Chhabra v Mohindra (Residential Tenancies)
[2022] ACAT 72
•5 September 2022
ACT CIVIL & ADMINISTRATIVE TRIBUNAL
CHHABRA & ANOR v MOHINDRA (Residential Tenancies) [2022] ACAT 72
RT 334/2022
Catchwords: RESIDENTIAL TENANCIES – application for compensation for repairs not undertaken by lessor – response claiming loss of rent and cleaning at end of tenancy – whether tenants were induced into the tenancy by a misrepresentation – whether faults notified by tenants required repair by lessor – where lessor took responsibility for repairs by ordering work to be done – where tenants vacated the premises shortly before the end of the fixed term – date of termination of the tenancy – whether rent can be charged after date of termination if the premises require cleaning and repairs – disposition of bond
Legislation cited: Australian Consumer Law (ACT) s 18
Human Rights Commission Act 2005 s 42
Competition and Consumer Act 2010 (Cth) s 139G
Domestic Animals Act 2000 Part 6
Fair Trading (Australian Consumer Law (ACT)) 1992 ss 6, 7, 8Residential Tenancies Act 1997 ss 31, 38, 46, 57, 61, 62, 63, 71, 83, 84, standard terms 52, 55, 57, 59, 60, 63, 63A, 64, 82, 86
Residential Tenancies Act 2010 (NSW) s 65
Trade Practices Act 1974 (Cth) s 52
Cases cited:Ahluwalia v Robinson [2003] NSWCA 175
Battye v Ho [1999] NSWRT 135
Beeby v NSW Department of Housing [1996] NSWRT 216
Bills v Trustees for Paul Sevier Practice Super [2016] ACAT 67
But v Baldwin [2016] ACAT 9
Faulder v Tran [2018] ACAT 80
Fenton v de Andrade [1999] ACTRTT 2
Grieves and Handley v Murray and Dawson [2001] NSWRT 174
Jones v Bartlett [2000] HCA 56
Kerai v Miller [2011] NSWCTTT 325
McKinnon v Kirdy [2003] QSC 302
McPartlan and Heinrich v Ashton [2010] ACAT 82
Miller and Associates Insurance Broking Pty Ltd v BMW Australia Finance Ltd [2010] HCA 31
Northern Sandblasting Pty Ltd v Harris [1997] HCA 39
Ordukaya v Hicks [2000] NSWCA 180
Peters v ACT Housing [2006] ACTRTT 6
Re Newell [2003] ACTSC 31
Sinanovic v Harriss Tripp Pty Ltd [2005] NSWCTTT 301
Taber v NSW Land and Housing Corporation [2001] NSWCA 182
Varricchio v Wentzel [2016] SASC 86
Von Reisner v Consumer, Trader and Tenancy Tribunal [2007] NSWSC 907
Weiss v Coles and Fitzpatrick [2010] ACAT 21
Tribunal: Senior Member M Hyman
Date of Orders: 5 September 2022
Date of Reasons for Decision: 5 September 2022
AUSTRALIAN CAPITAL TERRITORY )
CIVIL & ADMINISTRATIVE TRIBUNAL ) RT 334/2022
BETWEEN:
NAVDEEP CHHABRA
First Applicant/Tenant
SARGUN CHHABRA
Second Applicant/Tenant
AND:
UDIT MOHINDRA
Respondent/Lessor
TRIBUNAL:Senior Member M Hyman
DATE:5 September 2022
ORDER
The Tribunal orders that:
1.ACT Rental Bonds on behalf of the Territory is directed to release $310 of the bond to the lessor and the remainder to the tenants.
………………………………..
Senior Member M Hyman
REASONS FOR DECISION
Introduction
1.Mr Navdeep Chhabra and Ms Sargun Chhabra (the applicants or tenants)[1] rented a property from the respondent, Mr Udit Mohindra. They applied to the Tribunal on 21 April 2022, seeking an amount which they said was “capped at $3,000” in rent reduction and compensation for various alleged failures by the respondent to properly maintain the premises. They lodged a supplementary application dated 15 May 2022 seeking additional compensation, noting their decision to leave the premises which they described as “uninhabitable”, and claiming an additional amount for reduction in rent, the cost of moving and an amount to compensate for the higher rent they would be paying at new premises, bringing the total sought to $6,300. The respondent lodged a response on 20 May 2022, contesting all of the applicants’ claims. The matter proceeded to the conference stage, but did not reach a settlement. The applicants left the premises at the end of May 2022. They lodged final submissions and additional evidence on 14 June 2022. The respondent lodged final submissions and additional evidence on 28 June 2022 asking for dismissal of both applications and seeking arrears of rent of $848.57 and compensation estimated at $640 for cleaning the premises and replacing missing hardware.
[1] The second applicant appears in some of the material tendered as Sargun Kaur.
