ACT Housing v Mildwater

[2006] ACTRTT 3

Commissioner for Housing for the ACT v Lynda Jane Mildwater [2006] ACTRTT 3

CATCHWORDS
Termination of Residential Tenancy Agreement
Effect of Termination and Possession order on condition – breach of condition

ISSUES

LEGISLATION
Residential Tenancies Act 1997 (ACT)
sections: 36, 37, 39, 40
        prescribed terms: 92

CASES CITED
ACT Housing v K.A. [2003] ACTRTT43
Commissioner for Housing for the ACT v Nicole Smith [1995] ACTSC17
Commissioner for Housing for the ACT v Jeannene Masling [2005] ACTRTT9
Commissioner for Housing for the ACT v Ante Mihalj [2002] ACTRTT14
NSW Land & Housing Corporation v Liddell (Tenancy) [2005] NSWCTTT 386
Commissioner for Housing for the ACT –v- Darryl Hudson & Debbie Hudson [2005] ACTRTT10
Progressive Mailing House –v- Tabali [1985] 157 CLR 17
Commissioner for Housing for the ACT v Saddler [2002] ACTRTT31

Case Reference Number:     RT 01/1057

Re: 11 Dickinson Street, Watson  ACT  2602

Decision

1.        That the application to set aside the orders is refused.

2.        That the warrant of eviction is to be reissued.

Member:       J. Lennard
Date:          9 January, 2006

REASONS FOR DECISION

Background Facts

1.The Commissioner for Housing in the Australian Capital Territory (Lessor) and Lynda Jane Mildwater (Tenant) entered into a residential tenancy agreement in relation to premises at 11 Dickinson St. Watson, ACT on 24 June 1996.

2.The tenant's rental account was first in arrears in November 1996.  From November 1996 to July 2001 the tenant and the lessor had entered into not less than 7 agreements, under which the tenant was to pay rent plus an amount towards rental arrears.  None of these agreements was adhered to by the tenant.

3.The lessor served several Notices to Remedy and Notices to Vacate upon the tenant in this period.

4.On 14 August 2001, the Residential Tenancies Tribunal heard the Lessor's application for a Termination and Possession order to have effect as a warrant; and made the following orders by consent:

1)That the residential tenancy agreement relating to the tenant, Lynda Mildwater's, occupancy of the premises be terminated upon default in any of the conditions specified in Order 3 of this Order.

2)That the lessor be granted vacant possession of the premises on and from the expiration of 7 days written notice, from the date of any default in any of the conditions specified in Order 3 of this Order.

3)        That this Order is made subject to the following conditions:

a)that the arrears of rent being some of $1906.30 . be paid at a rate of $30 per fortnight;

b)that the arrears of rent are to be paid to the Commissioner for Housing for the ACT by way of Centrelink Direct Debit;

c)     …
d)     …

e)that rent from the date of this Order is payable in advance to the Commissioner for Housing for the ACT commencing 30 August 2001;

f)that the tenancy be varied to include a requirement that any rent payable is to be paid by direct debit through Centrelink;

4)        …

5.On 12 May 2003 the lessor made an application for a Warrant of Eviction.  This Application was successful and a warrant was served on the tenant of 15 May 2003.

6.On 20 May 2003 the Residential tenancies Tribunal heard the tenant's application to stay the warrant.  Ms Mildwater was represented by Mr Mark Avis.  The Residential Tenancies Tribunal denied the tenant's application.  At that date, the tenant was in rental arrears to the sum of $1610.54.

7.On 10 June 2003  the tenant appealed the Residential Tenancies Tribunal decision to the Supreme Court in Australian Capital Territory.

8.Details of the progress of the matter in the Supreme Court are not available to the Tribunal.  It appears likely that the lessor and tenant reached an agreement on terms of repayments, and on 2 July 2003  the Residential Tenancies Tribunal made following orders by consent:

1)        That the warrant herein be stayed.

2)        That the matter be adjourned for one month.

9.        These orders were drafted by the lessor.  The Tribunal recalled the Warrant of Eviction.

10.On 29 April 2005 be Residential Tenancies Tribunal heard the lessor's application to restore the matter to the list.  The lessor was represented by Mr Peter Christensen and tenant was represented by Mr Mark Avis.

11.      The Tribunal received from the lessor evidence that:

a)        the tenant was $1640.13 in arrears;

b)that the tenant had made no payment of rent between 25 November 2004 and 17 March 2005;

c)one payment of $107.50 was made on 17th of March 2005 and no further payments were made until the 13th of April 2005 ;

d)that the tenant and Mr Avis had commenced Centrelink Direct Debit for rent only on or about the 13th and 14th of April 2005

e)Ms Mildwater’s payment of rent had commenced only upon the lessor informing the tenant that the matter would be returned to the Residential Tenancies Tribunal.

12.On 29 Apr 2005 be Tribunal made a Termination and Possession order to have effect as a Warrant of Eviction.

13.On the first of May 2005 the tenant made an application to set aside the order of 29 April 2005.  The tenant was represented by Ms Bolton from Welfare Rights and Legal Centre.  The lessor by Mr Peter Christensen.

14.The Tribunal adjourned the matter for a written decision and required the applicant tenant to file written submissions by 19th of May 2005 and the respondent lessor to file written submissions by 24 May 2005.  The recall warrant continues for the adjournment.

Material considered by the Residential Tenancies Tribunal

written submissions from the lessor;

written submissions from the tenant;

ACT Housing v K. A . [2003]ACTRTT 43 (29 Jul 2003)

Commissioner for Housing for the ACT v Nicole Smith [1995] ACTSC 17 (14 Mar 1995)

Commissioner for Housing for the ACT v Jeannene Masling [2005] ACTRTT 9

Commissioner for Housing for the ACT v Ante Mihalj [2002] ACTRTT 14 (26 July 2002)

NSW Land& Housing Corporation v Liddell (Tenancy) [2005] NSWCTTT 386 (3 May 2005)
Commissioner for Housing for the ACT v Darrel Hudson & Debbie Hudson [2005] ACTRTT 10 (16 June 2005)

Legislation Act 2001 (ACT)

Community Law Reform Committee ACT Private Residential Tenancy Law 1994.

Issues before the Residential Tenancies Tribunal

Whether the residential tenancy agreement between the parties terminated by operation of the order is made on 14 August 2001; upon breach of the conditions set out in those orders?

What is the effect of the settlement between the parties, as reflected in the consent orders to July 2003?

Summary of the Tenant’s Submissions

15.That the lease terminated when the tenant breached the condition precedent of the Termination and Possession Order of 14 August 2001.  The tenant dates this as April 2003; but the evidence on the Statutory Declaration from the lessor indicates that the tenant cancelled the Centrelink Direct Debit on 11 March 2003.  The Tribunal notes that the tenant's submission at the hearing on 13 May 2005 was that issue of the warrant in June 2003 “marked the end of the tenancy".  This is not in accordance with the tenant's later written submissions, which do not clearly identify the " ending" of the tenancy. 

16.The effect of the "self-executing" order of 14 August 2001, was to terminate the residential tenancy agreement upon breach of a condition of that order, and upon the authority of Commissioner for Housing in the ACT v Nicole Smith [1995] ACTSC 17, the tenant becomes a statutory tenant. The right of a statutory tenant is merely to reject ejectment, and, the obligations of the tenant are those contained in the original residential tenancy agreement.

17.The appeal to the Supreme Court was withdrawn, and the consent orders of 2 July 2003, which stayed the warrant and adjourned the matter for one month, occurred because the "tenant pays the arrears off and the landlord consents to her continuing to remain in the premises".  The Tribunal received evidence to the effect that:

a)the tenant paid $1800 on 1 July 2003 and that this payment brought her account to $189.76 in credit;

b)the tenant kept her rental account in relatively good order under November 2004, save only for arrears which appear to have been caused by administrative processes; and

c)        no payments of rent were made from November 2004 to April 2005.

18.The tenant's submissions state that the consent orders of the second of July 2003 gave rise to "the formation of the new tenancy between the lessor and the tenant whereby a right of occupation , was given to the tenant in exchange for the payment of rent as due ".  That is, the tenant argues that the statutory tenancy became a new periodic tenancy, to be implied from the conduct of the parties.

19.      The "new tenancy" it is submitted arises from the conduct of the parties:

a)After withdrawal of the Appeal and the payment by the tenant of the rental arrears the lessor “consented to her continuing to remain in possession of the premises”;

b)The parties continued to manage the relationship in the same way as it was managed prior to the termination.  This continued for two years.

20.The tenant argues that since there is a new tenancy the lessor is obliged to follow the procedures set out at Clause 92 of the Prescribed Terms; and, section 49 of the Residential Tenancies Act 1997. On the evidence, the lessor has not complied with those procedures, and the orders of 29 April 2005, it is submitted, should be set aside.

21.The tenant submitted that, in the alternative, if there was a continuing lease the Orders made on the 29th of April 2005 were nevertheless  invalid because the lessor had not served notice to remedy prior to the 'notice to vacate' and that the dispensation allowed by Clause 92 of the Prescribed Terms was not applicable in Ms Mildwater's case.  Clause 92 is set out below.  The tenant provided no legal argument in support of this assertion.

Termination for failure to pay rent

92         The tribunal may order the termination of the tenancy and eviction of the tenant on the

ground of non payment of rent in the following circumstances:

(a)     rent has been unpaid for 1 week. The first day of this period concludes at midnight on the day when the unpaid rent was due;

(b)     the lessor has served a notice to remedy on the tenant for the failure to pay the rent, being a notice—

(i)        served not earlier than 1 week after the day when the rent was due; and

(ii)        containing a statement that if the tenant pays the rent outstanding to the

date of payment within 7 days of the date of service of the notice to remedy, no further action must be taken and the tenancy continues;

(c)     if all rent is not paid within 1 week of the date of service of the notice to remedy—the lessor may then serve a notice to vacate on the tenant requiring the tenant to vacate the premises within 2 weeks of service of the notice to vacate;

(d)    no earlier than the date when the notice to vacate is served, the lessor may apply to the tribunal for an order terminating the tenancy and evicting the tenant;

(e)     the tribunal hearing of the application to terminate and evict must not be earlier than the end of the period specified in the notice to vacate;

(f)during any tenancy in which the lessor has previously issued 2 notices to remedy, the lessor may serve a notice to vacate 1 week after the day when the rent has fallen due without serving a notice to remedy.

22.The tenant’s submissions also argued that the order of 29 Apr 2005 was invalid on its face for failure to comply with sections 39 and 40 of the Residential Tenancies Act 1997. Those sections are set out below.

RESIDENTIAL TENANCIES ACT 1997 - SECT 39

Content of termination and possession orders

(1)  If the tribunal makes a termination and possession order the order must specify the following:
                       (a)     the date the tenancy terminates;
                       (b)     that the tenant must vacate the premises on or before the date of termination;
                       (c)     either that, should the tenant fail to vacate the premises as specified—

(i)     the lessor may request the registrar to issue a warrant for the eviction of the former tenant; or

(ii)        the termination and possession order has effect as if it were a warrant for

eviction.

(2)    If a termination and possession order specifies that it has effect as if it were a warrant for

eviction issued by the tribunal under division 4.2, the order must comply with section 40.

RESIDENTIAL TENANCIES ACT 1997 - SECT 40

A warrant issued under this part must —

(a)   authorise the police to take appropriate action to evict a specified person within the period specified in the warrant; and

(b)       require the police to give the person not less than 2 days notice of the proposed

eviction

23.These provisions appear to have been misunderstood by the tenant. The content of the order of the tribunal is directed at the parties appearing before it, not the Australian Federal Police in relation to the service and execution of the warrant for eviction. Section 39 provides is that where an Order of the Tribunal is expressed to have effect as a warrant then section 40 is complied with.

24.The recovery of possession is regulated by section 37 of the Act which provides that possession may be recovered, inter alia, pursuant to a warrant issued by the Tribunal or an order made by the Tribunal. Section 39 provides that when making an order terminating a residential tenancy agreement, the Tribunal may specify that the lessor may seek the issue of a warrant from the registrar upon the expiration of the date specified for possession, that the order itself may have effect as if it were a warrant for eviction. In either case an actual or deemed warrant is necessary to obtain possession. Commissioner for Housing for the ACT v Darrel Hudson & Debbie Hudson [2005] ACTRTT 10 (16 June 2005) [19]

Summary of the Lessor's submissions

25.That the residential tenancies agreement is subject to the ordinary principles of contract law, as modified by the provisions of the Residential Tenancies Act 1997: Progressive Mailing House v Tabali (1985) 157 CLR 17. The Tribunal agrees with this submission. Residential tenancy agreements have legal characteristics of both the lease (most notably the creation of proprietary interests in land and a possessory right) and the contract (most notably the requirements of formation and interpretation of terms).

26.That Orders made under section 49 (3) are ‘self-executing’ only in the sense that the Residential Tenancies Tribunal is not directly involved further in the matter. Where there is a breach of a conditional order, until a breach is acted upon , and a warrant is sought and enforced, there is no effect upon the continuing [contractual] relationship between the parties.

27.That Smith's case has been misunderstood by the tenant.  That case is an example of the dual nature of the lease, where legal interest in property ceases upon the service of the notice to vacate, but the contractual aspect of the relationship continues and the lessor can only recover possession when the tenant peaceably vacate the premises, or, the warrant for eviction is executed.

28.Thus, in the present case the interest in land terminated in April 2003, but the contractual tenancy has continued (and still continues).

29.The Orders of 2 July 2003 are in effect a stay of the warrant issued by the Residential Tenancy Tribunal on 10 June 2003; but there is no basis for putting the limit upon how long a stay of a warrant may exist.

30.At one level, in the case that a warrant is stayed, the Tribunal has already formed the view that the lessor is entitled to the warrant, that is, there is an entitlement in the lessor to have the relationship terminated, so any extension the tenant gets is "borrowed time".  In this regard, the lessor submits that the length of time a tenant has under any stayed warrant cannot amount to unreasonableness…. where there has been further breaches  subsequent to the staying [of the warrant] the tenant must expect, having already being given a last-last chance, that eviction must surely follow.

31.A tenancy does not end (into case of a breach by the tenant) until the lessor takes action to end the tenancy, and that action results in the lessor obtaining vacant possession of the premises.  A similar analysis applies to invalid Notice to Vacate.  If a tenant does not surrender possession and the lessor takes no further action, then there is no effect on the contractual tenancy relationship.

32.Accordingly, if there has been no termination of both the interest in land and the contractual tenancy, either the whole tenancy, or at least the contractual tenancy remains on foot, and it follows that the lessor is entitled to apply to the Tribunal as it did, citing further breaches of the tenancy, and asked the warrant to be reactivated, as was the case in Saddler [2002] ACTRTT 31(13 December 2002).

33.The lessor submits that the conduct of the parties after the Orders of 10 June 2003 does not point to a new tenancy, but rather to the continuance of the original tenancy.  The Lessor asserts that it never had any intention of entering into a new periodic tenancy.  Further, that the tenant’s appeal to the Supreme Court is not consistent with the assertion that the tenancy ended upon her breach of the conditions set out in the Tribunal's orders.

Termination of Residential Tenancy Agreements

34.Residential tenancy agreements under the Residential Tenancies Act 1997 are leases to which the usual principles of contract law apply Progressive Mailing House v Tabali (1985) 157 CLR 17. This Tribunal adopts the reasoning of the Tribunal in Commissioner for Housing for the ACT v Darrel Hudson & Debbie Hudson [2005] ACTRTT 10 (16 June 2005): a residential tenancies agreement is a species of lease at common law and shares the dual characteristics of all such leases, namely:

a)that as between the landlord and tenant it is fundamentally a contract, regulated by the common law of contract as modified by any relevant statutory enactment; and,

b)   that as against the rest of the world, the lease is an estate in land.

35.The Residential Tenancies Act 1997 and the Prescribed Terms found in the Schedule to that Act provide rights to both the landlord and tenant to terminate the residential tenancies agreement for breach of contract, and, in other circumstances where appropriate.  Ss 43, 44, 45, 46 deal with the termination of a tenancy upon the Tenant’s application. Ss 47, 48, 49, 50, 51, 52, 53, 54 and 55 provide for termination upon the Lessor’s application. Sections 36 specifies the circumstances in which a tenancy agreement terminates and 37(1), prohibits self-help solutions by lessor.

36.This matter concerns the tenant’s breach of the residential tenancy agreement by non-payment of rent. The relevant provisions: Ss 36, 37(1), and 49 are set out below.

