Some issues to do with tenants liability for damage are so contentious they make it all the way to the High Court as was the case with Guo v Korck .
This case involves a family, Grant and Lara Korck, who moved into a rental property in Titirangi, Auckland, with their two poodles. Originally the landlord, Gary Guo, was reluctant to accept the tenants because of their dogs but was assured by Korcks that the dogs were house-trained.
Eight months later, the tenants and the landlord reached a mutual agreement to terminate a tenancy agreement early. After the Korcks moved out, the landlord discovered extensive carpet damage despite the professional cleaning.
The tenants agreed to forfeit their bond to settle the matter, but then lodged a claim for a full refund of the bond. Guo made a counter-claim to cover the costs of replacing the carpet.
The Tenancy Tribunal where the case was heard first decided in favour of the landlord by ordering the tenants to pay $10,000 to replace the damaged carpet. This decision was later overturned in the District Court on the grounds that the stains were not intentionally caused. As the landlord was also insured, exoneration was also applied (even though the insurer refused the cover)
Guo went to the High Court to appeal the decision stating that the tenants' original representation of the dogs being house trained was not taken into account. He also accepted that some damage by dogs could have been accidental, but the extent of the damage, the number of rooms affected, the sizes of the stains, led him to believe the damage was caused over a long time. The tenants had to be aware of the problem and did nothing about it.
The tenants argued that they could not be liable as the tenancy agreement allowed the two dogs on the property and the landlord held insurance that should have covered this situation.
Justice Walker agreed that section 269 of the Property Law Act restricted claims against tenants for insured damage where the damage was caused carelessly. But found that the evidence for extensive damage was compelling and believed the tenants failed to mitigate the damage by continuing to allow dogs to remain inside the property after several episodes. The fact that the insurance company had declined cover was also found significant. This led the High Court to rule that the damage was intentionally caused.
Justice Walker reinstated the order made by the Tenancy Tribunal and ordered additional court fees, applications fees to be covered by the tenants.
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