The hearing
2.I heard the matter on 4 July 2022. The tenants sought to appear by telephone, and as there was no objection by the respondent, I agreed. The lessor appeared in person. The applicants and the respondent each gave evidence, and each underwent cross-examination. The papers comprise the tenants’ application and attached documents (the application); the supplementary application of 15 May 2022 and attachments (the supplementary application); the lessor’s response of 20 May 2022 and its attachments (the response); the applicants’ arguments made to counter the respondent’s response, also filed on 20 May 2022,[2] with attachments (the counter-response); the applicants’ documents filed on 14 June 2022 in preparation for the hearing (the applicants’ submissions); a submission and a witness statement by the lessor, dated 14 June 2022, with attachments, the witness statement and attachments identified as Exhibit R1 (the respondent also tendered additional pages at the hearing to supplement those at attachment J to his statement, and these were taken into evidence without being assigned an exhibit number (the applicants were already familiar with these papers)); and a receipt from a cleaning company, tendered by the respondent at the hearing and admitted as Exhibit R2. As the above list discloses, only the respondent provided a witness statement; but the material filed by the applicants provides extensive factual evidence. The respondent did not object to my taking this factual material into account.
[2] Both the response and the counter-response are stamped by the Tribunal with the same date, namely 20 May 2022, but it seems unlikely they could have both been filed on the same day. So far as I can see, however, nothing in this matter turns on the date on which the papers were filed.
3.Both parties wished the bond to be taken into account, that is, they asked that my decision also determine how the money held as a bond should be released to the parties. The disposition of the bond was explicitly raised in the respondent’s final submission, and the lessor stated that he had written to the ACT Office of Rental Bonds, but no referral to this Tribunal as a bond dispute had been made at the time of the hearing. The inclusion of the bond issue in the respondent’s papers means that the matter is properly before the Tribunal, and so this decision deals also with the release of the bond moneys.
Issues
4.The issues before the Tribunal are:
(a)Whether the lessor should pay compensation to the tenants for failure to maintain the premises.
(b)Whether at the end of the tenancy the tenants owe any rental arrears.
(c)Whether the tenants should pay compensation to the lessor for cleaning and repairs at the end of the tenancy.
(d)To whom the bond should be released.
The legal framework
5.The Residential Tenancies Act 1997 (the RTA) is the legislation governing rental tenancies in the ACT; Schedule 1 to the RTA consists of the standard terms that then make up the terms of each rental tenancy agreement. At the end of a tenancy, the RTA allows deductions to be made by the lessor from the bond for certain specified reasons before any remainder is released to the tenant; the specified reasons include rental arrears and cleaning or repair of the premises.[3] Parties are not entitled to compensation that could be reasonably avoided.[4] The Tribunal may terminate a tenancy if persuaded that the tenants were induced to enter into the tenancy by a misrepresentation.[5] This Tribunal may order a reduction in rent where a tenant loses access to facilities provided under the residential tenancy agreement, or where the lessor fails to properly maintain the premises.[6] The Tribunal has broad powers to order that compensation be paid for breach of a residential tenancy agreement.[7] If a tenant gives the lessor a notice of intention to vacate the premises during the fixed term, the lessor may choose either to accept the notice, or to apply to the Tribunal for compensation for lost rent and for the costs of finding a new tenant.[8]
[3] Residential Tenancies Act 1997, section 31
[4] Residential Tenancies Act 1997, section 38
[5] Residential Tenancies Act 1997, section 46
[6] Residential Tenancies Act 1997, section 71
[7] Residential Tenancies Act 1997, section 83
[8] Residential Tenancies Act 1997, section 84
6.The standard terms in Schedule 1 of the RTA require the lessor to maintain rental premises in a reasonable state of repair having regard to their condition at the start of the tenancy; and require the tenant to notify the lessor of the need for repairs, although this obligation does not extend to simple repairs such as changing a light globe or a fuse.[9] The lessor, once notified of a need for repair, must make those repairs within four weeks (unless otherwise agreed).[10] A tenant must take care of the rented premises and keep them clean, and leave them at the end of the tenancy in substantially the same state of cleanliness as at the start of the tenancy and in substantially the same condition, fair wear and tear excepted.[11]
[9] Residential Tenancies Act 1997, standard term 55
[10] Residential Tenancies Act 1997, standard term 57
[11] Residential Tenancies Act 1997, standard terms 63, 64
The facts
7.Most of the facts of this matter are not in dispute. The parties entered into a residential tenancy agreement, commencing on 18 June 2021, for a fixed term of twelve months, ending on 17 June 2022. The lessor provided an ingoing condition report, which the applicants signed without making any written comment.[12] The rent was set at $660 per week, and a bond of $2,640 (four weeks rent) was lodged with ACT Rental Bonds.
[12] Exhibit R1 at [5]-[6]
8.It is clear that from the start the tenancy was marked by friction and disputes between the agents and the tenants. Harcourts were the agents for the first several months, and then Manage Me took over the agent’s role, but the relations between tenants and agents saw no improvement. One reason for this breakdown appears to have been that the tenants, from the outset, were troubled by the noise of barking dogs from neighbouring premises. Mr and Ms Chhabra said at the hearing that there was no disclosure of the dog problem until they had signed the tenancy agreement, at which point one of the agents immediately told them of the issue. The applicants said that they were misled as to the premises because the presence of barking dogs was not disclosed; and that this was a problem for them because their small children were scared by the dogs.
9.
