Tenant wins rent arrears but avoids exemplary damages

[2025] NZTT 5042995, 4989928

TENANCY TRIBUNAL AT MANUKAU | TE TARAIPIUNARA RETIHANGA KI MANUKAU

APPLICANT: [redacted]

Landlord

RESPONDENT: [redacted]

Tenant

TENANCY ADDRESS: [ADDRESS], [ADDRESS], [POSTCODE]

ORDER

1. [NAME] must pay [NAME] $4,846.67 immediately, calculated as shown in table below.

Description Landlord Tenant Rent arrears to 8 December 2024 $6,046.67 Exemplary damages: breach of section 23(1)(a) in requiring rent in advance of 2 weeks

$1,200.00

Total award $6,046.67 $1,200.00 Net award $4,846.67 Total payable by Tenant to Landlord $4,846.67

2. All other claims are dismissed.

Reasons:

1. Both parties attended the hearing on 10 February 2025. The landlord is represented by counsel [NAME]. The tenant is represented by her children [NAME].

2. The landlord has applied for rent arrears, compensation, exemplary damages, and reimbursement of legal costs following the end of the tenancy.

3. The tenant has applied for compensation and exemplary damages.

4. I first address the substantive claims by the landlord before turning to the tenant’s claims.

How much is owed for rent?

5. The landlord seeks an order for rent arrears to 8 December 2024, which is the date that actual possession was returned to the landlord when the landlord managed to gain access to the premises. I accept that the tenancy ended on 8 December 2024 in the circumstances.

6. The next issue is to do with the calculation of rent to that date.

7. The tenant disputes the landlord’s rental calculations.

8. The tenant considers that the rent has been fully paid for the period 1 December 2023 to 03 December 2024, in advance.

9. I have in my earlier order dated 30 September 2024 under application 4801097 required the landlord to refund rent that had been overpaid.

10. While the landlord failed to comply with that order (and continued to withhold the tenant’s money), the rental continues to accrue until the date possession is returned to the landlord.

11. I reject the tenant’s submission that the landlord unlawfully increased rent because rent has allegedly been paid in advance.

12. Given that the parties were on a periodic tenancy, the landlord is entitled to increase the rent as the landlord has done from $192.30 per week to $1,000 per week through a notice issued on 13 August 2024.

13. The rent was never increased in the last 12 months. I also note that the rent was never increased in the past 10 years when the tenancy first commenced.

14. The landlord has duly complied with section 24 of the Residential Tenancies Act 1986 (‘RTA’) with at least 60 days’ written notice.

15. The tenant’s submission that “she had already paid rent in full for the period” is misconceived. There was no issue of the landlord retroactively imposing a higher rent at all when the notice of rent increase dated 13 August 2024 was served on the tenant. I accept the landlord’s rental calculations set out in the rent summary that as of 1 November 2024, the advance rent or rental credit has been exhausted and the rent arrears were $760.93 as of 1 November 2024.

16. The landlord’s failure to refund the overpaid rent as required by my order of 30 September 2024 does not take away the landlord’s right and entitlement under the RTA to increase the rent. As long as the provisions set out under section 24 RTA has been complied with, the landlord is still able to increase the rent for this periodic tenancy. The landlord’s failure to comply with my order of 30 September 2024 in respect of overpaid rent (at the material time) will be

addressed and dealt with separately and subsequently, below, after I have traversed the landlord’s claims.

17. In my order of 30 September, I noted at [57] that:

“Now that the parties’ rights and responsibilities have been clarified above, they are at liberty to look to the RTA to enforce them by serving relevant notices to fix, notice to terminate the tenancy (under permitted grounds under the RTA) and for the landlord increase the rent under the RTA accordingly if she sees fit….”

18. The tenant could have avoided the imposition of the increased rent if she vacated prior to 12 October 2024 when the rental increase took effect. Naturally, the tenant is required to give the required 28 days’ notice to vacate prior to that date.

19. Given that the landlord had already given a notice dated 13 August 2024 for the tenant to vacate on 15 October 2024, the tenant could also have vacated (and handed possession back to the landlord) on 15 October 2024 without additional notice and if so, the tenant’s liability to pay the increased rent is limited to the period from 12 to 15 October 2024.

20. However, the tenant only handed back possession to the landlord on 8 December 2024 and accordingly, rent continues to accrue daily, and at the increased rent, to that date.

