Bartlett v Ramasamy

[2016] ACAT 115

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

BARTLETT & ANOR v RAMASAMY (Residential Tenancies) [2016] ACAT 115

RT 188/2016

Catchwords:              RESIDENTIAL TENANCIES – transfer/posting clause – misleading advice on transfer/posting clause – time in which cleaning is to be done

Legislation cited:      Competition and Consumer Act 2010 (Cth) sch 2

Residential Tenancies Act 1997 ss 8, 46, 84

Tribunal:                   Senior Member A Anforth

Date of Orders:  19 August 2016

Date of Reasons for Decision:         17 October 2016

AUSTRALIAN CAPITAL TERRITORY  )

CIVIL & ADMINISTRATIVE TRIBUNAL       )          RT 188/2016

BETWEEN:

ALLEN BARTLETT

First Applicant/Lessor

PAM BARTLETT

Second Applicant/Lessor

AND:

SARAVANAN RAMASAMY

Respondent/Tenant

TRIBUNAL:   Senior Member A Anforth

DATE:19 August 2016

ORDER

The Tribunal orders that:

1.The lessor is to pay the tenant $284 within 28 days.

……………Signed………..

Senior Member A Anforth

REASONS FOR DECISION

Summary

1.This case concerned:

(a)the application of a fair ‘posting’ clause allowed by section 8 of the Residential Tenancies Act 1997 (RTA) and misleading statements to the tenant from the lessors’ agent to the effect that the clause was only applicable to tenants who were military personnel; and

(b)the tenant’s obligation to have cleaning done before or at the time the tenancy ends and not to expect to retain the premises for cleaning purposes after rent obligations have finished.

2.An oral decision was given at the hearing on 19 August 2016. The lessors have sought reasons for that decision. Those reasons are set out below.

The reasons for the decision

3.The applicants are the owner and lessors of residential premises in the ACT let to the respondent as a tenant. The agreement was in the standard terms provided in schedule 1 of the RTA. The tenancy was for a fixed term commencing on 18 September 2015 for 12 months. The rent was $340.00 per week and the bond was $1360.

4.On 13 November 2015 the tenant gave the lessors written notice of his transfer to Brisbane in the course of his employment with the Commonwealth. He offered to introduce a replacement tenant.

5.The tenant vacated the premises on 23 November 2015 and returned the keys to the lessors’ agent. The final outgoing inspection had been arranged for that date but the plans miscarried. The tenant had arranged for cleaners to collect the keys from the lessors’ agent and carry out an end of lease clean on 5-6 December 2015 at a cost of $440. Ultimately these cleaners declined to undertake the task at the agreed cost.

6.The lessors had their cleaners attend the property on 14 December 2016 at a cost of $947.21 plus $155 for the carpets. The lessors did not take any photographs of the premises prior to the cleaning.

7.The tenant paid rent through until 5 January 2016 on the understanding that he was responsible for the rent until a new tenant was found. A new tenancy commenced on 6 January 2016. Had a fair posting clause provided for by section 8 of the RTA applied, the tenant would not have been liable for rent beyond four weeks from his notice. But the residential tenancy agreement said that the ‘posting clause’ did not apply. The posting clause is set out in section 8(2) of the RTA:

(1)A residential tenancy agreement—

(a)must contain, and is taken to contain, terms to the effect of the standard residential tenancy terms mentioned in schedule 1; and

(b)if the lessor and tenant agree—may contain a fair clause for posted people; and

(c)may contain any other term—

(i)that is consistent with the standard residential tenancy terms; or

(ii)that is inconsistent with a standard residential tenancy term if the term has been endorsed by the ACAT under section 10.

(2)In this section:

fair clause for posted people means the following clause:

Termination because of posting

(1)The tenancy agreement may be terminated—

(a)if the lessor is posted to Canberra in the course of the lessor’s employment—by the lessor giving the tenant at least 4 weeks written notice; or

(b)if the tenant is posted away from Canberra in the course of the tenant’s employment—by the tenant giving the lessor at least 4 weeks written notice.

(2)The tenancy ends—

(a)4 weeks after the day a notice is received under subclause (1); or

(b)if a later date is stated in the notice—on the stated date.

8.In January 2016 both parties made a claim on the bond held by the Office of Rental Bonds (ORB). On the 23 February 2016 the ORB referred the dispute to ACAT. The dispute was the subject of an unsuccessful negotiation conference. On 29 March 2016 the Tribunal made directions for the filing of a formal application by the lessors and the evidence the parties relied upon.

9.On 19 April 2016 the lessors filed their application to the tribunal seeking an order for compensation for the cost of cleaning the premises in the amount of $1102.21 to be paid from the bond that is held by the ORB. Appended to that application was:

(a)A copy of the residential tenancy agreement.

