Published tribunal order
Tenancy Tribunal case 4655732 — Exemplary damages at ORDER
Decided 13 Dec 2023 · Published 13 Dec 2023 · Application 4655732
- Exemplary damages
- Rent arrears
- Property damage
- Leaks
Order
- Mission Trustee Ltd (as Trustee of the Alice Chang Family Trust), Christine Lin and Bobby Lin must pay $10,745.28 immediately, calculated as follows: LandlordTenant Rent arrears$2,891.43 Water rates$136.29 Window repairs Compensation: unlawful termination Exemplary Damages: unlawful termination Compensation: draughts Compensation electricity overuse Compensation: Leaks from waste Compensation: Fail to repair window Compensation- fail to provide gas supply Compensation: Breach of right to quiet enjoyment $994.75 $2,600.00 $6,000.00 $3,400.00 $317.75 $880.00 $880.00 $440.00 $250.00 Total award$4,022.47$14,76757 Total payable by Landlord to Tenant $10,745.28
- The Bond Centre is to pay the bond of $3,520.00 (5299622-005) to St Johns Property Group Limited, immediately.
- The landlord has applied for a suppression Order but the grounds are not made out (s.95A(1)).
- This Order replaces the order dated 7 December 2023 which incorrectly recorded the amount payable as being from the Tenant to the Landlord.
Reasons
- Both parties attended the hearing.
- The landlord was represented by Mr Bobby Lin. Mr Lin is the son of Alice Chang, sole director of Mission Trustee Ltd, which is a trustee of the Alice Chang Family Trust, owner of the property. Mr Lin did not name himself or Ms Lin as parties to the application he filed on behalf of the Landlord. He is however named as a landlord in the agreement and has had a direct involvement as landlord in managing the tenancy. It is appropriate that he be included as a party to both applications. Christine Lin is also recorded as a landlord in the agreement.
- The tenant was represented by Mr Schuyler Jackson who is sole director of the tenant company. Mr Jackson and his family were the occupants of the premises and the parties agreed that the hearing should proceed on the basis that Mr Jackson is substantively the tenant. The Applications
- The proceedings began with an application by the landlord for post-tenancy compensation for rent arrears, water rates and damage repair (window). The initial claim was modified and at hearing the landlord sought: Rent arrears$2,891.43 Water rates$136.29 Window repairs$994.75 Costs$2,500.00
- The tenant filed a counter claim seeking rent abatement, compensation and exemplary damages for a number of claimed breaches of the landlord’s obligations which are addressed individually below. Compensation and exemplary damages totaling $84,388.73 are sought.
- Each party has raised issues about the other’s conduct suggesting bad faith and intimidation etc. Those issues primarily concern conduct once the parties were in dispute after the tenancy was ended rather than during the tenancy. Having heard the parties’ evidence, those are not grievances I feel it necessary to address in this Order or to make findings about. Background
- The tenancy agreement between the parties is dated 29 September 2022, though it was signed on 30 September 2022.
- The agreement names the landlord as Barfoot & Thompson Limited, “As agents for and on behalf of Lin, Christine (Alice Chang Family Trust); Lin, Bobby”.
- The agreement creates a periodic tenancy commencing 1 October 2022 at a weekly rental of $880.00. A bond of $3,520.00 was paid and is held at the Bond Centre.
- The agreement contains a special condition handwritten and initialed by the signatories to the agreement, which provides: “During the term of this periodic tenancy the vendor warrants that the subject property will not be advertised for sale/ and or on the market. No real estate agent and/ or other agent for the vendor will be promoting this property for sale.”
- In early December 2022 the landlord terminated the Barfoot & Thompson agency and Mr Lin took over management of the tenancy.
- The tenancy ended after the landlord gave the tenant notice of termination. The effective termination date in terms of that notice was 25 October 2023 but the parties negotiated an earlier date and the tenancy ended on 29 August 2023. Landlord’s Claims Rent and water rates
- The tenant does not dispute the landlord’s rent and water rates records which confirm the sums unpaid by the tenant as claimed by the landlord. The tenant claims a right of set off in terms of his cross application which is addressed separately below. Window damage
- The landlord claims compensation for the cost of repairing a very large window which was broken during the tenancy.
