Chandra v Masterman

[2017] ACAT 90

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

CHANDRA v MASTERMAN & ANOR (Residential Tenancies) [2017] ACAT 90

RT 600/2017

Catchwords:              RESIDENTIAL TENANCIES – tenant rights and obligations to correct defects after final inspection – ambit of fair wear and tear for carpets, walls and kitchen benchtops

Legislation cited:      Residential Tenancies Act 1997 s 83; standard terms 64

Cases cited:Tankard & Anor v Ogbonna & Anor [2017] ACAT 72

Tribunal:                   Member M Murray

Date of Orders:  2 November 2017

Date of Reasons for Decision:         2 November 2017

AUSTRALIAN CAPITAL TERRITORY  )

CIVIL & ADMINISTRATIVE TRIBUNAL       )          RT 600/2017

BETWEEN:

ASISH CHANDRA

Applicant/Lessor

AND:

ASA MASTERMAN

KRISTINA MASTERMAN

Respondents/Tenants

TRIBUNAL:   Member M Murray

DATE:2 November 2017

ORDER

The Tribunal orders:

1.Judgment for the applicant in the amount of $2,233.56.

2.The Office of Rental Bonds release $2,233.56 of the bond to the applicant and release the balance of the bond held in dispute ($286.44) to the respondents.

………………………………..

Member M Murray

REASONS FOR DECISION

Background

1.On 9 June 2012 the applicant, Mr Asish Chandra (the lessor), leased the property on Marcus Clarke Street in Canberra City to the respondents, Asa and Kristina  Masterman (the tenants). The tenants continued to lease the property for a period of five years, entering into a series of twelve month fixed term leases. The final lease ended on 7 June 2017.

2.A final inspection of the property was conducted by the lessor’s agent on 1 June 2017. An outgoing condition report was prepared and is dated 2 June 2017. The tenants were not present at the final inspection as they had already vacated the property and moved interstate. The tenants say they did not see the outgoing condition report until they received the lessor’s application in this matter. The tenants were advised of issues with the property by email dated 15 June 2017 sent by Ms Ordanic, the lessor’s agent. The outgoing condition report does not appear to have been attached to this email. The tenants responded to the issues raised via email to Ms Ordanic on 15 June 2017.

3.Clause 64 of the Standard Residential Tenancy Terms set out in the Residential Tenancies Act 1997 (SRTT) and replicated in the lease, sets out the tenants’ obligations regarding return of the property at the conclusion of the tenancy. It states:

The tenant must leave the premises—

(a)     in substantially the same state of cleanliness, removing all the tenant's belongings and any other goods brought onto the premises during the duration of the tenancy agreement; and

(b)     in substantially the same condition as the premises were in at the commencement of the tenancy agreement, fair wear and tear excepted.

4.The lessor claims that the tenants breached clause 64 and has applied to the Tribunal for orders that the tenants pay him compensation for his losses caused by the breach.

5.The Tribunal has power to order the tenants to pay compensation for any loss caused by the breach of a residential tenancy agreement under section 83(d) of the Residential Tenancies Act 1997.

6.The lessor makes the following claims:

(a)     Pest control fumigation $167.91.

(b)    Replacement of burnt oven trays $391.05.

(c)     Replacement of missing rubbish bin $308.

(d)    Attempt to remove carpet stain $145.

(e)      Vacuum and wipe down after fumigation $60.

(f)     Repair of chips to benchtop $396.

(g)     Repair/paint chips and scratches to walls, skirtings and door frames $308.

(h)     Repair/paint front door and wall $242.

(i)      Replacement of dead plants in two planter boxes $396.

(j)     Replace living room carpet $1,842.

(k)    Reimbursement of Tribunal application fee $150.00

TOTAL CLAIMED: $4,405.96

7.In their response to the lessor’s application and at the hearing of this matter the tenants agreed to pay the following amounts claimed by the lessor:

(a)Pest control fumigation $167.91.

(b)Vacuum and wipe down after fumigation $60.

(c)Repair/paint front door and wall $242.

8.At the hearing of the matter the tenants agreed to pay the sum of $391.05 for replacement of the burnt oven trays.

9.The remaining items and amounts claimed by the lessor were disputed by the tenants.

