Published tribunal order
Tenancy Tribunal case 4826178 — Rent arrears at Unit/Flat 4, 43 Liverpool Street, Epsom, Auckland 1023
Decided 20 Nov 2024 · Published 20 Nov 2024 · Application 4826178
Landlord favoured
- Rent arrears
- Property damage
- Cleanliness
Order
- Margaret Angela Mackay and Victoria Chloe Elliott’s application is dismissed.
- Margaret Angela Mackay and Victoria Chloe Elliott must pay David Jones, Judith Jones and Elysse Jones $16,280.55 immediately, calculated as shown in the table below:
- The Bond Centre is to pay the bond of $2,680.00 (3012935-019) to David Jones, Judith Jones, and Elysse Jones immediately.
Reasons
- The hearing took place on 19 September 2024, with Mr Jones and Mrs Jones, the landlords, present. Ms MacKay, one of the tenants, also attended the hearing, accompanied by her support person, Mr Curtis. However, Ms Elliot, the other joint tenant, was unable to attend due to personal circumstances that prevented her presence.
- Before the hearing, Ms MacKay, on behalf of Ms Elliott, had formally requested a postponement. She explained that Ms Elliot had been unable to complete the necessary paperwork due to her personal situation and was unable to attend in person. Ms MacKay further emphasised that Ms Elliott’s participation was crucial, as she was the only one able to present their claims and provide responses to the landlord's allegations. Ms MacKay believed that Ms Elliott’s absence would hinder their ability to properly present their case.
- The Tribunal, however, declined the request for a postponement. The reasons provided by Ms MacKay were not considered sufficient for delaying the hearing. The Tribunal also noted that both parties had been given ample time to prepare their cases and complete the required paperwork. In addition, the Tribunal highlighted that if Ms Elliott was unable to attend in person, she had been offered alternatives to participate, such as attending via teleconference or submitting a written statement or affidavit. These options were made available to ensure Ms Elliott could still present her side of the case, even if she could not physically attend the hearing.
- At the hearing, Ms MacKay informed the Tribunal that Ms Elliott had wished to participate by teleconference. However, it was made clear to Ms MacKay in advance that any such request needed to be arranged with the registrar prior to the hearing. Unfortunately, no arrangements were made. By the time the issue 4826178, 48391653 was raised at the hearing, it was too late to accommodate the request to for phone participation.
- Furthermore, given the longstanding nature of the matter, its previous adjournments, and the landlords’ objection to further delays, the Tribunal determined it would not serve the interests of justice to postpone the hearing any longer. As a result, the Tribunal decided to proceed with the hearing in Ms Elliott’s absence, noting the ample opportunity that had been provided to her to participate earlier in the process. The applications
- Ms Mackay and Ms Elliott (“the tenants”) have filed an application claiming compensation of $40,000.00 and exemplary damages due to various alleged breaches by the landlords including: i. The landlords have failed to comply with obligations to provide and maintain the premises in a reasonable state of repair and comply with healthy homes standards in relation to water in the back of the garage from flooding, the rotten garage door, faulty electrics, the gas stove not fully working, issues with the external spouting, and no suitable air conditioning/ heater available on site. ii. The bond was not lodged. iii. The landlords breached the tenants’ entitlement to quiet enjoyment of the premises and privacy.
- As part of the remedy, the tenants sought orders from the Tribunal relating to reimbursement for repairs/maintenance carried out at the tenants’ cost, rent refund/reduction due to not being able to use a bedroom for a month because of a leaky roof, and $5,000.00 in legal fees.
- Mr Jones, Mrs Jones and Ms Jones (“the landlords”) have filed a cross-application seeking rent arrears, compensation, and exemplary damages. This claim arises from several issues, including the contamination of the premises by methamphetamine, the costs associated with remediation and testing, as well as rent loss. Additionally, the landlords are seeking compensation for various breaches of tenancy obligations by the tenants. These breaches include damage to the premises and the failure to comply with their responsibilities at the end of the tenancy.
- Before addressing claims, I begin by noting that as with any claim before the Tenancy Tribunal, the Tribunal applies the usual civil law standards and expectations. That means that it is for the party bringing the application to 4826178, 48391654 establish their claims “on the balance of probabilities”. This is referred to as the “onus of proof”. In other words, the applicant must establish with evidence that what they are claiming is more likely than not, correct.
