What was Tenancy Tribunal case 4634752 about?

The tribunal order states: Samantha Ram must pay [The landlord/s] $4,595.88 immediately, calculated as

How much money was awarded in case 4634752?

Filing Fee: $20.44 awarded to landlord; Property Damage: $5,440.00 awarded to landlord; Property Damage: $315.00 awarded to landlord; Property Damage: $100.00 awarded to landlord; Rubbish Removal: $90.00 awarded to landlord

What type of tenancy dispute was case 4634752?

The primary dispute was Property damage.

Where can I read the official tribunal order for case 4634752?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/9903620-Tribunal_Order_Redacted.pdf.

What was Tenancy Tribunal case 4634752 about?

The tribunal order states: Samantha Ram must pay [The landlord/s] $4,595.88 immediately, calculated as

How much money was awarded in case 4634752?

Filing Fee: $20.44 awarded to landlord; Property Damage: $5,440.00 awarded to landlord; Property Damage: $315.00 awarded to landlord; Property Damage: $100.00 awarded to landlord; Rubbish Removal: $90.00 awarded to landlord

What type of tenancy dispute was case 4634752?

The primary dispute was Property damage.

Where can I read the official tribunal order for case 4634752?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/9903620-Tribunal_Order_Redacted.pdf.

New Zealand Tenancy Tribunal Case 4634752 — Property damage

Claims and awards in Tenancy Tribunal application 4634752 — net $4,595.88 NZD. Amounts reconciled from the published order (claims sum and net total). Verify on MoJ.
Claim	Landlord	Reason
Rent/loss of bargain damages	$5,440.00	Rent/loss of bargain damages
Cleaning & rubbish removal	$90.00	Cleaning & rubbish removal
Lock/key replacement	$315.00	Lock/key replacement
Ceiling damage	$100.00	Ceiling damage
Filing fee reimbursement	$20.44	Filing fee reimbursement
Net award	$4,595.88
Total payable by Tenant to Landlord	$4,595.88

Order

Samantha Ram must pay [The landlord/s] $4,595.88 immediately, calculated as shown in table below.
The Bond Centre is to pay the remaining bond of $1,369.56 ([Bond number suppressed]) to [The landlord/s] immediately.
The application for cleaning costs and for exemplary damages are dismissed.

Reasons

Both parties attended the hearing. [Ms H] represented the landlords.
The landlords have applied for rent arrears, compensation, exemplary damages, refund of the remaining bond, and reimbursement of the filing fee following the end of the tenancy.

Are the landlords entitled to the rent claimed?

Ms Ram had a one-year fixed term tenancy of the premises commencing on 27 February 2023. Rent was agreed at $630 per week and a bond of $1,890.00 was paid.
The tenancy ended on 17 May 2023 by order of the Tribunal dated the same day (under application number 4558690) for breach by Ms Ram of section 40(2)(b) of the Residential Tenancies Act 1986 (using or permitting the premises to be used for an unlawful purpose). However, Ms Ram did not move out of the premises until 22 May 2023. Rent was paid up until 14 May 2023. Ms Ram accepts that she is liable for rent from 15 May until 22 May, being $720.00.
In addition to the rent due until Ms Ram vacated the premises, the landlords are claiming damages (loss of bargain damages - the loss of promised benefit that the landlords’ have not received) resulting from the breach by Ms Ram of her obligations under the tenancy agreement. They say that, despite advertising the tenancy, they struggled to find a new tenant until 7 July 2023 and only after they agreed to reduce the rent to $550.00 per week. The landlords therefore claim damages totalling $4,720.00 made up of rent at $630.00 per week from 23 May until 6 July and then the sum of $80.00 per week from 7 July until 7 August 2023, being the difference between the rent agreed to be paid by Ms Ram and the rent received from the new tenant ([Ms H] confirmed that they were not claiming loss of rent beyond 7 August 2023).
Ms Ram claims that her liability to pay rent ceased when the tenancy was terminated and she should not be liable for rent after that.
The Residential Tenancies Act (the Act) does not specifically address the right to loss of bargain damages when the tenancy is terminated for breach by the tenant (other than for when the tenant abandons the premises with rent in arrears). However, the Tribunal has jurisdiction to consider and make orders under any enactment or rule of law relating to contracts: sections 77(1)(k) 78(1)(h) of the Act. An enactment relevant here that relates to contracts is the Contract and Commercial Law Act 2017 (CCLA). Section 37(1) of the CCLA provides that a party may cancel a contract if the other party has breached a term of the contract but only if the breach is a serious breach. Section 37(2) defines a serious breach to include where the breach substantially increases the burden of the contract to the cancelling party or makes the benefit or burden of the contract substantially different to that contracted for. Cancelling the contract does not prevent the cancelling party recovering damages for the breach by the other party: section 49 CCLA. Those damages may include loss of bargain damages, such as loss of rent after the termination of the contact for breach, but only if the breach is a serious (or fundamental breach): Morris v Robert Jones Investments Ltd [1994] 2 NZLR 275 (CA).
Thus, the question here is whether the breach by Ms Ram can be considered as a serious (or fundamental) breach of the contract (the tenancy agreement). That is, did it substantially increase the burden of the contract to the cancelling party (the landlords) or make the benefit or burden of the contract substantially different to that contracted for.
The breach by Ms Ram of section 40(1)(b) of the Act that led to the tenancy being terminated is set out in the Tribunal order dated 17 May 2023. In brief, Ms Ram was carrying on the business of prostitution at the premises in breach of the Christchurch City Council Brothels (Location and Commercial Sexual Services Signage) Bylaw 2013 (the Bylaw) and the Christchurch District Plan. The Tribunal order also detailed, at paragraph 11, the effect the breach had on the landlords, including that the landlords’ insurer had cancelled the insurance cover for the premises because of the use of the premises by Ms Ram and not having insurance compromised the mortgage contract the landlords had with their bank. The Tribunal notes that “[t]his is clearly an untenable position for the landlords to be in”.
I am satisfied that the breach by Ms Ram is a serious or fundamental breach given the substantial burden the breach placed on the landlords. I therefore find that the landlords are entitled to loss of bargain damages. The landlords had a legitimate expectation, under the bargain they struck with Ms Ram, that they would receive rent at $630 per week for the duration of the fixed term of the tenancy (that is until 25 February 2023). However, because of the breach of the agreement by Ms Ram they have lost the full benefit of that right.
The amount claimed has been established by the provision of a rent record and the evidence of [Ms H].

