Published tribunal order
Tenancy Tribunal case 5074250 — Exemplary damages at Unit/Flat 2, 146 Hutchinson Avenue, New Lynn, Auckland
Decided 18 Jul 2025 · Published 18 Jul 2025 · Application 5074250
- 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.
- Naran Properties Limited Jivan Naran must pay [The tenant/s] $6,577.00 immediately, calculated as shown in the table below.
Reasons
- Both parties attended the hearing. The landlord was represented by its director Mr Jivan Naran. Bond
- The tenant has applied for refund of the bond.
- The landlord has a claim against the bond but has not filed a counterclaim with Tenancy Services.
- Section 22B(2) Residential Tenancies Act 1986 provides that, where a tenant applies for refund of the bond, and the landlord seeks payment from the bond, the landlord must file an application setting out the details of the counterclaim.
- The landlord has, in its response to the tenant’s claims, set out the claims it is making against the tenant and evidence in support of its claims.
- I expressed the view that in those circumstances, it would seem appropriate to also deal with the landlord’s claims at this hearing, which would avoid for both parties the need for a further hearing. The tenant does not wish to do that and is entitled to have her application for refund of the bond determined as prescribed by s.22B(2).
- Accordingly, I am required to make an Order that the bond be paid to the tenant and the landlord will need to bring its claims against the tenant through a separate application, in the usual way.
- Through a series of WINZ payments, the landlord has received a total bond of $3,400.00 for the tenancy.
- The landlord was not lodged the bond with the Bond Centre.
- 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.
- By not doing so 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.
- In this context, it is the act itself (ie. not lodging the bond) that must be intentional, not an intention to act unlawfully.
- Mr Naran says that the bond was not lodged because the tenant asked him not to. That is denied by the tenant. In any event s.11 RTA is clear that, “Any purported waiver by a tenant of any right or power conferred upon tenants by this Act shall be of no effect.” Accordingly, the tenant agreeing that her bond need not be lodged, would not relieve the landlord of its legal obligation to do so.
- [The tenant/s] the landlord understood it had an obligation to pay the bond back to WINZ, as WINZ had paid the bond to the landlord. That is not the position under the RTA. The landlord did provide in evidence an exchange with WINZ in which Mr Naran asked whether the remaining bond after payment of claims should be paid to WINZ and was told it should. I can only assume that the WINZ officer misunderstood that as referring to an excess bond payment (which should be returned to WINZ) as opposed to the remainder of a bond held by the landlord under the agreement.
- I can see how that response may have led the landlord to believe it was obliged to refund the bond to WINZ. It is not though helpful in understanding why the obligation to lodge the bond with the Bond Centre in the meantime was not met.
- The tenant’s application was filed on 25 November 2024. It makes clear that the tenant believed that she was entitled to have the bond refunded and was concerned that the bond had not been lodged with the Bond Centre. Mr Naran was unable to give any satisfactory reason why, even then, the bond was not lodged.
- The tenant gave evidence of the stress caused by not having access to her bond when trying to enter a new tenancy. That is a somewhat different issue because the landlord would be entitled to dispute release of the bond even had it been held by the Bond Centre. I accept though that the situation was made more difficult for the tenant, knowing the disputed bond was held by the landlord.
- There is a public interest in landlord being aware of and complying with such core obligations.
- In the circumstances I find that the landlord’s initial breach is compounded by its continuing failure to meet its obligation with respect to lodging the bond and consider an award of exemplary damages of 1/2 of the maximum would be just. Healthy Homes Compliance
- Neither party has a copy of the tenancy agreement so the Healthy Homes compliance statement provided by the landlord in the agreement is not available.
- The landlord’s position however is that the premises were and were represented as, Healthy Homes compliant.
- The basis for the tenant’s concern that the premises were not compliant, is that the premises were cold and that there was excessive and ongoing mould growth, especially in the 2 back rooms.
- That evidence was corroborated by evidence from the tenant’s partner and a boarder, who had occupied one of those rooms for over 2 years.
- The tenant’s evidence is that the children were regularly sick with asthma and the tenants felt it necessary to move them out of the back room they were in (next to the room occupied by [the tenant’s boarder).
- The tenants say that they brought the concerns about the coldness and damp in the premises to Mr Naran’s attention many times but that nothing was done to improve the situation. Mr Naran denies having those concerns brought to his attention.
- Photographs were provided of what appears to be excessive mould growing on wall surfaces which I am told were in the 2 back bedrooms.
- At the hearing I expressed some surprise that having been aware since November 2024 of the tenants claim that the premises were not Healthy Homes compliant, the landlord had not arranged to have an assessment done to prove compliance.
- The landlord would like an opportunity to have that assessment done now. The tenant prefers to have her application dealt with on the basis of the evidence presented today.
- On balance I formed the view that the tenant was entitled to have her claim determined today if she chose, after having explained to her the risk in the Tribunal making a decision without the expert evidence that a professional assessment would provide.
- Compliance with three Healthy Homes Standards was question by the tenant: a. heating; b. insulation; c. moisture ingress.
