Published tribunal order
Tenancy Tribunal case 5298778 — Exemplary damages at 17 Robinson Crescent, Tamatea, Napier 4112
Decided 12 Nov 2025 · Published 12 Nov 2025 · Application 5298778
- Exemplary damages
- Property damage
Party names are redacted in the official published order.
Order
- The tenants have been largely successful and the Tribunal orders suppression of their names and identifying details. The landlords seek a suppression Order but the grounds in s.95A RTA are not satisfied.
- Manomani Swammy and Arun Swamy must pay [The tenant/s] $10,868.00 immediately, calculated as shown below:
- The landlords’ application is dismissed.
Reasons
- Both parties attended the hearing. The landlords were represented by Mrs Swamy. Mr Swamy did not attend. Background
- These premises are a converted garage on the landlords’ home.
- The landlords rented the premises to the tenants under a tenancy agreement dated 16 December 2024.
- The agreement failed to include the following mandatory information: a. insulation statement; b. Healthy Homes compliance statement; c. insurance statement.
- A bond of $860.00 was paid. The bond was not lodged with the Bond Centre.
- After becoming concerned about the premises’ compliance, the tenants approached the Napier City Council.
- That resulted in a letter being sent by the Council to Mr and Mrs Swamy on 4 June 2025 which said: “...A site visit was carried out at your property at 17 Robinson Cres on 26/05/2025 following receipt of a complaint regarding unconsented building work. The site visit confirmed that the following unconsented building work has been undertaken and needs attended to: • That there has been an illegal conversion of a garage into two self-contained one-bedroom flats. • Plumbing & drainage work has been carried out, which includes a HWC, bathroom & kitchen plumbing fixtures and sewer drainage. This is restricted building work that needs to be carried out by a licensed plumber. Please provide the plumbers and carpenters details as these will be provided to the licensing board for undertaking illegal building work. The outcome we require is the immediate removal of all the plumbing and drainage work. Capping of the sewer connection by a suitably qualified person. This office will carry out a site visit on the 09/07/2025 to view the building and confirm the plumbing and drainage work has been removed..”
- After being issued with that notice from the Council, the landlords gave the tenants notice on 6 June 2025 that they needed to vacate by 28 June 2025.
- The tenants filed an application on 2 July 2025 seeking compensation and/or exemplary damages for the landlords’: a. failing to provide a compliant tenancy agreement; b. failing to lodge their bond; c. renting them unlawful premises; d. failing to meet Healthy Homes standards and regulatory requirements; e. breaching their right to quiet enjoyment; f. ending the tenancy by unlawful notice.
- The landlords filed a cross application on 15 September 2025 for rent arrears and for damage to a bar freezer. Did the landlords breach their obligation to provide mandatory information in the agreement – if so should exemplary damages be awarded?
- A landlord has an obligation to ensure that specific mandatory information is included in a tenancy agreement. Breach of each obligation is an unlawful act for which exemplary damages of up to $750.00 may be awarded 1 .
- An agreement must include: a. an insulation statement 2 ; b. a Healthy Homes compliance statement 3 c. an insurance statement 4 .
- None of that information was included in the agreement and the landlords committed three unlawful acts.
- Where a party has committed an unlawful act intentionally, the Tribunal may make an award of exemplary damages where it considers it just to do so, after considering that parties’ intent, its effect, the interest of the other party and the public interest 5 .
- The landlords’ failure to provide that information in the agreement was intentional. In this context it is the intent in the act itself, not an intention to act unlawfully, that is relevant.
- I find it more likely than not that the breach was through ignorance of the landlords’ obligations.
- The effect was to leave the tenants unsure about the suitability of the premises, particularly regarding insulation and Healthy Homes compliance. They had to 1 Scheduled 1A RTA 2 S.13A(1A) RTA 3 S.13A(1CA) RTA 4 S.13A(2) RTA 5 S.109(3) RTA make enquiries themselves about those matters, when they were entitled to be informed before the tenancy began.
