What was the outcome of Tenancy Tribunal case 4995567?

The tribunal order states: The tenancy of Rhodes John Barton at 308 St Heliers Bay Road, St Heliers,

How much money was awarded in case 4995567?

Filing Fee: $27.00 awarded to landlord; Rent Arrears: $22,333.93 awarded to landlord

What type of tenancy dispute was case 4995567?

The primary dispute was Rent arrears.

Where can I read the official tribunal order for case 4995567?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/10853706-Tenancy_Tribunal_Order.pdf.

What was the outcome of Tenancy Tribunal case 4995567?

The tribunal order states: The tenancy of Rhodes John Barton at 308 St Heliers Bay Road, St Heliers,

How much money was awarded in case 4995567?

Filing Fee: $27.00 awarded to landlord; Rent Arrears: $22,333.93 awarded to landlord

What type of tenancy dispute was case 4995567?

The primary dispute was Rent arrears.

Where can I read the official tribunal order for case 4995567?

The official Ministry of Justice published order is available at https://forms.justice.govt.nz/search/Documents/TTV2/PDF/10853706-Tenancy_Tribunal_Order.pdf.

308 St Heliers Bay Road, St Heliers, Auckland 1071 Tenancy Tribunal Case 4995567 — Rent arrears

Claims and awards in Tenancy Tribunal application 4995567 — net $16,360.93 NZD. Amounts reconciled from the published order (claims sum and net total). Verify on MoJ.
Claim	Landlord	Reason
Rent arrears to 19/9/2024	$22,333.93	Rent arrears to 19/9/2024
Filing fee reimbursement	$27.00	Filing fee reimbursement
Net award	$16,360.93
Total payable by Tenant to Landlord	$16,360.93

Claims and awards in Tenancy Tribunal application 4995567 — net $16,360.93 NZD. Amounts reconciled from the published order (claims sum and net total). Verify on MoJ.
Claim	Landlord	Reason
Rent arrears to 19/9/2024	$22,333.93	Rent arrears to 19/9/2024
Filing fee reimbursement	$27.00	Filing fee reimbursement
Net award	$16,360.93
Total payable by Tenant to Landlord	$16,360.93

Order

The tenancy of Rhodes John Barton at 308 St Heliers Bay Road, St Heliers, Auckland 1071 is terminated, and possession is granted to Gramax Property Management Limited As An Agent For 308 St Heliers Limited Partnership, at
59pm on Thursday 19 September 2024.
The Bond Centre is to pay the bond of $6,000.00 (6487790-001) to Gramax Property Management Limited As An Agent For 308 St Heliers Limited Partnership immediately.
Rhodes John Barton must pay Gramax Property Management Limited As An Agent For 308 St Heliers Limited Partnership $16,360.93 immediately, calculated as shown in the table below.
The hearing is adjourned.
A further 120 minutes should be allowed for the next hearing of this matter, on the next available date.

