Cavallaro and Varney v Benke - [2010] SADC 49

District Court of South Australia
(Civil: Appeal Under Residential Tenancies Act 1995)
CAVALLARO AND VARNEY v BENKE
[2010] SADC 49
Judgment of His Honour Judge Beazley (ex tempore)
26 March 2010
LANDLORD AND TENANT - TERMINATION OF THE TENANCY
RESIDENTIAL TENANCY - Appeal against findings and orders of the Residential Tenancies Tribunal - whether tenancy validly terminated - whether the tenants had in fact paid bond and rental payments - order for possession suspended pending determination of the appeal - evidence of the parties as to rent and bond payments reheard.
Held: Determination by Tribunal that arrears had not been paid by tenants, and that tenancy ought be terminated clearly correct. Tribunal decision and orders made on 11 March 2010 and 19 March 2010 affirmed.
Residential Tenancies Act 1995 (SA) ss 41, 42, 87 and 93; Sullivan v Department of Transport (1978) 20 ALR 323 at 343, referred to.

CAVALLARO AND VARNEY v BENKE
[2010] SADC 49
Introduction

Nina Cavallaro and Torren Varney, (“the tenants”) appeal, pursuant to Section 41 of the Residential Tenancies Act, 1995, from orders made by the Residential Tenancies Tribunal firstly on 11 March 2010, and secondly on 19 March 2010, when its initial orders were affirmed. Those orders were, in effect, that the tenancy between the landlord and the tenants ought be terminated and that possession be given to the landlord.
The Background
On 16 October 2009 the tenants and the landlord entered into a residential tenancy agreement for a fixed term commencing on 19 October 2009 and ending on 19 October 2010. The agreement provided for rental to be paid at the rate of $640 per fortnight by direct debit commencing every second Saturday from 24 October 2009. An additional condition of the bond was an acknowledgement by the landlord of the receipt of a cheque from the tenants in the sum of $1,800 drawn on the account of the first appellant’s father, Mr L Cavallaro. That sum included both a bond in the sum of $1,280 and two weeks rent in advance. There was no dispute that such a cheque in the sum of $1,800 had been paid by Ms Cavallaro’s father, Mr L. Cavallaro, on 16 October 2009, but it had been misplaced by the Australian Defence Credit Union. It was not until 18 January 2010 that it was found. It had been assumed by the landlord until that date that the sum of $1,800 had in fact been paid. However, on 18 January 2010, when the cheque was presented by the credit union to Mr Cavallaro’s bank, the subject cheque in the sum of $1,800 was dishonoured.
The Tribunal hearings
On 11 March 2010 the Tribunal conducted a hearing upon an application by Kelly Benke, the landlord of premises situated at unit 2, 143 Crittendon Road, Findon, that the tenancy ought be terminated. The tenants did not attend the hearing on that day. Ms Cavallaro had telephoned the Tribunal that day, to explain that the tenants needed an adjournment of the application because their car had broken down. Ms Cavallaro was recorded as having said that she had paid the cash bond and that the tenants were now only one day in arrears of rent. The Tribunal decided to proceed in their absence.
The landlord, Ms Benke, gave evidence on oath. The Tribunal had recorded that the tenants had failed to pay the requisite bond moneys, and that rent had been paid only to 14 December 2009. In so far as that finding was based upon the payment of $640 per fortnight as required by the agreement, that finding was undoubtedly correct. Subsequent payments in fact made on 11 January 2010 in the sum of $450; 12 January 2010 in the sum of $190; 25 January 2010 in the sum of $320; 28 January 2010 in the sum of $200 and 29 January 2010 in the sum of $120, were set off against arrears of rental that had accrued before mid December 2009. The Tribunal accepted the evidence of Ms Benke and concluded that the rental had been paid to 14 December 2009 with a credit of $60, and that no bond had in fact been paid to the landlord. Notwithstanding an error as to the quantum in the notice of termination dated 16 February 2010, the Tribunal ordered that in light of the tenants’ very poor history of payment, since 6 November 2009; and the non-payment of the bond, the tenancy agreement ought be terminated; and possession be granted to the landlord pursuant to s 87 of the Residential Tenancies Act.
Accordingly on 11 March 2010, in the absence of the tenants, the Tribunal ordered that the tenants must move out of the premises by 11 am on Tuesday, 18 March 2010. It noted that if the tenants did not move out, then the order could only be enforced by the Tribunal bailiff. The Tribunal also ordered that the tenant must pay the landlord the sum of $4,237 within 14 days from the date thereof.
Application for variation – on 19 March 2010
On 16 March 2010 the tenants filed what was effectively an application for variation of the orders made on 11 March 2010. At the hearing on 19 March 2010, Ms Cavallaro appeared before the Tribunal, giving an explanation on oath as to her previous non attendance. The landlord, Ms Benke, gave evidence apparently by telephone. Ms Cavallaro told the Presiding Member of the Tribunal that she had paid $3000 in cash to the landlord, and had not received a receipt. This of course was contrary to the manner of payment by direct debit in the tenancy agreement. She referred to various text messages on her telephone which was said by her to confirm that payment had been made. The landlord had already tendered text messages which had been sent to her by both Ms Cavallaro and Mr Varney between 7 December 2009 and 26 February 2010. The Tribunal concluded that the text messages were entirely inconsistent with the evidence given by Ms Cavallaro. The Tribunal clearly regarded Ms Cavallaro’s evidence as unsatisfactory.
