What was Tenancy Tribunal case 5120717 about?

The tribunal order states: An application for suppression has been made in this case, and the Tribunal

How much money was awarded in case 5120717?

Verified claim lines are listed on this page.

What type of tenancy dispute was case 5120717?

The dispute type was not classified.

Where can I read the official tribunal order for case 5120717?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/11448250-Tribunal_Order_Redacted.pdf.

What was Tenancy Tribunal case 5120717 about?

The tribunal order states: An application for suppression has been made in this case, and the Tribunal

How much money was awarded in case 5120717?

Verified claim lines are listed on this page.

What type of tenancy dispute was case 5120717?

The dispute type was not classified.

Where can I read the official tribunal order for case 5120717?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/11448250-Tribunal_Order_Redacted.pdf.

New Zealand Tenancy Tribunal Case 5120717 — Tenancy dispute

Order

An application for suppression has been made in this case, and the Tribunal orders suppression of the landlord’s name and identifying details.
The application is dismissed.

Reasons

Both parties attended the hearing.
The tenant’s attended by video conference and the landlord attended by phone.
The tenants have applied for reduction of the fixed-term tenancy. Relevant legal provisions
The relevant law that applies is found in the Residential Tenancies Act 1986 (RTA). With any claim before the Tenancy Tribunal, the Tribunal applies the usual civil law standards and expectations. That includes a requirement that the applicant, establish their claims on the balance of probabilities. The balance of probabilities means more likely than un-likely, or in mathematical terms, has a fractionally more than 50% likelihood. The Tribunal does not need to be certain or very sure about any claim, only that what is claimed is likely. This obligation carried by the applicant is referred to as the “burden of proof”. Independent witnesses, corroborating documents and photographs are an important part of discharging this burden.
As noted by the District Court 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.” Reducing a fixed term tenancy
The usual legal position with fixed term contracts, is that the term of the contract will be applied strictly, and it will only be in limited circumstances, that a decision maker like the Tribunal would interfere with that term. There is a high threshold that needs to be met before the Tribunal will reduce the term.
The Tribunal may reduce a fixed term tenancy where: a. there has been an unforeseen change in the applicant’s circumstances; and b. there would be severe hardship to the applicant if the term is not reduced; and c. the applicant’s hardship would be greater than the hardship to the other party if the term is reduced. 1
Where the Tribunal makes an order reducing the term of the tenancy, the Tribunal may order that the applicant pay to the other party an amount determined by the Tribunal by way of reasonable compensation for any loss or damage to the other party which would result from the reduction in the term of the tenancy. 2 1 See section 66(1) of the RTA. 2 Section 66(2) of the RTA.
In order to make an order reducing the term of the tenancy, the Tribunal needs to find that unforeseen circumstances arose for all co-tenants 3
From the outset of the hearing, I outlined the relevant legal basis on which the Tribunal can reduce a fixed fee tenancy so that the parties understood on what basis I would be determining the matter. Tenant’s position
The tenant’s entered into a fixed term tenancy commencing 26 April 2024 with a contractual end date of 25 April 2025
The tenants said in the application that due to unforeseen financial constraints following the purchase of their first home, it has become unsustainable for them to fulfil their rent obligations beyond December 2024.
The tenants say they purchased their own home in October 2024.
The tenants gave the landlord two months’ notice to the property manager indicating that they would vacate the premises by 22nd December 2024.
The tenants say they offered to pay for advertising costs to find new tenants and noted interest from prospective tenants however no new tenancy commenced and on contacting the property owner directly, they learned that the property will only be available for rent until April 2025, as the owner plans to move back in. It appears this is why the landlord has been unable to secure a subsequent tenancy.
The tenants vacated the premises on or about 24 December 2024.
The tenants’ confirmed at the hearing that the financial burden of paying both rent and a mortgage is very difficult for their family. I understand Mr Mathew is the sole income earner and Mrs Jomon is a student.
The tenants say they have offered to pay for advertising and assisting with finding new tenants. I understand the tenants have also offered to help top up the difference in rent if new tenants are found who cannot pay the full amount. Landlord’s position
The landlord objects to the fixed term tenancy being reduced.
The landlord says the purchasing of a property is not an unforeseen change in circumstances and says the Tribunal has declined to reduce a fixed term tenancy in other similar proceedings. 3 see Derbyshire v Mark & Maggies Property Company Ltd Wellington [2013] NZTT 1477WN
The landlord is willing to try and find other tenants and is wanting to work with the tenant’s but there are limitations, and the landlord confirmed that potential tenants are being advised that this is a short-term tenancy.
The landlord referred me in particularly to the case Elliot Lawes and ors v Comprende Limited 4 . Adjudicator Lash said in that case: “14. Section 66 sets a high threshold for reducing fixed term tenancies. The jurisdiction in this section is an extension to the doctrine of frustration found in the general law of contract. In most cases, s66 is used to seek a balance between the competing interests of applicant tenants, for whom significant obligations under fixed term agreements can create severe hardship when circumstances unexpectedly turn against them, and landlords, who have financial obligations and expectations of their own arising from the same bargain.
The term “unforeseen” is a legal term defined by reference to the reverse (“foreseeability”) in cases relating to negligence (in determining whether a duty of care is owed and what damages are reasonably foreseeable) and in cases assessing damages for breach of contract (also in assessing the remoteness of damage). In both contexts, there is a body of case law which has established that: (a) foreseeability must be assessed objectively through the eyes of a reasonable person who has taken all reasonable steps to inform himself of the circumstances; (b) an outcome is foreseeable in legal terms if it is “liable to result”, “not unlikely”, “quite likely”, a “real danger”, a “serious possibility” or a “real risk”. (c) The term “unforeseen” has few if any direct dictionary definitions, but by thesaurus is aligned with such concepts as “unexpected” and “without warning”. In a legal context, it must also be taken as the reverse of what is “foreseen”, thus being “not liable to result”, “unlikely”, “not a real danger”, “not a serious possibility” or “not a real risk”.” Decision
In my view, s 66, which allows for fixed term tenancies to be reduced, is not intended to capture tenants’ changes of circumstances where the tenants have simply decided it would be better for them to discard the fixed-term tenancy in favour of different living circumstances. 4 Elliot Lawes and ors v Comprende Limited [2022] NZTT 4365020
Rather, s 66 is intended to capture changes to tenants’ circumstances which are unavoidable and unexpected, such as suffering a job loss or ill health, which require the tenant to relocate.
The tenants purchased a home with the full knowledge that they were subject to a fixed term tenancy.
The tenants should have made enquiries with the landlord as to whether the fixed term could be reduced, prior to entering into an agreement to purchase a home and should have expected that it might take time for new tenants to be secured or also that it might not occur, that it was not a certainty.
I appreciate that the tenants find themselves in financial difficulty and I accept they might suffer severe hardship if the fixed term is not reduced however this should have been foreseeable and was a likely risk when purchasing a property while subject to a fixed term tenancy.
The tenant’s current financial situation could have been avoided if the tenant’s delayed purchasing a property or the settlement date for the purchase.
I consider there has not been an unforeseen change in the tenant's circumstances.
I therefore dismiss the application to reduce the fixed term tenancy. Suppression
The tenants did not seek name suppression.
The landlord sought name suppression and as they have had substantial success in defending the application I make an order for name suppression for the landlord. 5