Did Ms Ram comply with her obligations at the end of the tenancy?

The landlords claim that Ms Ram did not leave the premises reasonably clean, did not remove all rubbish, and did not return the keys at the end of the tenancy as required section 40(1)(e) of the Act.
Ms Ram claims that she left the keys in the letter box of the neighbouring unit (which is apparently owned by [Ms H’s] daughter). Ms Ram accepts that she did not tell the landlords that she had done so. [Ms H] denies that the keys were in the letter box as claimed and if they were her daughter would have told her.
I find Ms Ram in breach of her obligation to return the keys to the landlords at the end of the tenancy. Her obligation was to hand the keys to the landlords or leave them in the premises at the end of the tenancy (unless the parties had agreed to an alternative means of returning the keys). I therefore find her liable to pay the cost incurred to replace the locks and keys. The amount ordered has been established by the production of an invoice.
The landlords claim the sum of $150.00 to clean the premises and remove rubbish. Ms Ram disputes that she did not leave the premises reasonably clean, but she accepts that she left some rubbish. I am not satisfied that the landlords have provided sufficient evidence to support their claim that the premises were not left reasonably clean, in particular the landlords did not provide photographs of the areas claimed to require cleaning. The claim for cleaning is therefore dismissed. In the circumstances I consider the sum of $90.00 reasonable to compensate the landlords for the removal of the rubbish.
The landlords also claimed the cost ($100.00) to repair damage to the ceiling at the premises. Ms Ram accepts that claim.

Should exemplary damages be payable?

The landlords claim exemplary damages for failure by Ms Ram to vacate the premises or give back possession of the premises when it was terminated on 17 May 2023.
Section 40(1)(e)((i) of the Act provides that the tenant must quit the premises on termination of the tenancy. Section 40(3A) of the Act provides that a failure, without reasonable excuse, to quit the premises is an unlawful act for which exemplary damages up to a maximum of 1,500.00 may be payable.
As mentioned, the tenancy ended by order of the Tribunal on 17 May (a copy of that ordered was emailed to the parties that same day) but Ms Ram did not vacate the premises or allow the landlords to take back possession until five days later (22 May). Ms Ram said that she could not vacate any earlier because she had to get a trailer and people to help her shift and arrange a storage unit for her possessions. She also said she believed that the landlords had agreed to her moving by 22 May.
I do not consider that the correspondence between the parties between 17 May and 23 May can reasonably be read as an agreement by the landlords to extend the time for Ms Ram to vacate. However, I do not consider that this is an appropriate case for the award of exemplary damages. I accept that it is reasonable that there be some delay in vacating because arrangements need to be made to do so. Moreover, the landlords had a remedy available to them if they wished get possession back sooner. The Tribunal, in its 17 May order, abridged time for enforcing the possession order which meant that the landlords could have immediately arranged for a Court Bailiff to start the eviction process but it appears they chose not to do so.
The claim for exemplary damages is therefore dismissed. Tribunal application fee
The landlords have been mostly successful in their claims and I consider this an appropriate case to award payment of the Tribunal application fee. Suppression
In its order dated 17 May 2023, the Tribunal ordered suppression of the landlords’ names and identifying details. The landlords’ names and identifying details are suppressed under this order so as not to undermine the suppression order made on 17 May.