From quite early in the tenancy the tenants complained of various problems that they said required repair by the lessor. Initially the tenants raised issues relating to the dogs; in an email of 23 June 2021.[13] Ms Chhabra complained both of the dogs and that the fence at the back of the property was insufficient and inadequate as a barrier against the dogs. The agents promised in an email dated 23 June 2021[14] that they would send out a handymen to fix the fence. The fence was also mentioned as needing work on
7 December 2021[15] and 18 January 2022.[16]
[13] Applicants’ submissions, attachment E2
[14] Applicants’ submissions, attachment E2
[15] Response, attachment 1A
[16] Response, attachment 1B
10.Later complaints related to other defects that the applicants say appeared or became apparent over time. Mr Chhabra said at the hearing that a blocked sink arose as a problem from August 2021. It was first reported on 7 December 2021[17] and was reported again on 18 January[18] and 17 March 2022. A tap in the garden was reported as leaking on 18 January 2022;[19] the oven was reported as not working on 19 February 2022.[20] The door to one of the kitchen cupboards became insecure and was reported in February 2022.[21]
[17] Response, attachment 1A
[18] Response, attachment 1B
[19] Response, attachment 1B
[20] Counter-response, attachments 4A, 4B
[21] Counter-response, attachments 4A, 4B
11.The tenants stated that towards the end of the fixed term tenancy the house was so badly affected by faults that had been notified but not repaired as to become uninhabitable. The tenants moved out about a fortnight before the end of the fixed term, on 31 May 2022 (although, as discussed below, there is some dispute over when the lessor obtained vacant possession).
12.The lessor provided ledger material[22] to establish that at the end of the tenancy there was rent owing of $848.57, up to 2 June 2022. The lessor also claims $300[23] as the cost of cleaning the premises after the tenants had vacated them (reduced from the $600 for this item in his final submissions), and $40 to pay for a missing desk divider and a missing light globe.
[22] Exhibit R1, attachment E
[23] Exhibit R2
The arguments of the parties
13.The applicants maintained that in each case they brought the defects in the premises to the attention of the lessor’s agents, but that the lessor failed to remedy them. They are therefore entitled to compensation for breach of the tenancy agreement and loss of amenity.
14.The respondent challenges the applicants’ claims on several grounds: that in each case either there was no defect or the defect was not one for which the lessor was responsible. And, to the extent that there were any defects, the applicants had not met their duty to mitigate their losses by taking simple steps to ameliorate or fix the problems as they arose. Where the respondent had attempted to remedy problems, the applicants had obstructed those attempts and made it difficult or impossible for the lessor to make repairs in a timely fashion. The respondent further argued that the tenants’ complaints were retaliatory and made in response to the respondent’s notice to remedy issued in December 2021. The respondent put forward a list of cases in support of some of these contentions.
15.At the end of the tenancy, the respondent says that the rent should be paid up to 2 June 2022, that being the date on which the cleaning was complete and the keys in his possession (the keys were returned to him on 31 May). The applicants initially disputed that any rent was still owed, but in the course of the hearing they conceded that some rent might be owed. But they contend that they vacated the premises on 31 May 2022, and that the respondent has no basis for claiming additional rent beyond that day. I do not understand the applicants to have contested the claims for missing hardware, and although they contested the claims for cleaning in their final submissions, this was not a focus of argument at the hearing.
Consideration
16.This case is marked by poor relations between lessor (or, perhaps sometimes, lessor’s agents) and tenants. These poor relations seem to have had an impact on the behaviour of the tenants and perhaps that of the lessor, but so far as I can see they do not come to bear directly on the issues to be decided. Some degree of bad feeling may have been initially triggered by the tenants’ discovery of the noise from the neighbouring dogs and their sense of having been misled (see below). In December 2021 a routine inspection prompted the lessor to issue a notice to remedy, for marks on the wall. The applicants were upset at this notice, and Mr Chhabra suggested that the marks on the wall should not be a problem provided he resolved the problem at the end of the tenancy. He also took umbrage at remarks by the agents regarding the reasons for the blocked sink, suggesting that they were racist. Subsequently, on 17 March 2022, the tenants issued a notice to remedy to the lessor, for defects that they said had been notified but not remedied. Meanwhile, the lessor issued more than one notice to remedy for rental arrears, despite the tenants being reliable in their rental payments, and in disregard of an arrangement the tenants had made regarding the day on which rent was due. It seems possible, even likely, that the poor relations between the parties influenced the decision of the tenants to quit the tenancy before the end of the fixed term.
17.None of this has a bearing in any direct way on the matters at issue. The question of liability for the noise of the dogs is dealt with below. The applicants suggest that the marks on the wall of the premises identified in December 2021 could have been left to the end of the tenancy; but standard term 63 requires a tenant to take reasonable care of premises during the tenancy, and prohibits intentionally or negligently damaging them or permitting such damage.
18.As for the contention by the lessor that the tenants have made their application to the Tribunal in retaliation for the notice to remedy issued by the lessor in December 2021, the RTA does have a provision that deals with retaliation. Under that provision, this Tribunal must deny a lessor a termination and possession order if satisfied that the lessor has applied for the order in retaliation for action by tenants in defence of their rights.[24] But that is the only such provision, and it clearly has no application in the present circumstances. I note too that the applicants had raised issues (such as the dogs and the fence) with the lessor well before the inspection that led to the notice to remedy in December 2021. In any case, the RTA does not deal with retaliation by tenants against action by lessors.
