Published tribunal order
Tenancy Tribunal case 4617030 — Exemplary damages at Unit/Flat 4, 25 Wallace Street, Herne Bay, Auckland 1011
Decided 4 Oct 2023 · Published 4 Oct 2023 · Application 4617030
- Exemplary damages
Party names are redacted in the official published order.
Order
- The Tribunal orders suppression of both parties’ names and identifying details.
- [The landlord/s] must pay [The tenant/s] $1,020.44 immediately, calculated as shown in the table below: Reas ons:
- Both parties attended the hearing. The tenant represented himself and [The landlord’s representative] represented the landlord.
- This tenancy commenced on 22 October 2022.
- This matter concerns just one aspect of the tenancy, namely the heating in the premises.
- The tenant claims that the landlord is in breach of the Healthy Homes (Heating) Standard and seeks exemplary damages for that breach. The tenant says he seeks those damages because he has repeatedly raised the issue and tried to
- The landlord says that they are not in breach of the standard because there is a relevant exemption that applies in this case.
- The tenancy otherwise seems to be without significant problems. I observe that both parties were polite and professional throughout the hearing and thank them both for that. Background
- Most of the facts are not in dispute.
- This premises is within a 1960s built block of units. The tenant rents one of the units at the property. The landlord manages the property on behalf of the owner.
- The premises were assessed on 7 March 2022 for compliance with the Healthy Homes Standards (“HHS”). The assessment was undertaken by [Insulation company], a company that the landlord has used for many years in various properties throughout [city].
- There was just one area of non-compliance identified within that report (a bathroom extractor fan was required) which was subsequently addressed and as of October 2022, based on that report, the landlord said that he believed the premises were fully compliant with HHS.
- The current heater in the premises is a 2kw electric wall panel heater.
- In the [Insulation company] report, it was noted that the main living area required a minimum of 2.9kw of heating capacity. It was observed that the current heating did not have the required capacity, but it was said that an exemption applied because there was insufficient wall space for an additional heater to be installed.
- It was not stated explicitly, but it is assumed that the report relied on an exemption “where it is not reasonably practicable to install one or more qualifying heating devices”.
- The owner of [Insulation company] gave evidence at the hearing (summary below) which further clarified the exemption believed to be applicable.
- As winter approached, the tenant made inquiries of the landlord about the heating because he was feeling cold.
- The tenant had also looked on the Tenancy Services website and had used the provided HHS calculators. Based on those calculators (and the presence of a 2kw panel heater only) he formed the view that the property was non-compliant with the heating standard.
- The landlord responded by advising the tenant that the heating in the premises was HHS compliant and provided him with the [Insulation company] report. It was suggested to the tenant that if he felt he needed more heating, he “purchase your own, portable, fan type heater to boost the heating on the coldest days”. Mention was also made of potentially providing thermal drapes.
- The tenant responded that after reading the [Insulation company] report, he remained sure that the premises were non-compliant with the heating standard. He observed that the report confirmed the required heating capacity was 2.9kw.
- He pointed out that in his view no exemption applied and specifically referred the landlord to parts of the Tenancy Services website, viz “You can’t use an electric heater (except a heat pump) if the required heating capacity for the main living room is over 2.4kw, unless you are ‘topping up’ existing qualifying heating that was installed before 1 July 2019.”
- On 16 May 2023 the tenant served a 14-day notice on the landlord requiring this to be remedied. He pointed out to the landlord that breaching the HHS standards was an unlawful act for which exemplary damages could be awarded.
- The landlord said that he was concerned by this, and so he requested [Insulation company] to check again as to whether or not an exemption applied and whether a mistake had been made. He said that he received the same result in May 2023.
- The tenant obtained a quote from [Heat pump company] on 5 July 2023 for two potential heat pump options. However, the landlords view continued to be that this was not required and not practicable to install.
- Later, after this application was filed, the tenant also commissioned his own HHS Assessment from [Home inspection company]. That report, dated 29 August 2023, assessed the premises as being non-compliant in relation to heating and draught stopping. There is no claim before me in relation to draught stopping so I make no further comment on this.