- A landlord must prove that damage to the premises occurred during the tenancy and is more than fair wear and tear. If this is established, to avoid liability, the tenant must prove they did not carelessly or intentionally cause or permit the damage. Tenants are liable for the actions of people at the premises with their permission. See sections 40(2)(a), 41 and 49B RTA.
- The parties’ evidence and the report from the glazier who ultimately repaired the window, satisfies me that the damage occurred during the tenancy and is more than fair wear and tear. There are no obvious signs of rot or decay in the broken window frame and the damage seems to have resulted from the window blowing open forcefully and breaking the frame. The frame was able to be glued and screwed by the glazier. The friction stays needed to be replaced.
- The tenant’s evidence is that he and his family discovered the damaged window when they returned to the premises on 20 July 2023 after having been away. Mr Lin was advised the next day. The tenant says he believes the window was properly closed and that the amount of draught in the house made it possible for the wind to rattle the latch loose and allow the window to be blown open even when secured.
- As noted, because the damage was not wear and tear and occurred during the tenancy, the onus is on the tenant to provide evidence to prove it did not occur through the carelessness (there is no suggestion of intentional damage) on the occupants’ part. I do not find that proved on the evidence available.
- The tenant is accordingly liable to compensate the landlord for the repair cost which is proved by the glazier’s invoice.
- The tenant raises concern about the landlord’s failure to repair the window, which is addressed below. Tenant’s claims Unlawful termination
- The tenant claims that the landlord breached its obligations under section 60AA by giving unlawful notice of termination.
- Under Section 60AA a landlord must not give a notice to terminate the tenancy or apply to the Tribunal for such an order, knowing they are not entitled to do so.
- Breaching that obligation without a reasonable excuse is an unlawful act for which exemplary damages may be awarded up to a maximum of $6500.00. See section 60AA and Schedule 1A Residential Tenancies Act 1986.
- The landlord initially gave the tenant a 63 day notice of termination on the basis that the premises were to be sold for relocation. That Notice did not comply with the requirements of s.51(3). The initial notice was then modified in a letter to the tenant dated 3 August 2023. That letter seems intended to make termination date 90 days from the date of the initial notice. It says: “The 90 days notice from the first notice that was sent to you means that the lease agreement for the property is expiring on October 25, 2023. Regrettably, I must request that you kindly make arrangements to move out of the property on or before this date......”
- The landlord says that the notice of termination was prompted by the grandson of the architect who built the property, having expressed an interest in buying it.
- Ordinarily, in circumstances that are relevant here, a periodic tenancy can be ended by the landlord on 90 days’ notice if: “(a) the premises are to be put on the market by the owner within 90 days after the termination date for the purposes of sale or other disposition; or (b) the owner is required, under an unconditional agreement for the sale of the premises, to give the purchaser vacant possession;” (s.51(2)(a) and (b)).
- There was much discussion at the hearing about whether the landlord agreeing to sell the premises during the tenancy breached the special condition quoted above. The landlord says that what they did was within the words of the condition because they had not advertised or promoted the premises for sale or put the premises on the market. While those actions have relevance to the award of exemplary damages and is discussed below in that context, it is not directly relevant to the question of whether the landlord had a right to end the tenancy by giving notice of termination.
- I find that the landlord didn’t have that right. The landlord’s evidence was clear that the premises were not being put on the market and no sale had been agreed. The s.51(2)(a) or (b) grounds were not met.
- Those provisions are clear and I find that the landlord must have been aware that there was no entitlement to end the tenancy. In giving unlawful notice to terminate the tenancy when not entitled to do so, the landlord committed an unlawful act under s.60AA.
- 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.
- At the time the special condition was negotiated between the tenant and the Barfoot & Thompson property manager, the property manager consulted with Mr Lin about the proposed condition in response to the tenant’s request, which was put as follows, “Happy to accept the tenancy. Just wanted to ask if you could add to the tenancy that the property will not be on the market for sale and no real estate agents and/or nominee will show through the property during the term of the tenancy.”
- Mr Lin’s response to the property manager was, “... , never had any agents come through the property before. We never planned to sell it. I recall there was one time when the previous tenant spoke with an agent who came on the site but I didn't know who that was. I mentioned to Stacey that it might have been someone from a nearby property that was up for sale at that time. So I am okay for you to put that in, that's not a problem...”
