Published tribunal order
Tenancy Tribunal case 4930373 — Exemplary damages at 4 Cambridge Street, Levin, Levin 5510
Decided 27 Aug 2024 · Published 27 Aug 2024 · Application 4930373
- 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.
- The landlord is to pay the tenant $1,727.00 immediately being: a. Bond refund $1,200.00 b. Exemplary damages $500.00 c. Refund of filing fee $27.00
- If the landlord does not pay the total amount due to the tenant under paragraph 2 then by 5 pm Friday 30 August 2024 then the amount of exemplary damages payable under paragraph 2(b) shall be increased to $1,000.00 so that the total payable will be $2,227.00.
Reasons
- The landlord attended the hearing in person.
- The tenant attended the hearing by telephone. Refund of the bond: section 22B RTA
- The tenant has applied for refund of their bond following the end of the tenancy.
- At the hearing the landlord made a claim against the bond. However, the landlord did not file an application with Tenancy Services.
- Section 22B RTA provides: (1) If there is a dispute between the parties as to the payment of a bond, either party may apply to the Tribunal for an order determining to whom the bond, or any part of it, is to be paid. (2) If the tenant applies to the Tribunal and the landlord seeks payment of the bond in whole or in part, the landlord must file an application with the Tribunal that sets out the landlord’s counterclaim.
- The requirement for the landlord to file a counterclaim is mandatory. Therefore, because the landlord has not done so, the bond must be refunded in full to the tenant.
- The tenant accepted that she had agreed to paying two weeks’ rent to the landlord out of the bond. The amount of the bond remaining is therefore $1,200.00 and the landlord is to pay this sum to the tenant immediately. Exemplary damages: section 19(2) RTA
- [The tenant/s] claims the landlord has not lodged the bond with the Bond Centre within the required time.
- A landlord must send any bond payment to the Bond Centre within 23 working days after the payment is received. See section 19(1) Residential Tenancies Act 1986.
- Breaching this obligation is an unlawful act for which the Tribunal may award exemplary damages up to a maximum of $1,500.00. See section 19(2) and Schedule 1A Residential Tenancies Act 1986.
- The landlord admitted that he had not paid the bond to the Bond Centre and that it was still retained by him. The landlord is deemed to know the law and on that basis is required to know the law relating to bonds. I find the failure to lodge the bond to be intentional. See TMT New Zealand Limited TA Strata Property Management v Sweeney and Sundahl [2021] NZDC 16182.
- The landlord believes he has a claim against the tenant for the balance of the bond but, eight months since the tenancy ended, has not made any application to the Tenancy Tribunal seeking compensation.
- The landlord has committed an unlawful act and that act was committed 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.
- Essentially these factors require a consideration of the gravity of the unlawful act: aggravating and mitigating factors. When considering the factors, it should be kept in mind that the object exemplary damages is to punish and deter, not to compensate the victim of the unlawful act. However, if the effect of the unlawful act has been particularly severe on the victim, then this is likely to be an aggravating factor and, if it has had little or no effect, it will be a mitigating factor.
- The tenant explained that the landlord’s failure to pay the bond to the Bond Centre meant that she was unable to access it to pay a bond on a new property. This was compounded by the landlord’s address for service and agent becoming unable to be contacted.
- The tenant gave evidence of the significant hardship she suffered because of this and explained that it meant that she had no option but to file this application with the Tribunal. It is noted that the tenancy ended some eight months ago and the tenant has been without these funds during that time.
- The landlord advised that he now understood his obligations in relation to bond payments and that he had not appeared before the Tribunal before.
- A bond is the tenants’ money and must be lodged with the Bond Centre within the statutory time limit to protect the tenants’ interests. Lodging a bond is not a conditional obligation but a mandatory one and it is in the public interest that landlords fulfil their obligations under the Act. If no penalty is imposed there can be no deterrent.
- It is appropriate in these circumstances to award the tenant $500.00 being one third of the maximum of $1,500.00. It is important that the Tribunal makes such awards to deter landlord’s from retaining the tenant’s money and causing the lengthy delay and consequent difficulties which the tenant has experienced.
- The landlord advised that he would make the bond repayment immediately. If he does not do so by 5 pm this Friday 30 August 2024 at the latest, then it is appropriate that the exemplary damages awarded be increased significantly as the landlord’s breach of the RTA has increased significantly by retaining the bond for a lengthier period having been made aware of his obligation and having promised to make payment immediately.
- Because [The applicant/s] has wholly succeeded with the claim I must reimburse the filing fee.