Tenant Wins Exemplary Damages for Breach of Standards

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[2025] NZTT 5146049, 5234696

5241241

TENANCY TRIBUNAL AT WELLINGTON | TE TARAIPIUNARA RETIHANGA KI TE WHANGANUI-A-TARA

APPLICANT: [redacted]

Landlord

RESPONDENT: [redacted]

Tenant

TENANCY ADDRESS: Unit/[ADDRESS], [POSTCODE]

ORDER

1. [NAME] must pay [NAME] and [NAME] $3,627.00 immediately, calculated as shown in the table below.

2. All other claims are dismissed.

Description Landlord Tenant Exemplary damages: Breach of [COMPANY] ventilation standard in respect of extractor fans

$2,400.00

Exemplary damages: Failing to maintain windows $1,200.00 Filing fee reimbursement $27.00 Total award $3,627.00 Total payable by Landlord to Tenant $3,627.00

Reasons:

1. Both parties attended the hearing.

2. This tenancy commenced on 24 February 2022 and ended on 7 January 2025.

3. The landlord has applied for loss of rent and compensation for carpet cleaning following the end of the tenancy.

4. The tenants filed a cross application seeking exemplary damages in relation to the following claims:

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a. Retaliatory notice to terminate the tenancy;

b. [COMPANY] standards regarding ventilation and draught- stopping;

c. Altering a tenancy agreement;

d. Failing to comply with a 14-day notice.

5. Each party has the burden to prove their respective claims. The standard of proof required is the usual civil standard of ‘on the balance of probabilities’. Put another way, the applicant party must persuade me that what he or she says is more likely than not to be the case.

Did the tenant comply with their obligations at the end of the tenancy?

6. At the end of the tenancy the tenant must leave the premises reasonably clean and tidy, remove all rubbish, return all keys and security devices, and leave all chattels provided for their benefit. See section 40(1)(e)(ii)-(v) Residential Tenancies Act 1986 (RTA).

7. The tenant's obligation to leave the premises reasonably clean and reasonably tidy is not an absolute standard, and it does not mean that the premises will be immaculate, spotless, or commercially clean. It also does not mean that the premises will necessarily be ready for occupation by a new tenant, the owner or ready for sale. It is to be expected that a landlord will spend some time (or pay someone else) on cleaning and maintenance work between tenancies. This is part of the business of being a landlord. The test as to whether premises are in a reasonably clean and tidy condition is an objective test, not to be determined based on the subjective opinion of either the landlord or the tenant. Also, a tenant should not be expected to keep the premises any cleaner or tidier than they were at the start of the tenancy.

8. The landlords ([NAME] and her partner [NAME]) complain that the tenants did not have the carpets commercially cleaned at the end of the tenancy. They say that they informed the tenants at the start of the tenancy that the premises would need to be commercially cleaned at the end. The tenants were not able to produce a receipt or invoice to prove commercial carpet cleaning had taken place. The landlords also produced 2 photos which they claim show areas of the living room carpet that were not reasonably clean. They sought carpet cleaning costs of $387.55 based on quote they obtained to clean carpets in 2 bedrooms, the living area, stairs and landing. However, they confirmed at the hearing that they had not in fact paid for professional carpet cleaning. The landlords cannot claim a loss they have not incurred. [NAME] said he cleaned the carpets himself using a rug doctor machine that he believes cost approximately $80 to hire. He did not have a receipt but typically a Rug

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Doctor can be hired from local supermarkets at a cost of $60 plus the costs of the cleaning solution.

9. The tenants’ friend who is a professional carpet cleaner cleaned the carpets at the premises for which they do not have a receipt. However, they argue that they are not required to have carpets commercially cleaned unless there are marks or stains that require commercial cleaning. They also argue that the carpets were reasonably clean at the end of the tenancy.

10. As discussed at the hearing and outlined above, the tenants’ obligation in s40 RTA is to leave the premises “reasonably clean and reasonably tidy” and that does not necessarily mean that commercial cleaning is required. Certainly, a landlord cannot require tenants to have the premises commercially cleaned and nor can tenants agree to commercial cleaning. Any purported waiver by a tenant of their rights and powers under the RTA is of no effect (See section 11(3) RTA).

11. After reviewing the 2 photos produced in evidence by the landlord and taking into account the length of the tenancy and that no other cleaning issues were raised by the landlords, I consider the premises, including carpets, were left reasonably clean and tidy. Therefore, the claim is dismissed.