Reasons

Both parties attended the hearing which took place by telephone. Gramax Property Management Limited attended for the landlord.
The landlord has applied for termination of the tenancy, rent arrears and refund of the bond. Shortly before this scheduled hearing the tenant made his own application referring to the failure to clean a fire, issues relating to a dishwasher, garden maintenance, fencing and inspections. Termination and arrears
The tenancy started on 11 April 2023 and the weekly rent is $1,500. The landlord seeks $44,667.85 in rent arrears.
I heard how initially the landlord’s accountant managed the tenancy. On 22 August 2024 Gramax Property Management Limited took over the day to day management of the tenancy.
A copy of the landlord’s accountant’s bank details showing the deposits made by the tenant as well as rent summaries were provided by the landlord. This shows that for the entire tenancy the tenant has paid $68,475 in rent. The sum payable for the entire tenancy to today’s date is $113,142.86 (75 weeks and 3 days at $1,500 per week). $113,142.86 minus $68,475 paid is $44,667.86. I am therefore satisfied that the arrears claimed by the landlord are accurate (there is a discrepancy of 1 cent - it is not claimed by the landlord in any event and is a discrepancy in the tenant’s favour so is not relevant).
I am therefore satisfied that rent was at least 21 days in arrears on the date the application was filed. The tenancy is terminated. See section 55(1)(a) Residential Tenancies Act 1986.
I must now consider the claim for arrears in more detail. It is unusual in the Tenancy Tribunal, to see rent arrears at the size of the amount claimed here and arising over such a long period of time with consecutive weeks missed constantly. The day upon which the tenant last made his payment for rent is 26 February 2024. The landlord did not file this application until 5 September 2024. Mitigation
As explained in the hearing there is an obligation under the RTA that the landlord mitigate loss. That requirement is found in section 49 which holds:
Mitigation of damage or loss Where any party to a tenancy agreement breaches any of the provisions of the agreement or of this Act, the other party shall take all reasonable steps to limit the damage or loss arising from that breach, in accordance with the rules of law relating to mitigation of loss or damage upon breach of contract.
What are the rules of law relating to mitigation of loss or damage following a contract breach? The rules of law are summarised in Halsbury’s Laws of England (4th ed, 1975) vol 12 at [1193]–[1194]: The plaintiff must take all reasonable steps to mitigate the loss which he has sustained consequent upon the defendant’s wrong, and if he fails to do so, he cannot claim damages for any such loss which he ought reasonably to have avoided. “The plaintiff is only required to act reasonably, and whether he has done so is a question of fact in the circumstances of each particular case, and not a question of law.”
In British Westinghouse Electric and Manufacturing Co Ltd v Underground Electric Railways Co of London [1912] AC 673 (HL) at 689, Lord Haldane described the rule as to mitigation of loss as follows: That the law does not allow [a claimant] to recover damages to compensate him for his loss which would not have been suffered if he had taken reasonable steps to mitigate his loss. Whether a claimant has failed to take reasonable steps to mitigate is a question of fact dependent upon the particular circumstances of each case.
The learned authors of Law Of Contract in New Zealand 5th ed, p.842 state: The burden which lies on the defendant of proving that the plaintiff has failed in his or her duty of mitigation is by no means a light one, for this is a case where a party already in breach of contract demands positive action from one who is often innocent of blame.
It is open to the Tribunal to reduce the level of rent ordered to be paid, following a finding that the landlord failed to mitigate their loss. It is worth noting for example, the District Court decision of Dunn and Dunn v Beedie and Beedie CIV-2014-088-000349. In that case the Tribunal (Adjudicator Blake) determined that: In this instance the Beedies breached the agreement by falling into rent arrears. Mr & Mrs Dunn took some steps but failed to take the ultimate step, which was to terminate the tenancy. In recognition of this failure to properly mitigate the loss I have reduced the amount of rent arrears owed by 10%
The Dunns’ appealed the Tribunal’s decision to the District Court. What happened then was somewhat unusual because the Beedies requested that the appeal be found in the landlords favour thereby requiring that they pay the full arrears to the landlord, but the Court commented that: I note in passing that the adjudicator could not be faulted for rightly pointing to s 49 of the Act and there have been cases where that clause has worked to reduce rent arrears where failure to mitigate exists.
The issue has very recently been considered in the District Court in Huang v Ashworth [2024] NZDC 15726. In this case the District Court confirmed there is a duty to mitigate for rent arrears.
In this case, for the reasons set out below, I am not persuaded that the landlord has acted reasonably when pursuing the rent debt. The landlord has failed to mitigate their loss.
This is because where rent arrears are accumulating, ordinarily, the Tribunal would expect to see an application being brought within around 6-8 weeks, 10 at the most. There is then usually a short period before the hearing can take place.
In Semmens v Wadman Adjudicator Woodhouse succinctly set out what would normally be seen when a landlord has a tenant who is not paying rent. He observed: What would normally be seen, is that is that a landlord when faced with increasing arrears, would file an application with the Tribunal to have the rent arrears paid, or the tenancy terminated.
I agree with Adjudicator Woodhouse that this is what is usually seen in respect of arrears. This was also explored in Huang v Ashworth where it was held that: If either the landlord or the tenant breaches the provisions of the tenancy agreement or the Act, the other party must take reasonable steps to minimise any loss arising from that breach. Accordingly, where the tenant fails to pay rent owning, there is an obligation on that landlord to mitigate the loss. This can be achieved by not allowing the arrears to continue to accrue, instead ending the tenancy and reletting the premises thereby preventing ongoing loss.
