What was the outcome of Tenancy Tribunal case 4940806?

The tribunal order states: The Bond Centre is to pay the bond of $1,840.00 (5137701-006) immediately

How much money was awarded in case 4940806?

Property Damage: $1,000.00 awarded to landlord; Filing Fee: $27.00 awarded to landlord

What type of tenancy dispute was case 4940806?

The primary dispute was Exemplary damages.

Where can I read the official tribunal order for case 4940806?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/11228584-Tribunal_Order.pdf.

What was the outcome of Tenancy Tribunal case 4940806?

The tribunal order states: The Bond Centre is to pay the bond of $1,840.00 (5137701-006) immediately

How much money was awarded in case 4940806?

Property Damage: $1,000.00 awarded to landlord; Filing Fee: $27.00 awarded to landlord

What type of tenancy dispute was case 4940806?

The primary dispute was Exemplary damages.

Where can I read the official tribunal order for case 4940806?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/11228584-Tribunal_Order.pdf.

Unit/Flat 2C1, 148 Quay Street, Auckland Central, Auckland Tenancy Tribunal Case 4940806 — Exemplary damages

Claims and awards in Tenancy Tribunal application 4940806. Amounts reconciled from the published order (claims sum and net total). Verify on MoJ.
Claim	Landlord	Tenant	Reason
Exemplary damages – subletting the premises	$1,000.00		Exemplary damages – subletting the premises
Filing fee	$27.00		Filing fee

Claims and awards in Tenancy Tribunal application 4940806. Amounts reconciled from the published order (claims sum and net total). Verify on MoJ.
Claim	Landlord	Tenant	Reason
Exemplary damages – subletting the premises	$1,000.00		Exemplary damages – subletting the premises
Filing fee	$27.00		Filing fee

Order

The Bond Centre is to pay the bond of $1,840.00 (5137701-006) immediately apportioned as follows: Thomas Morton: $1,027.00 Jun Sugita: $813.00
The landlord is entitled to exemplary damages and reimbursement of the filing fee as set out below:
The tenant’s counterclaim is dismissed.

Reasons

Both parties attended the hearing. The tenant, Mr Sugita, now resides in Christchurch, therefore he attended the hearing by phone. Mr Sugita was assisted by a Japanese interpreter.
The landlord, Mr Morton, filed a claim seeking exemplary damages on the basis Mr Sugita committed the following unlawful acts: a. Failing to ensure the number of residents did not exceed the maximum stated in the tenancy agreement (breach of section 40(3A) of the Residential Tenancies Act 1986 (RTA); b. Subletting the premises when he was prohibited from doing so (section 44(2A) of the RTA).
Mr Morton seeks exemplary damages of $1,840.00, being the amount held as bond.
The tenant, Mr Sugita, filed a counterclaim seeking compensation on the basis he says he was forced to sell furniture cheaply, or give it away for free, due to the tenancy ending quickly, compensation for hot water outgoings which the tenant says should have been the landlord’s responsibility, and emotional distress caused by moving out. Mr Sugita was not able to identify any part of the RTA, or the tenancy agreement, which he says the landlord breached in respect of the first and third claim. In respect of the second claim, Mr Sugita relied on the terms of the tenancy agreement and conversations with the letting agent.
The total amount Mr Sugita sought in compensation was $5,780.

THE TENANCY

The premises is a one-bedroom apartment, with floor area of approximately 55 square metres. Above the bedroom is a loft area which is approximately 1.4 –
5m high and was previously used as a storage area.
The tenancy commenced on 14 August 2022. The parties entered into a 12- month fixed-term tenancy which ended on 13 August 2023 (the Tenancy Agreement). From that date, it rolled into a periodic tenancy. The apartment was rented unfurnished.
The Tenancy Agreement states the maximum occupancy for the premises is 1 adult. The agreement provides that the tenant may make a request in writing to add further occupants, however the landlord retained the right not to permit further occupants. 1 The Tenancy Agreement also states, in accordance with s 44 of the RTA, that the tenant may not sublet the premises (all or any part). 2
On 20 April 2024, Mr Morton completed an inspection at the premises. Mr Sugita was not present. Mr Morton was aware Mr Sugita was in Christchurch for work.
At the inspection, Mr Morton found three residents in the premises. They described themselves as Mr Sugita’s flatmates. They explained they paid Mr Sugita (who also went by the name Johnny) rent. One of the three residents occupied the only bedroom in the apartment, and the other two residents occupied the loft area above the bedroom.
Upon discovering three flatmates were living in the premises and paying rent to Mr Sugita, Mr Morton engaged his letting agent to raise the issue with Mr Sugita.
On 1 June 2024, the tenancy came to an end.

