Published tribunal order
Tenancy Tribunal case 4758642 — Exemplary damages
Decided 14 Feb 2024 · Published 14 Feb 2024 · Application 4758642
- Exemplary damages
- Rent arrears
Party names are redacted in the official published order.
Order
- [The landlord/s] is granted possession of the premises at [Tenancy address suppressed] at 11:59pm on Sunday 3 March 2024.
- The rent is to remain at $600 per week for the remainder of the tenancy.
- [The landlord/s] must pay [The tenant/s] $1,608.06 immediately in accordance with the following table.
- All other claims are dismissed.
Reasons
- [The tenant/s] and his family have lived in this home since 2015. Unfortunately, due to the way the house was built, there have been subsidence issues which have been worsening over the years.
- The owner decided in 2023 to accept quotes to remedy the issues which involve lifting the house, pumping a foundation compound underneath and laying new sewage piping. The trades involved advised the landlord that the house would need to be vacant for this work to be undertaken given how extensive it is. They therefore served a notice on [The tenant/s] to end the tenancy.
- [The tenant/s], not wishing to lose his home over an issue that had been impacting him for the duration of his tenancy, applied to the Tribunal to set aside the termination notice and for compensation and/or exemplary damages due to the maintenance issues he faced over his tenure.
- The landlords then cross applied seeking a possession order, rent arrears and water rates. The water rates are agreed to, therefore that order is made by consent.
- I address each claim separately as follows. Before I do however, it is useful if I outline the requirements for proof. In the Tenancy Tribunal applicants are required to establish their case to the civil standard of “balance of probabilities”. This means that they must establish that the situation is more likely than not to be as they argue or allege. Independent witnesses, corroborating documents and photographs are an important part of discharging this burden of proof. It is up to the parties to establish their case and it is not for the Tribunal to extract the necessary evidence.
Should the termination notice be set aside, or an order made for possession?
- There are two grounds upon which [The tenant/s] challenges the termination notice, as follows: i. That it was retaliatory; and/or ii. That it was provided by the landlord whilst knowing they were not entitled to do so. Retaliatory notice
- [The tenant/s] submission is that he was issued with the notice in response to him regularly complaining about the plumbing. He says this was retaliatory action, and as such the notice should be set aside.
- Section 54 of the Residential Tenancies Act 1986 (RTA) provides that the Tribunal may declare a termination notice to be retaliatory, and of no effect, if: [I]n giving the notice, the landlord was motivated wholly or partly by the exercise or proposed exercised by the tenant of any right, power, authority, or remedy conferred on the tenant by the tenancy agreement or by this or any other Act or any complaint by the tenant against the landlord relating to the tenancy.
- There are four issues to consider: a. Does the termination notice comply with the procedural requirements of section 51 of the RTA? They do here. b. If so, was the application made within 28 working days of the notice being served? If not, are there grounds to extend the notice period under s 96(2) RTA? In Realty House Whakatane Limited v Eschbank [2020] NZDC 16081, the District Court held that the time limit for filing an application is mandatory and would only be extended in limited circumstances such as there being good reason for it being filed several days late (only). c. Has the tenant proved that, in terminating the tenancy, the landlord was motivated wholly or partly by the tenant exercising a right under the tenancy agreement or any enactment, or by any complaint against the landlord? d. If so, was the landlord justified in giving the notice because the tenant’s issue or complaint was frivolous or vexatious?
- The termination notice was served on 3 October 2023. [The tenant/s] application was filed on 3 January 2024. This is well outside of the mandatory time frame and as such the application must be dismissed.
- I note that even had the time frame been complied with, I find no evidence that the landlords were motivated to end the tenancy by [The tenant/s] actions. I am satisfied that they are genuinely attempting to resolve a serious maintenance issue. Reason for the notice
- [The tenant/s] submission is that there is no need for him to vacate the home whilst the works are undertaken as he has been told by other trades that the work should not take a long time. He says he would be prepared to move out for a short period and then move back in when all the work is done.
- He also submits that it is unfair for him to lose his home over this issue given its longevity. He says they could have addressed it years ago and there were other options which would not be so disruptive such as installing a pump. His view is that the work has increased in magnitude given how long it has been left by the landlord and he should not be punished for their tardiness.
- Representing the landlord, [The landlord’s representative]’s evidence is that the plumbing issue has arisen due to the subsidence of the house given how and where it is built. Various remedies were investigated over the years such as installing a pump. However, they would merely be temporary fixes and the only way to address the actual issue is to raise and reinforce the house foundation and re-lay the sewage system to prevent further subsidence issues.