(b)A copy of the ingoing and outgoing condition reports.

(c)An invoice from Stain Busters for $155 for carpet cleaning.

(d)An invoice from Focus for cleaning the house and yard at $947.21.

(e)A series of emails between the lessors agent, Ray White Canberra, and the tenant concerning arrangements for the tenant’s cleaner to gain access to the premises.

10.The lessors’ claim filed in the Tribunal did not include any claim for rent arrears or for any loss of future rent arising from the termination of the tenancy during the fixed term. It seems that the lessors had made a demand on the tenant for this loss of future rent and the break lease fee under section 84(3) of the RTA in the sum of $1214.21. Section 84 provides:

(1)If a lessor received a notice of intention to vacate before the end of a fixed term agreement, and the date nominated in the notice as the date when the tenant intends to vacate is a date before the end of the agreement, the lessor may—

(a)accept the notice; or

(b)apply to the ACAT for compensation for—

(i)the loss of the rent that the lessor would have received had the agreement continued to the end of its term; and

(ii)the reasonable costs of advertising the premises for lease and of giving a right to occupy the premises to another person.

(2)On application, the ACAT may award compensation of the kind mentioned in subsection (1) (b).

(3)The amount of compensation the ACAT may award—

(a)under subsection (1) (b) (i) must not be more than the lesser of the following:

(i)25 weeks rent;

(ii)rent in relation to the unexpired part of the agreement; and

(b)under subsection (1) (b) (ii) must not be more than 1 week’s rent.

(4)In deciding the amount of compensation that may be awarded in relation to the reasonable costs of advertising, the ACAT must have regard to when, apart from the vacation of the premises—

(a)the agreement would have ended; and

(b)the lessor would have incurred the costs.

11.On 28 April 2016 the tenant filed his response and counter claim. The response denied that the cleaning costs were reasonable. The tenant had arranged his own end of lease cleaners at a cost of $440.00 and asserted that the lessors’ agent inhibited their access to the premise and otherwise discouraged those cleaners from doing the job. The tenant’s cleaners ultimately did not attend to the task and the tenant did not pay them. The tenant offered the sum of $440 as the reasonable cost of the lessors’ cleaning and paid this amount to the lessors, for which credit is due.

12.The tenant asserted that the lessors’ agent had not attended the arranged outgoing inspection and made no effort to arrange a mutually convenient time for that purpose.

13.The counter claim sought a return of the rent paid by the tenant from 14 November 2015 to 5 January 2016 in the sum of $2574.21 and an order that the tenant not pay compensation for the early termination of the lease (break lease fee) in the sum of $1214.21.

14.The tenant asserted that he had been misled by the lessors’ agent into entering into the residential tenancy agreement without a posting clause. The tenant asserted that the lessors’ agent had wrongly told them that the clause only related to military personnel. Had the clause been included in the agreement then the tenant would need only to have given four weeks’ notice to terminate the fixed term lease without further penalties.

15.The tenant’s response appended:

(a)A notice from the lessors dated 26 April 2016 claiming compensation under section 84 of the RTA. The notice is plainly wrongly dated as the notice itself refers to the pending outgoing inspection on 23 November 2015.

(b)A series of emails between the parties relating to the cleaning issue.

(c)A rent ledger.

(d)An application for tenancy form on the letterhead of Ray White, completed by parties on or around 12 September 2015. The form referred to the transfer or posting clause and then offered the following explanation or comments on the clause:

(usually only applicable to defence personnel).  If you work for the defence forces will you require …. [a posting clause]

16.The matter was listed for hearing on 10 May 2016. There was no appearance for the lessors. An order was made ex-parte that the tenant pay the lessors $440 for cleaning costs and the balance of the bond be refunded to the tenant.

17.On 15 May 2016 the lessors’ agent applied to set aside the ex-parte order on the basis that they did not received the hearing notice. On 7 June 2016 a different member of the Tribunal set aside the ex-parte order and ordered that the tenant’s counter claim may be restored.

18.The matter was heard on 19 August 2016. Ms Smith, real estate agent, appeared for the lessors and the tenant appeared by telephone. Ms Smith tendered a chronology of relevant events and response to the counter claim. The lessors argued that the posting clause was optional and required agreement between the parties. The lessors said that even if the tenant had requested a posting clause, the lessors would not have agreed to it.

19.At the hearing it was explained to the tenant that his responsibility is to have the premises cleaned to the state in which they were received minus fair wear and tear at the end of the tenancy. It was not the case that a tenant can complete their rent obligations and only afterwards have cleaners attend the premises. Until the cleaning is done a lessor cannot put new tenants into occupation. A lessor has the choice of moving immediately at the end of the tenancy to have the cleaning done in order to mitigate rent loss; or allowing the outgoing tenant the indulgence of returning to clean the premises. In the latter event the tenant will be liable for the rent until they have cleaned and handed over the premises. If there is delay or uncertainty on the tenant’s part in returning to clean after the end of the tenancy, then a lessor has little practical choice but to bring in their own cleaners to get the premises back on the market as soon as possible.

