What was the outcome of Tenancy Tribunal case 4701408?

The tribunal order states: Prem Gill must pay Haze Te Aorewa Dickson and Whai Ako Haare $4,075.49

How much money was awarded in case 4701408?

Cleaning: $935.00 awarded to landlord; Compensation: Electricity Costs: $1,625.84 awarded to tenant; Property Damage: $400.00 awarded to tenant; Property Damage: $600.00 awarded to tenant; Property Damage: $500.00 awarded to tenant; Property Damage: $1,965.35 awarded to landlord; Property Damage: $750.00 awarded to landlord; Rent Refund Unlawful Premises: $4,600.00 awarded to tenant

What type of tenancy dispute was case 4701408?

The primary dispute was Exemplary damages. Related themes: Healthy homes.

Where can I read the official tribunal order for case 4701408?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/10843075-Tribunal_Order.pdf.

What was the outcome of Tenancy Tribunal case 4701408?

The tribunal order states: Prem Gill must pay Haze Te Aorewa Dickson and Whai Ako Haare $4,075.49

How much money was awarded in case 4701408?

Cleaning: $935.00 awarded to landlord; Compensation: Electricity Costs: $1,625.84 awarded to tenant; Property Damage: $400.00 awarded to tenant; Property Damage: $600.00 awarded to tenant; Property Damage: $500.00 awarded to tenant; Property Damage: $1,965.35 awarded to landlord; Property Damage: $750.00 awarded to landlord; Rent Refund Unlawful Premises: $4,600.00 awarded to tenant

What type of tenancy dispute was case 4701408?

The primary dispute was Exemplary damages. Related themes: Healthy homes.

Where can I read the official tribunal order for case 4701408?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/10843075-Tribunal_Order.pdf.

14 Raymond Avenue, Te Puke, Te Puke 3119 Tenancy Tribunal Case 4701408 — Exemplary damages

Claims and awards in Tenancy Tribunal application 4701408 — net $4,075.49 NZD. Amounts reconciled from the published order (claims sum and net total). Verify on MoJ.
Claim	Landlord	Tenant	Reason
Cleaning and carpet cleaning	$935.00		Cleaning and carpet cleaning
Replace damaged cooktop	$1,965.35		Replace damaged cooktop
Repairs	$750.00		Repairs
Exemplary damages: bond		$400.00	bond
Exemplary damages: healthy homes		$600.00	healthy homes
Exemplary damages: tenancy agreement		$500.00	tenancy agreement
Compensation: electricity costs		$1,625.84	electricity costs
Rent refund unlawful premises		$4,600.00	Rent refund unlawful premises
Total award	$3,650.35	$7,725.84
Net award		$4,075.49
Total payable by Landlord to Tenant		$4,075.49

Claims and awards in Tenancy Tribunal application 4701408 — net $4,075.49 NZD. Amounts reconciled from the published order (claims sum and net total). Verify on MoJ.
Claim	Landlord	Tenant	Reason
Cleaning and carpet cleaning	$935.00		Cleaning and carpet cleaning
Replace damaged cooktop	$1,965.35		Replace damaged cooktop
Repairs	$750.00		Repairs
Exemplary damages: bond		$400.00	bond
Exemplary damages: healthy homes		$600.00	healthy homes
Exemplary damages: tenancy agreement		$500.00	tenancy agreement
Compensation: electricity costs		$1,625.84	electricity costs
Rent refund unlawful premises		$4,600.00	Rent refund unlawful premises
Total award	$3,650.35	$7,725.84
Net award		$4,075.49
Total payable by Landlord to Tenant		$4,075.49

Order

Prem Gill must pay Haze Te Aorewa Dickson and Whai Ako Haare $4,075.49 immediately, calculated as shown in table below.