The ingoing condition report

10.Before dealing with the remaining items it is necessary to deal with an issue arising from handwritten notes on the ingoing condition report. There are handwritten notes on the report that describe the condition of each of the rooms noting, in particular, scuff marks and chips to walls and stains on the living room carpet. There was some dispute between the parties as to when the handwritten notes were added to the ingoing condition report. It is necessary for the Tribunal to determine this issue as the ingoing condition report is relevant to a consideration of whether the tenants are in breach of clause 64 of the SRTT.

11.A copy of the ingoing condition report was provided with the application. The report was signed by Asa Masterman, on behalf of the tenants, and Mark Nedeljkovic, on behalf of the managing agent of the lessor. There are handwritten notes on the report in various handwriting. The copy of the report provided to the Tribunal contains a notation at the top stating that “tenant notes are highlighted in green”. There are three handwritten notes highlighted in green noting the front door handle was loose, no towel rail in the bathroom and rubbish on top of the storage cage.

12.The tenants stated at the hearing they did not have a copy of the original ingoing condition report and were relying upon the copy of the report that was provided with the lessor’s application. They said they did not know who wrote the handwritten notes not highlighted in green but could only assume they were added by the managing agent at the time the tenancy began in 2012. Kristina Masterman did not recall being present at the ingoing inspection of the property in 2012. I assume Asa Masterman was present as he signed the ingoing condition report. He was not present in person or by telephone to give evidence, however, Kristina Masterman stated that she had asked Asa what notes were written on the ingoing condition report in 2012 and he told her he did not recall.

13.Marea Ordanic, the lessor’s agent, stated that the handwritten notes that were not highlighted green had been added to the ingoing condition report after the final inspection had taken place on 1 June 2017 and the tenants had vacated the property. She also said she saw the report prior to the tenants vacating the property and the only handwritten notes on it were the notes now highlighted in green. She indicated the additional handwritten notes were made by another agent working with Bright Partners, Patrick Bergman, after the tenants vacated the property.

14.Patrick Bergman of Bright Partners gave evidence that he wrote on the ingoing condition report in order to prepare a new report for incoming tenants. He identified the handwriting on the report that was not highlighted in green as his handwriting. He stated he used the comments made by Marea Ordanic in the outgoing condition report to update the ingoing condition report by adding the comments in his handwriting and then typed up a new report to provide to incoming tenants. He stated he wrote the comments on 17 August 2017. He also stated he was not working at Bright Partners or PRD Nationwide (the original managing agent of the property) in 2012.

15.I note that an outline of the evidence of Patrick Bergman was not provided to the tenants before the hearing, however, I do not consider the tenants were disadvantaged in the preparation of their case for hearing, given that one of the tenants does not recall attending the ingoing condition report inspection and the other tenant cannot recall what was written on the ingoing condition report.

16.I am unable to agree with the contention of the tenants that the handwritten comments not highlighted in green on the ingoing condition report were added at the time the tenancy began in 2012. I accept the evidence of Marea Ordanic that the handwritten comments were not on the ingoing condition report at the time she conducted the final inspection in June 2017. I also accept the evidence of Patrick Bergman that he added the handwritten comments to the ingoing condition report after the final inspection of the property on 1 June 2017. In the circumstances, I will only take into account the handwritten comments that are highlighted in green on the ingoing condition report in determining whether the tenants are in breach of clause 64 of the SRTT.

The missing rubbish bin

17.The lessor claimed the sum of $308 to replace a missing rubbish bin. In his email to the lessor’s agent dated 15 June 2017 Asa Masterman indicated the tenants would be happy to cover the cost of the missing bin if the lessor’s agent could order the replacement bin. The tenants now dispute the cost of the replacement bin and have provided an alternative quote showing a replacement bin could be purchased for $19.

18.The lessor’s agent stated that the lessor replaced the entire bin unit, which is a sliding unit, containing 2 bins that fits inside a cupboard. She stated that this was done as it was easier to do than source a bin to fit the existing unit.

19.I do not consider it was reasonable for the lessor to mitigate his loss by replacing the entire bin unit, rather than replacing the missing bin bearing in mind the tenants had agreed to pay for the cost of purchasing a replacement bin.

20.In the circumstances, I will award the lessor the cost of purchasing a replacement bin, being $19.

The living room carpet

21.I now turn to the living room carpet. There are two claims made in respect of the carpet. The first is for an attempt to remove stains on the living room carpet at a cost of $145. The second is for replacement of the entire living room carpet at a cost of $1,842.

