Tenant Not Liable for Unprompted Water Rates Invoices

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[2025] NZTT 5081354, 5087888

TENANCY TRIBUNAL - Auckland | Tāmaki Makaurau

APPLICANT: [redacted]

Tenant

RESPONDENT: [redacted]

Landlord

TENANCY ADDRESS: [ADDRESS], [POSTCODE]

ORDER

1. [NAME] and [NAME] to pay [COMPANY] $195.98 from the bond, calculated as shown in table below.

2. [COMPANY] is to pay the bond of $195.98 (5827292-003) to [COMPANY] immediately. [COMPANY] is to pay the bond of $3,124.02 (5827292-003) to [NAME] and [NAME] immediately.

Description Landlord Tenant Water rates: 26 September 2024 $76.02 Water rates: 24 October 2024 $96.29 Water rates: Final $50.67 Filing fee reimbursement $27.00 Total award $222.98 $27.00 Net award $195.98 Bond $195.98 $3,124.02

3. The landlord’s claim for full reimbursement of the water rates invoices is dismissed.

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Reasons:

1. Both parties attended the hearing: [NAME] and [NAME] appeared for the tenant and [NAME] appeared for Barfoot and Thompson Limited.

2. The landlord has applied for compensation for water rates invoices following the end of the tenancy.

3. The tenants are seeking an order declaring they are not liable for water rates invoices issued at the end of the tenancy due to the delay in the delivery of the invoices.

How much is owed for water rates?

4. The tenancy began on 2 March 2019 and lasted a total of five years and 35 weeks until 10 November 2024. In all that time the tenants did not receive a water rates invoice. This was because the owner who lived in China had set up a direct debit with [NAME] to ensure the water rates were always paid on time. Neither the property manager Barfoot and Thompson Limited, nor the tenant received the water rates invoices.

5. The landlord stated that the system at Barfoot and Thompson Limited is to pay on invoice; without an invoice coming through, there was no alert that money needed to be collected from the tenant.

6. When the tenancy ended due to the landlord selling the property, the owner realised they had not been being reimbursed for their water rates payments. They addressed this with Barfoot and Thompson Limited who subsequently raised it with the tenants. The tenants filed their application with the Tribunal on 22 November 2024.

7. The landlord provided water rates invoices which prove the amount of water rates that the tenant had not paid for the entirety of the tenancy is $7,417.95. This amount was not disputed by the tenant.

The parties’ respective positions

8. The tenant stated that at the beginning of the tenancy after they received no water rates invoices, they assumed that the water rates was included in the tenancy agreement. They did not check this with the landlord or by reading the tenancy agreement.

9. The tenants’ view is that the landlord has made an administrative error in not forwarding the water rates invoices to them, and that as a result of that, they (the tenant) should not have to pay any of the water rates invoices.

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10. The landlord on the other hand points out that the administrative error was an innocent mistake, and the tenant should now pay off the full water rates arrears at a reasonable rate over the next few years.

The law

11. A tenant is responsible for all outgoings in respect of the premises that are exclusively attributable to the tenant’s occupation of the premises or to the tenant’s use of the facility, see section 39(3) of the Residential Tenancies Act, 1986 (the “RTA”). This includes supply of water if the water supplier charges for water provided to the premises on the basis of consumption, see section 39(4)(c), and wastewater charges.

12. This provision was reiterated in the tenancy agreement in the first clause of the “Tenant’s Maintenance Duties and Costs” which sets out that the tenant is liable for water and wastewater charges.

13. The lead case on whether a landlord can claim for water rates invoices long after they have been issued by a water provider and not forwarded to the tenant in a timely manner, is the case of [NAME]. In this case, his Honour Judge McElrea considered a case on appeal in which a tenant had been charged only at the end of a tenancy lasting almost three years, $2,299.55 for water and wastewater charges. The tenant had never received a water rates invoice during the tenancy. His Honour found that implicit in section 39 of the RTA is a condition that water rates invoices must be supplied in a timely manner. His Honour’s judgment included the following relevant paragraphs:

[8] In my view, the Tenancy Tribunal and this Court on appeal must approach this matter within the scope of s 85 of the Act which sets out the manner in which the jurisdiction of the Tribunal is to be exercised. This section provides that the Tribunal is to exercise its jurisdiction in a manner that is most likely to ensure the fair and expeditious resolution of the disputes. Importantly subs (2) provides:

“The Tribunal shall determine each dispute according to the general principles of the law relating to the matter and the substantial merits and justice of the case, but shall not be bound to give effect to strict legal rights or obligations or to legal forms or technicalities.”