- A landlord may give notice to end a tenancy of at least 90 days on the basis that extensive alterations, refurbishment, repairs, or redevelopment of the premises are to be carried out by the landlord or owner, and— (i)it would not be reasonably practicable for the tenant to remain in occupation while the work is undertaken; and (ii)the work is to begin, or material steps towards it are to be taken, within 90 days after the termination date.
- Under Section 60AA of the RTA a landlord must not give a notice to terminate a tenancy or apply to the Tribunal for such an order, knowing they are not entitled to do so.
- In giving such notice landlords are entitled to rely on the advice of their trades as to whether it is reasonably practicable for tenants to remain in situ during such work. Here the plumber, in consultation with the engineer has said that due to the extent of the works, it would be unrealistic for it to be done with the tenants in the home and as such they required the property to be vacant. The evidence on this point provided by the landlord is reliable.
- Bearing in mind the evidential standard, I am satisfied that the landlord has contracted to undertake extensive repairs on the home shortly after the tenancy ends. In fact, they were to start three weeks after the tenancy was meant to end, but they have had to be pushed out due to this application.
- [The tenant/s] challenges the extent of the works and the unknown timeframe. I accept however the evidence provided directly from the trades as to the complexities and unknowns of the work. I also find that the landlord was entitled to rely on the advice of their trades that the tenants could not remain in the home.
- Whilst the subsidence has no doubt increased over time, I accept the magnitude and complexity of the decision to remedy for the owners. They were entitled to choose the work they deemed correct in the situation, i.e., the reinforcing over just installing a pump.
- Furthermore, landlords are not legally required to consider alternative options such as re-housing tenants for short periods, although obviously if this is possible it is a best practice approach.
- Accordingly, I am satisfied that the landlord was entitled to end the tenancy in order to undertake this extensive work. This is naturally upsetting and difficult for [The tenant/s] and his family. This is the situation however as I have not found that the landlord acted unlawfully.
- Therefore, I must dismiss the application to set aside the termination notice.
- As the tenancy therefore effectively ended on 8 January 2023, which is less than 90 days ago, the requirements of section 64(1) of the RTA are satisfied and I must make a possession order.
- [The tenant/s] and his family are still in their home, and it will take them some time to make arrangements to relocate. The landlord has agreed to a two-week delay to the currently contracted date for the works of 19 February 2024.
- Taking into account all the circumstances, I direct that the tenancy end on Sunday 3 March 2024; at that time possession will revert to the landlord.
What is the rent?
- Given the upset for [The tenant/s] and his family in having to leave the tenancy, the landlord generously reduced the rent from $600 per week to $500. The specific wording of the offer was: the owners have offered to help with your costs by reducing your rent to $500 per week during this final period. Therefore, when [The tenant/s] did not leave at the end of the notice period on 8 January, the landlord sought to re-establish the rent at $600 per week until he did actually vacate. [The tenant/s] disputes that he should have to pay the original rate.
- I do not find this temporary rent reduction was intended to be permanent therefore had the tenancy continued, the original rent of $600 could have been expected. I consider this was an act of kindness on behalf of the owner and was only even intended to be in place until 8 January.
- Accordingly, I find the claim for rent arrears established and as such [The tenant/s] is required to pay a weekly rent of $600 until the end of the tenancy and pay the arrears. Should [The tenant/s] receive financial redress for the maintenance issues he experienced over the tenancy?
- [The tenant/s] seeks compensation and/or exemplary damages for a lack of maintenance on the property, specifically: i. Drainage/plumbing issues since 2018. ii. Carpet maintenance since 2018. iii. Driveway concrete subsidence since 2016.
- Section 45 of the RTA details the landlord’s obligations to provide and maintain the premises 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.
- It is well settled that, the landlord’s obligation under section 45 is to investigate and repair a defect brought to its attention within a timeframe which is reasonable in the circumstances, and as to what that time is, depends on the gravity of the problem but also on the objective attempts made by the landlord to investigate, and put right, whatever the problem might be. Furthermore, a tenant has a statutory duty to advise of any defects under section 40(1)(d) of the RTA. Therefore, a tenant should promptly notify a landlord of any defects and a landlord should be given a reasonable opportunity to remedy the defect before being liable for any failure to do so.