- The issue of evidence at Tenancy Tribunal hearings was considered by the District Court in Kaipo v Clarke & McCarthy (DC) TT233/02: ...[L]ike anyone who brings an application before a Tribunal or Court, it is incumbent upon the applicant to provide the evidence necessary to prove the case. If the applicant fails to do that, then their application will be dismissed whether it has merit or not because it is up to the applicant to provide the necessary evidence. It is not up to the other parties, and it is certainly not up to the Tribunal to extract evidence.
- While I have carefully considered all the evidence and submissions from the parties, I have only addressed the evidence and arguments to the extent necessary to explain my decision. The tenants’ application
- Both tenants signed the tenancy agreement as joint tenants for the property. However, Ms MacKay explained that she did not primarily reside at the property and that it was mainly Ms Elliot who lived there. Ms MacKay further stated that she and Ms Elliott’s son had moved out of the property some time ago, leaving Ms Elliott as the sole occupant. This led Ms MacKay to assert that only Ms Elliott could address the issues raised in the application, as she was the primary resident and more familiar with the details related to the tenancy.
- Despite this assertion, Ms Elliott did not attend the hearing, nor did she provide the additional information that had been requested by the Tribunal to support her claims. In proceedings before the Tribunal, it is the applicant's responsibility to prove their case on the balance of probabilities. This means the applicant must provide sufficient and convincing evidence to substantiate their claims and demonstrate that their version of events is more likely than not to be true.
- In this case, since Ms MacKay was unable to speak directly to the specific issues raised in the application and Ms Elliott failed to attend or submit the necessary evidence, the Tribunal found that there was insufficient evidence to support the claims being made. The Tribunal's role is to make decisions based on the evidence presented, and without adequate proof or participation from the applicants, it had no grounds to proceed with the case. As a result, the Tribunal had no choice but to dismiss the application due to the lack of sufficient evidence to substantiate the claims.
- This decision is based on the failure of the tenants to meet their burden of proof, as required by law. In the absence of adequate evidence, the Tribunal cannot make a finding in favour of the tenants. 4826178, 48391655 The landlords’ application Liability of joint tenants
- I note Ms MacKay gave evidence that she did not primarily reside at the property and that it was mainly Ms Elliot who lived there. However, it is important to note that she had signed the tenancy agreement with Ms Elliot, thereby jointly committing to comply with its terms. This creates a joint tenancy under common law, a principle well established by the District Court. In Harrison v Shields (DC Dunedin, NP435/00, 2 September 2002, Judge MacAskill), the Court confirmed that tenants in a joint tenancy are equally responsible for fulfilling the obligations set out in the Residential Tenancies Act 1986 (“RTA”). This includes liability for breaches by a co-tenant, even if a tenant is not personally at fault for the breach. The case law supports the view that, once tenants have agreed to enter a joint tenancy, they are bound by the obligations of that tenancy jointly, and they may be held liable for the actions of their co- tenants.
- The tenancy agreement in this case explicitly provides for joint and several liability between the tenants. It states that the tenants are jointly responsible for any "indebtedness or damages, costs, claims, expenses, losses incurred or received by the Landlord”. This is consistent with the general principle that tenants in a joint tenancy are jointly liable for the actions and obligations of their co-tenants. The tenants, having entered into the agreement on this basis, are bound by its terms. The case law and the terms of the agreement make clear that both tenants are liable to the landlord for any debts or other obligations arising from the tenancy, regardless of the degree of their individual involvement in the actions that led to those liabilities.
- While I recognise that there may be a perception of unfairness in holding the tenants jointly responsible for costs that might have been primarily incurred by one tenant, I am unable to reconcile this perception with the established legal principles. The law imposes joint liability for tenancy obligations, and I must apply these principles in a manner consistent with the relevant case law. Although there may be a subjective sense of unfairness in some instances, the law requires the tenants to be jointly liable, and I am bound by that legal framework.
- It should also be noted that it is within the landlord's discretion how to enforce any order, including decisions on which tenant to pursue for payment and the amount to be recovered. The landlord has the right to determine how to enforce the order, based on their assessment of the tenants' respective liabilities and the circumstances of the case.
- Having concluded that the tenants are jointly liable, I will now briefly address each of the landlords' claims, in accordance with the principles of joint liability that apply in this matter. 4826178, 48391656
Do the tenants owe rent?