- The HH Standards are set out in the Residential Tenancies (Healthy Homes Standards) Regulations 2019 (“HH Regulations”) Heating Standard
- The heating standard requires landlords to provide one or more ‘qualifying heaters’, with a capacity to heat the main living 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.
- The premises were provided with a log burner, which the tenants say they seldom used because of the effect on the families’ asthma.
- Mr Naran says he used the calculator to do an assessment and ascertained that the log fire met the minimum heating capacity required by the regulations. Mr He was unable to confirm the basis on which the heating capacity of the log fire was assessed.
- As this is the tenant’s claim, there is an onus on her to prove her claim, on the balance of probabilities (i.e. more likely than not). The evidence provide does not prove that the heating provided in the premises did not meet HH requirements. Moisture Ingress
- The moisture ingress and drainage standard requires (among other things) that a ground moisture barrier be installed when there is an enclosed subfloor space.
- Mr Naran confirms that the premises have an enclosed sub floor space. He confirms that the premises do not have a ground moisture barrier installed. He says that his understanding is that the premises are exempt from that requirement due to barriers installed at the time of construction that prevent the flow of water under the house.
- The HH Regulations (R.39) provide an exemption where it is not reasonably practicable to install a ground moisture barrier. That exemption does not apply to these premises.
- On the evidence available I find it more likely than not that by not having a moisture barrier installed, the landlord breached the requirements to comply with HH standards. Insulation
- Mr Naran’s evidence is that the premises have Batts ceiling insulation. No evidence to the contrary was provided and I do not find it proved that the landlord failed to comply with the requirements for ceiling insulation.
- Rule 15 HH Regulations requires that for premises like these with suspended floors, the floor must be fully covered by qualifying underfloor insulation. Underfloor insulation is qualifying underfloor insulation if: “(a) the insulation’s R-value, when it was installed, was at least 1.3: (b) the insulation was installed in accordance with NZS 4246:2016: (c) the insulation is in a reasonable condition (or better).”
- Mr Narran’s evidence is that there is foil underfloor insulation.
- Foil is no longer regarded as a safe or appropriate insulation material, and appears to have been banned from use under the Building Act 2004, in 2016.
- However, under R.20(1), a partial exemption from compliance with R.15 applies, if: “(a) there is underfloor insulation covering a floor at the premises; and (b) when the insulation was installed, requirements relating to thermal insulation imposed by or under an enactment or a bylaw were applicable to the premises or tenancy building; and (c) the landlord is in possession of a compliance document ..........that includes a certification or other statement to the effect that the premises or tenancy building, with the insulation installed, complied with those requirements.”
- Rule 20(3) provides that: “This exemption ceases to apply if, during the term of the tenancy, either of the following occurs: (a) the landlord receives a request for evidence and fails to provide reasonable evidence of document A to the person making the request within 10 working days after the day on which the landlord receives the request: (b) the landlord receives a Tribunal request or requirement for evidence and fails to comply with it within the time allowed by the Tribunal.”
- While no such specific request was made during the term of the tenancy, those provisions seem to me to intend that where a question is raised as to the applicability of that exemption, there is an onus on the landlord to prove that the exemption applies.
- Here questions about the premises’ HH compliance and the reason for those questions were raised by the tenant’s application in November 2024. There has been ample opportunity for the landlord to provide the compliance document required by r.20(1)(c).
- That being so, and having regard to the tenant’s evidence about the degree of cold and damp experience living in the premises I do not find that the r.20 exemption applied and it is more likely than not that the foil insulation fails to meet the requirements of R.15.
Should exemplary damages be awarded?
- By failing to meet HH standards in respect of insulation and moisture ingress, I find that the landlord has, in each case, committed an unlawful act, for which exemplary damages of up to $7,200.00 may be awarded.
- Each breach is made an unlawful act by s.45(1A) RTA. A separate award of exemplary damages should not be made for each breach of that same provision but the extent and number of the breaches can be taken into account in assessing what, if any, award of exemplary damages would be just.
- Applying the criteria in s.109(3) referred to above, I take into account that: a. the evidence does not prove the repeated steps the tenants say they took to bring their concerns about these issues to the landlord’s attention; b. the landlord nevertheless had an obligation to ensure compliance and could quite easily have done so; c. the lack of compliance seems likely to have contributed to a living environment for the tenant and her family that was colder and damper than it ought to have been; d. there is no evidence directly linking the health issues experience by the family to the premises’ non-compliance with those requirements, but the symptoms reported appear consistent with an unreasonably cold and damp living environment – there may have been other causes or contributing factors e. there is a public interest in landlords taking seriously the need to mee the requirements established to try an ensure healthy living environments for residential tenants; f. I do not find a deliberate avoidance on the landlord part of its obligations under the HH regulations – rather a laxness in assuming compliance without proper assessment. g. weighing up those considerations I find it would be just to make a moderate award of exemplary damages of 1/3 of the maximum for a single breach.
- Because [The tenant/s] has substantially succeeded with the claim I must reimburse the filing fee.