Published tribunal order
Tenancy Tribunal case 4800244 — Exemplary damages
Decided 22 May 2024 · Published 22 May 2024 · Application 4800244
- Exemplary damages
Party names are redacted in the official published order.
Order
- This order replaces the order issued earlier today and corrects the date of the previous order from 15 April 2024 to 13 May 2024.
- An application for suppression has been made in this case, and the Tribunal orders suppression of the tenants’ names and identifying details.
- Sharna Andrews must pay [The tenant/s] $6,020.44 immediately, calculated as shown in the table below.
- The Bond Centre is to pay the bond of $800.00 ([Bond number suppressed]) to [The tenant/s] immediately.
- The tenants’ claims are otherwise dismissed.
Reasons
- All parties attended the hearing. The tenants attended in person. The landlord attended by telephone. Background
- The landlord bought the premises in 2018 and lived in for approximately two years. She said that this tenancy was the first tenancy of the premises. This tenancy began in January 2022.
- While the landlord was living in the premises, she converted an area at the rear of them into a fourth bedroom. The space was not originally accessible from inside the house and an opening was made to make that possible as well as doors that opened to the outside.
- It seems that the space had been a garage or workshop of some sort. There was a pit under the new floor of the converted bedroom. The landlord did not produce any documents relating to the conversion.
- The tenancy ended on 30 March 2024 following a termination notice from the landlord on the ground that she intended occupying the premises herself. Water Supply
- The tenants claim compensation because the water supply for the premises was inadequate.
- The premises are on the town reticulated supply. During the tenancy the premises received a half unit of water allocation. The cost of the water allocation is included in the general rates which are paid by the landlord in the usual way.
- For much of the tenancy, the water supply was governed by a restrictor at the road which ensured that the premises received the correct allocation of water. There were occasions when the valve became blocked and that affected the amount of water supplied to the premises. The council would come and unblock it and the normal supply would be restored.
- The premises has a water tank into which the water supply flows and is then pumped to the premises. One reason for the tank, which most if not all properties in the area have, is so that residents have a supply of water in case the mains supply is interrupted for some reason. The council recommends a 3000l tank for households receiving a half unit of water.
- Another reason for the tank is so that households have a continuous supply of water. When the tank is emptied, it can take a long time for it to fill because the water inflow is restricted. That can result in the household having no water or a very limited supply of it until the tank fills up.
- The problem that the tenants had was that the tank has a capacity of only 1000l and that meant that after a load of clothes washing and a couple of showers, the tank was empty. That was a considerable inconvenience for the tenants because it restricted the amount of clothes washing and showers that could be done in any one day. It even affected their use of the toilet.
- The landlord said that she did not have any such problem when she was living in the premises, but I accept the tenants’ evidence on this point. It is consistent with the size of the tank.
- The tenants raised the issue with the landlord and suggested that they needed a larger tank. The landlord chose not to replace the tank with a larger one.
- Section 45(ca) of the Residential Tenancies Act 1986 (the Act) provides that where the premises does not have a reticulated water supply, the landlord must provide adequate means for the collection and storage of water. But here, the water supply is reticulated and so the section does not apply.
- Regulation 9 of the Housing Improvement Regulations 1947 provides that every bathroom shall have a bath or shower with an adequate supply of water. Given the needs of a family of six or seven and their other water needs, I find that by failing to provide an adequately sized water tank, the landlord failed to provide an adequate supply of water.
- I note as well that there is no evidence that the landlord made any attempt to increase the water allocation for the premises. My instinct is that if she had had done so, the council would probably have advised her to get a bigger tank.
- The inconvenience to the tenants is obvious. Apart from a six month period when the council removed the restrictor valve altogether, they had to significantly restrict their use of water.
- This is not a breach, in my view, for which exemplary damages should be awarded. The landlord may not have fully appreciated the significance of not having a large enough tank for the supply of water to the premises. But an award of compensation is required.
- In my view a compensatory award based on $20 per week for 78 weeks (being the duration of the tenancy less six months) is appropriate. I have therefore awarded $1,500 compensation for the breach. Bond Lodgement
- The landlord did not lodge the bond for over two years.
- A landlord must send any bond payment to the Bond Centre within 23 working days after the payment is received.
- Breaching this obligation is an unlawful act for which the Tribunal may award exemplary damages up to a maximum of $1,500.00.
- 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.
