What was the outcome of Tenancy Tribunal case 4774119?

The tribunal order states: Muhammad Hamza Gul must pay Paul Graham Sculpher $2,840.44

How much money was awarded in case 4774119?

Property Damage: $2,500.00 awarded to tenant; Filing Fee: $20.44 awarded to tenant; Refund Of Overpaid Rent: $320.00 awarded to tenant

What type of tenancy dispute was case 4774119?

The primary dispute was Exemplary damages.

Where can I read the official tribunal order for case 4774119?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/10138131-Tenancy_Tribunal_Order.pdf.

What was the outcome of Tenancy Tribunal case 4774119?

The tribunal order states: Muhammad Hamza Gul must pay Paul Graham Sculpher $2,840.44

How much money was awarded in case 4774119?

Property Damage: $2,500.00 awarded to tenant; Filing Fee: $20.44 awarded to tenant; Refund Of Overpaid Rent: $320.00 awarded to tenant

What type of tenancy dispute was case 4774119?

The primary dispute was Exemplary damages.

Where can I read the official tribunal order for case 4774119?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/10138131-Tenancy_Tribunal_Order.pdf.

1 Dryden Street, Normanby, Dunedin 9010 Tenancy Tribunal Case 4774119 — Exemplary damages

Claims and awards in Tenancy Tribunal application 4774119 — net $2,840.44 NZD. Amounts reconciled from the published order (claims sum and net total). Verify on MoJ.
Claim	Tenant	Reason
Exemplary damages	$2,500.00	Exemplary damages
Refund of overpaid rent	$320.00	Refund of overpaid rent
Filing fee reimbursement	$20.44	Filing fee reimbursement
Net award	$2,840.44
Total payable by Landlord to Tenant	$2,840.44

Order

Muhammad Hamza Gul must pay Paul Graham Sculpher $2,840.44 immediately, calculated as shown in table below:

Reasons

Both parties attended the hearing, the landlord by telephone.
The tenant originally sought a refund of his $1,600.00 bond, compensation of $500.00 for the stress caused by the actions of the landlord, reimbursement for hiring gas cylinders and exemplary damages for non-lodgement of the bond, lack of notice when increasing the rent and termination of the tenancy without grounds.
The landlord cross applied for gas rental charges of $270.00 and compensation of $520.44.
Prior to the hearing the landlord refunded the bond and gas cylinder charges in full to the tenant and paid compensation of $520.44.
The claims for compensation are therefore moot, and I do not need to consider those issues.
The tenancy was originally for a fixed term from 3/8/2021 to 2/8/2022 at a weekly rent of $400.00.
At the end of the fixed term the tenancy rolled over to a periodic tenancy.
On 28/8/2023 the landlord gave two weeks notice to increase the rent to $440.00 per week.
After the premises were sold the tenant vacated on 28/10/2023.

Did the landlord fail to lodge the bond?

The tenant submitted and the landlord did not dispute that the bond was paid at the beginning of the tenancy.
The landlord confirmed that he had not lodged the bond but thought he would just refund it to the tenant at the end of the tenancy.
A landlord must send any bond payment to the Bond Centre within 23 working days after the payment is received. See section 19(1) Residential Tenancies Act 1986.
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 Residential Tenancies Act 1986.
As there is no dispute that the bond was not lodged, I find the landlord has committed an unlawful act.

Did the landlord give sufficient notice for the rent increase?

The tenant submitted that he received around two weeks notice of his rent increasing by $40.00 per week.
The landlord advised that he gave twenty days notice of the rent increase from 29/8/2023 and was unaware that he should have given more notice.
Section 24 sets out the circumstances under which a landlord can give written notice of a rent increase.
A rent increase shall be not less than 60 days after the date the notice is given and cannot be increased within twelve months after the date on which the last increase took effect.
I find the landlord did not give sufficient notice of the rent increase and the tenant is entitled to a refund of the eight weeks overpayment of rent.

Did the landlord give notice the premises were on the market for sale?