22.The ingoing condition report prepared in June 2012 indicated the living room carpet was in good condition. The outgoing condition report completed on 1 June 2017 noted the carpet was stained. Photographs supplied by the lessor’s agent taken at the time of final inspection show the living room carpet has a number of orange stains, three of which are substantial in size.

23.The evidence was that Stainbusters were engaged on 14 June 2017 and were unsuccessful in removing the stain. In an email dated 15 June from the lessor’s agent to the tenants it was noted that “I have already organised Stainbusters to treat the carpet as it looks unsightly for open homes.” In his email dated 15 June 2017, Asa Masterman noted the carpet was stained but indicated the tenants regarded that as ordinary wear and tear. He did not take issue with the attempt to remove the stain.

24.The tenants stated at the hearing that they should not be liable for the attempted stain removal because they were not contacted prior to the attempt at stain removal. Had they been contacted they said they would have advised there was no utility to attempting stain removal as they had tried to remove the stains at the time they occurred and again when they vacated the property, to no avail.

25.I accept that the lessor’ agent did notify the tenants, albeit a day after the stain removal was attempted, and the tenants did not take issue with the attempt. I accept, given the tenants had already vacated the property and moved interstate by the time the final inspection was undertaken, that it was reasonable on the part of the lessor to attempt to remove the stains on the carpet to facilitate open homes to relet the property, before deciding to replace the carpet. I allow the claim of $145.

26.In relation to the claim for the cost of replacing the carpet, the lessor’s agent stated the carpet was installed in the property in 2010. The tenants resided in the property for a period of five years between June 2012 and June 2017. They do not dispute the stains on the carpet, nor the need to replace the carpet. However, they allege the stains should be regarded as ordinary wear and tear.

27.In Tankard v Ogbonna, Presidential Member McCarthy helpfully canvasses the cases concerning fair wear and tear. He states at [12] – [13]:

In Maroney v Bullard [2016] ACAT 33 at [21] – [31] it was held that ‘wear and tear’ entails damage or disrepair arising from natural causes (sun, wind and rain) or caused by a tenant, or other persons on the premises with the consent of the tenants, as a normal and unintentional incident of their occupation of the property….

….. In JSM Management Pty Ltd v QBE Insurance (Australia) Limited [2011] VSC 339 at [27] Osborn J of the Supreme Court of Victoria quoted from A Dictionary of Modern Legal Usage regarding the meaning of ‘wear and tear’:

Wear and tear. In the context of leases, the phrase wear and tear - a ‘reduplicative phrase’, as linguists call it - includes not only the action of weather but also the normal use of property. A tenant is not liable to replace a carpet that becomes dingy from normal use during the tenancy - but a spilled bottle of black ink is another matter.[1]

[1] [2017] ACAT 72

28.Although the tenants did not explain the origin of the stains, it appears to me from viewing the photos supplied by the lessor’s agent that the stains occurred because some substance was spilt on the carpet. This is not a case of a carpet becoming “dingy from normal use” such as might occur if dirt is walked onto a carpet over a period of years. In the present case I do not accept that the stains on the living room carpet can reasonably be regarded as fair wear and tear.

29.It becomes necessary to determine whether the tenants should be required to meet the full replacement cost of the carpet being $1,842.  In Tankard v Ogbonna it was held that:

Carpet, as a floor covering, deteriorates over time as a consequence of fair wear and tear. The Federal Commissioner of Taxation (the FCT) allows significant tax deductions for depreciation in recognition of this fact. Even if carpet has to be replaced as a consequence of damage for which a tenant is liable, the carpet needs to be valued with reference to its age at the time of its replacement not the cost of its replacement.[2]

[2] [2017] ACAT 72 at [9]

30.The evidence showed the carpet was installed in 2010 and so was seven years old by the time the tenants vacated the property in June 2017. The tenants submitted that carpets of this kind have a lifespan of ten years. They relied upon an email dated 18 September 2017 from Kenny Leggoe of Lemon’s Carpets (who supplied the replacement carpet for the property) that a wool twist carpet could be expected to last ten years depending on how well it is maintained. The tenants submitted that prior to being replaced the carpet in the property had approximately three years lifespan left and that the tenants should be required to contribute no more than 30% of the replacement cost of the new carpet.

31.I accept the tenants’ submissions in this regard and allow the lessor the sum of $552.60 being 30% of the cost of replacing the living room carpet.

