What was Tenancy Tribunal case 4514709 about?

The tribunal order states: Hillis Shearing Limited William (Bill) James Hillis, William (Bill) James Hillis,

How much money was awarded in case 4514709?

Individual award amounts are in the official MoJ PDF. Claim amounts appear on this page when claims and net totals reconcile.

What type of tenancy dispute was case 4514709?

The primary dispute was Exemplary damages.

Where can I read the official tribunal order for case 4514709?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/10212175-Tribunal_Order_Redacted.pdf.

What was Tenancy Tribunal case 4514709 about?

The tribunal order states: Hillis Shearing Limited William (Bill) James Hillis, William (Bill) James Hillis,

How much money was awarded in case 4514709?

Individual award amounts are in the official MoJ PDF. Claim amounts appear on this page when claims and net totals reconcile.

What type of tenancy dispute was case 4514709?

The primary dispute was Exemplary damages.

Where can I read the official tribunal order for case 4514709?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/10212175-Tribunal_Order_Redacted.pdf.

Multiple Tenancies Tenancy Tribunal Case 4514709 — Exemplary damages

Order

Hillis Shearing Limited William (Bill) James Hillis, William (Bill) James Hillis, Sharon Hillis must pay [Tenant 1] the sum of $4,390.11 calculated as follows: ReasonAmount ordered Exemplary damages for breach of section 13$250.00 Exemplary damages for breach of section 13A$375.00 Exemplary damages for breach of section 45$3,600.00 Compensation$160.00 Filing fee$5.11 Total payable by landlords to tenant$4,390.11
Hillis Shearing Limited William (Bill) James Hillis, William (Bill) James Hillis, Sharon Hillis must pay [Tenant 2] the sum of $5,947.11 calculated as follows: ReasonAmount ordered Exemplary damages for breach of section 13A$250.00 Exemplary damages for breach of section 45$3,600.00 Compensation$2,092.00 Filing fee$5.11 Total payable by landlords to tenant$5,947.11
Hillis Shearing Limited William (Bill) James Hillis, William (Bill) James Hillis, Sharon Hillis must pay [Tenant 3] the sum of $5,273.11 calculated as follows: ReasonAmount ordered Exemplary damages for breach of section 13$250.00 Exemplary damages for breach of section 13A$375.00 Exemplary damages for breach of section 45$3,600.00 Compensation$1,043.00 Filing fee$5.11 Total payable by landlords to tenant$5,273.11
Hillis Shearing Limited William (Bill) James Hillis, William (Bill) James Hillis, Sharon Hillis must pay [Tenant 4] the sum of $5,709.11 calculated as follows: ReasonAmount ordered Exemplary damages for breach of section 13A$375.00 Exemplary damages for breach of section 45$3,600.00 Compensation$1,729.00 Filing fee$5.11 Total payable by landlords to tenant$5,709.11

Reasons

The Tribunal must consider applications filed by the Chief Executive of the Ministry of Business, Innovation and Employment (Chief Executive) on behalf of four tenants. The applications are filed within the Chief Executives enforcement jurisdiction, and given they relate to tenancies in the same complex have been managed and heard concurrently.

BACKGROUND

The Respondents have confirmed that the statement of facts presented by the Chief Executive is undisputed. I summarise this background as follows:
The premises are located at 57 – 59 Kana Street, Mataura, and could be described as a single building with a number of separate apartments comprising the respective tenancies.
The Respondents in this case are Hillis Shearing Limited and its directors William Hillis and Sharon Hillis. It is not disputed that they are the correct respondents.
The four tenancies are as follows: UnitTenantApproximate tenancy start date 5[Tenant 1]10 June 2022 6[Tenant 2]1 August 2018 7[Tenant 3]28 February 2021 8[Tenant 4]31 October 2019
I note that there are no written tenancy agreements, so the tenancy start dates are the best estimates of when each tenancy commenced.
On 2 March 2022 the Tenancy Compliance and Investigation Team (TCIT), a unit of the Ministry of Business, Innovation and Employment, received a complaint in relation to the premises.
TCIT investigated the complaint. Mr and Mrs Hillis advised that the premises were purchased with the intention of providing accommodation to shearers, working for their shearing business. However, the evidence is that the current tenants are not engaged with the shearing business.
As part of the investigation, the investigator attended and inspected the premises, and as part of that process took wide-ranging photographs which are now found on the Tribunal file.
The Investigator has also interviewed the tenants and Mr and Mrs Hillis. The directors advised that they had allowed non-employee tenants into the premises because they felt a social responsibility to do so, otherwise they would be homeless. The Directors also provided various explanations for why certain breaches had occurred, such as for example insulation purchased for the premises having been stolen, so that is why the premises are not insulated.
The investigator also contacted the Building Control Manager at Gore District Council, who has advised the warrant of fitness for the premises expired in 2017, and that the respondent(s) would not engage with the Council in relation to the expired warrant of fitness.
On 1 March 2023 the Chief Executive filed these applications with the Tribunal.
Hillis Shearing Limited has sold the building. Chief Executives submissions
The Chief Executive is represented by Ms Sagaga, who filed written submissions on the morning of the hearing. I will not set those out in detail here, but will address the points raised in my analysis further below

