Published tribunal order
Tenancy Tribunal case 4587913 — Rent arrears at 10 Beamish Road, Santoft, RD 1, Bulls 4894
Decided 7 Sept 2023 · Published 7 Sept 2023 · Application 4587913
Mixed / unclear
- Rent arrears
- 14-day notice
- Exemplary damages
Order
- No application for suppression has been made in this case and no suppression orders apply around publication of this decision.
- Karen Smyth owes Colliers New Zealand Limited as Agent For Office Of Treaty Settlements $8,070.44 (“the debt”), comprising rent arrears of $8,050.00 and the filing fee of $20.44.
- Karen Smyth must pay rent and the debt as follows: a. By an initial lump sum of $4,025 to be paid no later than 20 September 2023; b. By 80 weekly payments of $280.00, being $230.00 for rent and $50.00 for the debt. c. A final payment of $275.44, being $230.00 for rent and $45.44 for the debt. d. Payments will be every Wednesday, with the first payment on 20 September 2023 and continuing until 9 April 2025.
- Payments will be allocated in the following order: rent, rent arrears, and the filing fee.
- If the tenant fails to pay rent and rent arrears within 2 working days of the due dates: a. The tenancy at 10 Beamish Road, Santoft, RD 1, Bulls 4894 will terminate and the landlord will have immediate possession of the premises. b. The balance of the debt will be payable immediately.
- If the tenant fails to pay the filing fee within 2 working days of the due date, the filing fee will be payable immediately.
Reasons
- Both parties attended the hearing, the landlord being represented by Mr Williams of Colliers.
- The landlord has applied for termination of the tenancy, rent arrears and refund of the bond. At the hearing Mr Williams advised that if the arrears could be cleared, the tenant could remain in the property, but they require at least half to be paid now and instalments of $100 per week for the balance. The tenant believed that WINZ would assist her with payment of some of the debt and she could increase her payments but not to $100.
- Under section 55(1)(a) of the Residential Tenancies Act 1986, the Tribunal must order termination of the tenancy if the rent was at least 21 days in arrears on the date the application was filed.
- There is no dispute that the rent is well over 21 days in arrears, the landlord claiming $8,050, which amounts to 35 weeks. However, the tenant says that she was led to believe that she did not have to pay the rent for a period when she was not in occupation and that her tenancy would not be terminated. Therefore, she says it is not fair that the landlord is now trying to enforce their rights under the Act.
- The tenant provided a 40-minute recording of a phone conversation she had with a Crown Property Portfolio Manager at the office of Land Information New Zealand (LINZ) on 1 March 2022, in which she says the manager led her to believe that she did not have to pay rent because she did not feel safe at the property.
- I have considered the evidence provided by the parties to this case and as the parties are aware, I have also reviewed the previous decisions to which the tenant was a party. These concern the property at 6 Beamish Road, but are relevant to the tenant’s situation at 10 Beamish Road, as outlined below. Background
- In this decision the parties are described as follows: Landlord refers to Colliers Tenant is Karen Smyth Sub-tenants refers to the tenants in applications 4307955 4373433, 4329151 4337488, who have been granted name suppression.
- The tenant has leased the premises at 10 Beamish Road since 2012 when she signed a lease with Darroch Limited as agents for the Office of Treaty Settlements. At some point the management of the property was taken over by Colliers. It is evident from correspondence provided that by 2014 Colliers were the agents.
- The tenant advised that between 2014 and 2018 the Rangitikei District Council gave street numbers to every property that had a gateway. Therefore, the property had two addresses, 6 Beamish Road and 10 Beamish Road. In correspondence in 2014 and 2018, the landlord referred to the property as 6 and 10 Beamish Road.
- In a decision dated 11 November 2021 1 the Tribunal declared that the tenant had leased part of the premises, 6 Beamish Road, for $100 per week, and she was therefore a landlord, and the other party was her tenant. For the purposes of this decision, they are referred to has subtenants. In June 2021 the tenant had issued her sub-tenants with a trespass notice, but in the order made on 11 November it was declared that there was a residential tenancy and so the trespass notice was not valid.
- In that decision, the arrangement was outlined. In summary, from 5 June 2020, the sub-tenants occupied the decommissioned school at 6 Beamish Road, Santoft, using rooms as a bedroom, lounge and kitchen, and also had use of a toilet there. The tenant was living next door in a standalone house at 10 Beamish Road, which is right next door to the school. The school did not have a shower, so the sub-tenant would shower in the tenant’s house. A key was left out for that purpose.
- There were further disputes between the tenant and her sub-tenants. In an order made by consent on 7 September 2022, the parties agreed that the tenancy would terminate on 21 September 2022. 2 In a further decision dated 9 September 2022, the tenant was ordered to pay $1,000 in exemplary damages for breach of the sub-tenants’ quiet enjoyment of the premises.
- In the meantime, on 1 March 2022 the tenant had rung LINZ (Land Information New Zealand) and spoken to a Crown Portfolio Manager, whose name she had seen on email correspondence she had been having with Colliers, the property managers. One of the functions of LINZ is managing crown-owned property, including tenancies. In this instance, Colliers were the agents for LINZ. At the 1 2 Proceedings numbered 4373433, 4329151 4337488 time the tenant was dealing with more than one person at Colliers. At the hearing Mr Williams explained that some of the staff there deal with the Crown’s commercial properties for LINZ and some deal with the residential.
