CALLAN WRIGHTSONApplicantAND:SHANE ANDREW WILLIAMSONFirst RespondentVICKI LEE WILLIAMSONSecond Respondent

[2024] ACAT 4

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

WRIGHTSON v WILLIAMSON & ANOR [2024] ACAT 4

RT 890/2023

Catchwords:             RESIDENTIAL TENANCIES – the frequency and maximum amount of rent increases –statutory interpretation – whether the term ‘since the last rental rate increase’ under s 5A of the Residential Tenancies Regulation refers to the date that the last increase came into effect, or the date of notification of the last rental increase – the term ‘the last rental rate increase’ be understood as the date of notification of the last rental rate increase

Legislation cited: Residential Tenancies Act 1997 s 64B, Sch 1 s 35

Legislation Act 2001 ss 139, 140

Subordinate

Legislation cited:      Residential Tenancies Regulation 1998 s 5A

Cases cited:Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28

List of Text /Papers: D C Pearce and R S Geddes, Statutory Interpretation in Australia (LexisNexis Butterworths, 8th ed, 2014)

Tribunal:Senior Member D Kerslake

Date of Orders:  17 January 2024

Date of Reasons for Decision:   17 January 2024

AUSTRALIAN CAPITAL TERRITORY          )

CIVIL & ADMINISTRATIVE TRIBUNAL     )          RT 890/2023

BETWEEN:

CALLAN WRIGHTSON

Applicant

AND:

SHANE ANDREW WILLIAMSON

First Respondent

VICKI LEE WILLIAMSON

Second Respondent

TRIBUNAL:Senior Member D Kerslake

DATE: 17 January 2024

ORDER

The Tribunal orders that:

1.The application is dismissed.

………………………………..

Senior Member D Kerslake

REASONS FOR DECISION

Background

1.This case centres on the meaning and application of ACT residential tenancy provisions that apply to the frequency and maximum amount of rent increases.

2.Mr Callan Wrightson (the applicant) rents an apartment from Mr Shane Andrew Williamson and Ms Vicki Lee Williamson (the respondents). On 22 June 2023, the respondents issued the applicant with notice of a proposed rent increase (the proposed increase), to take effect on 29 September 2023.

3.On 15 September 2023, the applicant applied to the ACAT for an order that the proposed increase exceeded the amount (the prescribed amount) permitted by section 64B of the Residential Tenancies Act 1997 (the Act). The matter was heard by the Tribunal on 28 November 2023.

Applicable legislation

4.Section 35 of Schedule 1 of the Act provides that rent may not be increased at intervals of less than 12 months.

5.Section 64B of the Act prescribes a limit on any proposed increase. It also requires that a minimum of 8 weeks’ notice be given of any proposed increase:

(1)     A lessor may increase the rental rate under a residential tenancy agreement by an amount that is more than the amount prescribed by regulation only if—

(a)the residential tenancy agreement allows the lessor to increase the rental rate by the amount; or

(b)after the lessor gives notice under subsection (2), the tenant agrees, in writing, to the increase; or

(c)the lessor obtains the ACAT's prior approval.

(2)     For subsection (1) (b), the lessor must give the tenant a written notice stating—

(a)the day the proposed increase takes effect (being a day at least 8 weeks after the day the notice is given); and

(b)the amount of the proposed increase; and

(c)whether the amount of the proposed increase is more than the amount prescribed under subsection (1); and

(d)if the proposed increase is more than the amount prescribed under subsection (1)—that if the tenant does not agree to the increase, the lessor may only make the proposed increase with the prior approval of the ACAT.

6.Section 5A of the Residential Tenancies Regulation 1998 (the Regulation) sets out how the prescribed amount is determined. As at the date of the increase proposed by the respondents in this case[1], the wording of section 5A was as follows:

[1] A new section 5A was inserted in the Regulation on 12 December 2023. It states that the ‘initial index number’ means “the day the lessor gave the notice for that increase”. From that date on, in calculating the sum of CPI increases for the purpose of determining the prescribed amount, a lessor can go back the full 12 months preceding notification of the proposed increase - to the date the previous rate increase was proposed. This amendment did not become effective, however, until sometime after notification of the respondents’ proposed increase. The wording set out in paragraph 6 of this decision is therefore the wording relevant to the Tribunal’s determination of this matter.

5A Rent increase threshold—Act, s 64B and s 68

(1)     The prescribed amount is the amount worked as follows:

PI +

(2)     In this section:

index number means the rents component of the housing group of the Consumer Price Index for Canberra published from time to time by the Australian statistician.
PI means the percentage increase in the index number over the period since the last rental rate increase* or since the beginning of the residential tenancy agreement (whichever is later).

(*emphasis added)

The parties’ submissions

7.Pivotal to the determination of this application is the meaning of the words ‘since the last rental rate increase’ (outlined in emphasis above). The applicant contended that the term refers to the date the last rental increase actually came into effect. He submitted that, accordingly, when read in conjunction with the requirement to give 8 weeks’ notice and the maximum of one allowable increase every 12 months, calculation of the prescribed amount can only take account of the Consumer Price Index (CPI) increases between when the last rent increase took effect, and the date of notification of the next proposed increase. In the applicant’s submission, the total of the CPI that can be taken into account applied when calculating a proposed increase is limited to a maximum 10-month period (that is, 12 months since the last rent increase took effect, minus the minimum 8 weeks’ notice period).