RESPONDENTS CASE

The respondents are represented by Mr Hitchcock.
Mr Hitchcock explained that when the premises were purchased, it was intended at the time to provide accommodation for shearers engaged in the sharing business to reside, however around 2015 when there was less demand to house out-of-town shearers, the premises were not required for business-related purposes. It became known in the community that the premises were vacant, and out of goodwill the Hillis’s allowed locals in the community to rent the premises to give them somewhere to live.
Over time things did not go well with those living in the premises, where rent was not being regularly paid, and some of the tenants caused damage to the dwelling. At one point the premises were taken over by the Mongrel Mob, which meant that the landlords had an even more difficult time managing the premises.
In more recent times the premises were sold for the same price the premises were purchased for, meaning no financial gain from the premises was made.
The landlords do not take issue with the general law outlined by Ms Sagaga.
In terms of any penalty, it was submitted that recognition should be given to the landlord’s ready acceptance of the facts claimed, that the landlords had a degree of naivety, and they accept with hindsight that the premises should not have been rented. It was further submitted that the tenants themselves presented difficulties in managing, and the situation had gotten out of control for the landlords.
It was further submitted that no income has been made overall from the tenancies given the low rent and overall costs.

RELEVANT LEGAL CONSIDERATIONS

The relevant law that applies is found in the Residential Tenancies Act 1986 (“RTA”).
With any claim before the Tenancy Tribunal, the Tribunal applies the usual civil law standards and expectations.
That includes a requirement that the party bringing the claim (the applicant), establish their claims “on the balance of probabilities”. The balance of probabilities means more likely than unlikely, or in mathematical terms, has a fractionally more than 50% likelihood. The Tribunal does not need to be certain or very sure about any claim, only that what is claimed is likely.
This obligation carried by the applicant is referred to as the “burden of proof”. Independent witnesses, corroborating documents and photographs are an important part of discharging this burden.