RELEVANT LEGAL PRINCIPLES

Burden and standard of proof

The relevant law that applies is found in RTA.
With any claim before the Tenancy Tribunal, the Tribunal applies the usual civil law standards.
That includes a requirement that the party bringing the claim, establish their claims “on the balance of probabilities”. The balance of probabilities means more likely than unlikely, or in mathematical terms, has a fractionally more than 50% likelihood. The Tribunal does not need to be certain or very sure about any claim, only that what is claimed is likely.
This obligation carried by the applicant is referred to as the “burden of proof”. Independent witnesses, corroborating documents and photographs are an important part of discharging this burden.
As noted by the District Court in Kaipo v Clarke & McCarthy (DC) TT233/02, in practical terms this means that: [L]ike anyone who brings an application before a Tribunal or 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. 1 Clause 6 of the Tenancy Agreement. 2 Clause 8 of the Tenancy Agreement. Exemplary damages
In the landlord’s claim, the Tribunal must consider claims for exemplary damages. 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 of the 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 maximum levels of exemplary damages are set out in Schedule 1A of the Act. THE LANDLORD’S CLAIMS Did Mr Sugita fail to ensure the number of residents did not exceed the maximum stated in the tenancy agreement?
Mr Morton claims that the number of people living at the premises exceeded the maximum number permitted under the Tenancy Agreement.
Where the tenancy agreement specifies the maximum number of persons that may ordinarily reside in the premises during the tenancy, the tenant must ensure that the number is not exceeded. See section 40(3) of the RTA.
Breaching this obligation without reasonable excuse is an unlawful act for which exemplary damages may be awarded up to a maximum of $1,000.00. See section 40(3A)(e) and Schedule 1A of the RTA.
The tenancy agreement specifies that a maximum number of one may live in the premises during the tenancy.
Mr Sugita confirmed, before he went to Christchurch in December 2023, he had one and then two flatmates living with him. He confirmed that after going to Christchurch for work, three people occupied the apartment. Given this, I find Mr Sugita committed an unlawful act. The issue in this case is whether Mr Sugita did so intentionally – that is whether he exceeded the maximum number of occupants knowing he was not permitted to.
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 the District Court decision of Birch v Otautahi Community Housing Trust [2020] NZDC 17667, the Court needed to consider a case where the landlord had unlawfully entered the tenancy. That was not disputed. The evidence was that because of a misunderstanding around notices being given, the landlord went into the tenancy without the necessary notice having first been served on the tenant.
Judge Neave in the District Court agreed with an earlier summary of the law from the Tribunal 3 that: Before an award for exemplary damages can be made the threshold question for the Tribunal to answer is whether the unlawful act has been committed ‘intentionally’. In my view negligence does not equate to intention, and for the Tribunal to be satisfied that a party has ‘intentionally’ committed an unlawful act evidence must exist which would justify the Tribunal in coming to the conclusion that the party committing the unlawful act has in fact turned his or her mind to the act and deliberately set about to commit it.
Judge Neave went on to accept that the unlawful entry was made in error, and on that basis, there was no intention established, therefore there was no basis to order exemplary damages.
In this case, Mr Sugita acknowledges that the tenancy agreement states the maximum occupancy is one adult, however, he says he believed he was allowed to have flatmates as he says the advertisement stated the apartment could have up to three people.
Although Mr Sugita could not produce the original advertisement, Mr Sugita did produce an email between himself and the letting agent, Ms Nicki Kelleher dated 25 July 2022. In the email exchange, which took place two or three weeks before the tenancy commenced, Mr Sugita enquired about getting another set 3 Chief Executive, ex party Edmonson v Walls North Shore TT 548/92 of keys because he might be looking for a flatmate. Ms Kelleher’s response was, “yes you can [get another set of keys]. At the time your flatmate moves in, a 2 nd set of keys can be provided.”
Mr Sugita says, from that exchange with Ms Kelleher (which he says was repeated in-person) and the advertisement, he did not believe he was in breach of the agreement by having one or two flatmates. Essentially, he believed the maximum occupancy was three.
Mr Morton did not call Ms Kelleher to give evidence. When I asked Mr Morton whether he had any comment to make on Ms Kelleher’s email of 25 July 2022, Mr Morton stated he didn’t have a problem with two people in the apartment. He indicated he had given permission to his letting agent to rent the premises to a couple, or two individuals.
On the evidence made available, I am not satisfied that Mr Sugita intentionally exceeded the maximum number of occupants. Given the email exchange on 25 July 2022 with Ms Kelleher, I accept Ms Sugita believed he was permitted to have up to three people in the apartment.
While Mr Sugita did commit an unlawful act, I find he did not do so intentionally, and I therefore decline to award exemplary damages for exceeding the maximum number of persons in the premises.