Claims and awards in Tenancy Tribunal application 4634752 — net $4,595.88 NZD. Amounts reconciled from the published order (claims sum and net total). Verify on MoJ.
Claim	Landlord	Reason
Rent/loss of bargain damages	$5,440.00	Rent/loss of bargain damages
Cleaning & rubbish removal	$90.00	Cleaning & rubbish removal
Lock/key replacement	$315.00	Lock/key replacement
Ceiling damage	$100.00	Ceiling damage
Filing fee reimbursement	$20.44	Filing fee reimbursement
Net award	$4,595.88
Total payable by Tenant to Landlord	$4,595.88

Order

Samantha Ram must pay [The landlord/s] $4,595.88 immediately, calculated as shown in table below.
The Bond Centre is to pay the remaining bond of $1,369.56 ([Bond number suppressed]) to [The landlord/s] immediately.
The application for cleaning costs and for exemplary damages are dismissed.

Reasons

Both parties attended the hearing. [Ms H] represented the landlords.
The landlords have applied for rent arrears, compensation, exemplary damages, refund of the remaining bond, and reimbursement of the filing fee following the end of the tenancy.

Are the landlords entitled to the rent claimed?

Ms Ram had a one-year fixed term tenancy of the premises commencing on 27 February 2023. Rent was agreed at $630 per week and a bond of $1,890.00 was paid.
The tenancy ended on 17 May 2023 by order of the Tribunal dated the same day (under application number 4558690) for breach by Ms Ram of section 40(2)(b) of the Residential Tenancies Act 1986 (using or permitting the premises to be used for an unlawful purpose). However, Ms Ram did not move out of the premises until 22 May 2023. Rent was paid up until 14 May 2023. Ms Ram accepts that she is liable for rent from 15 May until 22 May, being $720.00.
In addition to the rent due until Ms Ram vacated the premises, the landlords are claiming damages (loss of bargain damages - the loss of promised benefit that the landlords’ have not received) resulting from the breach by Ms Ram of her obligations under the tenancy agreement. They say that, despite advertising the tenancy, they struggled to find a new tenant until 7 July 2023 and only after they agreed to reduce the rent to $550.00 per week. The landlords therefore claim damages totalling $4,720.00 made up of rent at $630.00 per week from 23 May until 6 July and then the sum of $80.00 per week from 7 July until 7 August 2023, being the difference between the rent agreed to be paid by Ms Ram and the rent received from the new tenant ([Ms H] confirmed that they were not claiming loss of rent beyond 7 August 2023).
Ms Ram claims that her liability to pay rent ceased when the tenancy was terminated and she should not be liable for rent after that.
The Residential Tenancies Act (the Act) does not specifically address the right to loss of bargain damages when the tenancy is terminated for breach by the tenant (other than for when the tenant abandons the premises with rent in arrears). However, the Tribunal has jurisdiction to consider and make orders under any enactment or rule of law relating to contracts: sections 77(1)(k) 78(1)(h) of the Act. An enactment relevant here that relates to contracts is the Contract and Commercial Law Act 2017 (CCLA). Section 37(1) of the CCLA provides that a party may cancel a contract if the other party has breached a term of the contract but only if the breach is a serious breach. Section 37(2) defines a serious breach to include where the breach substantially increases the burden of the contract to the cancelling party or makes the benefit or burden of the contract substantially different to that contracted for. Cancelling the contract does not prevent the cancelling party recovering damages for the breach by the other party: section 49 CCLA. Those damages may include loss of bargain damages, such as loss of rent after the termination of the contact for breach, but only if the breach is a serious (or fundamental breach): Morris v Robert Jones Investments Ltd [1994] 2 NZLR 275 (CA).
Thus, the question here is whether the breach by Ms Ram can be considered as a serious (or fundamental) breach of the contract (the tenancy agreement). That is, did it substantially increase the burden of the contract to the cancelling party (the landlords) or make the benefit or burden of the contract substantially different to that contracted for.
The breach by Ms Ram of section 40(1)(b) of the Act that led to the tenancy being terminated is set out in the Tribunal order dated 17 May 2023. In brief, Ms Ram was carrying on the business of prostitution at the premises in breach of the Christchurch City Council Brothels (Location and Commercial Sexual Services Signage) Bylaw 2013 (the Bylaw) and the Christchurch District Plan. The Tribunal order also detailed, at paragraph 11, the effect the breach had on the landlords, including that the landlords’ insurer had cancelled the insurance cover for the premises because of the use of the premises by Ms Ram and not having insurance compromised the mortgage contract the landlords had with their bank. The Tribunal notes that “[t]his is clearly an untenable position for the landlords to be in”.
I am satisfied that the breach by Ms Ram is a serious or fundamental breach given the substantial burden the breach placed on the landlords. I therefore find that the landlords are entitled to loss of bargain damages. The landlords had a legitimate expectation, under the bargain they struck with Ms Ram, that they would receive rent at $630 per week for the duration of the fixed term of the tenancy (that is until 25 February 2023). However, because of the breach of the agreement by Ms Ram they have lost the full benefit of that right.
The amount claimed has been established by the provision of a rent record and the evidence of [Ms H].

