What was the outcome of Tenancy Tribunal case 4460704?

The tribunal order states: Radius SPV Limited must pay Rose Marie Allan $375.00 immediately, calculated

How much money was awarded in case 4460704?

Property Damage: $375.00 awarded to tenant

What type of tenancy dispute was case 4460704?

The primary dispute was Exemplary damages.

Where can I read the official tribunal order for case 4460704?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/10045561-Tribunal_Order.pdf.

What was the outcome of Tenancy Tribunal case 4460704?

The tribunal order states: Radius SPV Limited must pay Rose Marie Allan $375.00 immediately, calculated

How much money was awarded in case 4460704?

Property Damage: $375.00 awarded to tenant

What type of tenancy dispute was case 4460704?

The primary dispute was Exemplary damages.

Where can I read the official tribunal order for case 4460704?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/10045561-Tribunal_Order.pdf.

23 Browne Street, Matamata 3400 Tenancy Tribunal Case 4460704 — Exemplary damages

Claims and awards in Tenancy Tribunal application 4460704 — net $375.00 NZD. Amounts reconciled from the published order (claims sum and net total). Verify on MoJ.
Claim	Tenant	Reason
Exemplary damages: Failure to notify change of landlord	$375.00	Failure to notify change of landlord
Net award	$375.00
Total payable by Landlord to Tenant	$375.00

Claims and awards in Tenancy Tribunal application 4460704 — net $375.00 NZD. Amounts reconciled from the published order (claims sum and net total). Verify on MoJ.
Claim	Tenant	Reason
Exemplary damages: Failure to notify change of landlord	$375.00	Failure to notify change of landlord
Net award	$375.00
Total payable by Landlord to Tenant	$375.00

Order

Radius SPV Limited must pay Rose Marie Allan $375.00 immediately, calculated as shown in table below:
Radius SPV Limited and Online Rentals Limited must pay Rose Marie Allan $1,145.44 immediately, calculated as shown in table below:

Reasons

All parties attended the hearing. The tenant and first respondent were represented by counsel. Counsel for the first respondent provided detailed and very helpful submissions.
The tenant claims the landlord failed to notify her of its contact details after buying the property, changed the locks without her consent, and breached her right to reasonable piece, comfort, or privacy in circumstances that amounted to harassment.
For the first breach she sought a fine of $2,000.00 and exemplary damages of $5,000.00. For the second she sought a penalty of $3,000.00 and exemplary damages of $5,000.00. For the third she sought a penalty of $1,500.00 and exemplary damages of $5,000.00.
The Residential Tenancies Act 1986 provides for exemplary damages as well as infringement fees and fines. Only one type of penalty can be imposed in relation to the same conduct (s 137A RTA). The Tribunal is not involved with the process of issuing infringement notices or proceedings. Therefore, the options available to the Tribunal are to order compensation or exemplary damages. The Tribunal cannot award common law exemplary damages over and above the amounts that can be awarded for unlawful acts under Schedule 1A RTA. Failure to notify successor’s details:
When a landlord’s interest in a tenancy passes to some other person, the new landlord must, within 10 working days, advise the tenant of their contact details, an address for service, a contact phone number, and an email address. Breaching this obligation is an unlawful act, for which the Tribunal may award exemplary damages up to a maximum of $750.00 (s 15(2) and Schedule 1A RTA).
Where a party has committed an unlawful act intentionally, the Tribunal may award exemplary damages where it is satisfied that 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 (s 109(3) RTA).
Radius bought the property on or about 29 September 2022, as part of a rest home purchase. The tenant had an existing tenancy. The previous owner notified the tenant of the sale, but Radius did not send the tenant the notice required under s 15.
On 8 November, Radius contracted Online to manage the tenancy.
On 23 November 2023, Online emailed the tenant to advise that it had been engaged to manage the property. It provided bank details and advised the tenant to pay rent to the new bank account as from 8 November (15 days prior). The email included Online’s legal name, a phone number and email. It did not provide the full name and contact address of the owner, an address for service, or any mobile number.
On 8 December, the agent emailed the tenant requiring her to immediately pay back-rent from 29 September. It said failure to do so could result in Tribunal proceedings.
Counsel for Radius says the sale and purchase transaction was complex and the failure to notify the tenant was an unintentional administrative oversight. Counsel correctly states that negligence is insufficient to establish intention.
I do not accept the explanation of administrative oversight. Radius took over the role of landlord and was required to inform itself about the responsibilities that entailed. Intent can be established where a party sets out to achieve a particular goal and carries out the necessary steps (this includes inaction where positive steps are required). It can also be established where a party either does something, or fails to do something, knowing that a particular outcome is a virtual certainty. Where a party fails to inform itself about its obligations as a landlord, and therefore fails to take necessary steps, then this is sufficient to prove intent. Were it otherwise, a landlord could simply plead ignorance of the law, which is not a defence.
The breach is not the most serious of its kind, although I accept that not knowing who her new landlord was would have caused the tenant some anxiety. The demand for immediate payment of back rent to the changeover date would have no doubt increased the level of stress. There is also a public interest in ensuring landlords apprise themselves of their obligations and fulfil them.
I have not awarded any compensation, as the landlord wrote off $3,535.70 in rent as a result of the late notification. That is sufficient recompense. Lock change:
Neither a landlord nor a tenant may alter or remove any locks without the other party's consent (s 46(1) and (2) RTA). Breaching this obligation is an unlawful act for which exemplary damages may be awarded up to a maximum of $1,500.00 (s 46(3) and Schedule 1A RTA).
On 6 December, Online sent the tenant a notice for an inspection on 15 December, between 9:00am and 5:00pm. Online said it did not have a key and required the tenant’s co-operation for access. It asked her to advise if she could not assist so that it could make “alternative arrangements”.
The tenant replied that she could not manage the 15 th and said she was only available Monday mornings. She said she would provide a copy of a key if Online provided the legislation requiring this. Online sent an extract from s 48 RTA, which only deals with the right of entry. The tenant said she wanted to be present to meet the new property manager.
The parties were unable to reach and agreement. On 8 December, Online sent the tenant an email stating it was “required by law” to inspect the property (an overstatement) and that if the tenant did not provide a key it would arrange for a locksmith to attend the property.
The tenant emailed Radius about the impasse, saying she was uncomfortable with the manager going through her home without having met her and that entry using a locksmith was “forceful and unnecessary”. Radius replied that it had emailed Online to see if a Monday inspection could be arranged.
On 15 December, the tenant left a note on the front door warning Online not to enter, and that an application had been filed in the Tenancy Tribunal.
Online attended the inspection with a locksmith. The locksmith was unable to provide a key to fit the lock and proceeded to change the lock. Although the locksmith briefly entered the house in the process of changing the lock, Online did not carry out an inspection. Online left a spare key in a gumboot by the front door. Online then sent the tenant a message saying it had left a new key in the gumboot and that the locksmith had broken the lock “accidentally”, which was clearly not the case.
Online says the locksmith went beyond the scope of his instructions by drilling out the old lock and replacing it, and the security camera footage shows one of the two property managers present questioning the locksmith’s actions after he has started drilling out the lock. However, the security footage also shows one of the managers watching the locksmith while he picked up the drill, activated it, and then started to drill the lock. There was no reaction from the manager. Although the managers say they are not experts, the locksmith’s actions were plain to see.
I find that the agent is responsible for the actions of its contractor and therefore committed an unlawful act by changing the front door lock without the tenant’s consent. The breach was aggravated by the managers leaving a spare key in a gumboot by the front door, rather than taking it to the tenant.
The maximum penalty available is reserved for the very worst or repeated incidents. Although the maximum is not justified in this case, I find that the breach was at the serious end of the spectrum, and that 75% of the maximum is appropriate ($1,125.00). The incident was distressing for the tenant and there is a strong public interest factor. Harassment:
The tenant says the communications from the property manager were confrontational and intimidating and caused her to feel unsafe and anxious.
The communications leading up to the first inspection and lock change have been previously summarised. On 8 February, Online sent the tenant notice of an inspection on 13 February between 9:00am and 5:00pm. The tenant sought confirmation of an inspection time, which the agent would not provide other than to say it would happen in the morning “if all goes well”. When pressed, the agent said it did not have to give a time, as it depended on departure time, travel time, and other inspections. The tenant says the agent gave an inspection time to other tenants and therefore discriminated against her.
The tenant reiterated to the agent that she wanted to be present at the inspection (for reasons it is unnecessary to specify) or alternatively that the agent should have a Police escort.
On the day of the inspection, the tenant did not answer the door and she had left a piece of wood in the sliding door track, so that the door could not be opened. After the property manager left, the tenant sent the agent a message to say she had been in the sauna at the time of the visit and did not hear a knock on the door.
The agent says its correspondence was in response to the tenants’ emails and that it was only trying to exercise its rights under the RTA to inspect the premises. It says the tenant’s correspondence was aggressive and she was obstructive.
There was clearly a contest of wills between the tenant and the agent. While the tone of some of the agent’s correspondence can be criticised, and the agent could have been more constructive in rearranging the December inspection and giving an approximate time for the February inspection, the evidence is insufficient to prove harassment. The tenant’s conduct in relation to the February inspection could also be criticised as being unhelpful.
The landlord claims a set-off for the tenant’s failure to allow entry. However, this is a separate cause of action, and the landlord has not filed an application to support the claim. In the absence of an application, it would not be appropriate to consider the issue.

Are both the landlord and agent liable?

The claim is against both Radius and Online. Therefore, the Tribunal must determine whether both come within the definition of ‘landlord’.
Section 2(1) RTA defines a landlord as: landlord, in relation to any residential premises that are the subject of a tenancy agreement, means the grantor of a tenancy of the premises under the agreement; and, where appropriate, includes- ... (e) an agent of the landlord" [emphasis added] and includes an employee of that person in that person’s capacity as landlord or tenant
There is no doubt that Radius is a landlord. Although it did not grant the original tenancy, it acquired the former owner’s interests in the property. The remaining issue is whether Online was also a landlord.
Online was not appointed as agent until after Radius breached s 15 RTA. Therefore, although Online’s notice to the tenant did not cure the original breach, Radius is solely liable for exemplary damages.
The situation is different for the unlawful lock change, because Online was acting as agent by then and was centrally involved in the relevant events.
There are two relevant sources of law in determining whether Online was a landlord at that time: the common law rules of agency, and the definition of landlord in s 2(1) RTA. If, under the common law rules of agency, Online is a ‘landlord’, then it will be jointly liable for the lock change breach.

What are the common law rules?

The District Court held in the case of Mumby v Gary Brown Realty Ltd [2011] DCR 420, that “the law is no different for agents acting under the Residential Tenancies Act than agents acting in any other capacity” (at para [31]).
The primary common law rule is that an agent who merely acts as an intermediary for a principal (the landlord) is not a party to the contract between the principal and the other party (the tenant). Whether an agent is acting as an intermediary depends on the intention of the parties, which is determined objectively from the words used in the contract and the background facts.
An agent who puts their unqualified name on a contract will usually be personally liable, even if the other party knows they are acting as an agent. Use of the term ‘agent’ will not necessarily displace this presumption, as this is a descriptive term that does not necessarily indicate the capacity in which the agent has signed the contract. In these circumstances, both the agent and the principal can sue or be sued on the contract (Mumby at paras [47] and [50]). On the other hand, use of qualifying words such as ‘as agent for’ on ‘on behalf of’ will usually be taken to mean the agent is acting as an intermediary.
An agent acting for an unnamed principal will not necessarily be a party to the contract; this is just a relevant factor in determining the parties’ intention. Where the existence of a principal is not disclosed, the agent will be a party to the contract. The undisclosed principal, if discovered, will also be liable under the contract.
In Mumby, the agent took over the tenancy from a previous agent. A new tenancy agreement was prepared, which named the agent as landlord and required the tenant to pay rent to the agent. The Court considered several factors in deciding the agent was liable under the tenancy agreement: the agreement named the agent as landlord, a bond lodgement letter from the Bond Centre referred to the agent as landlord, the agent was involved in inspections, the agent dealt with the tenant's inquiries and complaints, and the agent issued a termination notice.
In this case, the parties did not enter into a new tenancy agreement. The first written correspondence between Online and the tenant was the email dated 23 November, notifying the tenant that Online was managing the property “on behalf of the owner” (unnamed). Online gave its bank details for payment of rent, all subsequent inspection notices were issued by Online, and Online attempted to carry out the property inspections. Although the tenant became aware that Radius owned the property, and corresponded with Radius asking it to intercede regarding inspection dates and times, Radius made it clear that she should correspond with Online.
Some of the evidence points to Online being a landlord: providing its bank and contact details to the tenant, not naming Radius, and its day-to-day management of the tenancy. On the other hand, use of the words ‘on behalf of’ suggests otherwise. Therefore, it is necessary to consider whether the extended definition of landlord applies.