ANALYSIS

As can be seen above, the Respondents have not challenged much in relation to the Chief Executive’s application against them. They have not challenged that that they are the correct landlords, nor that the claimed tenants are their tenants. They have not disputed the underlying allegations in relation to the premises or the administration around the tenancies. The Respondent’s submissions were directed toward mitigation or explaining what happened, and I will consider those below.
As I said I will do, I need to work through each of the claimed breaches. I will then need to determine whether exemplary damages and compensation should be ordered for those breaches. Claim 1 – Signed tenancy agreements
The Chief Executive claims that the landlords have failed to provide signed tenancy agreements to four of the tenants. This is not disputed by the landlords.
It has long been a requirement in the RTA that tenancy agreements be in writing and signed. It is not disputed that the landlord has failed to provide written and signed tenancy agreements to any of the tenants, so the landlord has breached their obligations under the RTA.
However, the law changed as of 11 February 2021, when Parliament confirmed that if the landlord breached this obligation, then that was an unlawful act, meaning that exemplary damages could be ordered (I will discuss the law around exemplary damages further below).
Because this breach occurs if the landlord has not provided a written tenancy agreement before the tenancy commences, it must be a breach measured at the tenancy commence date. I am satisfied that the landlord has failed to provide any of the tenants with a written and signed agreement, so the landlords have breached their obligations under the Act. That means that there has been an unlawful act as far as units 5 and 7 are concerned because the law deemed failure to comply with section 13 an unlawful act at the tenancy commencement date for these two tenancies. However when the tenancies for units 6 and 8 commenced, it was not deemed to be an unlawful act at that time, and Parliament has not made this breach retrospective. Therefore I can consider exemplary damages only for units 5 and 7. Claim 2, 3, 4 – Failure to provide information on the tenancy agreements
Claims 2 – 4 relate to a failure of the landlord to provide necessary information on the tenancy agreements. Because these requirements are similar and all fall within section 13A, I will deal with these claims together.
Section 13A relates to the content of tenancy agreements, and prescribes a wide range of information that the written tenancy agreement must include. In this case, there is no written agreement, so this information has not been provided.
Subsection 1A requires the landlord to provide the tenant information in relation to insulation at the premises. That requirement commenced in 2016.
Subsection 1CA relates to a requirement to provide information in relation to the Healthy Homes Standards, and that obligation commenced on 1 July 2019.
Subsection 2 relates to a requirement that the landlord provide insurance information. That obligation commenced on 27 August 2019.
In this case the Chief Executive claims the landlord has breached these requirements for all four tenants.
I am satisfied that the landlord has breached all obligations in relation to units 5, 6 and 8. However I find that in relation to unit 6, the landlord has only breached one of the obligations, that relates to insulation information. That tenancy commenced on 1 August 2018, however the requirement to provide information in relation to the Healthy Homes Standards was only introduced on 1 July 2019, and the insurance information on 27 August 2019, that was after this tenancy commenced. Again these unlawful acts cannot be retrospective. Claim 5 – Failure to provide smoke alarms
Section 45(1)(ba) of the Residential Tenancies Act 1986 (RTA) requires that landlords comply with all requirements in relation to smoke alarms made under section 138A.
The relevant regulations are the Residential Tenancies (Smoke Alarms and Insulation) Regulations 2016. Those regulations require landlords to have qualifying smoke alarms installed and operational.
Regulation 5 requires that there be at least 1 qualifying smoke alarm installed: a. Within a sleeping space (bedroom); or b. Within 3 metres of the entrance to a sleeping space; AND c. On each story or level of the premises.
The Chief Executives position is that the landlord has breached this requirement in relation to units 5, 7 and 8, and that is not disputed by the landlords. These breaches are established. Claim 6 – Insulation obligations
Residential tenancies must be insulated where possible, including ceiling and underfloor insulation. This was required under the Residential Tenancies (Smoke Alarms and Insulation) Regulations 2016, and more recently under the Residential Tenancies (Healthy Homes Standards) Regulations 2019. The photographs show these premises are uninsulated, and again that is accepted by the landlords. A breach of these insulation obligations is an unlawful act under section 45(1A). This breach has been established for all tenancies. Claim 7 – Failure to maintain
Section 45 sets out the landlord’s responsibilities, and that includes the obligation to maintain the premises.
The photographs show premises that are dilapidated. I have no reservations in concluding that these premises have not been maintained. I have considered the reasons presented by the landlord at the hearing for failing to maintain the premises, but they are not convincing. My impression is that these premises have not been adequately maintained for years. If the landlord was having trouble accessing the premises for whatever reason, the Landlord could have applied to the Tribunal for any necessary orders to gain access to the premises and have the work completed.
I find by a comfortable margin that the landlord has breached their obligations to maintain these premises.
Failing to maintain the premises is deemed an unlawful act, and I find that claim is established for all tenancies. Claim 8 – Breach of obligations in relation to buildings, health and safety
Section 45(1)(c) requires that the landlord “comply with all requirements in respect of buildings, health and safety”.
The Chief Executives position is that the landlords have breached this obligation given they have not obtained an updated building warrant of fitness. The evidence from the Gore council is that this certification expired in 2017, and that the landlords have not been engaging with the Council in getting this renewed. The evidence from the Council is that this is a legal requirement for these premises. There is no evidence before me to the contrary. I am satisfied that the Landlords have breached their obligations under section 45(1)(c), which is an unlawful act under section 45(1A).

