Reasons
- Both parties attended the hearing.
- The landlords did not make a cross application, but the tenants agreed the landlords’ claims could be heard. Hearing time and evidential matters
- The hearing time set down was insufficient to get through all the evidence the landlords wished to place before the Tribunal, in response to the evidence provided to it by the tenants.
- The evidence the Tribunal considered highly relevant to the matter before it was examined fully during the hearing. It was agreed with both parties that the additional information, the landlords’ deemed relevant and/or important for the Tribunal to consider, would be filed post the hearing and considered on the papers.
- The tenants were given the opportunity to provide comments on the landlords’ additional evidence and the landlords given the opportunity to provide comments/feedback on the tenants’ comments/feedback.
- The landlords invited me to make a site visit to observe the driveway and the flat. I declined this invitation as I have been provided with a video of the outside of the flat, the landlords house and the two driveways to each premise. In addition, I have been provided with a series of photographs at various relevant points of time during the tenants’ tenure that show the inside and the outside of the flat and the driveway to the flat.
- I am satisfied that the evidence required to assist the Tribunal to decide this matter and make the appropriate orders was provided and fully considered.
- Although all the evidence provided by the parties has been fully considered, not all of it has been addressed expressly in this decision/order. The relevant evidence has been summarised to assist the parties to understand the basis for the orders made. Background
Who resided at the flat and when?
- The periodic tenancy commenced on 17 January 2015 and is current.
- Tenant 1 has lived continuously in the flat from the beginning of the tenancy.
- Tenant 2 lived at the flat when the tenancy commenced but moved out in early February 2015, as he and Tenant 1 decided to take a break in their love relationship. They remained close friends and Tenant 2 visited the flat from time to time and looked after it when Tenant 1 went away. He also stayed overnight from time to time.
- Around late October 2017, Tenant 1 and Tenant 2 rekindled their love relationship, and he moved back into the flat and had resided there ever since.
- Tenant 1’s evidence was that she informed the landlords of the dates Tenant 2 moved out and moved back into the flat. The landlords refuted they had been informed of that and maintained Tenant 2 was still living there, and causing damage to the driveway with his van, from February 2015 to late October 2017. The tenants’ evidence is that he was residing with his mother in [suburb] during this period.
When did Tenant 2 become self-employed?
- Tenant 2 was employed by [Employer 1] at the time the tenancy commenced and was more latterly employed by [Employer 2] up to 16 March 2020, when he purchased the business from his previous boss, [Tenant 2’s Boss]. Types of vehicles requiring access the flat driveway
- Tenant 2 owns a Nissan Caravan. At a curb weight of 1,650 kilograms a Nissan Caravan be described as a light commercial 4 to 5 door van designed for use as a fleet vehicle or cargo van. In Tenant 2’s case it is not being used as a commercial fleet or cargo vehicle. He uses the van as his personal vehicle that he drives to and from work and transports some plants, tools and/or equipment to a landscaping job from time to time when the items are not being transported on a small truck owned by his landscaping business.
- Sometimes Tenant 2 brings the light truck home at night with light tools, plants and equipment in it for his work the next day.
- Tenant 1 owns a small personal vehicle that she says weighs approximately 1000 kilograms, like most small cars.
- The types of light commercial vehicles used by courier companies to make deliveries to the flat are similar in size and curb weight to Tenant 2’s van. If fully loaded these vans can have a gross weight of approximately 2,500 kilograms or
- 5 tonnes.
- All the above vehicles should be able to access a residential driveway in a reasonable state of repair without causing damage to it.
- For comparison, the gross vehicle weight of a Tesla model 3 EV is 2,149 kilograms and a BMW 5 door SUV weighs 2,385 kilograms, both are non- commercial vehicles, and both have a heavier curb weight than Tenant 2’s van.
Where is the flat and flat driveway situated relative to the Landlords dwelling?
- The video provided by the tenant shows the landlords house is in front of the flat with a separate shorter driveway that goes down to its garage.
- The flat driveway runs down the length of the right-hand side of the landlords dwelling (if you are facing the road) and is the only access way to the flat. Tenants’ claims
- The tenants claim the landlords have failed to maintain the approximately 65- year-old driveway, that they claim is in such a bad state of repair that the tenants have been significantly restricted in their use of it and are required to seek permission from the landlords each time they want to use it as the landlords are concerned that any use of the driveway will cause further damage to it.
- The tenants’ claim any damage to the driveway during their tenancy has been due to fair wear and tear of a poorly maintained driveway that was not in a reasonable state of repair when they commenced their tenancy in 2015. Therefore, they say they should not be held liable for any of the costs to repair it.
- The premises were flooded in January 2023 because of a wet weather event. This required the flooring to be dried out with commercial fans and the flat to be thoroughly cleaned. The tenants are claiming compensation for the costs associated with the clean-up, post 3 January 2023 flood.
