Smith v Accessible Properties New Zealand Limited
[2019] NZCA 38
•8 March 2019 at 10.30 am
| IN THE COURT OF APPEAL OF NEW ZEALAND I TE KŌTI PĪRA O AOTEAROA |
| CA453/2018 [2019] NZCA 38 |
| BETWEEN | ESMERALDA MONICA SMITH |
| AND | ACCESSIBLE PROPERTIES NEW ZEALAND LIMITED |
| Court: | French and Miller JJ |
Counsel: | M J Sharp for Applicant |
Judgment: | 8 March 2019 at 10.30 am |
JUDGMENT OF THE COURT
A The application for special leave to appeal is declined.
BThe applicant must pay the respondent costs for a standard application for leave to appeal on a band A basis with usual disbursements.
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REASONS OF THE COURT
(Given by French J)
Introduction
Ms Smith applies for special leave under s 120 of the Residential Tenancies Act 1986 (the Act) to appeal a decision of Woolford J in the High Court.[1]
[1]Smith v Accessible Properties New Zealand Ltd [2018] NZHC 1010 [High Court Decision].
Ms Smith is a former tenant of the respondent, Accessible Properties New Zealand Ltd. In 2017, Accessible Properties gave Ms Smith 90 days’ notice of its intention to take possession of the rented premises, following testing that revealed levels of methamphetamine contamination at the property. On the expiry of the 90 days, Accessible Properties obtained a possession order from the Tenancy Tribunal.[2]
[2]Accessible Properties New Zealand Ltd v Smith NZTT Tauranga 4104292, 11 December 2017. We note that Mrs Smith later applied for a re-hearing and the Tenancy Tribunal declined to grant one in Accessible Properties New Zealand Limited v Smith NZTT Tauranga 4104292, 22 December 2017.
Ms Smith appealed the Tenancy Tribunal decision to the District Court. The appeal was unsuccessful.[3] Ms Smith then exercised her right of appeal on a question of law under s 119 of the Act to the High Court.
[3]Smith v Accessible Properties New Zealand Ltd [2018] NZDC 704.
In his decision, Woolford J made the following key findings:[4]
(a)Section 51 of the Act entitles a landlord to give 90 days’ notice of termination without having to supply a reason.[5]
(b)The only specific provision in the Act empowering the Tenancy Tribunal to declare the notice of no effect was s 54 of the Act (notice issued in retaliation of tenant exercising any right, power, authority or remedy conferred on the tenant by the tenancy agreement or any Act or any complaint by the tenant against the landlord relating to the tenancy) which did not apply on the facts.[6]
(c)The Tribunal did not have jurisdiction under either s 78(1)(f) or under ss 77 and 85 of the Act to make an order that it was harsh and unconscionable for Accessible Properties to give Ms Smith 90 days’ notice of termination.[7]
(d)In order to decide the case, it was not necessary to determine whether the methamphetamine testing of the property was unlawful as claimed by Ms Smith.[8]
(e)If it had been necessary, Woolford J would have found it was not unlawful because Ms Smith had consented to the testing and in any event non-invasive testing for methamphetamine could properly be considered as part of the landlord’s general power of inspection provided for in the tenancy agreement.[9]
[4]High Court Decision, above n 1.
[5]At [34].
[6]At [34].
[7]At [45].
[8]High Court Decision, above n 1, at [46].
[9]At [46]–[47].
Dissatisfied with that outcome, Ms Smith asked the Judge under s 120 to grant leave to appeal to this Court. The Judge declined to grant leave.[10] Ms Smith then made the current application for special leave.
Analysis
[10]Smith v Accessible Properties New Zealand Limited [2018] NZHC 1795 at [9].
It was common ground that in order to grant leave we must be satisfied that the proposed appeal raises a seriously arguable question of law of general or public importance.[11]
[11]Residential Tenancies Act 1986, s 120(3); Cook v Housing New Zealand Corp [2014] NZCA 504 at [3]; Waller v Hider [1998] 1 NZLR 412 (CA) at 413; and Winther v Housing New Zealand Corp HC Wellington CIV-2009-485-1954, 4 November 2009.
On behalf of Ms Smith, Mr Sharp advances four grounds of appeal which he has helpfully summarised into two questions of law:
(a)Whether there is jurisdiction under the Act to set aside terminations of tenancies as being harsh and unconscionable.
(b)Whether, in the absence of an express provision, landlords have the right to carry out methamphetamine testing of tenanted properties without the tenant’s consent and whether terminations of tenancies based on testing results can be set aside as being harsh and unconscionable.