21. I therefore uphold the landlord’s claim for rent arrears of $6,046.67.

22. The landlord provided rent records which prove the amount owing at the end of the tenancy.

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

23. On 13 August 2024, the landlord served a 63 days’ notice of termination on the tenant pursuant to section 51(1)(a) RTA. The tenant was required to quit the premises on 15 October 2024 but failed to do so until early December 2024.

24. A tenant must vacate the premises on the termination of the tenancy. See section 40(1)(e)(i) of the Residential Tenancies Act 1986.

25. Breaching this obligation without reasonable excuse is an unlawful act for which exemplary damages may be awarded up to a maximum of $1,500.00. See section 40(3A)(a) and Schedule 1A Residential Tenancies Act 1986.

26. By failing to recognise and vacate on the expiry of the landlord’s notice, I consider that the tenant has committed an unlawful act.

27. 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) Residential Tenancies Act 1986.

28. The tenant believes that the rent has been paid in advance to 3 December 2024. The landlord had failed to refund the rent paid in advance as ordered by the Tribunal on 30 September 2024. The tenant maintains that they were entitled to stay until 3 December 2024 to which they did.

29. Having regard to the tenant’s intent and to a large part the landlord’s own corresponding failure to pay the monies ordered by me on 30 September 2024 under application number 4801097, I do not consider it just or appropriate to award exemplary damages against the tenant. I consider that the landlord has been sufficiently compensated by an order for payment towards rent arrears to 8 December 2024 which is the date that actual possession had been returned to the landlord (which included increased rent).

30. Essentially, I have dismissed the claim for exemplary damages under section 40(3A)(a) RTA because I do not consider that the tenant has intentionally breached that provision. I consider that the tenant has only inadvertently breached that provision based on the issue of payment of rent in advance (which the tenant incorrectly but genuinely held) and the failure by the landlord to comply with my order of 30 September 2024.

31. Had the landlord complied with the order of 30 September 2024, the outcome of the landlord’s claim under section 40(3A)(a) RTA may have been different.

Did the tenant change the locks of the premises?

32. The landlord claims the tenant has altered the locks without the landlord’s consent.

33. A landlord must provide and maintain locks to ensure that the premises are reasonably secure. Neither the landlord nor the tenant may alter or remove any locks without the other party's consent. See section 46(1) and (2) Residential Tenancies Act 1986.

34. The landlord claims that the lock to the front door of the premises was different from the lock that existed when the landlord stayed at the premises on her last visit to New Zealand in November 2024.

35. The onus of proving that the lock has been changed without the other party’s consent is on the claimant, ie., the landlord in this instance.

36. I prefer the tenant’s evidence that she had never changed the lock to the front door at all.

37. The tenant submitted a photo of the front door showing the deadbolt lock and knob lock.

38. The tenant has previously noted that the door knob on the front door had jammed when she tried to lock it, resulting in difficulty when locking or unlocking.

39. The tenant used lubricant on the door knob when it jammed but mostly accessed the house through the garage.

40. For those reasons, I dismiss the landlord’s claim for $480 to replace the front door lock.

Did the tenant remove chattels and personal belongings of the landlord?

41. The landlord claims the tenant has removed their personal belongings left behind at the premises and chattels provided to the tenant at the start of the tenancy in November/December 2013. The landlord seeks damages totalling over $20,000.

42. 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.

43. The onus of proving lost or unreturned personal property and chattels lies with the claimant, ie., the landlord.

44. The landlord adduced a written statement by [NAME]. The landlord says that some of the missing items of furniture belong to Ms [NAME]. The landlord claims that a huge amount of items/stuff that they brought to the house from Taiwan in 1989 had been removed.

45. The landlord claims that items were still there during their previous visits. Collectibles were put in boxes and under the stairs. The master bedroom had been specifically reserved for the landlord’s use. The landlord had not visited the premises for 5 years because of COVID19. On their last visit, they discovered items have been removed from the master bedroom. The landlord is adamant that they lost a lot of treasured belongings such as special clay tea sets, top of the range teas, and bottles of liquor aged over 30 years old.

46. However, there was no list of chattels or photographs of what chattels were included in the tenancy at the start of tenancy. There was also no objective evidence of what personal belongings of the landlord had been left at the premises.

47. It is incumbent on the landlord to show what specific items were provided to the tenant and what personal belongings had been left behind at the start of the tenancy, and what have not been returned.