Is the landlord entitled to loss of rent?

12. The landlord seeks 4 weeks loss of rent on the basis that the tenants obstructed them from showing the premises to prospective tenants on the last day of the tenancy, 7 January 2025. They say that this delayed their ability to re-let the premises, with a new tenancy not starting until the first week of February 2025, about 4 weeks after this tenancy ended.

13. On the last day of the tenancy, 7 January 2025, the parties arranged to meet for an end of tenancy bond inspection at 5pm. At the same time, the landlord had arranged for a group of prospective tenants to view the premises at 5.15- 5.30pm. There is no evidence to prove that the landlords advised the tenants about the viewing and/or requested their consent to it. The landlords explained that they thought the bond inspection would be routine and not take too long because the tenants had moved out 1-2 weeks beforehand and they knew the condition of the premises. They expected that the tenants would return the keys to them, and they would be in possession and able to conduct the viewing by 5.15-5.30pm.

14. Unfortunately, the bond inspection did not proceed smoothly. [NAME] and [NAME] met inside the premises. After inspecting the rooms, [NAME] asked the landlord to confirm that the premises had been left in satisfactory condition and to sign the bond refund form. [NAME] refused to do so because the tenants could not produce a carpet cleaning receipt. [NAME] also

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apparently told [NAME] that he would have to review the entry photos to determine if the premises were reasonably clean and tidy. [NAME] then refused to hand over the keys. His argument is that he kept the keys so that the tenants could rectify any issues raised by the landlord at the inspection. Unable to reach an agreement, [NAME] then locked the premises and left with the keys. This meant the landlords had to cancel the viewing with the prospective tenants.

15. [NAME] called [NAME] and they arranged a second inspection later that evening. While the bond refund was not agreed, [NAME] handed over the keys.

16. I am satisfied on the evidence that the landlords did not seek nor obtain the tenants consent to show prospective tenants the premises on the last day of the tenancy. By doing so, they alone took on the risk that the viewing might not proceed, given the absence of the tenants’ consent. [NAME] was within his right to keep keys to the property until the tenancy ended technically at 11.59pm on 7 January 2025. His reason for wanting to retain the keys is understandable. He wanted to ensure that he could access the premises to rectify any issues that the landlord raised at the inspection. In the end, he returned the keys later in the evening on 7 January 2025.

17. After carefully considering the circumstances, I find that the tenants are in not responsible for the cancelled viewing given that they did not know about it nor consent to it. It follows that there is no basis on which to consider awarding loss of rent for the following 4 weeks before a new tenancy started.

18. The general law provides that if an applicant has suffered damage that is not too remote, then they must, so far as money can do it, be restored to the position they would have been in had the breach not occurred. However, compensation cannot be recovered for all types of damage and a line must be drawn somewhere. Therefore, the law does not provide for compensation where the damage is considered too remote, Recovery is limited to actual loss resulting from the breach that was reasonably foreseeable when the contract was made.

19. Even if the tenants were in some way responsible for cancellation of the viewing, it does not automatically follow that this one event caused a delay in re-letting the premises. There may be several contributing factors. For example, it is generally argued by landlords that properties are harder to let during the December/January holidays as the market slows down and people are on holiday; prospective tenants may simply have preferred other premises. The landlords stated that the group who was supposed to view on 7 January never returned .However, I am not satisfied that the cancellation of one viewing is the sole reason that the premises could not be rented sooner, given that the landlord received the keys immediately after that cancelled viewing. I am also

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not persuaded that a 4-week lapse between tenancies is an undue delay. In summary, there is insufficient evidence to persuade me that it was reasonably foreseeable that one cancelled viewing on 7 January would delay re-letting to any significant degree.

20. For the above reasons, the loss of rent claim is dismissed.

Did the landlords give a retaliatory termination notice?

21. A notice to terminate the tenancy was served on the tenants by the landlord over a year ago, on 23 February 2024. While the notice was later withdrawn, the tenants claim that it was retaliatory, for which they seek exemplary damages.