- There is a clear public interest in landlords being aware of and meeting these core statutory obligations
- It would not be just to make a separate award of exemplary damages for each of the three individual breaches, which really arose from one fundamental failure to provide a compliant agreement.
- I find that it would be just to make a single award of the maximum damages, to recognise that there were multiple breaches. Did the landlords breach their obligation to lodge the tenants’ bond – if so should exemplary damages be awarded?
- The tenant’s believed that a bond of $1,720.00 had been paid. That was the amount of their initial payment.
- The agreement says that the initial payment of $1,720.00 was made up of $860.00 for 2 weeks’ rent in advance and $860.00 for the bond. I find that the bond paid was $860.00.
- A landlord must lodge a tenant’s bond within 23 working days of receiving it 6 . Breach of that obligation is an unlawful act for which exemplary damages of up to $1,500.00 may be awarded.
- There is no dispute that the landlords breached this obligation. There is no explanation for the breach except that Mrs Swami generally deals with such administrative jobs and she was away overseas when the agreement was entered into, leaving Mr Swami to set up the tenancy.
- There was no immediate harm caused to the tenants. They were not aware their bond had not been lodged until the end of the tenancy and they were then able to get it back. The landlords initially indicated an intention to make deductions from the bond, which caused the tenants some anxiety and they resorted to improper tactics recover it.
- In the meantime, the bond was not held in a separate rental account for the tenants but intermingled with the landlords’ other finances, putting the tenants’ bond at potential risk of loss.
- Again, there is a clear public interest in landlords being aware of and complying with the obligation.
- In those circumstances I find a moderate award of exemplary damages would be just. 6 S.19(1)(b) RTA Were these unlawful premises – if so what should the remedy be?
- Unlawful residential premises means, “...residential premises that are used for occupation for a person as a place of residence but—(a)that cannot lawfully be occupied for residential purposes by that person (whether generally or whether for the particular residential purposes for which that person is granted occupation); and (b) where the landlord’s failure to comply with the landlord’s obligations under section 36 or 45(1)(c), or section 66H(2)(c) or 66I(1)(c), as relevant, has caused the occupation by that person to be unlawful or has contributed to that unlawful occupation.” 7
- The evidence from the Council shows that the premises could not lawfully be occupied for residential purposes, for 2 reasons: a. there has an unconsented change of use of the garage into a dwelling; b. unpermitted and unlawful building work was carried out.
- I therefore find that these were unlawful residential premises. Having made that finding, the Tribunal must decide what the consequences should be.
- First, unless there are special circumstances making it unjust to make such an Order, the Tribunal cannot order a tenant to pay rent arrears or other compensation to the landlord 8 .
- The landlords carried out an unconsented garage conversion, doing restricted work unlawfully and have received income from renting out unlawful premises. I do not find special circumstances here making it unjust to decline the landlords’ claims.
- Second, the Tribunal may order refund of the whole of the rent paid, less an amount, that in the special circumstances, including the nature of the premises, it is fair to deduct 9 .
- “Unlawful premises” covers a broad spectrum of living environments.
- The Tribunal’s decision in Tenant v Presland 10 contains a useful overview of the types of unlawful premises that typically come before the Tribunal and how the Tribunal has approached the exercise of assessing what a fair refund of rent might be.
- Within the range of Orders concerning garage/ basement conversions noted in Presland, many have considered a rent refund of around 50% of the rent paid, to be fair.