The tenant says that he did not realise his rent was not being paid. He says he is in the middle of a relationship breakdown and the bank account was frozen. He says this is the reason the rent was not paid. He also raises issues with the property as set out in his own application and says these are reasons for a rent reduction.
In this case the landlord could have reasonably mitigated its loss by remaining aware of the rent being paid (or not being paid) by the tenant and then taking appropriate action. If the landlord had remained aware by monitoring payments it could then have followed the usual steps to warn the tenant about missing rent, sending formal notices where necessary, engaging in discussion and ultimately terminate the tenancy if necessary where payment is not forthcoming.
In fact, no action of this nature was taken at all by the landlord until just before August. The landlord’s evidence was that there was a 14-day notice sent in August and then discussions took place between the tenant and the landlord’s new property manager until it became clear to the landlord that matters could not be resolved and they needed to apply to the Tribunal. The application was made on 5 September 2024. The tenant added to this evidence that indeed nothing was done until a 14 day notice dated 5 August 2024 was sent to him although he added that he was involved in a telephone call about 10 days prior to this, with the landlord’s accountant about the arrears.
Also relevant is that the rent summary provided shows a history of the tenant missing significant portions of rent and then “topping up”. I note that the final two payment made by the tenant on 17 January 2024 and 26 February 2024 were “top ups” of $23,600 and $7,375. The latter payment did but the tenant in credit for a period as well as paying off arrears. This history and recent behaviour should have alerted the landlord to the real possibility of the tenant falling into significant arrears again. The landlord was careless as to their own interest and the action taken prior to the telephone call just before the 14 day notice in August was not reasonable or diligent.
The Tribunal has often limited rent arrears to three months due to a failure to bring a timely application to terminate the tenancy or to claim rent arrears to mitigate loss. Cases include Semmens v Wadman [2022] NZTT 4380920, 4343555, Kāinga Ora–Homes and Communities v Tony Vaitai [2023] NZTT 4429004 and Peter Rama v Jasmine Pai Poasa and others [2023] NZTT 4499680. This is because where a landlord acts with reasonable diligence, the Tribunal could have determined the rent arrears dispute within three months of the rent arrears arising.
In Huang v Ashworth on appeal the Court took a different approach to the Tribunal (which was to limit the rent arrears to three months) when reducing the arrears payable to take into account a failure to mitigate. In Huang the District Court reduced the rent arrears by a third to take into account the landlord’s failure to mitigate loss. In Huang however, the Court accepted that the landlord had made some attempts to resolve the issue. He had not sat on his rights and there was ongoing discussion. The Court observed how Mr Huang had communicated with his tenant who had on numerous occasions promised to catch up. The tenant would also “top up” the rent amount reducing the amount owed and then falling back into arrears.
Unlike Huang the landlord here was not engaging with the tenant at all and took no action at all from the end of February to almost the start of August. That is in the region of 5 months of inaction.
I therefore consider that the landlord’s actions here are less reasonable and diligent than that in Huang. There is no pattern of discussions but arrears continuing to amount quickly in quick succession each week. For that reason, I consider that after taking into account mitigation an order in the region of half of the arrears is appropriate.
I therefore award the landlord arrears of $22,333.93.
I note that a similar sum would have been reached if had I adopted the alternative “3 month” approach described above that the Tribunal has taken previously. Broadly this would be: 1 month rent from 5 August (the date of the 14 day notice) to the date of the application (being 4 weeks to allow for negotiations and making the application - $6,000); an additional two months rent for further negotiations (8 weeks - $12,000) plus the time between the application being made and today’s hearing date (the date being something that the landlord had no control over here once the application was lodged – 2 weeks - $3,000).
While the tenant may have experienced issues with the property this does not excuse the tenant from his obligation to pay rent. Indeed, in any event the reason he gave for not paying the rent was not connected to issues with the property but rather his frozen bank account. For this reason, I have terminated the tenancy today and ordered the above arrears.
If the tenant is successful in his application the landlord may of course be awarded to pay him a sum in due course. Suppression and filing fee
I have awarded the landlord the filing fee as they have been substantially successful.
No application for suppression was made. The next hearing
I did not deal with a landlord claim for water rates as this was only lodged immediately prior to the hearing. The landlord will need to lodge a new application if it wants to pursue this.
This hearing could not deal with the tenant’s application because it was filed late and there was insufficient time. It remains unheard in full. Another hearing will therefore be scheduled for this. The parties will be notified in writing by Tenancy Services of the date and time of the next hearing.

Tenancy Tribunal case 4995567 — Rent arrears at 308 St Heliers Bay Road, St Heliers, Auckland 1071

At a glance

Tenancy Tribunal case 4995567 — Rent arrears at 308 St Heliers Bay Road, St Heliers, Auckland 1071

At a glance

Award balance

Claims & awards

Order

Reasons

Topics & place

Residential Tenancies Act sections

Key findings

Property management

Frequently asked questions

Award balance

Claims & awards

Order

Reasons

Topics & place

Residential Tenancies Act sections

Key findings

Property management

Frequently asked questions