- The tenants also claim the landlords, who live in the main house in front of the flat, breached their quiet enjoyment of the flat.
- Further, the tenants claim the landlords have made threats to end the tenancy in retaliation for the tenants continual requests to fix the driveway and/or to be able to use the driveway to their flat and/or because the tenants asked for a rent reduction during COVID-19 and that the landlords excessively raised the rent on spurious claims that the flat was being used as a commercial premises for the tenants to operate their business from. Landlords’ claims
- The landlords claim one of the tenant’s is conducting a business from the rental premises, in breach of the tenancy agreement and his obligations under s40 of the Residential Tenancies Act 1986 and is seeking exemplary damages for the breach. Section 40 (1)(b) of the Act requires the tenants “to ensure that the premises are occupied principally for residential purposes”.
- The landlords also claims that the tenants have intentionally or carelessly damaged or permitted any other person(s) to damage, the driveway and should pay them compensation as a contribution towards the repair of the driveway. The landlords’ have estimated it will cost approximately $6,000.00 to repair the driveway.
Did the landlord fail to maintain the driveway in a reasonable state of repair?
The law
- The tenants claim that the landlords have breached their obligations under section 45 of the Residential Tenancies Act 1986 (“the Act”) to, among other things, provide and maintain the premises in a reasonable state of repair and that they have suffered a loss of the use of the premises amenities because of the constant harassment over the driveway by the landlords.
- Section 2 of the Act defines premises to include any part of any premises and any land and appurtenances, other than facilities. This definition includes the flat driveway in the matter before me.
- Breaching the landlords’ obligation to provide and maintain the premises in a reasonable state of repair 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.
- Where the Tribunal finds the landlord has failed to comply with any of these obligations, it may make an order for the landlord to carry out the work. See section 78(1)(e) Residential Tenancies Act 1986.
- If the work order is not being made by consent of both parties, the Tribunal must also make a monetary order as an alternative to compliance with the work order. This provision does not apply to any work order, or part of a work order, in relation to smoke alarms, insulation, a failure to comply with a standard of fitness under section 120C Health Act 1956, or a failure to comply with any health or safety legislative requirement. See sections 78(2) and 78(2AA) Residential Tenancies Act 1986.
- A work order may also authorise the tenant to undertake the work and charge the landlord the costs of doing the work, if the landlord should fail to comply with the work order and alternative monetary order. A monetary limit must be imposed by the Tribunal on the amount of costs that can be charged. These costs can be set off by the tenant against rent payable. See sections 78(2AAB) and 78(2AAC)(b) Residential Tenancies Act 1986.
- In addition, the Building Code for driveways/access ways are published in Schedule 1 of the Building Regulations 1992. Clause D1 of the Building Code sets out the requirements for accessways. Subclause D1.2.1 states “Buildings shall be provided with reasonable and adequate access to enable safe and easy movement of people. Subclause D1.3.(d) and (e) provides that “Access routes shall enable people to manoeuvre and park cars and manoeuvre and park delivery vehicles required to use the loading space.
- The New Zealand Concrete Industry established industry standards about how thick a concrete driveway needs to be. These rules make sure that a driveway/access way is stable and strong enough to hold the weight of cars and other heavy loads. These industry standards for concrete driveways say that a residential driveway should be intended for cars and trucks up to a maximum loaded weight of 2.5 tonnes and that they must be a minimum of 100mm thick, while a commercial driveway should be a minimum of 150mm thick to cater for heavier vehicles. Residential driveways/access ways made of other materials are also required to be fit for residential purposes and to safely accommodate vehicle of up to 2.5 tonnes driving and parking on them. The law applied to the facts
- At the beginning of the tenancy, the landlords came to Tenant 1 and informed her that they wanted to preserve the driveway because it would cost $6,000.00 to repair and that they required Tenant 2 not to park his light van in the driveway, except on the odd occasion when he had their permission. This suggests that the landlord was aware that the driveway was not in a reasonable state of repair and needed to be repaired to bring it up to a standard where it could be used by the tenants for residential purposes without causing damage to it.
- It is clear from the evidence that the landlords have insisted on the tenants only having use of the driveway for Tenant 1 to park her small car on overnight. On the odd occasions, when they have given permission, Tenant 2 has been permitted to park his light van overnight on the driveway or to load or unload equipment/plants out of it so he could safely store them overnight at the flat for security purposes.
- The tenants have provided evidence that they have repeatedly informed the landlord of the requirement to maintain the driveway to the reasonable standard required of them by the Act, so they can safely use the driveway to park their vehicles off the street at night and couriers could have unfettered access to the flat for delivery purposes.