48. While some chattels and furniture have been provided, I am unable to conclude from the evidence as to which specific items were provided to the tenants at the start of the tenancy and which specific items have not been returned.

49. It is not in order for the Tribunal to simply make a determination based on conjecture and estimation of what items may have been provided and what is missing. Such a ruling would be founded primarily on guesswork.

50. Consequently, the landlord has failed to discharge the onus of proving the claim for compensation for lost chattels and personal belongings. No chattels list was stated on the tenancy agreement; there is simply no objective evidence of what has been provided.

51. The tenant’s children state that no chattels were provided to them when they moved in, they had their own furniture. Because there were no chattels provided, there is a bed in the master bedroom, chairs and drawers they later removed. The tenant says a friend of the landlord collected items during the process. Surplus of chattels in storage had been released back to the owners.

52. The parties’ respective oral evidence was in direct conflict.

53. However, it is for the landlord to prove their claim to do with lost items. In the upshot, I am unable to find on balance what the items were, how much they are worth and to what extent.

54. I accordingly dismiss the landlord’s claim in respect of lost chattels and personal belongings.

Did the tenant sublet and/or part with possession of the property during the tenancy without the landlord’s consent?

55. The landlord claims on around 7 November 2024, it came to the landlord’s knowledge that the tenant and/or her children had in breach of the tenancy agreement and the Residential Tenancies Act, sublet the property and parted with possession of the property on two instances.

56. Article 8 of the tenancy agreement states that the tenant shall not, without the landlord’s consent, privately lend, sublet, transfer, or allow others to use the leased premises in whole or in part by any other means.

57. Section 44 RTA on subletting or parting with possession by tenant states:

(1) There may be included in a tenancy agreement a provision that expressly and unconditionally prohibits the tenant from subletting or parting with possession of the premises during the term of the tenancy.

(2) In the absence of such a provision, the tenant may at any time during the tenancy sublet or otherwise part with possession of the premises with the prior written consent of the landlord and in accordance with any conditions attached to that consent by the landlord.

(2A) A tenant commits an unlawful act if he or she sublets or otherwise parts with possession of the premises—

(a) in contravention of a provision of the kind described in subsection (1); or

(b) in any other case, without the prior written consent of the landlord.

(3) The landlord shall not withhold that consent unreasonably, nor attach any unreasonable conditions to it.

58. The landlord says that through investigations discovered since at least end July/August 2024, the tenant and/or her occupant had sublet the property to two males without the consent or knowledge of the landlord. The landlord says they do not have information on the amount that the tenant and/or her children have received from the subletting.

59. Private investigator [NAME] on 25 October 2024 made enquiries if tenants are still residing there. He spoke with neighbours who told him that rear windows have been blocked out.

60. In the process of serving documents on the tenant, the private investigator observed 2 younger men, who he says were not the children of the tenant, at the premises.

61. However, the landlord’s above evidence is insufficient to show unlawful subletting having occurred.

62. The private investigator’s evidence was based largely on hearsay evidence from neighbours. His own observations are far short of reliable evidence that any unlawful subletting has occurred. At best, the private investigator’s evidence is conjectural.

63. It is also to be noted that tenants may have guests, including overnight guests, staying at the premises under the residential tenancy. It is not a breach of the tenancy agreement or the RTA to have guests or other people on the premises.

64. The tenant’s daughter [NAME] says that on occasions, her boyfriend had stayed over at the premises. I do not consider this concession to be a breach of the tenancy agreement or the RTA. Further, the tenant’s son [NAME] also stays at the premises, with the express knowledge of the landlord.

65. Therefore, the landlord’s claim that the tenant and/or her occupants had sublet the property to two males without the consent or knowledge of the landlord has not been substantiated.

66. Similarly, the landlord’s claim that other people named [NAME] and [NAME] were also living there at various times during the tenancy is unproved.

67. I accept the tenant’s evidence that [NAME] is merely an alias of the tenant’s daughter [NAME]. She is known to the landlord and had been expressly permitted to stay there since the inception of the tenancy.

68. The fact that the premises is recorded as an address for [NAME] on the Companies Register is neither here nor there. Mere record of an address on the Companies’ register is not direct proof of one’s residence at that location.

69. I prefer the tenant’s evidence that [NAME] is a business associate of the tenant’s daughter [NAME]; I accept the tenant’s evidence that [NAME] resides in Hong Kong at all material times. Whether that fact (to do with a non-resident recording that his residential address is in New Zealand) may contravene other New Zealand laws in respect of his stated residential address, whether as director or shareholder, of companies incorporated in New Zealand is not a matter which falls under the purview of the Tenancy Tribunal. The material fact remains that it has not been shown that [NAME] has actually resided at the premises during the tenancy in breach of Article 8 of the tenancy agreement.