- The landlord said that she was a first-time landlord and didn’t know that she had to lodge the bond. The tenants rightly pointed out that the obligation appears in the notes to the Tenancy Services tenancy agreement that the landlord used in this case. That said, the Tribunal does tend to go lightly on inexperienced landlords in cases where the bond has been lodged but outside the mandated period.
- What is different in this case is that the tenants asked the landlord to lodge the bond during the tenancy and the landlord declined to do so. If she wasn’t aware of the requirement before, she should have been aware of it when the tenants pointed it out to her. It would have been an easy thing for her to check in any case. That continued refusal to lodge the bond justifies an award of exemplary damages.
- The bond has been lodged and that counts for something, and I also have consideration for the landlord’s inexperience. An award near the lower end of the scale is appropriate and I have awarded $300. [Electricity distributor] Bill
- The electricity to the premises went out during bad weather and the tenants called [electricity distributor] who are the electricity distributor for the region. One of their technicians was in the vicinity and he called at the premises to assess the situation. The tenants were unsure whether the problem was with the network or the premises.
- The technician found that the problem was with the connection from the house not the network. He said that he could deal with it, but it would cost about $1,500 and that the tenants would be better to call out an electrician. The tenants chose to inform the landlord.
- The landlord arranged an electrician who attend and fixed the problem. The landlord, quite properly, met that expense.
- Sometime later, the tenants received a bill from [electricity distributor] in the sum of $819.47. The tenants asked the landlord to pay the bill, but she refused. She did not authorise the expense and she had paid for the electrician.
- In my view the landlord was entitled to decline responsibility for the bill. For one thing the tenants had not sought her authority for any electrical work. Section 45(1)(d) of the Act requires the landlord to compensate tenants for expenses in certain circumstances. One of the requirements is that the tenant has given notice of the problem to the landlord or made a reasonable attempt to do so. That did not happen here.
- Another reason is that I cannot see why the tenants should have any liability to [electricity distributor]. If they have no liability to pay the bill, they cannot expect the landlord to pay it. They contacted [electricity distributor] to ascertain whether the problem concerned the premises or the network. That was a perfectly reasonable thing to do and there was no expectation that they would have to pay for that assessment. There was no discussion about payment, and I do not see how any obligation to pay should be inferred. The charge also seems exorbitant for the little that the technician did.
- The tenants are paying off the bill over time and they may wish to consider disputing the bill and resolving the issue in the Disputes Tribunal if necessary.
- The claim is dismissed. Wood Burner
- Under section 45 of the Act a landlord must provide and maintain the premises in a reasonable state of repair and comply with any relevant enactment in relation to buildings, health and safety.
- Breaching any of these obligations is an unlawful act for which exemplary damages may be awarded up to a maximum of $7,200.00.
- At the start of 2023 the internal fire box of the wood burner ruptured, and the tenants reported it to the landlord and provided her with a photograph showing the damage. The tenants said that they would manage over the winter and the wood burner could be replaced before the following winter. The landlord was happy to accept that.
- There is no doubt at all that given the nature and extent of the damage that the tenants should not have used the wood burner in that condition. The tenants did not help themselves by telling the landlord that they could manage over the winter. Indeed, throughout the tenancy, the tenants were extremely tolerant and accommodating when things went wrong with the premises. They should have insisted on the wood burner being replaced or some other suitable means of heating being provided. There was no other means of heating in the living area.
- It should have been obvious to the landlord that the wood burner was unusable or at least that it was unsafe to use it. In my view a responsible landlord would have arranged for the wood burner to be replaced despite the tenants’ willingness to soldier on with it in a damaged condition.
- Using the wood burner in that condition put the tenants at considerable risk. Subsequently, the District Council served a Defective Building Notice for the wood burner.
- Despite the tenants’ willingness to continue using the wood burner, I find that there should be an award of exemplary damages for this breach. The tenants informed the landlord of the situation and provided a photograph of the wood burner from which any reasonable person would conclude that it was unsafe to use. By not repairing or replacing it, the landlord was in breach of her maintenance obligations. An award of $1,000 is appropriate. Termination Notice
- For a notice to be declared retaliatory, the tenant must prove that in terminating the tenancy, the landlord was motivated wholly or partly by the tenant exercising a right under the tenancy agreement or any Act, or by any complaint against the landlord.