[24] Residential Tenancies Act 1997, section 57
19.The applicants stated that at the inspection in December 2021 the lessors’ agents made remarks that were racist; this is denied by the lessor. It is open to the applicants, should they wish, to make a complaint of discrimination to the Human Rights Commission under section 42 of the Human Rights Commission Act 2005.
20.In their initial application the applicants sought a rent reduction because of faults they say were notified but not repaired. The RTA has provision for rent reduction, but there is little purpose in ordering a rent reduction where a tenancy has ended; the application will be dealt with as an application for compensation, in line with the usual practice of this Tribunal.[25]
[25] See Faulder v Tran [2018] ACAT 80, at [58]-[60] and the cases cited therein
Does the lessor have any liability for the noise of the neighbours’ dogs?
21.The applicants say that the respondent misled them by not disclosing the presence of large noisy dogs adjacent to the rented premises before they signed the tenancy agreement. They said that their children were scared to be in the backyard because of the dogs. The respondent says that the dogs were not under his control, and that he had no responsibility for them or for doing anything to resolve the problem. Yet despite this, he says, he made overtures to the neighbours with the intention of moderating the amount of noise from the dogs, but to no avail.
22.The respondent is correct in arguing that the dogs, which belong to a person unconnected with the tenancy, are not his responsibility. There are avenues available under ACT law for people to raise noise problems associated with dogs,[26] and these avenues were open to the applicants. That leaves to one side, however, the claim by the applicants that they were misled when signing the tenancy agreement by the failure to disclose the presence of noisy dogs next to the premises. There are some requirements in the RTA for a lessor to disclose certain information to a tenant: Division 2.2, for example, sets out the obligations of a lessor to provide certain information to a tenant before a residential tenancy agreement commences. Those obligations, however, do not extend to information about the neighbourhood of the premises, or whether it is noisy or quiet, nor does any other provision of the RTA impose such an obligation.
[26] Domestic Animals Act 2000, Part 6
23.Section 46 of the RTA, however, deals explicitly with this issue, and the Australian Consumer Law (ACT)[27] also deals with misleading and deceptive conduct. Section 46 of the RTA reads as follows:
On application by a tenant, the ACAT may terminate a residential tenancy agreement if satisfied that the agreement was induced by a false or misleading statement of the lessor.
[27] Fair Trading (Australian Consumer Law (ACT) 1992 section 6.7 and 8 apply Schedule 2 of the Competition and Consumer Act 2010 (Cth), along with regulations made under section 139G of the Commonwealth Act, as ACT law
24.It is immediately apparent that it will be easier for an aggrieved party to succeed under section 46 of the RTA where the purported offending party has made a positive statement, and more difficult where that party has been silent, all other things being equal. For a party to succeed, the Tribunal must be satisfied, first that the lessor made a false or misleading statement, and second that the statement induced the other party to enter into the tenancy. The remedy is that the Tribunal, if so satisfied, may terminate the tenancy. In this case the applicants plainly recall with great clarity being advised of the presence of noisy dogs immediately after signing the tenancy agreement, and they made their first complaint about the dogs shortly afterwards. I think it is reasonable to conclude that their willingness to enter the tenancy agreement would have been very much less if they had been aware of the dogs. But no evidence has come forward suggesting that any statement was made or any impression given about the noise environment of the premises, and accordingly I find it difficult to conclude that the lessor, or the lessor’s agent, made a false or misleading statement. This Tribunal has considered the possibility of a silence or omission being the basis for a claim under section 46 of the RTA on several occasions, but in each case either the claim succeeded because of a positive statement that was held to be false or misleading, or, in the absence of such a statement, the claim failed: see Weiss v Coles and Fitzpatrick[28]; Bills v Trustees for Paul Sevier Practice Super.[29] The last case cited raises the possibility that a claim of this kind might be pursued as one for loss of quiet enjoyment: standard term 52 provides that the lessor must not cause or permit any interference with the reasonable peace, comfort or privacy of the tenant in the use of the premises. The applicants did not put their case in those terms, and even if I were to treat it as implicit in their case, I do not think it would be reasonable to conclude that the lessor caused or permitted the presence of, or noise from, the dogs, which belong to some unrelated third party.
[28] [2010] ACAT 21 at [30]-[37]
[29] [2016] ACAT 67 at [48]-[70]
25.Section 18 of the Australian Consumer Law (ACT) reads as follows:
A person must not, in trade or commerce, engage in misleading or deceptive conduct, or in conduct likely to mislead or deceive.
26.Clearly the ambit of ‘misleading and deceptive conduct’ is broader than that of section 46 of the RTA and there is no requirement that the impugned conduct has induced the transaction. There is a long line of cases dealing with the provision, including examples where misleading and deceptive conduct has occurred or is alleged to have occurred through a silence or omission. In Miller and Associates Insurance Broking Pty Ltd v BMW Australia Finance Ltd[30] the High Court considered this issue in detail. The comments of French CJ and Kiefel J are illuminating:[31] “… as a general proposition, s 52 does not require a party to commercial negotiations to volunteer information which will be of assistance to the decision-making of the other party.” In the present instance, I do not believe that section 18 of the Australian Consumer Law (ACT) required the lessor or his agents to bring the presence of the dogs to the attention of Mr and Ms Chhabra, although not to do so was undoubtedly inimical to good relations between lessor and tenants thereafter. But so far as the evidence discloses the lessor (or his agents) made no statements about the ambient noise around the premises, in general, and no specific statements about neighbouring dogs. In the absence of any impression being made regarding these factors, the lessor’s actions, in my view, do not contravene section 18 of the Australian Consumer Law (ACT).
