Published tribunal order
Tenancy Tribunal case 4802938 — Rent arrears at [The Premises]
Decided 31 Jul 2024 · Published 31 Jul 2024 · Application 4802938
- Rent arrears
- Exemplary damages
Party names are redacted in the official published order.
Order
- An application for suppression has been made in this case, and the Tribunal orders suppression of the tenant’s name and identifying details.
- Sheree Elizabeth Taylor and Stephen Bruce Taylor must pay [The Tenant] $2,320.00 immediately, calculated as shown in the table below.
- The parties’ claims are otherwise dismissed.
Reasons
- All parties attended the hearing on 24 May 2024 in person.
- There are seven applications referred to above. I am concerned mainly with the five most recent applications between the parties. There are two earlier applications that I will refer to below as part of the background.
- The claims that I must determine in this order are the landlords’ claims for rent, compensation relating to the condition of the premises when the landlords took possession of them from the tenant and exemplary damages for the tenant’s alleged refusal to allow inspections and repairs.
- The tenant’s claims are for compensation and exemplary damages for interference with services, interference with her quiet enjoyment of the premises and damage to and loss of her goods after the landlords took back possession of the premises. Background
- I refer to the orders that have been made previously on these applications and so this background will be brief.
- Mr and Mrs Drake (the Drakes) granted a tenancy of the premises to the tenant in December 2021. The premises are a self-contained dwelling a short distance from the main house occupied by the landlords. The property is in a rural location.
- The premises were a commercial building previously used for honey processing. They were converted to residential use without the necessary consents and, from the time that they were rented, they were unlawful residential premises as defined in s78A of the Residential Tenancies Act 1986 (the Act). The Drakes were aware of that when they rented them to the tenant.
- In 2023, the Drakes decided that they wanted to sell the property. At no time did they serve a termination notice on the tenant based on a sale of the premises. They found a buyer for the property in Mr and Mrs Taylor (the landlords) in May 2023. On 24 May they (the Drakes) served a 63-day termination notice on the tenant based on their daughter’s intention to occupy the premises. The notice expired on 26 July, shortly before the settlement date agreed between the Drakes and the landlords of 2 August.
- The Drakes and the landlords have maintained that they came to an agreement and intended that the Drakes’ daughter would become the landlords’ tenant of the premises when the sale settled, and the termination notice had expired. I note here that the landlords were also aware that the premises could not lawfully be occupied by a tenant as residential premises.
- The tenant disputed the validity of the termination notice and refused to vacate the premises when the notice expired. The Taylors moved into the main house when the sale settled and proceeded to make life difficult for the tenant. They cut off the water and power to the premises.
- After a time, the tenant found somewhere to move to, but had not given notice to the landlords to terminate the tenancy. She began moving some of her belongings out of the premises. On 28 October the landlords took possession of the premises and excluded the tenant from them.
- When the landlords took possession, some of the tenant’s belongings were in the premises and in a container belonging to the landlords nearby the premises. Difficulties over how and when they were to be returned to the tenant ensued.
- I will turn now to the applications in the order that were made. Applications and Orders 4625650 and 4640871
- These were the Drakes and the landlords’ application for possession of the premises based on the termination notice and the tenant’s application to declare the notice invalid. The Tribunal issued an order on 7 September 2023 finding the notice to be invalid. The principal reason for that decision was that by the time the agreement for sale became unconditional, and certainly by the time of settlement, it was no longer the case that a member of the landlords’ family intended occupying the premises. The Drakes’ daughter is not a member of the landlords’ family.
- As well, I did not accept that the Drakes’ daughter intended occupying the premises and becoming the landlords’ tenant. It was more likely that one or both of the parties to the sale agreement wanted an early settlement and so it was decided to serve a 63 day notice instead of the usual 90-day notice. The tenancy to the Drakes’ daughter was contrived to justify the notice.
- The Tribunal issued another order on 10 November awarding the landlord exemplary damages for the tenant’s failure to allow an inspection and for power charges and ordering the Drakes to pay compensation, exemplary damages and to repay some rent.
