Published tribunal order
Tenancy Tribunal case 5011888 — Exemplary damages
Decided 3 Feb 2025 · Published 3 Feb 2025 · Application 5011888
- 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 and Landlord’s names and identifying details.
- [The landlord] must pay [the tenant] $10,227.00 immediately, calculated as shown in table below.
Reasons
- Both parties attended the hearing today. The property owners, the property manager and the owner of the property management company appeared for the landlord.
- The landlord has applied for rent arrears, compensation, refund of the bond, and reimbursement of the filing fee following the end of the tenancy. Background
- The tenant was renting a premise that was not suitable for her health needs and her business needs, so she actively began looking for a new place to live and run her business from.
- The property manager obtained the tenants contact details from a family member and was told she was looking for a tenancy in the area.
- The property owners had a one-bedroom self-contained unit on their property and decided to let it out through a property manager as they did nit want to have to deal with tenants directly.
- The property manager showed the tenant the premise and was told the tenant had a condition that meant she had an issue with chemical sprays, especially pesticides, and wanted to be sure there was nothing in the premise that may trigger her allergies to chemical sprays and pesticides.
- The property manager says she allowed the tenant more time than usual for her to go through the premise carefully and open all drawers and cupboards to ensure the environment did not contain any allergens that may trigger an auto immune response.
- The tenant asked if it would be possible for her to have a one-month trial period, before committing to the 12-month fixed term being offered so she could be sure there would be no auto immune related issues once she had moved into the property. She was informed by the property manager that the cost of finding and placing a tenant makes a one-month placement not fiscally viable for the owners who would incur those costs al over again if the tenancy ended in a month. The property manager says she was very clear about this and that the tenant accepted this.
- The tenant also asked if the owners would commit to not using pesticides on the property, more especially directly around her unit, if she could move some of the landlord’s furniture out of the unit and use her own and some further questions about use of the garage. The property manager said that these details could be put to and worked out with the property owners on 23 July 2024, when the property manager would take the tenant to meet the owners.
- The property manager verbally offered the rental premise to the tenant on 16 July 2024 and the tenant verbally accepted the tenancy over the phone. The property manager says that her intention was to convey that the tenant was the preferred applicant but that confirmation of securing the tenancy would be conditional upon the property owners’ agreement to let the premise to the tenant. Further, she says the property owners were living in such close proximity to the unit that they wanted to meet the preferred application before any offer was made as they needed to know they would get on with that person. However, the property manager did not convey this condition to the tenant and the tenant’s understanding was that she had been verbally offered the premise and she had verbally accepted and was waiting to receive written confirmation in the form of a tenancy agreement.
- The tenant has produced an email that proves on 17 July 2024, the property manager emailed a signed tenancy agreement to the tenant, asked her to sign it and to bring it with her when she came to meet the property owners on 23 July 2024. The tenant was also provided with a signed bond form dated 17 August 2024. The body of the email says “I hope you are enjoying this beautiful sun. Attached is the Tenancy Agreement and Bond form for [address suppressed]. Can you please read over them, sign and return to me. Please let me know when you can make payment for bond and 1st weeks rent in advance”.
- Based on the receipt of this written and signed agreement and the signed bond lodgement form, the tenant gave notice to her current landlord, purchased a fridge and started making arrangements to buy furniture for the rental premise. She signed the agreement on 19 July 2024 and put it in her bag to take to the catch up on 23 July 2024. The tenant took these preparatory steps towards moving based on the promise of the tenancy that had been verbally offered to her and on the basis of the terms and conditions contained in a written and signed tenancy agreement that had the same clear and certain terms that she had agreed to when verbally.
- The tenant had hoped that she could discuss the small details about the spraying, the garage et wit the property owners on 23 July 2025, but was happy with the terms and conditions outlined in the 12-month fixed term agreement she signed. She though that the parties could add a variation document to the tenancy agreement, if required, after the 23 July 2024 meeting with the owners.
- The property manager was new to the role and confirmed she had not meant to send a signed copy of the tenancy agreement to the tenant on 18 July 2024 and that she did so in error. She was under the impression that the conditional verbal offer she had made was not binding until after the tenant met the property owners and approval to continue with a formal written offer. The property manager did not raise this error with the tenant and the property managers actions thereafter led the tenant to believe the offer was genuine and binding. It had been verbally accepted by both parties and a signed copy sent to the tenant with an expectation the tenant would sign it and bring it to the 23 July 2024 meeting, that the meeting was for the tenant to meet the owners and to discuss storage in the garage.
