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Tenants' Damage Intentional

There’s a widespread feeling that legal rulings on damage tend to favour tenants but, in a welcome change, we take a look at a new High Court decision


1 August 2019

The issue of tenant liability for damage is a hugely contentious one. That’s because ever since the infamous 2016 Holler & Rouse v Osaki decision residential landlords have been liable for accidental damage caused by tenants.

And while tenants are liable for intentional damage, landlords have found that it’s very difficult to prove if damage is actually intentional. But the tide could be turning: a recent High Court decision has come down in favour of a landlord’s interpretation of “intentional” damage. Guo v Korck [2019] involves a family who moved into a Titirangi house with their two poodles. The landlord, Guo, was reluctant to accept them as tenants because of their dogs. But the family convinced him that the dogs were housetrained and would not soil the house.

When they moved out, Guo found the property’s carpet was badly stained and had to replace it. While he accepted that one or two stains might be accidental, the extent of the damage led him to conclude it was not accidental.

After initially forfeiting their bond to settle the matter, the Korcks then lodged a claim for a full refund of the bond. Guo made a cross-application to cover the cost of replacing the carpet. The Tribunal ruled in favour of Guo, so the Korcks – who insist the damage was not intentional – appealed successfully to the District Court.

However, Guo went to the High Court and the High Court has now overturned the District Court’s decision. Justice Tracey Walker found that Guo permitting the dogs on the premises under the terms of the tenancy agreement did not mean that he assumed all risk of damage.

“It did not mean that all damage, whatever the extent, caused by the dogs urinating on the carpet is fair wear and tear or unintentional… The Tribunal found that the evidence of extensive damage was compelling.”

She also found it was reasonable to conclude that the Korcks knew, after a few episodes of the dogs urinating inside, that further damage was certain if the dogs remained inside. Yet they did not mitigate the damage.

This all led Justice Walker to find the damage could be regarded as intentionally caused. She re-instated the order of the Tenancy Tribunal, which ordered that Guo be paid compensation of $10,000.


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