Published tribunal order
Tenancy Tribunal case 5070321 — Exemplary damages at 33 Kanuka Place, Mangawhai Heads, Mangawhai 0505
Decided 19 Mar 2025 · Published 19 Mar 2025 · Application 5070321
- Exemplary damages
- Healthy homes
Party names are redacted in the official published order.
Order
- [The landlord/s] must pay [The tenant/s] $824.81 immediately, calculated as shown in table below.
- I am dismissing the landlords claim for cleaning the blinds, repairing the wall and legal costs.
- Gary Porteous and Leslee Porteous and John Langford and Victoria Langford have applied for suppression of their names and identifying details. As both parties have been successful, I will grant suppression for both parties.
Reasons
- At the outset I apologise for the latest in receiving this order.
- Both parties attended the hearing.
- This is a landlord application and a tenant cross application.
- The landlord claimed the following: -Compensation, for legal costs, damage to coffee table and wall, cleaning costs, blind cleaning, -Refund of the bond, -Reimbursement of the filing fee following the end of the tenancy.
- The tenants claim the following: -The landlord has failed to lodge the bond, -Refund of the bond, -Breach of healthy homes standards, -Refund of the extra $450 charged for daughter staying for three weeks, -They were charged above market rent.
- The tenants seek the refund of the $450.00 and bond, dispute the landlord claims regarding cleanliness and damage to wall. They accept that they have caused damage to a coffee table.
- I am awarding the landlord the sum of $250.00 for the cost of the repairs to the coffee table as it is not disputed by the tenants. Civil burden of proof for Tenancy Tribunal:
- The Tenancy Tribunal applies the usual civil law standards and expectations. That means that it is for the party bringing the application to establish their claims “on the balance of probabilities”.
- That means that they must establish that what they are claiming is more likely than not. This is referred to as the “burden of proof”. Independent witnesses, corroborating documents and photographs are an important part of discharging this burden.
- As noted 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. Landlords’ claims :
Did the tenant comply with their obligations at the end of the tenancy?
- At the end of the tenancy the tenant must leave the premises reasonably clean and tidy, remove all rubbish, return all keys and security devices, and leave all chattels provided for their benefit. See section 40(1)(e)(ii)-(v) Residential Tenancies Act 1986. The tenant is required to replace worn out smoke alarm batteries during the tenancy. See section 40(1)(ca) Residential Tenancies Act 1986. The tenant must also replace standard light bulbs.
- The tenant did not leave the premises reasonably clean and tidy.
- The landlord provided the tenants and Tribunal with detailed photos of the property at the end of the tenancy and an invoice for cleaning costs.
- The tenants were unwell and not in a position to clean more thoroughly than they should have.
- I find the landlord has been successful with their claim for cleaning costs.
- The landlord also claims for the cost of cleaning the blinds for mould throughout the house after the end of the tenancy. The tenants say that the property was not adequately ventilated, and this caused mould to develop on the blinds.
- The property was not Healthy Homes complainant in terms of insulation, heating and ventilation; therefore, I may accept the tenants claim that the mould build up was a result of the failure to comply with the healthy homes standards.
- I am not satisfied that the landlord has been successful with their claim for the cleaning of the blinds.
Is the tenant responsible for the damage to the premises?
- A landlord must prove that damage to the premises occurred during the tenancy and is more than fair wear and tear. If this is established, to avoid liability, the tenant must prove they did not carelessly or intentionally cause or permit the damage. Tenants are liable for the actions of people at the premises with their permission. See sections 40(2)(a), 41 and 49B RTA.
- Where the damage is careless, and occurs after 27 August 2019, section 49B RTA applies. If the landlord becomes aware of the damage after 27 August, the damage is presumed to have occurred after that date unless the tenant proves otherwise.
- Where the damage is caused carelessly, and is covered by the landlord's insurance, the tenant's liability is limited to the lesser of the insurance excess or four weeks' rent (or four weeks' market rent in the case of a tenant paying income-related rent). See section 49B(3)(a) RTA.
- Where the damage is careless and is not covered by the landlord's insurance, the tenant's liability is limited to four weeks' rent (or market rent). See section 49B(3)(b) RTA. Where insurance money is irrecoverable because of the tenant's conduct, the property is treated as if it is not insured against the damage. See section 49B(3A)(a) RTA.
- Tenants are liable for the cost of repairing damage that is intentional or which results from any activity at the premises that is an imprisonable offence. This applies to anything the tenant does and anything done by a person they are responsible for. See section 49B(1) RTA.
- Damage is intentional where a person intends to cause damage and takes the necessary steps to achieve that purpose. Damage is also intentional where a person does something, or allows a situation to continue, knowing that damage is a certainty. See Guo v Korck [2019] NZHC 1541.
- The landlord claimed the following damage was caused during the tenancy: -Coffee table. (I have already awarded the landlord for these repairs in paragraph 6). -Wall damage.
- The landlord claims the damage is more than fair wear and tear, and the tenant has not disproved liability for the damage.
- The landlord has provided an invoice for the cost of washing, sanding, and repainting the wall. Furthermore, the landlord provided one photo of a wall with what appeared to be plaster on it.
- I am not satisfied that the landlord has proven the claim to the standard required of the Tribunal. The marks appeared to be minor and more wear and tear rather than any intentional damage. I am dismissing the claim for the wall repairs. Legal costs:
- This is a “lay Tribunal” and legal representation, and costs are not generally allowed, as the Tribunal does not award costs to or against any party. There are exceptions, such as when a party is found to have acted unlawfully or when the Tribunal deems it necessary due to the complexity of the issues or significant differences between the parties.( See s102 RTA).
- In general, that means that if you engage a lawyer or incur other legal expenses, you are unlikely to be reimbursed by the Tribunal.
- I do not consider that there were any significant complexities with these applications, nor claims exceeding $6000.00 that would warrant legal assistance.
- I do not find the tenants applications to be frivolous or vexatious and ought not to have been brought.
- Part of the process of preparing for a claim in any tribunal is the presentation of the application, documentation, and evidence. Both parties made applications and both parties shared the same burden of proof.
- For the reasons set up above I am not awarding the landlord legal costs. Filing fees for both parties:
- As both parties have been partially successful, I am not reimbursing either party the filing fee. Tenants’ claims:
- [The tenant/s] claim 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 accepted that they had not filed the bond within 23 working days. They say they did not intend to commit this breach, and that the tenant’s bond had gone into a bank account.
- I find the landlord has committed an unlawful act.
- 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.
- 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.
- The failure to lodge the bond must be intentional for exemplary damages to be awarded. Therefore, damages will not be awarded where non-lodgement is a genuine oversight, rather than an intentional act (Chief Executive for Housing New Zealand v Walls [1993] NZTT Auckland 548/92).
- However, the Tribunal may draw an inference of intent where the landlord claims to have simply forgotten or did not realise, they had to do so, as a landlord should have systems in place to ensure this does not happen. Exemplary damages have been awarded where: the landlord has no explanation for the non-lodgement (Jones v Ying [2001] NZTT Auckland 2783/01).
- In TMT Zealand Limited TA Strata Property Management v Sweeney and Sundahl [2021] NZDC 16182 the Judge said “Parliament's intention would be subverted if landlords were able to escape consequences for the unlawful acts involved by claiming ignorance of the law." Para 37.
- I award the tenants exemplary damages of $500.00 for the landlord’s failure to lodge the bond, this takes into account: •That the breach was for nearly 2 years. •That the tenant was placed in an uncertain position because the landlord did not lodge their bond. •That it is in the public interest to deter landlord’s from failing to lodge bond.
