"While I accept that the tenant has intentionally breached the agreement by allowing a dogs onto the property the landlord has not established that the tenant intended to damage the carpet," the adjudicator said.
"Nor has the landlord proven the tenants actions amount to an imprisionable offence or
that insurance is irrecoverable because of the tenant's acts or omissions.
"Ms Stewart is immune from liability for the damage to the carpet."
Russ told Fairfax he had filed an appeal against the decision in the Palmerston North District Court.
The case will be heard in December.
"I don't want to be in this situation but ... there's consequences outside of my own case," Russ said.
"It opens the door to all sorts of problems down the track."
Tenacy.co.nz director Scotney Williams said Russ' case was an example of competing definitions of intentional damage.
He hoped Russ' appeal would help set a more concrete measure for when damage could be considered unintentional, Fairfax reported.