The Tribunal had before it a document prepared by Ms Benke detailing all those payments by the tenants which she asserted had been received by her. That document made it clear, that almost immediately after they had obtained possession of the premises, the tenants had either made no rental payments at all, or had paid lesser sums than that required by the agreement. On not one occasion was the rent paid in the contracted sum of $640 per fortnight. What rental payments were paid, varied in amounts from $620 on 6 November 2009; to $120 on 29 January 2010. As at 8 February 2010 the rental record discloses a total amount of arrears of $3,140, which sum included the bond.
The Tribunal also had before it the text messages which had been received by the landlord from the tenants. They included various admissions by the tenants in December 2009 and January 2010 that rental arrears had not been paid. Those texts detailed a series of quite extraordinary excuses for non-payment, and undertakings to pay in the near future.
In particular on 23 December 2009 a text message from Ms Cavallaro to the landlord recorded:
Hi Kelly, I need to be honest with you about the rent. My dad has told me last night that he’s not paid the rent and will not pay it until Mr Varney is out of children’s and my life. Dad however will pay rent for the next two weeks plus the $700 arrears as soon as he leaves and he’s moving out today. As soon as he goes you’ll have all the rent. From the bottom of my heart I’m sorry but please let my children and I stay.
In early January 2010 various text messages from Ms Cavallaro to the landlord repeated the earlier unfulfilled promises that the arrears would be paid. Indeed she promised the landlord that she would vacate the premises within days.
On 6 January 2010 Mr Varney sent a text message to the landlord in which he acknowledged that the cheque in the sum of $1,800 for the bond had been cancelled. On 11 January 2010 Mr Varney sent a text to the landlord as follows:
Hi Kelly, how are you? I just deposited $450 into your account and the rest I’ll put in tomorrow morning as I had to transfer some money to my account and any payments that I make will bounce after six tonight. But at least I’m not behind at the moment, just let me know if you want the balance tonight or for me to put it in the morning. I’m happy either way just as long as you guys are’.
On 24 February 2010, Mr Varney sent a further text to the landlord as follows:
I understand how you feel and what’s happened with us isn’t your problem, that’s fair believe me. I couldn’t leave the money with Nina after what happened last time. At the moment I’m working 12 hours a day to pay for her lawyer. I tried in the 20 minute lunch break to pay it but the bank was packed, I waited a bit and had to leave. It was still late getting back, while she said I could drop it off to you after work - it isn’t your problem but I’ve been up front with you and do try to do the right thing. The other problem is Nina’s bail conditions are just to reside at this address …
Thereafter a series of texts from Ms Cavallaro of 26 February 2010 stated that the landlord wasn’t able to have her removed from the premises.
Ms Benke, and her sister Sarah Ann Downey, had filed statutory declarations challenging the evidence by Ms Cavallaro as to the alleged difficulties with her motor vehicle. The Tribunal did not need to make any findings on that topic. Ms Benke deposed that the $3,000 cash payment had not been made, and that Ms Cavallaro was untruthful. Ultimately the Tribunal did not accept the truthfulness of the evidence of Ms Cavallaro. In particular the Tribunal found as a fact that Ms Cavallaro had not paid any moneys other than those recorded by the landlord. The Tribunal affirmed its decision of 11 March 2010, that the tenants had remained in arrears; and confirmed the orders for possession, and the payment of the tenant’s debt.
Notice of Appeal
The tenants filed a Notice of Appeal on 19 March 2010. They complained about the findings made by the Tribunal, and the decision not to adjourn the earlier hearing on 11 March 2010. The application came before me on short notice on 23 March 2010, at which time I was informed by Counsel for the landlord, that the tenants remained in possession of the premises. The tenants informed me that they intended to call evidence from Mr Varney’s father who would produce documentary evidence to show that in fact the payments had been made. Having regard to urgency of the matter I determined that it was in the interest of justice to permit the tenants to produce that evidence of payment. Accordingly I stayed the orders made by the Tribunal pursuant to s 42 of the Act, until this day at 5.00 pm. I then listed the appeal before me for full hearing today.
The Appeal
On the hearing of the appeal, the joint tenant, Mr Varney appeared in person, while the landlord attended, and was represented by Mr McKay of Counsel. Ms Cavallaro, who had appeared before this court on 23 March 2010 did not appear. Mr Varney explained that his father was at work, and could not attend the hearing. He said that his father had provided a statutory declaration to the effect that he had given Mr Varney the sum of $1,500 in cash, shortly prior to 8 January 2010. Mr Varney conceded that his father was unable to give any evidence that the cash had been paid to the landlord. At its highest the statutory declaration could only establish that cash in the sum of $1,500 had been paid to Mr Varney.
