What was Tenancy Tribunal case 4703392 about?

The tribunal order states: An application for suppression has been made in this case, and the Tribunal

How much money was awarded in case 4703392?

Verified claim lines are listed on this page.

What type of tenancy dispute was case 4703392?

The primary dispute was Harassment.

Where can I read the official tribunal order for case 4703392?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/10325920-Tribunal_Order_Redacted.pdf.

What was Tenancy Tribunal case 4703392 about?

The tribunal order states: An application for suppression has been made in this case, and the Tribunal

How much money was awarded in case 4703392?

Verified claim lines are listed on this page.

What type of tenancy dispute was case 4703392?

The primary dispute was Harassment.

Where can I read the official tribunal order for case 4703392?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/10325920-Tribunal_Order_Redacted.pdf.

Unit/Flat 2, 365 The Terrace, Te Aro, Wellington 6011, Tenancy Tribunal Case 4703392 — Harassment

Order

An application for suppression has been made in this case, and the Tribunal orders suppression of the Tenant name and identifying details.
[The tenant/s] must pay Property Rental Services Limited $1,980.00 immediately, being refund of bond overpayment.
All other claims are dismissed.

Reasons

All parties attended the hearing with Mr Gouda representing Property Rental Services Limited (PRSL), Mr Taylor (by telephone) representing Taylor Hopkins Limited (THL) and both tenants attending. The third named respondent is a guarantor for the tenants and did not attend.
PRSL seeks recovery of $1,980 from the tenants overpaid to them as a bond refund at the end of the tenancy.

Is PRSL entitled to recover a mistaken payment?

Section 135 Residential Tenancies Act 1986 (RTA) provides: (1) Subject to subsection (2), where one party to a tenancy agreement pays any amount to the other party under a mistake of law or fact relating to the agreement, that party may, upon application to the Tribunal, recover that amount from the other party. (2) In any case to which subsection (1) applies, the Tribunal may decline to order the repayment of the amount in question, in whole or in part, if the Tribunal is satisfied that the person who received the money did so in good faith, and has so altered his or her position in reliance on the validity of the payment that, in the opinion of the Tribunal, having regard to all possible implications in respect of other persons, it would be unfair to order the repayment of the whole or any part of that amount. Facts
PRSL acted as letting agent for THL when arranging the tenancy of the premises which started on 23 February 2022 and ended on 12 February 2023. Part of PRSL’s duties was to collect the first 2 weeks rent in advance plus the equivalent of 4 weeks rent as bond from the tenants, and lodge the bond with the Bond Centre. Thereafter, PRSL had no further involvement in the tenancy. Day to day management of the tenancy was the responsibility of THL by its director Mr Taylor.
The tenants made a payment of $2,970 into the nominated bank account for PRSL to cover the first 2 weeks rent in advance and the bond. When submitting the bond paid by the tenants of $1980, PRSL used a credit card which was charged the bond amount three times on 1 March 2022, 2 March 2022 and 7 March 2022. One payment was refunded on 3 March 2022. However, this resulted in a bond amount being lodged of $3,960, instead of $1,980. Mr Gouda did not notice the overpayment deducted from the credit card used. He says that PRSL acts as a casual letting agent for several landlords, which results in many transactions for bond payments in and out of the company’s account.
Once the bond was lodged, the Bond Centre sent their standard letter to acknowledge receipt of the bond. The letter dated 14 March 2022 is addressed to THL (not to PRSL) and records a bond held of $3,960. Mr Taylor did not notice that the bond amount was double the amount it should be. Therefore, neither the letting agent nor the landlord noticed the error.
When the tenancy ended Mr Taylor prepared a bond refund form in respect of the total bond held of $3,960. The landlord deducted $1,395 for rent and repairs and refunded the balance of $2,565 to the tenants. This of course included the extra amount of $1,980 for bond that had been overpaid by the letting agent approximately 12 months prior.
Mr Taylor gave evidence that he had not noticed anything wrong with the total bond amount either when receiving the acknowledgement from the Bond Centre nor when he was checking the bond held to be refunded at the end of the tenancy. He says that he employed Mr Gouda to take care of the initial letting and took the resulting Bond Centre letter as “gospel” and relied on it when completing the bond refund form.
The tenants gave evidence that this was their first tenancy, and they did not realise that they were receiving a bond refund exceeding the actual bond paid. They were aware that the first payment made to PRSL was for $2,970 and they assumed that they were receiving most of their bond back. They did not register that the payment made to PRSL initially covered 2 weeks rent in advance and the bond.
Mr Gouda did not discover the error until late August 2023, almost 6 months after the tenancy ended. He then emailed the tenants demanding refund of the bond overpayment. It is unfortunate that Mr Gouda’s email to the tenants on 30 August 2023 was rather abrupt, demanding payment with little background provided and no evidence of the extra payment he claimed was made to the Bond Centre. He made demand for $1,287 in this email which was less than the actual overpayment. The tenants were concerned that the email was some unscrupulous attempt to extract money from them and they ignored it. It is also pertinent that very soon after the tenancy ended Mr Gouda emailed the guarantor (the father of one of the tenants) stating in capital letters “THE BOND IS HELD BETWEEN [The tenant/s] AND IT IS NOT WITH ME. Therefore, the tenants felt it did not make sense to discuss a bond issue with Mr Gouda.
On 7 September 2023, Mr Gouda followed up with a second email, which I find was unnecessarily threatening and contained many inaccuracies concerning his right to legal costs and interest. This time he increased the amount demanded to $1,980. Attached to the email was a 14-day notice demanding payment of $1,980 to remedy the matter. In the absence of payment, the email threatened various “court fees and any other legal charges” incurred by Mr Gouda to recover the amount. He also said he would “ask the court to issue another court order for compensation, for the dishonesty, the stress I had to go through, my time and interest. That is a minimum of $1,000. I will publish the case on Landlord websites. It is obvious and very clear court case so no need to waste anyone’s time.” Mr Gouda’s failure to provide the tenants with detailed evidence of the overpayments and the threatening tone of the email, caused the tenants concern and influenced their decision not to engage with Mr Gouda further. He then filed this application to recover the overpaid bond amount. Discussion and findings
The issues to determine are: a. Whether PRSL Limited can bring an application under s135 as landlord; b. If so, whether there has been a payment made by the landlord under a mistake of fact or law to the tenants that they are entitled to recover; c. Whether the tenants satisfy the criteria in section 135(2) RTA in that they received the funds in good faith and have so altered their position in reliance on the validity of the payment that it would be unfair to order the repayment of the whole or any part of that amount.