- A tenant must pay rent as and when it falls due and is responsible. See section 40 RTA.
- A tenant who remains in occupation after a tenancy has ended is liable for rent whilst they are in occupation of the premises. See section 60 RTA.
- In this situation, the tenants entered into a tenancy agreement with the landlords for the property at 4, 43 Liverpool Street, Epsom, Auckland. The tenancy began on 27 December 2022, with an agreed-upon fixed term set to end on 22 January 2024. The rent for the property was set at $670.00 per week, and the bond paid was $2,680.00.
- However, the conclusion of the tenancy became somewhat complicated. There was a series of communications exchanged between Ms Elliott and the landlords regarding the proper notice period required to end the tenancy. This resulted in an extension of time beyond the original fixed term. As a result, Ms Elliott who was the sole remaining resident at that point, did not vacate the premises until April 2024.
- A tenant's obligation to pay rent is clearly set out in section 40 RTA, which requires tenants to pay rent as it falls due. This obligation continues throughout the term of the tenancy, and the tenant remains responsible for rent until the tenancy has ended. In this case, Ms Elliott was in occupation of the premises until at least 6 April 2024, which marks the date the tenancy ended. As such, the tenants are liable for rent up until that date.
- The landlord has provided evidence showing that the last rent payment made by the tenants was for the period from 19 March to 25 March 2024. The landlord also claimed rent for the period up to 9 April 2024, the date of the inspection. However, it should be emphasised that occupation is not synonymous with the return of keys or the final inspection. While returning keys or conducting an inspection may indicate when the tenant vacates, occupation ends when the tenant physically leaves the premises. Even if the landlord cannot immediately confirm that the tenant has vacated due to the absence of keys or an inspection, this does not affect the tenant’s ongoing responsibility for rent while they remain in occupation.
- There is no provision in the RTA to allow for the award of rent beyond the actual period of occupation. Although the landlords conducted an inspection on 9 April 2024, there is no legal basis for claiming rent for this period, as the tenants’ liability for rent ceased when they vacated the premises on 6 April 2024. Occupation, and thus the tenants/’ liability to pay rent, ends when the tenants leaves the premises, not when keys are returned or a final inspection takes place.
- Given this, the claim for rent arrears from 26 March 2024 to 6 April 2024 is supported by the evidence, and the tenants are liable for $1,148.57 in rent for this period. However, the landlords’ claim for rent arrears extending to 9 April 2024 is 4826178, 48391657 not upheld, as no legal provision allows for rent to be charged beyond the end of the tenant’s occupation.
- Therefore, the claim for rent arrears from 26 March 2024 to 6 April 2024, totalling $1,148.57, is awarded.
- The landlords’ claim for rent loss is addressed below. Did the tenants comply with their obligations at the end of the tenancy, and did they cause any damage to the premises?
- At the end of the tenancy the tenant must leave the premises reasonably clean and tidy, remove all rubbish, return all keys and security devices, and leave all chattels provided for their benefit. See section 40(1)(e)(ii)-(v) RTA.
- A landlord claiming compensation 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. Tenants are liable for the actions of people at the premises with their permission. See sections 40(2)(a), 41 and 49B RTA.
- Carelessness is not defined in the RTA but it has its normal meaning of lack of care, negligence or lack of forethought. The standard of care required is similar to the standard of care required by the general law of tort in negligence cases. Thus, the question can be expressed as whether the tenant, or some other person at the premises with the tenant’s permission, was “exercising that degree of care and attention that a reasonable and prudent tenant would exercise in the circumstances:” Mercier v Smith & Greenan 14/12/98, Dunedin TT 228/93.
- Damage is intentional where a person intends to cause damage and takes the necessary steps to achieve that purpose. Damage is also intentional where a person does something, or allows a situation to continue, knowing that damage is a certainty. See Guo v Korck [2019] NZHC 1541.
- The landlords must provide sufficient evidence to discharge their burden of proof for each claim.