- There does of course need to be an assessment of what would be fair in the circumstances of these particular premises and this particular tenancy. 7 s/78A(2) RTA 8 S.78A(3) RTA 9 S.78A(4) RTA 10 Tenant v Presland and Co Trustee Company Limited [2021] [event location suppressed] 4290197
- There is a helpful summary of the sorts of factors to look at in making that assessment, in [Landlord] v [Tenant] 11 , which notes that, “The special circumstances [the Tribunal] must have regard to are not stated except for the nature of the premises. Other special circumstances I have weighed include: a. The landlord’s motivation for renting the property, and their conduct during the tenancy. b. The tenants’ motivation for renting the property and bringing the claim, and the length of and time he lived in the property. c. The benefits the landlord received in renting the property. d. The benefits the tenant received in renting the property. e. The seriousness of the regulatory breaches making the premises unlawful. f. The detriment or loss the tenants suffered. g. The purpose of s 78A in ensuring landlords do not unfairly profit from unlawful premises. h. The public interest in discouraging tenancies of unlawful premises.”
- The tenants had been living in a tent and were desperate for a place to live.
- The premises comprised a combined kitchen/ living area, separate bedroom and separate ensuite/ bathroom.
- From the photographs provided, the premises themselves appear in good condition. It was lined, had bathroom and kitchen extractors installed and it appears the landlords had made an effort to ensure the premises were healthy and comfortable to live in. The evidence suggest issues with under sink leaks and shows some poor workmanship but does not otherwise show lack of maintenance/ fitness for use.
- The tenants’ fridge and freezer were in an unlined lean to.
- The only escape in case of fire was out the main door, passing though the kitchen space.
- The landlords were in the process of converting an adjoining carport into another accommodation space.
- Because the premises were in the garage at the landlords’ home, there were issues with access to the premises for the tenants’ visitors, and limited privacy.
- The tenants did receive a benefit from living at the premises which should be taken into account alongside the expectation that landlords should not profit from renting out unlawful premises.
- The breach of the landlord’s obligation was serious, involving not only an unconsented change of use but undertaking illegal building work.
- I take into account the remedies awarded to the tenants for related breaches. 11 [Landlord] v [Tenant] [2021] Manukau 4295031
- Considering those factors I find that a refund of 45% of the rent paid during the tenancy would be fair.
- I accept the landlord’s rent records which show that $11,400.00 in rent was paid during the tenancy. Did the landlords fail to meet Healthy Homes standards and regulatory requirements?
- A landlord must: a. comply with Healthy Homes standards 12 ; b. comply with regulatory requirements for buildings, health and safety 13 ; c. take all reasonable steps to ensure the premises can be legally occupied 14 .
- Neither party has had a Healthy Homes compliance assessment done.
- This is the tenants’ claim to prove. The obligation is on them to provide evidence to prove their claim on the balance of probabilities.
- The evidence does not prove that the premises failed to comply with Healthy Homes standards, which are specific requirements, different than the requirement that the premises are able to be lawfully occupied and meet regulatory requirements. I do not find that claim proved.
- The Council evidence proves that the landlord did not comply with the obligation to comply with buildings’ health and safety. The landlords illegally undertook restricted building work.
- The landlords did not take all reasonable steps to make sure the premises could lawfully be occupied and therefore breached that obligation. However, compensation for that breach is included in the rent refund ordered for the premises being unlawful. Additional compensation would effectively penalise the landlord twice for the same breach. Should exemplary damages be awarded for non-compliance with buildings’, health and safety requirements?
- Breach of that obligation is an unlawful act for which exemplary damages of up to $7,200.00 may be awarded.
- The breach was intentional. 12 S.45(1)(bb) RTA 13 S.45(1)(c) RTA 14 S.36 RTA
- In considering the criteria in s.109(3) that I have referred to above, there is no evidence to counter the reasonable assumption that the restricted work was not done by a registered tradesperson, to save money. It was the potentially unsafe nature of that restricted work that led to the Council requiring that it be removed by 9 July and the tenants being required to leave the premises on very short notice.
- The landlords must have been aware of the need for building work to be properly carried out and there is no reasonable excuse or explanation for that not to have occurred.
- The public interest requires that landlord do not “cut corners” in that way.
- Weighing those considerations I find that a significant award of exemplary damages, 1/3 of the maximum, would be just. Did the landlords breach the tenants’ right to quiet enjoyment of the premises?