- The landlord is to refund the sum of $800.00 immediately to the tenants which represents the amount they paid the landlord in bond. Breach of Healthy Homes Standard s 45 RTA
- [The tenant/s] claim that the landlord has breached their obligations under section 45 of the Residential Tenancies Act 1986(RTA).
- Under section 45, a landlord must -provide the premises in a reasonable state of cleanliness. -provide and maintain the premises in a reasonable state of repair. -comply with all requirements in respect of smoke alarms and insulation set out in the Residential Tenancies (Smoke Alarms and Insulation) Regulations 2016 -comply with any relevant enactment in relation to buildings, health, and safety. -provide an adequate means for the collection and storage of water if there is no reticulated supply.
- Breaching any of these obligations is an unlawful act for which exemplary damages may be awarded up to a maximum of $7,200.00. See section 45(1A) and Schedule 1A Residential Tenancies Act 1986.
- The tenant claims that the property did not have heating as required under the RTA and that there were no bathroom or kitchen extractor fans.
- [The tenant/s] consider that the landlord has failed to comply with the HHS heating standard.
- Compliance dates for the HHS vary depending on the tenancy: a. All private rentals must comply within 90 days of any new or renewed tenancy after 1 July 2021, with all private rentals complying by 1 July 2024. b. All boarding houses must comply by 1 July 2021. c. All houses rented by Kāinga Ora and registered Community Housing Providers must comply by 1 July 2023.
- The heating standard requires landlords to provide one or more ‘qualifying heaters,’ with a capacity to heat the room to a required level. The heating standard defines what a qualifying heater would be and confirms that certain types of heaters are unacceptable heaters for the purpose of the HHS.
- The heating standard requires that heaters in the particular tenancy have a minimum heating capacity. An on-line calculator has been produced in order to determine what level of heating is required for any particular premises, and that can be found at https://www.tenancy.govt.nz/heating-tool/
- The HHS does provide exemptions in specific circumstances.
- The landlord provided two heaters during the tenancy. However, the tenants claim the property was mouldy due to lack of adequate insulation, ventilation and heating.
- There is no dispute that at the end of the tenancy the landlord obtained a Healthy Homes Assessment, and the property was non-compliant with heating, ventilation, and insulation standards. The landlord has subsequently carried out the work needed to bring the property up to standard.
- I find that there has been a breach of the Healthy Homes standards and a lack of awareness of a landlord’s obligations to comply, I therefore must find that the breach was intentional.
- The purpose of the Healthy Homes Standards for rental properties in New Zealand, is to ensure that rental properties are warmer, drier, and healthier, by establishing minimum standards for heating, insulation, and ventilation.
- I am awarding the tenants $500.00 in exemplary damages for the landlord’s breach of their obligation to comply with Healthy Homes Standards.
- I accept that the Landlord’s did not generally rent out this property to tenants. It was mainly, prior to the tenancy, a family Bach and occasional Air BnB. However, the tenants were at the property paying rent for nearly 2 years. Market rent:
- The tenants claim that they pay more than the market rent for the property:
- Sections 25(1) and (3) Residential Tenancies Act 1986 provide: (1) On an application made to it at any time by the tenant, the Tribunal may, in accordance with the succeeding provisions of this section, on being satisfied that the rent payable or to become payable for the tenancy exceeds the market rent by a substantial amount, make an order reducing the rent to an amount, to be specified in the order, that is in line with the market rent. (3) For the purposes of this Act, the market rent for any tenancy shall be the rent that, without regard to the personal circumstances of the landlord or the tenant, a willing landlord might reasonably expect to receive and a willing tenant might reasonably expect to pay for the tenancy, taking into consideration the general level of rents (other than income-related rents within the meaning of section 2(1) of the Public and Community Housing Management Act 1992) for comparable tenancies of comparable premises in the locality or in similar localities and such other matters as the Tribunal considers relevant.
- In the case of a fixed term tenancy, any application must be filed no later than 3 months after the start of the tenancy or the last rent review (see s 25(2) RTA).