Did Mr Sugita sublet the premises?

Mr Morton claims Mr Sugita sublet or parted with possession of the premises without his prior written consent and in breach of the tenancy agreement.
A tenancy agreement may include a provision that expressly and unconditionally prohibits the tenant from subletting or parting with possession of the premises during the term of the tenancy. See section 44(1) and (2A) of the RTA. The Tenancy Agreement in this case includes such a provision at clause 8.
Breaching this obligation is an unlawful act for which exemplary damages may be awarded up to a maximum of $1,500.00. See section 44(2A)(a) and Schedule 1A of the RTA.
Within the first three or four months of the tenancy, Mr Sugita was joined by one flatmate, and by the end of 2022, two flatmates. Mr Sugita says he had an agreement, but not a tenancy agreement, between himself and the two flatmates. Mr Sugita said the agreement (a copy of which was not produced) set out the rules that were agreed between the three flatmates.
In May 2023, Mr Sugita left New Zealand to return to Japan to visit an unwell family member. He stayed in Japan until he returned to New Zealand in November 2023. Mr Sugita says, while in Japan, he left the majority of his possessions in the apartment, taking only clothes and a few personal items.
Prior to leaving for Japan, Mr Sugita occupied the bedroom of the apartment. He said while he was in Japan the bedroom was used by others. Mr Sugita says he believed someone lived there, but only for two weeks. Mr Sugita confirmed he received rent from the person occupying his bedroom.
After returning from Japan in November 2023, Mr Sugita then travelled to Christchurch for work in December 2023. Mr Sugita did not give a clear answer when asked how long he intended to go to Christchurch for. Mr Sugita indicated his time in Christchurch was determined by the outcome of a visa application.
In any event, Mr Sugita confirmed, that he did not return to the apartment until shortly before the end of the tenancy on 1 June 2024, to remove his belongings.
Mr Morton produced an agreement, written in Japanese and translated into English, which appears to be dated November 2023. Mr Morton indicated one of the residents who was present on 20 April 2024 when Mr Morton conducted the inspection provided him with a copy.
The English translation of the agreement describes it as a “flat contract.” Given the date of the agreement, and its contents, it appears it was an agreement between Mr Sugita and those occupying the apartment while he was in Christchurch.
When asked about various parts of the agreement, Mr Sugita, confirmed the agreement provided instructions for the flatmates to make rent payments to his then-partner, Saki Miura. Mr Sugita confirmed Ms Miura received rent payments on behalf of Mr Sugita.
Mr Sugita confirmed that when he was in Christchurch, three others lived in the apartment. Mr Sugita stated he had met all three, however he was unable to tell me the names of all three (he could only recall the name of one flatmate).
I am satisfied that Mr Sugita sublet the premises in breach of the tenancy agreement. I do not accept Mr Sugita’s submission that he continued to occupy the premises while in Japan. A tenant is free to travel and leave their home for an extended period. However, where a tenant is expressly prohibited from subletting, the tenant can not on-rent the premises to another tenant while they are absent.
Mr Sugita confirmed someone else occupied his room while he was in Japan, and that he received rent in exchange. I find that meets the definition of subletting and was in breach of the agreement. Similarly, when Mr Sugita went to Christchurch for work, I find he sublet the apartment to others and received rent in exchange.
I find Mr Sugita committed an unlawful act.
As stated above, it is only where a party has committed an unlawful act intentionally, that the Tribunal may award exemplary damages. The Tribunal must also be 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) of the RTA.