Can PRSL bring a claim?

I am satisfied that PRSL may bring this application because at the time of letting the premises to the tenants and paying the bond to the Bond Centre, it was acting in its capacity as agent of the landlord and is therefore covered by the definition of a landlord in section 2 RTA, which includes an agent. Therefore, the overpayment was made by the landlord to the Bond Centre and held in credit for the tenants.
At the end of the tenancy, it was THL that authorised the overpayment of the bond refund to the tenants. However, Mr Taylor made it clear at the hearing that THL as landlord supported its agent’s claim and effectively THL and PRSL can be treated as one and the same landlord of the premises.

Was a payment made under mistake of fact or law?

I find on the evidence that the landlord, under a mistake of fact, refunded the overpaid bond to the tenants, and they are entitled to recover this sum under s135(1) RTA unless the Tribunal finds it would be unfair to do so under s135(2). Are there grounds for declining recovery of the overpayment in part or in full under s135(2) RTA?
The Tribunal must order recovery of the payment unless the tenants establish three factors: That they received the mistaken payment in good faith; they have so altered their position in reliance on the validity of the payment; and that it would be unfair to order recovery of the amount in full or in part.
I accept that the overpaid bond was received by the tenants in good faith. They did not realise that they were receiving funds exceeding the original bond amount. This was their first tenancy, and they thought the amount returned was in line with the lump sum paid to PRSL, forgetting that the lump sum included the first two week’s rent.
As to whether the tenants have “so altered their position in reliance on the validity of the payment”, they gave evidence that they are University students and have spent the funds received. They explained that finances were tight as this tenancy came to an end. They had signed another tenancy before the fixed term ended. They had hoped that the landlord would allow them to exit early because they found replacement tenants, but agreement could not be reached. In particular, there was disagreement over the fee PRSL wanted to charge for the work involved in approving any replacement tenants to enable an early exit from the tenancy. This meant the tenants were paying double rent for two tenancies for a few weeks. They also had to pay a bond on the new tenancy before receiving the bond refund on this tenancy. They say they don’t have the funds to repay, with both receiving study link and holding part-time jobs to cover their living costs. However, I note that the parent of one of the tenants is a guarantor liable for the tenants’ obligations and could be called upon to pay the amount owed.
The tenants also submit that, had the landlord (both PRSL and THL) not been so careless and discovered the error sooner, they would not be in this position. For the error to continue unnoticed until 6 months after the tenancy ended is an aggravating feature. They suggest that the situation has occurred through the fault of the landlords, not the tenants, and in those circumstances it would not be fair to order recovery of the overpayment.
There is a body of case law which addresses the approach taken in mistaken payments/unjust enrichment cases. The now repealed Judicature Act 1908 (JA) contained a similar provision introduced in 1958. Section 94B JA provided relief from recovery of a mistaken payment either wholly or in part if the recipient acted in good faith and had so altered their position in reliance on the validity of the payment that it would be inequitable to grant relief.
New Zealand cases still apply the principle from Kelly v Solari (1841), 152 ER 24, whereby the carelessness of the payer making the mistaken payment is not relevant. However, there are NZ cases (such as Thomas V Houston Corbett & Co [1969] NZLR 151 and National Bank of New Zealand Ltd v Waitaki International Processing (NI) Ltd [1999] 2 NZLR 211 ) where the Court of Appeal held that in rare circumstances, it may be necessary to evaluate each party’s post payment actions to determine their respective responsibility for loss. However, the recipient must prove that the three factors are present: good faith; alteration of position; and that it is inequitable to grant relief.