- On 20 July 2024, the tenant had signed the Agreement and was feeling a bit apprehensive about whether the property manager had made the owners clear about the need to accommodate the tenant’s disability and if the owners were going to be agreeable to not spraying around the unit. She says she called the property manager to seek her assurance that she had fully discussed this with the owners before confirming the tenancy with the tenant. When the property manager did not answer, the tenant went to the property to see if she could clarify what she needed to accommodate her disability and to ensure the owners were fully aware of what accommodation might look like.
- The property manager produced a screen shot from her phone that shows there were no missed call from the tenant’s number and the tenant produced a screen shot from her temporary phone that proved she had made a call to the property manager’s mobile number. The parties could not explain this evidential discrepancy, but this evidence was not critical to the tenant proving her claims. The tenant’s phone broke on the afternoon of 20 July 2024, and she got the loan of a temporary one on 21 July 2024. I was unsure whether this may have had anything to do with the screen shot discrepancy.
- The owners were out of Auckland when the tenant went to the gate, they confirmed they were surprised she had made direct contact with them, as that is why they had engaged the property manager but agreed to talk to her over the phone. The partes say the phone call was cordial and polite and the owners agreed to the tenant storing some of their furniture so she could use her own and to put in a mechanism in the garage to stop the flow of air between the two garages. The tenant followed this call up with a voice message over WhatsApp and the owners agreeing to the terms discussed. The tenant also mentioned the notice period again, the owners ignored this request as the property manager had already dealt with this issue.
- The property owners at this point were still acting under the belief there had been no offer made to the tenant and that no offer would be made until they had met the tenant and agreed to her renting the unit.
- On the Monday, 22 July 2024, the property manager’s boss met with the property manager and informed her that he was aware that the farm next to the premise regularly had a helicopter spray pesticide over the entire farm and that he had some concerns about how this may impact the tenant’s health. He made it clear that the owners had no control over when this spraying was undertaken and that they often had no warning it was about to be done. He expressed his concern that the tenant’s health may at significant risk and the property manager needed to convey this to the tenant as he did not think the tenant’s disability could be accommodated and the company was at potential risk if the tenant was not informed of this risk and suffered a health even as a result.
- The same day the property manager spoke with the owners, and they indicated they did not want to go ahead with offering the tenant the unit. They confirmed to me that they too were concerned about their ability to ensure the tenant’s safety when their neighbours undertook aerial spraying. In addition, they informed the property manager they were not happy with the way she had issued so many demands that made them think her living so close to them, with all her special requirements was more than they wanted to deal with. They were also not happy that she went to them directly and thought that her actions showed that it was highly probable she would continue to bypass the property manager during the tenancy and take all her issues to them.
- The property manager says she was busy that day, so at 10:21am on 22 July 2024, she sent a text to the tenant that says “I have just had a phone call from the landlords at [address suppressed]. I am not happy that you have gone to the property without my permission, I told you we would go through the property on Tuesday and you could have a conversation with them about spraying once you are settled. You have also asked about a trial, I told you this was not an option. I find this incredibly unprofessional and really rude. At this stage I am withdrawing your application”. This text was followed by a further text at 12:21pm that says “can you please send me your account number and I will get your bond refunded”. The tenant correctly states there is nothing in this email that suggests the offer of the tenancy was conditional on receiving the owners approval.
- The property manager says the tenants bond payment record shows the bond was made at 11am, just after the property manager had sent a text terminating the tenancy and that the tenant should not ha vade this payment. The tenant has this morning produced a letter from her bank confirming that her payment was made prior to 9am that day but processed at 11am in line with their normal processing timeframes. Regardless, the tenant was under the belief that the agreement was binding, and she thought she could talk to the property manager to clear up the concerns. She did not take the text termination of the tenancy as the process had gone well beyond the application stage. After appealing to the property manager, she became aware that the property manager intended this text to end the tenancy and was not going to change her mind.
- Based on all the evidence, I find that a residential tenancy exists and existed from the moment the property manager verbally offered the tenancy to the tenant, which the tenant accepted, and followed that offer up with a signed agreement that the parties intended the tenant would sign and bring the hard signed copy to the pre-arranged meeting with the owners on 23 July 2024.
- I also find that the tenant accepted the terms and conditions in the 12-month fixed term tenancy agreement and started to make preparations to move into the premise on 26 July 2024, to her detriment.
