Published tribunal order
Tenancy Tribunal case 4801097 — Tenancy dispute at 19 Thornbury Crescent, East Tamaki Heights, Auckland
Decided 30 Sept 2024 · Published 30 Sept 2024 · Application 4801097
- Boarding House
- Exemplary damages
- Harassment
- Healthy homes
Party names are redacted in the official published order.
Order
- Hsiu-Lien Yang must pay [The tenant/s] $2,458.84 immediately, calculated as shown in table below:
Reasons
- Both parties attended the three day hearing. Mrs Yang is legally represented. The tenant is represented by her children J and B. Jurisdiction
- The first issue is one of jurisdiction. Mrs Yang contends, through her counsel, that she had merely given The tenant a licence to occupy the premises with no or little commercial consideration. In the alternative, even if there is a residential tenancy, the tenancy relationship is between Mrs Yang and the tenant rather than her children. Mrs Yang also contends that the residential tenancy is excluded under section 5(1)(n) of the Residential Tenancies Act 1985 (‘RTA’) as the premises is used by Mrs Yang and her family as their principal place of residence.
- The premises at 19 Thornbury Crescent, East Tamaki Heights is a 4 bedroom plus 1 study, double storey house which has been newishly built.
- While Mrs Yang let the tenant and her children reside at the premises in November 2013 out of kindness and generosity, such arrangement that arises out of kindness and generosity does not preclude the existence of a residential tenancy.
- Since 1 December 2013, the tenant paid rent of $10,000 per annum to Mrs Yang. I consider that there is a residential tenancy in place because the tenant’s right of occupation was accorded in consideration of rent.
- Section 2(1) RTA defines tenancy, in relation to any residential premises, as the right to occupy the premises (whether exclusively or otherwise) in consideration for rent. I am satisfied that the tenant’s occupation of the premises meets the definition of tenancy under the RTA.
- While the rent payable for the tenant’s occupation of the premises is merely $10,000 per annum (which translates to $192.30 weekly rent), the law does not look at the adequacy of the consideration, only its sufficiency. I consider that there is sufficient consideration even though objectively, $192.30 weekly rent for such a property is well below market rent.
- On finding that there is a residential tenancy in place, I accept Mrs Yang’s evidence that the tenancy relationship is between her and the tenant rather than her children.
- Tenant, in relation to any residential premises that are the subject of a tenancy agreement, is defined under section 2(1) RTA to mean the grantee of a tenancy of the premises under the agreement.
- The fact that Mrs Yang has permitted the tenant’s children to reside with the tenant does not derogate from The tenant being the sole legal grantee of the tenancy of the premises. The written tenancy agreement drawn up by the parties confirm that the landlord is Mrs Yang and the tenant being the tenant.
- Accordingly, this determination will refer to Mrs Yang as landlord and to Ms PC as tenant.
- I now address the last issue on jurisdiction as to whether the residential tenancy between Mrs Yang and the tenant is excluded under section 5(1)(n) RTA.
- Section 5(1)(n) RTA states the RTA does not apply “where the premises, not being a boarding house, continue to be used, during the tenancy, principally as a place of residence by the landlord or the owner of the premises or by any member of the landlord’s or owner’s family.”
- Section 77(1) Residential Tenancies Act 1986 (RTA) provides that the Tribunal has jurisdiction to hear claims between landlords and tenants relating to any tenancy to which the Act applies. Section 4 RTA provides that the Act applies to every tenancy for residential purposes except as specifically provided.
- Section 10 RTA provides that, where a party to proceedings contends the RTA does not apply, they must establish the facts supporting their contention. In other words, the landlord has the burden of proving the RTA does not apply to the living arrangement involving the tenant.
- When determining whether the RTA is excluded, the Tribunal considers the substance of the agreement between the parties rather than the labels they have applied. The Tribunal looks behind labels to establish the true nature of the living situation.
- In Musson v Dobrisek & Ors DC Lower Hutt CIV-2006-032-36, the District Court considered tenancy premises where the owner lived in one bedroom and rented the other eight bedrooms out to people. Everyone shared the use of the kitchen, lounge and bathroom, known as the “common areas.” The District Court held that the relevant question in cases where the landlord lives at the property they also rent out, is whether the principal use of the premises is as a place of residence by the landlord.
- At [41] the Court held: I consider that this interpretation reflects what I perceive to be the policy objectives of the Act. Relevantly, it is intended to govern landlord/tenant relationships which are primarily commercial. Section 5(n) appears to me intended to cover the situation of the owner or tenant of a house letting out a bedroom or bedsitting room to a tenant or sub- tenant while the principal use of the house remains accommodation for the landlord and the landlord’s family. On this reading, the exception could only apply to small scale and limited letting, because the principal use of the property would have to be as a residence for the landlord and the landlord could have only one or perhaps two properties which could be so described.
