Published tribunal order
Tenancy Tribunal case 4864523 — Exemplary damages
Decided 2 Oct 2024 · Published 2 Oct 2024 · Application 4864523
- Exemplary damages
Party names are redacted in the official published order.
Order
- Total Transaction Realty Limited Amy Boyes must pay [The tenant/s] $6520.44 immediately.
Reasons
- All parties attended the hearing.
- The premises in this matter is owned by the Public Trust. The property manager is Total Transaction Realty Ltd.
- The four tenants are all relatives. There were four adults and two children living at the property.
- The tenancy commenced on 8 January 2022 and ended on 13 July 2024. Background to the tenancy
- The background is that the Public Trust is managing by trust the assets of a party (now deceased). The property was apparently meant to stay in the trust for 15 years before being sold. According to the tenants, the beneficiaries of the deceased are [redacted]. They all live [overseas] and the tenants regard them as family.
- The tenants and the beneficiaries wanted to preserve the property in the trust and the tenants moved in to facilitate that. Their idea was that they would live there for ten years and then the beneficiaries could decide from there what to do with the property. The tenants did not want to see the property sold.
- The beneficiaries, or some of them, appear to have become disgruntled with the Public Trust. None of that disagreement, or the reasons for it, have anything to do with the matters I must decide. This issue came up a few times during the hearing. I mention this background as it also formed the backdrop as to why this tenancy commenced in the first place.
- I did point out to the tenants during the hearing that their tenancy agreement was not for ten years, but rather was a periodic tenancy. There is clearly a high degree of trust and affection between the tenants and the five beneficiaries of the property.
- I consider that any issues between the Public Trust and the beneficiaries must, however, be dealt with in another forum. I have no jurisdiction regarding those issues. The premises
- The premises comprise two levels. The downstairs area has a separate kitchen, lounge, kitchen and bathroom. One of the tenants lived there.
- Upstairs had three bedrooms, a living area, one bathroom and a kitchen. The tenants’ claims
- The tenants raised a raft of issues which can be categorised generally as breaches of the landlord’s obligation of repair and maintenance and / or breach of Healthy Homes standards. These are as follows: (a) the roof leaked (b) there was black mould at the property (c) various facilities were in disrepair. The kitchen bench was made out of gib board and would crumble. The kitchen downstairs had a kitchen drawer disintegrate. The door under the kitchen sink fell off. Also, the tenant’s wardrobe drawers fell off (d) there was a lack of adequate heating (e) the tenants had an increased power bill for two months. This was due to a prior tenant running “a makeshift wire that ran from the hot water cylinder to the garage so that every time you turned on the garage the water cylinder would always turn on.” (f) the carpet in the house was very old and would disintegrate.
- On their application form, the tenants claimed: a) for $1000 compensation for “mould, safety, dampness, leaks, personal injury”. b) “We have decided we want $50,000 compensation for all of the above this has placed Mental & Physical abuse & Spiritual stress upon our family”. c) for exemplary damages because: Both myself and the owner (The Girls) are continually emailing with Public Trust and the Property Manager regarding ongoing issues that are not being addressed. They are doing patch jobs on the roof (putting a sticking plaster on a broken leg) which is costing unnecessary money and stress to us as tenants with continual water pouring inside the house and through the electricals. Relevant law relating to breach of the landlord’s obligations of maintenance and repair
- Under s 45 (1)(b) of the Residential Tenancies Act 1986 (the RTA), a landlord must 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. A landlord must also comply with all requirements in respect of buildings, health, and safety under any enactment so far as they apply to the premises. 1 This includes providing a source of heating in the living area.
- The obligation of the landlord to provide premises in a reasonable state of repair is not absolute. A landlord does not have to foresee a latent and unobservable defect before it causes damage (see Barfoot & Thompson v Casey. 2 ) Further, a tenant must notify the landlord as soon as possible after discovery of any damage to the premises and the need for repair. 3 The landlord's obligation is to then repair within a reasonable time after knowledge of the need for repair. 4
- I now turn to deal with each of the tenants’ claims. The roof
- The tenants allege that the roof was leaking in the upstairs kitchen, an upstairs bedroom and the upstairs bathroom.
- The tenants understand the roof was around fifty years old.
- The tenants would collect buckets of water whenever it rained. When there was a rain coming from the northwest, there would be even more water.
- The tenants first told the landlord about the problem at the beginning of the tenancy.
