Published tribunal order
Tenancy Tribunal case 4909829 — Rent arrears
Decided 24 Sept 2024 · Published 24 Sept 2024 · Application 4909829
- Rent arrears
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 both parties’ names and identifying details.
- This order is to be read alongside the Tribunal order under the same application number dated 16 September 2024.
- [The landlord/s] is to pay [The tenant/s] $413.96 immediately, in accordance with the following table:
Reasons
- Both parties attended the hearing on 16 September. A consent decision was issued that day. This decision has been reserved for the parties to provide further evidence which is now complete.
- This tenancy has been in place for some years 2 and is to end by consent 3 shortly as [The landlord/s] is intending to sell the property.
- The tenancy has run smoothly until recently when the electricity bills started increasing. The reason this is an issue is that the power supplied to this apartment (239) is also the power supplied to the neighbouring apartment (238). There has been no check meter in place to clarify how much electricity each apartment is using. [The landlord/s] owns 239 but not 238.
- The arrangement the parties had was that [The tenant/s] would have the power supply in his name, therefore he had choice as to provider, but [The landlord/s] would reimburse him half the power cost to compensate him for 238’s power usage. 4
- Unfortunately, of late the power bills have been substantially increasing. In June [The landlord/s] arranged for an electrician to check out the supply to ensure nothing was wrong and he advised the installation of a check meter. His advice was that the power costs have gone up so much because of the amount of power 238 is using. It was as a result of his advice to [The tenant/s] that he filed this application.
- Two days after [The tenant/s] filed his claim with the Tribunal, [The landlord/s] issued a 90 day notice to end the tenancy on the basis she intended to sell the property. At the hearing the parties agreed to an end date for the tenancy in resolution of her application for possession. In this decision I will reiterate the advice I gave the parties regarding the issue of the termination notice, for clarity.
- [The tenant/s] seeks compensation for the situation with the power bills as he says he has illegally been paying another person’s power which is unjust. [The landlord/s] has cross applied for rent arrears as their arrangements for rent and power have gone off the rails recently. This is because [The tenant/s] took the full amount of the power bills out of the rent for the June and July bills and didn’t pay rent for the fortnight 1-14 September. 2 Since 18 April 2021 3 Tribunal order 16 September 4 She has a separate arrangement with the owner of 238 to pay her $90 per month for their electricity supply. This was established when she purchased the property and has not been changed to reflect changing power prices.
- The questions therefore for the Tribunal are: a. Is [The landlord/s] breaching her obligations with respect to the electricity provision? b. If so, should she compensate [The tenant/s] further than she has already? c. How much is owed by both parties?
- Before I answer these questions, I make the following comments regarding the termination notice as discussed at the hearing.
Was the termination notice retaliatory?
- For the termination notice to be declared retaliatory by the Tribunal, [The tenant/s] must prove that in terminating the tenancy, the landlord was motivated wholly or partly by him exercising a right under the tenancy agreement or any Act, or by any complaint he has made against the landlord. See section 54(1) Residential Tenancies Act 1986 (“RTA”).
- The onus is initially on [The tenant/s] to satisfy the Tribunal that it is more likely than not that the landlord was so motivated, in whole or in part. The Tribunal has held that the term motivate has the ordinary dictionary meaning “to give impetus to ... to impel”. Accordingly, the link must be direct. Once he has established a link, the onus then shifts to the landlord to prove that the notice was not retaliatory.
- I am satisfied that the first requirement of s54 of the RTA has been met here as the termination notice was a valid notice that complies with section 51 of the RTA.
- The second requirement is that the claim must be filed within 28 days of the service of the notice. The notice was served on 11 June and [The tenant/s] raised the issue with the Tribunal on 26 August; therefore well outside of the statutorily required timeframe.
- The District Court has found that the Tribunal must apply this timeframe strictly: “In my view, s 54 is jurisdictional, and absent an application made within the time limit I consider that the Tenancy Tribunal has no jurisdiction to entertain any application for a declaration that notice is of a retaliatory nature. While I accept that the Tribunal does have the power to extend time limits, it seems to me that those provisions should not ordinarily be used in relation to consideration of issues arising under s 54, with the possible exception of a very short overrun of a day or two caused by circumstances beyond a tenant's control, such as documents being lost in the post or computer or internet outage or inaccessibility.” 5
- Therefore, [The tenant/s] application for the notice to be declare retaliatory cannot be progressed as it has been filed out of time.