Did Ms Ram comply with her obligations at the end of the tenancy?

The landlords claim that Ms Ram did not leave the premises reasonably clean, did not remove all rubbish, and did not return the keys at the end of the tenancy as required section 40(1)(e) of the Act.
Ms Ram claims that she left the keys in the letter box of the neighbouring unit (which is apparently owned by [Ms H’s] daughter). Ms Ram accepts that she did not tell the landlords that she had done so. [Ms H] denies that the keys were in the letter box as claimed and if they were her daughter would have told her.
I find Ms Ram in breach of her obligation to return the keys to the landlords at the end of the tenancy. Her obligation was to hand the keys to the landlords or leave them in the premises at the end of the tenancy (unless the parties had agreed to an alternative means of returning the keys). I therefore find her liable to pay the cost incurred to replace the locks and keys. The amount ordered has been established by the production of an invoice.
The landlords claim the sum of $150.00 to clean the premises and remove rubbish. Ms Ram disputes that she did not leave the premises reasonably clean, but she accepts that she left some rubbish. I am not satisfied that the landlords have provided sufficient evidence to support their claim that the premises were not left reasonably clean, in particular the landlords did not provide photographs of the areas claimed to require cleaning. The claim for cleaning is therefore dismissed. In the circumstances I consider the sum of $90.00 reasonable to compensate the landlords for the removal of the rubbish.
The landlords also claimed the cost ($100.00) to repair damage to the ceiling at the premises. Ms Ram accepts that claim.

Should exemplary damages be payable?

The landlords claim exemplary damages for failure by Ms Ram to vacate the premises or give back possession of the premises when it was terminated on 17 May 2023.
Section 40(1)(e)((i) of the Act provides that the tenant must quit the premises on termination of the tenancy. Section 40(3A) of the Act provides that a failure, without reasonable excuse, to quit the premises is an unlawful act for which exemplary damages up to a maximum of 1,500.00 may be payable.
As mentioned, the tenancy ended by order of the Tribunal on 17 May (a copy of that ordered was emailed to the parties that same day) but Ms Ram did not vacate the premises or allow the landlords to take back possession until five days later (22 May). Ms Ram said that she could not vacate any earlier because she had to get a trailer and people to help her shift and arrange a storage unit for her possessions. She also said she believed that the landlords had agreed to her moving by 22 May.
I do not consider that the correspondence between the parties between 17 May and 23 May can reasonably be read as an agreement by the landlords to extend the time for Ms Ram to vacate. However, I do not consider that this is an appropriate case for the award of exemplary damages. I accept that it is reasonable that there be some delay in vacating because arrangements need to be made to do so. Moreover, the landlords had a remedy available to them if they wished get possession back sooner. The Tribunal, in its 17 May order, abridged time for enforcing the possession order which meant that the landlords could have immediately arranged for a Court Bailiff to start the eviction process but it appears they chose not to do so.
The claim for exemplary damages is therefore dismissed. Tribunal application fee
The landlords have been mostly successful in their claims and I consider this an appropriate case to award payment of the Tribunal application fee. Suppression
In its order dated 17 May 2023, the Tribunal ordered suppression of the landlords’ names and identifying details. The landlords’ names and identifying details are suppressed under this order so as not to undermine the suppression order made on 17 May.

Tenancy Tribunal case 4634752 — Property damage

At a glance

Tenancy Tribunal case 4634752 — Property damage

At a glance

Award balance

Claims & awards

Order

Reasons

Are the landlords entitled to the rent claimed?

Did Ms Ram comply with her obligations at the end of the tenancy?

Should exemplary damages be payable?

Topics & place

Residential Tenancies Act sections

Key findings

Frequently asked questions

Award balance

Claims & awards

Order

Reasons

Are the landlords entitled to the rent claimed?

Did Ms Ram comply with her obligations at the end of the tenancy?

Should exemplary damages be payable?

Topics & place

Residential Tenancies Act sections

Key findings

Frequently asked questions