- On 1 March 2022 the tenant rang LINZ to plead her case. The tenant said that this phone call took place in the midst of a lot of communications via phone and email between the tenant and LINZ and Colliers.
- The tenant said to the portfolio manager that she had been emailing Mr Williams but getting no reply. The parties agreed there were three parts of the 40-minute conversation that were relevant to the tenant’s current claim that she did not have to pay rent for a certain period. These were played during the hearing. The following excerpts are statements made by the portfolio manager during that conversation. a. At 2 minutes 45 seconds “We’re acknowledging that you are in a terrible spot at the moment. If it were me, just by the way, I would not pay for the moment, I would say you can’t live in the place, therefore shouldn’t be having to pay rent.” b. At 9 minutes 3 seconds “You wouldn’t be terminated from your tenancy for not paying (inaudible) of the rent when you can’t be on the property for your own safety. I can assure you of that part.” c. At 33 minutes “I’d say that I think you shouldn’t have to pay the rent while you are not there and I am going to talk to Jacob and Cameron about that fact.”
- The tenant did not tell the portfolio manager that the phone call was being recorded.
- Looking at the rent summary provided by the landlord, at the time of the phone call, the tenant owed between 2 and 3 weeks in the rent.
- On 27 May 2022 the tenant cleared rent owing of $1700, which equates to over 7 weeks’ rent. She then stopped paying rent. Rent accrued to a total of $7,590 by 7 January 2023. The tenant made no further payments of rent until 12 January 2023. She told the Tribunal that in May she had moved to Woodville.
- Since January the tenant has paid her rent most of the time. Some missed payments meant that by 27 May 2023 she owed $8,050. The day before that she was issued with a 14-day notice to pay $8,050 in full.
- At the hearing of the present application for termination and rent arrears, the tenant said that the sub-tenants had not moved out until December 2022. She was unsure of the exact date, as she was overseas at the time. She had not felt safe in the premises until they had moved out.
- The tenant did not apply to the Tribunal for possession of the property once the sub-tenancy had terminated.
- The tenant did not pay the rent at all between 27 May 2022 and 12 January 2023.
- In summary, the chronology is: 11 November 2021 arrangement with sub-tenants is declared a tenancy 1 March 2022tenant’s phone call with LINZ property portfolio manager 27 May 2022tenant clears arrears with payment of $1,700 21 September 2022 sub-tenancy terminates 12 January 2023tenant resumes rent payments 26 May 2023landlord issues 14-day notice. .
Is the landlord estopped from enforcing their rights?
- Promissory estoppel is a legal term describing the situation where one party has acted in reliance on the other party’s promise to their detriment, and so it would be inequitable or unconscionable to allow that party not to be bound by such promise.
- I accept Mr Williams’ submission that the portfolio manager was not the landlord, did not know she was being recorded and had no authority to give any advice to the tenant about payment of rent.
- From the tenant’s perspective, she was speaking with someone who had responsibilities in the management of the property. It is arguable that speaking with a portfolio manager at LINZ is analogous to speaking with the owner of a property. The portfolio manager was clearly trying to be helpful to the tenant, talking with her for over 40 minutes and even reading from some legal advice that had been given to LINZ. It is understandable from the circumstances and tone of the conversation that the tenant might believe she could rely on that advice. The portfolio manager assured the tenant that her tenancy would not be terminated for not paying rent if she could not be on the property because of her safety.
- Added to that is the fact that the landlord took no steps to enforce non-payment of rent. The tenant did not receive any notices to remedy until May 2023, some 12 months since she had stopped paying rent.
- However, the tenant’s argument would have more weight if she had stopped paying rent in March immediately. She continued to pay the rent for another three months and did not resume payment of the rent even after she knew the tenants had moved out. At the time of the hearing with her sub-tenants in September 2022 she was not paying rent for the property.
- In addition, the portfolio manager said that she would discuss it with others and so the final statement was not that the tenant could stop paying rent. The tenant made no effort to confirm the situation or obtain any advice from the landlord. It was not until these proceedings were brought that she has produced a copy of the conversation with the portfolio manager.
- I find that: a. the tenant was not able to rely on the advice of the portfolio manager because she was not the landlord. b. the tenant did not rely on that advice but has attempted to do so in retrospect.
Should a conditional termination order be made?
- At the hearing Mr Williams said that the landlord agrees to the tenant staying in the tenancy but she must pay the debt. The tenant said that she has some work lined up and that WINZ will pay some of the debt.
- Where rent is at least 21 days in arrears on the date the application was filed, the Tribunal must make either a final or a conditional termination order. See section 55(1)(a) and (1A) Residential Tenancies Act 1986.
- I am satisfied the tenant will pay the debt within the period specified in the order and is unlikely to commit any further relevant breach. I have granted a conditional termination order.
- The conditional termination order will lapse if it is fully complied with. If the tenant breaches the order, the possession order may be enforced for 90 days from the first breach. See section 64(4)(b) Residential Tenancies Act 1986.
- The landlord has been successful and so I must reimburse the filing fee.