70. For those reasons, the landlord’s claims about alleged subletting fail.

71. The landlord also claims that the tenant had given exclusive use of property from 16 to 26 September 2024 to a film crew.

72. The landlord says that on 30 August 2024, the tenant’s daughter, [NAME], represented herself to be the owner of the property and entered into an agreement to loan the property to [COMPANY], a film crew for filming purposes for the period 16 September 2024 to 26 September 2024. The film crew paid $7,360 (inclusive of GST) to a bank account belonging to [COMPANY], a company with [NAME] as the sole shareholder and director.

73. The landlord considers such use to be a parting of possession of the premises in breach of Article 8 of the tenancy agreement and section 44 RTA.

74. However, I find that the tenant has not contravened the tenancy agreement or the RTA when they permitted filming to be carried out at the premises.

75. I accept the tenant’s daughter [NAME]’s account that she allowed the film crew to use premises during business hours for about a week. The tenant and her children were still living at the premises at the time.

76. The film crew never stayed or resided at the premises.

77. I find that there is no unlawful parting of possession in the circumstances.

78. I also consider that the tenant’s permission to a commercial entity to film at the premises for a brief period of time to be a lawful use of the premises.

79. Under section 40(1)(b) RTA, the tenant is to ensure that the premises are occupied principally (rather than solely) for residential purposes.

80. Under section 38 RTA, the tenant shall be entitled to have quiet enjoyment of the premises without interruption by the landlord or any person claiming by, through, or under the landlord or having superior title to that of the landlord. Subsection (2) also provides that the landlord shall not cause or permit any

interference with the reasonable peace, comfort, or privacy of the tenant in the use of the premises by the tenant.

81. I consider that the rights of a tenant to peaceful and quiet enjoyment of the premises under section 38 RTA extends to the tenant or the tenant’s daughter granting permission to a film crew to film at the premises in the daytime; the tenant’s daughter works from home.

82. Naturally, if the nature of the tenant’s vocation causes unreasonable interruption to the use and quiet enjoyment of other persons residing in the neighbourhood, that use of the tenanted premises would not be permitted. An obvious example is when a welder uses the residential premises to weld heavy machinery which industrial use of the premises is inconsistent with the residential purpose of the premises.

83. Here the landlord has not alleged any interruption to the neighbour’s peace, or conflict with the general residential purposes of the premises. The landlord is only taking issue with the fact that the tenant has derived a commercial undertaking and income from that use. I do not consider such use by itself to be unlawful or in contravention with the parties’ tenancy agreement.

84. To further illustrate this point, if the tenant had been a professional webhost or IT specialist, the mere fact that the tenant has operated a workstation/office converted from a bedroom at the premises and worked remotely from home would not have rendered that carrying of the tenant’s IT profession unlawful nor should it be liable to a claim for account for profit by the landlord.

85. For those reasons, the landlord’s claims for damages and exemplary damages in respect of the use of the premises for filming purposes for a brief period of a week’s duration also fails.

86. For completeness, the landlord’s claim for $1,000 per each of the two alleged instances of breach of s 40(3A)(e) RTA for failing to ensure number of residents does not exceed maximum allowed also fails. There is nothing on the tenancy agreement which specifies a maximum number of persons that may ordinarily reside in the premises during the tenancy. Neither is there any issue of overcrowding during the tenancy. I find that all long-term overnight guests have been accounted for and there has been no subletting at all.

Conclusion on landlord’s claims

87. In the upshot, only the landlord’s claim for rent arrears is successful.

88. I now turn to the tenant’s claims.

Was the oven faulty due to lack of maintenance by the landlord?

89. The tenant claims that the landlord failed to repair the oven which hindered their ability to cook. The tenant contends that the gas stove smelt when being ignited and the oven does not work properly. The tenant says that the fan will not spin, and they can smell electrical burning. Hence the tenant stopped using it and notified the landlord.

90. However, I find on the evidence that the oven was in proper working condition. I accept the 13 December 2024 inspection report by [COMPANY] that the oven was in working condition.

91. It is for the tenant to establish the oven is not working as alleged. There was only viva voce evidence from the tenant in this regard.

