Who should have been paying a landlord $800 a week for using his rental property?

Ordinarily, one would expect the tenants to foot the bill for the house they live in – unless, like Neil and Angela Cameron, you assumed your insurer was picking up the tab.

It should have been a simple question, but instead, it’s taken multiple legal jurisdictions thousands of dollars in legal bills and several years to answer.

Now, after a protracted legal battle, the Camerons have been partially successful in overturning a Tenancy Tribunal order that they pay the owner of the house they lived in rent-free for nearly 15 months some $52,000.

Instead, they only have to pay him half that amount.

Why? Because both they and their landlord wrongfully assumed the insurer was paying. Meanwhile, the insurance company – IAG New Zealand – thought it was only funding six months’ worth of accommodation.

“I’m not a freeloader,” Neil Cameron told NZME.

“But that [Tenancy Tribunal] ruling made us sound like liars and cheats who were just taking his money.”

Cameron said he’d never been told of the amount he owed the property’s owner Peter Randle for rent and had been working on the assumption IAG were paying.

“If he’d contacted me sooner and I’d known I was liable to pay, I would have,” he said.

“We’re not poor, we pay our bills on time. We’re not bad people.

“Really we wanted all our money back... but the most important thing for us is that the Tenancy Tribunal ruling was quashed.”

The misunderstanding began in 2018 when the property the Camerons bought in Clearwood, just outside the city, turned out to have been damaged in the Christchurch earthquakes.

Repairs to the units, which were part of a small body corporate and insured by IAG New Zealand under the organisation’s policy, were done in stages, with the property next door owned by Randle the first to be fixed.

Randle wasn’t using his place, though, so when it came time for the Camerons’ place to be repaired, they agreed to move in for $800 a week on the understanding IAG was footing that bill.

However, there were significant delays in completing the work, which resulted in the Camerons living in their neighbour’s townhouse rent-free for about 15 months after their accommodation insurance coverage reached its limit.

In January last year, two years after the Camerons had moved back into their own house, Randle filed a claim with the Tenancy Tribunal seeking $52,943 in rent arrears.

The Camerons claimed in turn that they hadn’t agreed to pay any rent, they didn’t have a tenancy agreement and they were under the assumption that insurance should have been covering them.

The tribunal last year described the couple’s assertion that they could live rent-free until their house was ready if insurance didn’t cover the cost as “surprising”.

“It would mean that the landlord was bound to allow them to occupy the premises, rent-free, for an indeterminate time,” the ruling stated.

Since then the Camerons have appealed the ruling and their legal fight was moved to the Christchurch District Court.

In his recent decision, Judge Paul Kellar said that on one hand, their appeal was simple and not uncommon in post-earthquake era Christchurch, where people had to move around while repairs on their own properties were being completed.

“Sometimes, in fact often, the repairs take longer than anticipated and the insurance accommodation cover runs out before the repairs are completed. In that situation, the tenant must meet the uninsured cost of the accommodation,” Judge Kellar said.

The way those repairs were handled was the subject of a separate ruling in the Camerons’ favour after they took the repair company to the Disputes Tribunal and won $30,000.

On the other hand, Judge Kellar noted that the Camerons’ case was difficult because communications between IAG and the body corporate the units belonged to didn’t state that they would have to pay any rent themselves.

“An objective interpretation of the alternative accommodation agreement is that the costs (namely the rent) would be fully funded by insurance cover without the Camerons being called upon personally to make payment,” his judgment reads.

There was no provision in the Alternative Accommodation Agreement for what would happen if the repairs were delayed or if the insurer wouldn’t continue paying. Nor was there any subsequent agreement about how the rent was to be paid when it became apparent that available insurance monies were exhausted.

While Randle didn’t specify that his tenants should start forking out personally, the Camerons remained in the property knowing their coverage had run dry, Judge Kellar found.

“The difficulty in this case is that neither party clearly communicated with the other as to what would happen once insurance money ran out. To that extent they must share responsibility for the situation that has eventuated,” Judge Kellar said.

The judge ruled that ultimately there was a tenancy agreement between Randle and the Camerons, but it was a somewhat vague agreement and one based heavily on assumptions about what IAG would and wouldn’t pay.

“Mr and Mrs Cameron occupied the premises rent-free for some time after insurance was no longer available,” Jugde Kellar said.

“It was never their position that Mr Randle was not entitled to rent. Their position simply is that they were not personally liable to pay it.”

Judge Kellar quashed the Tenancy Tribunal’s order for the Camerons to pay Randle $52,000 and replaced it with an order to pay $26,000, noting that the two parties were equally liable for the outstanding rent.

Randle declined to comment for this article.

Jeremy Wilkinson is an Open Justice reporter based in Manawatū covering courts and justice issues with an interest in tribunals. He has been a journalist for nearly a decade and has worked for NZME since 2022.