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Paddi Co Ltd v Sneddon [2018] NZDC 16369

Published 12 June 2019

Appeal — Tenancy Tribunal decision — residential use of building — Anderson v FM Custodians Ltd [2013] NZHC 2423 — Residential Tenancies Act 1986, ss 2, 19, 36, 45, 65, 77, 109, 118 & 137 — Building Act 2004, s 115. The appellant company appealed a decision by the Tenancy Tribunal that had resulted in an award of $17,977.13 to the respondent. The sum awarded being the entire amount paid by the respondent as rent, for renting out a building that had not been approved for residential use. The Tribunal ruled that the tenancy agreement constituted a prohibited transaction in terms of s 137 of the Residential Tenancies Act 1986. Relying on Anderson v FM Custodians Ltd it was determined that the Residential Tenancies Act did not apply as the building was not permitted for residential use. At issue was whether the Tribunal was in wrong in applying Anderson v FM Custodians Ltd and regarding the tenancy as a prohibited transaction. Further questions were raised about the extent to which the Act and the Tenancies remedial powers apply to premises that are not approved for residential use by a territorial authority. The Judge held that this case was distinguishable from Anderson v FM Custodians Ltd, in that there was a residential tenancy in accordance with the definition in s 2, therefore the appellants were subject to the obligations under ss 36 and 45. The Judge ordered a re-hearing of the respondent's claims and the appellant's counterclaim. No costs orders were made. Judgment Date: 24 August 2018.

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