BOAG v BURDON (Residential Tenancies) - [2016] ACAT 6

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

BOAG v BURDON (Residential Tenancies) [2016] ACAT 6

RT 15/92
Catchwords: RESIDENTIAL TENANCIES – 26 weeks no cause notice of termination – retaliatory notice – use of the word ‘must’ in the Act

Legislation cited: Residential Tenancies Act 1997 s 57

Subordinate
Legislation: Agents Regulation 2003 sch 8, part 8.2 r 8.4, 8.6

Tribunal: Senior Member J Lennard

Date of Orders:  2 April 2015
Date of Reasons for Decision:         8 February 2016
ACT CIVIL &   )
ADMINISTRATIVE TRIBUNAL )  FILE NUMBER
RT 15/92

GREG BOAG
Applicant/Lessor
ROSS BURDON
Respondent/Tenant
Tribunal: Ms J. Lennard, Senior Member
Date: Thursday 2 April 2015
ORDERS

1. The application is dismissed.
Signed
Ms J. Lennard
Senior Member
ACT Civil and Administrative Tribunal
REASONS FOR DECISION

On 26 July 2013 the parties entered into a residential tenancy agreement in relation to premises in Duffy, ACT. The residential tenancy agreement was for a term of 12 months. The managing agent was Bertram Ellis Pty Limited.
On or about 2 August 2013 the tenant (Mr Burdon) notified the lessor’s (Mr Boag) agent that the heater in the premises was not operating. The lessor’s agent failed to respond and the lessor failed to repair the heater. On 23 August 2013 the tenant issued a notice to remedy in respect of the heater. No servicing or repairs to the reverse cycle air-conditioning and heater were undertaken by the lessor and on 1 December 2013 the tenant issued a second notice to remedy in respect of the heater. That second notice to remedy included a list of 17 other issues in relation to the premises, the majority of which were either minor or reflected the condition of the premises at the commencement of the tenancy.
On 4 August 2014 the lessor’s agent posted to the tenant a notice to vacate the premises requiring the tenant to vacate the premises on Monday 2 February 2015 at 11am. This was expressed to be a 26 weeks notice to vacate. The lessor’s agent had made no allowance for postage delivery time and the notice was in fact days short of 26 weeks.
On 5 August 2014 the tenant commenced proceedings in ACAT and was awarded a sum of $3,685.00 compensation for loss of amenity resulting from the lessor’s failure to address the heating and cooling issues, water leaks and flooding and an unsafe deck. Those ACAT orders were made 10 November 2014.
The tenant failed to vacate pursuant to the notice to vacate and on 2 February 2015, the lessor applied for orders terminating the tenancy agreement.
The tenant filed submissions resisting termination of the tenancy. The submissions set out the following:
(a)the serving of the notice to vacate and the filing of the application for orders terminating the tenancy are retaliatory in nature;
(b)the applicant is unable to secure new rented premises because the lessor’s agents have in reply to enquiries from other real estate agents stated that they would not rent premises to this tenant again;
(c)a termination and possession order would cause the tenant extreme hardship; and
(d)any orders sought by the lessor should be stayed on the grounds of equity and justice following improper action by the agent.
Section 57 of the Residential Tenancies Act 1997 (ACT) applies if a lessor has applied for a termination and possession order and the tenant presents evidence that the tenant applied to the ACAT for an order about the lessor, or complained to a government entity about the lessor, or took reasonable action to secure or enforce rights or that ACAT made an order in favour of the tenant against the lessor. ACAT must refuse to make a termination and possession order if satisfied that one of the circumstances mentioned above exist and in the absence of proof to the satisfaction of the ACAT, that the lessor was not motivated to apply for a termination and possession order by the circumstance.
The Tribunal received written submissions from the lessor and from the tenant. The Tribunal heard sworn evidence from Ms Terri-Lee McGrath, property manager at Bertram Ellis Real Estate, and Ms Everyl Ellis, former principal Bertram Ellis Real Estate. The tenant gave extensive oral evidence.
The lessor’s submissions and evidence are summarised as follows:
(a)The notice to vacate was issued to the tenant for financial reasons. The repairs undertaken to the premises during the tenancy were expensive and the lessor had not made any profit from the rent for the premises;
(b)the lessor was in poor health and no longer able to work full time;
(c)the lessor required vacant possession of the premises to allow some ‘breathing space’ while he determined what he should do with the premises.
The lessor’s agent gave evidence that the lessor intended to enter into a residential tenancy agreement with friends and that those friends would, unlike the current tenant, not exert any pressure for necessary repairs to be undertaken.
The evidence before the Tribunal indicated that the lessor was suffering poor health, and that the repairs undertaken had cost approximately $23,000. The rent received during the same period of time was approximately $22,000. The lessor made a statutory declaration which stated: ‘in response to [the tenant’s] claim, the termination notice was not retaliatory but due to personal circumstances and circumstances associated with the property’. There was no other evidence of the lessor’s financial circumstances before the Tribunal.