[30] [2010] HCA 31
[31] The case arose under the identical provision at that time in section 52 of the Trade Practices Act 1974 (Cth)
Were the repairs sought ones that the tenants should have made themselves?
27.Standard term 55 requires the lessor to maintain the premises “in a reasonable state of repair having regard to their condition at the commencement of the tenancy agreement”. The tenant must notify the lessor of any need for repair, but the term does not require that the tenant notify the lessor “about anything that an ordinary tenant would reasonably be expected to do, for example, changing a light globe or a fuse”. Standard term 57 then requires the lessor to make repairs within four weeks of being notified. The outcome of applying these terms is to divide defects in premises into two classes: those that a tenant would be expected to do and those that are the responsibility of the lessor. Some defects fall clearly into the former class – changing light globes and fuses (because they are given as examples) and changing smoke alarm batteries (because these are made the responsibility of the tenant by standard term 63A); but for other defects a question may arise as to whether the defect falls into the first or the second of the above classes.
28.This question would usually be resolved at the time of the report, or possible report, by the tenant: tenants might resolve to attend to a defect themselves, so that no report of the fault would be made and the question would not arise, or a lessor or lessor’s agent might tell tenants that a matter is their responsibility. But if a lessor takes on the responsibility for the matter, I do not think they can later escape liability by saying that the tenant should have made the repair. By taking on the responsibility at the time of the report they have assumed liability and must attend to the matter within four weeks unless they reach agreement with the tenant to resolve the matter on a longer timescale.
29.Much of the case law that the lessor has cited in support of his arguments is of little help to him. A number of the cases cited deal with questions of a lessor’s liability where a tenant or third party is injured, but the lessor had no reason to know that some part of the premises had some flaw and might pose a risk to a tenant. Northern Sandblasting Pty Ltd v Harris[32] and Jones v Bartlett[33] are leading cases examining a lessor’s liability in tort, contract and under statute where an unforeseen risk on premises led to injury. In the first there was a severe injury to a little girl arising from electrical repairs not carried out with sufficient attention to safety, and in the second a glass door that caused an injury when a visitor came in sharp contact with it. The High Court held the lessor liable in the first but not the second, with a critical question in each being whether there was a discernible fault in the premises or in the article leading to the injury. In Ahluwalia v Robinson,[34] where a shower screen shattered causing injury, the court followed Jones. In Ordukaya v Hicks,[35] similarly, the court found that a proprietor was not liable in respect of a stone step which had given way, injuring a workman, because there was no discernible fault in the step prior to the accident. All of these cases, however, involved a hidden risk and a subsequent injury; in the present matter the purported fault in the premises was not hidden, having been notified to the lessor’s agents. At issue in the present matter is the lessor’s obligation to repair once notified of a defect, and the extent of that obligation, and the quoted cases do not bear on that issue.
[32] [1997] HCA 39
[33] [2000] HCA 56
[34] [2003] NSWCA 175
[35] [2000] NSWCA 180
30.Of more assistance is another case cited by the respondent, namely Varricchio v Wentzel.[36] In that case the lessor was found liable for mould and water damage present in the premises both at the start of and during the tenancy; the lessor was notified of the problem by the tenants and had an obligation to address the issue. The case is helpful, although in my view it is more helpful to the applicants than the respondent. The respondent cited a further case, Kerai v Miller (Kerai),[37] in support of the argument that by doing what he could when he could, in circumstances where the availability of tradesman was very constrained, the lessor had done all that was required to meet his liability. But that case deals with NSW tenancy law, and at the relevant time the NSW statute demanded that lessors complete repairs “with reasonable diligence”;[38] the NSW tribunal held that that standard had been met in the circumstances of the case. But the standard term in ACT legislation, which becomes a term of the contract between lessor and tenant, requires that a lessor must complete repairs within four weeks of being notified. This is more prescriptive that the NSW statute in Kerai, and there is a long list of cases noting its mandatory wording, starting with Peters v ACT Housing[39] and continuing through many others to But v Baldwin[40] and Faulder v Tran.[41] What these cases all say is that the obligation to make repairs within 28 days of notification is mandatory; indeed it is just as complete and unyielding as the obligation on the tenant to pay the correct amount of rent as it falls due, and for essentially the same reason.
