Tenant Allowed to End Tenancy Early and Receive Compensation

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[2025] NZTT 5180191

TENANCY TRIBUNAL AT REMOTE LOCATION | TE TARAIPIUNARA RETIHANGA

APPLICANT: [redacted]

Tenant

RESPONDENT: [redacted]

Landlord

TENANCY ADDRESS: [ADDRESS], [POSTCODE]

ORDER

1. The tenant may terminate the tenancy by giving the landlord at least 21 days’ notice.

2. [COMPANY] and [NAME] must pay [NAME] $1,027, being $1,000 compensation and $27 filing fee immediately.

Reasons:

1. Both parties attended the hearing which was conducted by telephone. The property manager, [NAME], represented the respondents.

2. The tenant seeks to be released from this fixed term tenancy early and compensation for the landlord’s refusal to allow her to have a [NAME] in the premises.

Background

3. The tenancy agreement is for a fixed term from 20 December 2024 to 20 December 2025.

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4. It is a term of the written agreement that only one person may occupy the premises.

5. The tenant says that the property manager misled her into believing that she could have a [NAME]. Her case is therefore based on misrepresentation.

Law

6. The Contracts and Commercial Law Act 2017 (CCLA) contains the law concerning compensation for and the right to cancel a contract for misrepresentation.

7. The common law governs what conduct constitutes misrepresentation.

8. A representation is usually a written or oral statement made in relation to a present or past fact. A misrepresentation occurs when the statement is untrue.

9. Where a party enters a contract in reliance on a misrepresentation, that party may be entitled to cancel the contract and claim compensation as though the misrepresentation was a term of the contract.

Evidence

10. The first question is did the landlord make a relevant representation?

11. Before the tenant’s application for the tenancy, she had a discussion with [NAME] about her son joining her in the premises in due course and about having a [NAME]. Following that discussion, [NAME] spoke to the landlord who said that he was fine with two people occupying the premises, but the other person must be a friend or family.

12. [NAME] said that he mentioned the possibility of the tenant’s son joining her in the premises and the landlord was fine with that. [NAME] said that he did not discuss a [NAME] with the landlord.

13. [NAME] said that he then went back to the tenant and told her that her son living with her was not a problem. He said that nothing further was said about the [NAME].

14. There was a telephone conversation between the tenant and [NAME] immediately after receipt by the tenant of the tenancy agreement sent to her for signing. The parties had differing recollections of that conversation.

15. The tenant said that she made it clear to [NAME] that she wanted to have a [NAME]. She therefore did not want to be restricted to one occupier as stated in the agreement. Her evidence was that [NAME] said that “When the [NAME] comes, then we will add that later in the tenancy.” On that basis, she signed and returned the agreement.

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16. [NAME] agreed that there was a discussion about a [NAME], but his evidence was that he told the tenant that if she wanted a [NAME] to let him know and he would speak to the landlord. In other words it would require the landlord’s permission.

17. When the tenant had found a [NAME] at the end of January, and spoke to Mr [NAME] about it, he said that he would need to obtain permission from the landlord for the [NAME]. The tenant said that she was shocked by that because she had understood that it would be allowed.

18. The landlord refused to allow a [NAME] although he later offered to allow one if the rent was increased for the rest of the tenancy whether there was a [NAME] or not. The tenant refused that offer.

Discussion and Decision

19. What is most striking about this is that after [NAME]’s initial conversation with the landlord, he was aware the landlord would allow two occupants in the premises provided the other occupant was a friend or a family member. It follows that the landlord would not permit a [NAME] and yet [NAME] did not inform the tenant of that. He said that it had not been confirmed that the tenant wanted a [NAME]. But it was, at least, a possibility, and I find it remarkable that [NAME] did not make that clear to the tenant at the time.

20. When it came to the conversation immediately before the tenant signed the agreement, [NAME] had another opportunity to inform the tenant that she would not be permitted to have a [NAME]. Yet again he failed to mention it.

21. At the very least, it follows that [NAME] misled the tenant into believing that having a [NAME] in the premises was a possibility, when he was aware that it wasn’t. In my view that amounts to a misrepresentation.

22. But I find that it goes further than that. I am satisfied that the tenant intended to have a [NAME] and that she made that clear to [NAME]. I do not think that if [NAME] had told her before she signed the agreement that it would be subject to the landlord giving his permission, or that it would not be permitted, that she would have signed the agreement. I therefore prefer the tenant’s evidence that [NAME] told her that the [NAME] would be added when the time came. That gave her the clear impression that the [NAME] would be permitted.

23. I find that the tenant was induced to enter the agreement by [NAME]’s representation that she would be allowed to have a [NAME]. It follows that it became a term of the agreement that it would be allowed.

24. By refusing to allow a [NAME], the landlord acted in breach of the term and the breach substantially increased the burden of the contract on the tenant because

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she then had no one who would contribute to the rent. That entitles the tenant to cancel the contract.

25. I refer to the landlord because as the landlord’s agent, [NAME]’s words bind the landlord.

26. The tenant asked for the right to terminate the tenancy on 21 days’ notice and so I have made an order to that effect.

Compensation

27. There is then the tenant’s claim for compensation.

28. On the face of it the tenant has lost board of approximately $2,000 due to the landlord’s breach. That assumes that the [NAME] would have moved in at the end of January and would have paid $250 per week board including utilities. As well, the tenant will incur moving costs.

29. There is no obvious reason as a matter of law why the tenant should not be compensated for her loss and expense. But I am not minded to award them in full. Relying on s85 of the Residential Tenancies Act 1986, it would not be in accordance with the substantial merits and justice of the case.

30. I have found that the landlord misled the tenant but at the same time the tenant has contributed to this situation. She signed a tenancy agreement limiting occupation of the premises to one person. She should not have done so. It was always her intention to have a [NAME] and so the agreement should have permitted it. She should have insisted on it or at least put something in writing that confirmed the landlord’s willingness to allow it.

31. One can argue that the fault lies entirely with the landlord due to the misrepresentation, but this situation could have been avoided simply by the tenant insisting that the written terms reflected her understanding of what had been agreed instead of contradicting it.

32. The tenant should have some compensation and I have awarded $1,000 which I regard as reasonable in the circumstances. I have also awarded her the filing fee.

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[NAME] 14 March 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: