Published tribunal order
Tenancy Tribunal case 5007202 — Exemplary damages
Decided 27 May 2025 · Published 27 May 2025 · Application 5007202
- 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 names of all parties and witnesses and identifying details.
- [The landlord/s] must pay [The tenant/s] must pay $2,250.00 immediately, as set out in the table below and following the offset ordered in this decision.
- The Bond Centre is to pay the bond of $1,050.00 ([Bond number suppressed]) to [The landlord/s] immediately.
Reasons
- Both parties attended the hearing. The issues
- The landlord has applied for rent arrears, following the ending of the tenancy. The tenant has cross applied for orders that: (a) the premises did not comply with Healthy Homes Standards (b) the premises were otherwise in breach of the landlord’s obligations under s 45 of the Residential Tenancies Act 1986 (the Act). Background
- The background is that the tenants began their occupation of these premises in 2017. At that time, the premises was owned by another landlord. The tenants are not claiming damages against the landlord for that prior landlord’s failure to comply with their obligations regarding the property. Their claim relates to the period the current landlord was managing the property.
- The current landlord purchased the premises in March 2021. A fresh tenancy agreement was signed between the parties on 5 May 2021.
- Beside the boxes to be ticked for ceiling and underfloor insulation It recorded that “insulation will be done before 1 June 2021”.
- The tenancy ended on 8 October 2024. The tenant’s evidence
- The tenants evidence was: (a) The ceiling was leaking in the kitchen / dining area. There was also a leak in a bedroom celling light fixture. Every time it rained there would be leaking. When it rained, the tenants would have to put buckets down to catch the water. The tenants had brought this to the attention of their previous landlord, who performed repairs, but the repairs were inadequate. The tenants told the current landlord about the leak when the landlord bought the premises. The landlord eventually performed repairs but the repairs did not remedy the issue. The tenants told the landlord that the repairs had not remedied the issue. (b) The windows could not be closed securely in the sitting room and the toilet. The tenants told the landlord about the problem when it first took over the tenancy and they were asked to sign a fresh tenancy agreement. They also kept reminding the landlord about the issue. The landlord said this and other issues would be fixed in around June or July 2021. The windows were never fixed. The tenants say they kept reminding the landlord by telephone about the issue. The rent went up but the issue was never fixed. (c) The carpet was threadbare and there were holes in patches. The tenants ask for this to be fixed. (d) There were cracked tiles in the kitchen / dining area which made the floor uneven. There was a hole in the wall which allowed rats and cockroaches into the property. The tenants drew this issue to the attention of the landlord but it was never remedied. (e) The oven did not work. Two of the elements on the stove top did not work. The tenants told the landlord also about this but it was not repaired. (f) The heating in the property was inadequate, there was no source of heating in the living rooms. The property was very cold in winter. The tenants complained about this issue to the landlord. When it got particularly cold the tenants and their son all slept in the same room. (g) The exterior of the property was in a decrepit and run down condition. There was black tape to hold the spouting together. A fence at the back of the property was broken. (h) In the bathroom, the cabinet under the sink was starting to rot. There was constant mould in the bathroom which the tenants had to clean off. There was no extractor fan in the bathroom. The tenant complained to the landlord also about this issue. (i) The kitchen cupboards could not be closed. The tenants complained to the landlord about that issue.
- Regarding the landlord’s rent summary, this showed that the last payment made by the tenants was $1,500 and was paid on 23 August 2024.
- [Witness 1], a relative, gave evidence in support of the tenants. She said: a. She first visited the property back when the tenants took their tenancy in 2017. b. By 2021, she considered the property was well below a habitable standard. She said no one should have been living there. The ceiling was leaking and falling down in parts. There was always mould in the bathroom. The carpet was very thin, and threadbare in places. In the covered balcony there were leaks and the tenants would have to put towels on the floor. The outside porch and railings were all rotting away. c. She arranged to get a report from [redacted], a healthy homes specialist. This report concluded that the premises were non-compliant in heating, insulation, ventilation, draught stopping and moisture ingress and drainage standards. d. She has on occasions contacted the landlord about some of these issues, on behalf of the tenants. The position of the landlord
- The landlord claims that $8700 is owing for rent.