- The tenant must prove on the balance of probabilities that the rent exceeds market rent by a “substantial amount”. The term 'substantial' is not defined in the RTA, but it is the opposite of ‘minor’ or ‘insignificant’. Some earlier Tribunal cases suggested a 'rule of thumb' of 10% over market rent. However, a rule of thumb based on a specific percentage has no legal status and is not appropriate where rents rise at a rate significantly above income inflation.
- The test for market rent is the amount “a willing landlord might reasonably expect to receive, and a willing tenant might reasonably expect to pay for the tenancy”.
- The concept of the 'market' is constrained by the requirement that both parties be 'willing', and that the rent meets their 'reasonable' expectations. These terms are not defined by the Act. The Oxford English dictionary defines willing as: "having a ready will; disposed to consent or comply; ready to do (what is specified or implied) without reluctance"; and reasonable as "having sound judgement; sensible ... not asking for too much ... not extravagant or excessive; moderate".
- The factors the Tribunal may have regard to are “the general level of rents ... for comparable tenancies of comparable premises in the locality or in similar localities and such other matters as the Tribunal considers relevant”.
- The evidence for comparable rents is usually based on advertisements for similar premises in the locality. This evidence has its limitations. Although advertisements usually list the essential features of the property advertised, there is often limited qualitative information available for comparison. Also, advertisements only cover houses currently on the market and do not necessarily reflect the overall level of rents charged for existing similar tenancies in the area.
- It is also common for parties to refer to the 'market rent' statistics published by Tenancy Services. These statistics cover the rents charged for tenancies where bonds have been lodged over the preceding 6 months. The statistics include median rent as well as upper and lower quartile.
- The Tribunal may also consider “such other matters as [it] considers relevant” to market rent. In Housing New Zealand v Hobman (DC Lower Hutt, TT89/97, 27 November 1997) the Court said the other factors to be considered must be of the same kind as the preceding specified factors. It is arguable however that the term ‘other matters’ is broad enough to cover any anything relevant to the ‘reasonable’ expectations of a ‘willing’ landlord or tenant.
- The tenants offer no evidence to support their claim. The landlord, however, has provided the Tribunal for a current rent appraisal from a local property management company. From that report, it would appear that the property is under market rent.
- I do not find that the tenants were charged more than current market rental for the property, and I dismiss this claim. Compensation:
- The tenants seek a refund of the additional $450.00 they paid to the landlord when their daughter stayed with them for 3 weeks.
- The landlord said an additional cost of $150.00 per week was negotiated with the tenants as their adult daughter was staying with them, without a definite moving out date.
- The landlord claims that there was a non – subletting clause in their tenancy agreement. The tenants say this was not a sub letting situation, but an emergency and support for their daughter.
- Subletting under the RTA means where the tenant’s part with possession of part of the rental and gives someone else exclusive use for any period of time. I find this is not a subletting situation.
- A landlord cannot add a clause to a tenancy agreement saying that visitors are not allowed to stay. That would be a breach of a tenants right to quiet enjoyment of the property.
- The daughter stayed 3 weeks and yet the tenants were charge a one third more on their rent. That is not fair and reasonable to charge the tenants for their daughter staying in an emergency situation for three weeks.
- Regardless of whether a tenant agree to this rent increase for the period the daughter was staying.
- An unreasonable clause in a tenancy agreement is one that conflicts with the RTA and tries to remove or reduce a tenant right or asks a tenant to do more than the Act requires and is therefore unenforceable. See s78 (1) ( f) RTA.
- I am setting aside the agreement that the tenants pay an additional $150 per week while their daughter stayed temporary at the property. I consider that agreement to be harsh and unconscionable. The landlord is to refund the $450.00 paid by the tenants to the landlord.
- Both parties have sought suppression of their names and identifying details. As both parties have been partially successful, I am granting suppression of the landlord and the tenants names and details.