- The tenant’s position is that in asking for that special condition to be inserted in the agreement, he made it plain that he was wanting to have some security of tenure for his family, which included a very young child, and did not want to be put through the stress of having to relocate. He says that Mr Lin’s response shows he was aware that what was being agreed was that the property not be sold during the tenancy and that it is disingenuous for Mr Lin to now say it was only the marketing and showing of the property that were prevented.
- For the reasons given above I am not required to decide whether sale of the premises to an unsolicited buyer would breach the special condition. What I do find is that the tenant had made it very clear to the landlord that security of tenure was of paramount concern to the tenant. The landlord had agreed to specific provisions to protect the tenant’s interest in that regard, as part of the tenancy terms.
- In those circumstances the landlord was required to be particular about ensuring that there was a solid legal basis to end the tenancy before purporting to do so.
- I find that there wasn’t and as a result that tenant has been unlawfully required to leave the premises and find somewhere else for he and his family to live – exactly the thing the landlord knew he was looking to avoid when the special condition was negotiated.
- I find that it would be just to award exemplary damages toward the maximum end of the available range.
- As well, the tenant has suffered direct financial loss for which he is entitled to be compensated. The purpose of the compensation is to put the tenant in the position he would have been in but for the landlord’s breach.
- The premises the tenant relocated to after being given notice of termination was at a more expensive rent by $100.00 per week. While there are variables involved (the tenant may be in better premises for the higher rent and the rent for these premises may have increased after 12 months from commencement date) the evidence persuades me that but for the landlord’s breach the tenancy would likely have continued for a reasonable period. I am satisfied that the tenant has suffered a loss at least equal to 6 months of that higher rent and is entitled to be compensated accordingly. Healthy Homes Compliance
- This was a general tenancy with a commencement date between 28 August 2022 and 3 March 2025. As such, the premises were required to comply with Healthy Homes standards 120 days after commencement date.
- The tenant says that the premises were not compliant with the draught stopping standard and that the landlord signed a false Healthy Homes statement, which said they were.
- Four Healthy Homes reports were put in evidence.
- The first was undertaken at the landlord’s request in February 2022 by “Warm Fuzzies”. It reported that the premises were not compliant with the heating, ventilation or draught stopping standards.
- The landlord had a bathroom extractor fan installed, installed a heat pump and had Warm Fuzzies attend to draught stopping work. That work was undertaken before the tenancy began. No follow up inspection by Warm Fuzzies was carried out.
- The second report was undertaken at the tenant’s request in October 2022. The report, from “Cosy Spaces NZ” assessed the premises as non-compliant with the heating standard (although it is common ground that was because of a temporary issue with a heat pump) and with the draught stopping standard.
- The third report was completed in August 2023 by “Ace Energy”. It too notes that the premises were non compliant with the draught stopping standard.
- The final report was completed in November 2023 by “Warm Fuzzies” for the landlord. It assesses the premises as compliant with all Healthy Homes standards.
- Two reports commissioned during the tenancy by separate assessors find that the premises were non-compliant with Healthy Homes draught stopping standards. Those findings are corroborated by the photographic evidence provided by the tenant, showing what do appear to be unreasonably large gaps around window and door joinery in particular.
- By contrast, of the 2 reports relied upon by the landlord, one was completed some months before the tenancy began and noted non compliance with that standard. The second was not done until after the tenancy had ended.
- I find it proved on the balance of probabilities that the premises were not compliant with Healthy Homes draught stopping standards during the tenancy.
- That constitutes a breach of the landlord’s obligations under s.45(1)(bb) and is an unlawful act for which exemplary damages of up to $7,200.00 may be awarded.
- I find that the circumstances do not warrant an award of exemplary damages. The landlord had arranged for a Healthy Homes assessment to be completed well in advance of its’ obligation to do so. It took immediate steps to have the recommended work done to achieve compliance – by the organisation that provided the assessment. I find it was reasonable for Mr Lin to have believed compliance had been achieved once that work was done and to provide the Healthy Homes declaration accordingly.
- I note too that the Healthy Homes report prepared for the tenant in October 2022 was not provided to the landlord who was therefore unaware of that assessor’s different view about the premises’ compliance at that time.
- Nevertheless, the premises were not adequately draught proofed, in breach of the landlord's obligations. The tenant is entitled to compensation for losses caused by that breach.
- The tenant’s evidence is that the worst of the draught came through gaps around a back door and up stairs that were adjacent to a room intended to be occupied by their daughter. The landlord had attempted to remedy the situation, but ineffectively. The tenant says that the draught made that room unusable as a bedroom for her and significantly reduced the utility of the home.
- That evidence is consistent with the HH reports and with the photographic evidence provided.
- Assessing appropriate compensation is necessarily inexact. The tenancy was for a 48 week period from October 2022 to September 2023 (inclusive). I find that compensation of $100.00 per week for 20 weeks and $50.00 per week for 28 weeks would be appropriate to compensate the tenant for the loss of amenity from the effects of the draught and inability use that room for its intended purpose during colder months.
- I am also persuaded that the extent of the draughts in the premises would inevitably have meant higher electricity costs from use of the heat pump (whether warning or cooling) than would have been the case had the premises been compliant. I award compensation of 10% of the tenant’s electricity costs as submitted. Decks
- The tenant says that the decks at the premises were non-compliant with the Building Code and unsafe because they are of a height that requires a balustrade and there are no balustrades erected.
- From looking at the photographs provided, it does seem likely to me that the decks are of a height that would require a prevention from falling barrier in terms of the Building Code.
- It is clear from the photographic evidence that the tenant nevertheless used the decks so there is no apparent loss caused to the tenant, to support a claim for compensation.
- There is insufficient evidence to establish a basis for an award of exemplary damages. It is for the tenant to bring evidence to prove the claim. That claim is dismissed. Maintenance and Repair
- Under section 45, a landlord must provide and maintain the premises in a reasonable state of repair. Failure to do so 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 tenant claims that the landlord breached that obligation in a number of ways. Each is addressed separately below; Drains
- Waste drains at the premises drain into a sump with a grate and concrete surround.
- In early October 2022 the tenant notified the (then) property manager that the drain was blocked and had overflowed, and was pooling in the garage.
- While there is debate between the parties about the cause of that problem and other drainage issues, what is clear from the evidence is that there were issues with that drain. It appears that it was not overflowing, but that the concrete surround had deteriorated to the point that it was not containing the wastewater. The problem was not remedied for approximately 8 weeks. During that time the tenant was exposed to unpleasant discharge from the drain, close to the front entrance steps and into the garage.
- I award 1 weeks rent as compensation for the resulting impact on the tenant’s use and enjoyment of the premises.
- The tenant says that damage to his property in the garage was caused by the wastewater discharges. There is insufficient evidence of the property damage and value to support a claim for compensation for that loss. Window
- I have found (above) that the tenant is liable to compensate the landlord for the cost of replacing the broken window,
- However, the tenant met his obligation to advise the landlord of the need for the window to be repaired (s.40(1)). In my view the landlord then had an obligation to have the window repaired, albeit on the basis that the cost could be recovered from the tenant.
- The landlord failed to do so, meaning that the premises were left insecure, with rubbish bags taped over the large opening to the premises where the window had been, close to the ground and easily accessible, with broken glass still in the frame on the ground.
- In failing to attend to that repair and leaving the premises in an insecure and unsafe state, I find that the landlord was in breach of the obligation to ensure the premises were maintained in a reasonable state of repair.
- I consider that 1 weeks rent as compensation is an appropriate compensatory award for that breach.
- I do not consider it just to award exemplary damages for that breach given my finding that the tenant was responsible for the damage. Gas
- The premises were provided without a gas bottle for the gas cooker. While the tenant is required to pay for gas used at the premises (see s.39(2)) the landlord is required to provide the necessary infrastructure.
- The gas bottle connection was positioned directly beneath the meter box. When the tenant tried to have a bottle installed the installer would not do so due to the safety risk. The tenant requested that the landlord have a compliant connection installed.
- The landlord had the bottle to the house replaced on 18 October 2022.
- In the meantime the tenant continued to use the existing connection despite the safety warning.