- There was no order on the tenant’s claims against the landlords because they had another application against the tenant and the tenant had another application against them. It was sensible to hear all those claims at one time.
- I note here that the tenant’s application disputing the Drakes’ termination notice was filed on 27 July 2023 and the notice of hearing was sent to the parties (including the landlords) on 9 August. The landlords were therefore aware, from that time at the latest, and likely before then, that the tenant disputed the termination notice. 4698390 and 4706669
- The landlords’ application was filed after the Tribunal’s order deciding that the Drakes’ termination notice was invalid. It claimed rent arrears and compensation for loss of earnings and legal expenses.
- The tenant’s application claimed compensation and exemplary damages for interference with her quiet enjoyment of the premises, among other things.
- The Tribunal’s order issued on 21 November, the date of the hearing, dismissing the parties’ claims and declareing that the tenancy was terminated by surrender when the landlords took possession of the premises.
- The tenant did not attend the hearing. She applied for an adjournment shortly before the hearing and it was refused.
- The tenant subsequently applied for a rehearing which was granted. The landlords were also granted a rehearing.
- The rehearing hearing took place on 27 May, at the same time as the parties’ later applications which I describe next. It follows that I must consider and determine these two applications as well as the later applications. 4760798, 4802938 and 4854620
- These applications were filed after the hearing on 21 November.
- Application 4760798 is the tenant’s application for access to her belongings left at the premises, compensation for breach of the landlords’ obligations in respect of those belongings and exemplary damages for unlawful eviction.
- Application 4802938 is the landlords’ application for compensation for damage to the premises, cleaning, garden work, loss of earnings and legal expenses.
- Application 4854620 is another landlords’ application for rent arrears, compensation for damage (more detail is provided), storage costs and exemplary damages for the tenant’s refusal to allow entry to the premises to enable the landlords to repair the shower. The cost of repairing the shower in the sum of $4,426.27 is not claimed.
- I therefore have five applications to consider and determine although there is some overlap between them. Overview
- I will deal first with the rehearing of the landlord’s application 4698390.
- Under the landlord’s application 4698390, the bond has been paid to the tenant and so nothing can be done about that. In any case, given the overall result of these applications, the order was correct.
- Having now heard from the tenant on the issue of termination, I have made a different order from the one I made in my original order. I note that my original order required a liberal interpretation of what can constitute a surrender of a tenancy. After hearing from the tenant, I am satisfied that there was no surrender.
- I said in my order that if I had not found that there had been a surrender, I would have ordered termination for rent arrears. That, of course, is not a given because the premises are unlawful residential premises (unlawful premises) and the Tribunal may disallow a claim for rent arrears in those circumstances. The indication that I gave must also be subject to the tenant’s claims because any money award under those claims must be set off against any arrears. Given the overall result, plainly I would not have ordered termination.
- I dismissed the landlords’ claims for legal expenses and loss of earnings. There is no reason to revisit that order. There is no legal basis for awarding those to the landlord. The Act does not allow it. The only possible ground is that the tenant did not attend the hearing. In granting her rehearing, I have found that she had a reasonable excuse for that and so that ground does not apply.
- As well, the overall result of these cases favours the tenant and in those circumstances an award of costs or expenses to the landlord would not be appropriate.
- The rehearing of the tenant’s application is dealt with separately.
- In her application, the tenant claims her bond and work orders. There is now no need for orders in relation to those. Termination
- After hearing and considering all the evidence provided in relation to the landlords’ taking possession of the premises, I have decided that the tenant did not surrender the tenancy to them. No one served a termination notice and the Tribunal did not order termination and so the only possible way that the tenancy could have been terminated in the circumstances of this case is by surrender of the tenancy by the tenant.
- A surrender can either be by the express agreement of the parties or implied from the acts or words of the parties. There was no express agreement, so the only possibility is an implied surrender.
- The tenant was in the process of moving her belongings out of the premises. The landlords could see that, and they had heard from third parties that the tenant had taken a tenancy of another property. The tenant appeared to have moved her beds out of the premises and was not staying overnight there. The landlords therefore assumed that she had vacated, and they took possession by changing the locks on 28 October.