- The tenants have also provided proof that they have met the requirement in the general conditions section of the tenancy agreement “to give prompt notice of all property maintenance requirements” and allowed “adequate time” “for arrangements to be made and work carried out on ordinary working days” by providing communications that prove they repeatedly informed the landlords of the need to maintain the driveway to a reasonable standard for these purposes. Specifically, the tenants have provided evidence that they have spoken to the landlords about repairing the driveway and that they were told the landlords could not afford to do so. The tenants also provided evidence of a 14 day notice they gave to the landlords on 6 September 2023 requiring the landlords to “repair the driveway so that it is fit for all vehicle types” by 21 September 2023. The landlords have not done so.
- The landlords evidence confirms that the driveway is not fit for general residential purposes in that: a. The “driveway consists of a thin layer of surface chip seal underlain by a layer of basecourse metal supported by a clay subgrade”; b. The “driveway is not designed to withstand continuous daily use (movement and parking)” by Tenant 2’s light van (deemed by the landlords to be a commercial vehicle because he drives it to and from his landscaping job and sometimes keeps a few landscaping tools or plants in overnight for jobs he is going to in the morning); c. At the time of an alleged agreement with the tenants, in February 2016, the following driveway damage had occurred from the tenants’ daily use: i. “At the upper end of the driveway the seal had been removed exposing a depth of metal erosion” that was likely to have been “caused by vehicle acceleration”; and ii. “At the lower end of the driveway an area of surface settlement caused by continuous daily (overnight/daily) parking”;
- The landlords defence to the tenant’s claim that the landlords failed to maintain the driveway to the statutorily required standard can be summarised as follows: a. The tenants only instructed [the couriers] to leave items in the letterbox and not to drive on the flat driveway and failed to notify other courier companies of the same requirement, thereby failed to prevent persons inside their control causing further damage to the flat driveway. b. The driveway has been damaged from June 2017 to the date of the hearing “due to commercial activities related to the tenant’s work or business or other third parties, such as courier drivers”; c. The landlords do not consider it an unreasonable request for the tenants not to use the driveway to their flat (other than Tenant 1 leaving her small car on it overnight) in order not to cause any further damage to it; d. The landlords considered the tenants should have provided a more detailed and prompt response to their 9 March 2022 email request but were left in the dark as to whether the tenants had complied with their request for no couriers to access the flat driveway and so had to keep a close eye on when and which courier company drove down it and to whom the parcels were addressed; e. The tenants have not been good tenants in that they have caused damage to the driveway that is more than fair wear and tear; f. The landlords have been good to the tenants in numerous ways such as providing support documents for Tenant 2’s application to WINZ for rental relief, giving permission for the tenants to establish a vegetable garden within the side of the flat, giving reliable and prompt responses and action to all requests for flat repairs or maintenance, complying with numerous requests to keep a lookout on the mailbox for deliveries and to clear the mail box when asked or when the tenants were away, washing and drying the tenants clothing, giving a rent reduction from $800 to $740.00 from 3/9/2021 to 1/10/2021 (during the 15 week COVID-19 lockdown) and forgiving 2 weeks rent in January 2023 to assist the tenants when they could not live in the flat due to 3 January 2023 flooding.
- The parties have provided photographic evidence that shows in 2012, prior to the start of the tenancy, the flat driveway was already in a state of disrepair and needed repair/restoration.
- The parties have also provided photographic evidence of the flat driveway over the course of the tenancy that also show that the driveway has been patched from time to time to cover exposed metal rods, but that it has remained in state of disrepair and in need of replacement or restoration in order for it to be deemed to be in a reasonable state of repair, having regard to the age and character of the premises and the period during which the premises are likely to remain habitable and available for residential purposes.
- The tenants have provided evidence of requests to the landlords to repair/restore the driveway so it can be used for residential purposes and the landlords have failed to undertake these reasonable repairs at all, let alone in a timely manner.
- I find the landlords have 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.