- Had it been filed in time I would have accepted that it was a retaliatory notice given the time frames involved, i.e. the notice being issued 2 days after [The tenant/s] filed his Tribunal claim. This is because it is well established in precedent that where there has been a short time between a tenant exercising their rights and the landlord giving notice, there is an inference that the landlord has at least been partly motivated by the tenant exercising their rights.
- However, The District Court has discussed the intent of section 54 RTA and is clear that although a tenant may be exercising their rights, a landlord is also entitled to exercise theirs: The purpose behind empowering the tribunal to declare a termination notice retaliatory and of no effect is to prevent landlords from discriminating against those who assert their rights as tenants or make complaints by ending their tenancy. The provision is designed to protect tenants but not from the legitimate decision any landlord may make to sell their property or no longer operate it as a rental property. 6
- The Tribunal has noted in the application of that case that it is also relevant for noting that evidence that the landlord has dealt with or attempted to deal with complaints is supportive of a finding that a notice is not intended to be retaliatory. 7
- I accept [The landlord/s] evidence that she has been and is trying to sell the property. I also accept her evidence that she is willing to install a check meter and has been attempting to resolve the situation by paying the majority of the recent power bills.
- Further case law from the District Court is the case of Kerr v Woodman 8 where Judge Ongley stated that a notice given for genuine reasons would not be considered retaliatory.
- The parties have agreed to end the tenancy on their own terms therefore specific findings were not required and I include these comments as this is what I discussed with the parties at the hearing. I turn now to the issue that brought this all to a head. 5 Realty House Whakatane Ltd v Eschbank [2020] NZDC 16081 6 Carver v Kiesanowski [2021] NZDC 3939, paragraph 43 7 X v X [2022] NZTT 4330900 8 DC Porirua, MA 244/88, 03 November 1988, Is [The landlord/s] breaching her obligations with respect to the electricity provision?
- Section 39 of the RTA states that landlords are responsible for outgoings that are incurred whether or not the premises are occupied, or incurred for common facilities, i.e. the fixed rate for the provision of gas or water. It also states that tenants are responsible for outgoings exclusively attributable to their use of their premise, i.e., the gas or water they specifically use.
- Case law is clear that a tenant is to be provided with an ability to only be billed for their actual use of outgoings, such as electricity. What this means in this situation is that [The landlord/s] had an obligation to ensure that [The tenant/s] only paid for his usage of electricity in this unusual set-up.
- This has clearly not been the case given the lack of check meter. Until recently the agreement that the parties pay half each has been suitable to each other, and they both relied on this arrangement. It would be unjust of me to undo that agreement given its longstanding nature. 9
- However, when [The tenant/s] raised the matter with [The landlord/s] she was required to investigate and rectify the situation.
- [The tenant/s] as the applicant has the burden of proof. What that means is that he has to establish, to the standard of the balance of probabilities, that the landlord has failed to investigate and rectify the issue adequately.
- The email and text communications clearly show that he raised the issue in May 2024. It was in response to those emails that [The landlord/s] arranged for an electrician to investigate the matter which was appropriate. His advice was to install a check meter. She should have done this immediately, but I accept that the Tribunal proceedings have muddied the water in that respect. She has consented to a work order now to that end. She has also paid 2/3rds of the March, April, May, June, July and August bills and will pay 3/4s of any future bill until a check meter is installed.
- [The tenant/s] has also however provided text evidence from October 2022 that he advised [The landlord/s] that the power bill had doubled since the neighbours started construction and it was getting difficult to afford. [The landlord/s] took no steps in response to that notification, and she should have.
- Having considered the evidence I am satisfied that [The tenant/s] did first raise the issue in October 2022. It was at this point that [The landlord/s] had an obligation to investigate it for him.
- This issue is complicated due to the longevity of the tenancy. Had the tenancy just started and [The landlord/s] asked [The tenant/s] to pay half of the power bills when it was not clear how much usage was actually his, I would direct that 9 Section 85 RTA and the doctrine of estoppel he pay no power costs until the check meter was installed. However, this arrangement has been continuing to both parties’ satisfaction for a number of years. I must therefore consider the situation holistically.
- I find that the steps discussed above that [The landlord/s] took from May 2024 were appropriate and reasonable. However, I consider that it is not just that [The tenant/s] pay for half of the electricity costs since October 2022 given the neighbours appeared to be undertaking renovations, the overall usage started increasing when his usage was not and [The landlord/s] was aware of the concern.
- I do take into account that electricity prices have considerably increased in New Zealand for everyone since September 2021 and more dramatically over the last year. I also find, looking at the amounts, that [The tenant/s] bills did not start exponentially increasing until July 2023. However, [The tenant/s] should not be paying for power he is not using. This amount cannot be quantified given there is no check meter on the property.