Reasons

Both parties attended the hearing.
The tenants applied for exemplary damages and compensation. Their claim was first heard in January 2024. The tenants’ claim was clarified, and the landlord was directed to file a counterclaim if he wanted it dealt with at the next hearing.
The claim was part-heard in early April and, as the landlord had not filed a counterclaim, the bond was refunded to the tenants.
The landlord filed his counterclaim for compensation in late April. The next hearing could not proceed for health reasons. Tenant’s claim:
The tenancy started on 26 August 2022 and ended on 26 September 2023. Tenancy agreement
The tenants signed a partially completed copy of the tenancy agreement on 24 August but say they did not receive a copy of the agreement at the start of the tenancy.
On 29 November, the tenants served a 14-day notice on the landlord requesting (amongst other things) a copy of their tenancy agreement.
On or about 5 December, the tenants received the three pages of the agreement they signed from a property manager temporarily engaged by the landlord.
The landlord says the signed copy of the tenancy agreement was left on the kitchen table for the tenants to photograph, and he claims the tenants would have required a copy of the tenancy agreement for an accommodation supplement. The tenants dispute the latter point.
A landlord must ensure the tenancy agreement is in writing, signed, and a copy provided to the tenant prior to the tenancy commencing (s 13 RTA). Breaching this obligation is an unlawful act. The Tribunal may award exemplary damages up to $750.00 where it is satisfied the act was intentional and it would be just to do so. The relevant factors are the party’s intent, the effect of the unlawful act, the interests of the other party, and the public interest (s 13(4), 109(3) and Schedule 1A Residential Tenancies Act 1986).
I do not accept that leaving the incomplete tenancy agreement on the kitchen table for the tenants to photograph was sufficient compliance with the landlord’s duty. The section requires positive steps to be taken, which did not happen here. Even when the agreement was provided, it was still incomplete.
When assessing an appropriate level of exemplary damages, a common starting point is one-third of the maximum for a first incident. However, because the landlord had to be prompted by a 14-day notice, and still did not properly comply with the section, I have increased the damages to two-thirds of the maximum. There is a strong public interest in ensuring that landlords understand and comply with their obligations. Bond
The tenants paid the bond on or about 25 August 2022.
A landlord must send any bond payment to the Bond Centre within 23 working days after the payment is received (s 19(1) RTA). Breaching this obligation is an unlawful act. The Tribunal may award exemplary damages up to $1,500.00 (s 19(2) and Schedule 1A RTA).
The bond should have been sent to the Bond Centre by 28 September. It was not and the tenants referred to the non-lodgement in their 14-day notice of 29 November. The landlord lodged the bond on 13 December.
The landlord says he did not lodge the bond as he did not understand the process. Ignorance of the law is no excuse (TMT New Zealand Limited v Sweeney and Sundahl [2021] NZDC 16182 at para [37]), and the failure was therefore intentional. The fact that the landlord did eventually comply with his obligations and lodge the bond is a mitigating factor that justifies a reduction on the usual one-third starting point. However, it is unlikely this would have happened had the tenants not sent the 14-day notice. Therefore, only a modest reduction to $400.00 is warranted. Healthy Homes Standards.
Minimum insulation standards have been in place since 1 July 2019. In relation to the other healthy homes standards, because the tenancy started on 26 August 2022, the landlord had 90 days to comply (i.e., by 24 November 2022). He did not obtain a healthy homes assessment before the tenancy started.
The tenants’ 14-day notice of 29 November included reference to “insulation compliance”.
On or about 10 December, the landlord added extra ceiling insulation. He says the existing insulation was only about halfway up the framing (i.e., about 50mm) so it would not have been compliant.
On 13 December, the landlord had a healthy homes assessment carried out. The assessment found the insulation compliant, but the drainage and draught stopping standards were not met. The accompanying photos show plants growing in one of the gutters. The draught stopping related to gaps around some of the windows. The landlord had these matters addressed shortly after receiving the report.
Breaching any of the healthy homes standards is an unlawful act, and each breach can attract exemplary damages up to $7,200.00 (s 45(1A) and Schedule 1A RTA).