The kitchen benchtops

32.The lessor makes a claim in the amount of $396 for repairing chips in the kitchen benchtops. The ingoing condition report noted that the kitchen benchtops were “brown, clean and intact no chips”. The outgoing condition report noted the benchtops had “2 large obvious chips, multiple minor chips”. In her email to the tenants dated 15 June 2017, the lessor’s agent notes there were “large chips to the stone benchtop in kitchen”.

33.Photographs relied upon by the lessor taken at the time of the final inspection depict two noticeably large chips along the edge of the benchtop by the sink and on the long edge of the benchtop. Also depicted are five smaller but still noticeable chips that appear at the corner and along the edge of the benchtops. The repair invoice submitted with the lessor’s application stated fourteen chips to the edges of the benchtop were repaired by ACT Marble and Granite Pty Ltd. The lessor’s agent stated at the hearing that the benchtops were granite. She also stated that she manages seven other properties in the same building complex and this property is the only one that has required repairs to fix chipped benchtops. She submitted the presence of chips arose because of a failure to take proper care by the tenants.

34.The tenants contended that any dings and chips in the benchtops were ordinary wear and tear. In their response to the application the tenants agreed they did recall causing the chip near the sink in 2014. They did not explain how the chip occurred but asserted it was accidental and during the normal course of using the kitchen. They also stated this and the presence of other chips in the benchtops was never raised during twice yearly inspections. While they conceded the photographs showed two larger chips and five minor chips to the edges of the benchtops, they said they did not notice any other chips throughout their tenancy. The tenants submitted that many of the chips repaired by ACT Marble and Granite were not noticed at final inspection and this suggested they were minor and likely to have been as a result of fair wear and tear. The tenants also submitted the evidence about benchtops in other properties in the building was not relevant as chips could exist but were so minor as to not be noticeable.

35.I am not persuaded that the chips in the benchtops can be put down to fair wear and tear for the following reasons. Firstly, granite is considered to be a very hard wearing and durable surface and should hold up even after five years of ordinary use. Secondly, the chips that have been photographed are noticeable and are not insignificant in size. This also suggests some force over and above normal use would have been needed to chip the granite. Thirdly, fourteen areas of the benchtops required repair, which seems a large number of chips to make during normal use of a surface that is considered to be very durable. I do accept that of those fourteen chips, at least half were not noted by the lessor’s agent when she undertook the final inspection. Why this was the case I am unable to say with certainty – they may not have been as noticeable. That said, for the three reasons outlined above, I allow the lessor’s claim of $396 for the repair of the chips in the benchtops.

The walls, skirting boards and door frames

36.The lessor makes a claim for $308 being the cost of repairing and repainting chips and marks on walls, skirting boards and door frames. The ingoing condition report recorded all walls and doors in good condition. The outgoing condition report noted dents, scuffs and chipping to walls in the front entrance area, the lounge room and study. It also noted chips and marks on the doors and door frames in the laundry, master bedroom, study and bathroom. In her email to the tenants dated 15 June 2017, the lessor’s agent noted there were chips to the door frames of the study, laundry and bathroom. There is no mention of chips and scuffs to walls and skirting boards. Photographs depict a number of chipped areas and minor scratching on the corners of door frames, minor chipping located at the corners of walls, small indents scattered over walls, small chips to 2-3 areas of skirting boards, and one reasonably substantial gouge to the corner of a wall that left a hole.

37.In his email dated 15 June 2017 Asa Masterman stated the tenants considered the dings and chips in the interior doorframes were ordinary wear and tear. In their response to the application the tenants stated that the presence of chips and scratches on walls, door frames and skirting boards was never raised during twice yearly inspections.

38.I accept that some scratches, dents and chips will occur to walls and the exposed corners of walls, doors and door frames during the course of normal use of a property where scraping against these areas and knocking into them is to be expected. I also accept that it is inevitable that skirting boards will sustain some chips and scratches during the course of normal use of a property. The photos supplied by the lessor showing the scratches, dents and chips, save for the photo showing a larger gouge of corner of one wall, are consistent in my opinion with fair wear and tear over the life of a five year tenancy.

39.The gouge in the corner of the wall is not consistent with fair wear and tear, in my opinion, as the damage that has occurred was forceful enough to make a hole in the wall adjoining the exposed corner. A hole in the wall is not likely to be caused by the inevitable knocks and scrapes a wall would be likely to sustain in the normal use of a property.