- Here, Mrs Yang and her family only visited and stayed at the premises 3 times over the period of over 10 years, on short stays ranging from a few days to a couple of weeks. Mrs Yang resides in Taiwan with her family. While the principal use of the premises at East Tamaki Heights may be as a place of residence for the landlord whenever they are in New Zealand, the principal use of the premises is as a place of residence by the tenant and her children rather than by the landlord. Mrs Yang reserved a room at the premises which was not to be used by the tenant and her children.
- Judging from the very low level of rent charged, I accept that the landlord/tenant relationship between the parties are not primarily commercial. It is clear to me that Mrs Yang had allowed the tenant and her children to reside there at the time (and continues to do so) as an act of kindness and generosity to the tenant who had just separated from her husband at the time. I also conjecture that Mrs Yang wanted someone trustworthy to house-sit their home in New Zealand while they are mostly away from New Zealand and by chance both Mrs Yang and the tenant hail from Taiwan which would account for the trust that Mrs Yang had on the tenant and her children.
- Based on those factors, and applying Musson, I find that Mrs Yang’s principal use of the premises was not as a place of residence for herself and her family at all. It would make nonsense of the exclusion set out under section 5(1)(n) RTA that the meaning of the word ‘place’ is directed and limited to New Zealand only as submitted by counsel for Mrs Yang.
- I adopt a wide and global meaning to the word ‘place’ which includes Mrs Yang’s actual place of residence in Taiwan. As held by the Court at [42] in Musson, consideration of the duration of the landlord’s occupancy in the premises, in some cases, may assist in deciding whether the principal use is as a residence for the landlord. I consider this to be such a case.
- Mrs Yang and her family’s occupation of the premises in New Zealand for only 3 times for short stays of no more than a couple of weeks each time over the period of over 10 years point clearly and definitively to the East Tamaki Heights premises not being used as the principal place of residence for the landlord.
- For those reasons, I find that the parties’ residential tenancy is not excluded under section 5(1)(n) RTA.
- Having determined that the parties’ residential tenancy is within the Tribunal’s jurisdiction, I now address the tenant’s claims. Refund of rent in advance
- The parties entered into a written tenancy agreement on 9 November 2013. The agreement written in Taiwanese Chinese had been adopted from a standard Taiwanese deed of lease whereby the annual rent is expressed to be paid on 1 December 2013 and in New Taiwan Dollars of $10,000.
- While the rent had been expressed in New Taiwan Dollars (‘NTD’), the tenant paid NZD$10,000 in December 2013 and every year thereafter. I consider that the parties had always intended for the consideration to be in NZD rather than NTD. This understanding was supported by the tenant making payments in NZD$10,000 rather than its NZD equivalent of NTD$10,000.
- The agreement was expressed to be for a fixed term of 2 years. After that, the tenancy became periodic, given the tenant’s continued occupation at the premises until this day, for over 10 years now, paying rent of $10,000 each year, except for 2014 when the tenant accidentally overpaid the rent by $100.
- The most recent annual rent paid by the tenant of $10,000 on 1 December 2023 pays the rent to 30 November 2024.
- While the tenant was happy to pay rent annually in advance in the past, the tenant currently seeks the return of overpaid rent under the RTA. This was after the landlord had attempted serve termination notices to the tenant.
- Under section 23 RTA, a landlord shall not require the payment of any rent more than 2 weeks in advance. Accordingly, the tenant now requires the landlord to refund rent in excess of what a landlord can lawfully require to be paid in advance under the RTA.
- The landlord agrees to the return of excess rent paid in advance of what is permitted under the RTA.
- I accede to the tenant’s claim for refund of 8 weeks’ rent totalling $1,538.40 and the $100.00 accidentally overpaid by the tenant in 2014 as set out in the table above.
- With the above 8 weeks’ rent being returned to the tenant, rent is now paid to Thursday, 3 October 2024, with the next weekly rent of $192.30 due on Friday, 4 October 2024. Quiet enjoyment, privacy and harassment
- [The tenant/s] claims the landlord has breached her and her children’s right to quiet enjoyment and privacy and harassed her and her children.
- A landlord must not interfere with the reasonable peace, comfort or privacy of the tenant in their use of the premises. See section 38(2) 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.
- 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.
- From the evidence and written communication between the parties, the longstanding tenancy relationship of the parties had been amicable until the landlord’s visit and short stay at the premises in November 2023.
- In October 2023, the landlord communicated with the tenant informing her that she will be visiting New Zealand in November 2023. The last time that the landlord stayed at the premises was in 2015, some 8 years back. Although there was another planned visit in 2018, that trip by the landlord to New Zealand did not materialise.
- Perusing the text messages between the parties, there is nothing in the communication between the sole tenant and Mrs Yang which indicated that the tenant or their children would have any issues with welcoming the landlord back to the premises during their 2023 year end holiday.
- As agreed between the parties, 2 bedrooms have been reserved for the landlord for occasions in which the landlord may return to New Zealand, whereby the landlord would occupy those bedrooms and also share the use of the rest of the common areas such as the dining room, kitchen, living areas, lounge and laundry. This arrangement is understandable given the very low rent that the landlord had charged the tenant throughout the tenancy.
