Published tribunal order
Tenancy Tribunal case 4858862 — Exemplary damages at 104 Munroe Street, Napier South, Napier 4110
Decided 2 Aug 2024 · Published 2 Aug 2024 · Application 4858862
- Exemplary damages
- Property damage
Party names are redacted in the official published order.
Order
- The Tribunal orders suppression of the tenant’s name and identifying details
- Regent Realty Limited Courtney Mason must pay [The tenant/s] $5,130.44 immediately as set out in the table below.
Reasons
- Both parties attended the hearing.
- The applications name the respondents as Regent Realty Limited and Courtney Mason, a property manager employed by Regent Realty Limited.
- The agreement names Susie Gorodi as the landlord and identifies Regent Realty Limited as the landlord’s agent.
- It seems clear that at all times Ms Mason was acting in her capacity as employee of Regent Realty Limited, as agent for Ms Gorodi.
- The appropriate respondents to this application are accordingly the landlord Ms Gorodi and Regent Realty Limited her agent (together described as “landlord” for the purposes of this Order), not Ms Mason personally. The Proceedings 6These proceedings involve 5 applications filed by [the tenant].
- The applications claim that the landlord breached its obligations to him by: a. Breaching his right to quiet enjoyment of the premises in circumstances that amounted to harassment; b. Failing to meet its obligation to ensure the premises were compliant with Healthy Homes standards; c. Failing to meet its obligation to maintain the premises in a reasonable state of repair; d. Potentially exposing him to harm from asbestos. Harassment
- Sections 38(1) to (3) RTA provide that: “(1) The tenant shall be entitled to have quiet enjoyment of the premises without interruption by the landlord or any person claiming by, through, or under the landlord or having superior title to that of the landlord. (2) The landlord shall not cause or permit any interference with the reasonable peace, comfort, or privacy of the tenant in the use of the premises by the tenant. (3) Contravention of subsection (2) in circumstances that amount to harassment of the tenant is hereby declared to be an unlawful act.” Exemplary damages of up to $3,000.00 may be awarded (s.38(3) and Schedule 1A RTA).
- The tenant claims that he was harassed by the landlord: a. putting undue pressure on him to release his former partner from her obligations under the tenancy agreement; b. taking an unreasonably critical approach to its expectations of him about how the premises were kept.
- A periodic tenancy agreement was signed on 27 July 2021.
- The tenants are named as [Tenant 1] and [Tenant 2]. Both [Tenant 1] and [Tenant 2]signed the agreement.
- The relationship between [Tenant 1] and [Tenant 2] ended.
- [Tenant 2] contacted the property manager, Ms Mason, on 14 November 2022 to advise that she had moved out of the premises effective 12 November 2022. She requested that her name be taken off the agreement. [Tenant 1] was copied into that communication.
- Ms Mason contacted [Tenant 1] about having a variation signed to remove [Tenant 2] from the agreement. A variation document was prepared and signed by she and [Tenant 2] on 17 January 2023.
- The variation document was signed by [Tenant 1] on 2 May 2023.
- [Tenant 1] alleges that until the agreement was signed by him, he was wrongly pressured by the landlord to sign the variation, in circumstances where he was unsure whether it was appropriate, or in his interests, that he take full liability for the tenancy.
- On this issue I heard evidence from [Tenant 1], from Ms Mason and from Ms Taylor, a senior property manager for Regent Realty who became involved when it was clear the relationship between [Tenant 1] and Ms Mason was becoming strained.
- Much of the parties’ communication is in writing. I need not traverse those communications in detail. Having considered that evidence and heard oral evince from those involved, my findings are that: a. it was appropriate for Ms Mason to pass on to [Tenant 1], [Tenant 2] request to be released from the agreement; b. the landlord had an agreement with [Tenant 1] and[Tenant 2], as tenants with joint and several liability. [Tenant 2]’s decision to vacate the premises did not alter that position; c. there was no obligation on [Tenant 1] to agree to that variation, which would leave him solely responsible for obligations that he and [Tenant 2] had taken on jointly; d. the landlord took a position in supporting [Tenant 2]’s request, that was inappropriate, given that the issue was one between [Tenant 1] and [Tenant 2] as joint tenants, not an issue between the landlord and the tenants; e. that position is illustrated by a series of communications from the landlord, including: “At this stage [Tenant 2] is still on the tenancy, as we are awaiting your signature on the variation document. This was emailed to you, [Tenant 2] and [Ms Mason] have both signed. Please sign the document urgently so we can get it all tidied up.” “Please take this e-mail as confirmation that [Tenant 2] wishes to be removed from the tenancy and you must sign the variation of tenancy which has been sent to you“ “We need a response, and it would be fair to everyone if you simply signed the [variation] documents to allow [Tenant 2] to be released. Please respond to this e-mail urgently and confirm that we can send the documentation for signing to you both”
- [Tenant 1] alleges multiple other calls or attempted calls from the landlord, putting pressure on him to sign the variation. I do not find all those allegations proved. Nevertheless, the evidence satisfies me that the nature of these continuing requests/ demands from the landlord, in circumstances where it was apparent that the tenant was feeling bullied over the issue, did have a significant and negative effect on his tenancy.
- As to whether it amounted to harassment for the purposes of s.38, 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.
- I cannot view the communications between the parties as other than bringing pressure on to [Tenant 1] to achieve a particular outcome ie. having him sign the variation releasing [Tenant 2] from her obligations under the agreement. Clearly [Tenant 1] was distressed by it, describing to the property manager his feelings of being bullied over the matter.
- I do find that in the circumstances, the landlord’s continued pursuit of that outcome, which in my view was really nothing to do with the landlord, did amount to harassment and thereby constituted an unlawful act.
- 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. See section 109(3) Residential Tenancies Act 1986. In that regard I note that intention refers to performing the act itself, not an intention to act unlawfully.
- In assessing whether it would be just to make an award of exemplary damages, I take into account the landlord’s evidence, which I accept, that there was no wish to ‘bully” [Tenant 1] and that from the landlord’s perspective the intention was to “tidy up” a situation that needed to be sorted. I take into account too, evidence that later the property manager believed [Tenant 1] had indicated his agreement to signing the variation, so the follow up was simply to give effect to what the landlord believed had already been agreed. I think too that from the evidence, it is not unfair to [Tenant 1] to take into account that at the time, he was particularly sensitive to issues concerning [Tenant 2]’s decision to move out.
- I take into account too, that the variation [Tenant 1] was being pressured to sign, was not to the material advantage of the landlord.
- Weighing those considerations and adding the public interest in tenants being left free to take such decisions without improper pressure from a landlord, I conclude that the landlord acted wrongly, at the tenant’s cost, to a degree that a meaningful award of exemplary damages would be appropriate
- [Tenant 1] claims that because of the decline on the parties’ relationship over this issue, after [Tenant 2] left the landlord took an overly dogmatic approach in ensuring compliance with [Tenant 1]’s obligations with “picky” inspections and unnecessary remedy notices being given.
- While the evidence does provide instances of what seem to be very “zealous” inspections, the evidence does not establish harassment of the tenant in that respect. Healthy Homes compliance
- Under section 13(1CA) a landlord must include in the agreement a Healthy Homes compliance statement. Failure to do so or to include information that is false or misleading, are each unlawful acts for which exemplary damages may be awarded up to a maximum of $750.00 or $900.00 respectively.
- Under s.45(1) (bb), a landlord must comply with the Healthy Homes standards.
- Breaching that obligation is an unlawful act for which exemplary damages may be awarded up to a maximum of $7,200.00. See section 45(1A) and Schedule 1A Residential Tenancies Act 1986.
- The tenancy began on 30 July 2021.
- In terms of the Residential Tenancy (Healthy Homes Standards) Regulations 2019 (“HH Regulations”), the landlord was required to ensure that the premises complied with Healthy Homes Standards 90 days from that date.
- The agreement contains a Healthy Homes statement signed by the landlord confirming giving details about the premises’ compliance with Healthy Homes standards. It includes a declaration that, “....all reasonable efforts have been made to ensure this Healthy Homes statement is true and correct as at the date of signing.”
- The variation signed in May 2023 contains a standard form statement of intent to comply with Healthy Homes obligations. The purpose of that variation was simply to remove [Tenant 2] as a tenant and has no bearing on the landlord’s healthy Homes compliance obligations.
- The tenant had concerns about the difficulty in keeping the premises warm and requested that the insulation be checked. He spoke about it being so cold that often his then partner in particular, would go straight to be on getting home to keep warm.
- The landlord arranged for the insulation to be checked. On 14 August 2023 Pink Batts issued a Certificate confirming that the ceiling insulation was compliant, that walls could not be accessed and that for the underfloor insulation, “Not assessed: Underfloor was not accessible – house is extremely low so even if access as gained an install of insulation would not be possible”
- The tenant arranged for a Healthy Homes inspection to be undertaken. A report from [property inspectors] dated 20 June 2024 is in evidence. That report identifies that the premises comply with Healthy Homes standards for Heating and Ventilation.
- A “fail” is assessed for compliance with the insulation standard noting, “Underfloor where there is no existing designated access point in an otherwise accessible subfloor space, landlords are expected to create one to insulate the space so long as it does not require significant building work.”
- A “fail” is assessed for drainage and guttering noting, “drainage does not comply as drain pipes are not connected to an appropriate outfall.”
- A “fail” is assessed for absence of a sub floor moisture have barrier noting, “subfloor moisture barrier was unable to be verified as we could not inspect the subfloor. We were unable to locate an inspection hatch.”
- A “fail” is assessed for draughts because, “the dwelling does not comply with the Healthy Homes standard. There are multiple gaps exceeding 3 millimetres between the door/ window sash and the door / window frame.” Insulation
- The Pink Batts insulation assessment satisfies me that though there is no access point to the sub floor space as there should be, it would not be reasonably practicable to install underfloor insulation and there is no breach of the Healthy Home standards requirement in that respect (R.19(2) HH Regulations). Drainage and Guttering
- The evidence suggests that the deficiencies noted in the drainage and guttering do not reflect non compliance with Healthy Home standards but rather damage that was sustained during cyclone Gabrielle.