- The tenant disputed some of the landlords’ evidence and made the point that she had not, either expressly or impliedly, conferred authority on anyone to speak for her. Therefore, the landlords were not entitled to rely on what they were told by any third party about the tenant’s circumstances or intentions.
- I note here that the tenant has provided a copy of the tenancy agreement for her current tenancy and some surrounding documentation. These have not been provided to the landlords for privacy reasons. The documents show that the tenant’s current tenancy began on 23 October. Therefore, the information that the landlords claimed to have received from third parties concerning the tenant’s new tenancy was wrong. The new tenancy had begun, but not weeks earlier as the landlords said they were told.
- I do not need to examine and discuss the evidence in detail because even on the landlords’ evidence, there was no implied surrender of the tenancy by the tenant. She was in the process of moving out, but that does not constitute an implied surrender. She had not handed the keys to or left the keys for the landlords. She still had some belongings in the premises and in the container on the property.
- The landlords may have believed that she had moved out or abandoned the premises, although I don’t accept that objectively they were entitled to assume that, but there is a process in the case of a suspected abandonment, and it requires an application to the Tribunal. There was no application. The landlords decided to take the risk and act as though the tenant had abandoned the premises.
- Apart from that, the obvious thing for anyone in the landlords’ position to have done was to contact the tenant and ask her if she had vacated the premises. They did not do that or make any attempt to do that. If they had done that, the tenant would certainly have told them that she was still in the process of moving out.
- It follows that the landlords took possession of the premises during the tenancy without justification. The Landlords’ Claims Rent
- The Act states that where the premises are unlawful residential premises, as they are in this case, the Tribunal must not award rent arrears to the landlord unless it is unjust not to so.
- The premises had been converted for residential use and the evidence suggests that they were reasonably suitable for that use. The tenant was, in the main, comfortable living there. She has questioned whether the premises met the insulation requirements and raised some maintenance issues which she says resulted in dampness. There is no evidence that the premises did not meet insulation requirements.
- When a tenant becomes aware that the premises are unlawful for residential occupation by them, they have the choice to remain living in them or to leave. If they choose to leave, they need give the landlord only two days notice. The Tribunal may terminate the tenancy for rent arrears, but it does not have to. What the tenant should not be permitted to do, in my view, is remain living in the premises indefinitely without paying rent.
- The tenant was aware that the premises were unlawful from about June 2023. She was still in possession on 28 October when the landlords evicted her. Her current tenancy began on 23 October.
- My approach, after considering the relevant factors, is to allow a reasonable time for the tenant to find other accommodation and after that time to expect her to pay rent. It is important to note that the issue of rent is distinct from the claims that the tenant makes about how the landlords’ behaved towards her. Those claims have resulted in awards against the landlords and the awards to each of the parties are set off against each other.
- I find that a reasonable time to find other accommodation was by mid- September. I note that if the tenant had been given a 90-day termination notice, it would have expired on 22 August. But the tenant was put in difficulty by the landlords’ actions and that made looking for other accommodation problematic. Therefore, rent should be paid from 16 September and so I have awarded six weeks rent arrears in the sum of $3,000. Loss of Earnings and Legal and Other Expenses
- There is no basis for awarding any of these claims. They relate to the conduct of this litigation and the tenant has been the more successful party. These types of costs would usually only be awarded to a party who was substantially successful. Legal costs would be awarded only when a party was represented by counsel. The landlords represented themselves in this case. These claims are therefore dismissed. End of Tenancy Claims
- These claims relate to the condition that the premises were left in when the landlords took possession and include cleaning and, at least to some extent, repairs. I have found that the tenancy was not lawfully terminated when the landlords’ evicted the tenant. The tenant was entitled to remain in possession of the premises until the tenancy was lawfully terminated. In this case, that means either by notice given by the tenant or by an order of the Tribunal. By evicting the tenant, the landlords denied her the opportunity to comply with her end-of- tenancy obligations. For that reason alone, the claims for cleaning and garden work must be dismissed.