- The landlords have proven in evidence that the tenants did not leave the premises reasonably clean and tidy, did not remove all rubbish and did not leave a full bottle of gas. The following costs are awarded: Cleaning $275.00 Lawns and removal of external rubbish $120.00 Gas bottle $201.00 4826178, 48391658
- I accept the landlords’ evidence that they were asked to replace the garage lockset as the keys had been lost. I consider the tenants liable for this cost and award the following: Replace garage single door lockset $60.00
- The following damage was caused during the tenancy: Front door: The trim was left in three pieces, filled with filler but not painted. A new lockset and strike plate were installed. The exterior trim was filled, sanded, and then painted. Pantry: The pantry base had a heat burn. Toilet seat: The left-hand toggle holding the seat in place could not be tightened or release. The bolt was cut, and a replacement toggle was purchased, along with a missing rubber washer. Bedroom 1 door: A second hole had been made to accommodate a handle with a lock. Timber packing was glued around the handle area for structural support, and the external surfaces were repaired. A replacement handle was fitted, and the jamb at the strike plate was also repaired. The other handles were replaced to match. Rugs, Runners and Timber Floors: The large carpet square in the lounge was heavily stained, both on top and underneath. Mould had grown and penetrated the timber floor coating. The three runners had been placed in the damp garage and folded rather than rolled resulting to damage to the top layer thread, the underside, and the binding. Vanity Drawer: The bottom drawer was hanging off the runners due to water damage.
- The damage is more than fair wear and tear, and the tenants have not disproved liability for the damage.
- The following costs have been proved and are therefore awarded: Repair front door & replace lockset - $210.00 Grind pantry base, order/collect panel & fit$125.00 Remove toilet toggle & collect/install replacement with rubber washer $80.00 Make good on hollow core door with two holes &fit replacement handle $150.00 Rugs and runners ($534.00 and $390.00)$924.00 Timber Floors $129.00 First sand only of timber floor in open plan area$300.00 Vanity drawer insertion – top damage due to sitting out$20.00 4826178, 48391659
- I have taken into account betterment and depreciation. The landlord should be returned to the position they would have been in had the tenant not breached their obligations, and should not be better or worse off. Methamphetamine contamination
- A tenant must not use the premises, or allow the premises to be used, for any unlawful purpose, as set out in section 40(2)(b) RTA. The use of methamphetamine is considered unlawful, as it breaches section 7 of the Misuse of Drugs Act 1975. The landlords claim that either the tenants or their invitees used methamphetamine at the property, which they argue constitutes a breach of section 40(2)(b) of the RTA. The landlords are seeking compensation for the costs of methamphetamine testing, decontamination, remediation, and associated expenses, as well as loss of rent.
- Before any damages or compensation can be awarded, the losses arising from a breach must be reasonably foreseeable. This includes losses related to the breach of the RTA, the tenancy agreement, or applicable common law principles (unless modified by provisions of the RTA). In this case, the premises were tested for methamphetamine contamination prior to the start of the tenancy, and no detectable levels were found.
- However, on 13 January 2023, Ms Elliott arranged for further methamphetamine testing, shortly after moving in. According to the report from MethSolutions, it appears Ms Elliott had concerns about possible methamphetamine use at the property. The report noted that the “Doors, door frames and window frames were repainted prior to the tenancy commencing”. The test results returned positive for methamphetamine contamination.
- The landlords expressed confusion over Ms Elliott’s concerns, stating that she had mentioned she had “fallen into bad habits”, but they could not understand why she would suggest such a problem at the property. They assert that there was no evidence of methamphetamine contamination before she moved in.
- After the tenants vacated, the landlords arranged another round of testing by Buyer’s Choice Home Inspections. This test revealed significant levels of contamination, with measurements ranging from 0.26 μg/100cm² to 37 μg/100cm².
- The damage claimed by the landlords is chemical damage. As this damage cannot be physically seen the Tribunal is informed by scientific evidence to establish whether there is damage, the extent of the damage, where it is located and what is required to remedy the damage.
- There are two main sources of guidance on safe levels of methamphetamine contamination in residential premises. The 2017 NZS 8510:2017 standard 4826178, 483916510 recommended a maximum contamination level of 1.5 μg/100cm² for high-use areas, where contamination may result from both consumption and manufacture. It recommended a higher level of 3.8 μg/100cm² for limited-use areas. However, in May 2018, the then Chief Science Advisor, Professor Sir Peter Gluckman, released a report that questioned the health risks posed by low-level methamphetamine exposure. The report suggested that exposure to levels below 15 μg/100cm² was unlikely to cause adverse health effects, although it recommended retaining the 1.5 μg/100cm² threshold for areas contaminated by methamphetamine manufacture due to the risks posed by toxic chemicals involved in the production process.