- Having regard to the intention and factors outlined in subs 109(3)(a) to (d)] of the Act I am satisfied that exemplary damages of $1,500.00 should be awarded against the landlords for the following reasons: a. The landlords knew that the driveway was in a state of disrepair when the tenants’ tenancy commenced in January 2015 and sought almost immediately to secure their agreement to very minimal and highly restricted vehicle use of the only access way to their flat. The landlords have intentionally continued to unreasonably restrict the tenants use of this amenity for the duration of the tenancy to date. They have done so to delay having to pay to get the driveway returned to a reasonable state of repair, having regard to the age and character of it and to enable the tenants to have reasonable use of that amenity as part of their tenancy. Such use by the tenants is what a reasonable person in the tenants’ position would expect to have been made available to them; b. The effect of the landlords’ unlawful act has been: i. The tenants have been put to the inconvenience of having to take items out of Tenant 2’s van each night and bring them into the flat, or outside the back of the flat, to be stored securely and taken back to his van in the morning; ii. The tenants have been put under constant stress and duress to try to foresee which courier companies are likely to be used by vendors they purchase items from. They have been expected to contact all these potential courier companies to instruct them not to allow their courier drivers to access the driveway by vehicle and to place all items for delivery into the letterbox, regardless of whether the tenants are home or not. As a result, the tenants have had some items stolen from their letterbox and other items they have had to collect from courier depots as they were not of a size that could be left in the letterbox; and iii. The tenants have suffered loss of amenity of the driveway when that amenity is part of the premises, they are paying rent to use/enjoy; iv. The interests of the landlord wanting to preserve the flat driveway, because they do not want to pay for or are not in a financial position to replace or restore it to the standard that fair and reasonable use of it by the tenants would be acceptable as part of the amenities that come with their tenancy do not outweigh the rights of the tenant against whom the unlawful act was committed; and v. It would not be in the public interest to allow the landlords to breach their statutory obligations to the tenant because they do not want to or cannot afford to meet these obligations.
- It is not appropriate to impose an alternative monetary order to the landlords carrying out the ordered repairs to the driveway. If the landlords fail to carry out the work order made at Order 5 above, a limit of $8,000.00 has been placed on the charges for tenant to do the work themselves or engage a contractor to do the work ordered. The $6,000.00 estimate provided to the tenant by the landlords back in 2019 has been adjusted for inflation. Should the driveway be repaired by the tenants, they will need to have regard to the age and character of the premises when choosing any replacement composites that vary from those of the existing driveway. Did the tenants intentionally or carelessly damage the driveway that they should compensate the landlords for?
- In accordance with the general conditions of the tenancy agreement, the tenants must “repair at the tenants’ cost, all or any damage suffered by the premises and caused by the tenants association with the property”.
- In addition, pursuant to s 40(2)(a) of the Act, the tenants must not intentionally or carelessly damage, or permit any other person to damage, the premises.
- The landlords are relying on these two tenant obligations for their claim for compensation for damage done to the driveway by the tenants themselves and/or light courier vans delivering items to the tenants at the flat. The law
- To be successful in a claim under 40(2)(a) of the Act, the landlord must prove that damage to the driveway occurred during the tenancy and is more than fair wear and tear. If this is established, to avoid liability, the tenants must prove they did not carelessly or intentionally cause or permit the damage. The tenants are liable for the actions of people at the premises with their permission. See sections 40(2)(a), 41 and 49B RTA.
- Where the damage is careless, and occurs after 27 August 2019, section 49B RTA applies. If the landlord becomes aware of the damage after 27 August, the damage is presumed to have occurred after that date unless the tenants prove otherwise.
- Where the damage is caused carelessly, and is covered by the landlord's insurance, the tenant's liability is limited to the lesser of the insurance excess or four weeks' rent (or four weeks' market rent in the case of a tenant paying income-related rent). See section 49B(3)(a) RTA.
- Where the damage is careless and is not covered by the landlord's insurance, the tenant's liability is limited to four weeks' rent (or market rent). See section 49B(3)(b) RTA. Where insurance money is irrecoverable because of the tenant's conduct, the property is treated as if it is not insured against the damage. See section 49B(3A)(a) RTA.
- Tenants are liable for the cost of repairing damage that is intentional or which results from any activity at the premises that is an imprisonable offence. This applies to anything the tenant does and anything done by a person they are responsible for. See section 49B(1) RTA.
- Damage is intentional where a person intends to cause damage and takes the necessary steps to achieve that purpose. Damage is also intentional where a person does something, or allows a situation to continue, knowing that damage is a certainty. See Guo v Korck [2019] NZHC 1541. Applying the law to the evidence
- The landlords maintain the tenants deliberately and/or carelessly caused damage to the driveway during their tenancy because of using it sporadically to drive Tenant 2’s light nearly empty van on without the landlords’ permission and for failing to stop commercial couriers from using the driveway instead of leaving items in the letterbox as instructed by the landlords. The landlords say the resulting damage is more than fair wear and tear, and that the tenant has not disproved liability for the damage.
- Photographic evidence provided to me by both parties from 2012, prior to the tenancy commencing, up to late August 2023 and video evidence provided by the tenants from the date of the hearing, show that the driveway was not in a reasonable state of repair, having regard to the age and character of the premises and the period during which the premises are likely to remain habitable and available for residential purposes. The driveway has continued to deteriorate from when the tenancy commenced in 2015. Only some minor patching has been undertaken.
- The evidence confirms that the driveway does not meet the building regulations for accessways, in that the residents are not able to manoeuvre and park their cars on it nor are delivery vehicles able to manoeuvre or park in the driveway to load or unload. In addition, although the driveway is not made of concrete, the standards set by the concrete industry state that residential driveways should be able to withstand vehicles of up to 2.5 tonnes. Neither of the tenants’ vehicles weigh greater than 2.5 tonnes.
- The tenants are not responsible for any additional deterioration of the flat driveway or damage that can be legally classified as fair wear and tear resulting from the tenants’ minimal use.
- It has been proven by the photographic evidence provided by the landlords and the tenants that the flat driveway has consistently been below the standard required by s45(1)(b) of the Act throughout the tenancy. Consequently, the landlords claim for compensation for half the cost of the repairs is declined. Should the tenants be reimbursed for costs incurred because of the 3 January 2023 flooding of the premises?
- The tenants claim that they had to repeatedly clean the flat walls and floors, over a 3-day period post the 3 January 2023 flooding, until the smell of sewage went. They are seeking compensation for $10.00 for the cleaning products, they say they would not have had to purchase but for the flooding.
- The tenants are also claiming compensation for the additional $85.00 of power they paid for because of 3 dehumidifiers running day and night for 2 weeks to dry the property post the 3 January 2023 flood.
- Section 45(1)(d)(i) of the Act requires the landlords to compensate the tenant for any reasonable expenses incurred by the tenant in repairing the premises where “the state of disrepair has arisen otherwise than as a result of a breach of the tenancy agreement by the tenant and is likely to cause injury to persons or property or is otherwise serious and urgent”.
- The flat was uninhabitable during the 2-week period post the 3 January 2023 flood, regardless of whether the flood water was fresh or contained wastewater/sewerage. The landlords accepted the flat was uninhabitable at this time as is evidenced by the two weeks rent relief they provided.
- The tenants provided power bills that prove the increase in power usage during this 2-week period and receipts for the cleaning products used. The tenants have also provided evidence of the flooding that prove these are reasonable expenses incurred by them that they are entitled to be compensated for in accordance with s45(1)(d)(i) of the Act. Did the landlords breach the tenants’ reasonable comfort, privacy and quiet enjoyment of the premises?
- Tenants claims the landlords have breached their quiet enjoyment of the premises, which is a form of harassment. The law
- The tenants are entitled to have quiet enjoyment of the premises without interruption by the landlords and the landlords must not interfere with the reasonable peace, comfort or privacy of the tenants in their use of the premises. See section 38(2) and (3) Residential Tenancies Act 1986.
- Breaching this obligation in circumstances that amount to harassment is an unlawful act for which exemplary damages may be awarded up to a maximum of $3,000.00. See section 38(3) and Schedule 1A RTA.
- Harassment means "to trouble, worry or distress" or "to wear out, tire, or exhaust" and "indicates a particular pattern of behaviour directed towards another person". MacDonald v Dodds, CIV-2009-019-001524, DC Hamilton, 26 February 2010. The law applied to the evidence
- Since the commencement of the tenancy in January 2015, the landlords have constantly significantly restricted the tenants access to the flat driveway, due to its poor condition and their concerns that even normal residential use of it would cause further damage to it.
- For the duration of the tenancy, the driveway not being fit to be used for residential purposes, and what is meant by residential purposes, has been a constant cause of contention between the landlords and the tenants and the driver of the breach of the tenants’ quiet enjoyment as is evidenced by the following: a. The tenants have received at least 16 emails from the landlords “that deal exclusively with the tenants’ use of the driveway. The landlords claim “the volume of these emails has been caused by the tenant’s driveway access activities and ongoing damage to the landlord’s property since 2016” after their “agreement” not to use it except in very limited circumstances; and b. These emails prove the tenants have had to ask permission to use the driveway from 8 April 2016 to 24 August 2023, have often been refused permission and have been chastised when the landlords have observed that the driveway has been intermittently used during the day without their permission; and c. On 30 September 2019, the landlords sent an email to the tenants giving them three options regarding use of the flat driveway and stating that they must choose option 1 and 2 together or 3 and if they chose options 1 and 2 that the landlords would keep assessment records of any further wear and tear caused by Tenant 2’s van having been on the driveway. The three options are as follows: i. They must advise the landlords “by email each time the tenants wish to randomly drive and or park the commercial vehicle in the flat access driveway” and their expectation is that this will be “in the order of once a month on average”; ii. They must be “advised by email each time the tenants wish to park the van on the concrete adjacent to the flat for an extended period” or iii. The tenants share the costs of restoration of the driveway to a level sufficient for them to park their vehicles off the street at night and to allow couriers unfettered access to the flat for delivery purposes. d. The landlords’ minutes to a 6 October 2019 meeting, recorded that the tenants did not agree with the landlords’ position but agreed to abide by options 1 and 2. The tenants gave evidence at the