Published tribunal order
Tenancy Tribunal case 4639413 — Smoke alarms at 7 Salisbury Avenue, Terrace End, Palmerston North 4410
Decided 22 Sept 2023 · Published 22 Sept 2023 · Application 4639413
- Smoke alarms
- Exemplary damages
Party names are redacted in the official published order.
Order
- An application for suppression has been made in this case and the Tribunal orders suppression of the tenants’ names and identifying details.
- Marnu Botes must pay [The tenant/s] $2,560.44 immediately as detailed in the table below. DescriptionTenant Exemplary damages: no Tenancy Agreement $250.00 Exemplary damages: not lodging Bond $500.00 Exemplary damages: no smoke alarms $1,000.00 Filing fee reimbursement $20.44 Total award $1,770.44 Bond $790.00 Total payable by Landlord to Tenant $2,560.44
Reasons
- The tenants attended the hearing in person.
- The landlord had advised the Tribunal that he was overseas. Approval was given for him to attend by telephone. When contacted by the Tribunal, he advised that he was not able to telephone the Tribunal.
- The landlord advised that he did not have an agent in New Zealand.
- Section 16A RTA provides: “16 A Landlord must have agent if out of New Zealand for longer than 21 consecutive days (1) A landlord who is out of New Zealand for longer than 21 consecutive days must ensure that the landlord has an agent in New Zealand. (2) A landlord who does not already have an agent and who knows that he or she will be out of New Zealand for longer than 21 consecutive days must appoint an agent before he or she departs from New Zealand. (3) A landlord who does not already have an agent and who has been out of New Zealand for longer than 21 consecutive days must promptly appoint an agent. (4) A landlord who appoints an agent under this section must, immediately after appointing the agent,— (a) notify the tenant of the agent’s name, contact address, and address for service; and (b) if a bond is held in respect of the tenancy, notify the chief executive in the approved form of those particulars. (4A) For the purposes of subsection (4)(a), the following must be notified with the agent’s contact address: (a) the agent’s contact mobile telephone number (if any): (b) the agent’s contact email address (if any). (5) An agent appointed under this section has, as against the tenant, all the rights and obligations of the landlord. (6) A landlord who fails to comply with this section— (a) commits an unlawful act; and (b) commits an infringement offence and is liable to a fine or an infringement fee specified in Schedule 1B.”
- The landlord is in breach of this section. While no application was made to the Tribunal by the tenant in relation to this breach, it was a factor considered before deciding to proceed with the hearing in the landlord’s absence.
- Section 92 RTA provides that where notice of a hearing has been given to a party in accordance with section 91 and that party does not attend at the hearing, the Tribunal may hear and determine, or dismiss or adjourn, the matter in the absence of that party. I am satisfied that the landlord had received notice of the hearing in accordance with section 91A RTA.
- I am further satisfied that the landlord’s failure to appoint an agent in New Zealand while he is overseas for more than 21 days in breach of his obligations under section 16 RTA has resulted in the landlord’s predicament and that the Tribunal should hear the tenant’s application in the landlord’s absence. Jurisdiction
- There is a preliminary issue as to whether the Tenancy Tribunal has jurisdiction to hear the claim which needs to be resolved.
- The Tribunal has jurisdiction to determine any dispute between a landlord and a tenant, and/or a guarantor of a tenant, that relates to a residential tenancy to which the Residential Tenancies Act 1986 (RTA) applies (see section 77 RTA).
- The Tribunal does not have jurisdiction to determine disputes between parties other than those in a landlord and tenant relationship.
- Section 2 RTA defines a landlord, in relation to any residential premises that are the subject of a tenancy agreement, as the grantor of a tenancy of the premises under the agreement. A tenant is the grantee of a tenancy of the premises under the agreement.
- The landlord has claimed that this was a “flatmate situation”.
- The tenants gave evidence that the first tenant replied to the landlord regarding a listing on Trademe for a room to rent. The landlord agreed to the tenant’s occupation of a room designated for her occupation in exchange for an agreed rental and payment of a bond. The first tenant advised that she then rented a room, together with an ensuite, for her occupation. She shared cooking facilities and a living room with four other people who rented three other bedrooms.