Only Mr Varney and Ms Cavallaro could give evidence of the alleged payment of $3,000, not merely $1,500, to Ms Benke. Mr Varney submitted that the tenants had not been given a chance before the Tribunal to put their case. In the event I directed that both Mr Varney and Ms Benke should give evidence before me pursuant to s 41(2)(a) of the Act.
In the Notice of Appeal the tenants asserted that they had paid the bond and the arrears of rent and they were unable to establish the same because the landlord had failed to give any receipts.
The Full Court of the Federal Court said in Sullivan v Department of Transport (1978) 20 ALR 323 at 343:
The failure of a Tribunal which is under a duty to act judicially, to adjourn a matter may conceivably, constitute a failure to allow a party the opportunity of properly presenting his case … In this regard, however, it is important to remember that the relevant duty of the Tribunal is to ensure that a party is given a reasonable opportunity to present his case. Neither the Act nor the common law imposes upon the Tribunal the impossible task of ensuring that a party taken the best advantage of the opportunity to which he is entitled.
Mr Varney conceded that he had no basis to complain about the refusal of the Tribunal to adjourn the first hearing. It had reheard the matter on 19 March 2010, at which time Ms Cavallaro was given the opportunity to present her case.
Mr Varney deposed that he had paid a cash sum of $2,560 to the landlord on 8 January 2010. He said he had received $1,500 from his father in cash, and the balance of the money had come from cash which he had saved. He said that he and Ms Cavallaro had taken the cash to the landlords’ house, and had given it to her. He said that he was not given a receipt.
He said that thereafter in addition to moneys which the landlord had acknowledged receiving, he had paid two other cash payments to the landlord. He said that on or about 10 February 2010 he paid the sum of $640 to Ms Benke, and again had not received a receipt. He said that a further cash payment of $640 was given to Ms Cavallaro’s mother to give to the landlord. Mr Varney, said that he assumed that it had been paid to Ms Benke. He said that this very day he had caused the sum of $2,500 to be paid in cash into the National Australia Bank account of Ms Benke.
Mr Varney was cross-examined about how those payments could possibly have occurred given his own text messages. He denied the inferences arising from those text messages that in fact no such money had been paid in early January 2010. He maintained that all such payments had been made.
Ms Benke gave evidence on oath saying that the rent record was an accurate record of all of the payment of rent made by the tenants. She explained that she had not received the said sum of $2,560 nor either of the alleged payments of $640. Although she was unable to say whether a sum of $2,500 had been paid today, she didn’t believe Mr Varney. She repeated that he had made promises to pay from December 2009 and that he had lied about the alleged cash payment of $2,560.
Discussion
I listened very carefully to the evidence of each of the witnesses. I have no doubt that Mr Varney has been under a great deal of pressure for a long time. He is unemployed. His evidence as to payment flies in the face of his own text messages after the dates when he asserts the payment was made. I have no doubt that whatever moneys were paid to him by his father were used for other more pressing purposes.
I have reflected very carefully upon this evidence in this case. I had listed the matter today because it is clearly urgent. I do not accept that the asserted payments have been made to Ms Benke. I accept entirely the evidence that was given by Ms Benke in that regard.
It may well be that certain moneys were made available to Mr Varney and to Ms Cavallaro but I don’t accept for one moment that those moneys have been paid as Ms Cavallaro had deposed to the Tribunal.
I note that my findings are consistent with those made by the Presiding Member of the Tribunal particularly on 19 March 2010. In my opinion it is obvious that it was also open to the Tribunal to reach the conclusions that it did. I accordingly affirm the respective decisions and order of the Tribunal made on 11 March 2010.
The effect of that determination is that the orders which were made by the Residential Tenancies Tribunal on those respective dates remain in force.
The Order which I had made on 23 March 2010 staying the Orders of the Tribunal will lapse today at 5 pm. In consequence of my conclusions and orders I will not further extend that stay. I note that pursuant to s 93(4) of the Act the Tribunal and this Court is empowered to grant a further stay whenever an Order for immediate possession would cause severe hardship to a tenant.
In this case the Tribunal made no reference to that power. However, I do not regard that as being any error by the Tribunal because the tenants had been on notice since 16 February 2010, that they would likely be evicted. Indeed in early January 2010, Ms Cavallaro in one of her text messages had undertaken to look for alternative accommodation.
The landlord is quite justifiably anxious to obtain possession as soon as possible. In those circumstances notwithstanding the fact that the occupants have young children, it is not appropriate that I further stay the order for possession pursuant to s 93(4) of the Act. Accordingly the orders which have been made by the Tribunal below remain in force, and as I say, after 5 pm today, the order staying the right to possession will cease. It is entirely a matter for the landlord as to whether she permits the tenants some short period of time to leave the premises before requesting the bailiff of the Tribunal to enter in possession. I make the following formal orders:
1.That the decisions and orders of the Tribunal made on 11 March 2010 and 19 March 2010 be affirmed.
2. That the appeal by the tenants be dismissed.