- Section 45 of the RTA does not impose absolute liability on a landlord, and the courts and Tribunal have adopted a “common sense” approach when assessing a landlord’s responsibility for maintenance issues. Bearing on this approach is how any issue affects a tenant but also that the landlord, as owner of the property, is entitled to choose their own tradespeople, provided they are of a professional standard, and types of maintenance.
- Breaching section 45 of the RTA is an unlawful act for which exemplary damages may be awarded up to a maximum of $7,200.00 1 . I discuss each issue separately. Plumbing
- [The tenant/s] evidence is that from the start of the tenancy plumbing issues started arising. Firstly, the sink and waste disposal regularly blocked. Then the toilet, then the shower, then the ensuite toilet and shower and finally the other shower. He would tell [the previous property manager], his then property manager, and she would send a plumber who would unblock it.
- The impact of these blockages was challenging and embarrassing and at one stage they had a toilet and shower out of commission for a weekend due to the plumber not being able to attend until the following Monday. 1 See section 45(1A) and Schedule 1A Residential Tenancies Act 1986.
- He says the plumber told him relatively early into the tenancy that the issue was that the pipes were sagging because of the subsidence and there would need to be a proper fix such as a pump being installed.
- The landlord’s evidence is that it was not until approximately 2021 that they became aware of the extent of the issue. At that point the owner commenced discussions with plumbers and engineers as to what could be done. Various options were explored, but as discussed above, they wished the issue to be fixed and not temporarily repaired. It was not until 2023 that they had sufficient information and ability to accept the quote for the major repairs discussed above.
- I do not find it established in evidence that the landlord ever delayed unreasonably in instructing a plumber upon receiving a complaint from [the previous property manager].
- I also accept that the investigation of such an issue is major and as such the owner needed to consult with various people to establish the best resolution option. This process took time which is understandable and reasonable.
- Accordingly, whilst the regular plumbing issues were an inconvenience and difficulty for [The tenant/s] and his family, I do not find that the landlord failed in their obligations pursuant to the RTA to address the situation. They were not obliged to install a pump earlier when there was other, more long-term options they were considering.
- It is an unfortunate issue that was not caused by either party but has negatively affected both. This claim therefore must be dismissed.
- A related issue has arisen in that in September 2023 the plumber dug holes in the backyard as part of their work. These have not been filled in and just left, which are hazards for [The tenant/s] and his family although there are cones in place marking them. [The property manager/s], the current property manager, says she was not aware the holes had not been filled in until January when she received the application, otherwise she would have instructed the plumber to fill them.
- I understand that [The tenant/s] was frustrated by this time with all the back and forth regarding the plumbing and as such he left the issue of the holes to raise at an inspection. That inspection never came as the landlord gave notice a month later and as such this issue fell to the wayside.
- It is clearly unacceptable to have such holes left on a property, however the landlord cannot be held responsible as I accept their evidence that they were unaware. Accordingly, I make no direction as to redress for this issue. Carpet
- In 2018 [The tenant/s] raised a concern with the carpets being threadbare and sagging with [the previous property manager]. He says that she said she would look into it, but he had to chase her up. Eventually in 2019 they were stretched which helped a bit.
- However, over time they started sagging again and were becoming more and more threadbare. Again, in December 2021 they were re-stretched but the problem continued. The photos provided of their current state depicts a carpet that has holes and is threadbare in sections.
- [The tenant/s] evidence is that they would cut their toes on the carpet tacks, trip on the sagging and suffered from the dust that accumulated due to their state. He says he regularly followed up with [the previous property manager] and at one stage contacted the owners directly when he was not receiving a response from her.
- [The property manager/s] agrees that in the lounge primarily the carpet is in a bad state. She says the owner has been advised that they need to be replaced but they were waiting to combine the work with the other works.
- [The tenant/s] says [the previous property manager] originally told him they would be replaced, and a quote was arranged. However, she subsequently said the owner no longer wished to do that so she would look into obtaining covering mats for him. He never received these although I note he did not respond to her email offering them.
- It is undisputed that the owners have been told that the carpet needs to be replaced and that they have not authorised such replacement. It is undisputed that the carpet needs to be replaced. [The landlord’s representative] apologises to [The tenant/s] for not providing mats and is unsure why that got missed.
- The carpet, especially in the lounge is not reasonably maintained, nor has it been for many years. It is threadbare and a hazard. This is an issue of maintenance that has not been addressed by the landlord in a timely way. I find that they were aware from at least 2018 of the need to replace or repair it.
- If the owners wished to wait for a period before replacing the carpet, then they were obliged to mitigate the impact on [The tenant/s] and his family. In this case that means supplying suitable mats. They have not done so.