- A landlord must not cause or permit any interference with the reasonable peace, comfort, or privacy of the tenant in the use of the premises by the tenant 15 .
- The location of the premises, in the garage of the landlord’s home, necessarily meant that the tenants were living in close proximity to the landlords, with their privacy being affected accordingly. The shared and locked gate access meant, by its’ nature, complications for providing visitors with access.
- The rent compensation awarded for the premises being unlawful, takes into account the nature of the premises and the implications for the tenants’ quiet enjoyment of their home.
- The tenants also claim though, that the landlords’ conduct toward them, as distinct from the nature and location of the premises themselves, breached their right to quiet enjoyment.
- [The tenant/s] produced in evidence a large bundle of notes that she had made during the tenancy, to record her concerns about what was happening. Because they are notes made at the time, they should be given weight.
- In summary, those concerns relate to: a. the landlords dictating who could visit the tenants and how long they could stay; b. not being allowed to use their washing machine until after 9:00pm when lower power charges applied (electricity was included in the rent); 15 S.38 RTA c. the landlords shutting of power to the washing machine to enforce that rule; d. not being allowed to use air conditioning for the same reason; e. watching over the tenants from upstairs in the landlords’ property; f. not providing the password for the Wi-Fi, meant to be included in the rent; g. converting and renting out the adjoining carport, with associated noise and disruption; h. entering the premises when the tenants were out; i. making unreasonable rules such as not being allowed to close the curtains during the day or being allowed to have washing on the line overnight; j. yelling at the tenants when the rules weren’t complied with.
- Mr Swamy is mostly the subject of those complaints. He did not attend the hearing to give evidence.
- Some of the allegations made are serious and would of themselves constitute unlawful acts, such as entering the premises without notice or consent, or interfering with the supply of services.
- The evidence does not prove those specific allegations.
- Based on [the tenant/s]’s record of the events as they occurred and her oral evidence, I do find it proved on balance that some of the landlord’s demands, expectations and conduct toward the tenants, breached their right to have quiet enjoyment of the premises, which were their home, without interruption by the landlords. If the landlords were concerned about the tenants’ electricity use, it is up to them to have a separately metered supply installed. 16
- I award two weeks’ rent as compensation for the significant effect of those breaches on the tenants.
Did the landlords end the tenancy by unlawful notice?
- The tenants were given 21 days’ notice of termination. They were entitled to 90 days’ notice 17 .
- A landlord commits an unlawful act if they give notice to end a tenancy knowing they are not entitled to do so 18 .
- I find that the landlords breached their notice obligations and committed an unlawful act. 16 See s.39 RTA 17 S.561 RTA 18 S.60 RTA
- In my view it would not be just to award exemplary damages for that unlawful act. The landlords issued the notice to comply with the Council’s requirement to have the restricted and unconsented work removed by 9 July.
- The tenants have borne the consequences, by being required to find somewhere else to live on much less notice than they were entitled to. They were, initially at least, required to take emergency housing.
- To an extent, that has been taken into account in the award of exemplary damages for the landlords’ breach of s.45(1)(c).
- I nevertheless find that an additional award of general damages for having to try and find somewhere else to live on such short notice, would be just. It was caused by the landlords’ wrongdoing.
- As to what general damages to award, the Tribunal’s decision in Tenant v Ezy Rentals NZ Ltd 19 notes the range of harms caused to a tenant that general damages might compensate for, from disappointment or annoyance, through worry, stress or tension, to insecurity humiliation, fear and hardship. Awards from very little to over $3,000.00 are in order.
- My assessment is that the consequences of the short notice given to the tenants were significant, in the nature of real worry stress and tension, which would suggest a general damages toward the higher end of the range. I then need to reduce the award to recognise the other compensatory awards made to the tenants that stemmed from the same essential cause. The amount awarded is fixed though that assessment.
- Because the tenants have succeeded with their claims I reimburse the filing fee.