- The second tenant is the first tenant’s sister and she was introduced to the property by the first tenant. The tenants’ rental included all utilities. Each had a key to the front door and the exclusive use of one bedroom. Each paid their rental directly to the landlord. They directed any enquiries or complaints directly to the landlord. The tenants did not have any other person to whom they could direct enquiries. The tenant advised that the landlord told her that he owned the property.
- As the landlord did not live at the property during any part of the tenancy, I cannot see any grounds for this arrangement being excluded from jurisdiction under the RTA. If the landlord did not live at the property, the tenants cannot be his flatmates and the exclusion in section 5(1)(n) RTA cannot apply.
- The Tribunal has jurisdiction to hear the tenants’ application. The tenants’ claims
- The tenants’ application to the Tribunal is for: a. A refund of the bond under section 22B RTA b. Exemplary damages for the landlord’s failure to lodge the bond with the Bond Centre. See section 19(2) RTA. c. Exemplary damages for the landlord’s failure to have a written tenancy agreement. See section 13(4) RTA. d. Exemplary damages for the landlord’s failure to supply a statement signed by the landlord that the landlord will comply with the healthy homes standards as required by section 45(1)(bb) RTA. See section 13A (1CA) and (1F) RTA. e. Exemplary damages for the landlord’s failure to supply smoke alarms in the property. See section 45(1)(ba) and (1A) RTA. f. Compensation for the landlord’s breaches outlined above. The bond
- The tenant has applied for refund of the bond. Text correspondence between the landlord and the tenant indicates that the landlord believes he has a claim against the bond for rent in lieu of notice. The landlord has not filed a counterclaim with Tenancy Services.
- Section 22B(2) Residential Tenancies Act 1986 provides that, where a tenant applies for refund of the bond and the landlord seeks payment from the bond, the landlord must file an application setting out the details of the counterclaim. Because the landlord has not filed a counterclaim the bond is to be refunded in full to the tenant.
- The tenants claim the landlord has not lodged the bond with the Bond Centre within the required time.
- A landlord must send any bond payment to the Bond Centre within 23 working days after the payment is received. See section 19(1) Residential Tenancies Act 1986.
- Breaching this obligation is an unlawful act for which the Tribunal may award exemplary damages up to a maximum of $1,500.00. See section 19(2) and Schedule 1A Residential Tenancies Act 1986.
- Exemplary damages under the Act are different from compensation. The provision of such damages is designed to punish and deter: Attorney-General (Commissioner of Crown Lands) v Little Bo Peep Sheep Company Ltd (HC CIV 2010-412-134).
- The tenants provided evidence of the bond being paid to the landlord. The Bond Centre has no record of having received the bond from the landlord.
- I find 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) Residential Tenancies Act 1986.
- I am satisfied that the landlord’s failure to pay the bond to the Bond Centre was intentional. He had no grounds to assume that this was a flatmate situation and was clearly the landlord in a landlord-tenant relationship. He sought and was paid a bond and has delayed paying this to the tenants for some two months after the end of their tenancies, despite texts to the tenants promising to repay the bond on 21 June 2023 and 15 July 2023.
- There is a public interest in deterring landlord’s from holding onto bond money. It is not the landlord’s money. It belongs to the tenant and it needs to be held by the Bond Centre in order to protect it so that situations such as this, where a landlord withholds payment unilaterally, do not occur.
- Having considered these factors I am satisfied that exemplary damages of $500.00, being one third of the maximum, is appropriate. Tenancy agreement
- The tenants gave evidence that the landlord has not ensured the tenancy agreement is in writing and/or did not sign the tenancy agreement and provide a copy to the tenant.
- A landlord must ensure the tenancy agreement is in writing, signed and a copy provided to the tenant prior to the tenancy commencing. See section 13 Residential Tenancies Act 1986.
- Breaching this obligation is an unlawful act, for which the Tribunal may award exemplary damages up to a maximum of $750.00. See section 13(4) and Schedule 1A Residential Tenancies Act 1986.
- Having considered the matters in section 109(3) I am satisfied that the failure to provide written tenancy agreements was intentional and that there is a public interest in deterring landlords from ignoring their obligations under the RTA.
- I also note that there are two separate tenancy agreements that the landlord has failed to have completed, signed and supplied to the tenants.