The maximum penalties available indicate the potential gravity of breaching the standards. In this case, however, I have awarded minimal amounts for the three breaches ($200.00 for each making a total of $600.00). This is because the landlord complied soon after the compliance date (albeit after receiving the 14-day notice in the case of insulation) and, due to the time of year, the brief period of non- compliance would not have had a significant effect on the tenants. Because the landlord has committed a series of breaches (both in relation to the healthy homes standards and other obligations) I have also kept in mind the totality of the penalties imposed. Power
The house was divided into two occupancies. The tenants lived upstairs and, for most of their tenancy, other tenants lived downstairs. Tenants moved in downstairs about two weeks after the tenants’ tenancy started. The downstairs flat was empty between approximately 28 March and 24 April 2023.
There is only one electricity supply, with two meters: one for 24-hour supply and one for controlled supply (for hot water).
The power was in the tenants’ name. The landlord says he wanted it in his name, but the tenants insisted as they wanted to win a free television. The question of whose name the power was in does not affect the parties’ rights and obligations.
The power was divided 60:40 between the upstairs and downstairs tenancies. The tenants say the landlord told them one of the two meters was for upstairs and one was for downstairs. In July 2023, they obtained confirmation from their supplier that the meters were for 24-hour and controlled supply, and that if each meter was supplying a separate dwelling, they would likely both be 24-hour supplies.
The landlord has provided a photograph of a meter board which he says is a check meter for the downstairs unit. He says he discussed providing readings from the meter with the tenants, but they preferred to keep to the 60:40 split of power.
The tenants say the discussion about the meters was during an inspection in April 2023, but that the landlord never provided any details of usage through the check meter. They also say he was tardy in reimbursing them for the downstairs usage.
Section 39 RTA provides that tenants are liable for outgoings “exclusively attributable” to their occupation of the premises, including electricity. Where a landlord divides premises into two occupancies, but only has one electricity supply, they will be liable for the cost of electricity unless it is possible to calculate each tenant’s usage through a check meter. Even if there is a check meter, the landlord will still be liable for the fixed charge component of the invoice, as this is not exclusively attributable to either tenant’s occupancy. If a landlord wants to avoid this cost, they can install two separate supplies.
The landlord has not provided any independent evidence that there is a check meter for the downstairs flat, apart from a photograph of a meter. However, I have proceeded on the basis that there is a meter in existence. That being the case, it is difficult to understand why the landlord did not provide details of downstairs usage to enable their contribution to be accurately calculated.
On the face of it, the tenants are entitled to have all of their electricity costs reimbursed. However, there are two competing considerations. On one hand, tenants cannot be required to contract out of their rights under the Act, even though the landlord says they were content to continue with the 60:40 split (s 11 RTA). On the other hand, there is a duty to mitigate loss (s 49 RTA) and if tenants could have taken steps to deal with a landlord breach during a tenancy, but do not, they could receive an unfair windfall if they claim compensation for the breach after the tenancy has ended. Balancing these competing considerations is part of the Tribunal’s obligation under s 85(2) RTA to determine claims according to their substantial merits and justice.
I have dealt with the claim on the following basis: a. The landlord had an obligation from the outset of the tenancy to pay for the fixed charges and provide the tenants with usage from the downstairs to enable their contribution to be calculated. b. Because the tenants did not provide any supporting evidence for September to November 2022, I have not provided any reimbursement for this period (this is partially offset by a payment made in November 2022 for $278.00). c. For the period December 2022 to March 2023, I have ordered full reimbursement of the electricity costs as the landlord did not provide any details of downstairs usage ($1,919.78). d. I have excluded electricity costs for the period 5 to 29 April, as this roughly equates to the period the downstairs flat was empty. e. The tenants say the discussion about meters occurred during an inspection in April. It is probable that there was a misunderstanding about the metering, hence their inquiry to the power supplier and their decision to continue with the 60:40 split. Giving the landlord the benefit of any doubt, it appears that calculation of contributions could have been regularised from this point onwards, so for the invoices May to October I have calculated reimbursement based on the fixed charge and 40% of usage ($1,202.53). f. The payments made by the landlord between December 2022 and August 2023 have been taken into account ($1,496.47), and the termination fee excluded. g. Based on all these factors the amount to be reimbursed is $1,625.84.

