Published tribunal order
Tenancy Tribunal case 4614651 — Exemplary damages at 34 Sisson Road, Pakowhai, Napier 4183
Decided 2 Aug 2023 · Published 2 Aug 2023 · Application 4614651
Tenant favoured
- Exemplary damages
Order
- No application for suppression has been made in this case and no suppression orders apply around publication of this decision.
- Michael Brown and Susanne Brown are to pay the bond of $1,350.00 and the filing fee of $20.44 to David John Frethey immediately.
- By declaration, Michael Brown and Susanne Brown committed an unlawful act by failing to lodge the bond within 23 working days as is required by section 19 of the Residential Tenancies Act 1986. Background
- Both parties attended the hearing. The tenant appeared with his son as a support person.
- This is a sad situation that has arisen following the major flood event in Hawke’s Bay on 14 February 2023. The premises were destroyed, and the tenant vacated the premises on the morning of the flooding. It transpires that the tenant may have been intending to vacate the premises before his fixed term tenancy ended despite the fact that the landlord did not agree to shortening the fixed term. Cyclone Gabrielle took the matter out of the hands of the parties and the landlord has not filed a counter claim to give effect to their concerns.
Should the tenant be refunded the bond?
- The tenant has applied for refund of their bond following the end of the tenancy.
- At the hearing the landlord made a claim against the bond. However, the landlord did not file an application with Tenancy Services.
- Section 22B of the Residential Tenancies Act 1986 (RTA) provides: (1) If there is a dispute between the parties as to the payment of a bond, either party may apply to the Tribunal for an order determining to whom the bond, or any part of it, is to be paid. (2) If the tenant applies to the Tribunal and the landlord seeks payment of the bond in whole or in part, the landlord must file an application with the Tribunal that sets out the landlord’s counterclaim.
- The requirement for the landlord to file a counterclaim is mandatory. Therefore, because the landlord has not done so, the bond is refunded in full to the tenant. This does not prevent the landlord from filing a claim against the tenant at a later date. It just means that, if the landlord’s claim is successful, there is no bond to put towards any monetary award made.
Did the landlord fail to lodge the bond with the Bond Centre?
- The tenant claims the landlord has not lodged 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) RTA.
- 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 RTA.
- The landlord received the bond at the start of the tenancy and submitted the bond form but did not make payment. The landlord claims that they thought the Bond Centre would contact them to arrange payment as cheques were no longer accepted. I find they have 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) RTA.
- In this case, the tenant is not seeking compensation or exemplary damages from the landlord for the breach. Whilst I accept the landlord misunderstood the payment arrangements, the landlord ought to have followed up with the Bond Centre and ensured that the bond was lodged as is required. It is tenant’s money, and it is important it is securely held with an independent third party. Filing fee
- Because the tenant has been wholly successful with his claim I have reimbursed the filing fee. T Lee-Lewis 02 August 2023