Landlords have lost a claim dispute with Suncorp after evicting a tenant who used a false name, defied multiple orders not to paint a hardwood deck and was later arrested by police.

The investment property owners held a landlord insurance policy and lodged a claim after evicting the tenant. Suncorp accepted the claim and covered some damage but not the cost of rectifying the outdoor deck.

The tenant had twice asked for permission to paint the merbau deck and been refused by the landlords. He went ahead and used house paint on the hardwood, which the landlords said permanently ruined the area and devalued the property.

Paint was applied to areas that did not require paint and there were stains from items being placed on still-wet paint. Outdoor blinds had paint on them and there were gaps in coverage where access was difficult which the landlords said denoted malicious intent.

They argued it was “not painting but graffiti” as the job was not fully done, and that this was also evidence of the tenant’s malicious intent to misuse the property.

The Australian Financial Complaints Authority (AFCA) said the policy “simply does not respond in the circumstances” and Suncorp was not liable for costs relating to the deck or the outdoor blinds.

“It is not intentionally harmful or destructive to paint a deck,” AFCA ruled. “That the tenant used house paint may have been negligent but the policy makes it clear that this is not covered.”

The ruling says the tenant’s decision to paint the deck was not to cause harm.

“It was to change the appearance of an aspect of the home,” it said. “It is not consistent with vandalism.”

AFCA said the decision to proceed with the work was “essentially an aesthetic choice for the tenant” and whether or not it was a breach of the terms of the rental agreement, or the understanding between the parties, was not relevant to the insurance cover.

“The policy does not provide cover for a failure to follow instructions or a possible breach of a tenancy agreement,” AFCA said.

The landlords said the tenant entered the home under an assumed name and an arrest by police since his eviction from the property was evidence of the tenant’s poor character but AFCA said the only relevant issue was his decision to paint the back deck.

AFCA agreed malicious damage and vandalism was the cover type most closely aligned with the claim but it found the “actions of the tenant do not align with this behaviour” and no other listed policy events applied.

The policy covered “deliberately harmful acts or omissions” but not “reckless or negligent acts”.

AFCA said photos of the painted deck “arguably do not show damage” and even if they had, there was still no evidence the painting was done with the intent to cause harm or damage.

“This is the same for the paint staining of the outdoor blinds, which appears to have been a by-product of the painting effort,” AFCA said.

The use of house paint on the hardwood “appears to be a mistake by the tenant,” AFCA said.

“The painting of the deck was a choice made by the tenant that the complainants did not agree with. The policy does not provide cover for this,” AFCA said. “It would be unfair to compel the insurer to cover the rectification of the work.”

See the full ruling here.