- The tenant must not carelessly or intentionally damage the premises. The landlord must prove that damage occurred during the tenancy. If they can do that, the tenant must prove that the damage was not their responsibility.
- The tenant denied responsibility for damage to the cat door, and I accept her explanation for how the damage happened. A foreign cat forced its way through it and broke the door. Plainly that was not the tenant’s responsibility.
- She also denied responsibility for carpet damage, and I accept her evidence that carpet damage occurred due the shower leaking, and she had reported the problem to the Drakes. They promised to fix the problem but because they the decided to sell the property, they did not do so. The carpet damage was not the result of the tenant’s carelessness and therefore she is not responsible for it.
- The landlords claim the cost of supplying and installing and new vanity but again the evidence does not support a finding that it was damaged due to the tenant’s carelessness.
- Overarching all these claims is the tenant’s claim that all these issues arose when the Drakes were her landlord. The tenant’s evidence was that she reported them to the Drakes and there is no evidence to refute that. There was no inspection of the premises when the landlords took over. The landlords did not accept that the tenant was lawfully in occupation, and they treated her as a trespasser. Therefore, the landlords lack the evidence to prove that the tenant was responsible for the damage.
- In any case the landlords did not provide enough evidence to prove that the claimed damage occurred during the tenancy or that the damage was of such a nature and extent that the costs claimed were reasonable. Storage
- The landlords claim storage costs. This relates to the tenant’s belongings remaining at the premises, mainly in the container, after the landlords evicted her. I have found that the landlords unlawfully evicted the tenant and then failed to comply with their obligations in relation to the tenant’s belongings left at the premises. It follows that they cannot claim that she left goods at the premises which they then had to store for her. If the landlords had acted lawfully, the tenant would have had time to remove her belongings before the tenancy ended.
- The other reason why this claim must fail is that the landlords have not incurred any storage costs. The goods were stored at the property in the landlords’ container. There is no evidence that the landlords have incurred costs or lost the opportunity of receiving storage costs if the container did not contain the tenant’s goods. This claim is therefore dismissed. Inspections
- Where the landlord has given the tenant a lawful notice requiring an inspection of the premises, the tenant must allow the inspection. Failure to do so without reasonable excuse is an unlawful act for which exemplary damages of up to $1,500 may be awarded.
- 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 landlords claim exemplary damages for the tenant’s refusal to allow inspections. For this claim to succeed the landlords must have served the requisite notice or notices on the tenant informing her that an inspection was to take place.
- The evidence shows that the landlord did give the tenant valid notices of inspection and the tenant refused to allow any inspection.
- At the time, the tenant felt vulnerable due to the landlords’ behaviour towards her. I accept that her feelings were genuine and understandable. But I do not accept that they provided the tenant with a reasonable excuse for refusing an inspection.
- The landlord’s right to inspect the premises is important and the Tribunal should not lightly find that a refusal to allow an inspection is reasonable. As I have found below, the landlords were acting unlawfully. But as I often have to say both landlords and tenants, two wrongs don’t make a right. A party must comply with their obligations even when the other party is in breach of theirs.
- I find that the tenant should have allowed an inspection. She did not have to be present for it but if she wanted to be and she felt intimidated, she could have arranged for someone else to be present.
- The tenant’s refusal was obviously intentional, and I find that it was an unlawful act. I have awarded exemplary damages in the same amount that I awarded previously to the Drakes, namely $1,000.
- I note that the landlords have suggested that the tenant refused to allow repairs to the premises. But I take that as being an alleged consequence of the refusal to allow an inspection. There was no notice requiring access for repairs. Locks
- Neither the landlord nor the tenant may alter or remove any locks without the other party's consent.
- Breaching this obligation is an unlawful act for which exemplary damages may be awarded up to a maximum of $1,500.00.
- The tenant put a chain and padlock on a gate to the premises at a time when she felt, with justification, intimidated by the landlords. The landlords took a bolt cutter to the chain and removed it.
