[2020] NZTT Tauranga, 4214884 and 72 others (refer to appendix) TENANCY TRIBUNAL AT Tauranga APPLICANT: The Chief Executive, Ministry of Business, Innovation and Employment Applicant RESPONDENT: Bay City Rentals Tga Limited, Nigel David Walker Landlord TENANCY ADDRESSES: Refer to appendix ORDER 1. By consent, Nigel David Walker is removed as a party to the claim. 2. The application for exemplary damages for failure to provide an insulation statement in relation to application 4215172 is withdrawn. 3. Bay City Rentals Tga Limited is to pay The Chief Executive of the Ministry of Business, Innovation and Employment $16,417.14, calculated as set out in the table below and in the Appendix, by 9 March 2020. Award Amount No. of orders Total Exemplary damages - bond $150.00 73 $10,950.00 Exemplary damages- insulation $75.00 53 $3,975.00 Costs $20.44 73 $1,492.12 Total Award $16,417.12 Reasons: 1. The Chief Executive of the Ministry of Business, Innovation and Employment has filed claims against Bay City Rentals Tga Limited and Nigel David Walker under s 124A(1)(a) Residential Tenancies Act 1986, alleging failure to provide compliant insulation statements and failure to lodge bonds within 23 working days. __________________________________________________________________________________ 4214884 1 2. Both parties attended the hearing on 29 January 2020, where all claims were heard together under s 124B(4) RTA. MBIE was represented by Ms Pragji and Ms Lyons-Montgomery. Bay City was represented by the sole director Mr Walker. 3. MBIE withdrew all the claims against Mr Walker, and withdrew the insulation claim against Bay City in relation to application 4215172. Pre-hearing issues 4. A pre-hearing conference was held on 8 January 2020. Ms Pragji and Mr Walker attended by teleconference. An order was made setting out directions for any further evidence to be provided. The hearing date of 29 January was confirmed. 5. Mr Walker subsequently informed the Tribunal he did not receive the hearing notice and order in a timely way. However, he was able to file his evidence before and at the hearing, and he did not request an adjournment. Details of the claim 6. Bond: MBIE has filed 73 applications. All 73 applications allege failure to comply with duties relating to bonds: 7. Insulation statement: In 53 of the applications, MBIE alleges that Bay City did not provide a compliant insulation statement in the tenancy agreement. In 32 cases an insulation certificate was later sent to the tenant. Background 8. Bay City Rentals Tga Limited was incorporated on 2 December 2014. Initially Mr Walker was an employee of the company. On 18 April 2019 Mr Walker became the director and shareholder of the company. 9. In January 2019 MBIE became aware of allegations Bay City had not lodged bonds. In February it asked Bay City to provide relevant documentation. In June MBIE interviewed Mr Walker. It later provided a spreadsheet of the allegations, to which he provided comments and documentary evidence. Did Bay City fail to lodge bonds within 23 working days? 10. Mr Walker accepts that Bay City failed to lodge the 73 bonds within 23 working days: a. In five cases the bond was not lodged b. In 68 cases the bond was lodged more than 23 working days after being received. In 62 of those cases, the bonds were lodged during a period 6 between March 2019 to 10 April 2019. The law 11. A landlord must send any bond payment to the Bond Centre within 23 working days after the payment is received (s 19(1) RTA). Breaching this obligation is an __________________________________________________________________________________ 4214884 2 unlawful act for which the Tribunal may award exemplary damages up to a maximum of $1,000.00 (s 19(2) and Schedule 1A RTA). 12. 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 (s 109(3) RTA). Should exemplary damages be awarded and, if so, how much? 13. Where a landlord fails to lodge the bond, the starting point for a first incident is usually about one-third of the maximum. Mitigating and aggravating factors are then taken into consideration. Where the bonds have been lodged late I normally discount the usual award by about 50%. 