I am satisfied Mr Sugita committed the unlawful act intentionally. The tenancy agreement is clear in stating that “the tenant may not sublet the premises (all or any part).” 4 Unlike Mr Morton’s claim relating to the maximum number of occupants, Mr Sugita did not suggest he had mistakenly understood he was permitted to sublet the premises. His position was that he did not do. Having found he did sublet the premises (all or any part), I also find the unlawful act was intentional.
For all of the above reasons, I am satisfied it would be just to award exemplary damages. The maximum amount available for breach of s44(2A) is $1,500. I consider the tenant’s breach was in the upper middle band of culpability and order they pay the tenant $1,000.00 for subletting the tenancy. TENANT’S COUNTER-CLAIM
The tenant filed a counterclaim seeking compensation on the basis of three complaints, summarised as: a. He was forced to sell furniture cheaply, or give it away for free, due to the tenancy ending quickly; b. He should be compensated for outgoings related to hot water which the tenant says should have been the landlord’s responsibility; and c. Emotional distress caused by moving out.
In respect of (a) and (c) above, Mr Sugita was not able to identify any part of the RTA, or the Tenancy Agreement, which he says the landlord breached.
The total amount Mr Sugita sought in compensation was $5,780.
An applicant is required to establish the claim to the civil law standard of proof, on the balance of probabilities.
On claims (a) and (c) above, the applicant has not satisfied me that there has been any breach of the RTA or the Tenancy Agreement. I therefore dismiss the claims for compensation for selling his furniture and emotional distress.
As to the claim for outgoings related to hot water, Mr Sugita claims Mr Morton breached the Tenancy Agreement which states, “Water: Is the responsibility of the landlord.” Mr Sugita says he checked with the letting agent, Ms Kelleher, on 4 Clause 8(a) of the Tenancy Agreement. several occasions that that included both hot and cold water. He says he was assured both were included.
The premises is an apartment which, in the 1980s, was converted from a commercial building into apartments. Mr Morton stated there is one water meter for the entire building. Mr Morton says each apartment owner pays body corporate fees, which includes the cost of supplying water to each apartment.
Once water is conveyed to each apartment, each apartment then has its own mechanism to heat water. For the apartment Mr Sugita occupied, there is a hot water cylinder, which is powered by electricity. Therefore, the cost of heating water forms part of the apartment’s general electricity use. There is no meter or way of measuring to determine how much electricity is used to heat water. The tenancy agreement states power is the responsibility of the tenant.
Mr Sugita confirmed he was not charged any additional monthly fee for hot water. He confirmed the cost of heating water formed part of his monthly electricity bill. Mr Sugita seeks compensation of $1,100.00 for hot water, based on an estimated $50.00 per month over 22 months.
I am not satisfied Mr Sugita has proven Mr Morton breached the tenancy agreement in respect of water supply. Mr Sugita was not charged by the landlord for the provision of water to the apartment. Mr Sugita was only charged (by his power supplier) for the electricity the apartment used – for both the heating of water and other uses.
I dismiss Mr Sugita’s counterclaims for compensation.

FILING FEE

As the landlord has substantially succeeded with his claim the tenant must reimburse the filing fee.

Tenancy Tribunal case 4940806 — Exemplary damages at Unit/Flat 2C1, 148 Quay Street, Auckland Central, Auckland

At a glance

Tenancy Tribunal case 4940806 — Exemplary damages at Unit/Flat 2C1, 148 Quay Street, Auckland Central, Auckland

At a glance

Claims & awards

Order

Reasons

THE TENANCY

RELEVANT LEGAL PRINCIPLES

Did Mr Sugita sublet the premises?

FILING FEE

Topics & place

Residential Tenancies Act sections

Key findings

Frequently asked questions

Claims & awards

Order

Reasons

THE TENANCY

RELEVANT LEGAL PRINCIPLES

Did Mr Sugita sublet the premises?

FILING FEE

Topics & place

Residential Tenancies Act sections

Key findings

Frequently asked questions