EXEMPLARY DAMAGES

The Tribunal must now consider whether exemplary damages should be ordered.
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, and before the Tribunal may award exemplary damages, it must take account of 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.
The maximum levels of exemplary damages are set out in Schedule 1A of the Act.
There is an issue in this case around whether the Tribunal can order multiple orders of exemplary damages for multiple breaches within a single unlawful act provision, or only the single potential maximum. In her submissions, Ms Sagaga has indicated that the Chief Executive is seeking multiple maximum orders, but I raised that I did not consider that was available and that I could order only a single maximum.
As above, the provision of the RTA which provides the Tribunal with the authority to order exemplary damages, is section 109. Subsection 4 confirms. (4) The maximum amount that a person may be ordered to pay under this section for any unlawful act referred to in any section shown in column 1 of Schedule 1A is the amount shown opposite that section in column 3 of that schedule.
Schedule 1A sets out the maximum amounts that may be ordered for exemplary damages, and section 13A(1F)(a) as an example, is as follows: Schedule 1A Amounts for unlawful acts Column 1 Section Column 2 Description of unlawful act Column 3 Amount ($) ... 13A(1F)(a)Landlord failing to comply with section 13A(1), (1CA), (2), (3), or (4). $750
Section 13A(1F)(a) confirms that a landlord commits “an” unlawful act if they fail to comply with subsections (1A), (1CA), (1CB), (2), (3), or (4). In this case, the landlord has breached three of those requirements in relation to the insulation statement, the HHS statement and the Insurance statement. So the question is whether the Tribunal can order one maximum of $750.00 for all three breaches, or three maximums of $750.00, that is one maximum for each breach so a potential total of $2,250.00.
In my assessment, section 109 anticipates that if there has been an unlawful act found (for example 13A(1F)(a) is found to apply), then reference must then be made to column 1 of Scheduled 1A, and then the maximum that can be ordered is found in column 3.
If there were three breaches (as in this case), then if the Chief Executives position was correct, then I would need to apply column 1 three separate times, but that interpretation would not sit comfortably with section 109 which sets out a maximum.
Again section 109(4) confirms that the maximum amount that a person may be ordered to pay under section 109 for any unlawful act referred to in column 1 of Schedule 1A is the amount shown opposite that section in column 3 of that schedule. In order to interpret the law in a way to order 3 potential maximum orders, I would need to then include column 2, but section 109 does not refer to the multiple potential breaches in column 2, only a single unlawful act in column 1.
I also note the District Court decision of Gardiner v Upland Bay Investments Ltd DC Wellington CIV-2014-085-13, 27 August 2014. In that case, the District Court was presented with an argument that a maximum level of exemplary damages was available for each breach. The Court was not supportive of multiple maximums being available, stating: [28] Mr Opie also submitted, as noted above, that individual awards of exemplary damages should be made for each individual breach, in effect arguing that the statutory maximums as set out in Schedule 1A to the Act should apply not globally, but in respect to each individual breach. Accordingly, Mr Opie sought an award of exemplary damages of $1,000 (the statutory maximum) for Upland Bay's failure to lodge the bond, and $1,000 in exemplary damages for its refusal or omission to issue a receipt for the bond. In respect to the various breaches of building standards or health and safety requirements, he sought a separate award in respect to each failure, of $1,000 for each individual breach. [29] However, Schedule 1A is explicit, when setting the maximum amount awardable in relation to both s 19 and s 45 breaches, that the maximum applied to the breach of duties (plural), in the case of s 19 and the landlord's failure to meet obligations (also plural) in respect of s 45. The plural forms as adopted by the legislature in both instances indicate that the maximums are in respect to a global or total award for all breaches under the respective sections.
If the Chief Executive’s position was correct, that would lead to severe and unreasonable outcomes. As an example, section 13A sets out the required content of tenancy agreements. Subsection 1(a) sets out wide-ranging information that must be included in the tenancy agreement, there are 18 specific requirements including the landlord’s name, telephone number, email address, tenancy address, date of commencement of the tenancy etc. Section 13A(1AAA) confirms that if the 13 of those requirements are breached, then that would be an unlawful act. It could not have been in Parliament’s contemplation that a landlord would face up to $9750.00 of exemplary damages simply because a written tenancy agreement was not provided to the tenant.
I find therefore, that the Tribunal can only order one maximum for each unlawful act, as a global order.
I note for completeness that where the Tribunal can consider the fact of there being multiple breaches within a single unlawful act, is in applying its discretion as to the quantum to order up to the maximum.
I am entirely satisfied that exemplary damages for the identified unlawful acts, should be ordered. I reach that conclusion for these reasons: a. I consider that all identified breaches were intentional. In my assessment, the breaches relate to fundamental obligations that all landlords should be aware of. I have not heard evidence directly from Mr and Mrs Hillis, but I consider their actions are likely to have been intentional, and that the breaches are therefore likely to have been intentional breaches. b. The effect of the unlawful acts are that the tenants were not provided with the information they should have had about the tenancy, and they lived in premises that were unsafe and poorly maintained. Considering the defects with the premises, the dwellings would have been unhealthy. c. There are strong interests for the tenants to live in safe and healthy tenancies, and to be provided with the statutory information in relation to the tenancy. d. There is an associated public interest, that tenancies are healthy, and that landlords comply with their statutory obligations in relation to the tenancy. e. In the circumstances, I consider it would be just to make an order of exemplary damages.
The challenge then becomes assessing the level of exemplary damages to order. The amounts set out in Schedule 1A are maximum amounts. In the scheme of things, the Tribunal would only order a maximum level of exemplary damages in the most egregious of cases, particularly when there is a history of breaches being considered in the Tribunal, and the Tribunal’s orders ignored. That is not the case here. Otherwise there are no statutory set of considerations I must make when deciding the level of exemplary damages to order. I do take into account factors such as the period over which the breaches occurred, the lack of engagement with the Gore Council, and the extent of the identified breaches. But on the other side of the ledger, I also take into account the very low level of rent the landlords charged for the tenancies, the landlord’s approach to this hearing in conceding the identified facts thereby sparing the tenants from needing to give evidence. I also take into account that I accept the landlords acted in part on the basis that they wanted to house people who would otherwise have been homeless, but that the landlords recognise in retrospect they had obligations in law they needed to meet.
Taking those considerations into account, I conclude as follows:
For the breach of section 13 (written tenancy agreement), the landlord should pay the unit 5 and 7 tenants one third of the maximum level of exemplary damages which is $750.00, therefore the order is for the payment of $250.00 for each tenant.
For the breach of section 13A (insulation, HHS and Insurance statements), the landlord should pay the unit 5, 7 and 8 tenants 50% of the maximum level of exemplary damages which is $750.00, because there has been a breach of the three obligations. These orders therefore are $375.00. However for the unit 6 tenant, the landlord should pay one third of the maximum being $250.00 as that is a single breach.
For the breach of section 45(1A) (smoke alarms, insulation, maintenance and building WOF), I consider the landlord should pay all four tenants 50% of the maximum, which is $7,200.00. The result is that the landlords are ordered to pay each tenant $3,600.00.

