Published tribunal order
Tenancy Tribunal case 5169815 — Exemplary damages at 30 Applin Lane, Pyes Pa, Tauranga 3112
Decided 13 May 2025 · Published 13 May 2025 · Application 5169815
Tenant favoured
- Exemplary damages
Order
- Bhaviya Kapoor and Dheeraj Kapoor must pay the bond of $3,680.00 to Alexander Goldberg and Mariana Goldberg immediately.
- Bhaviya Kapoor and Dheeraj Kapoor must pay Alexander Goldberg and Mariana Goldberg $500.00 immediately.
Reasons
- Both parties attended the video hearing.
- Alexander Goldberg and Mariana Goldberg sought release of the bond and claim the landlord has not lodged the bond with the Bond Centre within the required time.
- A landlord must send any bond payment to the Bond Centre within 23 working days after the payment is received. See section 19(1) Residential Tenancies Act 1986 (“RTA”).
- Breaching this obligation is an unlawful act for which the Tribunal may award exemplary damages up to a maximum of $1,500.00. See section 19(2) and Schedule 1A RTA.
- Where a party has committed an unlawful act intentionally, the Tribunal may award exemplary damages where it is satisfied it would be just to do so, having regard to the party’s intent, the effect of the unlawful act, the interests of the other party, and the public interest (see section 109(3) RTA).
- 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).
- The landlord admits that they failed to lodge the bond. I find they have committed an unlawful act.
- Where a party has committed an unlawful act intentionally, the Tribunal may award exemplary damages where it is satisfied it would be just to do so, having regard to the party’s intent, the effect of the unlawful act, the interests of the other party, and the public interest. See section 109(3) RTA.
- The landlord says that she simply was not aware of the requirement to lodge the bond with the Bond Centre. The operation of a residential tenancy is a business and the landlord is required to be aware of the obligations with regards to the bond.
- This tenancy commenced on 5 February 2024. It is an aggravating feature that as of the date of this hearing, the landlord has still not lodged the bond. Taking into account all factors relevant in this matter the landlord is ordered to pay exemplary damages of $500.00.
- The tenant has applied for refund of their bond following the end of the tenancy.
- At the hearing, the landlord made a claim against the bond. However, the landlord did not file an application with Tenancy Services.
- Section 22B RTA provides: (1) If there is a dispute between the parties as to the payment of a bond, either party may apply to the Tribunal for an order determining to whom the bond, or any part of it, is to be paid. (2) If the tenant applies to the Tribunal and the landlord seeks payment of the bond in whole or in part, the landlord must file an application with the Tribunal that sets out the landlord’s counterclaim.
- The requirement for the landlord to file a counterclaim is mandatory. Therefore, because the landlord has not done so, the bond is refunded in full to the tenant. This does not prevent the landlord from filing a claim against the tenant at a later date. It just means that, if the landlord’s claim is successful, there is no bond to put towards any monetary award made.
- The landlord applied for name suppression. The landlord has not been wholly or substantially successful in this matter. The landlords’ application for name suppression is dismissed.