Exclusive Estates Limited v Hoffman - [2023] NZHC 1878

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2023-404-000326

[2023] NZHC 1878

IN THE MATTER Of the Residential Tenancies Act 1986

AND

IN THE MATTER OF

an appeal against a decision of the District Court pursuant to s 119 of the Residential Tenancies Act 1986

BETWEEN

EXCLUSIVE ESTATES LIMITED

Appellant

AND

SONIA MCKELLER HOFFMAN

Respondent

Hearing: 28 June 2023 and 5 July 2023

Appearances:

J Mackie for Appellant Respondent in person

Judgment:

19 July 2023

JUDGMENT OF LANG J

[on appeal on a question of law]

This judgment was delivered by Justice Lang On 19 July 2023 at 11.00 am
Pursuant to r 11.5 of the High Court Rules Registrar/Deputy Registrar

Date:…………………………

Solicitor/counsel:
Urlich Milne Lawyers/J Mackie, Barrister, Auckland

Copy to:
The Respondent, S M Hoffman

EXCLUSIVE ESTATES LTD v HOFFMAN [2023] NZHC 1878 [19 July 2023]

[1] The present appeal is the latest chapter in a long running dispute between the owner and former tenant of a residential property in Orewa. The dispute has taken many forms, but for present purposes it relates to a finding by the Tenancy Tribunal (the Tribunal) that the owner of the property, Exclusive Estates Ltd (EEL), breached s 78A of the Residential Tenancies Act 1986 (RTA) when it rented the property to the respondent, Ms Hoffman, in circumstances where it was unlawful for Ms Hoffman (or any other person) to live in the property.1 The Tribunal ordered EEL to refund 25 per cent of the rental it had received from Ms Hoffman.

[2] EEL did not appeal against the Tribunal’s decision. Rather, it applied to the Tribunal for a re-hearing under s 105(1) of the RTA. This provides the Tribunal with the power to order a re-hearing where a substantial wrong or miscarriage of justice has or may have occurred or is likely to occur. The Tribunal dismissed the application in a decision delivered on 20 October 2021.2

[3] EEL appealed to the District Court against the Tribunal’s decision refusing to grant it a re-hearing.3 In a decision delivered on 19 January 2023, Judge D J Clark upheld the Tribunal’s conclusion that EEL had breached s 78A of the RTA by permitting Ms Hoffman to reside in the property.4 However, he allowed the appeal in part by reducing the amount of rental that should be refunded to Ms Hoffman to the sum of $1,500.5

[4] EEL now appeals against the Judge’s decision on a question of law.6 Therefore, this appeal is limited to whether the Judge misinterpreted and/or misapplied s 78A of the RTA.7 Ms Hoffman opposes the appeal.

1      Hoffman v Exclusive Estates Ltd [2021] NZTT North Shore 4301149, 4306243.
2      Hoffman v Exclusive estates Ltd [2021] NZTT North Shore 4301149, 4306243.
3      Pursuant to Residential Tenancies Act 1986, s 117.
4      Exclusive Estates Ltd v Hoffman [2022] NZDC 25495.
5 At [79].
6      Pursuant to Residential Tenancies Act, s 119.
7      See Anderson v FM Custodians Ltd [2013] NZHC 2423,…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2023] NZHC 1878
Decision Date: 19 July 2023

CaseChat Overview and Summary

Exclusive Estates Limited (EEL) is the owner of a residential property in Orewa, which it rented to Sonia McKeller Hoffman (Ms Hoffman). The dispute originated with the Tenancy Tribunal, which found that EEL had breached s 78A of the Residential Tenancies Act 1986 by permitting Ms Hoffman to reside in the property when it was unlawful for her to do so. The Tribunal ordered EEL to refund 25 per cent of the rental it had received from Ms Hoffman. EEL did not appeal against this decision but applied to the Tribunal for a re-hearing, which was dismissed. EEL then appealed to the District Court, which allowed the appeal in part, reducing the amount of rental to be refunded to $1,500. EEL now appeals to the High Court against the District Court's decision.

The legal issue before the Court was whether the District Court misinterpreted and/or misapplied s 78A of the RTA. The Court held that the District Court erred in law by concluding that EEL breached s 78A of the RTA. The Court found that there was no lawful impediment to EEL permitting Ms Hoffman to reside in the lower unit. The dwelling was always intended to be used as two separate units, and this was known to the Council from the time it issued building and resource consents. EEL effectively gave the Council notice of the proposed use of the dwelling for this purpose when it applied for and obtained those consents. Thereafter the use of the dwelling never changed. Furthermore, the dwelling already fell within the definition of an SR in the schedule to the Regulations because it was a multi-unit dwelling. It follows that Ms Hoffman was not entitled to any refund of the rental that she paid whilst occupying the lower unit.

The appeal is allowed. The order directing that Ms Hoffman be refunded rental in the sum of $1,500 is set aside. EEL is entitled to costs as the successful party. If these cannot be agreed the parties have leave to file concise memoranda and the Court will fix costs on the papers.

Orders