- He said the condition of the property is exactly what the tenants described. He said he initially wanted to do renovations but it was clear to him that the tenants were treating the premises as their family home and did not want to leave.
- The landlord said he did install new insulation when he took over the tenancy but provided no corroborating evidence to support that.
- He agreed that the tenants reported leaks and every time that happened he sent a builder to repair the leaks. He says this happened three times, but eventually the builder told him he would need to replace the roof. This was in May 2023.
- At this point, he told [Witness 1] that the builder said to replace the roof but that he was thinking of replacing the kitchen and bathroom as well anyway. He explained that he would need to give 90 days to terminate the tenancy in that event.
- He asked her to help them find another tenancy, but never heard back.
- [Witness 1] said she replied to say she would try to find an alternative property for the tenants but was unable to do so.
- The landlord said he was trying to act respectfully and reasonably towards the tenants.
- Regarding the heating, he intended to install a heat pump but never did so. Burden of proof
- Before I go on to consider what issues this premises has had, I begin by noting that the Tribunal applies the usual civil law standards and expectations as to the burden of proof. That means that it is for the party bringing the application to establish their claims “on the balance of probabilities”. They must establish that what they are claiming is more probable than not.
- This is referred to as the “burden of proof”. Independent witnesses, corroborating documents and reports and photographs can be an important part of discharging this burden. Ultimately however, it is for the party making the application to decide what evidence to put before the Tribunal.
- As noted in Kaipo v Clarke, in practical terms this means that: 1 ...[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 1 Kaipo v Clarke DC Waitakere TT 233/02, 12 April 2002, at [7]. 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 tenants say the premises were not healthy homes compliant. As I explained to the parties during the hearing, for tenancies entered into or renewed between 1 July 2021 and 27 August 2022, private landlords must ensure that they comply with the healthy homes standards within 90 days of any new or renewed tenancy.
- This tenancy commenced before that time so did not need to be healthy homes compliant. I explained to the parties during the hearing that the landlord did however need to comply with their obligations under the Residential Tenancies Act 1986 (the RTA).
- Under s 45 of 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. 2
- The landlord also has an obligation under the Housing Improvement Regulations 1947, regulation 15, as follows: “Every house shall be free from dampness”. Regulation 17 provides that the materials from which a house is constructed must be sound, durable and, where subject to the effects of the weather, weatherproof. Likewise, the walls and ceilings of every habitable room, bathroom, kitchen, hall and stairway must be sheathed, plastered, rendered or otherwise treated and shall be maintained to the satisfaction of the local authority. This regulation further provides that every floor shall be kept in a good state of repair, free from crevices, holes and depressions. Regulation 6 provides that Every living room shall be fitted with a fireplace and chimney or other approved form of heating.
- 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. 3 ) Further, a tenant must notify the landlord as soon as possible after discovery of any damage to the premises and the need for repair. 4 The landlord's obligation is to then repair within a reasonable time after knowledge of the need for repair. 5 Analysis
- The landlord has breached their obligations under s 45 (1) (a) to (c) of the RTA and the Housing Improvement Regulations 1947 in the following respects: 2 Section 45 (1)(a)-(c) of the RTA 3 DC Auckland CIV 2005 004 1762, at [28] 4 S 40(1)(d) of the RTA, Vu v Hutchings [2016 ] NZTT 4054247, at [13] 5 Collins v Professionals Hutt City Ltd DC Wellington CIV 2009 085 1431, at [15] a. There was no source of heating at all in the living area. I accept the tenant’s evidence and find that the premises were very cold, particularly in winter time. b. The windows would not close properly. This would have made the property even colder in winter. c. The exterior of the property was in a dilapidated and poor condition and part of the exterior railing is rotting. d. There are holes in the interior walls letting rodent and cockroaches in. e. The ceiling is falling down in parts. f. There is a mould issue in the bathroom, likely caused by the lack of an extractor fan. g. There are cracked tiles in the kitchen and dining area. h. There were holes in the roof and ceiling which let water in whenever it rained. i. The cupboards could not be closed properly.
