not long after the improvement notice was received, all of the tenancies had ended or were renewed. I disagree for three reasons. Firstly, I am not persuaded that all of the Tenancy’s ended after the improvement notice has been given. I note the fixed term tenancy for the premises at [Address 1] was due to end on 28 February 2022, that of course was after the compliance date. Secondly, if there was a problem with the tenancy agreement even if the tenancy agreement had come to an end, the landlord should still notify the tenants, because if the tenant wished to pursue a claim against the landlord for any breach, the tenant could still do so. It could be argued that if nothing was said to the tenants, that there would be misleading by silence occurring. Thirdly the improvement notice applied to all of the 600 odd tenancies held by the landlord. The landlord has provided no evidence to show that all of those tenancies had ended prior to 15 February 2022.
Accordingly, I find the landlord has failed to action the improvement notice in relation to this breach, and that is an unlawful act. Rent increases
At the hearing, for reference we considered one of the tenancy agreements on file, that was for [Address 2]. That tenancy commenced on 28 January 2021, and was a fixed term tenancy until 28 January 2022.
The clause in relation to rent increases is found at clause 9 of the written agreement, as follows: Rent review: the landlord may increase the rent in accordance with section 24 of the RTA. The landlord cannot do so within 180 days of the start date or a previous rent increase.
There could be no issue with the tenancy agreement citing section 24 of the RTA, which is the provision dealing with rent increases. However in relation to when a rent increase can be applied. As of 28 January 2021, the version of that provision (as it is currently) holds at subsection 1(d) and (e): (d) the rent must not be increased within 12 months after the date of the commencement of the tenancy; and (e) the rent must not be increased within 12 months after the date on which the last increase took effect; and
It is plain that the reference in the tenancy agreement to a rent increase not occurring within 180 days of the start of the tenancy or previous rent increase is wrong, it is contrary to the restrictions on rent increases found in the RTA.
The landlord’s position is that because the clause in the agreement also refers to section 24, that the clause overall does not offend the RTA, because the section 24 provision will prevail. I disagree with that. I consider that having express provisions in the agreement, which are plainly inconsistent with the landlord’s obligations, are misleading to the tenant. To accept the landlords argument, I would need to conclude that all tenants who had that clause in their tenancy agreement would know what section 24 demanded, and that the express provision in the tenancy agreement was not at all enforceable.
I cannot accept that the statutory scheme of the RTA allows landlords to have misleading provisions in the tenancy agreement. There are certain provisions in the RTA which expressly make misleading statements in tenancy agreements unlawful acts. For example section 13A(1) confirms it to be an unlawful act if the landlord ”includes anything that the landlord knows to be false or misleading”, in a HHS statement, insulation or insurance statement in the tenancy agreement. It is unlikely that Parliament would have intended to prohibit misleading conduct in those statements, but permit it in the tenancy agreement otherwise.
I am also minded that section 137 which relates to prohibited transactions, does not support misleading conduct. That provision holds: 137 Prohibited transactions (1) No person shall— (a) ... (b) enter into any transaction or make any contract or arrangement, whether orally or in writing, or do anything, for the purpose of or having the effect of, in any way, whether directly or indirectly, defeating, evading, or preventing the operation of any of the provisions of this Act. (2) Requiring any person to enter into any transaction, or to make any contract or arrangement, in contravention of subsection (1) is hereby declared to be an unlawful act.
In my assessment, having a clause in the tenancy contract which misleads the tenant that they have less rights than they do around rent increases, would be a case of the landlord entering into a contract in writing having the effect directly or indirectly defeating, or evading the operation of section 24.
The landlord submitted that it was largely moot, because they have not at any stage made a rent increase in less than one year of the tenancy. That is not a defence to a potential breach of section 137, in order to commit an unlawful act under that provision it is not necessary that the detriment actually occur. Having the clause in the agreement is the unlawful act.
I have no reservation in concluding that the landlord’s tenancy agreement as it relates to rent increases is contrary to the landlord’s legal obligations.
The landlord has failed to action the improvement notice in relation to this breach. Renewal of tenancy agreements
Again referring to the [Address 2] tenancy agreement, that holds the following at clause 40: End of Tenancy. The Tenant(s) will provide at least 60 days’ notice prior to the end of the fixed term tenancy of their intention to vacate the premises or extend their tenancy for a further fixed term. The Tenant(s) agreed that upon providing at least 60 days’ notice to terminate the tenancy at the end date stated on the current Agreement, that the landlord has the authority to show potential Tenants(s) through the property between the hours of 9:00am and 7:00pm, Monday to Sunday, by giving notice of no less than 4 hours.
Again using the [Address 2] tenancy as an example, that tenancy commencing on 23 January 2021, the law that applied at that time is as follows, in section 60 A: 1) On the expiry of a fixed-term tenancy of more than 90 days, the tenancy continues as a periodic tenancy with the same terms as the terms contained in the expired tenancy so far as those terms are consistent with a periodic tenancy. (2) Subsection (1) does not apply if— (a) the parties enter into a new tenancy agreement or agree to extend the existing tenancy agreement; or (b) within the effective period, either party gives the other written notice of the party’s intention not to continue with the tenancy. (3) The effective period is the period that starts on the 90th day before the date on which the tenancy expires and ends with the 21st day before that date. (4)...
Accordingly, at the end or near the end of the fixed term tenancy, the tenant does not need to advise the landlord of anything. If the tenant gave no notice to end the fixed term tenancy, then the tenancy would roll into a periodic tenancy, unless the landlord gave notice during the effective period, or the parties extended the fixed term agreement.