- The [Home inspection company] report found that the heating capacity required for the main living area was 4kW however that was based on a different calculation which also incorporated the bedroom. The reasoning for this was that the bedroom is separated from the main living area by sliding doors only. As such arguably the bedroom is part of the main living area.
- I do not need to make any finding in relation to this. Either way, whether in reliance on the [Home inspection company] or the [Insulation company] report, the heating capacity required is more than is currently provided in the premises.
- Rather, the dispute in this case is whether there is an exemption for this premises. Summary of Tenant Evidence
- In short, the tenant says that he has had a very thorough read of the requirements. He notes that it appears [Insulation company] believes there is an exemption because there is not enough space for 2 wall panel heaters
- The tenant says that the wording of the heating standard is that electric heating is not permitted except for living rooms needing capacity of 2.4kw or less.
- The tenant says that the exemptions only apply if there are one or more existing heaters installed before 1 July 2019 and that each of those existing heaters has a capacity of at least 2.4kw.
- The tenant says that the panel heater was installed in October 2022 and only has a 2kw capacity, therefore an exemption does not apply.
- The tenant said that the only other exemption possibly was that it was not feasible to install a heat pump in the unit. However, he points out that the unit next door to his does have a heat pump and has the exact same layout as his unit.
- For that reason, he requested a professional heat pump installer to assess the property. The tenant said that [Heat pump company] have been to the property and inspected it. They are professional installers, and the tenant says their quote speaks for itself Summary of Landlord Evidence
- The landlord said that they are a professional property management company and always comply with any legal requirements, including HHS.
- The landlord said that [Insulation company] is also a reputable company that they use all the time. He said they rely on [Insulation company]’s professional opinions to ensure they are fully compliant.
- The landlord said when the tenant identified potential issues with heating, he went back to [Insulation company] to check if it was possible that a mistake may have been made. The owner also inspected the property. However, by May 2023 he was reassured that the assessment was correct.
- The landlord pointed out that [Insulation company] was also a professional heat pump installer and that they were effectively doing themselves out of a job by advising against installation of a heat pump. Thus, they had no motive to get it wrong.
- The landlord said that he believed the existing heater had been installed prior to 1 July 2019. He did not have any independent confirmation of that but said he would endeavour to find some and provide it to the Tribunal. Summary of Witness Evidence
- [Redacted] is the co-owner of [Insulation company]. He has been doing work in relation to Healthy Homes for 14 years and in that time estimates he would have done around 7000 assessments. I accept that [Insulation company co- owner] is an expert in this area.
- When questioned by the landlord, [Insulation company co-owner] said he stood by the assessment in the [Insulation company] report.
- He said he had only briefly looked at the [Home inspection company] report provided by the tenant and had no real comment to make on the content of that report, other than that he had not heard of that particular company.
- [Insulation company co-owner] acknowledged that people did frequently question the reports provided and that it often came down to an interpretation of areas being measured.
- [Insulation company co-owner] explained that in his view, the heating was compliant in this case because an exemption applied.
- He said that if the heating was to be upgraded it would need to be more than
- 5kw. He said that a heat pump would be the preference but in his professional opinion a heat pump could not reasonably be installed without compromising the integrity of the structure.
- He said that there was aluminium window framing in the property and the only way to install a heat pump would be to break the seal of the glass framing and run the trunking along the aluminium window framing. He said that this would risk the weathertightness of the property and they would not be able to indemnify themselves against the risk of damage.
- When asked to clarify this, [Insulation company co-owner] said that in multi-unit apartments there is often a body corporate which will have rules around penetrating exterior walls. He said there is quite a hefty process that comes along with that and usually they are required to provide evidence that there will be weathertightness for the life of that unit.
- He said that in this case there is no body corporate so arguably owners can do anything they like. However, this meant that [Insulation company] would be liable for any damage, and they did not want that liability.
- In particular, [Insulation company co-owner] said that he was concerned around the weight of the piping on the glass substrate.
- The tenant then questioned [Insulation company co-owner].
- In response to those questions, [Insulation company co-owner] said that he had assumed the existing wall panel heater was installed before 1 July 2019. He also said that that he was aware of the second criteria for the exemption (that each existing heater must have a minimum capacity of 2.4kw).
- [Insulation company co-owner] acknowledged that if the existing heater was installed after 1 July 2019 then the law said there was no exemption.
- [Insulation company co-owner] said that he had no particular knowledge that the heat pump in the next-door unit had been improperly installed, but said he wondered how they had done it. He said that his recollection was that the pipe was penetrating the window framing and glass.
- I asked [Insulation company co-owner] to look at some of the photos in the [Insulation company] report and asked whether or not the piping could be put through the wall which appeared to be plaster. He said that it was not possible because the kitchen was directly on the other side of that wall. After the Hearing
- At the end of the hearing, I requested that the landlord provide confirmation as to whether or not the existing 2kw panel heater was installed prior to 1 July 2019.
- I also requested the tenant to email photographs showing how the heat pump in the next-door unit was installed.
- I also looked at further photographs of the unit that were readily available online and observed that the entire front side of the unit (closest to where the existing panel heater is) appeared to be a solid wall and could not help but wonder why a heat pump could not be installed on that side of the property? Of course, by that time the parties had left and there may well be a reasonable explanation for that. Analysis and Findings
- The tenant duly provided photographs of the installation for the heat pump in the next-door unit.
- The landlord also duly emailed the Tribunal. In that, he advised that he had been mistaken in his belief that the existing panel heater was installed prior to 1 July 2019 and that in fact it had been installed in November 2021. He apologised for the error and said he had also apologised to the tenant for this.
- I am grateful to both parties for their prompt provision of the requested information.
- Section 45(1)(bb) of the Residential Tenancies Act 1986 (“the Act”) provides that a landlord must comply with the Healthy Homes Standards.
- Failure to do so is an unlawful act for which for which exemplary damages may be awarded up to a maximum of $7,200.00. See section 45(1A) and Schedule 1A of the Act.
- The heating standard requires landlords to provide one or more ‘qualifying heaters’, with a capacity to heat the room to a required level. The heating standard defines what a qualifying heater would be and confirms that certain types of heaters are unacceptable heaters for the purpose of the HHS.
- The heating standard requires that heaters in the particular tenancy have a minimum heating capacity. An on-line calculator has been produced in order to determine what level of heating is required for any particular premises, and that can be found at https://www.tenancy.govt.nz/heating-tool/
- The HHS does provide exemptions in specific circumstances.
- In this case, there was never any dispute that the heating provided was below the required heating capacity.
- The dispute arose over whether an exemption applied.
- The specific standards are found in the Residential Tenancies (Healthy Homes Standards) Regulations 2019 (“the regulations”).
- Regulation 8 provides that the main living room of the premises must be heated by one or more qualifying heaters with a total heating capacity of at least the required heating capacity for that room.
- Regulation 9(2)(c) provides that an electric heater is an unacceptable form of heating if the required heating capacity of the living room is more than 2.4kw. Here, it is not disputed that the required heating capacity is at least 2.9kw and the current heater is an electric heater.
- Regulation 12 provides that there is an exemption to regulation 8 if it is “not reasonably practicable to install qualifying heaters so as to comply with that regulation”.
- Regulation 4 provides the meaning of “not reasonably practical to install”, as follows. It is not reasonably practicable to install something at any premises or tenancy building if, because of the way the premises or tenancy building is designed or built,— (a) a professional installer cannot access the relevant area of the premises or tenancy building to install the thing without— (i) carrying out substantial building work; or (ii) causing substantial damage to the premises or tenancy building; or (b) a professional installer cannot install the thing without creating greater risks to the health or safety of any person than are normally acceptable when something of that kind is being installed by a professional installer; or (c) it is otherwise not reasonably practicable for a professional installer to install the thing
- In this case, it is clear that the heating currently provided is not a qualifying heater and is an unacceptable heater.
- On the face of it then, the landlord is in breach of regulation 8. The onus is then on the landlord to establish that an exemption exists. In this case, the landlord relies on its contention that it is “not reasonably practicable” to install a qualifying heater.