[9] In my view, this Adjudicator has failed to deal with the evidence of the tenant that she never received any advice of these rates during the course of the tenancy, that is, over a period of three years, and that she was a single mother with two children to support and “living from pay day to pay day” with no significant savings. For any tenant to be supplied with a bill for three years’ water rates at the end of a tenancy is, in my view, quite unconscionable.

https://anzlaw.thomsonreuters.com/Link/Document/FullText?refType=N7&docFamilyGuid=I40399053020f11e99495db3043f758b0&pubNum=1100191&originationContext=document&vr=3.0&rs=cblt1.0&transitionType=DocumentItem&docVersion=Law+in+Force&contextData=(sc.Default)

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[11] In my view, there is an implied term in this tenancy agreement that the landlord would provide accounts to the tenant at regular intervals so as to enable payment to be made. That is in fact what occurred in the case of [NAME] dealt with by Judge Hubble, but it did not occur here. I imply such a term because it seems to me to be a necessary term to make commercial sense of the agreement. How can a tenant be expected to pay for a regular charge such as a quarterly charge unless it is told the amount of the charge from time to time? That makes nonsense of any attempt to budget, which presumably most tenants have to do, whether they be commercial or residential tenants. It makes nonsense of any proper concept of financial management as between parties to a commercial arrangement.

[18] However as I say I do not think that is the real issue in this case. In my view it is a question of an implied obligation on landlords to advise their tenants of the amounts payable as they accrue, or within a reasonable time thereafter, unless some other agreements has been reached between landlord and tenant.

[20] As a result, based on the evidence before the Court and the law as I understand it but also having regard to the substantial merits and justice of the case, my finding is that these landlords are not entitled to recover water rates - with one exception. I have already said that there was an obligation on them to notify the tenant of the amount payable at the time it arose or within a reasonable time thereafter. On that basis my conclusion is that the tenant is obliged to pay the last two accounts for water in relation to this property which the parties have agreed is a sum of $215.40, covering a period of just over four months.

14. His Honour Judge McElrea’s decision has been adopted and followed on many occasions since. In [NAME] 3202 Ltd v Nair [2018] NZDC 17499 [2018] her Honour Judge Sinclair dealt with an appeal from the Tenancy Tribunal where the Adjudicator had ordered that the tenant was not liable for all but the last two water rates invoices. The landlord in that case had argued that the case of [NAME] could be distinguished on the following points among others:

a. “There is no evidence that the tenancy agreement without such an implied term would be a commercial nonsense. [NAME] would not be someone who lived on a tight budget and in any event, the bond money would have been available to cover such contingencies.”

b. “There is no evidence to support the substantial merits and justice of the case being in favour of [NAME]. The landlord submits that [NAME] was fully aware or ought to have been fully aware of her obligation to pay for water. She had never offered to pay nor raised any issues regarding not being charged. The “unconscionability” in the context of s 85(2) in [NAME] was absent in this case.”

15. At [18] of her decision, her Honour found that a tenant’s financial position does not fetter the requirement for a landlord to provide a tenant with water rates invoices in a timely manner:

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[18] The landlord says that the financial position of [NAME] is considerably different to that of the tenant in [NAME]. In that case, the tenant was a single mother with two children to support and was described as “living from pay day to pay day”. [NAME] submits that in this case, there was no evidence before the Tribunal that [NAME] would have been under any financial difficulty if she had been required to pay the water rates. Indeed, there was no evidence as to [NAME]’s financial circumstances. However, I do not consider that [NAME]’s financial position is a determining factor as to whether such a term should be implied. It can be expected that most tenants whether residential or commercial tenants need to budget for such outgoings and as Judge Mc Elrea held, the implied term is necessary to make commercial sense of the agreement.

[19] The facts in this case are otherwise very similar to those in [NAME]. I do not accept that the wording of the tenancy agreement alters or adds anything to the wording of s 39 RTA and requires any particular consideration in the context of the application of the [NAME] judgment. It is the obligation of the landlord to supply the water rates accounts to the tenant. Furthermore, this obligation cannot be deflected by saying that the tenant was aware of their responsibility to pay such outgoings and/or did not raise the issue.

16. In my view, the law on whether a landlord can expect to be reimbursed for water rates invoices that were not provided to a tenant within a reasonable timeframe is clearly settled: they cannot.

17. I have considered whether the substantial merits and justice of the case, (section 85 of the Residential Tenancies Act, 1986) warrant a reduction beyond the “last two invoices” as was ordered in the [NAME] case and upheld in the [NAME] 3202 case. In particular I have considered the case of Geraghty v Raui [2019] NZDC 3813, in which his Honour Judge de Ridder ordered the Tribunal to rehear a case in which the adjudicator had not given sufficient weight to section 85 of the RTA. The facts of that case were significantly different to this case in that the tenants had been charged for power throughout their tenancy even though there was not a separate power metre to accurately record their power use.

18. However in the [NAME] decision, her Honour specifically addresses the tenants circumstances which are similar to the tenants’ circumstances in this case, and finds that section 85 of the RTA does not serve to justify divergence from Judge McElrea’s implied condition.

19. Ultimately, I do not find the facts of this case to be significantly different to what was presented in the two cases of [NAME] and [NAME].

20. For these reasons I find that the tenant is liable for the last two full-month water rates invoices and the final reading invoice, and nothing more.

https://anzlaw.thomsonreuters.com/Link/Document/FullText?refType=N7&docFamilyGuid=I36f80711020f11e99495db3043f758b0&pubNum=1100191&originationContext=document&vr=3.0&rs=cblt1.0&transitionType=DocumentItem&docVersion=Law+in+Force&contextData=(sc.Default)

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21. Because I consider the tenants have substantially succeeded with their claim, I have reimbursed the filing fee.

[NAME]

13 February 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].