Were the premises unlawful?

As previously stated, the premises consist of a two-storey house, with the tenants occupying the upstairs and other tenants occupying the downstairs for most of the tenancy. The premises were, however, only consented as a single dwelling.
Section 78A RTA applies to unlawful residential premises. Unlawful premises are defined by subsection (2): For the purposes of this Act, 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), ... , has caused the occupation by that person to be unlawful or has contributed to that unlawful occupation.
Section 36 requires a landlord to take reasonable steps to ensure that there is “no legal impediment to the occupation of the premises for residential purposes”. Section 45(1)(c) requires a landlord to comply with “all requirements in respect of buildings, health, and safety under any enactment so far as they apply to the premises”.
In the case of Harding v Caroto [2023] NZDC 5981, the District Court dealt with a similar situation of a two-storey dwelling with a ‘granny flat’ downstairs. The premises as a whole were consented as a single dwelling (SH – sleeping single home) and the granny flat could not be lawfully occupied as a separate dwelling unless a change of use from SH to SR (sleeping residential) had occurred.
The Court discussed ss 114 and 115 Building Act 2014 and regulations 5 and 6 of the Buildings (Specified Systems, Change the Use and Earthquake Prone Buildings) Regulations 2005.
The BA provisions provide that a building owner must notify the territorial authority of any change of use. They must not change the use where it involves additional household units unless the territorial authority gives written notice that it is satisfied on reasonable grounds that the new use will comply “as nearly as reasonably practicable, with the building code in all respects”.
The BSSR provisions provide that a change of use is where “the requirements for compliance with the building code in relation to the new use are additional to, or more onerous than, the requirements for compliance with the building code in relation to the old use”. The regulations refer to the uses listed in Schedule 2, which include SR for multi-unit residential dwellings and SH for a single household.
The Court’s finding that the granny flat was unlawful is consistent with one of the underlying purposes of s 78A, which is to ensure that landlords do not financially benefit from renting out premises while evading legal and regulatory requirements.
The Court accepted the Tribunal’s finding that the breach was technical and that the premises were otherwise safe and sanitary. On this basis the Court found that there were special circumstances (s 78A(4) RTA) not to order a full refund of rent. It agreed with the Tribunal’s finding that no rent arrears should be ordered ($1,920.00) and it reduced the Tribunal’s order for a rent refund from $1,100.00 to $975.00.
In Harding, the Council had served a notice on the owner prohibiting the owner from renting the granny flat as a separate unit as there was no firewall between the two premises. Despite this, the Tribunal found that there was no intent behind renting out the unconsented premises and that they were otherwise safe and sanitary. The District Court accepted the Tribunal’s finding that this was a technical breach, and that the granny flat was “relatively safe and sanitary” despite the lack of a firewall. With due respect to the Tribunal and District Court in that case, it is difficult to see how non-compliance with fire safety requirements can be construed as a technical breach. Although the risk of fire may be statistically very small, this should be weighed against the potentially catastrophic consequences should it happen.
In the present case, the landlord argued that the area occupied by the tenants was the same as in the original consented plans. This however misses the essential point that he was not permitted to rent out the house as two separate dwellings: during the periods when he did so, both premises were unlawful residential premises.
The landlord has provided a copy of a recent building consent application and a fire engineering report. The description of the work in the consent application is “Creating 2 dwellings 1 upstairs and 1 dnstairs [sic] from exist. 2 storey house. Fire rating floor/ceiling and walls as per fire report. Internal stairs removed & framed in. External stairs & deck removed. ...” The estimated cost of the building work is $45,000.00. The work will result in a change of use from SH to SR.
The fire engineering report describes the extent of work required as ’significant’ and includes the following components (in addition to removing the stairs and deck): Following the proposed Change of use, a Type 1 interconnected fire alarm system shall be installed in each Unit to comply with NZS4514:2021 All new fire separations are to achieve the required life and property rating of 30 Minutes. Following the change of use to create two units/firecells (upper ands lower floors) to protect the only means of escape from the upper unit, the external shed walls adjacent to the escape route shall require minimum of 30/30/30 FRR. Installing 30/30/30 FRR to the mid floor. The proposal to divide the building into two dwellings, external walls on stacked units that are within 5.0m of the relevant boundary shall require 30/30/30 FRR.
Based on the evidence provided about the level of work required to make the premises compliant with fire safety requirements, I find that the breach was more than just ‘technical’.
In Harding, the District Court discussed issues relevant to assessing any reduction in the rent refunded. It said the motivation of the tenant is potentially relevant. Where the breach is technical, a percentage approach may not be appropriate, as it could result in a ‘skewed’ outcome where a greater penalty would be imposed for a longer tenancy than a shorter one for essentially the same type of breach. The focus needs to be on the nature of the breach measured against the benefit of the tenancy to the tenant.
Rent payable for the tenancy was $36,864.29. Based on my finding that the breach was more than just technical, it is appropriate to consider an appropriate percentage as well as the overall level of rent refund that meets the substantial merits and justice. In one sense, the non-compliance did not greatly affect the tenants on a day to day basis as the house was otherwise safe and sanitary. On the other hand, the length of the tenancy was relevant to the ongoing risk created by the lack of fire safety.
In a number of District Court appeals, Tribunal awards have been reduced to $1,500.00 to $2,000.00 for technical breaches (the effective award in Harding was $2,895.00). Because this breach was more than just technical, a higher refund of rent is justified, which I have assessed at $4,600.00 (which is 12.5% or one-eighth of the rent payable). The landlord’s claim:

Did the tenants comply with their obligations at the end of the tenancy?

At the end of the tenancy the tenant must leave the premises reasonably clean and tidy (s 40(1)(e)(iii) RTA).
The landlord has provided photographs taken before the tenancy (from a distance) and after the tenancy (close up), and the tenants provided a couple for short videos taken at the end (from a distance).
Although it can be difficult to compare photos taken at a distance with those taken close up, I find that the tenants did not leave the premises reasonably clean. The landlord provided a quote and invoice for $1,035.00 for cleaning and carpet cleaning. The amount claimed is relatively high for the remedial cleaning required and includes cleaning the outside of the windows (normally not the tenant’s responsibility). I have therefore reduced the amount awarded to $935.00.