Residential Tenancies Act 1997 - Sect 36, 37 & 49

Termination

36. Notwithstanding anything to the contrary in any law of the Territory, a residential tenancy agreement shall not terminate or be terminated other than in the following circumstances:

(a)     where a fixed term agreement expires and the tenant vacates the premises on or after the expiration;

(b)        where a tenant notifies the lessor in the prescribed form of the tenant's intention to

terminate and vacates the premises in accordance with the notice;

(c)        where the Tribunal terminates an agreement under Division 3 or 4;

(d)     where the Tribunal makes a termination and possession order in relation to the

premises that are the subject of the agreement under Division 4 or 5;

(e)        where the tenant abandons the premises that are the subject of the agreement;
                       (f)         where a person takes action in accordance with section 64;
                       (g)        where the tenant and lessor agree in writing to terminate the agreement and the

tenant vacates the premises in accordance with the agreement to terminate;

(h)        where the tenant and the lessor are the same person;
                       (j)         where—
  (i)     a party to the agreement repudiates the agreement;
  (ii)     the other party accepts the repudiation; and
  (iii)     the tenant vacates the premises.

Entry for eviction purposes

37. (1) A person shall not enter premises or any part of premises of which another person has prescribed possession for the purpose of recovering possession of the premises or part except in accordance with a warrant issued by the Registrar, an order or a warrant of the Tribunal or an order or judgment of the Supreme Court.

Failure to pay rent

49.      (1) On application by a lessor, the Tribunal may make a termination and possession order where—

(a)        the tenant has failed to pay rent due and payable under the residential tenancy

agreement;

(b)     the lessor has served a termination notice in the prescribed form on the tenant on

the basis of the failure to pay rent; and

(c)        the tenant has not vacated the premises in accordance with the notice.

(2) Where a lessor has made an application under subsection (1), the Tribunal may refuse to make a termination and possession order if—

(a)        the tenant has paid the rent due and payable and is, in the opinion of the Tribunal,

reasonably likely to pay rent as it becomes due and payable; and

(b)        the Tribunal considers it just and appropriate to do so.

(3) Instead of making a termination and possession order under subsection (1), where—

(a)        the tenant is, in the opinion of the Tribunal, reasonably likely to repay the rent due

and payable as well as pay rent that becomes due and payable; and

(b)        the tenant agrees to repay the rent due and payable, and undertakes to pay rent as

it becomes due and payable, as required by the Tribunal;

the Tribunal may order that if the tenant fails to pay the rent due and payable, or rent that becomes due and payable, as required by the Tribunal—

(c)        the tenancy shall terminate at a specified hour on the day after the day on which

any rent was due and payable and not paid; and

(d)        the lessor shall become entitled to possession of the premises and all rent due shall

be payable immediately.

(4) Where—

(a)        the Tribunal makes an order under subsection (1); and
                       (b)        the Tribunal is satisfied that—

(i)         were the order not suspended for a specified period of no more than 21 days

he tenant would suffer significant hardship; and

(ii)     that hardship would be greater than the hardship that would be suffered by
the lessor if the order were suspended for the specified period;

the Tribunal may suspend the operation of the termination and possession order for a specified period of no more than 21 days.

37.These provisions must be interpreted by the Tribunal in the context of the Act as a whole.  The orders made under these provisions must be given meaning that accords with the scheme of the Act.  The Legislation Act 2001 provides:

139: In working out the meaning of an Act, the interpretation that would best to the purpose of the Act is to be preferred to any other interpretation.
140: In working out the meaning of an Act, the provisions of the Act must be read in the context of the Act as a whole. 
141: In working out the meaning of and Act, material not forming part of the Act may be considered

38.Section 142 sets out the non-legislative material that may be considered, and this includes "any relevant report a royal commission, law reform commission, committee of inquiry or other similar entity that was presented to the Legislative Assembly before the Act was passed".

