Published tribunal order
Tenancy Tribunal case 5081827 — Exemplary damages at Unit/Flat 1, 49 Te Kanawa Crescent, Henderson, Auckland
Decided 7 May 2025 · Published 7 May 2025 · Application 5081827
- 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 tenants’ names and identifying details.
- Kelly Midwood must pay [The tenant/s] $3,200.00 immediately.
Reasons
- Both parties attended the remote hearing. Does the Tribunal have jurisdiction to determine the tenant’s claim?
- In response to the tenant’s claim for exemplary damages, the landlord contends the Residential Tenancies Act 1986 (RTA) does not apply on the basis the tenancy was a “holiday let” which was “month by month.”
- After hearing from the parties, I determined the tenancy was not excluded under s 5 of the RTA and found the Tribunal does have jurisdiction to determine the tenant’s claims. I set out my reasons below.
- Section 77(1) of the Residential Tenancies Act 1986 (RTA) provides that the Tribunal has jurisdiction to hear claims between landlords and tenants relating to any tenancy to which the Act applies. Section 4 RTA provides that the Act applies to every tenancy for residential purposes except as specifically provided.
- Section 2(1) of the RTA defines a landlord as the grantor of a tenancy under a tenancy agreement of residential premises. A tenant is the grantee of the tenancy. Residential premises means any premises used or intended for occupation by any person as a place of residence. Tenancy in relation to any residential premises means the right to occupy the premises (whether exclusively or otherwise) in consideration for rent.
- Section 10 of the RTA provides that, where a party to proceedings contends the RTA does not apply, they must establish the facts supporting their contention.
- Section 5 of the RTA sets out a variety of circumstances where a tenancy is excluded from the Act. Section 5(1)(k) states the RTA does not apply where the premises: (i) are intended to provide temporary or transient accommodation (such as that provided by hotels and motels), being accommodation that is ordinarily provided for periods of less than 28 days at a time; and (ii) are subject to an agreement that has been entered into for the purpose of providing temporary or transient accommodation that continues to be provided under the agreement:
- Section 5(1)(m) states the RTA does not apply where the premises are let for the tenant’s holiday purposes.
- When determining whether the RTA is excluded, the Tribunal considers the substance of the agreement between the parties rather than the labels they have applied.
- The tenants say they understood the tenancy to be a periodic tenancy. They say before the tenancy commenced, the landlord asked if they would agree to a longer fixed-term tenancy. However, they say they were unable to commit to a fixed-term tenancy as they were dependent on a visa being granted to remain in New Zealand, and on their employment continuing.
- The tenants say they wanted to enter into a monthly reoccurring tenancy. They understood that the tenancy would continue month-by-month until notice was given to end the tenancy.
- They rely on the written agreement entered into on 31 July 2024, which is the standard Residential Tenancy Agreement. The agreement states the tenancy commenced on 31 July 2024 and was a periodic tenancy that may be ended by either party giving notice as required under the RTA.
- The landlord says she may not have used the term “holiday let” but that that was what was intended. She says she may have used the wrong form, referring to the tenancy agreement entered into. The landlord says the tenants wanted a “month by month” tenancy, and although the landlord would have preferred a fixed term of up to 3 months, she agreed to the tenants taking on a monthly tenancy. The landlord says it was verbally agreed that either party could give 28 days’ notice to end the tenancy.
- The landlord confirmed the only written agreement entered into by the parties in the Residential Tenancy Agreement signed 31 July 2024 (and 1 August 2024 by one of the tenants).
- The landlord says the property was fully furnished, down to the knives and forks and towels, and that it “physically presents” as a short-term let.
- I am satisfied the nature of the agreement entered into by the parties was a residential tenancy and that the premises were used or intended for occupation by the tenants as a place of residence, and not as a short-term let or holiday let. I note the tenancy commenced on 31 July 2024 and ended on 16 September 2024, being for a total of 47 days. Given the length of the tenancy, and that no other agreement was entered into, I find it was not an agreement for temporary or transient accommodation, nor was it a premises let for the tenant’s holiday purposes.
- The agreement entered into by the parties clearly recorded the parties’ intention to enter into an agreement for a periodic residential tenancy, and to be bound by the RTA. The written agreement, which was on a periodic basis, is consistent with the tenant’s communication on 27 July 2024 in which they requested a “monthly tenancy.” The parties confirmed no other written agreement was entered into.
- I find the landlord has not proved the tenancy was excluded under s5 of the RTA, therefore the Tribunal has jurisdiction to determine the tenant’s claims. Exemplary damages
- In the tenant’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 damages 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 RTA.
Did the landlord fail to lodge the bond?
- [The tenant/s] claim the landlord did not lodge 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 tenant paid the bond of $2,250 (along with first rent, in total $4,500) to the landlord on 1 August 2024.
- The landlord accepts they did not lodge the bond with the Bond Centre. The bond was held in the landlord’s bank account for the duration of the tenancy.
- At the end of the tenancy, or shortly after, the landlord refunded the bond to the tenants, less some agreed outgoings that were owed to the landlord.
- I find the landlord 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.
- The landlord is a real estate agent. The landlord currently has two rental properties, including these premises. The landlord says she has previously owned up to seven rental properties. The landlord stated the second rental property she currently owns is rented long-term and she has lodged the bond with the Bond Centre in relation to that tenancy.
- Given the landlord’s occupation, and experience with other residential rental properties, I find the landlord’s failure to lodge the bond with the Bond Centre was committed intentionally. The landlord intended to hold the bond in her bank account for the duration of the tenancy. While the landlord says she was mistaken as to the nature of the tenancy, and believed this to be a “holiday let” that is not consistent with the written agreement entered into by the parties.
- The effect of the unlawful act was that the bond was not held by a secure third- party. However, I note that the bond was refunded, for the agreed amount, shortly after the tenancy ended. The impact on the tenants is therefore limited.
- I am satisfied it would be just to award exemplary damages but consider an award at the lower end of the spectrum appropriate, given the minimal impact the landlord’s unlawful act had on the tenants.
- I make an order for $200 for the landlord’s failure to lodge the bond.
Did the landlord terminate the tenancy without grounds?
- [The tenant/s] claim the landlord 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.
- The tenants say that on 15 August 2024, the landlord left the tenant a voicemail stating they had a new tenant who would be willing to take on a longer tenancy. The landlord gave the tenant’s the option of committing to a longer tenancy, but said that they would otherwise require the tenants to move out.
- On 15 August 2024, the tenant sent the landlord a text asking for time to consider what they could do. On 17 August 2024, the tenant sent the landlord a further text saying they were waiting to hear on a visa and so could not “extend” their tenancy until January 2025.
- The same day, the landlord sent a text message reply to say she would email the tenants giving them four weeks’ notice as she said he had to “take what is there and a guaranteed rental for that long is attractive.”
- On 19 August 2024, the landlord emailed the tenants advising them she was giving them 30 days’ notice to vacate and the tenancy would end on Monday 16 September 2024. The email did not state a reason for the termination or refer to the grounds relied upon under the RTA.
- The landlord confirmed 30 days’ notice was given on 19 August 2024. The landlord says this was agreed to by the tenants. The tenants say they only complied on the basis they were told there was no other option.
- The tenancy agreement entered into by the parties clearly stated the tenancy could only be ended by either party giving notice as required under the RTA. The landlord did not give notice in accordance with any provision of the RTA, and accordingly, I find the tenancy was terminated without grounds.
- I find the landlord 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.
- Given the landlord’s occupation, and experience as a landlord, as referred to at paragraph 31, I am satisfied the landlord was aware of the notice required to end a tenancy under the RTA. The notice issued on 19 August 2024 was given to allow the landlord to accept a new tenant, who would commit to a longer tenancy. The landlord stated this was particularly attractive as it included a commitment over the Christmas/New Year period when it is difficult to find tenants.
- The impact of the landlord’s unlawful termination was to cause the tenants significant stress. They say this occurred at a difficult time when they were trying to secure employment in a new country, while awaiting the outcome of their visa applications.
- It goes without saying that it is in the public interest that tenancies are only terminated for the reasons provided for in the RTA, and that the correct notice periods are given.
- I consider an award in the middle band of the maximum available is appropriate to recognise the stress the unlawful termination notice caused the tenants, who were relatively recent immigrants to New Zealand. I also consider the award appropriate to uphold the public interest in ensuring landlords do not terminate tenancies without proper grounds. Did the landlord breach the tenant’s quiet enjoyment?
- [The tenant/s] claim the landlord has harassed them by sending multiple text messages regarding rent arrears, and by requiring the tenants to move out of the premises by 12 noon on the last day of the tenancy.
- A landlord must not interfere with the reasonable peace, comfort or privacy of the tenant in their use of the premises. See section 38(2) Residential Tenancies Act 1986.
- Breaching this obligation in circumstances that amount to harassment is an unlawful act for which exemplary damages may be awarded up to a maximum of $3,000.00. See section 38(3) and Schedule 1A RTA.
- Harassment means "to trouble, worry or distress" or "to wear out, tire, or exhaust" and "indicates a particular pattern of behaviour directed towards another person". MacDonald v Dodds, CIV-2009-019-001524, DC Hamilton, 26 February 2010.
- The tenants say the landlord sent the tenant multiple text messages regarding rent arrears owed near the end of the tenancy. The tenants say this was ultimately clarified, but that the text messages and demands caused the tenants stress.
- The tenants also say the landlord initially required the tenants to move out of the premises by 12 noon on the 16 September 2024, and that it was only when the tenants sent a text message quoting the Tenancy Services website, which stated a tenant could remain until midnight on the last day, that the landlord relented and allowed them to move out later in the day. The tenants say the landlord only confirmed they would not be required to exit the premises by noon at 11:34am on 16 September 2024. The tenants moved out of the premises by 7:20pm that day.
- I find the landlord did not commit an unlawful act. Communication via text message is not in and of itself inappropriate, and I do not consider the language used in the landlord’s text messages aggressive or inappropriate. I am not satisfied that, by sending those text messages, the landlord intended to cause the tenants trouble, worry or distress.
- Similarly, while I accept that the landlord’s messages relating to the tenant’s exit on the last day of the tenancy may have cause the tenants worry and distress, I do not consider that it was the landlord’s intention to do so, and do not consider her behaviour was behaviour which amounts to harassment.
- I dismiss the tenant’s claim for exemplary damages for breach of quiet enjoyment.