hearing that they agreed to these minimal use options under duress as they felt harassed and that it was clear to them that the landlords were watching every movement of Tenant 2’s van on the driveway, or that of any courier vans making deliveries of personal items to the flat, and they did not agree that they were responsible for contributing to the driveway restoration costs. e. Post the 6 October 2019 meeting, the tenants sought clarification of what options 1 and 2 entailed and received an email from the landlords the same day stating: i. The van may be “parked or stood on the driveway once a month”, meaning “two movements (loading and unloading) each month” or “12 double movements each year”; ii. The vehicle “must be driven at low speed to prevent any further skidding damage”; iii. The “van must be stationary on the driveway while loading/unloading for no more than two hours maximum at any one time”. f. In addition, these email communications show that delivery vans were not allowed to access the driveway at all to make deliveries and Tenant 1 gave evidence that the landlords have verbally accosted couriers that had come up the driveway in their vans, which has led to verbal complaints being made to the tenants by the courier companies. g. Other examples of the tenants being harassed can be seen in the 9 March 2022 email sent to the tenants at 4:09pm saying: “Hello [Tenant 1]. Today a commercial [courier van] used the driveway to deliver a parcel to the flat entrance at [tenancy addressed supressed], 3:00pm. The driver of the van was accosted in the driveway by Ross and asked why he was using a private driveway to make deliveries. The driver of the van license number [redacted] pleaded ignorance. He then proceeded to complete his exit from the driveway but could not do so due to excessive rear wheel skidding which exposed the driveway gravel adding further damage to the driveway to complete an exit. He then reversed back down the driveway and proceeded to accelerate to skid his way up the driveway to complete an exit. Attached are two images which record the disturbed gravel due to this skidding damage. There have been other recent van deliveries over the past months. The damage to the driveway is not acceptable and must be stopped. Can you please agree to instruct future courier deliveries be deposited into the flat letterbox? Please advise. Sincerely Patricia Cato”. This email shows how much unreasonable scrutiny was being place of the tenants’ driveway by the landlords. As a result of this email, the tenants felt pressured into putting in place a please leave in the letterbox authority for [courier] deliveries in March 2022, even though Tenant 1 had experienced courier items being stolen from the letterbox and would rather the items be left down by the flat entrance or delivered to her door. The landlords also sent the tenants a photograph of the “fresh skidmark from the courier delivery van reversing out of the driveway” on 9 March 2022 noted on it. h. On 24 August 2023, the tenants received a further email from the landlords at 4:41pm that said: “Dear [tenants names suppressed]. Yesterday a commercial [courier van] used the full length of the flat access driveway to deliver a parcel to the flat entrance at [tenancy address suppressed] The driver could not get access to the flat. The driver, on speaking to Ross showed a parcel address to [tenant 2] The driver was directed to place the package in the [Address] letterbox which he did. He then reversed out of the driveway. In the email below dated 9 March 2022 we asked: Can you please agree to instruct future courier deliveries be deposited into the flat letterbox. As stated, this was to prevent further damage to the flat access driveway. Our records do not reveal an answer to this request.
Why is the flat still receiving courier deliveries which use the flat access driveway?
According to the NZ Companies Office a NZ Limited Company [Employer 2], incorporated 13 Sep 2019, currently has company address as follows: Registered Office [tenancy address suppressed] Address for Service [tenancy address suppressed]
Unless advised otherwise, we believe that a commercial business is being managed out of a contracted Residential Tenancy. Cato Trustees Ltd, landlord, has never been consulted about such an arrangement outside the Residential Tenancy contract which exists between the tenants and landlord. However, from time-to-time storage of gardening tools and various flora stored in the flat yards have been observed. It is now two years since the last rental review and increased rental rates. The landlord believes the next rental increase should be calculated using both residential and commercial rental rates. We wish to discuss this next rental review and arrangements with you as tenants. Please nominate and agree a time for such a meeting”. This email also demonstrates the levels of harassment the tenants have continued to be subject to by the landlords and how their quiet enjoyment of the flat they rent has been compromised by the landlords’ unreasonable actions in relation to the driveway and the criteria for setting new rental rates. i. Despite the landlords’ unreasonable conduct, on 24 August 2023, the tenants replied briefly to the landlords informing them that in April 2022 Tenant 1 had responded to the request for couriers not to use the driveway and to leave all parcels in the letterbox, despite having had items stolen from the letterbox previously, and that she was very upset at the inaccurate and accusatory email. j. On 25 August 2023 at 10:05am, the tenants provided a more detailed response to the landlords’ email of 24 August 2023 again reiterating that Tenant 1 had instructed [the couriers] in March 2022 to leave parcels in the letterbox as instructed by the landlords and had followed up with [the couriers] drivers that had not followed her instructions. k. In this email Tenant 1 also states that Mrs Cato agreed that they are good tenants, they pay their rent on time, cleaned up after the 3 January 2023 flood at their own time and expense, and confirmed that while Tenant 2’s business uses the flat address as its registered address and address for service he does not conduct his landscaping business from the flat. She confirmed that Tenant 2 does from time to time store a few plants on the flat property or a ladder on the side of the flat driveway that neither obstructs or interferes with the landlords’ enjoyment of their property and that the tenants are simply using the premises they pay to rent solely for residential tenancy purposes. Further she pointed out that the landlords’ refusal for the tenants to have full use of the driveway to the flat has meant
