Cavanagh v Egmont Eco Leisure Park
[2022] NZHC 3601
•21 December 2022
IN THE HIGH COURT OF NEW ZEALAND NEW PLYMOUTH REGISTRY
I TE KŌTI MATUA O AOTEAROA NGĀMOTU ROHE
CIV-2021-443-000064
[2022] NZHC 3601
BETWEEN ARAGORN DUNEDAIN CAVANAGH
Appellant
AND
EGMONT ECO LEISURE PARK
Respondent
Hearing: 28 September 2022 Appearances:
L E Hansen for the Appellant Respondent in Person
Judgment:
21 December 2022
JUDGMENT OF GRICE J
Introduction
[1] Mr Cavanagh appeals against a decision of the District Court which allowed an appeal from a determination of the Tenancy Tribunal.1
[2] The background to the appeal relates to the accommodation arrangements between Mr Cavanagh and Egmont Eco Leisure Park (the Leisure Park), owned by Mr Gary Ogle.2 The issue is whether the arrangement between the parties was covered by the Residential Tenancies Act 1986 (the Act).
1 Egmont Eco Leisure Park v Cavanagh [2021] NZDC 21896 [the District Court judgment], on appeal from Cavanagh v Ogle t/a Egmont Eco Leisure Park [2021] NZTT New Plymouth 4295118 [the Tenancy Tribunal decision].
2 Mr Ogle explained that he owns and runs two businesses which are closely connected, namely Egmont Eco Leisure Park, which is a leisure park, and Egmont Eco Lodge, which is a backpackers. While they are run as separate businesses, they are adjoining. For the purposes of this decision, I refer to the businesses together as “the Leisure Park”.
CAVANAGH v EGMONT ECO LEISURE PARK [2022] NZHC 3601 [21 December 2022]
[3] In the hearing before the Tenancy Tribunal, the Tribunal Adjudicator (the Adjudicator) determined that Mr Cavanagh’s accommodation was not excluded under any of the exclusions in the Act.3 Rather, the Adjudicator found that the arrangement was a boarding house tenancy and thus came within the Part 2A jurisdiction of the Act.4 The District Court, however, allowing the appeal, decided that the arrangements between Mr Cavanagh and the Leisure Park were not arrangements which fell within the jurisdiction of the Tribunal, because the accommodation provided by the Leisure Park was excluded under s 5(1)(y) of the Act, which excluded emergency or transitional accommodation for people in need of housing.5
Background
[4]The background was set out in the District Court judgment as follows:
Background
[4] In October 2020, Mr Cavanagh was effectively homeless. He was staying in emergency accommodation in a motel in New Plymouth. His rent was being paid by WINZ. He had been there for a week or two when WINZ advised him that he must move to what they described as “short or long-term” accommodation. What it appears WINZ really meant was somewhere cheaper. They gave Mr Cavanagh a list of places that he could try.
[5] Mr Cavanagh contacted the Egmont Eco Leisure Park, where he spoke to Mr Ogle. Mr Ogle owns Leisure Park, which might be better understood as a camping ground equipped with a variety of types of accommodation and facilities.
[6] Mr Ogle’s business was heavily dependent on the tourist industry. In October 2020 he, like everyone else in the tourist industry, was faced with a serious contraction of his business. He therefore started taking in what might be termed, “WINZ tenants”. He agreed to take on Mr Cavanagh.
[7] Mr Cavanagh signed a document that was headed up: “The boarder will abide by the following rules”. The actual document that Mr Cavanagh signed was not available, but the Tribunal found, as a finding of fact, that a document produced at the hearing that had been signed by another tenant of Leisure Park was probably the same, or very similar, to the document that Mr Cavanagh said he signed. The Tribunal referred to this document as a “boarding house tenancy agreement.”
[8] The Tribunal considered a variety of living arrangements that are excluded by the Act from the Tribunal’s jurisdiction. The Tribunal determined that Mr Cavanagh’s occupation of Leisure Park did not come under the
3 The Tenancy Tribunal decision, above n 1, at [33].
4 At [38]–[42].
5 The District Court judgment, above n 1.
heading of “temporary or transient accommodation such as that provided by hotels and motels”.6 The tribunal found that Mr Cavanagh’s arrangement did not fall under s 5(1)(ta) of the Act, being “structures located within a camping ground”, due to the length of time, being 67 days, that Mr Cavanagh had stayed at Leisure Park. The tribunal also determined that the arrangements were not excluded under s 5(1)(y), which applies to emergency or transitional accommodation where the accommodation has been funded wholly or partly by a government department.
[9] Having run through the possible likely options that would have excluded the Tribunal’s jurisdiction, the Tribunal determined, on the basis of the criteria set out in s 66B of the Act, as well as the document that the tribunal had determined was a boarding house tenancy agreement, that Mr Cavanagh’s arrangement was a boarding house tenancy and thus came within the jurisdiction of the Act.
[5] Mr Ogle is a very experienced operator of leisure park and backpacker lodges. In his submissions, he said he has been in that business for some 50 years. He has apparently been careful to ensure the Leisure Park accommodation was not subject to the Act. The camping ground/backpacking facilities usually operate under an exclusion for cabins and camping grounds specifically provided in the Act. That exclusion to the Act is set out in s 5(1) as follows:
(ta)where the tenant occupies, under a tenancy agreement, a cabin, caravan, vehicle, tent, or other building or structure that—
(i)is located in a camping round subject to regulations under the Health Act 1956; and
(ii)is intended for human habitation for periods not exceeding 50 days in any continuous term of occupancy:
As Mr Ogle explained at the Tribunal hearing, he was not involved personally in Mr Cavanagh’s check-in at the accommodation. Therefore, he could only give evidence on how his staff were instructed to deal with agreements for the provision of accommodation.
[6] There was no evidence before the Tenancy Tribunal Adjudicator (the Adjudicator) that the accommodation was only intended for human habitation for periods not exceeding 50 days in any continuous term of occupancy. Given Mr Cavanagh stayed for 67 days, the Adjudicator found that s 5(1)(ta) did not exclude
6 Residential Tenancies Act 1986, s 5(1)(k).
the jurisdiction of the Tenancy Tribunal on the evidence he had before him.7 Another exclusion, under s 5(1)(k), which would normally apply when the premises were intended to provide temporary or transient accommodation such as that provided by hotels and motels similarly was not established on the evidence.8 The findings of the Tribunal under ss 5(k) and 5(ta) were not subject of the District Court judgment, nor were they the subject of the appeal to this Court.
[7] Mr Ogle had not been personally involved in the arrangements concerning Mr Cavanagh and the member of staff who made those arrangements did not give evidence.
[8] Mr Ogle was unrepresented at the Tenancy Tribunal, in the District Court and in this Court. He was given the opportunity to seek legal advice but preferred to continue to represent himself. However, he struggled to meet the procedural requirements for responding to the appeal. He filed no documentation until his memorandum for the first case management conference. In that memorandum he responded to the points on appeal by dismissing them as “far ranging and have been proven beyond doubt”. He said the Judge’s conclusion and findings of fact were well within the given scope of the Judge’s discretion to make the findings on the evidence before the Judge.
[9] Mr Ogle also filed submissions for this hearing which were received by the Court the day before the hearing. However, Mr Ogle had omitted to serve them on the appellant and they were emailed to counsel in the course of the hearing. His submissions were brief, raising the following subsidiary issues.
[10] First, Mr Ogle submitted that the Adjudicator had improperly admitted and rejected evidence. This related to a document produced by the Adjudicator purporting to be a copy of a document Mr Cavanagh said he signed headed “The boarder will abide by the following house rules”. It listed 14 paragraphs of “house rules” to be followed. The Adjudicator said that he accepted Mr Cavanagh’s evidence that he had actually entered into a “boarding house” tenancy agreement on the terms in this
7 The Tenancy Tribunal decision, above n 1, at [21]–[24].
8 Residential Tenancies Act, s 5(k); and the Tenancy Tribunal decision, above n 1, at [11]–[20].
document. The Adjudicator had indicated that Mr Cavanagh could not produce the agreement that he actually signed but instead had produced a boarding house tenancy agreement that Ms Ross, as manager of the holiday park, had provided to another occupant.9 The Adjudicator accepted as a matter of fact that Mr Cavanagh had signed an agreement on the same terms as that signed by the other occupant at the time he first checked in but was not given a copy of the agreement. Mr Ogle admitted to the Adjudicator that he did not know if his manager had required Mr Cavanagh to sign such an agreement. It was open to the Adjudicator to accept the evidence of Mr Cavanagh on this.
[11] Mr Ogle, in his submissions, further said that the Tribunal was plainly wrong in the conclusion it reached that the arrangement with Mr Cavanagh amounted to a boarding house tenancy.
[12] The submissions went on to refer to s 66L of the Act, concerning a tenant’s liability for damage caused by others. Mr Ogle said that the application for exemplary damages against Mr Cavanagh was never heard.
[13] At the appeal hearing Mr Ogle indicated he wished to pursue a claim of damages against Mr Cavanagh. I indicated that in view of the fact the matter had only just been raised, and that Mr Ogle had only emailed a copy of the submissions to Mr Cavanagh’s lawyer in the course of that hearing, I would nor grant leave for that matter to be pursued on appeal. The appeal ground was out of time and raised new matters.
[14]The points on appeal can be summarised as follows:
(a)whether the Leisure Park was providing emergency housing and therefore exempt from the Act under s 5(1)(y)(i)(B); and
(b)if no, then whether the Leisure Park provided boarding under Part 2A of the Act.
9 The Tenancy Tribunal decision, above n 1, at [13]–[16].
[15] In other words, the major issues are first whether the accommodation arrangement was covered by the emergency housing exclusion under s 5(1)(y)(i)(B) of the Act. If the exclusion did not apply, the arrangement for Mr Cavanagh’s accommodation was a residential tenancy in the terms of the Act and covered by the Act. If the arrangement was a residential tenancy, the second issue is whether it was a boarding house tenancy under Part 2A of the Act.
Appeal on a question of law
[16] The appeal to this Court is an appeal on a question of law.10 The approach is well-established. It was summarised by Duffy J in Anderson v FM Custodians Ltd in the following way:11
… In short, this Court is not to substitute its own views for that of the lower Court; instead the Court must consider whether the decisions under appeal reveal a misinterpretation and/or misapplication of the statutory powers in the [Residential Tenancies] Act, and if not, whether what has been decided is so misconceived that it is an unlawful decision …
[17] Unlike general appeals, the right of appeal does not extend to a factual error. However, as her Honour noted, in reference to Supreme Court authority:12
… there are the rare occasions where “an ultimate conclusion of a fact finding body can sometimes be so insupportable – so clearly untenable – as to amount to an error of law, because proper application of the law requires a different answer” …
[18] Such occasions might include, for instance, where there was “no evidence to support the determination”, where “the evidence is inconsistent with and contradictory of the determination”, or where “the true and only reasonable conclusion contradicts the determination”.13
Emergency or transitional accommodation exclusion under s 5(1)(y) of the Act
[19]Section 4 of the Act reads:
10 Residential Tenancies Act, s 119.
11 Anderson v FM Custodians Ltd [2013] NZHC 2423, (2013) 15 NZCPR 123 at [32], citing Bryson v Three Foot Six Ltd [2005] NZSC 34, [2005] 3 NZLR 721 at [24]–[27] and Vodafone New Zealand Ltd v Telecom New Zealand Ltd [2011] NZSC 138, [2012] 3 NZLR 153 at [5]–[55].
12 At [32], citing Vodafone New Zealand Ltd v Telecom New Zealand Ltd, above n 11, at [52].
13 At [32], citing Vodafone New Zealand Ltd v Telecom New Zealand Ltd, above n 11, at [52].
4Act generally to apply to all residential tenancies
This Act applies to every tenancy for residential purposes except as specifically provided.
[20]“Tenancy” is defined as follows:14
tenancy, in relation to any residential premises, means the right to occupy the premises (whether exclusively or otherwise) in consideration for rent; and includes any tenancy of residential premises implied or created by any enactment; and, where appropriate, also includes a former tenancy
[21] Exceptions to the application of the Act are set out in s 5. In particular, s 5(1)(y) relevantly states:
5Act excluded in certain cases
(1)This Act shall not apply in the following cases:
…
(y)if the premises are used to provide emergency or transitional accommodation and—
(i)the provision of the accommodation is funded wholly or partly by—
(A)emergency housing assistance paid to or for the credit of a person under the Special Needs Grants Programme; or
(B)any other payment made by a government department for the provision of emergency or transitional accommodation to people in need of housing; or
…
[22] The Tenancy Tribunal found that neither this nor any of the other exclusions applied.15 The reasons for this were:
(a)There was an agreement which had been reduced to writing which set out the amount of rent per week payable in advance, a bond of $500, and other requirements.16
14 Residential Tenancies Act, s 2 definition of “tenancy”.
15 The Tenancy Tribunal decision, above n 1, at [33].
16 At [15].
(b)While the provision of accommodation to Mr Cavanagh was funded wholly or partly by payments made by a government department, Te Manatū Whakahiato Ora | the Ministry of Social Development (MSD), for the provision of emergency or transitional accommodation to people in need of housing, the premises had not been used to provide emergency or transitional accommodation to Mr Cavanagh “during the entire duration of his stay at the holiday park.”17
(c)Mr Cavanagh was first referred to the holiday park at the behest of MSD when he found himself in need of emergency or transitional accommodation.18
(d)The manager of the Leisure Park did not accept Mr Cavanagh merely as a guest for emergency or transitional accommodation. The terms of the agreement indicated that the accommodation was neither emergency nor transitional. Rather, the written agreement was for Mr Cavanagh to occupy the unit/room as a tenant under a boarding house tenancy “rather than on short term, emergency or transitional purposes.”19
(e)On 20 October 2020, MSD made two lots of payments to the Leisure Park on behalf of Mr Cavanagh, namely for rent in advance of $295 and a tenancy bond of $500.20
(f)If there was an emergency or transitional arrangement in place with Mr Cavanagh, it ended on 20 October 2020 and transitioned into a “full fledge boarding house tenancy” when MSD made the two payments.21
[23] Contrary to the determination of the Tribunal, however, the District Court found that the s 5(1)(y)(i) exclusion applied.22 The Judge said:
17 At [26].
18 At [27].
19 At [29].
20 At [30].
21 At [31].
22 The District Court judgment, above n 1.
[23] Mr Cavanagh had been specifically directed by WINZ to find alternative emergency accommodation. WINZ had provided him with a list of premises that might take him in. Having consulted that list Mr Cavanagh had approached the Leisure Park facility. WINZ had paid Mr Cavanagh’s bond and had also paid $500 towards his rent in advance. WINZ then paid part of Mr Cavanagh’s benefit directly to Leisure Park each week, deducting it directly from Mr Cavanagh’s benefit.
[24] In other words, these premises were providing emergency or transitional accommodation for Mr Cavanagh, funded wholly or partly by a government department, namely WINZ.
[25] For that reason, the Tenancy Tribunal had no jurisdiction over the arrangement between Mr Cavanagh and Egmont Eco Leisure Park.
[24] The Judge therefore upheld the appeal and quashed all orders made by the Tribunal.23
[25] The Adjudicator relied on the provisions of a boarding agreement headed “The Boarder Will Abide By The Following House rules” (the boarding agreement). This included the rental payment per week, a requirement for a $500 bond to be paid and various other requirements, including the limitation of personal guests to “one per boarder at any one time” and that the manager’s word was “final”. One week’s notice was required to be given by either party to terminate the contract.
[26] The Adjudicator also had before him a document given by Work and Income to assist their clients to find accommodation, headed “Accommodation Contacts - New Plymouth/Waitara”.24 The Leisure Park appeared under a list headed “Long Term”. The entry provided a phone number and address for the Eco Lodge and included the comment “[s]ome capacity for long term rooms on a weekly basis during winter months”.
[27] Another document of relevance was a letter dated 27 January 2021 from Work and Income New Plymouth to Mr Cavanagh on an MSD letterhead, offering to help Mr Cavanagh pay the Leisure Park by direct credit rent in advance of $295 and a tenancy bond of $500. The letter indicated that repayment by regular amounts of $3
23 At [26].
24 That document has on the first page a Work and Income New Plymouth date stamp of 16 November 2021.
and $5 respectively would be required. Nothing in that letter indicates that this was for emergency or transitional accommodation.
[28] Also before the Adjudicator was a letter from MSD dated 22 July 2022. That letter states that emergency housing special needs grants were paid for Mr Cavanagh during the time he was in the emergency housing supplier Ducks and Drakes Boutique Motel and Backpackers in New Plymouth in the period 1 August 2020 to 12 October 2020. That letter also confirmed that the Leisure Park was registered or had a warrant to provide emergency housing for MSD but that no emergency housing payments were made to the Leisure Park for providing Mr Cavanagh housing in the relevant timeframe. It did, however, confirm that advance payments of Mr Cavanagh’s benefit were approved on 13 October 2020 both for a tenancy bond and rent in advance of
$500 and $295 respectively and paid to the Leisure Park. An appendix to that letter showed a list of benefit income and payments made on behalf of Mr Cavanagh, including redirections for rental. None of the listed benefits from which the Leisure Park received payments, however, were for emergency housing payments. They were mainly for “job seeker” benefits and included accommodation supplements.
[29] A note of a conversation between Mr Ogle and MSD in the MSD records, dated 12 October 2020, also indicated that the “client” (presumably Mr Cavanagh) had been recently transferred from a youth payment benefit to a job seeker benefit and had been in emergency housing for about six to eight weeks. He was studying full time. From the note, it appears Mr Ogle advised he had a room available. A further note is then recorded, dated 13 October 2020, that the client (again, presumably Mr Cavanagh) was moving into the Eco Lodge that day based on a rental of $295 per week.
[30] As Mr Ogle admitted in the Tribunal hearing, he was not privy to the discussions or conversations either with MSD representatives or with Mr Cavanagh. He was also unsure as to whether Mr Cavanagh had signed the boarding agreement referred to above. The Adjudicator questioned Mr Cavanagh closely on this document and Mr Cavanagh was adamant he had signed the same document as was produced but had not been given a copy. Mr Cavanagh said it was “the exact same contract” and confirmed that he signed it the day he moved in. The document before the
Adjudicator was a copy of the agreement provided by the other occupant referred to above, who had also not been given a copy but took a photograph of it with his phone. Mr Ogle confirmed that he did “have some older boarder contracts on file” but stated he was not privy to the agreement before the Adjudicator.
[31] In response to a question from the Adjudicator to Mr Ogle as to whether there was an agreement between WINZ and the Leisure Park for the purpose of providing temporary or transient accommodation, Mr Ogle suggested the better indication of the nature of the accommodation offered was to be found in a “house rules” document of the Leisure Park describing it as “a family friendly holiday park welcoming a multitude of guests including families, sports teams, school groups and many individuals both in private rooms and in multi share facilities”. A number of “house rules” then follow, including requirements to keep the rooms and kitchen clean and tidy and requirements concerning visitors, cars, weapons, alcohol and other behaviour. Mr Ogle pointed out there was one clause stating that the Leisure Park used a “live” booking system that may at times require guests to swap rooms if they had failed to book and pay for any extended stay in advance. Mr Ogle said that this document was held at reception and was in the cabins and bunk rooms, and submitted it showed the transiency of the guests. It was not designed to be a signed document, nor was it signed by Mr Cavanagh.
[32] This document might have been relevant to an appeal based on the camping ground exclusion, but has little relevance here.
Analysis
[33] The evidence indicated that the Leisure Park was registered for use for emergency or transitional accommodation by MSD clients. However, to establish that the exclusion in s 5(1)(y) applied requires the person asserting its application to prove that the payment for the relevant accommodation was funded “wholly or partly” to provide “emergency or transitional accommodation to people in need of housing”.25 The provision of accommodation to Mr Cavanagh was funded wholly or partly by WINZ for, at best, the period from 13 October 2020 to 20 October 2020.
25 Residential Tenancies Act, s 10.
[34] However, the advance on Mr Cavanagh’s benefit payments which paid the rental and bond beyond that date were not “for the provision of emergency or transitional accommodation to people in need of housing”.
[35] Rather, the money was in the nature of advances on Mr Cavanagh’s job seeker benefit. I am of the view that payment of a bond as well as weekly rental without any indication that the accommodation was for a limited period indicates it was not for “emergency or transitional accommodation”.
[36] The fact that the rental and bond were paid by a government department is insufficient in my view to satisfy the requirements of s 5(1)(y)(i)(B). The requirement is that the payment is made “for the provision of emergency or transitional accommodation to people in need of housing”.
[37] If the accommodation is initially used for emergency or transitional accommodation and the funding is by a government department for the provision of that accommodation to “people in need of housing” for one period but the accommodation ceases to be paid for that purpose for a different period, the exclusion will only apply for the period in which the payment is made for the provision of emergency or transitional accommodation to the person in need.26
[38] Section 11 of the Legislation Act 2019 explicitly provides as one of the general principles of statutory interpretation that legislation “applies to circumstances as they arise”. Thus, the interpretation of s 5(1)(y)(i) is to be considered in the light of the use of the accommodation at the relevant time, as opposed to the use at the beginning of the accommodation period.
[39] That contrasts with the requirement of s 5(1)(y)(ii), where the provider of accommodation is in a class prescribed by the regulations for the purposes of that paragraph. The position of the person taking the accommodation is irrelevant. In this case, there is no evidence that the Leisure Park was such a provider.
26 See s 11 of the Legislation Act 2019, which provides that legislation “applies to circumstances as they arise”.
[40] It is also relevant, as Mr Hansen pointed out for Mr Cavanagh, that the onus of proof lies on the party who contends the Act does not apply in respect of the tenancy of residential premises. It is for that party to establish the facts upon which it is contended that the Act does not apply.27
[41] Where an agreement or arrangement in respect of a tenancy under the Act is inconsistent with the provisions of the Act, that is of no effect unless the inconsistency is expressly permitted by the Act or the Tribunal is satisfied that:28
… having regard to the nature of the tenancy, the provisions of the tenancy agreement, the interests of the parties, and all relevant circumstances of the case, the inconsistency … should be permitted.
[42] Any purported waiver by a tenant of any right or power conferred on tenants under the Act is of no effect.29
[43] Therefore, the Adjudicator was correct to find that the s 5(1)(y)(i)(B) “emergency or transitional accommodation” exclusion does not apply. There was no evidence to support the District Court Judge’s finding otherwise. His conclusion in this respect was an error of law.
[44] I now turn to consider the second issue, that is whether the accommodation falls within the boarding house definition under s 66B of the Act.
Boarding house tenancy under Part 2A of the Act
[45] Boarding house tenancies were introduced as a new category of tenancies included in the Act from 1 October 2010.30
[46]A “boarding house” is defined in s 66B as follows:
boarding house means residential premises—
(a)containing 1 or more boarding rooms along with facilities for communal use by the tenants of the board house; and
27 Residential Tenancies Act, s 10.
28 Section 11(1).
29 Section 11(3).
30 Residential Tenancies Amendment Act 2010, ss 49 and 93.
(b)occupied, or intended by the landlord to be occupied, by at least 6 tenants at one time
[47]A “boarding house tenancy” is defined in s 66B as:
… a residential tenancy in a boarding house—
(a)that is intended to, or that does in fact, last for 28 days or more; and
(b)under which the tenant is granted exclusive rights to occupy particular sleeping quarters in the boarding house, and has the right to the shared use of the facilities of the boarding house
[48] There are particular requirements as to the content of boarding house tenancy agreements set out at s 66C. Boarding house tenancy agreements should be in writing and signed by both the landlord and the tenant before the tenancy commences.31 It is the landlord who must ensure the tenancy agreement is in writing.32 A landlord who fails to comply commits an unlawful act and an infringement offence and is liable to a fine or infringement fee.33 A copy of the tenancy agreement must be provided to the tenant.34
[49] The Tenancy Tribunal concluded that Mr Cavanagh had a boarding house tenancy as he had entered into a residential tenancy with the Leisure Park that was:35
… intended to, and does in fact, last for 28 days or more; and under which the tenant is granted exclusive rights to occupy particular sleeping quarters in the boarding house (initially at Chalet 4 and later Room 5-e) and he has the right to the shared use of the facilities of the holiday park.
[50] The Adjudicator found on the evidence adduced that Mr Cavanagh had been described as a boarder in the boarding house tenancy agreement he had entered into when he checked in with Ms Ross, the holiday park manager.36 As the Adjudicator found, the holiday park contained one or more boarding rooms along with facilities for communal use by its tenants and was in fact occupied by at least six tenants at any one time.37
31 Residential Tenancies Act, s 13.
32 Section 13(1).
33 Section 13(4).
34 Section 13(2)(b).
35 The Tenancy Tribunal decision, above n 1, at [40].
36 At [41].
37 At [39].
[51] The Adjudicator found that Mr Cavanagh had been granted exclusive rights to occupy particular sleeping quarters.38 Mr Cavanagh occupied Chalet 4 at the holiday park from 13 October 2020 until 3 November 2020 as sole occupant, so that was exclusive to Mr Cavanagh. He then resided in Room 5-e from 4 November 2020 until 19 December 2020, which was a bunk room shared with a number of other people. The Adjudicator’s description of the bunk accommodation in Room 5-e as containing “a cluster of bunk beds in a hostel-type room” is not contested.
[52] In the hearing, the Adjudicator’s “initial concern” was that Mr Cavanagh did not have a “boarding room” in the terms of the Act because he did not have exclusive possession of a single room after 4 November 2020. However, the Adjudicator considered this was “immaterial” in this context due to the definition of a boarding house tenancy and the fact that Mr Cavanagh’s was given exclusive right to occupy particular sleeping quarters for a period that was intended to and did in fact last for 28 days or more, being 67 days. The Adjudicator questioned Mr Cavanagh as to what bunk he occupied, and the evidence before the Adjudicator was that Mr Cavanagh occupied a top bunk which he had chosen in Room 5-e. The transcript recorded Mr Cavanagh’s evidence on this in the following exchange between the Adjudicator and Mr Cavanagh:
Adjudicator:
… So it satisfies the definition, so sleeping quarters can be a bed, an identifiable section which you have exclusive rights. So if I want to stay in that dorm, I can’t go to your top bunk at the time because that’s yours?”
Mr Cavanagh:
That’s correct.
Adjudicator:
For which you were paying $195?
Mr Cavanagh:
Yes, that’s correct.
Adjudicator:
Okay, got it.
[53] The District Court, however, found that the boarding house tenancy provisions did not apply because:
38 At [40].
[14] It was accepted by all parties that when Mr Cavanagh was in the bunk room, he shared the room with a number of other people and did not have the exclusive right to any particular bed. Who slept in which bed in the bunk room was a matter of first come first served. He did not therefore have an exclusive right to occupy particular sleeping quarters.
[54] The Judge went on to note that the boarding house tenancy agreement which had been produced contained none of the requirements of s 66C but was “simply a set of rules that stipulated how much rent was to be paid, when it would be paid, the penalties for late payment, the requirement of a bond, and then a series of other rules about language, behaviour, smoking, use of communal facilities and so forth.”39 The agreement contained the word “boarder” in a number of places but the Judge considered that did not convert it into a boarding house arrangement or boarding house tenancy agreement.40
[55]The Judge found:
[19] It is clear that Mr Ogle had never intended Mr Cavanagh’s occupation to be described as a boarding house tenancy. It is clear that the legal definition of what constitutes a boarding house does not apply to the arrangements that existed for Mr Cavanagh and it is clear that the agreement he signed was not a boarding house tenancy agreement.
[56]The Judge considered therefore that the Tribunal was “plainly wrong”.41
Analysis
[57] In my view, the accommodation clearly meets the definition of “boarding house”, in that the accommodation lasted more than 28 days and there was a receipt to show use of facilities. The issue is whether the bunk bed arrangement could be described as “exclusive occupation”, given that one of the requirements under the definition of a “boarding house tenancy” under s 66B is that “the tenant is granted exclusive rights to occupy particular sleeping quarters in the boarding house”.
[58]Also relevant here is the definition of “boarding room”, which is as follows:42
39 The District Court judgment, above n 1, at [15]–[16].
40 At [17].
41 At [20].
42 Residential Tenancies Act, s 66B definition of “boarding room”.
boarding room means a room in a boarding house that is used as sleeping quarters by 1 or more tenants of the boarding house, and that is for use only by a tenant whose tenancy agreement relates to that room
[59] There is no definition of “sleeping quarters”. However, given there is a definition of “boarding room” distinct from “sleeping quarters” indicates that the latter does not need to be a separate room for which the tenant has exclusive occupation rights. It may be less. There is no reason why the “sleeping quarters” could not be a bed or a bunk.
[60] This is an issue which the Tenancy Tribunal considered in 2011 in Kapoor v Kohli Enterprises Ltd.43 In that case, the Adjudicator was dealing with tenants who shared a bedroom. Some rooms in the premises had up to five beds. The adjudicator in that case said:
[8] Mr Kapoor and Mr Chanday had occupancy of the same two-bed room. Each of them had a separate but identical written agreement with the landlord. The two agreements operated independently of each other. Each occupant could give the landlord notice and depart, without affecting the rights of the occupancy of the other. Both agreements referred only to the room number. Neither agreement referred to a particular bed, or to anything in the nature of a subdivision of the room. There was therefore no express provision giving either occupant exclusive possession of a particular bed or space within the room.
[9] The broad intentions of the Residential Tenancies Amendment Act 2010 included bringing boarding house tenancies within the ambit of the Residential Tenancies Act 1986. To give effect to this policy, one would expect that the contractual relationship between Mr Kapoor and Kohli Enterprises Limited turned into a boarding house tenancy on 1 October 2010, when the Amendment Act commenced.
[10] There is, however, a lacuna in the Act. An essential element of a “boarding house tenancy” is that “the tenant is granted exclusive rights to occupy particular sleeping quarters …” The Act does not define the term “sleeping quarters”.
[11] In the absence of a definition, the rules of statutory interpretation require that words are to be given their natural, or dictionary meaning. In this case, dictionary definitions and common usage are not particularly helpful. None of them suggests that the term describes a space within an undivided room. In common usage, “quarters” often denotes an entire building. “Shearers’ quarters” and “staff quarters” are examples. The Shorter Oxford Dictionary offers 27 meanings for “quarter”. Leaving aside the clearly irrelevant ones, meaning 15 is “a place of residence; lodgings; the living
43 Kapoor v Kohli Enterprises Ltd [2011] NZTT Auckland 424.
accommodation of troops.” Meaning 14 comes closest to fitting the facts of this case: “assigned or appropriate position; now rare; mid 16th century.”
[12] Section 66H(2), which expressly mentions room-sharing, sheds some light on the intended meaning of “sleeping quarters”:
(2) When a tenant first takes occupation of a boarding room under a boarding house tenancy, the landlord must ensure that
(a)the tenant has vacant possession of the room or, if the room is shared, of the tenant’s sleeping quarters in the room; …
[13] It is clear from the above words that “room” and “sleeping quarters” are not the same thing and that, within a room, there may be two or more “sleeping quarters”. While it strains common usage, it appears that, in the context of a shared room, the legislature intended “sleeping quarters” to mean a particular bed, together with any space dedicated exclusively to the storage of the personal effects of the person who occupies the bed. In more Spartan establishments, “sleeping quarters” might consist of no more than a bed and a coat-hook. In others, it might include, for example, a chest of drawers and a wardrobe.
[14] This brings us back to the hurdle in s.66B. An essential element of a “boarding house tenancy” is that “the tenant is granted exclusive rights to occupy particular sleeping quarters…” In the absence of an express grant of exclusive rights, can one be implied?
[15] It would be incongruous if the application of the Act were to turn on such a narrow point as whether, in each case, the landlord expressly allocated a particular bed to a particular occupant. An implied grant is necessary, in order to give effect to the Act’s purpose. In practice, the allocation of a particular bed space is likely to be an informal process. For example, the landlord tells the tenant to take any bed that is free. The tenant then “runs the flag up” by putting personal effects on the bed or in the associated storage space. From that point on, the tenant can be taken as having exclusive possession of the “sleeping quarters”.
[16] If the above view correctly interprets the Act, then the relationship between Mr Kapoor and Kohli Enterprises Ltd became a boardinghouse tenancy on 1 October 2010 and the Residential Tenancies Act 1986 governs that relationship. I hold that view and the orders made above give effect to it. This Tribunal has jurisdiction and the substantive issues will be determined when the hearing resumes on 29 April 2011, unless the parties can resolve the matter informally before then.
[61] In Karmarkar v Pandem, the High Court looked at what constituted a boarding house tenancy.44 There the premises involved provided residential accommodation for 16 people under an agreement signed between the landlord and 16 named tenants. The agreement between the landlord and the tenant included a provision for the tenants to
44 Karmarkar v Pandem [2018] NZHC 693, (2018) 19 NZCPR 636.
agree to an internal management plan that should “clearly include allotment of bedrooms”.45
[62] The Judge noted the difficulty in interpreting the boarding house tenancy provisions. His Honour said:
[27] The more difficult question is determining whether a tenancy is or is not a boarding house tenancy—the issue considered by the District Court in Cutlers, Saunders and Raffles Lodge. Part of the problem is the circularity in the drafting of the definitions of “boarding house”, “boarding house tenancy” and “boarding room” in s 66B which refer back to each other.46 Another concern has been that a simplistic application of the definitions (that is by deciding the question solely by reference to the number of bedrooms in a house) could result in large numbers of residential tenancies becoming boarding house tenancies, with the consequence, unintended by landlord or tenants, that some of their provisions would become unenforceable following the decisions in Platinum Rentals and Portfolio Property.47 Another complication is that, as in the present case, some tenancy agreements have elements that would usually be found in a normal residential tenancy agreement and others that would usually be found in a boarding house tenancy.
[28] Judge Crosbie in Cutlers considered s 66B to be an enabling rather than a deeming provision. By this he appears to have meant that just because a particular tenancy might fall within the definition of “boarding house tenancy” does not mean it has to be regarded as such and that the Court should endeavour to ascertain the parties’ intentions as evidenced by the tenancy agreement and other evidence before the Court.48 As noted by Judge Neave in Saunders, since the decision in Cutlers, Tenancy Tribunal decisions tended to focus on the intentions of the parties when called on to decide whether a particular tenancy was or was not a boarding house tenancy.49
[29] In Saunders, Judge Neave observed that a focus solely on the intention of the parties was as flawed as focusing solely on the number of bedrooms.50 I agree. The fact that parties may have intended a particular outcome cannot override the statute. It is the intention of the legislature that must be the driving consideration, particularly where the purpose of the legislation is remedial in the sense noted by Judge Broadmore in Platinum Rentals in his quotation of the Minister’s second reading speech: to provide protections for some of the most vulnerable in New Zealand—those who live in boarding houses. It would be an odd result to make the application of such legislation contingent on the intention of the parties when there is an inherent imbalance in the bargaining power of the two parties to the agreement.
45 At [11].
46 Saunders v Chau DC Ōtautahi | Christchurch CIV-2014-0009-733, 19 November 2014 at [16].
47 Cutlers Ltd v Thompson DC Ōtepoti | Dunedin CIV-2013-012-410, 4 November 2013 at [27].
48 At [23].
49 Saunders v Chau, above n 46, at [24].
50 At [24].
[30] In Saunders, Judge Neave proposed a more comprehensive approach to determining whether a tenancy is a boarding house tenancy:51
[26] The statute clearly sets out a number of matters which will be required to establish a boarding house tenancy. Perhaps, more particularly, it lists matters which must exist if there is a boarding house tenancy, or at least will apply if a boarding house tenancy has been created.
[27] Without being an exhaustive list, it seems to me that among the matters that will be relevant in determining what kind of tenancy one will be:
(a)The nature of the property (obviously the smaller the property and the fewer the rooms there are, the less likely it will be a boarding house).
(b)The number of tenant (ie are there more than six? Any less than that will be excluded from being a boarding house tenancy by virtue of the Act.).
(c)The nature of the agreement and, in particular, does the agreement grant a right of exclusive occupancy to a particular room but with a right to use the rest of the house, or is it an agreement to occupy the house solely or in common with others?
(d)The terms of the agreement. In other words, are there terms of the agreement more consistent with those required by a boarding house tenancy or those which relate to an ordinary residential tenancy under the Act?
(e)This, to a certain extent, follows on from the previous point—What is the provision for notice, what rights of entry does the landlord have, does the agreement provide for house rules?
(f)The intention of the parties. While that cannot be crucial if the other indicia of a boarding house tenancy, as opposed to a normal residential or periodic tenancy, are present, but a clearly expressed intention one way or the other will be of assistance.
…
[32] While I recognise the practical wisdom in that approach, I consider the initial inquiry must begin with an analysis of how the tenancy being considered fits with the relevant definitions of s 66B. Those definitions determine whether or not a particular tenancy is a boarding house tenancy. The consequences of that inquiry are determined by s 66C, which sets out what a boarding house tenancy must contain as a matter of law, and by ss 66D–
51 Saunders v Chau, above n 46.
66Y which apply to boarding house tenancies whether or not a particular agreement reflects those sections. To use those later sections, such as the provisions on notice, rights of landlord entry and whether the agreement provides for house rules, to determine the existence of a boarding house tenancy is problematic. To do so uses the consequences of the application of the definitions to determine whether the definitions apply in the first place. That is more circular, in my view, than the fact that the definitions refer to each other.
…
[34] In my view, it is possible to make sense of the definitions by asking the following questions:
(a)Does the house contain one or more bedrooms along with facilities for communal use by the tenants?
(b)Is the house occupied or intended to be occupied by 6 or more tenants?
(c)Is the tenancy intended to, or does in fact, last for 28 days or more?
(d)Are tenants granted exclusive rights to occupy particular bedrooms, whether that occupancy is for single or shared use?
(e)Does the right to occupy a particular bedroom derive from the tenancy agreement between the individual tenant and the landlord rather than from a collective decision of the tenants?
[35] If the answer to all of those questions is “yes”, then the tenancy is a boarding house tenancy and the rest of the provisions of Part 2A apply.
[36] I acknowledge that applying these questions will not always be straightforward, as the current case illustrates. Questions of judgment can arise as to whether what is set out in the tenancy agreement reflects the reality of how a tenancy operates, particularly with respect to the last two questions. But if these questions are answered in the affirmative, then it should not be necessary to enquire into whether the tenancy has the attributes required under ss 66C–66Y as a matter of law.
[63] In Karmarkar v Pandem, the focus was on whether the tenants were granted exclusive rights to occupy particular bedrooms and whether that derived from the tenancy agreement between the landlord and tenant. On exclusive possession his Honour said:
[41] Taken together, these factors persuade me that the right to a room derives, in the case of each individual tenant, from the tenancy agreement between the tenant and the landlord rather than from a collective decision of the tenants. Accordingly, the answer to the fifth question is also “yes”.