COMPENSATION

The Chief Executive also seeks an order that the landlord pay compensation to the tenants. Compensation is ordered to compensate a person for a loss they have sustained because of a breach on the part of the respondent(s). Compensation differs to exemplary damages, because exemplary damages are like a fine, but exemplary damages are not intended to compensate for any loss incurred.
I have determined that compensation should be awarded for the breaches of section 45. That is because those breaches had a direct relationship to the tenants occupying a safe and healthy tenancy. Ultimately the tenants were paying the landlord rent, and as part of that rent the tenants had a statutory expectation that the tenancy would comply with the minimum health and safety expectations around the tenancy and that it would be maintained to be a safe and acceptable tenancy. In short, the tenants were not getting what they paid rent to receive.
While I accept that the experience for each tenant from the breaches would have been different, I am not persuaded that any difference in experience would support the Tribunal taking a different approach for compensation purposes.
I have determined that it would be reasonable for the landlord to reimburse the tenants 10% of the rent those tenants have paid. I take into account that while there were breaches on the part of the landlord (which the landlords seem to accept), there is also an obligation on the tenants to mitigate their loss (see section 49). The tenants could have mitigated (reduced) their loss by way of an application to the Tribunal, or even a complaint to TCIT. 1
Ms Sagaga has set out a calculation of the rent paid (or payable) for each tenant at paragraph 7 of her submissions. I have no reason not to accept that calculation as accurate for compensation purposes. Applying that calculation, I make the following compensation order: f. Unit 5, $160.00 compensation g. Unit 6, $2,092.00 compensation h. Unit 7, $1,043.00 compensation i. Unit 8, $1,729.00 compensation

FILING FEE

Because the applicant has been wholly successful in their application, I must award the filing paid to commence the proceeding in the Tribunal, which is 1 I note that the complaint to TCIT which commenced this proceeding was not a complaint from the tenants. $20.44. According to my records, one filing fee was paid, so I have divided the filing fee order between the four tenants.

NAME SUPPRESSION

Because this is a case advanced by the Chief Executive, I must order tenant name suppression under section 124A.

Tenancy Tribunal case 4514709 — Exemplary damages at Multiple Tenancies

Tenancy Tribunal case 4514709 — Exemplary damages at Multiple Tenancies

Order

Reasons

BACKGROUND

RESPONDENTS CASE

RELEVANT LEGAL CONSIDERATIONS

ANALYSIS

EXEMPLARY DAMAGES

COMPENSATION

FILING FEE

NAME SUPPRESSION

Order

Reasons

BACKGROUND

RESPONDENTS CASE

RELEVANT LEGAL CONSIDERATIONS

ANALYSIS

EXEMPLARY DAMAGES

COMPENSATION

FILING FEE

NAME SUPPRESSION