14. Intention: The aggravating factor in this case is the number and frequency of the breaches. The delay in lodging bonds ranges from 31 to 701 working days, with the average 266. 15. Bay City was fully aware bonds were continually not being lodged. Mr Walker says there was an issue with money being transferred between accounts and an incident where a cheque was dishonoured because of a delay in transferring the money. He also referred to an incident where a bond had to be paid out where it was lodged to the wrong name. However, this provides neither an excuse nor a reasonable explanation for the administrative processes not being corrected. 16. I have previously dealt with a claim against Bay City for late lodgement of a bond Crichton v Bay City Rentals Tga Limited [2018] Tauranga 4153013, 4154535. In that case there was an initial joint tenancy. The bond was not lodged. The tenancy was later transferred to one of the tenants. The landlord paid out the departing tenant’s share of the bond and received further bond for the remaining tenant. Again, it was not lodged. Because there were effectively two breaches, I did not mitigate the usual penalty and awarded exemplary damages of $300.00. 17. The Crichton decision was in September 2018, and the landlord did not start lodging the bonds it was holding until approximately six months later. The delay was unacceptable. 18. As a mitigating factor, ownership of the company was transferred to Mr Walker in April 2019. He says the process for handling bonds has been corrected so that they are now lodged immediately. I accept his evidence. 19. Effect on tenants and tenants’ interests: In four of the five cases where the bond was not lodged at all, Bay City has provided written confirmation from the tenants that the bond was repaid promptly after the tenancy. 20. Bay City has also provided numerous other references from past and present tenants attesting to Mr Walker’s honesty and integrity and his commendable qualities as a landlord. In about half of the cases the tenants said Mr Walker __________________________________________________________________________________ 4214884 3 admitted the delay in lodging the bond and said they were not particularly concerned. 21. As Mr Walker was the public face of the business, I accept that the character references are relevant and provide mitigation. 22. However, I have not given any weight to the statements by some of the tenants that they were not concerned about the delay in lodging the bond. There can be a power imbalance between landlords and tenants, and tenants can be reluctant to complain about their landlord. A landlord cannot substitute their own processes for those prescribed by the RTA. Unless a valid claim is made against the bond, it remains the tenant's property. If it is retained by the landlord, they can obtain an unfair tactical advantage in any dispute. 23. Public interest: There is a strong public interest in maintaining the integrity of the bond system. Therefore, deterring other landlords from bypassing the system is a legitimate consideration in calculating exemplary damages. Here the bond money totalled $136,328.00. That is a substantial amount of money withheld from the Bond Centre for a substantial period of time. 24. Discretionary factors: An award of exemplary damages is discretionary and section 109(3) requires that it be “just” to make an award. There is no doubt that it would be just to award exemplary damages. The real issue is how much. MBIE has suggested a figure of $200.00 for each breach. 25. The relevant factors in each case will vary slightly, for example, the length of time the bond was not lodged, and the degree of tenant knowledge. It is appropriate however to take a broad approach and fix the same amount for each unlawful act. 26. If this was a claim brought by a single tenant, it is likely that I would award more than in the Crichton case, because of the previous breach. However, it is relevant to weigh the repetitive nature of the unlawful acts against the totality of the penalty imposed. I have taken into account the change in ownership of the company and Mr Walker’s assurance that the correct processes are now in place. I have also taken into account that Mr Walker's fully co-operated with the investigation. 27. Taking these factors into account I have awarded exemplary $150.00 for each breach. Did Bay City fail to include compliant insulation statements in the tenancy agreements? The law 28. Since 1 July 2016, every new tenancy agreement has required an insulation statement specifying: __________________________________________________________________________________ 4214884 4 a. Whether there is, at the date of the agreement, insulation in the ceilings, floors and walls. b. Details of the location, type, and condition of the insulation. c. If the landlord has not been able to obtain any of the required information, despite making reasonable efforts, the statement must specify what information cannot be obtained and why (s 13A(1A)-(1C) RTA). 29. A landlord commits an unlawful act, for which the Tribunal may award exemplary damages up to $500.00, if they: a. Fail to include an insulation statement in the tenancy agreement b. Include anything in the statement that they know to be false or misleading (s 13A(1F) and Schedule 1A RTA). Did Bay City breach this requirement? 30. MBIE alleges that in 53 of the agreements Bay City did not include a compliant insulation statement. In many cases the agreement recorded that insulation was to be assessed later. In other cases the statement referred to there being compliant insulation but did not specify its type or condition. Bay City did not dispute the allegation. 31. Bay City provided insulation certificates obtained between October 2017 and July 2019, 32 of which related to the properties. In some cases the certificates covered more than one tenancy, and some of them were for properties where there was a compliant insulation statement. 32. The delay between the tenancy agreements being signed and insulation certificates being provided varied greatly: from as little as a month to over two years. The average delay was just over nine months. 33. Mr Walker says that even with new builds, he did not want to include information about insulation in the tenancy agreement that might be inaccurate. While this may have been an honestly held belief, it was not well-founded as this would have only been unlawful if inaccurate information was knowingly included. Should exemplary damages be awarded and, if so, how much? 34. I find that the failure to provide accurate insulation statements was intentional. The same four factors apply as for the failure to lodge bonds. 35. The breaches in this case were less serious than in relation to the bonds, which is reflected in the lower maximum penalty. MBIE has suggested $100.00 for each breach. 36. The nature and extent of the breaches vary in relation to: the information included in the insulation statement, the time that elapsed before an insulation certificate was provided, and the degree to which the existing insulation complied with the __________________________________________________________________________________ 4214884 5 requirements under the RTA. As with the bond breaches, it is reasonable to calculate an average award. 37. I accept that Bay City was largely motivated by an intention to provide accurate information about insulation as and when it was available, rather than by a desire to avoid its responsibilities, although in at least one case the insulation statement was still non-compliant even though the tenancy agreement was signed after the certificate was obtained. 38. There is no specific evidence about the effect of the breaches on the tenants. They were however entitled to be informed as fully as possible about the state of the insulation at the start of the tenancy. 39. There is a strong public interest in ensuring that landlords comply with their obligations and do not seek to write their own rules. 40. The factors discussed in relation to the bonds are equally relevant here. The starting point is about one-third of the maximum. The number and frequency of the breaches is an aggravating factor, but there is also the totality aspect to consider. 41. MBIE has suggested an award of damages that is half the recommended amount for the bond breaches. That proportionality is reasonable and, to maintain it, I have awarded $75.00 for each breach. 42. Because of the total amount awarded, I have given Bay City 14 days to pay. Should costs be awarded? 43. Because MBIE has succeeded with the claim I have awarded the filing fee for each application. __________________________________________________________________________________ 4214884 6 Appendix Reference Tenant name Address Section 4214884 Ajit Chaudhary, P D, Ashish Rasayali 44 Topaz Drive, Papamoa Beach, Tauranga Section 19(1)(b) Section 13A(1A) 4215051 Amber Stacey Whelan 9 Delta Close, Pyes Pa, Tauranga Section 19(1)(b) Section 13A(1A) 4215045 Ana Niua 12F Hayes Avenue, Greerton, Tauranga Section 19(1)(b) Section 13A(1A) 4215058 Bridie Jean Wakelin, Matthew Yardley 866 Papamoa Beach Road, Papamoa Beach, Tauranga Section 19(1)(b) Section 13A(1A) 4215071 Camille Parker, Peter Betham 1168 Papamoa Beach Road, Papamoa Beach, Tauranga Section 19(1)(b) Section 13A(1A) 4215063 Cathy Renner 10a Stirling Grove, Tauranga Section 19(1)(b) 4215065 Chad George 181 Otumoetai Road, Otumoetai, Tauranga Section 19(1)(b) Section 13A(1A) 4125097 Christopher Savage 21 Boulder Lane, Pyes Pa, Tauranga Section 19(1)(b) Section 13A(1A) 4215128 Constance Hall, Michael Hall 418 Maungatapu Road, Maungatapu, Tauranga Section 19(1)(b) 4215171 Courtney Sly, Ben Herder 7 Mulberry Lane, Otumoetai, Tauranga Section 19(1)(b) Section 13A(1A) 4215172 Darren William James Mantell 10A Stirling Grove, Greerton, Tauranga Section 19(1)(b), 4215174 Davina Milgrew 20 Highfield Crescent, Brookfield, Tauranga Section 19(1)(b) Section 13A(1A) 4215162 Dayna McVeagh 1252B Cameron Road, Greerton, Tauranga Section 19(1)(b) Section 13A(1A) 4215180 Fem Ryan 210B Fourteenth Avenue, Tauranga South, Tauranga Section 19(1)(b) Section 13A(1A) 4215166 Fern Ryan 35B Kiteroa Street, Greerton, Tauranga Section 19(1)(b) Section 13A(1A) 4215225 Fern Ryan 163 Maungatapu Road, Maungatapu, Tauranga Section 19(1)(b) Section 13A(1A) 4215227 Fern Ryan (CEO, Connexu) 99B Eighth Avenue, Central City, Tauranga Section 19(1)(b) Section 13A(1A) 4215229 Gail Thompson 18 Merivale Road, Merivale, Tauranga Section 19(1)(b) Section 13A(1A) 4215253 Gerald Roelofsz, Susannah Roelofsz 23 Hugo Way, Papmoa Beach, Tauranga Section 19(1)(b) Section 13A(1A) 4215238 Glenn Richard Jobson, Dawn Herbert 113 Otumoetai Road, Tauranga Section 19(1)(b) 4215240 Greg Jonas, Leeza Miller-Edwards 4 Scarr Lane, Pyes Pa, Tauranga Section 19(1)(b) __________________________________________________________________________________ 4214884 7 4215259 Hannah Rachel Brown 33 Percival Avenue, Matua, Tauranga Section 19(1)(b) Section 13A(1A) 4215265 Inseok Ko, Minyoung Kim 96c Sixteenth Avenue, Tauranga Section 19(1)(b) 4215269 J J Englebrecht, Randri Nicole Englebrecht 395B Ngatai Road, Otumoetai, Tauranga Section 19(1)(b) 4215246 Jamie Ganderton 19 Mamaku Rise, Welcome Bay, Tauranga Section 19(1)(b) Section 13A(1A) 4215271 John Anderson 1248A Cameron Road, Greerton, Tauranga Section 19(1)(b) Section 13A(1A) 4215312 John Janes, Penny Janes 38 Russley Drive, Bayfair, Tauranga Section 19(1)(b) Section 13A(1A) 4215315 Josie Third 42 Holcombrooke Lane, RD 5, Tauranga Section 19(1)(b) Section 13A(1A) 4215331 Juyeon Woo 53 Santa Barbara Drive, Papamoa Beach, Tauranga Section 19(1)(b) Section 13A(1A) 4215321 Kamalpreet Singh 1248B Cameron Road, Greerton, Tauranga Section 19(1)(b) Section 13A(1A) 4215362 Karen Rumble Unit 2, 18 Ashley Place, Papamoa Beach, Tauranga Section 19(1)(b) Section 13A(1A) 4215363 Kate Achilles 17B Rutherford Street, Otumoetai, Tauranga Section 19(1)(b) Section 13A(1A) 4215371 Kiyko Nakano 63 Brookfield Terrace, Brookfield, Tauranga Section 19(1)(b) 4215373 Kristel Phillips 38 Landing Drive, Pyes Pa, Tauranga Section 19(1)(b) 4215374 Leah Friss Unit 9, 31 Reynolds Place, Papamoa Beach, Tauranga Section 19(1)(b) 4215375 Louise McKain, Michael McKain 72B Meander Drive, Welcome Bay, Tauranga Section 19(1)(b) Section 13A(1A) 4215376 Maure Nimo 73a Esmeralda Street, Welcome Bay, Tauranga Section 19(1)(b) Section 13A(1A) 4215377 Melissa Hoete, Graham Hoete 1166A Papamoa Beach Road, Papamoa Beach, Tauranga Section 19(1)(b) Section 13A(1A) 4215366 Michael Brown, Kylee Soanes 395B Ngatai Road, Otumoetai, Tauranga Section 19(1)(b) Section 13A(1A) 4215379 Michael Gerard Woodnut 15 Jude Way, Brookfield, Tauranga Section 19(1)(b) Section 13A(1A) 4215369 Mustasam Munir 96B Sixteenth Avenue, Tauranga South, Tauranga Section 19(1)(b) 4215380 Nicole Kanimako, Kokoira Kanimaku 53 Puhirake Crescent, Pyes Pa, Tauranga Section 19(1)(b) 4215381 Nigel Gordon, Akram Hossain 40A Tui Street, Mt Maunganui, Tauranga Section 19(1)(b) Section 13A(1A) __________________________________________________________________________________ 4214884 8 4215382 Paula Hadland, Tony Saunders 27 Sylvania Drive, Matua, Tauranga Section 19(1)(b) Section 13A(1A) 4215183 Paula Vickers Unit 2, 18 Ashley Place, Papamoa, Tauranga Section 19(1)(b) Section 13A(1A) 4215670 Penina Bennett, Alexander Bennett 8 Tautara Place, Ohauiti, Tauranga Section 19(1)(b) 4215682 Petua Williams 67 Oteki Park Drive, Welcome Bay, Tauranga Section 19(1)(b) Section 13A(1A) 4215697 Renee Gardner 86 Links Avenue, Mt Maunganui South, Tauranga Section 19(1)(b) 4215687 Robert Reweti 139 Princess Road, Otumoetai, Tauranga Section 19(1)(b) Section 13A(1A) 4215690 Roddy Thompson, Joseph Thompson Unit 3, 17 Puriri Street, Mt Maunganui, Tauranga Section 19(1)(b) Section 13A(1A) 4215706 Ross Carter 27 Te Paea Crescent, Papamoa Beach, Tauranga Section 19(1)(b) Section 13A(1A) 4215709 Roy Jesen 8 Greenvale Place, Welcome Bay, Tauranga Section 19(1)(b) Section 13A(1A) 4215734 Sam Wright 164 The Boulevard, Papamoa Beach, Tauranga Section 19(1)(b) Section 13A(1A) 4215737 Samsud Dean 53A Puhirake Crescent, Pyes Pa, Tauranga Section 19(1)(b) Section 13A(1A) 4215721 Samuel O'Dwyer, Sharne May 44b Topaz Drive, Papamoa Beach, Tauranga Section 19(1)(b) 4215741 Saran Fell, Shervon Lingman 22 Arawata Avenue, Welcome Bay, Tauranga Section 19(1)(b) 4215759 Shane Ashby, Brenda Roberts 17C Belray Place, Papamoa Beach, Tauranga Section 19(1)(b) Section 13A(1A) 4215776 Simon Ritsan 1 Sharman Place, Pyes Pa, Tauranga Section 19(1)(b) 4215780 Susannah Lin 20 Tory Way, Omokoroa Beach, Western Bay Of Plenty Section 19(1)(b) Section 13A(1A) 4215783 Talaa Mataika 60A Merivale Road, Parkvale, Tauranga Section 19(1)(b) Section 13A(1A) 4215787 Tania M Browne 16A Wade Place, RD 5, Tauranga Section 19(1)(b) Section 13A(1A) 4215789 The Salvation Army NZ Trust 573 Maunganui Road, Mt Maunganui, Tauranga Section 19(1)(b) Section 13A(1A) 4215812 The Salvation Army NZ Trust 39B Sherson Street, Greerton, Tauranga Section 19(1)(b) 4215815 The Salvation Army NZ Trust 72 Tom Muir Drive, Gate Pa, Tauranga Section 19(1)(b) 4215797 The Salvation Army NZ Trust Unit 4, 208 Fourteenth Avenue, Tauranga South, Tauranga Section 19(1)(b) __________________________________________________________________________________ 4214884 9 4215800 Tia Morgan 6A Sharyn Place, Brookfield, Tauranga Section 19(1)(b) Section 13A(1A) 4215818 Tonci Barcot 11A Wellesley Grove, Gate Pa, Tauranga Section 19(1)(b) Section 13A(1A) 4215819 Tracey Coker 159A Maungatapu Road, Maungatapu, Tauranga Section 19(1)(b) Section 13A(1A) 4215833 Tuki-Kelly Maaka 5 Tudor Place, Mount Maunganui Section 19(1)(b) Section 13A(1A) 4215823 Tyson Tainui, Nicole Paora 38 Landing Drive, Pyes Pa, Tauranga Section 19(1)(b) Section 13A(1A) 4215826 Vanessa Gamble 23A Princess Road, Bellevue, Tauranga Section 19(1)(b) Section 13A(1A) 4215836 Varisila Rokocakau Unit 22, 6 Durham Street, Central City, Tauranga Section 19(1)(b) Section 13A(1A) 4215838 Wayne Hastie 28 Nicole Place, Papamoa Beach, Tauranga Section 19(1)(b) Section 13A(1A) J Smith 24 February 2020 __________________________________________________________________________________ 4214884 10 Please read carefully: Visit 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 $200. 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 0800 233 222 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/enforcingdecisions or phone Tenancy Services on 0800 836 262. 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 0800 836 262 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 0800 836 262. __________________________________________________________________________________ 4214884 11