Reasons

Both parties attended the hearing.

The tenant’s attended by video conference and the landlord attended by phone.

The tenants have applied for reduction of the fixed-term tenancy. Relevant legal provisions

The relevant law that applies is found in the Residential Tenancies Act 1986 (RTA). With any claim before the Tenancy Tribunal, the Tribunal applies the usual civil law standards and expectations. That includes a requirement that the applicant, establish their claims on the balance of probabilities. The balance of probabilities means more likely than un-likely, or in mathematical terms, has a fractionally more than 50% likelihood. The Tribunal does not need to be certain or very sure about any claim, only that what is claimed is likely. This obligation carried by the applicant is referred to as the “burden of proof”. Independent witnesses, corroborating documents and photographs are an important part of discharging this burden.

As noted by the District Court 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.” Reducing a fixed term tenancy

The usual legal position with fixed term contracts, is that the term of the contract will be applied strictly, and it will only be in limited circumstances, that a decision maker like the Tribunal would interfere with that term. There is a high threshold that needs to be met before the Tribunal will reduce the term.

The Tribunal may reduce a fixed term tenancy where: a. there has been an unforeseen change in the applicant’s circumstances; and b. there would be severe hardship to the applicant if the term is not reduced; and c. the applicant’s hardship would be greater than the hardship to the other party if the term is reduced. 1

Where the Tribunal makes an order reducing the term of the tenancy, the Tribunal may order that the applicant pay to the other party an amount determined by the Tribunal by way of reasonable compensation for any loss or damage to the other party which would result from the reduction in the term of the tenancy. 2 1 See section 66(1) of the RTA. 2 Section 66(2) of the RTA.

In order to make an order reducing the term of the tenancy, the Tribunal needs to find that unforeseen circumstances arose for all co-tenants 3

From the outset of the hearing, I outlined the relevant legal basis on which the Tribunal can reduce a fixed fee tenancy so that the parties understood on what basis I would be determining the matter. Tenant’s position

The tenant’s entered into a fixed term tenancy commencing 26 April 2024 with a contractual end date of 25 April 2025

The tenants said in the application that due to unforeseen financial constraints following the purchase of their first home, it has become unsustainable for them to fulfil their rent obligations beyond December 2024.