- The tenants became very stressed about the water coming through the lights in the bathroom. The tenant was worried about her children turning on the lights and getting electrocuted. The power to that room was turned off following a request to the landlord. This lead to the tenant slipping on the floor in the bathroom on one occasion when the roof was leaking during a rain and she had 1 Section 45 (1)(c) of the RTA 2 DC Auckland CIV 2005 004 1762, at [28] 3 S 40(1)(d) of the RTA, Vu v Hutchings [2016 ] NZTT 4054247, at [13] 4 Collins v Professionals Hutt City Ltd DC Wellington CIV 2009 085 1431, at [15] to use the bathroom in the middle of the night. The tenant hurt her hip very badly. She produced a letter from her GP by way of verification.
- The landlord does not deny being contacted about this issue. They said they would speak to the Public Trust and they would obtain quotes for repair. At the end of the day, the decision regarding repairs was made by the Public Trust.
- Various patch up repairs on the roof were done, but it was common ground that these did not appear to have worked.
- The landlord said that the Pubic Trust would simply not agree to replace the full roof.
- Although the Public Trust has never been joined into the application (the claim was brought against the landlord), Ms French gave some evidence for the Public Trust. She said that since it wanted to sell the property anyway there was no point in doing a roof replacement.
- I find that the roof has had various spot repairs but that it has been in a state of disrepair during the tenancy, causing leaks in a bedroom and the bathroom and possibly other areas as well.
- It was probably a reasonable step for the Public Trust to consider first the cheaper option of spot repairs, but clearly the roof has most likely always needed full replacement. I note that the roof is fifty years old. So it is no surprise that it leaked.
- I find that the condition of the roof has meant the landlord failed to provide and maintain the premises in a reasonable state of repair, in breach of s 45(1)(a) of the RTA.
- I deal with the question of compensation below. The black mould
- The tenants says that in the bedroom where there was leaking through the roof, there was mould in the ceiling and high up on the wall. The tenant would wipe the mould off fortnightly, sometimes weekly.
- The tenants complained to the landlord about the mould continually. The tenants would do this when the landlord came for three monthly inspections.
- No photographs of the mould were produced but the tenants produced an email dated August 2022 showing they had raised the issue of mould.
- The landlord says the tenants never complained about mould. This is not correct, though. As noted above, at least one email was produced. I suspect that more likely, the tenant has just not complained about this aspect as much as the roof.
- The tenants say most of the complaints were verbal and were delivered when the landlord came for the three monthly inspection.
- I find that the presence of recurring mould has meant the landlord failed to provide and maintain the premises in a reasonable state of repair.
- I deal with the question of compensation below. The lack of a source of heating / breach of healthy homes standards.
- There was no source of heating in the living area initially. This is consistent with a Greenside healthy homes report which failed the property on the heating standard. Subsequently, however, heating panels were installed in the property and the property then passed its Healthy Homes assessment on 3 February 2022.
- According to the tenants, the property was still cold.
- The tenant produced a copy of a letter form Starship recommending the installation of a heat pump at the property due to the tenant’s daughter suffering from respiratory issues due to the house being cold, damp and mouldy.
- Eventually, a heat pump was installed eventually in around mid-2023. The tenants say the heat pump was still insufficient for their needs.
- The heating situation was never addressed properly from the point of view of the tenants.
- The landlord’s expert, Greenside, said that due to the structure of the property having a flat roof it did not suit a heat pump. Due to the lack of a ceiling cavity it initially recommended two wall panels, one for upstairs and one for downstairs to meet the requirement.
- The landlord says that after the Starship letter was provided she spoke to an electrician and she got a quote for a heat pump. This was approved by the Public Trust and the landlord then arranged to install a 5.35 Kilowatt heat pump in the lounge upstairs. The landlord therefore says that the heating at the property was above the standard.
- A party who brings a claim to the Tenancy Tribunal must prove on the balance of probabilities (more likely than not) that their version of events took place. Independent witnesses, corroborating documents and photographs are an important part of discharging this burden of proof.
- The issue of evidence at Tenancy Tribunal hearings was considered by the District Court in Kaipo v Clarke & McCarthy (DC) TT233/02. Judge Mather stated: “...[the applicant] needs to be reminded that like anyone who brings an application before a Tribunal or a Court, it is incumbent upon the applicant to provide the evidence necessary to prove the case. If the applicant fails to do that, then their application will be dismissed whether it has merit or not because it is up to the applicant to provide the necessary evidence. It is not up to the other parties and it is certainly not up to the Tribunal to extract evidence.”
- The burden of proving their claim on the balance of probabilities therefore lies in the tenants.
- The tenants have not proven any breach of Healthy Homes standards or any other standard with regard to heating other than a short period at the commencement of the tenancy when there was heating panels at all. They have not produced any expert healthy homes report of their own, for instance. The kitchen bench was made out of gib board and would crumble, the one bedroom unit under the house had a kitchen drawer disintegrate. The door under the kitchen sink fell off. Also, the tenant’s wardrobe drawers fell off.
- The upstairs kitchen was very old and was falling apart, according to the tenants.