Ms McGrath gave evidence that she had advised the lessor about the options for obtaining vacant possession. Ms McGrath indicated that the lessor’s son may move into the property once it became vacant but he was also contemplating entering into a residential tenancy agreement with friends. In either case it was anticipated that there would be ‘no pressure on them to do any urgent maintenance or anything like that.’[1] Ms McGrath gave evidence that she believed the premises to be in good condition and that all major repairs had been addressed, although there was some minor outstanding issues. Ms Ellis gave evidence that the lessor had indicated that he wanted some ‘clean air’ to determine what steps to take in relation to the premises.
[1] Transcript of Proceedings 2 April 2015 page 15 at lines 30 to 37
The evidence given by both the real estate agents indicated that, in their opinion, the current tenant was a difficult tenant. Ms Ellis described the tenant as one who required special attention.
The tenant gave evidence that he had been unable to obtain new rental premises because the lessor’s agents had given him poor references. When asked by other agents to whom the tenant had made application, whether they would rent to him again, Ms McGrath, and Mr Taylor had replied ‘No’. They refused to give further details or explanation as to why they would not rent to the tenant again. Mr Taylor and Ms McGrath indicated that ‘privacy issues’ existed, although they were unable to elaborate on whose privacy was being protected by a refusal to give full and honest answers. In the Tribunal’s view this is a specious argument. The conduct of the agent in failing to give a proper and full reference appears to be part of a personal vendetta against the tenant.
It was evident to the Tribunal that there was a high level of personal animosity from the lessor’s current agents directed towards the tenant. The agents had a negative view of the tenant and said that they would prefer to have a different, more cooperative and less assertive tenant in the premises.
The parties canvassed a number of issues at the hearing on 2 April 2015. The Tribunal needs only to deal with two issues:
(a)did the lessor serve a valid notice to terminate; and
(b)was the notice retaliatory in nature?
The notice to terminate has the following defects:
(a)it fails to set out the grounds for the giving of the notice, but instead reproduces clauses 94 and 95 of the residential tenancy agreement. It may be inferred from a reading of these clauses that the lessor is exercising the right to give a ‘no cause notice’; and
(b)fails to give the requisite 26 weeks notice because it does not allow for postage delivery times.
The Tribunal notes that it has the power to correct defects in notices. So that the issue of whether the notice was retaliatory in nature can be considered if it is assumed that those defects are of the type that would be corrected.
Section 57 of the Act applies if a lessor has applied for a termination and possession order and the tenant presents evidence that the tenant has taken reasonable action to secure or enforce the tenant’s rights.[2] The Tribunal is satisfied that the issuing of the notices to remedy were reasonable steps taken by the tenant to assert his right to have the lessor undertake urgent repairs.
[2] Section 57(1)(b)(iii)
ACAT must refuse to make the termination and possession order if satisfied that the circumstances described in section 57(1)(b) exist and in the absence of proof to the satisfaction of ACAT that the lessor was not motivated to apply for a termination and possession order by those circumstances.
There is no reliable or relevant evidence before the Tribunal relating to the lessor’s financial circumstances, although the Tribunal accepts that the lessor has been in poor health. The evidence before the Tribunal is that during the term of the tenancy there was a neutral return from rent. The agent gave evidence that this was an investment property, but provided no other information about the lessors other assets, debts or income.
The Tribunal concludes from the evidence of Ms Ellis and Ms McGrath that there was a plan to end this tenancy in a way that the tenant could not attack and that the lessors waited until the urgent repairs were completed before serving a notice to vacate so that what was in reality a retaliatory action, did not look like one. The attitude of the agent and thus of the lessor appears to be that because the tenant took action under the Act for the lessor’s breach of agreement, the tenant should be evicted: the 26 week notice is given in an attempt to avoid the assertion that the agent/lessor is vindictive or is serving the notice to vacate in retaliation.
The Act does not require that retaliation be the only motivation of the lessor for seeking to terminate a tenancy. On the evidence before the Tribunal retaliation is a clear motivation here. The tenant has been ‘difficult’, has served notices to remedy and has brought action in the ACAT where he was awarded compensation. The retaliation is not out weighed by the lessor’s personal and financial circumstances. The Tribunal does not have discretion: the Act states that ACAT must refuse to make the termination and possession order if satisfied that the tenant had taken reasonable steps to assert his rights, and in circumstances where the lessor is not able to provide evidence to prove to the satisfaction of the Tribunal, that the lessor was not motivated to retaliate against the tenant for those actions.
The Tribunal therefore dismisses the application for a termination and possession order.