[64] In this case, the District Court concluded that the boarding house tenancy provisions did not apply because Mr Cavanagh was in a bunk room which he shared with a number of other people and did not have an exclusive right to any particular bed. Rather, it was a matter of “first come, first served” and Mr Cavanagh therefore did not have an exclusive right to occupy a particular sleeping quarters.52 However, based on the tests laid out by van Bohemen J in Karmarkar, the exclusivity required to be derived from the tenancy agreement was to a particular bedroom, whether the occupancy was for shared or single use. In fact, a “sleeping quarters” did not require that the same bed be used every night, but only that there was a bed which was for the exclusive use of the tenant. The bedroom itself could be shared.
[65] The evidence in this case is that Mr Cavanagh had an exclusive chalet for a period, which clearly met the definition of exclusive sleeping quarters. He was then allocated a particular bunk room, which was allocated to him personally but which he shared with others. Contrary to the District Court Judge’s comment that it was accepted in writing and by all parties that Mr Cavanagh did not have the exclusive right to any particular bed, the only evidence before the Tenancy Tribunal was in fact that he had the use of a top bunk and used that particular bed in the bunk room.
[66] The Judge also found that the agreement signed by Mr Cavanagh did not contain the provisions required by s 66C.53 However, that is due to the failure by the landlord to comply with the protective requirements for the tenancy agreement to be in writing and to provide a copy of the tenancy agreement to Mr Cavanagh.54 These are measures for the protection of the tenant. It is, for present purposes, the substance of the arrangement that is relevant.
[67] Therefore, the Judge erred in his application of s 66B. There is no evidence to support his finding that Mr Cavanagh’s sleeping quarters were not exclusive. The fact that there was not a written tenancy agreement which contained all the required terms does not render the arrangement unenforceable.55
52 The District Court judgment, above n 1, at [14].
53 At [15].
54 Residential Tenancies Act, ss 13 and 56C.
55 Section 13C.
[68]Therefore, the appeal is allowed on the second issue.
Exemplary damages
[69] The Tenancy Tribunal made orders for the return of the bond.56 No issue is taken with the calculation of rent in the Tenancy Tribunal, nor was that an issue on appeal.
[70] However, in the District Court the Judge considered the issue of exemplary damages. He said:
[27] Because of the above finding it is not strictly necessary for me to consider any of the other orders made by the Tribunal. In the event that I am wrong about the issue of jurisdiction however there is the issue of exemplary damages that Mr Ogle was directed to pay Mr Cavanagh. The circumstances of that issue are that WINZ provided Mr Ogle with a bond of $500 upon Mr Cavanagh moving into the Leisure Park. Mr Ogle did not lodge the bond with the Bond Centre, an act that the Tribunal described as an “unlawful act”. The Tribunal ordered Mr Ogle to pay Mr Cavanagh $850 by way of exemplary damages.
[28] In doing so the Tribunal noted Mr Ogle’s explanation for not lodging the bond, namely that he did not consider it met the legal definition of a bond.
[29] Exemplary damages may only be awarded by the Tribunal if the act complained of was both unlawful and intentional and, after considering the intent of the offender in committing the unlawful act, and the effect of the unlawful act, and the interests of the party against whom the unlawful act was committed, and the public interest, the Tribunal may then order the offender to pay exemplary damages.57
[30] Mr Ogle clearly and genuinely believed that he was not subject to the Residential Tenancies Act and that the normal rules around bonds did not therefore apply. This was a mistake of law at its worst. He had evicted Mr Cavanagh for repeated breaches of the rules that Mr Cavanagh had agreed to and which Mr Cavanagh had been warned for breaching prior to his final eviction. It should also have been clear that Mr Ogle believed that he was owed money by Mr Cavanagh for losses incurred as a result of Mr Cavanagh’s breaching of the rules.
[31] Setting that background against the criteria for exemplary damages set out in the relevant section of the Act, the award of exemplary damages was “plainly wrong”.
56 The Tenancy Tribunal decision, above n 1, at [56].
57 Residential Tenancies Act, s 109(3).
[71] The District Court Judge’s finding in respect of exemplary damages was not the subject of this appeal. Mr Cavanagh raised the issue of exemplary damages in his submissions but was seeking that they be paid to him. I raised the issue with Mr Hansen, who indicated that he opposed any interference with the exemplary damages award as granted by the Tenancy Tribunal.
[72] The exemplary damages issue is outside this appeal and I do not consider it any further. The Judge’s determination in the District Court that the order for exemplary damages should be quashed stands. He allowed the appeal on for reasons independent of the points which have been allowed on appeal. That aspect of his judgment is not affected.
Conclusion
[73] As I have found, the Adjudicator was correct to find that the exclusion under s 5(1)(y)(i)(B) did not apply. I am of the view the District Court Judge erred in law in concluding otherwise.
[74] I am also of the view that the District Court Judge erred in finding that the accommodation arrangement did not meet the requirements for a “boarding house tenancy” under Part 2A of the Act, in particular that Mr Cavanagh did not have any exclusive right to occupy particular sleeping quarters. I consider there was no evidence before the Judge to support his finding that Mr Cavanagh’s sleeping quarters were not exclusive.
[75] The Judge’s determination that the order for exemplary damages be quashed was not the subject of this appeal and is not changed.
[76]The appeal is allowed.
Costs
[77] I have been advised that Mr Cavanagh is legally aided. Any application for costs should be filed within seven days of the date of this judgment together with any
submissions. Any response should be filed within a further three days and any reply within a further three days. I will deal with the issue of costs on the papers.
Grice J
Solicitors:
Tungsten Legal, New Plymouth
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