CARVALHO and SILVA & SCARLETT (Residential Tenancies)
[2011] ACAT 80
•18 October 2011
ACT CIVIL & ADMINISTRATIVE TRIBUNAL
CARVALHO AND SILVA & SCARLETT (Residential Tenancies) [2011] ACAT 80
RT 694 of 2011
Catchwords: RESIDENTIAL TENANCIES – residential tenancy agreement – break down of washing machine during the tenancy period - obligation to repair – a term in the Condition and Inventory Report is not a term of the residential tenancy agreement – tenants are not bound by a specific contractual obligation to which the lessor had not drawn their attention – inability to contract out of the statutorily prescribed residential tenancy agreement except with ACAT endorsement.
List of legislation: Australian Consumer Law (in Schedule 2 of the Competition and
Consumer Act 2010 (Cth) (see also, Fair Trading
(Australian Consumer Law) Act 1992, ss. 5 and 6Residential Tenancies Act 1997, Schedules 1, 2 & 3
List of cases: Toll (FGCT) P/L v Alphapharm P/L [2004] HCA 52
List of Texts: Anforth and Chistensen, Residential Tenancies Law and Practice in NSW, (4th ed., 2009)
Tribunal: Mr A. Anforth, Senior Member
Date of Orders: 18 October 2011
Date of Reasons for Decision: 28 November 2011
AUSTRALIAN CAPITAL TERRITORY )
CIVIL & ADMINISTRATIVE TRIBUNAL ) RT 694 of 2011
BETWEEN:
ALEXANDER CARVALHO & RENATO SILVA
Applicant
AND:
KERRY SCARLETT
Respondent
TRIBUNAL: Mr A. Anforth, Senior Member
DATE: 18 October 2011
ORDER
1.The respondent is to pay the applicant $61.00 forthwith.
………………………………..
Signed Mr A. Anforth
Senior Member
REASONS FOR DECISION
This matter was determined by an oral decision on 18 October 2011 in favour of the tenants.
The case raised a discrete but important issue of law. The tenants asked for a statement of reasons addressing this point of law.
The tenants rented a furnished residential unit in Canberra under the written tenancy agreement dated 16 March 2011. The residential tenancy agreement had a number of special conditions but none that address the issue in dispute between the parties.
The tenants were given a Condition and Inventory Report at the same time as they were given the residential tenancy agreement. The Condition and Inventory Report contains 17 pages of written description and several pages of photographs. On page 6 there appears the words:
For any electrical appliances provided, it is the tenants’ responsibility to get them fixed if they break or wants to continue using them.
This clause was not brought to the tenants’ attention prior to executing the tenancy agreement.
The washing machine provided with the premises broke down during the tenancy and the lessor declined to repair it relying upon the above clause. This was the first time the tenants became aware of the clause.
The Tribunal held that the clause was void and that the responsibility to repair the washing machine was that of lessor.
The reasons given by the Tribunal are essentially those that follow.
A residential tenancy agreement is a species of contract that is regulated by:
(a) the common law of contract;
(b) as modified by the terms of the Residential Tenancies Act 1997 (the Act).
(Anforth and Chistensen, Residential Tenancies Law and Practice in NSW, 4th ed., 2009 [2.3.0])
The term is void at common law
The contract between the parties is that contained in the written residential tenancy agreement and the terms expressly or impliedly orally agreed between the parties (section 8 of the Act). The Condition Report is not itself a term of the contract (section 29 of the Act).
If the lessor seeks to impose specific contractual obligations on the tenants then it must be done by bringing the proposed term to the tenants’ attention, either orally or in writing, and obtaining agreement on the term from the tenants at the time the contract is entered.
Parties to a contract are only taken to be bound by terms that they either expressly or implicitly agreed to. The tenants cannot be taken to have expressly or implicitly agreed to a term that they had no knowledge of and which did not appear in the written contract.
The tenants are not taken to have had notice of a term buried in the 6th page of the Condition Report that was not brought to their attention. If the lessor wishes bury a contractual term in a Condition Report then it is incumbent on the lessor to bring the term to the tenants’ attention prior to the contract being entered (sections 18, 20, 21, 23, 29 and 34 of the Australian Consumer Law, Competition and Consumer Act 2010 (Cth), Schedule 2; Fair Trading (Australian Consumer Law) Act 1992, sections 5 and 6)
Had the term been included in the written tenancy agreement then the tenants would be taken to have notice of the term whether they had read the tenancy agreement or not (Toll (FGCT) P/L v Alphapharm P/L [2004] HCA 52). But the Condition Report is not a document that ordinarily includes contractual terms and so is not a document that the tenants would ordinarily read to discover contractual terms.
The terms of a contract are determined by the ambit of the agreement between the parties at the time the contract is entered. It is not open to either party to a contract to purport to unilaterally alter the terms of a contract after the contract has been entered. Thus, it was not open to the lessor to bring the term buried in the Condition Report to the attention of the tenants only after the washing machine had broken down.
The Residential Tenancies Act 1997
This contract provided for the unit to be furnished. The terms of the tenancy agreement are the standard prescribed terms contained in the Schedule to the Act. These terms include the duty of the lessor to repair goods provided with the premises (prescribed term 55).
Prescribed terms 1, 2 and 3 of the Schedule to the Act provide that the parties cannot contract out of the prescribed terms in the Act. Thus the lessor cannot pass the responsibility of repairing goods to the tenant whether or not a term to that effect is clearly set out in the residential tenancy agreement.
The only method by which a term can be included in a residential tenancy agreement that is inconsistent with a prescribed term, is if the Tribunal endorses the inconsistent term by the process set out in section 10 of the Act. No such process occurred in this case.
Thus, the term included in the Condition Report would be void even if it had been included in the residential tenancies agreement itself.
………………………………..
Mr A. Anforth
Senior Member
PUBLICATION DETAILS
TO BE PUBLISHED
To be completed by Tribunal Staff
PART A FILE NO:
APPLICANT:
RESPONDENT:
COUNSEL APPEARING: APPLICANT:
RESPONDENT:
SOLICITORS: APPLICANT:
RESPONDENT:
OTHER: APPLICANT:
RESPONDENT:
TRIBUNAL MEMBER/S:
DATE/S OF HEARING: PLACE: CANBERRA
DATE/S OF DECISION: PLACE: CANBERRA
PART B
RECOMMENDATION:
FULL REPORT ( ) CASE NOTE ( ) UNREPORTED DECISION ( )
COMMENTS:
0