- I found the tenants and [Witness 1] to be truthful in their description of the property, which was not in any event challenged by the landlord. The premises were rotting, dilapidated and there should not have been people living there.
- The tenants had lived in the premises a very long time, and may well have initially been reluctant to leave, but I accept their explanation they could not leave until they found somewhere else to live and that was difficult.
- The fact that the landlord was being mindful of their attempt to find alternative premises does not remove the landlord’s need to comply with the obligations under the RTA.
- I accept the landlord has attempted repairs where he could but still, the problems persisted and it was no answer for the landlord to conclude that the obligation to comply with Healthy Homes standards did not yet apply. This is because the landlord had clear obligations to the tenants under s 45 of the RTA, regardless.
- The parties have been in a contractual relationship from May 2021 to October 2024. I consider it appropriate to award a global sum of $10,000 to the tenants as compensation for the landlord’s failure to company with s 45 of the RTA. This is the sum they asked for and I consider it is a reasonable sum to compensate them for the living conditions they endured over this period of time. Exemplary damages
- The tenants have also applied for exemplary damages.
- The landlord’s failure to comply with s 45(1)(a)-(c) of the RTA was an unlawful act, for which the maximum amount that can be awarded is $7200.
- 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 Auckland City Council v Blundell, the Court of Appeal stated: 6 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 the conduct.
- 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.
- It is established and settled law that the Tribunal must take into account the intent of the party against whom the order for exemplary damages are sought: 7 Before an award of 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 the act and deliberately set about to commit it.
- That there must therefore be evidence of actual intention on the part of the landlord (as opposed to mere negligence) has been accepted in several District Court decisions as being the touchstone. 8 6 Auckland City Council v Blondell [1986] 1 NZLR 732 (CA) at 704 per Cooke P 7 See Chief Executive ex Parte Edmonson v Walls, North Shore Tenancy Tribunal 548/92, 29 June 1993 at [20]. 8 See, for example, AI Property Managers Ltd v Duggan [2021] NZDC 9168 and TMT New Zealand Ltd v Sweeney [2021] NZDC 16182.
- The District Court in MBIE v Hillis Shearing Ltd 9 has recently concluded that a global approach to exemplary damages is to be taken in the case of the landlord’s obligations under 45(1), with the District Court stating: 10 This maximum amount would be meaningless if breaches under S 45 could be punished separately with the maximum amount multiplied a number of times over.
- The landlord accepted the condition of the property was as the tenants had described it. He barely challenged this aspect. He knew the property needed a heat pump but did not install one. The sheer visual condition of this property would have signalled to any responsible landlord that significant repairs were necessary.
- I cannot accept that the landlord did not act intentionally in failing to comply with the obligations under s 45.
- In my assessment, the breaches are of such a magnitude that any reasonable landlord would have been well aware of them.
- It is strongly in the public interest that premises are in a reasonable living condition throughout a tenancy, no matter how cheap the rent.
- An appropriate starting point in this case is one third of the maximum.
- I consider that it would be just to require the landlord to pay the tenants $2,000 by way of exemplary damages.
- I take into account the landlord’s explanations in reducing the amount order to roughly half of the total amount that could have been ordered. I consider that a mitigating factor here is that the landlord did not in this case set out to avoid its obligations under the RTA. I think that this has been more a case where the landlord has adopted a casual approach to its obligations under the RTA. I accept that there were some attempts at repairs.
- Offset against the sums I have ordered in favour of the tenants is the rent owing of $8700. I find the landlord to have proven that claim.
- Both parties have had a measure of success and so I do not refund the filing fee.
- I order name suppression in favour of both parties, for the same reason.