The landlord submitted that all this provision requested was that the tenant provide an ‘indication’ to the landlord of the tenant’s intentions, which means they would not be bound by it, because it was no more than an indication. But the problem for the landlord is that there is no expectation in the RTA that the tenants provide even an ‘indication’ to the landlord of their intentions as the landlord is contracting with the tenant to do. Ultimately the tenants are signing a contract, and I consider a reasonable tenant would read that clause as the tenant being required to provide an indication which is contrary to their obligations in law.
For similar reason to that set out above, I consider this clause would fall within the prohibited transaction category, because it would be a case of the landlord entering into a contract in writing having the effect directly or indirectly of defeating, or evading the operation of section 60A.
I am not persuaded that the landlord has sufficiently actioned the requirements around this breach from the improvement notice, for the same reasons set out above. Landlords right of entry
The final breach in the improvement notice is around the landlords right of entry. Again referring to the [Address 2] tenancy agreement, that holds the following at clause 40: End of Tenancy. The Tenant(s) will provide at least 60 days’ notice prior to the end of the fixed term tenancy of their intention to vacate the premises or extend their tenancy for a further fixed term. The Tenant(s) agreed that upon providing at least 60 days’ notice to terminate the tenancy at the end date stated on the current Agreement, that the landlord has the authority to show potential Tenants(s) through the property between the hours of 9:00am and 7:00pm, Monday to Sunday, by giving notice of no less than 4 hours.
Section 48 sets out the provisions relating to the landlords right of entry. That provision confirms that: (1) The landlord shall not enter the premises during the currency of the tenancy agreement, except— (a) with the consent of the tenant freely given at, or immediately before, the time of entry; or (b) in any of the circumstances described in subsections (2) to (3). (2) ... (3) With the prior consent of the tenant, the landlord may enter the premises at any reasonable time for the purpose of showing the premises— (a) to prospective tenants; or (b) ... (3A) For the purposes of subsection (3), the tenant— (a) may not withhold his or her consent unreasonably; and (b) may make the consent subject to any reasonable conditions.
A plain reading of clause 40 of the Tenancy agreement is to the extent that the parties are contracting to the landlord being able to enter the premises to show prospective tenants the premises, with a minimum of four hours’ notice.
That is not what is required in the RTA. As discussed at the hearing, there is no notice period fixed, but the landlord must have the prior consent of the tenant. Furthermore the tenant is not required to consent to the entry, the tenant can withhold that consent if there are reasonable grounds for doing so, or can make reasonable conditions.
I have no doubt that clause 40 would fall within the prohibited transaction category, because it would be a case of the landlord entering into a contract in writing having the effect directly or indirectly of defeating, or evading the operation of section 48.
I am again not persuaded that the landlord has sufficiently actioned the requirements around this breach from the improvement notice. Exemplary damages
Exemplary damages 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, as in this case, the Tribunal may award exemplary damages taking into account the factors set out in section 109 RTA.
Section 109 of the RTA relates to exemplary damages, and confirms that exemplary damages can be awarded if the unlawful act was committed intentionally, and having regard to: a.The intent of the person committing the unlawful act. b.The effect of the unlawful act. c.The interests of the landlord or tenant against whom the unlawful act was committed. d.The public interest; and e.Whether it is just to make the award.
Taking those factors into consider, I conclude that exemplary damages should be ordered for these reasons. a.I am satisfied that the Landlord has acted intentionally in failing to comply with the improvement notice. In fact even at the time of the hearing I consider the landlord has failed to comply with the notice, which negates any argument that the notice was missed. I consider it almost certain that conscious decisions were made around the actions the Landlord would take in addressing the notice or not. b.The effect of the unlawful act is that the Landlord’s tenants have not had the benefit of properly knowing their rights around their tenancy, and that impact may relate to some 600 tenants. The effect is very significant. c.There are strong interests for the tenants to have had any defect with their tenancy agreement corrected without delay. d.There is a very strong public interest that landlords comply with improvement notices when they are issued, given the role TCIT have in protecting the public. e.It would be just to make an order in this case.
The maximum levels of exemplary damages are set out in Schedule 1A of the Act, which for a breach of section 126J(1) is $3,000.00. In this case I have decided an order of $2,000.00, some 66% of the maximum. In setting that level, I have taken into account a range of factors including: a. The approach the landlord has taken in working with TCIT during the investigation and following. b. The size of the landlord. The landlord reports having 600 tenancies, which means it would be one of the larger landlords in New Zealand. A large landlord such as this must know what it is required to do in law. c. Similarly the number of tenancies which may be impacted could be up to 600, which is by any measure a very significant number. d. My impression is that the landlord has elected to evade its obligations under the RTA, and to beguile it’s tenants into believing they had less rights than they did. e. The fact that even at the time of the hearing the landlord has not complied with the notice, makes the breach particularly egregious. Adjudicators note
I wish to emphasise that while I have considered the terms of the ‘new’ tenancy agreement provided by the landlord for the hearing, I am expressing no view as to whether those terms would be lawful, that is not the matter before me.

Tenancy Tribunal case 4453805 — Mould & damp

At a glance

Tenancy Tribunal case 4453805 — Mould & damp

At a glance

Claims & awards

Order

Reasons

WITNESS EVIDENCE

RELEVANT STATUTORY PROVISIONS

ANALYSIS

Topics & place

Residential Tenancies Act sections

Key findings

Frequently asked questions

Claims & awards

Order

Reasons

WITNESS EVIDENCE

RELEVANT STATUTORY PROVISIONS

ANALYSIS

Topics & place

Residential Tenancies Act sections

Key findings

Frequently asked questions