[36] [2016] SASC 86
[37] [2011] NSWCTTT 325
[38] Residential Tenancies Act 2010 (NSW), section 65(3)
[39] [2006] ACTRTT 6 at [41]-[42] (the numbering of the paragraphs has become confused; the relevant paragraphs [41]-[42] are towards the end of the decision)
[40] [2016] ACAT 9 at [31]
[41] [2018] ACAT 80 at [23]
31.The respondent gets a little more help from another set of cases establishing that a lessor has no obligation to repair or improve an item that is not defective. In Re Newell[42] the ACT Supreme Court held that a lessor had no liability to widen a staircase because tenants discovered, after signing their tenancy agreement and moving in, that the staircase was too narrow for their furniture; the tenants had accepted the premises and the staircase was not defective. In Taber v NSW Land and Housing Corporation[43] a tenant fell on steps at the rented premises, but the NSW Court of Appeal held that the absence of a handrail for the steps was not a defect – once again, the steps had been accepted as they were and were not defective. In Beeby v NSW Department of Housing[44] the tenant wanted a front fence where none had been provided with the premises. The tribunal held that this was not a repair, but a capital improvement; there had been no breach of the tenancy agreement by the lessor, and the tribunal had no jurisdiction. All of these cases support the notion that the lessor does not have an obligation to improve some element of the premises because a tenant, some way into the tenancy, might find a need for it. Mr Mohindra advanced an argument along those lines in respect of the fence, and I return below to that argument.
[42] [2003] ACTSC 31
[43] [2001] NSWCA 182
[44] [1996] NSWRT 216
32.The respondent put forward some additional cases relating to the purported absence of a discernible defect. In Grieves and Handley v Murray and Dawson[45] the collapse of a ceiling was found not to be the fault of the lessors, as they were unaware of the problem and had no reason to be aware of it. In McKinnon v Kirdy[46] (Kirdy) a tenant tried to mend a fence at the rented premises but fell and injured himself; the court found that the lessor had no obligation to fix the fence at the start of the tenancy because the improved security was for the tenant’s dog, not for the tenants, and in any case the tenant had not notified the need for the repair during the tenancy. In Battye v Ho[47] a fire sprinkler went off defectively and flooded the rented apartment, but the tribunal determined that the lessor had no reason to know that the sprinkler was defective and was not liable for the damage to the tenant’s possessions. The first and third of these cases have a good deal of similarity to those raised earlier, such as Jones v Bartlett, in that they involved a defect which could not be discerned and of which the lessor was unaware, a defect that subsequently caused damage to the tenants or their property. For the reasons given earlier, they are not helpful here, where the defects were notified to the lessor. Kirdy has some similarities to the present matter, but is distinguished in two ways: first, the fence in the present matter was the subject of complaint because of perceived risk to the tenants’ family, who were entitled to security; and second, unlike in Kirdy, here the tenants notified the lessor of the problem.
[45] [2001] NSWRT 174
[46] [2003] QSC 302
[47] [1999] NSWRT 135
33.There are five matters that the tenants say should have been attended to by the lessors but were not. These are the back fence; the leaking garden tap; the blocked sink; the kitchen cupboard door; and the oven. Of these five matters, the lessor in my view took on responsibility for all except the sink.
34.The blocked sink was cleared on a number of occasions through the use of commercial drain cleaning products; at each inspection it was tested and found to be running and draining satisfactorily. The applicants say this was only because on each occasion they had cleaned it. That, it seems to me, is what the standard terms call for from a tenant – that the premises are kept reasonably clean, and that matters of this minor nature are attended to. The history does not suggest that the sink required the lessor’s involvement, and the lessor did not at any stage assume responsibility for it. The applicants say a plumber should have inspected the drain for any structural problem; but if the sink was readily cleared with a simple drain cleaner on each occasion it became blocked, I cannot see that a plumber need have been engaged. The drain cleaner is the sort of consumable normally supplied and used by a tenant as part of the care of the premises, like other cleaning agents. My conclusion is that the lessor has no liability for the blocked sink.
35.
The applicants first complained of the fence on 20 June 2021. The lessor’s agents undertook to send a handyman to fix the fence on 23 June 2021 with the intention of adding to the fence’s height and fixing any missing palings.[48] The fence was given added height, by addition of what is termed a ‘courtesy screen’, but the screen became partly detached and the need for remedial work was raised as an issue at inspections on 7 December 2021 and 18 January 2022. It seems that it was also recognised that the fence was somewhat at an angle, and needed to be straightened. Work orders were issued, to Armstrong Services on 12 December 2021,[49] to NHC Carpentry on
1 February 2022,[50] and again to Armstrong Services on 26 April 2022,[51] the last referring both to the courtesy screen and to the need for the fence to be straightened. No repair appears to have been made under any of the work orders. One handyman, apparently from NHC Carpentry (identified as ‘Nick’), said on 25 March 2022 that fixing the fence would need a further work order.[52] It appears that no further work was done on the fence up to the end of the tenancy, and as late as mid-May a text message from a handyman identified as ‘Woz’ from Armstrong Services referred to his intention of reattaching the courtesy screen and straightening the fence.[53] In my view, by issuing work orders on several occasions the lessor signalled that he had assumed responsibility for fixing the fence. At the hearing he submitted that there was nothing wrong with the fence at any stage, and that what the applicants were seeking was of the nature of a capital improvement rather than a remedy for a defect. But that is inconsistent with the promises made, and with the continued inclusion of the fence in successive work orders. I note that the fence was in the condition complained about from the start of the tenancy, and therefore it might be argued that the tenants accepted it in that condition when signing the tenancy agreement and the condition report. But this was an issue that became important to the tenants once they became aware of the dogs in the neighbours’ yard, and they were entitled therefore to bring this to the lessor’s attention, despite having accepted the fence as it was at the start of the tenancy.