- That is a repair and maintenance rather than Healthy Homes compliance issue. The evidence does not prove a failure by the landlord to complete this necessary repair and maintenance work, after the tenant had met his obligation under section 40(1)(d) to notify the landlord of the damage that required repair.
- I do not find a breach of the landlord’s obligations proved in this respect. Moisture Barrier
- I find it proved to be more likely than not that no underfloor moisture barrier was installed at the premises.
- Regulation 28 HH Regulations requires installation of aground moisture marrier where: “(a) the tenancy building has a suspended floor; and (b) the subfloor space is enclosed.”
- The Healthy Homes assessment report makes it clear that these premises have a suspended floor and an enclosed subfloor space, Accordingly a moisture barrier is required to be installed, except if exempt under r. 29 because it is not reasonably practicable to install one.
- While there is evidence showing that it would not be reasonably practical to install underfloor insulation, there is no such evidence with regard to the practicality of installing a ground moisture barrier. In my view, the onus is on the landlord to provide evidence that the exemption applies. There has been ample opportunity to provide that evidence.
- I note that the Healthy Homes compliance statement signed by the landlord states that the property has no enclosed sub floor space. That is inconsistent with the healthy homes assessment. No evidence is available about the “reasonable efforts made to ensure that the statement was true and correct as at the date of signing”, beyond asking the owner.
- I find that in breach of section 13(1CA) the landlord has provided misleading information in the Healthy Homes compliance statement.
- The landlord has not proved that an exemption applies from the requirement to install a ground moisture barrier and has breached the obligation to ensure that the premises are Healthy Homes compliant in that regard. Draught Stopping
- As noted, the Healthy Homes assessment identifies multiple non-compliant gaps around door and window frames.
- The Healthy Homes compliance statement, states that the property is free from unintentional and unreasonable gaps or holes.
- I find that I in breach of section 13(1CA) the landlord has provided misleading information in the Healthy Homes compliance statement and has breached the obligation to ensure that the premises are Healthy Homes compliant in that regard.
Should compensation and/ or exemplary damages be awarded?
- It having been found that the landlord has breached its obligation to provide an accurate healthy homes compliance statement and to ensure the premises were compliant with the Healthy Home draught stopping and moisture ingress standards, the tenant is entitled to a compensation for the impact of those breaches on his use and enjoyment of the premises.
- As noted above, the tenant raised concerns with the landlord about how cold the premises were to live in. He has given evidence of the impact on he and his former partner’s use of the premises. That evidence is consistent with the premises lacking a ground moisture barrier and being subject to unreasonable draughts.
- I find it proved on balance that the tenant’s use and enjoyment of the premises has been negatively impacted by those breaches and my view compensation is justified. I assess a general award of compensation equal to four weeks rent as appropriate.
- In considering the criteria under section 109(3), as to whether exemplary damages should be awarded, I understand the property manager’s evidence to be that the enquiries made to ensure the compliance statement was accurate were made of the owner, not from independent assessment.
- The direct impact of the breaches on the tenant’s use of the premises is recognised in the award of compensation made. The evidence does however show some substance to the tenant’s concern that the landlord was diligent about protecting its interests visa a vis the tenant but less scrupulous about making sure the tenant’s legitimate interests were respected.
- For the most part, the landlord ensured that the premises were compliant with Healthy Home standards but in my view a modest award of exemplary damages in addition to the compensation of ordered, is warranted. The tenant has proven on balance that concerns he raised about the liveability of the premises, were contributed to by breaches of the landlord’s obligations which were not remedied, and reflected incorrect information given in the compliance statement. Taps
- The tenant says that issues with the leaking kitchen tip were raised in August 2023 but not addressed until February 2024. The landlord acknowledges that but its counsel submits, “....it did not immediately respond to the issue, however the applicant did not follow up or mention any further issues with the kitchen tap until February 2024. In the circumstances it was reasonable for the respondent to believe that the issue had resolved itself\ or been resolved.”
- With respect, the tenant’s obligation under section 40(1)(d) is to, “notify the landlord, as soon as possible after discovery, of any damage to the premises of the need for any repairs.” The tenant did so.
- It is unsurprising that the tenant interprets the landlord’s lack of response as another example if a lack of priority given to his rights, while diligently asserting its own. In my view a modest award of compensation is warranted. Asbestos
- The tenant says that the landlord’s workmen installed an extractor without an asbestos management plan, which the tenant believes ought to have been in place given the age of the premises and of some alterations to it.
- There is no evidential foundation for a finding that the landlord has breached any obligation in that regard.
- For the sake of completeness on note that the work orders initially sought by the tenant are no longer required.
- Because [The tenant/s] has had claims upheld, I reimburse the filing fee.