- Having considered the situation holistically and taking into account sections 77(1)(d) and 85 of the RTA, I find that [The landlord/s] should pay 2/3rd of each electricity bill since October 2022 which I determine is appropriate compensation for [The tenant/s] for the situation. I understand that [The landlord/s] does not get much compensation from the neighbour for their use of power however that is not [The tenant/s] fault. This is [The landlord/s] property, and she is responsible to ensure she complies with the RTA if she tenants it.
- I therefore direct that [The landlord/s] pay [The tenant/s] the equivalent of 17% of each of the electricity bills between October 2022 and April 2024 after which she commenced paying 2/3rds of the bills. 17% is the difference between the liability of 2/3rds I have assessed her as having, and the 50% she has paid. This amount totals $499.65.
- [The landlord/s] did not pay her share of the November 2023 bill therefore she is to reimburse [The tenant/s] $80.21 being her 2/3rds share of that bill.
- To be deducted from this amount is the fortnightly rent between 1 and 14 September of $620 which was not paid.
- [The tenant/s] also deducted from the rent the entire amounts of the power bills in June and July. He is liable for 1/3 of those, therefore $319.06.
- I use the following table to explain my workings: DescriptionLandlordTenant Reimbursement of 17% of power bills 10/22-4/24 Reimbursement of 2/3rds November bill Rent arrears$620.00 $440.09 $80.21 1/3 rd Power in June and July deducted from rent$319.06 2/3rds August bill 10 $312.72 Total award$919.06$833.02
- I note that this order includes the money orders I made on 16 September. Is [The tenant/s] entitled to compensation for stress?
- [The tenant/s] also claims compensation for the stress he has been put under due to the increase in his bills, the lack of meaningful response from [The landlord/s] and having to resolve this with her. He says he has lost work days and his health has been detrimentally affected by this issue.
- The Tribunal has the authority 11 to award damages for stress and inconvenience. It does so on the basis that the law of contract allows such damages where the purpose or one of the purposes of the contract is the peace and comfort of the party and, in the case of a tenant, that is regarded as one of the purposes of a tenancy agreement.
- Nevertheless, it is not something that the Tribunal does lightly. The normal rules for damages apply and the tenant must prove breach of an obligation or right, damage, that the damage was foreseeable and that an amount of damages is appropriate. I find that it was foreseeable that this arrangement could well end badly. When actual usage of a utility is unmeasurable, disputes are highly likely to arise.
- As a starting point the Tribunal adopts the position that a tenancy agreement involves a relationship: relationships are rarely smooth, and a tenant must expect some disruption or inconvenience from to time to time. Some degree of anxiety and stress has been considered an inevitable corollary to rights based on promises, and a contracting party has traditionally been deemed to take the risk. Accordingly, when considering the level of damages to award, it is well established that where the loss suffered is intangible, awards must be kept modest.
- The landlord here has breached her obligations in not investigating and dealing with the situation earlier. Frustration, stress and disappointment to that breach was an obvious corollary.
- Nice Place Property v Ogbourne and Couzens (2017) NZTT 4046775 is a previous case which suggests appropriate bands where making awards for 10 Order 6 of 16 September 11 77(2)(n) RTA emotional harm damages. Those amounts have been increased in the 2022 Tribunal case A v Singh 12 to take into account inflation: “ A. At the lower end of the scale, where a breach causes inconvenience, frustration, annoyance, or disappointment: an award of $200.00 to $1,000.00. B. Where due to the breach the party has endured more inconvenience and a higher level of mental distress such as worry, stress, tension, or anxiety: an award of $1,000.00 to $2,000.00. C. At the upper end of the scale, where the party has experienced hardship, insecurity, humiliation, intimidation, aggravation, or fear: an award of $2,000.00 and upwards.”
- Adopting that formular, I consider this a situation of inconvenience, frustration and disappointment. As such, I find that an award of $500 is reasonable in the circumstances. Other orders
- Both parties have sought suppression and reimbursement of the filing fee. As both parties have been partially successful in their applications it is not appropriate to award reimbursement of the filing fee to either party and those costs should lie where they fall.
- Section 95A of the RTA requires the Tribunal to supress a party’s name or identifying details if that party was “wholly or substantially” successful (in their application or defence) and allows discretion if in the public interest.
- Both parties have been successful to an extent, and I accept that this is a complicated situation and neither party was genuinely aware of their legal obligations. Accordingly, I consider it just to suppress all of their details from the published order.