The tenants say they purchased their own home in October 2024.

The tenants gave the landlord two months’ notice to the property manager indicating that they would vacate the premises by 22nd December 2024.

The tenants say they offered to pay for advertising costs to find new tenants and noted interest from prospective tenants however no new tenancy commenced and on contacting the property owner directly, they learned that the property will only be available for rent until April 2025, as the owner plans to move back in. It appears this is why the landlord has been unable to secure a subsequent tenancy.

The tenants vacated the premises on or about 24 December 2024.

The tenants’ confirmed at the hearing that the financial burden of paying both rent and a mortgage is very difficult for their family. I understand Mr Mathew is the sole income earner and Mrs Jomon is a student.

The tenants say they have offered to pay for advertising and assisting with finding new tenants. I understand the tenants have also offered to help top up the difference in rent if new tenants are found who cannot pay the full amount. Landlord’s position

The landlord objects to the fixed term tenancy being reduced.

The landlord says the purchasing of a property is not an unforeseen change in circumstances and says the Tribunal has declined to reduce a fixed term tenancy in other similar proceedings. 3 see Derbyshire v Mark & Maggies Property Company Ltd Wellington [2013] NZTT 1477WN

The landlord is willing to try and find other tenants and is wanting to work with the tenant’s but there are limitations, and the landlord confirmed that potential tenants are being advised that this is a short-term tenancy.

The landlord referred me in particularly to the case Elliot Lawes and ors v Comprende Limited 4 . Adjudicator Lash said in that case: “14. Section 66 sets a high threshold for reducing fixed term tenancies. The jurisdiction in this section is an extension to the doctrine of frustration found in the general law of contract. In most cases, s66 is used to seek a balance between the competing interests of applicant tenants, for whom significant obligations under fixed term agreements can create severe hardship when circumstances unexpectedly turn against them, and landlords, who have financial obligations and expectations of their own arising from the same bargain.

The term “unforeseen” is a legal term defined by reference to the reverse (“foreseeability”) in cases relating to negligence (in determining whether a duty of care is owed and what damages are reasonably foreseeable) and in cases assessing damages for breach of contract (also in assessing the remoteness of damage). In both contexts, there is a body of case law which has established that: (a) foreseeability must be assessed objectively through the eyes of a reasonable person who has taken all reasonable steps to inform himself of the circumstances; (b) an outcome is foreseeable in legal terms if it is “liable to result”, “not unlikely”, “quite likely”, a “real danger”, a “serious possibility” or a “real risk”. (c) The term “unforeseen” has few if any direct dictionary definitions, but by thesaurus is aligned with such concepts as “unexpected” and “without warning”. In a legal context, it must also be taken as the reverse of what is “foreseen”, thus being “not liable to result”, “unlikely”, “not a real danger”, “not a serious possibility” or “not a real risk”.” Decision

In my view, s 66, which allows for fixed term tenancies to be reduced, is not intended to capture tenants’ changes of circumstances where the tenants have simply decided it would be better for them to discard the fixed-term tenancy in favour of different living circumstances. 4 Elliot Lawes and ors v Comprende Limited [2022] NZTT 4365020

Rather, s 66 is intended to capture changes to tenants’ circumstances which are unavoidable and unexpected, such as suffering a job loss or ill health, which require the tenant to relocate.

The tenants purchased a home with the full knowledge that they were subject to a fixed term tenancy.

The tenants should have made enquiries with the landlord as to whether the fixed term could be reduced, prior to entering into an agreement to purchase a home and should have expected that it might take time for new tenants to be secured or also that it might not occur, that it was not a certainty.

I appreciate that the tenants find themselves in financial difficulty and I accept they might suffer severe hardship if the fixed term is not reduced however this should have been foreseeable and was a likely risk when purchasing a property while subject to a fixed term tenancy.

The tenant’s current financial situation could have been avoided if the tenant’s delayed purchasing a property or the settlement date for the purchase.

I consider there has not been an unforeseen change in the tenant's circumstances.

I therefore dismiss the application to reduce the fixed term tenancy. Suppression

The tenants did not seek name suppression.

The landlord sought name suppression and as they have had substantial success in defending the application I make an order for name suppression for the landlord. 5

Tenancy Tribunal case 5120717 — Tenancy dispute

At a glance

Claims & awards

Tenancy Tribunal case 5120717 — Tenancy dispute

At a glance

Claims & awards

Order

Reasons

Topics & place

Residential Tenancies Act sections

Frequently asked questions

Order

Reasons

Topics & place

Residential Tenancies Act sections

Frequently asked questions