- Whilst putting the chain and padlock on the gate was a breach of the Act, it was understandable in the circumstances of this case. As well, it did not prevent the landlords from gaining access to the premises. I find, therefore, that there is no justification for making an award of exemplary damages against the tenant for the breach. Tenant’s Claims Interference with Services
- A landlord must not interfere with the supply of water, gas, electricity, telephone of other service to the premises, except where the interference is necessary to avoid danger to any person or to enable maintenance or repairs to be carried out.
- Breaching this obligation is an unlawful act for which exemplary damages may be awarded up to a maximum of $1,800.00.
- Shortly after the landlords moved into the main house, they cut off the water and power to the premises. They admit cutting off the water but not that they cut off the power. After considering the evidence, I am satisfied that they did cut off the power.
- They have said that they did so because they were concerned about the electrical safety of the premises, the risk of fire and the effect of the tenant’s refusal to allow an inspection on their insurance. I don’t accept that there was any justification for cutting off these services. There was no evidence of any risk to the premises and insurers generally require inspections to be carried out at least every three months. I am satisfied that the landlords cut off the services to drive the tenant out of the premises.
- There is an issue concerning how long the water remained cut off. It was restored after the Tribunal’s order on 7 September 2023. After considering the communications between the parties I am satisfied that the landlords cut off the water for three weeks. The power was off intermittently. The evidence suggests that it was off for a few days in total.
- The landlords said that they believed that the tenancy had been ended by the Drakes’ termination notice. Whilst I accept that there was a genuine argument about whether the notice was valid, that provides very little mitigation for the landlords. They were aware that the tenant disputed the notice and therefore they were aware that the Tribunal might declare the notice to be invalid. The obvious and sensible thing to do was to wait until the Tribunal decided the issue before acting as though there was no tenancy.
- I note as well that, according to the landlords, they were expecting to have a tenant in the premises after they completed the purchase of the property. It is striking that they then immediately took such strong exception to having a tenant who had been in the premises for over eighteen months, largely without any problem. I am bemused by the landlords’ decision not to treat the tenant as the tenant and allow the Tribunal to determine any issues between the parties.
- Without running water, life in the premises became very inconvenient and unpleasant for the tenant and her son. The landlords intentionally deprived the tenant of on one the most needed services in their own interests. There could hardly be a clearer case for an award of exemplary damages.
- A substantial award towards the upper end of the scale is required and I have awarded $1,200.
- The tenant is also entitled to compensation. She had to buy bottled water and she had to travel to public baths to shower. Without electricity she couldn’t cook food in the premises, and she had to buy takeaway food.
- She is also entitled to general compensation for the inconvenience, upset and stress that the situation caused to her and her son.
- The tenant has provided some evidence of the expenses she incurred due to the loss of the services and based on that I find that it amounts to $40 per day. I find that compensation for the additional expense should be $1,120. In addition, I award $1000 compensation for the inconvenience and upset making a total of $2,120. Quiet Enjoyment
- A landlord must not interfere with the reasonable peace, comfort or privacy of the tenant in their use of the premises.
- 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.
- 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".
- There can be no doubt that the landlords interfered with the tenant’s quiet enjoyment of the premises and that it amounted to harassment. Theirs was a sustained exercise in making the tenant’s life in the premises difficult and unpleasant. They did so in the fundamental way by unlawfully evicting her. They did so in other ways as well.
- For example, they accept that they shut the tenant out from bringing her car onto the property. She had to leave it out on the road. They said that the tenant drove too fast on the driveway which the tenant denied. In any case there is no evidence that the landlords gave the tenant any warning. They did not, for example, serve her with a breach notice.
- The tenant’s claims are consistent with the landlords’ avowal that the tenant had no right to be living in the premises. In one of the landlords’ applications, they state about the tenant – “You are not a legal tenant, a legal tenant pays the rent on time.” They go on to lay out a tenant’s other obligations. They appear to be oblivious to the fact that whether a party complies with their obligations does not determine whether they are a party to a tenancy. They also conveniently ignore their own serious misconduct. So much of this very unpleasant business could have been avoided if they had merely treated the tenant with some respect.
