Rental property damage: Landlords liable - court rules

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Tenants who damage rental properties aren't necessarily liable for the damage, the Court of Appeal has ruled.

In a years-long dispute over fire damage to a property, the court says tenants don't necessarily have to cover the costs of damage they or people they invite into a house have caused.

When Tieko Osaki poured oil into a pot and put it on high heat in March 2009, she had no idea it was the beginning of a legal quagmire she and husband Kenji would still find themselves in seven years later.

Mr Osaki rented the house he, his wife and their children lived in from Andreas Holler and Katharine Rouse.

Mrs Osaki left the oil on the stove for five fateful minutes and in that time fire took hold, causing "substantial damage" to the house.

The owners had insurance with AMI, which covered the $216,000 cost of the repairs.

But the insurance company applied to the High Court, under the owner's names, for the tenants to compensate them.

Mr and Mrs Osaki protested, saying that was not the right court to hear the matter.

So the matter went to the Tenancy Tribunal, which rules the tenants were liable for the damage.

On to the District Court. It reversed that decision, which resulted in another appeal.

Seven years later the Court of Appeal has dismissed the owner's latest attempt to recoup their costs.

In a judgement released today, the court says it's trying to decide: "Are residential tenants immune from a claim by the landlord where the rental property suffers loss or damage caused intentionally or carelessly by the tenants or the tenant's guests?"

The answer: Yes, sometimes.

The owners have been ordered to pay the tenants' appeal costs.