22. Under the version of section 54 RTA in force at the relevant time (before the amendments introduced on 30 January 2025), an application for retaliatory notice had to be made within 28 working days after receiving the termination notice. While the District Court accepted that the Tribunal has the power to extend time limits, it was held in [COMPANY] v [NAME] that those provisions should not ordinarily be used in relation to consideration of issues arising under s 54, with the possible exception of a very short overrun of a day or two caused by circumstances beyond a tenant's control, such as documents being lost in the post or computer or internet outage or inaccessibility.1

23. The tenants lodged their application on 13 April 2025. Therefore, the tenants are out of time and an extension of time would be unreasonable. For those reasons, the claim must be dismissed.

Have the landlords breached their [COMPANY] /maintenance obligations?

24. The tenants claim that the landlord has breached the landlord’s obligations under section 45(1)(bb) RTA which requires compliance with the Residential Tenancies ([COMPANY]) 2019 (HHS). The tenants consider that the landlord has failed to comply with the HHS ventilation and draught-stopping standards.

25. Compliance dates for the HHS vary depending on the tenancy. For this tenancy commencing on 24 February 2022, the rental premises were required to comply within 90 days of the commencement date which was 25 May 2022.

26. The ventilation standard sets out minimum expectations around windows and doors, and in particular the area of doors and windows that are openable. The

1 Realty House Whakatane Ltd v Eschbank [2020] NZDC 16081

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standard also requires that each kitchen and bathroom have extractor fans installed with a minimum defined extraction capacity.

27. The draught stopping standard requires that residential premises be free from unreasonable gaps and holes that are not an intentional part of the building, which allow draughts to arise.

28. The HHS does provide exemptions in specific circumstances.

29. The tenants’ claims might also establish a breach of section 45(1)(b) RTA which requires landlords to provide and maintain the premises in a reasonable state of repair.

30. Breaching any of the obligations under s45(1)(b) or (bb) RTA is an unlawful act for which exemplary damages may be awarded up to a maximum of $7,200.00. See section 45(1A) RTA.

Extractor fans

31. There is no dispute that there are no extractor fans in either the kitchen or the bathroom. Furthermore, there is no evidence that any exemption would apply. Based on the description of the premises as a ground floor, two storey flat, I am satisfied that it was reasonably practicable to install extractor fans during the tenancy, but this was not done by the landlords. See regulations 23 and 24 HHS. Therefore I find that the landlord is in breach of the ventilation standard requiring extractor fans in the bathroom and kitchen.

Openable windows

32. In relation to the windows at the property, I am satisfied on the tenant’s evidence including copies of emails and texts with the landlord and photos taken during and towards the end of the tenancy that several windows in the house would not open and/or close properly and had broken latches and handles which the tenants asked to be fixed.

33. It is difficult to establish whether the problems with the windows amount to a breach of the ventilation standards set out in regulations 21 and 22 HHS. The regulations require each habitable space to have one or more “qualifying windows or doors” which is defined in the regulation. The total openable area of the qualifying windows or doors must be at least 5% of the floor area of the habitable space. The tenants did not provide sufficient evidence to establish that these “measurements” have been breached. Opinion evidence from parties rather than a suitably qualified expert is often not persuasive to determine these matters.

34. While I cannot be satisfied if the windows breach the HHS, I accept that the failure to fix the windows is a breach of the landlord’s obligation to maintain the premises in a reasonable state of repair under section 45(1)(b) RTA.

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Draughts

35. The tenants also claim that there are gaps letting in draughts around some window frames. While there are photos showing gaps around the windows, it is again difficult to establish from the photos whether the gaps are unreasonable such that the draught-stopping standard has been breached. See regulation 26 HHS.

36. Despite reporting the above issues to the landlord several times during the tenancy and serving a 14-day breach notice on 18 December 2024, many of the problems were not fixed before the tenancy ended on 7 January 2024. It is acknowledged that the landlord replaced the windows in the upstairs bathroom and main bedroom. However, issues raised about windows in the kitchen, the lounge and the smaller upstairs bedroom were not addressed during the tenancy. The landlord says they fixed the windows in the kitchen and lounge after the tenancy ended.

37. The landlords confirmed at the hearing that they talked to a “[NAME]” about HHS compliance but only in relation to insulation and a ground moisture barrier. They have not taken any steps to have the premises assessed for HHS compliance generally.

38. In summary, I find that the landlords have breached the HHS ventilation standard by failing to install extractor fans in the kitchen and bathroom by the compliance date, 25 May 2022. I also find that the landlords have breached their obligations to maintain the windows in a reasonable state of repair. In respect of both breaches, the landlords have committed unlawful acts.