the Tenant 2 has had to leave his work truck and his light personal van on the street with some work-related items contained within them. This has meant that he has had to unload these work items he has in the truck for the next day’s work, so they are not visible to the general public and not so likely to be stolen. These items have been stored on the flat premises overnight and placed back in the truck the following morning. Some of Tenant 2’s gardening items have also been stored on the property from time to time as an overflow to the storage unit he has for his work equipment or for items he is going to use at the flat. Tenant 1 also described the levels of stress and inconvenience the inability to use the driveway to the flat, for anything other than to store her car on overnight, has caused her and her partner and asks for a meeting to discuss these matters. l. The landlord also produced other photographic evidence of items stored at the flat that the tenants are legally entitled to have their, such as a trolley, a ladder, plants, 2 wheelbarrows as well as photographs of a number of packages delivered to Tenant 2 that the landlord claims are deliveries for Tenant 2’s business and not him personally. There is also a photograph of Tenant 2’s van parked in the driveway late at night. This level of scrutiny of what is being kept at the flat premises or what items the tenants are having delivered is not fair and reasonable and constitutes a breach of the tenants’ private enjoyment of the flat.
- The landlords must not interfere with the reasonable peace, comfort or privacy of the tenant and they have done so. I find they have committed an unlawful act.
- Where a party has committed an unlawful act intentionally, the Tribunal may award exemplary damages where it is satisfied that 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 landlords committed the unlawful acts intentionally, and that it is just to require the landlords to pay a sum in the nature of exemplary damages, based on the following: a. the landlords were aware that they had the tenants under intense scrutiny not to have anyone drive or park on the driveway without their express written permission in order to preserve a driveway they knew was in a such a state of disrepair that made was unfit for normal residential purposes; and b. This intense scrutiny of the landlords was enabled by the fact that they reside next door to the flat and are home during the day and were able to watch, photograph and report their observations to the tenants as well as being able to harass delivery drivers they did not want using the driveway and to then put continual pressure on the tenants about these restrictions they placed on the tenants reasonable use of the premises they rent; c. The landlords have a right to preserve the driveway, but not to stop further deterioration of a driveway that the tenants should be able to have full and unfettered use of, as part of their tenancy, without fear of breaches of their privacy and ongoing harassment; and d. It is not in the public interest to have landlords scrutinise and harass tenants to the degree these landlords have just because they live next door and they can. Were the tenants conducting a business at the premises in breaches of the tenancy agreement and s 40(1)(b) of the Act?
- The landlords claim one of the tenant’s is conducting a business from the flat, in breach of the tenancy agreement and his obligations under s40 of the Residential Tenancies Act 1986 based on the following grounds: a. Tenant 2 is the sole shareholder and director of [Employer 2] that is registered with the NZBN [number redacted]; b. The driveway has been damaged from June 2017 to 27 October 2023 “due to commercial activities related to the tenant’s work or business or other third parties such as courier drivers”; c. The administration of a business requires, among other items of business, invoicing documentation and the preparation of, trading bank transactions, for the purposes of IRD tax submissions, including income and offsetting expenses to income, all of which would have been undertaken from the flat as commercial activities of the business;
- According to the NZ Companies Office register: a. Tenant 2 became director of [Employer 2] on 16 March 2020; b. [Employer 2]’s registered address and address for service was [tenancy address suppressed] from 24 March 2020 to 06 September 2023; c. From 13 September 2019 to 24 March 2020 [Employer 2]’s registered address and address for service was [address redacted]; and. d. Prior to 24 March 2020, [Tenant 2’s Boss] was the sole director and shareholder of [Employer 2].
- Tenant 2 confirmed during the hearing that he was employed by [Tenant 2’s Boss] prior to 24 March 202 and purchased the business on that date.
- Tenant 2 also gave evidence that he stores the occasional piece of gardening equipment and/or a small number of plants at the flat, for security reasons, when he has them in his van or light truck to take to a landscaping job the next day and is forced to leave these vehicles on the street overnight.
- Tenant 2 also gave evidence that his landscaping business pays to rent a storage space, at [storage company], where he stores most of the tools/equipment for his landscaping business. A few other items such as 2 wheelbarrows and a ladder that don’t fit in the storage space are kept at the flat.