- Consideration was agreed and the tenant made payment of the bond on 22 July 2024, based on her view that she had a legally binding fixed term lease.
Did the landlord act to give notice ending the tenancy without lawful grounds?
- The tenant claims that the landlord has breached their obligations under section 60AA.
- Under Section 60AA a landlord must not give a notice to terminate the tenancy or apply to the Tribunal for such an order, knowing they are not entitled to do so.
- Breaching any of these obligations without a reasonable excuse is an unlawful act for which exemplary damages may be awarded up to a maximum of $6500.00. See section 60AA and Schedule 1A Residential Tenancies Act 1986.
- Based on the evidence outlined in the background section of this decision, I find the landlord committed an unlawful act when it ended the tenancy by text message on 22 July 2024, when it ought reasonably to have known that it had entered into a binding and enforceable tenancy agreement with the tenant when it sent her the signed copy of the tenancy agreement on 18 July 2024, that contained the terms and conditions conveyed to her in the 16 July 2024 verbal offer, that the tenant had verbally accepted and had agreed to sign and bring to the 23 July 2024 meeting.
- The new property manager had access to an experienced property manager that would have known that the landlord was not entitled to lawfully end that tenancy unilaterally when and how it did.
- I find that the landlord intentionally breached s60AA of the RTA when it terminated this tenancy.
- 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.
- I am satisfied the landlord gave the tenant notice terminating the tenancy when it did not have grounds to do so, and that the property manager should have known or found out what was required to justify terminating the tenancy before issuing a termination notice by text and it did not. Therefore, it would be it would be just to require the landlord to pay the tenant $1,625.00 of exemplary damages (a quarter of the maximum penalty available), because: a. The landlord should have reasonably known it could not terminate the tenancy based on not having yet received the signed copy of the tenancy agreement that the tenant had verbally accepted and informed the landlord she was going to sign and bring to the 23 July 2024 meeting. The property manager terminated the tenancy in retaliation to the tenant going behind her back to the owners and because the owners had informed her that they did not want to have to reasonably accommodate the tenant’s disability and numerous demands as one of the owners had health issues and did not want any stress. The tenant took steps to try to get the landlord to back track and retracked the unlawful notice, but the property manager and the owners considered her too high a risk as a tenant and chose to go with the termination of the tenancy. They did not give the tenant the additional information about the neighbours aerial spraying of pesticides, the owners inability to control when that was undertaken, and the owners concerns about how that could impact the tenants health. As such, the tenant was denied the opportunity to decide whether she wanted to end the fixed term tenancy earlier by the consent of all parties and asked if she wanted to stay until she found alternative accommodation. The property manager with reasonable diligence should have been able to ascertain whether the tenancy could be lawfully ended before she gave the tenant notice terminating the tenancy; b. The impact on the tenant of the landlord giving her unlawful notice was that she was placed in a position where she had to find alternative accommodation quickly and has still been unable to find anywhere suitable to live. She confirmed she is staying with a friend that has just sold her house and so she is about to be homeless. In addition, the tenant produced evidence from her accountant that she works from home and has lost 10 weeks income from the landlord’s breach. This lost income amounts to $370.00 per week; c. It is in the interests of the tenant to be compensated for the landlord’s failure to give notice terminating the tenancy on lawful grounds; d. It is in the public interest to penalise landlord’s that intentionally breach the law and fail to ensure notice is given to tenants terminating their tenancy when there are not lawful grounds to justify the giving of such notice.
- The quantum of one quarter of the maximum penalty available is because I am also awarding additional exemplary damages for the termination being based on discriminatory factors. I consider it appropriate in the circumstances to make made two lesser exemplary damage awards that recognise that the termination was unlawful on two distinctly separate grounds.
- The tenant made claims for her moving costs but has not quantified these costs nor produced evidence to support the claim. I dismiss the claim for moving costs.
- I award the tenant $3,700.00 lost income based on the evidence produced by her accountant that proves that loss. Did the landlord terminate the tenancy in contravention of the Human Rights Act 1993?
- [The tenant] claims that the landlord discriminated against them.
- A landlord must not discriminate against a tenant in relation to the grant, renewal, variation or termination of a tenancy, in contravention of the Human Rights Act 1999. See sections 12(1) and 109(3) Residential Tenancies Act 1986.
- Section 12(4) also confirms that tenancy agreement, in this section, “includes a prospective tenancy agreement, regardless of whether or not a tenancy is granted”.