- The tenant made other claims about the landlords’ behaviour towards her. She claimed that the landlords had set their children against her, and the children and their friends harassed her and her son at the landlords’ behest. That is an extreme claim and if it were to be true, would put reflect extremely badly on the landlords. The other explanation is that this was children being annoying without encouragement. The evidence was not there to prove the tenant’s allegation.
- The tenant made other specific allegations about the landlords’ conduct. There is no need to go into detail. It is enough to say that the landlords set out to make life for the tenant in the premises unpleasant and they succeeded.
- In my view there should be an award of exemplary damages. The landlords’ actions were intentional, and they were designed to make life difficult for the tenant with the aim of forcing her to vacate the premises. To the extent that the landlords believed that they were justified because the tenant was not paying rent or for any other perceived breach of her obligations, they were wrong.
- Wrongfully evicting a tenant is one of the most serious examples of interfering with a tenant’s quiet enjoyment. In this case the effect was mitigated because the tenant already had somewhere else to live and had partially moved her belongings there. Other acts in this case made the tenant’s life stressful and unpleasant. The landlords had made an application for termination, and they should have waited for that to be decided before acting as though the tenant was a trespasser.
- There can be no doubt that the landlords’ action amounted to harassment. They were intentional, repeated and prolonged.
- For the acts I have found to be proved, a substantial award is appropriate, and I award $2,000. I have taken the effect on the tenant into consideration in making that award and so there is no need for a separate award of compensation. Wrongful Entry
- The tenant claims that the landlord has entered the premises without consent or notice.
- A landlord may not enter the premises during the tenancy except with the tenant's consent, in an emergency, or after giving the required notice for inspections and repairs and maintenance.
- The evidence did not satisfy me that the landlords entered the premises unlawfully (apart of course from when they took possession) or, if there was any unlawful entry, that there should be an award of exemplary damages. The Tenant’s Belongings
- The difficulties concerning the return of the tenant’s belongings to her began with the landlords’ unlawful eviction of the tenant. In the aftermath, there was fault on both sides in my view. Both sides attempted to impose unreasonable conditions on the other for the collection or delivery of the goods. It took an order of the Tribunal to resolve the situation. The landlords, at one stage, required the tenant to pay their legal costs before releasing her goods to her. That was wholly unreasonable and unlawful.
- There is no unlawful act for the landlord’s failure to comply with their obligations in relation to the tenant’s belongings and so there can be no award of exemplary damages.
- The tenant claims compensation for loss of and damage to some of her belongings and because she had to replace some of her belongings after being evicted which she would not have to do had she been able to retrieve them.
- After considering the evidence I can accept that there was some damage to the tenant’s goods when the landlords moved them to the container, but the evidence did not prove that it was serious or extensive. The tenant’s photographs show that her goods were not all loaded into the container carefully.
- I also accept that the tenant was put to inconvenience, expense and upset because she was not able to move her goods from the premises into her new accommodation in an orderly and timely fashion. That said, the tenant has the items that she bought and so an award of the cost of those items is not justified.
- I directed the tenant to file a list of the items she that claims for with details of their cost and value, but she has not done so. I must therefore make my own assessment of compensation based on the evidence. Including the visible damage and the inconvenience and added expense an award of $1,000 is appropriate. Other Claims
- Both sides have made claims which are outside the Tribunal’s jurisdiction and for that reason no order can be made in relation to them. They include claims of defamation and breach of privacy not directly connected to the tenant’s use of the premises. The landlords made claims concerning the tenant’s behaviour towards them in circumstances where, even if the allegations were true, there is no obligation on the tenant, under the law of landlord and tenant, that could ground such a claim. For example, the Act provides a remedy for the tenant if the landlord harasses the tenant but not vice versa.
- The tenant would like access to the property to retrieve the remains of her dog which are buried there. This Tribunal cannot make any order in relation to that. The remains are not goods under the Act, and they are now part of the land. It is up to the landlords to decide whether to allow the tenant access to remove the dog’s remains out of compassion for her and her son.
- I note as well that I cannot consider claims (or evidence) raised or provided after the hearing. Filing Fees
- The parties have had mixed success and so I make no award of filing fees. Suppression
- The tenant has had substantial success and in all the circumstances her application for name suppression should be granted.