For the reasons that follow, we are not persuaded that either question raises a seriously arguable question of law warranting determination by this Court.
In support of her contention that the Tribunal does have jurisdiction to set aside terminations of tenancies as being harsh and unconscionable, Ms Smith relies on two provisions, first, s 78(1)(f) of the Act and, secondly, s 85.
Section 78(1)(f) states that where it appears to the Tribunal that an agreement between the parties, or any term of any such agreement, is harsh or unconscionable, or that any power conferred by an agreement between them has been exercised in a harsh or unconscionable manner, it may make an order varying the agreement, or setting it aside (either wholly or in part).
We agree with Woolford J that Ms Smith faces insuperable difficulties in relying on this provision. First, the power is limited to making an order setting aside or varying the agreement itself, which is not the remedy Ms Smith seeks. Secondly, the power which Accessible Properties was exercising in giving the 90 days’ notice was a statutory power and not a power under the tenancy agreement.[12] It is correct that the power to give 90 days’ notice is mentioned in Ms Smith’s tenancy agreement but under a heading stating, “Outline of the Provisions of the Residential Tenancies Act.” The mere fact of the reference to the power in that agreement cannot in our view convert it from being a statutory power into a contractual power for the purposes of s 78(1)(f).
[12]Residential Tenancies Act, s 51(1)(d).
Ms Smith also seeks to rely on s 85. It states:
85 Manner in which jurisdiction is to be exercised
(1) Subject to the provisions of this Act and of any regulations made under this Act, the Tribunal shall exercise its jurisdiction in a manner that is most likely to ensure the fair and expeditious resolution of disputes between landlords and tenants of residential premises to which this Act applies.
(2) The Tribunal shall determine each dispute according to the general principles of the law relating to the matter and the substantial merits and justice of the case, but shall not be bound to give effect to strict legal rights or obligations or to legal forms or technicalities.
Again, in our view, Ms Smith faces insuperable difficulties in relying on this provision. As the heading makes clear, it is about the manner in which the Tribunal’s jurisdiction is exercised. It does not purport to create a jurisdiction.
It follows we consider it is not seriously arguable that the Tribunal has jurisdiction to set aside terminations of tenancies on 90 days’ notice as being harsh and unconscionable. An amendment of the legislation would be required to achieve that result.
As for the second proposed question of law — whether, in the absence of an express provision, landlords have the right to carry out methamphetamine testing of tenanted properties without the tenant’s consent and whether terminations of tenancies based on testing results can be set aside as being harsh and unconscionable — that too is highly problematic, not least of all because it was not the basis of Woolford J’s decision.
Further, the question assumes the testing was done without consent whereas Woolford J found Ms Smith consented.[13] That was a case-specific finding of fact and so not appealable. We acknowledge that the testing in this case yielded results now considered not to raise any health and safety concerns.[14] However, this cannot, in our view, assist Ms Smith when under the Act the giving of 90 days of notice of termination can be given for any reason, need not give reasons and so is not required to be justified.[15] We also consider that arguments that Accessible Properties had no right to conduct the non-invasive testing untenable having regard to the landlord’s general right of inspection.[16]
Outcome
[13]High Court Decision, above n 1, at [46].
[14]There is no evidence that the levels of methamphetamine contamination typically resulting from third-hand exposure to methamphetamine smoking residues (as opposed to methamphetamine manufacture) on household surfaces can elicit an adverse health effect. Peter Gluckman Methamphetamine contamination in residential properties: Exposures, risk levels, and interpretation of standards (Office of the Prime Minister’s Chief Science Advisor, 29 May 2018). Consequently, in the future, the Residential Tenancies Amendment Bill (No 2) 2017 (258-2) will require the Minister to be satisfied that a contaminant may be harmful to the health of persons before making regulations under the Act (cl 138C).
[15]Residential Tenancies Act, s 51(1)(d); and Winther v Housing Corp of New Zealand [2010] NZCA 601, [2011] 1 NZLR 825 at [64].
[16]Residential Tenancies Act, s 48(2)(b). We note that the Residential Tenancies Amendment Bill provides for an explicit right of entry for the purposes of testing for contaminants (cl 27(1)(ba)). This does not preclude such testing from also being covered by the landlord’s general right of inspection.
The application for special leave to appeal is declined.
There is no reason why costs should not follow the event. The applicant is therefore ordered to pay the respondent costs for a standard application for leave to appeal on a band A basis with usual disbursements.
Solicitors:
Te Whenua Law & Consulting, Rotorua for Applicant
Duncan Cotterill, Wellington for Respondent
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