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Residential Tenancies Amendment Bill (Consistent) (Sections 14, 25) [2020] NZBORARp 2 (5 February 2020)
Last Updated: 10 March 2020
5 February 2020
LEGAL ADVICE
LPA 01 01 24
Hon David Parker, Attorney-General
Consistency with the New Zealand Bill of Rights Act 1990: Residential Tenancies
Amendment Bill
Purpose
- We
have considered whether the Residential Tenancies Amendment Bill (‘the
Bill’) is consistent with the rights and freedoms
affirmed in the New
Zealand Bill of Rights Act 1990 (‘the Bill of Rights Act’).
- We
have not yet received a final version of the Bill. This advice has been prepared
in relation to the latest version of the Bill
(PCO 20933/12.0). We will provide
you with further advice if the final version includes amendments that affect the
conclusions in
this advice.
- We
have concluded that the Bill appears to be consistent with the rights and
freedoms affirmed in the Bill of Rights Act. In reaching
that conclusion, we
have considered the consistency of the Bill with s 14 (freedom of expression)
and s 25 (minimum standards). Our
analysis is set out
below.
The Bill
- The
Bill aims to modernise the Residential Tenancies Act 1986 (‘the principal
Act’) while appropriately balancing the
rights and obligations of tenants
and landlords.
- The
purposes of the Bill are to increase security of tenure for tenants who are
meeting their obligations, promote good-faith relationships
in the renting
environment, enhance the regulatory powers and tools available to the chief
executive of the Ministry of Housing and
Urban Development (‘the
regulator’); and better support tenants to assert their legal rights.
- One
significant amendment is that the Bill removes the ability for landlords to end
a periodic tenancy for any reason or without providing
a reason. Instead, the
Bill specifies grounds upon which landlords can end a tenancy, including
frequent anti-social behaviour or
late rental payments, and imposes notice
requirements.
- The
Bill also makes the following changes:
- clarifying
the rules around minor changes that a tenant may make to the premise;
- providing
for fixed-term tenancies to become periodic upon expiry;
- prohibiting
the solicitation of rental bids by landlords;
- limiting
rent increases to once every 12 months;
- improving
a tenant’s ability to assign their
tenancy;
- providing
for suppression orders to be granted in the Tenancy Tribunal (‘the
Tribunal’);
- allowing
for identifying details to be anonymised in situations where a party has been
wholly or substantially successful in taking
a case to the Tribunal; and
- requiring
landlords to provide for the installation of ultra-fast broadband, subject to
specific triggers and exemptions.
- The
Bill also establishes the new financial penalties for non-compliance with the
scheme by:
- introducing
an infringement offence regime applicable to many new and existing offences (sch
1B);
- expanding
the category of unlawful acts for which exemplary damages can be awarded (sch
1A); and
- introducing
pecuniary penalties for landlords with six or more tenancies who intentionally
commit certain unlawful acts (cl 55).
Consistency of the Bill with the Bill of Rights Act
Section 14 – Right of Freedom of Expression
- Section
14 of the Bill of Rights Act affirms that everyone has the right to freedom of
expression, including the freedom to seek,
receive, and impart information and
opinions of any kind and in any form. The right has been interpreted as
including the right not
to be compelled to say certain things or to provide
certain information.1
- Various
provisions in the Bill prima facie limit the freedom of expression
by:
- requiring
landlords to respond to requests from tenants, the regulator or network
operators within a certain timeframe and/or in a
certain way;
- prohibiting
landlords from soliciting rental bids or advertising or offering tenancies
without stating a rental amount in the advertisement
or offer;
and
- providing
that landlords and tenants who fail to comply with many new and existing
notification and information obligations commit
an infringement offence and/or
an unlawful act.
- A
provision found to limit a particular right or freedom may nevertheless be
consistent with the Bill of Rights Act if it can be considered
reasonably
justified in terms of s 5 of that Act. The s 5 inquiry asks whether the
objective of the provision is sufficiently important
to justify some limitation
on the freedom of expression; and if so, whether the limitation is rationally
connected and proportionate
to that objective and limits the freedom of
expression no more than reasonably necessary to achieve that
objective.2
1 See, for example, Slaight
Communications v Davidson 59 DLR (4th) 416; Wooley v Maynard [1977] USSC 59; 430 US
705 (1977).
2 Hansen v R [2007] NZSC 7, [2007] 3 NZLR 1
at [123].
- We
consider that the limitations on s 14 of the Bill of Rights Act serve and are
rationally connected to the important objectives
of promoting good faith and
reasonable communication between landlords and tenants and ensuring compliance
with the Act.