- For failure to provide the means for gas supply I consider compensation equal to 1/2 a weeks rent would be appropriate. Breach of right to quiet enjoyment
- The tenant claims that the landlord breached his right to quiet enjoyment of the premises by the manner in which the landlord visited the premises and arranged for tradespeople and others to visit.
- Two instances in particular caused the tenant significant disquiet. The first involved the tenant finding one weekend that the neighbors had embarked on the process of building a boundary fence, involving chopping down boundary trees and leaving them on the yard of the premises and effectively using the yard as a construction site.
- The other involved a visit to the property and then another to view the inside the premises by the potential purchaser, which the tenant says was without any prior warning.
- The landlord says that he has not made or arranged any visits to the premises by he or others, without proper notice or the tenant’s consent.
- As regards the boundary work, the landlord’s evidence is that he had no knowledge of the neighbours’ intention to start work on the boundary fence. That is corroborated by a statement from the neighboring owner confirming that they had decided to do the work over a weekend after his brother-in-law arrived unexpectedly on a Friday. The statement confirms that the tenant approached him and expressed surprise at what was going on. The neighbor's statement expresses the view that the disruption to the tenant was minimal and that the work was substantially completed by the Sunday afternoon.
- With respect, that does miss the point somewhat. The tenant had the right of occupation of the premises and its grounds. As such, any entry onto or use of the property without the lawful excuse or the tenant’s consent is a trespass against that right of occupation.
- I accept that the landlord did not know exactly when the boundary work was going to be done but Mr Lin had been in conversation with the neighbours about the work and as adjoining owner the landlord would benefit from it.
- The neighbour clearly felt that he had the landlord’s consent to go ahead with the work. In giving that permission the landlord had an obligation to make sure that the landlord and/ or the neighbour notified and consulted the tenant about arrangement for the work to be done before simply coming onto the property the same way as is necessary if a landlord is arranging a visit to the premises by tradespeople.
- I find that to be a clear breach of the tenant’s right to quiet enjoyment of the premises and his home which the landlord had a responsibility to prevent. A modest compensatory award is appropriate.
- The tenant’s recall of the events around the boundary fence work is corroborated by contemporaneous txt messages.
- The same is not true of the visits to the premises by the proposed purchaser. The txt exchanges show that the the first visit to the outside of the property was with the tenants prior consent. There is no evidence of the tenant raising concern at the time about a second unannounced visit inside the premises. I do not find that part of the claim proved.
- As regards other visits to the premises by the landlord and/ or tradespeople on the landlord’s behalf, some liberties appear to have been taken (eg the drainage contractor filling his tank with 1000litres of water from the premises, paid for by the tenant.
- However, those visits seem largely to have been in connection with necessary repairs and I do not find it proved that those visits constituted breaches by the landlord of the tenants right to quiet enjoyment of the premises. Other claims
- The tenant claims that: a. the premises were not provided clean at the start of the tenancy b. the rough driveway surface caused damage to his car c. there were unsafe electrical sockets in the kitchen.
- There is little evidence of those issues and in particular of them having been raised at the time. The evidence does not prove losses caused the tenant or grounds for an award of exemplary damages. Costs
- Section 102 provides that: “(1) Except in a case to which any of subsections (2), (4), or (5) apply, the Tribunal shall have no power to award costs to or against any party to proceedings before it. (2) The Tribunal may make an order of a kind referred to in subsection (3) in any of the following cases: (a) where, in the opinion of the Tribunal, the proceedings are frivolous or vexatious or ought not to have been brought: (b) where any of the parties was represented by counsel: (c) where, in the opinion of the Tribunal, the matter in dispute ought reasonably to have been settled before the Tenancy Mediator but that the party against whom the order is to be made refused, without reasonable excuse, to take part in proceedings before a Tenancy Mediator or acted in any such proceedings in a contemptuous or improper manner: (d) where any applicant to the Tribunal, after receiving notice of the hearing, fails to attend the hearing without good cause.”
- Subsections (4) and (5) are not relevant to this issue.
- None of the factors in s.102(2) apply here an no costs ward is made.
- The tenant has substantially succeeded with his claim and reimbursement of the filing fee is Ordered.