The tenant suggested that the landlord never officially told him the premises were on the market for until the property was sold in September 2023.
Rather the landlord advised him he was thinking of selling.
In response, the landlord submitted that he mentioned several times to the tenant that he would probably put the premises on the market, and had agents value the property.
Under section 47 if at any time after entering into a tenancy agreement a landlord puts the premises on the market for the sale or other disposition, the landlord must, as soon as practicable give written notice to a tenant of that fact.
Failure to give notice is an unlawful act and can lead to an award of exemplary damages to a maximum of $1,800.00.
The landlord has failed to persuade me that he gave any written notice to the tenant that the premises were on the market for sale.
At best the only written notice by the landlord was the 90 day notice to vacate issued on 27/9/2023.
Mentioning to a tenant that premises may be sold and having agents value a property is not sufficient to comply with the requirements of section 47(1).
I find the landlord has committed an unlawful act.

Was the notice to vacate from the landlord invalid?

The tenant submitted that the landlord gave three months notice by email on 27/9/2023 for him to move out by 26/12/2023, because the property had been sold.
In addition, the tenant suggested that the landlord encouraged him to move out by 22/12/2023, which he did.
In response the landlord confirmed he gave notice on 27/9/2023, being the date he signed the agreement for sale and purchase.
Further, the landlord advised that the agreement for sale and purchase did not become unconditional until 3/11/2023.
Section 51(2) provides the circumstances under which a landlord may terminate a periodic tenancy by giving at least 90 days notice.
This includes under section 51(2)(b) if the owner is required, under an unconditional agreement for sale of the premises, to give the purchaser vacant possession.
I find the notice to vacate of 27/9/2023 was invalid.
At the time the landlord issued the notice the agreement for sale and purchase was not unconditional and did not become so until six days after the date of the notice.

Did the landlord issue an unlawful notice?

Under Section 60AA a landlord must not give a notice to terminate the tenancy or apply to the Tribunal for such an order, knowing they are not entitled to do so.
Breaching any of these obligations without a reasonable excuse is an unlawful act for which exemplary damages may be awarded up to a maximum of $6,500.00. See section 60AA and Schedule 1A Residential Tenancies Act 1986.
The relevant time for determining the landlord’s intention is when the notice is given. For the notice to be valid the landlord should genuinely intend to carry out the stated objective. It is not enough that it is a mere possibility or one of a range of options available.
Although the notice to terminate was invalid because it did not comply with the requirements of section 51/(2)(b) I am not persuaded that the landlord knew he was not entitled to give such notice.
The landlord believed he had sold the property when he issued the notice, albeit not unconditionally and the sale was subsequently completed.
I find the landlord has not committed an unlawful act.

Should exemplary damages be awarded?