- Accordingly, I find that the landlord has breached section 45 of the RTA by providing carpet that is poorly maintained. I discuss redress below. Concrete driveway
- In 2016 there was an earthquake that sunk the concrete driveway slightly. Over the years it has sunk further which has meant that just in front of the doorway and side gate, being the two entrances into the home, there are exposed edges of concrete. [The tenant/s] says people regularly trip on these and they are hazards.
- He says he advised [the previous property manager] of the issue shortly after it happened, and she sent a concrete layer to look at it. He says they told him that they could put a temporary fix on the drops to mitigate the hazard until the full issue could be remedied.
- Unfortunately, despite [The tenant/s] chasing [the previous property manager] up on the issue nothing has been done. He accepts that the subsidence issue of the driveway as a whole is major, but all he wanted was a temporary smooth over of the jagged edge, so it was not such a hazard. The email evidence substantiates that [the previous property manager] was looking into the issue 2 but nothing was actually done.
- [The previous property manager] left the company over a year ago when [The property manager/s] took over managing the property. She says she was not told of the issue and can find no record of it.
- The photos certainly show a hazard, especially in front of the front door. This is a lack of maintenance which could easily have been remedied. I find it established that [the previous property manager] has been aware of it for many years. Accordingly, I am satisfied that the landlord has breached their obligations pursuant to section 45 of the RTA here. I discuss redress below.
What redress should be ordered?
- [The tenant/s] seeks compensation and exemplary damages for these landlord breaches of section 45 of the RTA. As I have found breaches with respect to the carpet and entrance ways, I discuss his claims in that respect.
- Compensation is intended, so far as money can do it, to restore the injured party to the same position as they would have been in, but for the breach of the RTA. Liability exists for foreseeable losses flowing from the breach of the RTA and takes into account loss of amenity.
- Where a party has committed an unlawful act intentionally, the Tribunal may also 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. 3 Exemplary damages are designed to punish and to deter and as such are like a fine. 2 Email 2/5/22 3 See section 109(3) Residential Tenancies Act 1986.
- Turning firstly to compensation. I consider that due to the state of the carpet, [The tenant/s] and his family have not had full amenity of their lounge primarily, due to the state of the carpet. They have also had to purchase their own mats to mitigate the issue. I do not find a lack of amenity established with respect to the entrance ways, more of an inconvenience.
- Appellate Courts have advised of the need to adopt a global approach when considering compensation awards. They have repeatedly emphasized that the assessment of the proper amount of compensation is a question of fact in each case; it is not an exact exercise and a common sense approach is required; that there are no general or absolute rules for calculating the amount of compensation but that the primary purpose of awarding compensation is to reflect the extent of the loss actually and reasonably suffered by the injured party.
- Having regard to all relevant factors, I assess that an award of $900 is justified. In coming to this figure, I have taken into account the following particularly: a. The longevity of both issues. [The previous property manager] in particular was aware of the issues and [The tenant/s] requests, and allowed no substantive action to take place. b. That both issues have caused minor injuries to the tenants. c. That [the previous property manager] advised the carpets would be replaced and then advised they would not be. d. That [The tenant/s] has had to follow the matters up regularly with [the previous property manager]. e. That the issues on their own are relatively minor. f. That the owners were considering the prospect of major repairs to the house and that these relatively minor issues unintentionally got side-lined.
- I now consider an award of exemplary damages. I find that the intentional element of section 109 is met as the landlord are a professional property management company and as such are aware of their obligations. Accordingly, I take into account the following: a. I do not find the landlord’s actions intentionally calculated to cause distress to [The tenant/s], more that the matters were side-lined for greater issues. b. The effect on [The tenant/s] however was to create frustration, inconvenience and stress. c. It is in the public interest that landlords attend to their maintenance obligations in homes they provide. d. Parliament has set the level of maximum exemplary damages for such a breach high at $7,200 to reflect the level of seriousness they attribute to it.
- Having considered all of the above, I find that an award of $1,500 exemplary damages for both breaches reasonable. Filing fee
- As both parties have been partially successful in their applications it is not appropriate to award reimbursement of the filing fee to either party and those costs should lie where they fall. Suppression
- Section 95A of the RTA requires the Tribunal to supress a party’s name or identifying details if that party was “wholly or substantially” successful. Both parties were successful to an extent in their claims, accordingly I direct that all identifying details of both parties are to be redacted from the published order.