Is the tenant responsible for the damage to the premises?

A landlord must prove that damage to the premises occurred during the tenancy and is more than fair wear and tear. If this is established, to avoid liability, the tenant must prove they did not carelessly or intentionally cause or permit the damage (s 40(2)(a), 41 and 49B RTA).
Where the damage is careless, and is covered by the landlord's insurance, the tenant's liability is limited to the lesser of the insurance excess or four weeks' rent (s 49B(3)(a) RTA). The landlord’s insurance excess is $2,500.00.
The landlord claims the following amounts: a. $1,695.35 for the ceramic cooktop (the correct figure is $1,965.35) b. $2,359.74 for “bathroom vanity floor tile shower”: c. $646.76 for “broken cabinet, hole in walls, colour and pencil marking” (the associated invoice is for door handle and window repairs) d. $150.00 for “curtain not clean, damage to windows, door”.
The tenants accept the careless damage to the cook top.
The claim for $2,359.74 is accompanied by a quote for replacing the existing vanity with a different type of vanity (on legs, off the floor), replacing the shower hose, handle and slide, and siliconing the toilet to the floor.
The landlord has not provided an invoice for remedial work actually done. He says he paid someone $1,800.00 in cash to temporarily repair the vanity, replace the shower, fix the toilet, and repair broken tiles. The landlord’s photos show damage to the vanity and a broken tile. The slide on the shower is detached from the top bracket.
Damage to the vanity is proved. The tenants say the shower slide came out of the fitting but was not broken, a tile was already cracked at the start of the tenancy but worsened, and the toilet was wobbly.
The landlord’s claim that he spent $1,800.00 is difficult to square with the work likely to have been done, especially as the vanity was repaired rather than replaced. Also, landlords are expected to keep proper business records and it is unacceptable to make a claim based on an unsubstantiated cash payment rather than providing a proper invoice.
The landlord has not excluded fair wear and tear in relation to the toilet, shower fittings and tile. I accept that repairs to the vanity would have been necessary, and that its value is likely to have been diminished by the damage (notwithstanding the repairs). Due to the difficulties in quantifying the loss, all the damage claims will be dealt with together.
The claim for $646.76 is for replacing three ranch-slider locking mechanisms and a window handle. The landlord’s photos show a window hanging outwards from its frame, a ranch-slider door handle hanging loose, a door lock with the handle missing, and a detached window fitting.
The tenants say they only had one key to the house and the other sliding doors locked with deadbolts, the door handles were old wooden ones that came loose through wear and tear, and the rivets came loose in the window fitting.
It is likely that there was a combination of careless damage, fair wear and tear, and betterment through upgrading the door handles.
In the case of both the bathroom claim and the door handles, assessing compensation is no easy task due to the poor quality of the supporting evidence provided. The quote for the bathroom and the invoice for the joinery total just over $3,000.00, but only a small percentage of the work claimed has been proved. I have assessed a reasonable compensation figure as 25% of the total claimed ($750.00).
The landlord’s claim for $150.00 is for fixing holes in walls and was misdescribed in the application form. He has provided photos of two dents. There is no invoice or receipt, and the landlord says he paid cash. As the damage is minimal and there is no proof of payment, the claim is dismissed. Filing fee
As both parties have been partially successful, their filing fees would effectively cancel each other out. So, neither is awarded.
Both parties sought name suppression (s 95A RTA). The tenants have been substantially successful in their claim against the landlord, but on the other hand have had a significant award made against them for cleaning and repairs. The landlord has only been partially successful with his compensation claim but has had a substantial award made against him for numerous serious breaches of the RTA. While the case for name suppression is stronger for the tenants than the landlord, I cannot overlook the awards made against them so, on balance, I have not made an order for either party. J P Smith 2 October 2024

Tenancy Tribunal case 4701408 — Exemplary damages at 14 Raymond Avenue, Te Puke, Te Puke 3119

At a glance

Tenancy Tribunal case 4701408 — Exemplary damages at 14 Raymond Avenue, Te Puke, Te Puke 3119

At a glance

Award balance

Claims & awards

Dismissed claims

Order

Reasons

Were the premises unlawful?

Did the tenants comply with their obligations at the end of the tenancy?

Is the tenant responsible for the damage to the premises?

Topics & place

Residential Tenancies Act sections

Key findings

Frequently asked questions

Award balance

Claims & awards

Dismissed claims

Order

Reasons

Were the premises unlawful?

Did the tenants comply with their obligations at the end of the tenancy?

Is the tenant responsible for the damage to the premises?

Topics & place

Residential Tenancies Act sections

Key findings

Frequently asked questions