- It is appropriate that the landlord pay the tenants $250.00 in exemplary damages to the tenants for this breach. Healthy Homes Standards Statement
- Under section 13A(1CB) RTA a landlord must “include in the tenancy agreement a statement, made and signed by the landlord: (a) that, on and after the commencement of the tenancy, the landlord will comply with the healthy homes standards as required by section 45(1)(bb) or 66I(1)(bb) (as the case may be); and (b) including the information (if any) prescribed by regulations under section 138B(5).”
- The tenants gave evidence that the landlord did not provide this information as the landlord did not provide a signed copy of their tenancy agreements.
- If there are multiple breaches of an obligation (multiple instances of unlawful acts) that could otherwise individually be the subject of an exemplary damages order, only one order can be made for a breach of a particular section – here section 13 RTA.
- As exemplary damages have been awarded to the tenants already for the landlord’s breach of section 13 RTA, the Tribunal is unable to award further exemplary damages for what is, in effect, a breach of the same section of the RTA.
- The tenants advised that they did not make a request of the landlord during the tenancy for Healthy Homes Standards information pursuant to section 45(1AC) RTA and they did not produce evidence of the landlord’s breaches of those standards.
- The tenants’ claims in relation to the Healthy Homes Standards is dismissed. Smoke alarms
- [The tenant/s] claim that the landlord has breached his obligations under section 45 of the Residential Tenancies Act 1986.
- Under section 45, a landlord must comply with all requirements in respect of smoke alarms set out in the Residential Tenancies (Smoke Alarms and Insulation) Regulations 2016.
- Breaching any of these obligations is an unlawful act for which exemplary damages may be awarded up to a maximum of $7,200.00. See section 45(1A) and Schedule 1A Residential Tenancies Act 1986.
- The tenants gave evidence that there were no smoke alarms installed at the property during their tenancy. They included evidence from a subsequent tenant that smoke alarms were not installed by 23 July 2023.
- The landlord has failed to comply with the smoke alarms regulations. The landlord has committed an unlawful act.
- The binding District Court decision of TMT New Zealand Limited TA Strata Property Management v Sweeney and Sundahl [2021] NZDC 16182 confirmed that “Like all citizens a landlord is deemed to know the law. Parliament’s intention would be subverted if landlords were able to escape the consequences of unlawful acts by claiming ignorance of the law.” I am satisfied that the landlord’s failure to comply with the smoke alarms regulations was intentional.
- The provision of smoke alarms is a significant matter for the safety of the tenants. The seriousness of this breach is reflected in the maximum amount that the Tribunal can award as exemplary damages.
- There is a strong element of public interest in deterring landlords from ignoring their obligations in relation to such a fundamental requirement for the safety of tenants. It is appropriate to award a sum of $1,000.00 to the tenants as exemplary damages for this breach.
- Because [The tenant/s] have substantially succeeded with the claim I have reimbursed the filing fee. Compensation
- It is very rare for compensation for stress, distress or emotional harm to be granted because it is difficult to objectively quantify such harm in monetary terms and the extent of intangible harm is difficult to prove. If measured, any award is open to criticism on the basis that the outcome is unpredictable, or contains a punitive element not permitted in calculating loss for breach of contract.
- Apart from these practical issues, there is a more fundamental policy concern against such awards. Contracts often give rise to stress, particularly where personal, social or family interests are affected. This is a risk borne by those who transact, and, if recognised, would add a layer of uncertainty and subjectivity to every claim. Claims for distress on its own are therefore generally unsuccessful.
- Higher courts have demonstrated a reluctance to award any amount for stress unless the core purpose of the contract in question was to relieve it.
- The Court of Appeal has stated regarding the law relating to general damages for distress: "The law may properly be described as uncertain in this area, for example, we refer to the majority and minority judgments in Bloxham v Robinson, in which competing views are expressed by McKay and Temm JJ, and Thomas J." (see Ma v Tay [2014] NZCA 608.)
- It is appropriate for the Tribunal to take a cautious approach when the state of the law as to general damages for distress for breach of contract has been described by the Court of Appeal as uncertain. The Tribunal is also bound by the decision in Bloxham v Robinson.
- The tenants’ claims for compensation are therefore dismissed.