The garage floor was concrete with carpet glued directly to it and the premises suffered from high humidity and dampness, which caused mould and a "prevalence of slugs" according to the decision.
"It does seem to me more likely than not that the dampness and humidity levels (the tenants have provided evidence of humidity levels of 70 per cent) were contributed to by the spaces being lived in, cooked in, subjected to steam from cooking and showering etc having never been designed or intended to cope with those uses," the tribunal said.
"The draughts and lack of insulation contributed to the issues with cold and dampness experienced by the tenants."
The tenants lived at the property for nearly four years and the landlord lent them a dehumidifier, provided them with use of a hydrometer and installed a bathroom extractor fan.
"Nevertheless, I find that by seeking to derive rental income from renting out a space that was not intended, approved or adequate for that use, and the tenants, as a result of having to deal with the inadequacies of that space, an award of exemplary damages is appropriate."
The tribunal found the landlord, Sara Hong, breached her health and safety obligations at the property and had committed an unlawful act.
Hong told the tribunal that she had poor command of the English language and wasn't aware of what she was signing when she signed the renting agreements.
However, the decision states that she must have been aware she was entering into a formal agreement and had a responsibility to make an effort to understand what exactly she was signing.
"The landlord may have been unaware of her obligations as a landlord under the Residential Tenancy Act but that is not a reason for her not to be held to those important legal obligations," the decision says.
"The information supplied by the landlord is simply misleading. If, as the landlord says, she was not really aware of the content of the agreement, she ought not have made those representations without checking their effect."
Among the reparation Hong was ordered to pay her former tenants was a $750 fine for failing to provide insulation, a $500 fine for not supplying any form of heating and $30,000 in repaid rent which amounted to 30 per cent of the base rent of $500 per week paid over a total of four years.
In addition to the house being mouldy, cold and full of slugs, the tenants said the landlord became a constant presence in the garden area immediately outside their living area.
They understood from the agreement that they had exclusive use of that garden area which the landlord then "took away" by using it herself.
They say that her presence was unsettling and disturbing and fundamentally undermined their peace, comfort and privacy in living in the premises.
However, the Tribunal did not find that the landlord had harassed the tenants as they claimed.