- The landlords maintain that these items being kept at the flat are proof that the tenants are running a business from the flat, in breach of the tenancy agreement. I do not agree that storing small amounts of garden tools and plants from time to time at the flat constitutes the running of a commercial enterprise from the flat.
- From the evidence provided, it was clear to me that the tenancy premises are occupied principally for residential purposes. Tenant 2 is not running his landscaping business from the flat just because the flat address is the physical address and address for service for [Employer 2] registered on the Companies Office register. The business is a landscaping business, and all of its business undertakings are conducted offsite. As a residential tenant, Tenant 2 is within his rights to use his residential address for these business purposes and to store some work-related tools, plants and equipment at the flat.
- Premises do not cease to be residential because of minor commercial use, such as storage of some landscaping tools at the premises and/or carrying out accounting and administration activities at home.
- Premises used for commercial and residential purposes are deemed to be residential unless it is proven that the premises were let principally for purposes other than residential purposes. 1
- It is clear from the evidence before the Tribunal that the premises were not let for commercial purposes and that the tenants use of the premises were primarily residential. Therefore, the tenants can continue to use the premises in the manner in which they have to date without their use being deemed commercial for the purposes of the landlords future rent reviews or for any future claims that the landlords may try to make that the Act does not apply to these rental premises. Did the landlord make retaliatory threats to end the tenancy and increase the rent to an above market rate?
- The email exchanges between the parties between 28 and 30 August 2021, in relation to an increase in rent, show that the landlord sought to put the rent up from $740.00 per week to $800.00 per week from 3 September 2021, partially 1 Main v Main [2007] NZCA 306 at [10]. because the rent had not been increased in over 3.5 years and partially because the landlords believe the tenants were conducting a commercial enterprise out of the flat and should be charged part residential and part commercial rent as a result.
- The tenants requested that the rent increase be delayed as [City] was in level 4 lockdown, as part of the Government’s COVID-19 response. Neither of the tenants were receiving any income, other than the Government subsidy, which did not cover all their expenses and they did not know how long the lockdown and restrictions on their work would continue. a. The landlords agreed to delay the rent increase until [City] was at level 3 lockdown, when Tenant 2 would be able to recommence some work to help pay the bills; and b. The tenants request for rent relief had caused the landlords to reconsider the business case for continuing to rent out the flat for the following reasons: i. Based on their accountant’s financial report for the year ending 31 March 2020 they would be running the rental of the premises at a loss, if maintenance expenses were deducted; ii. It was an imprudent financial investment made some 45 years prior; iii. The landlords advancing age and the associated costs/ time incurred on the administration of the rental property was impacting their desire to continue to let the flat; iv. These factors may impact on the landlords ongoing and future rental of the flat.
- The tenants took this email as a threat to end their tenancy because of them asking for rent relief, when up to that point they had not asked for any COVID- 19 related rent relief and considered the rent to be still set at current residential market rate. The tenants also considered the flat being used for commercial purposes as a partial reason for rent increase was an invalid reason for raising the rent as they were not doing so.
- The landlord’s defence can be summarised as follows: a. The landlords consider it to be fair and reasonable to use both commercial and residential market rates to establish what the rent increase should have been as they have proof the tenants are conducting a business from the flat which consists of the New Zealand Companies Office register information for [Employer 2]; b. Photographic evidence that the tenants have kept some items on the premises that could be associated with Tenant 2’s landscape gardening business; and c. The rent increase was fair after having not reviewed the rent for a period of
- 5 years.
- I find that a rent increase from $740.00 per week to $800.00 after 3.5 years free of rent reviews is not an unreasonable and $800.00 per week is a fair market rate given the location and nature of the rental premises.
- It is noted that the two reasons given by the landlords for the rent increase include the premises being used to run a business. This is not a relevant factor for the landlord to have taken into consideration in the tenants’ circumstances.
- However, the rental increase itself is not unreasonable, despite one the reasons given for it is not valid. The tenants have not provided any evidence of them having been disadvantaged in any way by the landlords’ inappropriate consideration of alleged commercial use of the premises when reviewing the rental rate.
- Further, I do not find that the landlords’ emails of 28 and 30 August 2021 are retaliatory or unreasonable. The landlords were pointing out the fact that the rent increase was necessary for it to remain fiscally viable for them to continue to rent the flat out. They also made the point that if renting out the flat became unviable, the landlords may be put in a position where they have no choice but the leave the flat vacant rather than rent it out at a loss. They also pointed out that even at a financial breakeven point it may not be viable for them to continue to rent the flat out when they were having to invest so much of their own time on administration and property management in their advancing years. Filing Fee
- Because tenants have wholly succeeded with the claim, I must reimburse the filing fee.