Exemplary damages

39. The tenants seek an award of exemplary damages. Exemplary damages are designed to punish and to deter. They are like a fine. In Auckland City Council v Blundell2 the Court of Appeal ([NAME]) said:

Exemplary and punitive [damages] are different words for the same thing. The damages are exemplary because they are meant to teach an example to the guilty officer and others. They are punitive because they are meant to punish. They are like a fine, though they go to the citizen who has been the victim of conduct.

40. Exemplary damages are awarded at the Tribunal’s discretion when one party has proved that the other party has committed a defined unlawful act. If that is proven, and before the Tribunal may award exemplary damages, it must take account of the factors set out in section 109 RTA.

41. Exemplary damages can be awarded if the unlawful act was committed intentionally, and having regard to:

2 Auckland City Council v Blundell [1986] NZLR 732

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a. The intent of the person committing the unlawful act;

b. The effect of the unlawful act;

c. The interests of the landlord or tenant against whom the unlawful act was committed;

d. The public interest; and

e. Whether it is just to make the award.

42. The District Court has said the requirement of intention is not about whether the party was aware they were breaching the Act. Rather, it is about whether they acted intentionally i.e. whether they intended to do whatever it was they did or did not do.3 .

43. I consider the landlord cannot plead confusion, lack of knowledge, or ignorance of the law. In [COMPANY] T/A Strata Property Management v Sweeney and Sundahl4, where the landlord claimed not to be fully aware of his obligations, the District Court held:

“Like all citizens, corporate or otherwise, he and his company are deemed to know the law and on that basis a failure to provide these fundamental documents is properly seen as intentional. Parliament’s intention would be subverted if landlords were able to escape consequences for the unlawful acts involved by claiming ignorance of the law.”

44. Where a party fails to carry out a legal requirement because they are unaware of the particular obligation they have failed to perform, ignorance of the law is no defence. They are deemed to know the law, and therefore failure to perform the obligation is considered intentional.

45. I am satisfied that the matter of intention is proved in this case because the landlords ought to know their legal obligations..

46. It is of significant interest to tenants and the public that landlords comply with their maintenance and HHS obligations. The HHS was a major piece of legislation designed to address a well-documented lack of healthy, warm, dry rental houses. The legislation was well publicised over a long period with the initial provisions regarding insulation coming into force from 1 July 2019 and remaining standards from 1 July 2021. Having regard to those factors, I consider the following awards of exemplary damages are justified for each breach:

a. For failure to install extractor fans in breach of the ventilation standard, I award $2,400, being 33% of the maximum available award to reflect the

3 [NAME] v [NAME] TT 1815/00, DC Auckland,1/5/2001 4 [COMPANY] T/A Strata Property Management v Sweeney and Sundahl [2021] NZDC 16182

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seriousness of failing to comply over a period of 2 years and 7 months (25 May 2022 to 7 January 2025);

b. For failure to maintain windows, I award $1,200, being 16.6% of the maximum award, recognising that some, but not all, windows were fixed during the tenancy.

47. I have not awarded the maximum available of $7,200 as I am not aware that the landlords have previously committed similar breaches. However, I consider the total award of $3,600 is appropriate and justified to mark disapproval of the landlords’ conduct.

Are the landlords liable for a further award of exemplary damages for failing to comply with a 14-day notice?

48. The above awards also address the landlord’s failure to comply with the 14-day notice served on them by the tenants on 18 December 2024. The tenants are not entitled to a separate and further exemplary damages award for the failure as they claimed.

Did the landlords alter the tenancy agreement?

49. The tenants gave notice on 10 December 2024 to end the tenancy on 23 December 2024. They say that the landlord accepted this notice in a telephone call, and they discussed having a final inspection on 22 December 2024. Subsequently, the landlord sent an email on 18 December 2024 advising that the law required the tenants to give 28 days’ notice at the time. Therefore, the end date would be 7 January 2025. The tenants sent a reply email acknowledging the new date and advising that the end of tenancy inspection should be deferred until closer to the end date

50. The tenants argue that the landlord altered the end date agreed by the parties unlawfully. However, the landlord denies orally agreeing to less than the legal notice required and say they simply insisted on the notice required under the RTA. I am also satisfied that the tenants agreed to the end date proposed by the landlord in their reply email. For those reasons, the claim is dismissed.

51. As the tenants have substantially succeeded in the proceedings they are entitled to reimbursement of the filing fee.

[NAME], 21 May 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.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].

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/