20.On the basis of the above logic the Tribunal found the tenant liable for the whole of the lessors’ cleaning and carpet cleaning costs in the sum of $1102.00 minus the $440 already paid by the tenant to the lessors as part payment of this amount, leaving a balance of $662. To this was to be added the Tribunal filing fee of $142 giving a balance of $804.

21.The remaining issue was that of the rent arrears and break lease fee. The tenant put this matter in issue in his counter claim and the lessors responded to the claim. The issue was addressed at the hearing. The tenant asserted that he had been misled by the lessors’ agent and had he known of the availability of the posting clause he would have sought its inclusion in the tenancy agreement. The lessors assert that they would not have agreed to a posting clause.

22.The Tribunal noted the misleading content on the lessors’ agents application for tenancy in which it said that the posting clause was only ‘usually’ available to defence personnel. The tenant gave evidence that he was told orally by one of the Ray White staff with whom he was dealing that the clause was only available to military personnel.

23.These statements by the lessor’s agent are factually wrong and misleading. The clause is available to any tenant in the ACT and following recent amendments in the Legislative Assembly will be mandatory in all residential tenancy agreements.

24.As the RTA presently stands the posting clause requires agreement between the parties. It does not apply automatically. The lessors argued that even if the tenant had not been given the wrong advice that the lessors would not have agreed to the posting clause. This may or may not be the case. What is also unknown is how the tenant would have reacted if he had correctly understood that the posting clause was not limited to the military so that he may have the advantage of the clause under a different lease with a different lessor. That is, would the tenant have entered the present agreement at all if he had been correctly advised of the law?

25.The tenant did not articulate the particular cause of action that he relied upon. This is to be expected with unrepresented parties and is no criticism of the tenant. It is the Tribunal’s role to consider the substance of the case put by the parties and correlate that case with a cause of action known to law and to do so within the bounds of proportionality. If the Tribunal were to insist that unrepresented parties frame their case with the precision of a cause of action known to law, it would be tantamount to requiring the parties to retain lawyers to draft pleadings. This is not the modus operandi of the Tribunal and would not be consistent with its statutory mandate.

26.The agent’s misrepresentations are actionable under the Australian Consumer Law (ACL) and may sound in damages.[1] The misrepresentations are also relevant to the exercise of the Tribunal’s powers under section 46 of the RTA:

On application by a tenant, the ACAT may terminate a residential tenancy agreement if satisfied that the agreement was induced by a false or misleading statement of the lessor.

[1] Section 18 of the Australian Consumer Law

27.The tenant’s argument was consistent with an application under section 46. That is, the tenant argued that the Tribunal should treat his rent obligations as finishing at the date the tenancy would have terminated under the posting clause. In the alternative, it is consistent with a claim for damages under the ACL to the extent that the rent obligation exceeds the obligation that would have applied under a posting clause.

28.The lessors’ agent informed the Tribunal that the understanding that the posting clause only applied to military personnel was a common understanding among real estate agents in Canberra. The Tribunal expressed its surprise and concern at this understanding.

29.The Tribunal determined to limit the tenant’s liability to that which would have arisen under the posting clause in accordance with section 46. That is, to terminate the tenancy agreement on the date it would have terminated under the posting clause; but in the alternative by application of the ACL.

30.It follows that no break lease fee is payable by the tenant.

31.The four weeks’ notice required by the posting clause from (but not including) 13 November 2015 expired on 11 December 2015. By this time all the cleaning had been completed and the lessors were in search of a new tenant. The tenant had in fact paid rent to the 5 January 2016 and so was entitled to a credit for the rent paid from 12 December 2015 to 5 January 2016 in the amount of $1020. The tenant is also entitled to tribunal filing fee in the sum of $68. This gives a total credit to the tenant of $1088.

32.The outcome is that the lessors are entitled to $804 and the tenant to $1088 leaving a net amount due from the lessors to the tenant of $284.

………………………………..

President L Crebbin

for and on behalf of Senior Member A Anforth

HEARING DETAILS

FILE NUMBER:	RT 188/2016
PARTIES, APPLICANT:	Allen & Pam Bartlett
PARTIES, RESPONDENT:	Saravanan Ramasamy
COUNSEL APPEARING, APPLICANT	N/A
COUNSEL APPEARING, RESPONDENT	N/A
SOLICITORS FOR APPLICANT	N/A
SOLICITORS FOR RESPONDENT	N/A
TRIBUNAL MEMBERS:	Senior Member A Anfoth
DATES OF HEARING:	19 August 2016