As I have found the landlord committed unlawful acts by failing to lodge the bond and not providing notice to the tenant that the premises were on the market, I must consider the issue of exemplary damages.
Exemplary damages under the Act are different from compensation. The provision of such damages is designed to punish and deter; Attorney-General (Commissioner of Crown Lands) v Little Bo Peep Sheep Company Ltd (HC CIV 2010-412-134).
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) Residential Tenancies Act 1986.
In making an award of exemplary damages I need to consider the four matters set out in section 109(3).
First, I need to consider the intent of the landlord.
A bond is the tenants’ money and must be lodged with the Bond Centre within the statutory time limit to protect the tenants’ interests. Lodging a bond is not a conditional obligation but a mandatory one and it is in the public interest that landlords fulfil their obligations under the Act. If no penalty is imposed there can be no deterrent.
The failure to lodge the bond must be intentional for exemplary damages to be awarded. Therefore, damages will not be awarded where non-lodgement is a genuine oversight, rather than an intentional act (Chief Executive for Housing New Zealand v Walls [1993] NZTT Auckland 548/92).
However, the Tribunal may draw an inference of intent where the landlord claims to have simply forgotten, as a landlord should have systems in place to ensure this does not happen. Exemplary damages have been awarded where: the landlord has no explanation for the non-lodgement and has other tenancies (Jones v Ying [2001] NZTT Auckland 2783/01); the landlord is experienced (Hart v Allen Realty Ltd [2003] NZTT Auckland 2183/02); and where the landlord knew of the obligation from the bond form signed by the tenant (Fu v Florendo [2013] DC Manukau, CIV-2013-092-2373).
For intent there must be actual knowledge of the breach. In a recent case the District Court confirmed that intentional means “in the sense of deliberately and in full knowledge” TMT New Zealand Limited TA Strata Property Management v Sweeney and Sundahl [2021] NZDC 16182.
That decision, which was a case about the failure to supply Healthy Homes Standards documents and Insurance details, also confirmed that “Like all citizens a landlord is deemed to know the law. Parliaments intention would be subverted if landlords were able to escape the consequences of unlawful acts by claiming ignorance of the law.”
I consider the evidence supports that the landlord intentionally failed to lodge the bond.
The landlord agreed he was aware he needed to lodge the bond, having done so for the previous tenant in the premises. Rather, he decided he would hold the bond in his bank account and refund it at the end of the tenancy.
Moreover, I consider the landlord turned a ‘blind eye’ to the need to advise the tenant in writing that the premises were on the market, after initially advising the tenant, he possibly might sell the property.
I have carefully considered all the evidence provided and submissions made by the parties.
The effect on the tenant has been significant. It was not until he filed a claim with the Tribunal that the landlord refunded the bond.
The legislation provides for bond money to be used for dispute resolution procedures under the Act. Non-lodgement of bonds is a loss and against the public interest.
Moreover, lodgement of bonds has been a feature of the legislation since its introduction in 1986.
I consider this is an appropriate circumstance to award maximum exemplary damages for non-lodgement of the bond.
Further, the lack of adequate notice about whether the premises were on the market and indeed the lack of appropriate notice meant that the tenant was disadvantaged in the timeframe he had to find alternative accommodation.
The public and tenants in particular should be able to rely on landlords to comply with the legislation and when they do not the public should expect some censure.
Having considered the factors set out in section 109(3), particularly the effect on the tenant and the public interest I consider it just to award exemplary damages at the higher end of the scale. I have set these at $2,500.00.
The renting of premises is a business. Landlords have obligations under the legislation and need to comply with these.
Tenants have rights under the legislation which landlords ignore at their peril.
As the tenant has wholly succeeded with the claim, I must award the filing fee.
The tenant did not want his name suppressed.
Suppression is not available to the landlord because he was unsuccessful.

Claims and awards in Tenancy Tribunal application 4774119 — net $2,840.44 NZD. Amounts reconciled from the published order (claims sum and net total). Verify on MoJ.
Claim	Tenant	Reason
Exemplary damages	$2,500.00	Exemplary damages
Refund of overpaid rent	$320.00	Refund of overpaid rent
Filing fee reimbursement	$20.44	Filing fee reimbursement
Net award	$2,840.44
Total payable by Landlord to Tenant	$2,840.44

Order

Muhammad Hamza Gul must pay Paul Graham Sculpher $2,840.44 immediately, calculated as shown in table below:

Reasons

Both parties attended the hearing, the landlord by telephone.
The tenant originally sought a refund of his $1,600.00 bond, compensation of $500.00 for the stress caused by the actions of the landlord, reimbursement for hiring gas cylinders and exemplary damages for non-lodgement of the bond, lack of notice when increasing the rent and termination of the tenancy without grounds.
The landlord cross applied for gas rental charges of $270.00 and compensation of $520.44.
Prior to the hearing the landlord refunded the bond and gas cylinder charges in full to the tenant and paid compensation of $520.44.
The claims for compensation are therefore moot, and I do not need to consider those issues.
The tenancy was originally for a fixed term from 3/8/2021 to 2/8/2022 at a weekly rent of $400.00.
At the end of the fixed term the tenancy rolled over to a periodic tenancy.
On 28/8/2023 the landlord gave two weeks notice to increase the rent to $440.00 per week.
After the premises were sold the tenant vacated on 28/10/2023.

Did the landlord fail to lodge the bond?

The tenant submitted and the landlord did not dispute that the bond was paid at the beginning of the tenancy.
The landlord confirmed that he had not lodged the bond but thought he would just refund it to the tenant at the end of the tenancy.
A landlord must send any bond payment to the Bond Centre within 23 working days after the payment is received. See section 19(1) Residential Tenancies Act 1986.
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 Residential Tenancies Act 1986.
As there is no dispute that the bond was not lodged, I find the landlord has committed an unlawful act.