- The
information landlords are required to supply is limited to what is necessary to
enable tenants to assert their legal rights and
the regulator to monitor to
compliance with the scheme, and the timeframe and manner restrictions are
reasonable. The newly applicable
penalties are set at proportionate levels and
the scheme enables the regulator to choose the most appropriate penalty type for
non-compliance.
Further, the prohibition on the solicitation of rental bids
appears to be necessary in order to effectively regulate the practice,
which
further exacerbates landlords’ market power over tenants.
- For
these reasons, we conclude that any limits to the freedom of expression imposed
by the Bill are justified under s 5 of the Bill
of Rights
Act.
Section 25 – Minimum standards of criminal procedure
Infringement offences
- Section
25(c) of the Bill of Rights Act affirms that everyone who is charged with an
offence has, in relation to the determination
of the charge, the right to be
presumed innocent until proved guilty according to the law.
- A
number of clauses in the Bill provide that a landlord’s failure to comply
with their existing and proposed obligations under
the Act amounts to an
infringement offence under a new infringement offence regime to be inserted by
clause 66. The infringement
offences in the Bill are listed in proposed new
Schedule 1B, which also sets out the applicable penalties. Clause 70 will also
enable
regulations to be made that specify additional offences, either in the
Act or in regulations made under it, as infringement offences.
- These
offences are strict liability offences that raise a prima facie issue of
inconsistency with s 25(c) because the accused is required to prove a defence or
disprove a presumption in order to avoid
liability. In the case of strict
liability offences, a defendant who is unable to prove a defence, or disprove a
presumption, could
be convicted even if reasonable doubt exists as to their
guilt.
- We
consider that the proposed strict liability infringement offence regime serves
the important purposes of regulating tenancy relationships,
encouraging
compliance with the Act, and efficiently penalising non-compliance. In
considering whether the provisions are proportionate
to their objectives we note
that:
- infringement
offences do not result in a criminal conviction;
- the
infringement offences are applicable only to landlords, who have chosen to
participate in a regulated activity and can reasonably
be expected to adhere to
the applicable standards of conduct;
- for
the specified offences in this Bill, the defendant (the landlord) is in the best
position to justify their apparent failure to
comply with the law, rather than
requiring the Crown to prove the opposite; and
- the
applicable penalties, namely an infringement fee of $1,000 or a fine of not more
than $3,000, are relatively low. For each infringement
offence, a lower
level
of penalty is applicable to landlords with
five or fewer tenancies, upon whom the financial impact of a fine or fee may be
greater.
- For
these reasons, we consider that the infringement offences in the Bill appear to
be justified.
Pecuniary penalties
- Clause
55 of the Bill introduces new ss 109B to 109E in the principal Act. These
sections provide the Tribunal with the discretion
to make a pecuniary penalty
order if it is satisfied that a landlord with six or more tenancies has
intentionally committed an unlawful
act under one of the following provisions of
the principal Act:
- sections
45(1A) or 66I(4) (landlord’s responsibilities in relation to cleanliness,
maintenance, smoke alarms, healthy homes
standards, and building health and
safety requirements);
- sections
45(1AB) or 66I(5) (landlord’s responsibilities in relation to contaminated
premises);
- section
54(3) (retaliatory notice of termination);
- section
60AA (acting to terminate a tenancy without grounds); and
- section
137(2) (contracting to contravene or evade the provisions of the
Act).
- Under
proposed new s 109C, the maximum amount of pecuniary penalty is $50,000. Since
this penalty significantly exceeds the fines
that can be imposed for conduct
that is characterised as criminal under the Act, we have considered whether it
could offend s 25
of the Bill of Rights Act to address the relevant conduct in a
way that may avoid its criminal procedure
safeguards.3
- In
considering whether the pecuniary penalty provisions are justified under s 5 of
the Bill of Rights Act we note that pecuniary penalty
orders:
- aim
to deter non-compliance with key obligations of the scheme, including to provide
rental premises in a condition that is not detrimental
to the health and safety
of tenants;
- can
only be made in respect of intentional conduct and are likely to be reserved for
more serious offending; and
- can
only be made in respect of landlords with six or more tenancies, whose actions
have the potential to affect a wider proportion
of the rental market and who are
likely to receive substantial rental income.
- On
this basis, we are satisfied that the civil pecuniary penalty provisions are not
in breach of s 25 of the Bill of Rights Act.
3 In this respect we note the New Zealand
Law Commission’s 2014 observation that it is not yet clear whether the
criminal procedural
safeguards in the Bill of Rights Act, which apply to
“offences”, also apply to pecuniary penalties: NZLC R133:
Pecuniary Penalties, para 6.5.
Conclusion
- We
have concluded that the Bill appears to be consistent with the rights and
freedoms affirmed in the Bill of Rights Act.
Jeff Orr
Chief Legal Counsel Office of Legal Counsel
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