92. I therefore dismiss the tenant’s claim for compensation and exemplary damages to do with the oven not being in working condition.

Did the landlord require or keep more than 2 weeks rent in advance?

93. The tenant claims the landlord has required more than two weeks rent in advance or rent before the already paid rent expires.

94. Despite the Tribunal order of 30 September 2024 under application number 4801097 requiring the landlord to immediately refund overpaid rent of $1,538.40 being 8 weeks' advance rent for the 4 October 2024 to 30 November 2024 period, the landlord failed to refund the overpaid rent.

95. A landlord must not require a tenant to pay more than two weeks in advance or rent before the already paid rent expires. See section 23(1) Residential Tenancies Act 1986.

96. 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 23(4) and Schedule 1A Residential Tenancies Act 1986.

97. I consider the landlord’s failure to comply with the order to be an overt act of requiring and keeping of rent in advance of what a landlord may lawfully require. I find the landlord have committed an unlawful act.

98. 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. Section 109(3) Residential Tenancies Act 1986.

99. The landlord apologises for the failure to comply with order to return overpaid rent. The landlord says that this was due to inadvertence because her health is not good.

100. From the date of the Tribunal order of 30 September 2024 to the date of termination of the tenancy on 15 October 2024 (based on the termination notice issued by the landlord) the landlord was in poor health. The landlord claims that she has no online banking facility to make payment to the tenant; the landlord says that the non-compliance is not deliberate.

101. I do not accept the landlord’s excuses for non-compliance. The landlord is legally represented and ought to have been advised to comply with the order for return of overpaid rent immediately. In this day and age, and particularly when rent has been deposited into the landlord’s New Zealand bank account, I do not accept that she does not have online banking facility or unable to arrange for online banking facility to ensure compliance with her obligation as a residential landlord.

102. I consider an award of exemplary damages on the higher end of the scale to be appropriate in the circumstances.

103. In my order of 30 September 2024, I made it clear as follows:

29. The most recent annual rent paid by the tenant of $10,000 on 1 December 2023 pays the rent to 30 November 2024.

30. While the tenant was happy to pay rent annually in advance in the past, the tenant currently seeks the return of overpaid rent under the RTA. This was after the landlord had attempted to serve termination notices to the tenant.

31. Under section 23 RTA, a landlord shall not require the payment of any rent more than 2 weeks in advance. Accordingly, the tenant now requires the landlord to refund rent in excess of what a landlord can lawfully require to be paid in advance under the RTA.

32. The landlord agrees to the return of excess rent paid in advance of what is permitted under the RTA.

33. I accede to the tenant’s claim for refund of 8 weeks’ rent totalling $1,538.40 and the $100.00 accidentally overpaid by the tenant in 2014 as set out in the table above.

34. With the above 8 weeks’ rent being returned to the tenant, rent is now paid to Thursday, 3 October 2024, with the next weekly rent of $192.30 due on Friday, 4 October 2024.

104. For the record, the then unpaid but overpaid rent has since been set-off against the rent arrears which accrued thereafter until 8 December 2024 and which rent arrears included a lawful rent increase which have been ignored by the tenant.

105. Having regard to the above factors, I am satisfied it would be just to make an award of exemplary damages against the landlord for $1,200 for breach of section 23 RTA.

Is the landlord entitled to an award of costs?

106. Finally, I address the landlord’s claim for legal costs (which has been calculated on an indemnity basis) against the tenant.

107. The general principle is costs follow the event.

108. I do not consider that the landlord has been the successful party overall in the proceedings.

109. The landlord has only succeeded in their claim for rent arrears. All other claims totalling about $50,000 were unsuccessful.

110. The tenant was also successful in her claim for exemplary damages for the landlord’s breach of section 23 RTA.

111. Overall, I consider that both parties were partly successful in their respective claims and defence against the other parties’ claims.

112. When viewing the claim in an itemised fashion, the majority of the landlord’s claims had been dismissed; only the claim for rent arrears has been upheld out of a number of claims prosecuted by the landlord’s counsel.

113. By comparison, the tenant was successful on one of her two claims prosecuted during the hearing. In that context, I would consider that the tenant is the more successful party in the proceedings.

114. However, as the tenant is not legally represented, I make no award for costs in favour of either party. See section 102 RTA

115. I conclude that costs should lie where they fall.

116. In the upshot, only the amounts set out in the table above are proved.

[NAME]

24 March 2025

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/

Reasons: