Published tribunal order
Tenancy Tribunal case 4653889 — Exemplary damages at 86 Reynolds Street, Taita, Lower Hutt 5011
Decided 2 Oct 2023 · Published 2 Oct 2023 · Application 4653889
- 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 Tenant’s name and identifying details.
- The landlord is to pay $920.44 to the tenant immediately being refund of the balance of the bond of $500.00, exemplary damages of $400.00 and reimbursement of the filing fee of $20.44.
Reasons
- Both parties attended the hearing by telephone.
- The landlord explained and the tenant agreed that the bond was $1,140.00 and that the landlord has refunded $640.00 to the tenant already.
- The tenant has applied for refund of the balance bond. The landlord explained that he believed he had a claim against the bond and so did not refund the full amount and retained $500.00 of the bond.
- 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 $500.00 balance of the bond is to be refunded in full to the tenant.
- [The tenant/s] claims 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.
- The landlord accepted that he did not pay the bond to the Bond Centre. He explained that he has always in the past paid bonds to the Bond Centre but forgot to do so on this occasion.
- The landlord has failed to lodge the bond as required by section 19(1) RTA. I find 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) Residential Tenancies Act 1986.
- 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.”
- The District Court in 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.”
- In considering an appropriate level of exemplary damages in this case, I have considered: a. The landlord has not had an award of exemplary damages awarded against him for a breach of section 19(1) RTA. b. His failure to lodge the bond with the Bond Centre has meant that the tenant’s funds have been in the landlord’s possession and not in trust with the Bond Centre. c. His failure has allowed him to unilaterally deduct over half of the bond from the funds held without the consent of the tenant or an order of the Tribunal. d. There is a public interest in deterring landlords from retaining bonds and then deducting amounts from them without tenant consent or lawful authority from the Tribunal.
- The tenant had also claimed that she was entitled to a refund of overpaid rent but withdrew this claim at the hearing.
- Because [The tenant/s] has wholly succeeded with the claim I must reimburse the filing fee.