- I take judicial notice of market rent for a 5+ bedroom house in East Tamaki Heights of $950, with rents on the upper quartile of $1,175 per week. When considering the house as a 4 bedroom property (plus study), the current median rent is $855 with rents on the upper quartile of $898. This house has 3 bathrooms, 2 living areas and an internal double garage. This based on data from Tenancy Services: https://www.tenancy.govt.nz/rent-bond-and-bills/market- rent/?location=Auckland+-+East+Tamaki+Heights&period=17&action_doSearchValues=Find+Rent
- Whichever way one describes the premises, the contrast between market rent (of over $800) and rent actually charged (of under $200) over the 10 years must be taken into account when considering the parties’ arrangement regarding the landlord’s occupation of the premises whenever she is in New Zealand. Viewed in that context, the tenant’s complaints that the landlord has breached her (and her children’s) quiet enjoyment when the landlord occupied the premises during their visit to New Zealand in November 2023 must fail.
- That said, I accept the tenant’s evidence that the landlord had breached the tenant’s privacy when they rummaged through the tenant’s personal belongings while staying at the premises. The tenant is entitled to instal and keep video recordings in the premises as the tenant is entitled to quiet enjoyment of the premises during the tenancy. I reject the landlord’s submission that the tenant has engaged in any untoward activity when the tenant installed and operated CCTV recordings there without notifying the landlord.
- Regardless of the landlord’s thinking that she is merely in her own “home” while going through the tenant’s personal items as shown on the CCTV recordings, I consider that the landlord ought to have realised that she and her guests were rummaging the tenant’s belongings and such behaviour is unacceptable as they were dealing with personal items belonging to other people. I consider that the tenant’s privacy has been breached in the circumstances and I award compensation for the encroachment in the sum of $800.00. I consider this award sufficient to address the nature and extent of the breach.
- I do not consider however that the landlord has interfered with the reasonable peace, comfort or privacy of the tenant in their use of the premises in circumstances that amount to harassment. Consequently, I make no further award of exemplary damages on the landlord’s breach of the tenant’s privacy set out above. Tenant’s claims under section 45 RTA
- Generally, a landlord is responsibly for maintaining the premises under section 45 RTA.
- However, I dismiss the tenant’s claims for reimbursement of items maintained by the tenant and under the Healthy Homes Act during the tenancy for the following reasons.
- I find that the majority of the items expended by the tenant has not been notified to the landlord at the material time of the expenditure being incurred.
- Even if the expenditure is justified, regard must be had on the rent charged by the landlord during the 10 year tenancy. Substantial merits and justice of the case demand that Mrs Yang’s kindness and generosity on letting the tenant and her children reside at the premises at such a nominal amount of rent for over a decade be taken into account when considering the tenant’s claims under section 45 RTA.
- The tenant’s claim for reimbursement of expenditure is just shy of $20,000. Taking a conservative market rent of $40,000 for each year of the tenancy, the tenant in this case has saved more than $30,000 each year when she paid annual rent of just $10,000. View in that context, the tenant has had the benefit and financial savings of over $300,000 in rent over the ten year period which amount far surpasses the tenant’s claim for reimbursement of $20,000!
- I hasten to add that had the tenant voiced her concerns about lack of maintenance and demanded that the landlord carries out their responsibility strictly under section 45 RTA early on during the tenancy, this would inevitably lead the landlord to reconsider her generosity in respect of the low level of rent charged. This would no doubt resulted in the landlord then paying for the repairs herself and then understandably increasing the rent charged to an amount that is closer to market rent. That has never occurred and so the tenant’s current claims must fail as to order reimbursement of costs under the circumstances would in my view result in significant injustice.
- Finally, I note that both parties have made a number of gratuitous submissions about each other’s conduct, motives and perceived wealth and financial wellbeing. I have not addressed those submissions as I do not consider them relevant to the claims before me.
- There remains a residential tenancy that falls under the purview of the RTA between the parties which require adjudication based on the general principles of law as well as application of substantial merits and justice of the case under section 85 RTA. Beyond that, it is unhelpful to second guess each other’s motives and the submission by the landlord that she has been taken advantage of by the tenant over the years is rejected.
- Now that the parties’ rights and responsibilities have been clarified above, they are at liberty to look to the RTA to enforce them by serving relevant notices to fix, notice to terminate the tenancy (under permitted grounds under the RTA) and for the landlord increase the rent under the RTA accordingly if she sees fit. But the steps to be taken by the parties ahead do not erase the past arrangement and goodwill held between the parties prior to the fateful November 2023 visit by the landlord. Conclusion
- In the upshot, only the amounts ordered in the table above are proved.
- Because [The applicant/s] has partly succeeded with the claim I have reimbursed the filing fee as well as ordered the suppression of her name from publication.