Bankrupt Tenant's Bond Ordered to Landlord in Tenancy Dispute
📌 In brief
In a recent Tenancy Tribunal case, the court ordered the bond to be refunded to the landlord because the tenant was declared bankrupt. However, the court could not order any further payments beyond the bond amount due to the tenant's bankruptcy status.
⚖️ Legal holding
Where a tenant is adjudged bankrupt and the debt arose prior to the bankruptcy, the Tribunal can order the bond be paid to the landlord, but cannot make monetary orders in excess of the bond.
📖 Technical summary
The Tribunal ordered the bond to be refunded to the landlord due to the tenant's bankruptcy, but no further monetary orders could be made beyond the bond amount.
📜 Headnote Official document
The Tenancy Tribunal ordered the bond to be paid to the landlord due to the tenant's bankruptcy, but no further monetary orders could be made beyond the bond amount. The landlord had claimed rent arrears totaling $41,127.57, but the Tribunal ruled that only the bond amount could be refunded due to the tenant's bankruptcy status.
📚 Full judgment Official document
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[2025] NZTT 5027275
TENANCY TRIBUNAL AT REMOTE LOCATION | TE TARAIPIUNARA RETIHANGA
APPLICANT: [redacted]
Landlord
RESPONDENT: [redacted]
Tenant
TENANCY ADDRESS: [ADDRESS], Saint Marys Bay, Auckland 1011
ORDER
1. The [COMPANY] is to pay the bond of $4,500.00 (3484204-011) to [NAME] immediately.
Reasons:
1. [NAME] attended the teleconference hearing as representative for the landlord. The tenant was called on the number provided and the calls went to voicemail. The file records that the tenant was sent notice of today’s hearing, so the hearing proceeded in the tenant’s absence.
2. This tenancy began in January 2019 and ended in August 2024.
3. The landlord has applied for rent arrears and claims that the amount owed to the end of the tenancy on 21 August 2024 is the sum of $41,127.57. The landlord has provided a rent summary which includes an agreed reduction in rent granted for the final weeks.
4. The landlord advised that the tenant is bankrupt and provided evidence of the date the tenant was adjudged bankrupt as being 10 December 2024.
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5. Where a tenant is adjudged bankrupt and the debt arose prior to the bankruptcy the Tribunal can order the bond be paid to the landlord, but no money orders may be made in excess of the bond. The landlord must contact the Official Assignee to lodge the debt.
6. As this debt arose prior to the bankruptcy the Tribunal orders refund of the bond of $4500.00 to the landlord. The balance of the debt being claimed is $36,627.57 and the landlord may contact the Official Assignee if this is to be pursued.
[NAME]
14 April 2025
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Please read carefully: Visit justice.govt.nz/tribunals/tenancy/rehearings-appeals for more information on rehearings and appeals.
Rehearings You can apply for a rehearing if you believe that a substantial wrong or miscarriage of justice has happened. For example: • you did not get the letter telling you the date of the hearing, or • the adjudicator improperly admitted or rejected evidence, or • new evidence, relating to the original application, has become available.
You must give reasons and evidence to support your application for a rehearing. A rehearing will not be granted just because you disagree with the decision. You must apply within five working days of the decision using the Application for Rehearing form: justice.govt.nz/assets/Documents/Forms/TT-Application-for-rehearing.pdf
Right of Appeal Both the landlord and the tenant can file an appeal. You should file your appeal at the District Court where the original hearing took place. The cost for an appeal is $260. You must apply within 10 working days after the decision is issued using this Appeal to the District Court form: justice.govt.nz/tribunals/tenancy/rehearings-appeals
Grounds for an appeal You can appeal if you think the decision was wrong, but not because you don’t like the decision. For some cases, there’ll be no right to appeal. For example, you can’t appeal: • against an interim order • a final order for the payment of less than $1000 • a final order to undertake work worth less than $1000.
Enforcement Where the Tribunal made an order about money or property this is called a civil debt. The Ministry of Justice Collections Team can assist with enforcing civil debt. You can contact the collections team on [PHONE] or go to justice.govt.nz/fines/civil-debt for forms and information.
Notice to a party ordered to pay money or vacate premises, etc. Failure to comply with any order may result in substantial additional costs for enforcement. It may also involve being ordered to appear in the District Court for an examination of your means or seizure of your property.
If you require further help or information regarding this matter, visit tenancy.govt.nz/disputes/enforcing- decisions or phone Tenancy Services on [PHONE].
Mēna ka hiahia koe ki ētahi atu awhina, kōrero ranei mo tēnei take, haere ki tenei ipurangi tenancy.govt.nz/disputes/enforcing-decisions, waea atu ki Ratonga Takirua ma runga [PHONE] ranei.
https://www.justice.govt.nz/tribunals/tenancy/rehearings-appeals https://www.justice.govt.nz/assets/Documents/Forms/TT-Application-for-rehearing.pdf https://www.justice.govt.nz/tribunals/tenancy/rehearings-appeals/ https://www.justice.govt.nz/fines/about-civil-debt/ https://www.tenancy.govt.nz/disputes/enforcing-decisions https://www.tenancy.govt.nz/disputes/enforcing-decisions http://www.tenancy.govt.nz/disputes/enforcing-decisions/
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A manaomia nisi faamatalaga poo se fesoasoani, e uiga i lau mataupu, asiasi ifo le matou aupega tafailagi: tenancy.govt.nz/disputes/enforcing-decisions, pe fesootai mai le Tenancy Services i le numera [PHONE].
Reasons:
⚖️ What tends to weigh in cases like this
✅ Tends to be accepted
- The tenant was declared bankrupt before the debt occurred.
- The landlord requested the return of the bond amounting to $4,500.00.
- The landlord provided evidence of the tenant's bankruptcy dated 10 December 2024.
- The debt claimed by the landlord arose before the tenant was declared bankrupt.
- The Tribunal can order the bond to be refunded to the landlord in such cases.
❌ Tends to be rejected
- The Tribunal cannot make monetary orders exceeding the bond amount.
- The landlord's request for the full amount of rent arrears ($41,127.57) was denied.
- The landlord was instructed to contact the Official Assignee for pursuing the remaining debt.
Patterns observed in similar cases in this collection — every case is unique.
❓ Frequently asked questions
What did this decision decide?
The Tenancy Tribunal ordered the bond to be refunded to the landlord due to the tenant's bankruptcy, but no further monetary orders could be made beyond the bond amount.
What was the dispute about?
The landlord claimed rent arrears totaling $41,127.57 from the tenant, who was declared bankrupt.
How did the court decide, and why?
The court decided to refund the bond to the landlord but could not order any further payments beyond the bond amount because the tenant was declared bankrupt prior to the debt arising.
Which laws or rules were applied?
The Residential Tenancies Act 1986, section 54 was applied.
What was the argument that mattered most?
The fact that the tenant was declared bankrupt prior to the debt arising was the central reasoning of the case.
Was the decision for or against the person who brought the case?
The decision was for the landlord, who brought the case.
What does this mean for someone in a similar situation?
For a landlord dealing with a bankrupt tenant, they can only recover the bond amount through the Tenancy Tribunal, unless they contact the Official Assignee to pursue the remaining debt.
What evidence or documents mattered?
The evidence of the tenant's bankruptcy declaration and the rent summary provided by the landlord mattered in the decision.