[48] Counter-response, attachment 4B
[49] Lessor’s response, attachment 2A
[50] Lessor’s response, attachment 2B
[51] Lessor’s response, attachment 2C
[52] Applicants’ submissions, attachment 10
[53] Counter-response, attachment 4B
36.The cupboard door and the oven were both first reported to the lessor on 19 February 2022. Again, each was the subject of a work order by the lessor’s agents. The handyman Nick came to the house on 25 March 2022, and declared himself unqualified to fix the oven. The second handyman, ‘Woz’, also attended the premises, and could not get the oven to function; he appears to have been responding to a work order dated 26 April 2022,[54] a work order that failed to ask him to determine the make and model. The lessor’s agents asked the applicants to provide details of the oven;[55] they also asked a series of questions designed to ensure that the oven really was defective, and that it was not faulty operation by the applicants that was the cause.[56] The applicants failed to provide information about make and model, and responded somewhat testily to the questions posed by the lessor’s agent about the oven. The lessor has argued that these failures left the applicants responsible rather than him, or, in the alternative, that it was evidence of obstruction by the tenants. I return to that second argument below, but in respect of the first, I would note that the request for information about the oven was made on 26 April 2022, some 11 weeks after the problem with the oven was first reported, by which time the lessor was obliged under standard term 57 to have attended to the issue. The agents asked the questions about the oven’s functions on 19 April 2022, also well after the time allowed for a lessor to make repairs. Further, two handymen went to the house over this period, and neither was tasked to collect the make and model information sought. The respondent said at the hearing that after the tenants had vacated he found the oven to be working, and that the tenants could have checked the manual online and solved the problem themselves. But once the lessor had assumed responsibility there was no continuing requirement for the tenants to resolve the issue – it was now in the hands of the lessor. If in the 28 days allowed under standard term 57 the lessor had established that the oven was in working order, no liability would arise; in the absence of that action, liability rests with the lessor.
[54] Lessor’s response, attachment 2C
[55] Response, attachment 3C
[56] Response, attachment 3B
37.The handyman Nick made a repair to the cupboard door on 25 March 2022, but described it as a temporary fix until he could get a work order for the full job.[57] The respondent said at the hearing that the cupboard door had been completely repaired by Nick on 25 March and needed no further work, but that is contradicted by Nick’s own report of his work on that day. The tenants say, and I accept, that the door was inclined to come off its fastenings or hinges, and that with young children in the house they were unable to put any fragile or dangerous items in a cupboard that was not secure.
[57] Applicants’ submissions, attachment 10
38.The tenants said that the leaking tap began as a drip but worsened to a dribble. Mr Chhabra said he dealt with it by attaching a hose with a trigger nozzle and turning the trigger nozzle off, but that the tap still leaked. The tap was notified to the agents on 7 December 2021 and reported again at the inspection on 18 January 2022. It was the subject of two work orders,[58] but was only resolved after the tenants had left the tenancy. The respondent said at the hearing that he then replaced the washer (finding the existing washer ‘very worn’) but for aesthetic reasons also replaced the tap itself. The respondent said that replacing a washer, a consumable, was the tenants’ responsibility. The tenants said that there was more wrong than a washer, and that the tap itself had a problem.
[58] Response, attachments 2A, 2B
39.This is once again a matter where the lessor took responsibility by accepting notification of the problem and issuing work orders. The tap was only fixed after the tenancy finished, and since the tap as well as the washer was changed, whether there was a problem that went beyond the washer is not a question that can now be answered. But the answer to that question is beside the point, as the lessor had taken responsibility for the tap, but had failed either to fix it or to tell the tenants that it was their responsibility to do so.
40.Standard term 57 requires a lessor to repair notified faults within four weeks. The sense of terms 55 and 57 is that a lessor, when notified, can tell a tenant to take care of minor repairs, or within the four week period either make the repairs or identify the problem notified as not needing repair. In the present matter the lessor took responsibility for the matters reported but did not make the repairs requested within the four weeks required. The lessor was in breach of the tenancy agreement in respect of the fence, the oven, the cupboard door and the tap. I do not believe that any of the cases cited assists the lessor to escape liability.
41.The respondent also contends that the applicants obstructed attempts by his agents to make repairs. The specific examples appear to be during April 2022, when handymen were attempting to address problems such as the oven, and the applicants had an exchange of text messages with the handyman to agree on a date for access to the premises. It is also possible to regard the lack of response by the applicants to the request for information about the oven as a form of obstruction. As I understand the respondent’s argument on this issue, it is that he cannot be expected to have effected repairs within the 28 days allowed when the applicants were intentionally placing obstacles in his way.