39.The Tribunal has considered the meaning of the law relating to termination of tenancies and other cases, including that of ACT Housing v K. A . [2003]ACTRTT 43 (29 Jul 2003). The Tenant’s written submission refers the Tribunal to paragraph 47 of the case.  The Tribunal adopts the view that the tenant's understanding of the case is incomplete, and that the selective quoting in the submission is not a deliberate attempt to mislead the tribunal.  In ACT Housing v K. A .  the Tribunal states:

Section 42 sets out a method for determining whether the condition attached to the conditional order for possession has been breached. If a breach of the stipulated condition has occurred then section 49(3)(c) and (d) provide that the lease terminates and the lessor becomes entitled to possession by virtue of the breach, without the need for further order of the Tribunal. In this sense section 49(3) operates in the manner of a self executing provision. However, before the Registrar can issue a warrant for eviction to give effect to the order of the Tribunal, the Registrar needs to be satisfied that the stipulated condition has in fact been breached. Section 42 addresses this issue. If the tenant fails to respond to the notice by the Registrar of the intention to issue a warrant, then s42(3) provides a form of deemed satisfaction on the part of the Registrar that the stipulated condition has in fact been breached and the warrant may issue. [47.]

40.      Further in discussing the scheme of the Act the Tribunal stated:

The scheme of the Act appears to embody the principle that the lessor is entitled, as of right, to recover possession of the premises if the tenant defaults in rent and fails to make good the default. Section 49(3) appears to provide a "last chance" for the tenant to make good the default pursuant to conditions imposed by the Tribunal in a conditional termination and possession order, but if the tenant defaults in compliance with such an order, then the lessor is entitled to recover possession pursuant to section 42. The Tribunal notes and generally concurs with the terms of the Applicant's submission on this point at paragraph 17 of the submission of 9 May 2003 and its reliance on the terms of the Community Law Reform Commission Report upon which the Act was modelled [The Estate of Tanya Humphries -v- The Commissioner for Housing 2003 ASTSC 40 at 15-16].

41.      Finally, at paragraph 76, the tribunal states:

It is clear from section 39(1) that a lease comes to an end of the date specified in the termination and possession order of the Tribunal.  In the case of an unconditional order the date is specified in the order,…. In the case of a conditional order for termination and possession there is no date specified for termination of the lease, rather section 49 (3) (c) provides that the coming into existence of such a date is contingent upon a breach of the stipulated condition therein.  In the case of a conditional order the lease continues in existence unless and until the procedures of section 42 are invoked.

42.The Tribunal can find no support in ACT Housing v K. A for the tenant's argument that Termination and Possession Orders on Condition act as a self executing orders in the sense that the entire relationship both proprietary and contractual between the landlord and the tenant comes to end automatically upon default by the tenant. The usual circumstances where the tenant is in breach of a condition set down in a termination and possession order on condition is that the tenant remained in possession of the premises. The scheme of the Act prevents the lessor from retaking possession in any manner except for as provided by section 42 -- that is by the lessor requesting that a warrant for eviction be issued, served and executed. Thus, the entire lease is not brought to an end until there is:

a)        breach by the tenant of a condition to termination possession Order, and

b) action under section 42 by the lessor.

43.It follows that where there is a breach and the lessor takes no action the tenancy does not end, and, the rights and obligations created by the termination possession order on condition remain in force.

44.      The Tribunal is confirmed in this view by reference to the Community Law Reform Report.

[Community Law Reform Committee ACT Private Residential Tenancy Law 1994.] That committee stated, inter alia, that:

In cases where termination is sought for failure to pay rent the Tribunal should have the discretion to refuse eviction where it is apparent that the tenant is able and willing to pay the ongoing rent and the rent arrears over a reasonably short period. [854]
The committee considered procedures for termination and eviction in cases where the Tribunal refuses termination of the condition that the tenant repay the rent owing overtime and the tenant fails to make repayments required by the Tribunal.  The Committee considers that in this case the lessor should be able to obtain possession of the premises with little further delay.  It should not be necessary for the lessor to have to give further notice of termination to the tenant and return to the Tribunal for a termination order.  (Emphasis added)[857]

45.The Residential Tenancies Act 1997 provides for termination and possession orders relating to residential tenancy agreements in a variety of circumstances. One such method is what is known as a termination and possession order on condition. This is provided for in section 49(3) of the Act.

46.The scheme of the Act at section 49(3) balances the interests of the lessor (in having the obligations of the tenant to pay rent enforced) and the tenant (in being able to preserve the tenancy and being given last chance to retain the housing). The purpose of the Act is to mitigate the harshness of the common law and provide some level of security of tenure for tenants and their families. Section 49(3) and 42 balance this interest with the interests of the lessor and provide a scheme whereby the lessor is able to obtain possession of the premises upon further failure by the tenant to pay rent and/or arrears as required by an order made by the Residential Tenancies Tribunal should section 49(3).