- The Tribunal has generally applied the Gluckman report's findings. This approach was endorsed by the District Court in Full Circle Real Estate Limited v Piper [2019] NZDC 4947, where the Court held that the Gluckman report represented the best available scientific knowledge on the health risks of methamphetamine contamination. Similarly, in Acme Realty Limited v Hogg and others [2021] NZDC 3231, the District Court emphasized that NZS 8510:2017 was not legally binding, and the Tribunal was not obliged to apply the 1.5 μg standard.
- In this case, the pre-tenancy methamphetamine test was negative. The test conducted during the tenancy on 13 January 2023 was positive and the test conducted after the tenancy ended showed significant increased levels of methamphetamine. Based on the evidence, I find on the balance of probabilities that methamphetamine was used on the premises during the tenancy, either by the tenants or by others with their permission. The test results indicate methamphetamine contamination in multiple areas of the home, with some levels exceeding the 1.5 μg/100cm² recommended by the New Zealand Standard, and in certain areas exceeding the 15 μg/100cm² threshold suggested by the Gluckman report as potentially harmful.
- Therefore, I am satisfied that the premises were damaged during the tenancy as a result of unlawful methamphetamine use. This damage was caused intentionally, either by the tenants or by those at the property with their permission. Consequently, the tenants are liable for the costs associated with methamphetamine testing, remediation (including removal of contaminated soft furnishings, cleaning and decontamination of surfaces, air cleaning, and repairs to fixtures and fittings), and any other related expenses.
- The landlords have confirmed that they do not have insurance coverage for methamphetamine contamination. As a result, they have taken on much of the work themselves to address the contamination and minimise costs. By undertaking the remediation tasks personally, they have made efforts to ensure that the expenses involved in restoring the property remain reasonable and as low as possible. This approach was taken to avoid the higher costs that would have been incurred by hiring external contractors for the entire remediation process. 4826178, 483916511
- The following claims have been proved and are therefore awarded: Decontamination of property$4,600.00 Methamphetamine Testing (8/4/24, 15/4/2024, 1/5/24)$2,219.50 Replace curtains and blinds$631.04 Replace carpet and underlay$2,117.00 Electrical repair$200.00 Internal prep/painting of the unit$2,800.00 Remove and source second hand rangehood$350.00 Remove and dump, underlay, carpet, runners, curtains/blinds & rangehood $250.00 Remove carpet / underlay staples, paint and plaster $20.00
- The landlords have submitted a claim for rent lost due to several factors, including the need for a commercial clean, carpet clean, and repairs, totalling $1,340.00, assuming the methamphetamine test was negative. Additionally, they have claimed rent loss for the period they were unable to access the unit to start decontamination (from 18 April), rent loss for the decontamination period until 1 May ($670.00), and rent loss for the period of repairs, painting, and carpet replacement, extending to 22 May ($2,010.00).
- It is generally accepted that a landlord has an obligation to perform necessary maintenance and preparation of the property between tenancies. This includes routine cleaning and repairs, which are considered part of the landlord's responsibility. These costs are not typically borne by the tenant unless there has been damage caused by the tenant's actions. A tenant cannot be held liable for the regular upkeep of the property between tenancies. A claim for compensation for rent lost while the premises were put in order for re-letting could succeed if there was extensive damage to the property during the tenancy or a direct relationship between the damage, the time to remedy the damage and delay in re- letting.
- However, a claim for rent loss may be justified if there is significant damage to the property during the tenancy, leading to a delay in re-letting the premises. The claim for rent loss must establish a direct connection between the extent of the damage, the time taken to remediate it, and the delay in re-letting the property. In this case, the landlords have shown that extensive decontamination, cleaning, and repairs were required due to the methamphetamine contamination and other damage caused during the tenancy. 4826178, 483916512
- Given the substantial nature of the remediation required—including decontamination, cleaning, and repairs—I have determined that the landlords are entitled to compensation for the period when the property could not be rented. The damage was significant enough to prevent immediate re-letting, and the decontamination process alone took time to complete. Based on the evidence provided, I have allowed for a loss of rent of $2,010.00, covering a period of approximately three weeks. Filing fee
- As the landlords have been substantially successful with their claim, it is reasonable to order the other party to reimburse the filing fee.