40.It is difficult to quantify the cost of repairing and repainting the hole caused by the gouge as the invoice for repair and paint work is not itemised. I consider it reasonable to allow the amount of $60 to patch and paint the hole and surrounding area.

Plants

41.Finally, the lessor makes a claim of $396 being the cost of replacing dead plants in planter boxes located on the balcony of the property. The plants are white potato creeper. Clause 64 of the SRTT obliges the tenants to return the premises (and this includes the balcony garden planters and the plants in them) in “substantially the same condition” as they were at the commencement of the lease. The ingoing condition report noted the plants in the planter boxes on the balcony were healthy. The outgoing condition report stated the plants were dead. The photographs taken at the time of the final inspection and relied upon by the lessor showed a small plant with totally bare branches and no leaves at all in the smaller planter box and at least two plants in the larger planter box that had no leaves at all on their bare branches. There were three to four plants in the larger planter box that had some leaves in various shades of green, yellow and brown. The invoice relied upon by the lessor indicated all plants in the planter boxes were dead and were replaced with four bags of potting mix, ten plants in the larger planter box and four plants in the smaller planter box.

42.The tenants stated that they watered the plants during their tenancy but were under no obligation to prune the plants or renew potting mix that the plants were growing in. They also stated that the plants would die off in winter and would recover after winter. They stated they vacated the property in winter and this explained why some of the plants appeared to look dead. They also relied on a ‘Plantmark Ornamental Climbing Plants’ profile sheet that noted the white potato creeper does not grow well in mountainous zones of Australia and is partly deciduous in colder zones. The tenants stated that throughout the tenancy there were ongoing issues with the viability of the plants, particularly in the smaller planter box because of the cold and windy location on the balcony and they raised with the lessor’s agent the suitability of the plants for the location. The tenants also stated that they believed there were no more than eight plants in the larger planter box and two plants in the smaller planter box at the time their tenancy commenced.

43.In relation to the smaller planter box I accept the tenants’ evidence that there were two plants in the box at the commencement of the tenancy. On vacation of the property there is now only one plant and it looks decidedly stunted in growth and dead to me. I have assumed the other plant is dead as it is no longer visible in the planter box at all. I therefore find that the smaller planter box is not in the same state it was at the beginning of the tenancy.

44.In relation to the larger planter box, I accept the tenants’ evidence that there were no more than 8 plants in the box at the commencement of the tenancy. The photos taken at the time the property was vacated show eight plants remain. After considering the evidence, I accept the tenants’ evidence that the plants were not dead but were likely to be in a partly deciduous state, given Canberra is a cold area in winter, at the time the tenants vacated the property. I find therefore the larger planter box is likely to be in the same state it was at the commencement of the tenancy.

45.I find that the tenants are liable to pay for replacement of two plants in the smaller planter box and the supply of potting mix to replant the two plants. The invoice for replacement of the plants is not itemised so it is difficult to allocate a precise amount, however, I consider it reasonable to allow an amount of $50.

Conclusion

46.For these reasons I order that the tenants pay the lessor the sum of $2,233.56 comprised as follows:

(a)Pest control fumigation $167.91.

(b)Vacuum and wipe down after fumigation $60.

(c)Repair/paint front door and wall $242.

(d)Replacement of oven trays $391.05.

(e)Replacement of missing rubbish bin $19.

(f)Attempt to remove carpet stain $145.

(g)Replace living room carpet $552.60

(h)Repair of chips to benchtop $396.

(i)Repair/paint chips and scratches to walls, skirtings and door frames $60.

(j)Replacement of dead plants $50.

(k)Reimbursement of Tribunal application fee $150.

47.To give effect to this order, I direct the Office of Rental Bonds to release $2,233.56 of the bond to the lessor and the balance of the bond ($286.44) to the tenants.

………………………………..

Member M Murray

HEARING DETAILS

FILE NUMBER:	RT 600/2017
PARTIES, APPLICANT:	Asish Chandra
PARTIES, RESPONDENT:	Asa and Kristina Masterman
COUNSEL APPEARING, APPLICANT	N/A
COUNSEL APPEARING, RESPONDENT	N/A
SOLICITORS FOR APPLICANT	N/A
SOLICITORS FOR RESPONDENT	N/A
TRIBUNAL MEMBERS:	Member M Murray
DATE OF HEARING:	16 October 2017