Comment

The tenant made submissions that the agent had failed to act fairly and professionally in relation to the tenant. The tenant gave evidence to the Tribunal that he had no desire to leave the premises but felt that the relationship between himself and the agent was characterised by such animosity and lack of professionalism on the part of the agent that he would leave, even though he thought it was proper to resist the termination and possession order because that carried the implication that he had done something unlawful or wrong.
The focus of the submissions in relation to failure to act honestly, fairly and professionally with all parties in a transaction refers to the rules of conduct set out in schedule 8 to the Agents Regulation 2003, particularly rule 8.4, which states that an agent must act honestly, fairly and professionally with all parties in a transaction and must not mislead or deceive any parties in negotiations or a transaction. Rule 8.6 provides that an agent must not engage in high-pressure tactics, harassment or harsh or unconscionable conduct. The Tribunal in this application only considers the residential tenancy issues. Nevertheless, the conduct of the agent, having been raised, should be commented on. The conduct of the agent in failing to provide a full and accurate reference for the tenant was taken into account in the determination by the Tribunal that the notice to terminate was retaliatory.
In his evidence the tenant made the following statement:[3]
I believe it’s specifically part 8.4, rule 8.4: honestly, fairly professionally with all parties in the transaction; that the agent should deal with me, thus being the party in the transaction. I take it that it is improper to deliver a partial response to a question that leaves the other party very likely to walk away with misinformation; that the short answer, even if the [belief was] held truly, can deliver a false impression. I put it that [the agents] when they say, “we wouldn’t rent to him again, no further comment,” is abominable, terrible, wicked. When they say there were actions in the ACAT and fail in every occasion … to make sure that they communicate that there were problems with the house and not problems with the tenant, they do not act honestly, fairly and they breach the rules. We’ve heard here in the Tribunal predominantly Everyl Ellis describing me as a tenant requiring special attention yet the management of the property is somehow not a property of special attention.
[3] Transcript of Proceedings 2 April 2015 pages 58- 59 from line 40 on page 58
In response to the assertion that the agent failed to act fairly and professionally in relation to the tenant, the agents each gave evidence that where rental references were sought, the agent gave those references without instructions from or reference to the lessor. Ms Ellis and Mr Taylor both stated that it was hard to work with tenants who were always coming to ACAT, and that they believed that although this tenant was a good tenant, any prospective lessor or agent should be made aware that the tenant will take everything he is entitled to take to ACAT, and this makes life more difficult.[4] Mr Taylor further stated that for many agents, the knowledge that a tenant had made an application to ACAT would be a ‘no touch signal’. Ms McGrath gave evidence that she had not had a conversation with the lessor, where she had explained to him the likely consequences of his failure to respond promptly and to properly undertake the urgent repairs to the heating. No one seems to have informed agents asking for references that the ACAT found against the lessor and that the lessor had failed to comply with his obligations under the agreement and the Act.
[4] Transcript of Proceedings 2 April 2015 at page 41
It was evident that the attitude to the tenant as exhibited by the agents was one of animosity. It is a matter of some concern to hear that real estate agents regard any tenant who asserts their rights under a residential tenancy agreement, or who makes an application to ACAT for orders requiring repairs (with the consequence that lessors are required to comply with their obligations under that agreement) to be undesirable. The evidence before the Tribunal revealed an unfortunate culture placing the desire of agents to have an easy working life above their obligations to the principal lessor, to the tenant, and the requirements that they act in accordance with the rules of conduct.
………………………………..
Senior Member J Lennard
HEARING DETAILS

FILE NUMBER:	RT 92/15
PARTIES, APPLICANT:	Mr R Burdon
PARTIES, RESPONDENT:	Greg Boag
REPRESENTING, APPLICANT	Ms McGrath, Mr Taylor
APPEARING, RESPONDENT	Self Represented
SOLICITORS FOR APPLICANT	N/A
SOLICITORS FOR RESPONDENT	N/A
TRIBUNAL MEMBERS:	Ms J Lennard
DATES OF HEARING:	2 April 2015