Does the extended definition of landlord include Online?

The District Court’s statement in Mumby, that the law applicable to agents is the same under the RTA as in any other capacity, has sometimes been taken out of context and relied on for the proposition that the extended definition of landlord does not alter the common law principles of agency. However, the statement was made in the context of a finding that the Tenancy Tribunal had misapplied the common law rules: [30] The findings of the tenancy adjudicator in respect to the liability appear to be premised, on his view, as expressed in his “Background” – that if a tenant is aware that the agent is acting for the landlords then liability rests with the landlords and no liability attaches to the agent. [31] This in fact is not the legal position in respect to agents, and the law is no different for agents acting under the Residential Tenancies Act than agents acting in any other capacity.
Because the Court found that the property manager was a landlord under the common law rules, it did not need to consider the extended definition of landlord under s 2(1).
The plain and ordinary meaning of ‘landlord’, as defined by s 2(1) RTA, is that a landlord includes “where appropriate ... (e) an agent of the landlord”. If the Tribunal were to confine the meaning of landlord to the common law agency rules, then it would be ignoring the clear and explicit language of the statutory definition and would render the words in sub-clause (e) meaningless.
The Tribunal has held that the common law rules of agency are affected by the extended definition of landlord in the RTA, and that the words "where appropriate" in s 2(1) do not limit the extended definition. In Hayward v Lambton Property Management Limited [2012] NZTT, Lower Hutt, 11/01694/LH, the Tribunal said there were sound policy reasons why the definition of landlord should be extended to include the agent: many owners use professional property managers; some owners are absentee or live oversees; many tenants, owners and agents do not understand the implications of the common law rules; and a tenant could be left in a difficult situation if forced to pursue an owner whom they did not know and had no dealings with.
Based on the background factors outlined in paragraph 43, I find that it is appropriate to regard Online as a landlord, based on the extended definition in s 2(1). Therefore, I find that Radius and Online are jointly liable for the lock change breach. Filing fee and name suppression
Because the tenant has succeeded with two of her claims, I have reimbursed the filing fee. The tenant did not apply for name suppression. J P Smith 3 April 2024

Tenancy Tribunal case 4460704 — Exemplary damages at 23 Browne Street, Matamata 3400

At a glance

Tenancy Tribunal case 4460704 — Exemplary damages at 23 Browne Street, Matamata 3400

At a glance

Award balance

Claims & awards

Order

Reasons

Are both the landlord and agent liable?

What are the common law rules?

Does the extended definition of landlord include Online?

Topics & place

Residential Tenancies Act sections

Key findings

Property management

Frequently asked questions

Award balance

Claims & awards

Order

Reasons

Are both the landlord and agent liable?

What are the common law rules?

Does the extended definition of landlord include Online?

Topics & place

Residential Tenancies Act sections

Key findings

Property management

Frequently asked questions