- Giving a termination notice which is declared to be retaliatory is an unlawful act for which exemplary damages may be awarded, up to a maximum of $6,500.00.
- It is also an unlawful act for a landlord to give a termination notice knowing that they are not entitled to do so. The maximum award of exemplary damages is also $6,500.
- The tenants claim that the landlord’s termination was retaliatory. That is a claim that it was wrongful and that means that I must consider as well whether the notice was unlawful.
- The notice came very shortly after the tenants had made complaints about the premises and the bond and they had served a breach notice for the bond.
- I suspect that retaliation may have played a part in the termination notice but there is evidence that the landlord did move back to [town] from where she was living which suggests that the reason for the notice was genuine. For that reason, I do not find that the notice was retaliatory.
- The tenants say that the landlord should have given 90 days’ notice not the 63 days that the notice gave. The Act requires 63 days’ notice where the landlord intends occupying the premises. The form of notice that the landlord used refers in the notes to 90 days. It must be an old form and that is how the misunderstanding has arisen. But it does not make the notice invalid.
- What does make the notice invalid is the fact that the parties had agreed a renewal of the fixed term tenancy before the landlord served the notice. There is ample evidence of that in the messages between the parties. The parties had agreed terms, including a rent increase and all that remained was for the landlord to send the tenants an agreement to sign. She assured the tenants more than once that she would do so and that they had no need to worry about their security of occupation. For example, in one message she said, “you are safe there”.
- A fixed term tenancy cannot be terminated by a notice such as the one that the landlord served. That makes that notice unlawful. People are deemed to know the law and so the landlord is deemed to know that the notice was unlawful.
- An award of exemplary damages is required. The only reason why it should be at the lower end of the scale is that by the time the notice was served, the tenants had decided that they did not want to remain living in the premises. No doubt that was due to the many problems they had experienced living there and arguably that should not provide much, if any, mitigation for the landlord. Yet the fact remains that the tenants did not want to dispute the notice.
- An award of $1,000 is appropriate. Bedroom
- The tenants occupied the bedroom that was converted from the garage or workshop.
- Intermittently, after heavy rain, water entered the bedroom. How the water tracked into the room has not been established. It did not overtop the threshold of the outside entrance. Therefore, it most likely entered below the floor of the room due to inadequate water proofing or drainage or both. After the landlord had the floor of the room replaced, water continued to enter below the floor.
- The water ingress caused the carpet to become wet and visibly so as shown in photographs provided by the tenants. They used vacuums and dehumidifiers to dry out the room. There were times when the tenants could not use the room and they slept in the lounge. At other times they put up with the damp and musty odour in the room. One of the tenants has a serious health condition which was possibly was worsened by the dampness. In any case, damp conditions are known to be a threat to human health.
- The District Council subsequently deemed the room to be unfit for habitable use.
- Regulation 15 of the Housing Improvement Regulations 1947 states that houses must be free from damp. As well, the Building Code requires buildings to be constructed to provide adequate resistance to the penetration and accumulation of moisture from the outside. Neither of these requirements was met in this case. The conversion of the space by the landlord plainly failed to ensure that the room would be free of damp and its construction failed to provide adequate resistance to water from outside entering the room.
- It follows that the landlord is liable for the consequences of these failings.
- The landlord employed a builder to carry out the conversion and there is no evidence that she knowingly allowed the conversion to be faulty. The tenants are entitled to compensation, but this is not a case for exemplary damages in relation to the bedroom.
- The tenants seek compensation based on $100 per week for 52 weeks. The $100 figure comes from the bedroom being one of four and so one quarter of the weekly rent ($400) over approximately half the duration of the tenancy. I don’t accept that is the correct approach.
- The premises consists of rooms and facilities other than the bedrooms and so one quarter of the rent is not a reasonable starting point. The loss of use of the bedroom and the diminished enjoyment of it are plainly relevant. The evidence does not establish loss of use of one year.
- After considering the evidence, an award of $2,200 compensation is appropriate. I have taken account of the tenants’ out of pocket costs in my assessment.
- I note that the tenants had other complaints about the condition of the premises. They were raised until near the end of the tenancy and so I have not made any award in respect of them. Bond
- The tenants seek repayment of the bond. The landlord has not claim on the bond and so it must be paid to the tenants. Filing Fee
- The tenants have been substantially successful and so I have awarded them the filing fee. Suppression
- Because the tenants have been substantially successful, I have granted their request for name suppression.