- Section 21 of the Human Rights Act 1993 (“HRA”) specifies the prohibited grounds of discrimination, which include sex, marital status, religious or ethical belief, race or ethnicity, disability, age, political opinion, employment status, family status, and sexual orientation.
- The HRA, protects tenants against discrimination in the landlord’s grant, renewal, variation or termination of a tenancy and the definition of “disability” covers a wide range of situations. The definition includes a physical disability or impairment or a physical illness.
- In addition, s19 of the New Zealand Bill of Rights Act 1990 defines discrimination as -“differential treatment on a prohibited ground of a person or group in comparable circumstances ... [that] when viewed in context ... Imposes a material disadvantage on the person or group differentiated against.”
- Ministry of Health v Atkinson [2012] NZCA 184 at [109]. See also discussion in Butler, The New Zealand Bill of Rights Act: A Commentary, 2ed, at 17.9.
- The wording of s12 of the RTA also does not suggest that the test requires “intention”. See Butler, at 17.13, citing Child Poverty Action Group Inc v. Attorney General [2013] NZCA 402, at [53].
- The tenant went to great lengths to ensure the property manager and the owners knew that she had a physical disability in the form of being immune suppressed and being made physically unwell when exposed to certain chemicals and sprays, that she could define.
- The landlord had the obligation not to discriminate against her because of this disability when deciding whether to grant her the tenancy or in deciding to terminate the tenancy.
- Breaching this obligation is an unlawful act for which the Tribunal may award exemplary damages up to a maximum of $6,500.00. See section 12(1) and Schedule 1A Residential Tenancies Act 1986.
- For the reasons set out above, I find that the landlord terminated the tenancy based on not wanting to have to deal with the tenant’s disability on an ongoing basis and its fear that it may not have been able to accommodate her disability enough to stop adverse health events.
- I find the landlord has committed an unlawful act.
- Where a party has committed an unlawful act intentionally, the Tribunal may award exemplary damages if it is satisfied that 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.
- I am satisfied the landlord did not discriminate in the granting of the tenancy as the offer was made and accepted by the parties despite the property manager’s knowledge that the tenant had a health-based disability.
- I am satisfied that the notice terminating the tenancy was at least in part based on a prohibited ground in the HRA and is therefore unlawful.
- The property manager, her boss and the owners all discussed the tenant’s disability and decided that accommodating it was to hard and the owners were not well enough to ensure the ongoing stress of having to do so, so they agreed the tenant had made to many demands, would be too much trouble for the owners (who would have to live next door to her on a daily basis) and did not want to have to deal with the risks their neighbours aerial spraying created for the tenant. Instead of discussing this with the tenant and coming to a mutually agreeable solution to their joint plight, the property manager unilaterally and intentionally made the decision not to continue with offer of a tenancy she had already made because of these factors. Therefore, it would be it would be just to require the landlord to pay the tenant $4,875.00 of exemplary damages (three quarters of the maximum penalty available), because: a. The landlord should have reasonably known it was a breach of the RTA to make a decision not to grant or to terminate the tenancy based on one of the prohibited grounds set out in the HRA; b. The stress and inconvenience on the tenant of the landlord discriminating against her based on her disability has been significant as it has placed her in a position where she had to find alternative accommodation quickly and has still been unable to find anywhere suitable to live. She confirmed she is staying with a friend that has just sold her house and so she is about to be homeless and will once again have nowhere she can work from; c. It is in the interests of the tenant to be compensated for the landlord’s discrimination; d. It is in the public interest to penalise landlord’s that intentionally breach the law and give notice to a tenant terminating their tenancy based in part on statutorily prohibited discriminatory grounds. Reimbursement of the filing fee
- Because the tenant has wholly succeeded with her claim, I must reimburse the filing fee. Name suppression
- The tenant applies for non-publication of her name and identifying details.
- The Tribunal must, on the application of a party that has wholly or substantially succeeded in proceedings, order that the party’s name or identifying particulars not be published, unless the Tribunal considers that publication is in the public interest or is justified because of the party’s conduct or any other circumstances of the case.
- The tenant has substantially succeeded in her proceedings. I do not consider publication is in the public interest or justified because of the tenant’s conduct or any other circumstances of the case.
- Non-publication is ordered.
- The landlord made an application during the hearing for its name and identifying details to be suppressed.
- I am satisfied that the public interest in this matter does not outweigh the significant duress publishing the landlord’s name could result in when the property owners try to relet the premise. I therefore used my discretion to grant the landlord suppression of the property management company’s and the owners names and identifying details.