- In the written [Insulation company] report, the focus of the “not reasonably practicable to install” exemption was said to be that there was insufficient wall space for any top up heating to be provided. There are several issues with this. a. First, it was premised on an assumption that the existing heater was installed prior to 1 July 2019. As it turns out, that is not the case. b. Secondly, it failed to recognise that installing ‘top up’ heating could only be relevant if the existing heating provided at least 2.4kw heating capacity. That was also not the case. c. Thirdly, it also relied on an interpretation of “not reasonably practicable to install” that does not come within the definition in regulation 4. Insufficient wall space is not a situation requiring significant building work or likely to cause substantial damage to the premises or building.
- At the hearing, the focus of the “not reasonably practicable to install” exemption became the inability to install a heat pump without compromising the integrity of the building.
- I have carefully considered the evidence of the landlord and of [Insulation company co-owner] and I accept that [Insulation company co-owner] has expertise in respect of heat pump installations. However, as with any professional opinion, the advice that is given is only as good as the information known to the person giving the advice.
- In this case, I am not satisfied that the landlord has shown it is not reasonably practical to install a heat pump, for the following
Reasons
.
a. There is a heat pump installed in what appears to be an identical unit next door. b. The piping in the next-door unit appears to penetrate the unit not through the aluminium window framing, but through the timber framing directly adjacent to the window. c. [Insulation company co-owner]’s opinion that it was not possible to install in this area due to the presence of the kitchen appears to be contradicted by the installation next door. d. The possibility of other areas for installation has not been excluded. e. A professional heat pump installer ([Heat pump company]) has assessed the premises and found that a heat pump can be installed. If the landlord’s preferred supplier, [Insulation company], does not wish to take on the liability in relation to installation, the landlord may wish to consider using another supplier. f. I am not satisfied that installation would cause “substantial damage to the premises” to bring it within the definition of “not reasonably practical to install”.
- Accordingly, I find that there is no exemption to the heating standard in this case, and the landlord is in breach of section 45(1)(bb) of the Act. Remedies
- In this case, the landlord presented as a responsible landlord trying to do the right thing. I am therefore confident that the landlord will now take steps to properly investigate and install a heat pump.
- The tenant also sought exemplary damages.
- Exemplary damages are awarded at the Tribunal’s discretion when one party has proved that the other party has committed a defined unlawful act.
- I am satisfied that the landlord has committed an unlawful act.
- Where a party has committed an unlawful act intentionally, the Tribunal may award exemplary damages where it is satisfied it would be just to do so, having regard to the party’s intent, the effect of the unlawful act, the interests of the other party, and the public interest. See section 109(3) of the Act.
- In this case, even though the landlord has breached the Act, I find that there was no bad faith involved. Taking into account all the factors identified in section 109(3) I do not consider it just to award exemplary damages against a landlord who has made an honest mistake, as opposed to one that has intentionally breached their obligations.
- I do however consider that it is appropriate to award compensation to the tenant. The compensation is for a loss of amenity; that is, rather than a direct financial loss the tenant has essentially been paying for something he did not receive. He has paid rent and in return was entitled to a warm dry home that met the relevant regulatory requirements. Instead, he had to live through a cold damp winter without adequate heating.
- I therefore order the landlord to pay $500.00 in compensation to the tenant. Suppression and Filing Fee
- Section 95A of the Act provides that on the application of a party that has been wholly or substantially successful in proceedings the Tribunal must order that the name or identifying particulars not be published, unless the Tribunal considers that it is in the public interest to publish the names of the parties or is justified because of the parties conduct or any other circumstances of the case.
- Section 95A(4) provides that the Tribunal may on its own initiative, having regard to the interests of the parties and to the public interest, order that the name of any identifying particulars of any witness or party not be published
- In this case, the tenant has wholly succeeded in the proceedings. As there are no countervailing reasons not to do so, I therefore grant suppression of his name and identifying details.
- I further consider that in this case, there has been no bad faith on the part of the landlord and no legitimate public interest that would require publication of the landlord’s name. I therefore also order suppression of their name and identifying details.
- Because the tenant has wholly succeeded with the claim, I must reimburse the filing fee. J R Smith 7 September 2023