47.It is the breach by the tenant of the condition contained in the order that triggers the right of the lessor to, without the need for any further hearing in the Tribunal use the administrative processes set out in section 42 to require the Registrar to issue a warrant for eviction. This breached terminates the tenant's proprietary right against the rest of the world , and allows the tenant to resist eviction, except where the eviction is carried out through the procedures available in the Act. [See s37 of the Act and Smith.]

48.Upon the service of a warrant the tenant may peaceably vacate the premises, and such vacation brings the contractual relationship of landlord and tenant to an end.  Where the tenant does not peaceably vacate, the warrant will be executed, and upon the forcible removal of the tenant the contractual relationship of landlord and tenant shall end.

49.The Tribunal concludes that this is the only sensible meaning to be given to the words of section 49(3). If the tenant's argument was adopted, leases would be ended upon the breach of every condition, whether the lessor took action or not. Suppose a tenant failed with a payment of rent as required by the termination possession order on condition; contacted the lessor and explained that they had been involved in a car accident while on the way to make the payment and then made the payment one day late: - on the tenant’s argument the lease would have ended for breach and the acceptance by the lessor of the (one day late) payment would give rise to a new tenancy by implication. The tenant would then evade all consequences of further breach of the condition and the lessor would be required to begin the process of termination by service of notices to remedy and vacate. Instead of having an automatic and timely method of regaining possession of the premises the lessor would risk further economic loss and incur extra expense. All lessor would resist the making of termination and possession orders on condition and prefer to proceed to a warrant for eviction.

50.Such an implied tenancy has other difficulties, for example, the lessor would be unable to increase the rent payable until 12 months after the tenancy by implication had arisen. This would have the effect of denying the Lessor and right provided by the legislation.

51.The legislature could not have intended that a tenant through the action of breaching not only the obligations under the residential tenancy agreement, but also by breaching an order made by the Tribunal, could avoid or ignore the obligations imposed by the legislation, the tenancy agreement and the order of the Tribunal in relation to an existing tenancy, without the possibility of any further sanctions for such a breach. Nor could the Legislature have intended that a lessor shall lose the protection provided by the scheme of the fact, in particular as set out in sections 49 and 42, by the act of waiving the right to proceed to eviction and allowing a tenant in breach of an order of the Tribunal to remain in possession of the premises.

52.Taking into account the submissions of both parties, the Tribunal enters the question whether the residential tenancy agreement between the parties terminated by operation of the order made on 14 August 2001; upon breach of the conditions set out in those orders, in the negative.The parties were in a residential tenancy agreement which commenced on 24 June 1996 and continues to the present. This tenancy was characterised by frequent failure of part of the tenant to meet her obligations with regard to the payment of rent. The Residential Tenancies Tribunal made a termination and possession order on condition on 14 August 2001.  The residential tenancy agreement remains subject to that termination and possession order.

What is the effect of the settlement between the parties, as reflected in the consent orders to July 2003?

53.The Orders of the Tribunal were stayed by the appeal from the tenant to the Supreme Court. When the parties reached agreement as reflected in the consent orders of July 2003, the appeal had been withdrawn by the tenant and the Orders of the Tribunal were no longer stayed. The tenant had paid the outstanding arrears and the lessor forbore from applying to the Tribunal or Registrar for the re-issuing of the warrant. This can amount to no more than a waiver by the lessor of the right to proceed to eviction.

54.The lessor made an application to restore the matter to the list, because the previous order had stayed the warrant and adjourned the matter for one month, however the matter had not returned to the Tribunal. The warrant remained stayed and it is appropriate for the Tribunal, rather than the Registrar, to hear an application for the lifting of the stay.

55.In the interests of clarity and because the matter had been dormant for such a long period of time the Tribunal made a termination and possession order, rather than an order lifting the stay of the warrant; the practical effect of either form of order would be identical.

56.The tenant has failed to establish any grounds upon which the Tribunal should set aside the termination and possession order. The application to set aside the Orders is refused. Accordingly, the Tribunal shall re-issue the warrant for eviction.

Jann Lennard
Member

9 January 2006