Did the landlord give sufficient notice for the rent increase?

The tenant submitted that he received around two weeks notice of his rent increasing by $40.00 per week.
The landlord advised that he gave twenty days notice of the rent increase from 29/8/2023 and was unaware that he should have given more notice.
Section 24 sets out the circumstances under which a landlord can give written notice of a rent increase.
A rent increase shall be not less than 60 days after the date the notice is given and cannot be increased within twelve months after the date on which the last increase took effect.
I find the landlord did not give sufficient notice of the rent increase and the tenant is entitled to a refund of the eight weeks overpayment of rent.

Did the landlord give notice the premises were on the market for sale?

The tenant suggested that the landlord never officially told him the premises were on the market for until the property was sold in September 2023.
Rather the landlord advised him he was thinking of selling.
In response, the landlord submitted that he mentioned several times to the tenant that he would probably put the premises on the market, and had agents value the property.
Under section 47 if at any time after entering into a tenancy agreement a landlord puts the premises on the market for the sale or other disposition, the landlord must, as soon as practicable give written notice to a tenant of that fact.
Failure to give notice is an unlawful act and can lead to an award of exemplary damages to a maximum of $1,800.00.
The landlord has failed to persuade me that he gave any written notice to the tenant that the premises were on the market for sale.
At best the only written notice by the landlord was the 90 day notice to vacate issued on 27/9/2023.
Mentioning to a tenant that premises may be sold and having agents value a property is not sufficient to comply with the requirements of section 47(1).
I find the landlord has committed an unlawful act.

Was the notice to vacate from the landlord invalid?

The tenant submitted that the landlord gave three months notice by email on 27/9/2023 for him to move out by 26/12/2023, because the property had been sold.
In addition, the tenant suggested that the landlord encouraged him to move out by 22/12/2023, which he did.
In response the landlord confirmed he gave notice on 27/9/2023, being the date he signed the agreement for sale and purchase.
Further, the landlord advised that the agreement for sale and purchase did not become unconditional until 3/11/2023.
Section 51(2) provides the circumstances under which a landlord may terminate a periodic tenancy by giving at least 90 days notice.
This includes under section 51(2)(b) if the owner is required, under an unconditional agreement for sale of the premises, to give the purchaser vacant possession.
I find the notice to vacate of 27/9/2023 was invalid.
At the time the landlord issued the notice the agreement for sale and purchase was not unconditional and did not become so until six days after the date of the notice.

Did the landlord issue an unlawful notice?

Under Section 60AA a landlord must not give a notice to terminate the tenancy or apply to the Tribunal for such an order, knowing they are not entitled to do so.
Breaching any of these obligations without a reasonable excuse is an unlawful act for which exemplary damages may be awarded up to a maximum of $6,500.00. See section 60AA and Schedule 1A Residential Tenancies Act 1986.
The relevant time for determining the landlord’s intention is when the notice is given. For the notice to be valid the landlord should genuinely intend to carry out the stated objective. It is not enough that it is a mere possibility or one of a range of options available.
Although the notice to terminate was invalid because it did not comply with the requirements of section 51/(2)(b) I am not persuaded that the landlord knew he was not entitled to give such notice.
The landlord believed he had sold the property when he issued the notice, albeit not unconditionally and the sale was subsequently completed.
I find the landlord has not committed an unlawful act.

Should exemplary damages be awarded?