The Court of Appeal in the above National Bank case also upheld the House of Lords decision in Lipkin Gorman v Karpnale Ltd [1991] 2 AC 548 which recognised that in claiming a change of position defence, it is not enough for a defendant to use the money in the ordinary course of business. Mere spending of the payment is not enough. Rather the payment must have encouraged the recipient to do something with their money that they would otherwise not have done. The Court gave the example of a donation to charity that would not otherwise have been made.
After considering all the available evidence, submissions, and applicable case law, I find that the carelessness of the landlords in making the mistaken payment in the first place is irrelevant. Secondly, while I find the tenants acted in good faith, I am not persuaded that they “so altered their position in reliance on the validity of the payment” by doing something with the money that they otherwise would not have done. The money was used for ordinary, upcoming expenses that they would’ve incurred regardless of the payment. Therefore, they have failed to establish one of the important factors that must be present before the Tribunal can consider whether to decline the landlord’s application under s135(2) RTA. That being the case, I must order the tenants to pay PRSL the overpaid bond amount of $1980. Other claims for costs
PRSL claims compensation of: a. $2,000 compensation for stress and anxiety because of the overpayment; b. $1,800 costs for Mr Gouda’s time regarding the application to the Tribunal; c. $1,200 for alleged dishonesty in accepting and keeping the funds and failure to respond to communications; d. $1,800 for breach of s137(2) RTA—committing an unlawful act by breaching s135 (1) and 137(1)(a) RTA.
The above claims are all dismissed, there being no basis or justification for bringing them. The landlord is not entitled to general damages for stress, anxiety or alleged dishonesty by the other party when acting in a commercial context as he was here. Furthermore, I find that responsibility for the overpayment and failure to discover it sooner sits primarily with Mr Gouda, and to some extent Mr Taylor, but not the tenants who I found acted in good faith.
Furthermore, the tenants’ failure to respond to Mr Gouda’s demands for payment was understandable, to an extent, given his failure to provide evidence of the overpayment; the threatening tone of his communications and his own advice that the bond was not with him, which suggested bond issues should be discussed with Mr Taylor not Mr Gouda.
Landlords are rarely if ever entitled to costs for their time preparing claims and attending the Tribunal, even where they succeed in their claims (see section 102 RTA). The landlord is certainly not entitled to costs in this case.
Section 137(1) and (2) RTA provides that it is an unlawful act for one party to require another to enter any transaction, or make any contract or arrangement, purporting to do, whether presently or at some future time or upon the happening of any event or contingency, anything that contravenes or will contravene any of the provisions of this Act. These provisions are not applicable to this case as the tenants did not require the landlord to do anything of that nature. Nor have the tenants committed any breach or unlawful act regarding s135(1) RTA. The tenants were perfectly entitled to question Mr Gouda’s claim and have the Tribunal assess whether to grant relief under s135(2).
In summary, I consider Mr Gouda’s claims for $6,800 in costs are unjustified.
While succeeding with an order for recovery of the bond overpayment, the landlord has failed with his other claims for costs. Therefore, I do not award reimbursement of the filing fee.
The tenants seek suppression of their names and identifying details. Given that the mistaken payment was not their fault; and the finding that they acted in good faith, I consider they are entitled to suppression of their names and identifying details because to publish their details in those circumstances is not in the public interest.

Tenancy Tribunal case 4703392 — Harassment at Unit/Flat 2, 365 The Terrace, Te Aro, Wellington 6011,

At a glance

Tenancy Tribunal case 4703392 — Harassment at Unit/Flat 2, 365 The Terrace, Te Aro, Wellington 6011,

At a glance

Claims & awards

Order

Reasons

Is PRSL entitled to recover a mistaken payment?

Can PRSL bring a claim?

Was a payment made under mistake of fact or law?

Topics & place

Residential Tenancies Act sections

Key findings

Frequently asked questions

Claims & awards

Order

Reasons

Is PRSL entitled to recover a mistaken payment?

Can PRSL bring a claim?

Was a payment made under mistake of fact or law?

Topics & place

Residential Tenancies Act sections

Key findings

Frequently asked questions