8.Citing, as an example, the increase proposed to his own rent, the applicant noted that only three CPI figures had been published by the Bureau of Statistics since his previous rental increase came into effect. In his view, the lessor was limited to taking into account these three quarterly increases, plus the allowed addition of up to 10% of that total. Instead, the respondents had relied upon four preceding quarterly increases in CPI, that is, backdated to the date of notification of the last proposed increase. This, he contended, would result in an increase that exceeded the prescribed amount, which the lessor had not been entitled to without first obtaining ACAT approval.

9.The respondents submitted, to the contrary, that a lessor was entitled to take account of four CPI increases, otherwise a 12-monthly increase in rent could in effect only reflect the total of three quarterly CPI increases. They  pointed out that, applying the applicant’s contention, the only way a total of 12 months’ CPI could be applied would be for a lessor to delay notification of any proposed increase and await publication of a further CPI increase, effectively extending the interval between rent increases to approximately 14-15-months. This, he submitted, was inconsistent with the legislative intent. Why allow a rental increase once every 12 months, but only allow 9-month CPI to be taken into account?

The Tribunal’s decision

10.In the Tribunal’s view, in section 5A of the Regulation the term ‘the period since the last rental rate increase’ is ambiguous. It is not clear, based on those words alone, whether ‘the last rental rate increase’ refers to the date that the last increase came into effect, or the date of notification of the last rental increase.

11.Section 139 of the Legislation Act 2001 provides  that in working out the meaning of an Act, the interpretation that would best achieve the purpose of the Act is to be preferred to any other interpretation.[2] Put another way, in enacting the relevant provisions, what message was the legislature trying to convey?[3] Possible ways to identify the purpose or object of statutory provisions are to look for a specific statement of intent in the legislation itself, or in associated extrinsic material such as an explanatory statement when the relevant legislation was introduced. Neither the explanatory statement for the Residential Tenancies Bill 1997, nor for the first iteration of section 5A (in the Residential Tenancies Regulation 1998), is helpful in that regard. Neither contains any references that point to the legislative intention behind the words the ‘last rental rate increase’.[4]

[2] Legislation Act 2001 s 139

[3] D C Pearce and R S Geddes, Statutory Interpretation in Australia (LexisNexis Butterworths, 8th ed, 2014) 146

[4] Even in the recently substituting section 5A, the Explanatory Statement does not make clear whether that increase represents a clarification of an existing policy, or a change in policy

12.Section 140 of the Legislation Act further provides that in working out the meaning of an Act, the provisions must be read in the context of the Act as a whole. Also, the High Court’s decision in Project Blue Sky Inc v Australian Broadcasting Authority[5] is authority for the view that the meaning of a statute should be construed in a way that gives effect to harmonious goals. Looking to the legislative context and to give effect to a harmonious meaning of the legislative provisions as a whole, the Tribunal has concluded that the interpretation advanced in this case by the applicant would apply contradictory meanings and purpose to the relevant statutory provisions.

[5] Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28

13.To expand upon this reasoning, section 35 of Schedule 1 of the Act provides:

The rent may not be increased at intervals of less than 12 months from either the beginning of the tenancy agreement for the first increase, or after that, from the date of the last increase.

14.While this provision clearly sets out to limit the application of rental increases that occur more frequently than every 12 months, it also clearly implies that rental increases are permitted once in every 12 months.[6] That being the case, in the Tribunal’s view, the relevant statutory provisions would be rendered discordant and unworkable if the wording of section 5A (as in force at the date of this application) was taken to permit the application of only 9-month CPI, when section 35 of Schedule 1 clearly allowed for rental increases to be calculated and applied every 12 months. If the only permissible way to take account of 12 months CPI were to delay notification of an increase until 14-15 months after the last increase, this also would defeat the purpose of allowing for 12-monthly increases. In the Tribunal’s view, therefore, the only way to give effect to the harmonious application of the relevant provisions is to interpret the words ‘since the last rental rate increase’ to mean ‘since the date notice was given of the last rental rate increase’.[7] Interpreting the relevant provisions in this way still provides an intended level of protection for tenants, in that they are not required to pay an increase in rent until 12 months after the last increase took effect. At the same time, this interpretation maintains “the unity of all the statutory provisions”[8] in reflecting the legislature’s intention that lessors should be entitled to increase the rent once in a 12-month period.

[6] Except in the case of a tenant’s first rental rate increase, in which case it is only permissible to go back to the beginning of the tenancy agreement

[7] While not treating the legislature’s recent re-wording of section 5A as in any way determinative, the Tribunal nonetheless notes that the revised wording is not inconsistent with the meaning of other provisions relevant to this application

[8] Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28 at [70]

15.In the specific circumstances of this application, the only workable interpretation and application of section 5A in the Regulation (as in force at the time the applicant was given notice of the proposed increase), is that in calculating the PI applicable to the proposed increase, the respondents were legislatively permitted to go back to the date of the previously notified increase. Accordingly, the application is dismissed.

………………………………..

Senior Member D Kerslake

Date of hearing:	28 November 2023
Applicant:	In person
Respondents:	Ms L Bates and Ms D Jackson Hope, authorised representatives