As I have found the landlord committed unlawful acts by failing to lodge the bond and not providing notice to the tenant that the premises were on the market, I must consider the issue of exemplary damages.
Exemplary damages under the Act are different from compensation. The provision of such damages is designed to punish and deter; Attorney-General (Commissioner of Crown Lands) v Little Bo Peep Sheep Company Ltd (HC CIV 2010-412-134).
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) Residential Tenancies Act 1986.
In making an award of exemplary damages I need to consider the four matters set out in section 109(3).
First, I need to consider the intent of the landlord.
A bond is the tenants’ money and must be lodged with the Bond Centre within the statutory time limit to protect the tenants’ interests. Lodging a bond is not a conditional obligation but a mandatory one and it is in the public interest that landlords fulfil their obligations under the Act. If no penalty is imposed there can be no deterrent.
The failure to lodge the bond must be intentional for exemplary damages to be awarded. Therefore, damages will not be awarded where non-lodgement is a genuine oversight, rather than an intentional act (Chief Executive for Housing New Zealand v Walls [1993] NZTT Auckland 548/92).
However, the Tribunal may draw an inference of intent where the landlord claims to have simply forgotten, as a landlord should have systems in place to ensure this does not happen. Exemplary damages have been awarded where: the landlord has no explanation for the non-lodgement and has other tenancies (Jones v Ying [2001] NZTT Auckland 2783/01); the landlord is experienced (Hart v Allen Realty Ltd [2003] NZTT Auckland 2183/02); and where the landlord knew of the obligation from the bond form signed by the tenant (Fu v Florendo [2013] DC Manukau, CIV-2013-092-2373).
For intent there must be actual knowledge of the breach. In a recent case the District Court confirmed that intentional means “in the sense of deliberately and in full knowledge” TMT New Zealand Limited TA Strata Property Management v Sweeney and Sundahl [2021] NZDC 16182.
That decision, which was a case about the failure to supply Healthy Homes Standards documents and Insurance details, also confirmed that “Like all citizens a landlord is deemed to know the law. Parliaments intention would be subverted if landlords were able to escape the consequences of unlawful acts by claiming ignorance of the law.”
I consider the evidence supports that the landlord intentionally failed to lodge the bond.
The landlord agreed he was aware he needed to lodge the bond, having done so for the previous tenant in the premises. Rather, he decided he would hold the bond in his bank account and refund it at the end of the tenancy.
Moreover, I consider the landlord turned a ‘blind eye’ to the need to advise the tenant in writing that the premises were on the market, after initially advising the tenant, he possibly might sell the property.
I have carefully considered all the evidence provided and submissions made by the parties.
The effect on the tenant has been significant. It was not until he filed a claim with the Tribunal that the landlord refunded the bond.
The legislation provides for bond money to be used for dispute resolution procedures under the Act. Non-lodgement of bonds is a loss and against the public interest.
Moreover, lodgement of bonds has been a feature of the legislation since its introduction in 1986.
I consider this is an appropriate circumstance to award maximum exemplary damages for non-lodgement of the bond.
Further, the lack of adequate notice about whether the premises were on the market and indeed the lack of appropriate notice meant that the tenant was disadvantaged in the timeframe he had to find alternative accommodation.
The public and tenants in particular should be able to rely on landlords to comply with the legislation and when they do not the public should expect some censure.
Having considered the factors set out in section 109(3), particularly the effect on the tenant and the public interest I consider it just to award exemplary damages at the higher end of the scale. I have set these at $2,500.00.
The renting of premises is a business. Landlords have obligations under the legislation and need to comply with these.
Tenants have rights under the legislation which landlords ignore at their peril.
As the tenant has wholly succeeded with the claim, I must award the filing fee.
The tenant did not want his name suppressed.
Suppression is not available to the landlord because he was unsuccessful.

Tenancy Tribunal case 4774119 — Exemplary damages at 1 Dryden Street, Normanby, Dunedin 9010

At a glance

Tenancy Tribunal case 4774119 — Exemplary damages at 1 Dryden Street, Normanby, Dunedin 9010

At a glance

Award balance

Claims & awards

Order

Reasons

Did the landlord fail to lodge the bond?

Did the landlord give sufficient notice for the rent increase?

Did the landlord give notice the premises were on the market for sale?

Was the notice to vacate from the landlord invalid?

Did the landlord issue an unlawful notice?

Should exemplary damages be awarded?

Topics & place

Residential Tenancies Act sections

Key findings

Frequently asked questions

Award balance

Claims & awards

Order

Reasons

Did the landlord fail to lodge the bond?

Did the landlord give sufficient notice for the rent increase?

Did the landlord give notice the premises were on the market for sale?

Was the notice to vacate from the landlord invalid?

Did the landlord issue an unlawful notice?

Should exemplary damages be awarded?

Topics & place

Residential Tenancies Act sections

Key findings

Frequently asked questions