- The landlord accepts that the kitchen was old. The kitchen bench was Formica and was degrading. She accepts the kitchen bench was at the end of its life.
- A photograph was produced of the kitchen bench which shows it to be in a very degraded condition.
- A photograph was produced about a kitchen drawer that was broken in the downstairs unit.
- The landlord obtained a quote for a new kitchen and to do repairs to the downstairs kitchen. This quote was submitted to the Public Trust and it decided not to proceed.
- I find that the condition of the degrading kitchen and the kitchen drawer have meant the landlord failed to provide and maintain the premises in a reasonable state of repair.
- I deal with the question of compensation below. An over charged power bill due to a prior tenant ran a makeshift wire that ran from the hot water cylinder to the garage so that every time you turned on the garage the water cylinder would always turn on.
- The tenants had two big power bills during a winter of $1,400 each.
- The tenant’s explanation is as above, and I found it difficult to follow. There was no corroborating evidence or expert evidence on the topic as to what had been done wrong by the landlord.
- I find the tenants have not proven this part of their claim. The carpet in the house was very old and would disintegrate.
- The tenants says that when they moved into the property the carpet was very all. They do not have any photographs of its condition at that time.
- The tenant described the carpet was threadbare.
- The carpet was replaced about 8 weeks after the tenants moved in.
- The landlord says that the carpet was indeed old, as was the lino. She got quotes and liaised with one of the beneficiaries. The Public Trust decided to replace the carpet and the lino.
- Once again, I have little if any corroborating evidence on this aspect. I find it to be unproven. Compensation
- The tenants have endured a very inconvenient and no doubt stressful situation, in particular, with regards to the roof. The roof has leaked throughout. The other breaches I have found were also all largely there throughout.
- I consider the sum of $4,000 a reasonable sum of global compensation for the breaches I have found. Exemplary damages
- I have found that the landlord is in breach of s 45(1)(b) of the RTA in regard to the roof leaking, the presence of ongoing mould and the degrading facilities. These were all ongoing breaches.
- Under s 45(1A) if the RTA, failure of the landlord to comply with s 45(1)(b) is an unlawful act.
- The tenants may therefore apply for exemplary damages under s 109 of the RTA. Under s 109(2) of the RTA, a tenant may not apply later than 12 months after the date of commission of the unlawful act.
- The tenants filed this application on 17 April 2024, more than twelve months after the breaches of s 45 I have referred to above.
- Those breaches are, however, continuing breaches. I can still award exemplary damages for the preceding one year to the application being filed.
- Exemplary damages are designed to punish and to deter. They are like a fine. In Auckland City Council v Blundell [1986] NZLR 732 the Court of Appeal (Cooke P) said: Exemplary and punitive [damages] are different words for the same thing. The damages are exemplary because they are meant to teach an example to the guilty officer and others. They are punitive because they are meant to punish. They are like a fine, though they go to the citizen who has been the victim of conduct.
- Exemplary damages are awarded at the Tribunal’s discretion when one party has proved that the other party has committed a defined unlawful act. If that is proven, and before the Tribunal may award exemplary damages, it must take account of the factors set out in section 109 RTA.
- Section 109 of the RTA relates to exemplary damages and confirms that exemplary damages can be awarded if the unlawful act was committed intentionally, and having regard to: a. The intent of the person committing the unlawful act. b. The effect of the unlawful act. c. The interests of the landlord or tenant against whom the unlawful act was committed. d. The public interest; and e. Whether it is just to make the award.
- The first question is whether the unlawful act was committed intentionally. In this regard, I consider that intention is proved where the party turns their mind to the unlawful act and deliberately sets out to commit the act. It is unnecessary to prove that the party intended to act unlawfully, it is enough that they intended to commit the act which is in fact unlawful. The same principle applies where the party fails to carry out a legal requirement. Even if the party is unaware of the particular obligation they have failed to perform, ignorance of the law is no defence. They are deemed to know the law, and therefore failure to perform the obligation is considered intentional. Also, if the party is wilfully blind to the factual circumstances that give rise to an unlawful act, this may also be sufficient to prove they acted intentionally.
- I consider that the landlord acted intentionally in being continuously in breach of s 45(1)(b) of the RTA. I understand that its explanation is that it kept in contact with the owner to secure repairs and that at the end of the day it was hamstrung by the Public Trust’s unwillingness to do those repairs but ultimately that is not a satisfactory response.
- I consider that the landlord must have known about the areas of breach and it was incumbent on the landlord to do something about it.
- I award a total of $2,500 for exemplary damages as a collective sum for all areas of breach.
- Because [The tenant/s] have partly succeeded with the claim I must reimburse the filing fee. I consider it appropriate to award name suppression in their favour as well.