42.The applicant suggested two cases as precedent for this argument. In Sinanovic v Harriss Tripp Pty Ltd[59] the NSW tribunal dealing with rental tenancies dismissed a claim from a tenant for failure by a lessor to effect repairs. The basis of the dismissal was that the tenant had refused to move her possessions to make space for the repairing tradesman to do his work. In Von Reisner v Consumer, Trader and Tenancy Tribunal[60] the NSW Supreme Court confirmed orders originally made in the Consumer, Trader and Tenancy Tribunal for urgent repairs to be made in the plaintiff’s apartment. The tenant had prevented these repairs from proceeding for an extended period by various means. These two cases certainly illustrate that a tenant is expected to cooperate with the lessor in ensuring that repairs proceed; but whether in any particular instance a tenant has obstructed a lessor from effecting repairs, and by doing so absolved the lessor of the obligation to repair within the allotted time, will depend in large part on the particular circumstances of each case.
[59] [2005] NSWCTTT 301
[60] [2007] NSWSC 907
43.In the present instance I am not persuaded by the lessor’s argument. In the first place, the text message exchanges that appear in the papers are of the kind one might expect when the two participants explore the possibility of a mutually acceptable time – that is, they do not have the flavour of one side of the conversation being excessively difficult and deliberately putting obstacles in the path of the other. Second, these exchanges occurred well after the 28-day time limit for a lessor’s repairs had already expired. Third, in the ACT, if a tenant obstructs a lessor’s attempts at repair, a lessor can rely on standard term 82, which allows a lessor, on one weeks’ notice, to enter the premises “at a reasonable time” to make repairs; this course was not even attempted, in this instance. As for the failure to respond with details about the oven, the issue was not pursued with vigour by the lessor, and as noted above, neither Nick nor Woz was tasked with reporting back on the details of the oven when visiting the premises. I do not think that obstruction played any significant part in the delay in the lessor making the repairs.
Does the duty to mitigate limit the applicants’ claim?
44.Section 38 of the RTA limits the compensation that may be paid to lessor or tenant if the party to be compensated could have reduced their losses. The respondent in the present matter has argued that as most if not all the matters complained of by the applicants were minor in scale, and some were easily remedied, the applicants could have mitigated their losses by undertaking their own repairs. This argument is not without force and there is a good number of cases in which such an argument has been applied by this Tribunal (or its predecessor) to reduce the compensation that might otherwise have been paid to a lessor: see for example McPartlan and Heinrich v Ashton;[61] Fenton v de Andrade.[62] To some extent the force of the argument is diminished by the willingness of the lessor or his agents to take responsibility for the repairs, but it was always open to the applicants, if they found the matter pressing, to organise the repairs themselves and seek reimbursement, or to bring the matter before the Tribunal at an earlier point. I have taken this aspect into consideration in drawing conclusions below.
[61] [2010] ACAT 82, at [52]-[55]
[62] [1999] ACTRTT 21, at [177]-[179]
When did the rental obligations of the tenants come to an end?
45.The applicants complain that the statement from Manage Me that rent is payable until keys returned and premises cleaned to the point where they are suitable for another tenant[63] is without foundation in the RTA. The applicants are right. The return of the keys is an essential step in vacant possession; but the requirement that rent be paid until the premises are completely clean is at odds with the processes in the RTA. The model set out in the RTA is that a tenant pays rent in exchange for the right to occupy the rented premises as a home. The RTA specifies in most cases when a tenancy comes to an end, and in general rent is payable up to the time the tenancy ends; the exceptions to that rule are those set out in the RTA, for example if premises are abandoned[64] or if a tenant leaves during a fixed term.[65] Section 31 of the RTA allows arrears of rent to be deducted from the bond if a tenant leaves the premises with rent unpaid, and allows costs for such matters such as cleaning, repairs and new locks or keys to be recovered. Section 83 allows the Tribunal to order compensation for breach of a tenancy agreement. But nothing in the RTA suggests that a lessor may charge a tenant rent after premises have been vacated because those premises are not adequately clean; indeed to do so would be unlawful. The appropriate step in those circumstances is for the lessor to apply to this Tribunal for a deduction from the bond or for compensation.
[63] Applicants’ final submission, attachment E12
[64] Residential Tenancies Act 1997, sections 61, 62, 63
[65] Residential Tenancies Act 1997, section 84
46.That said, it is the case here that the tenants notified the lessor that they intended to leave the tenancy a few weeks before the end of the fixed term, enlivening the provisions of section 84 of the RTA. That section provides that where a tenant provides notice of an intention to vacate a tenancy before the end of a fixed term, the lessor may either accept the notification, or may seek compensation for lost rent and the costs of finding a new tenant (both costs are capped). In this instance, the lessor has decided not to pursue the compensation that might have been available to him, which he estimated at $5,502.86[66] (although no inference should be drawn that this is the amount the tenants would have been obliged to pay in practice, as the RTA imposes limits on the amount that can be claimed, according to the circumstances at the time). But by deciding not to seek compensation, the lessor was accepting the tenants’ notice of intention to vacate. The lessor cannot now rely on that as a concession that entitles him to leeway in some respect under the other claims. Section 84 says that the tenancy ends when the tenant vacates, and that was on 31 May 2022. Rent is only payable up to that day.
[66] Respondent’s final submissions at [122]
47.The lessor is entitled, however, to compensation if the premises were not left in a sufficiently clean state. He has supplied a receipt for $300 for cleaning the premises, and although the tenants took issue with the possibility of a claim of this kind in their final submissions, they did not make the cost of cleaning a matter for contention during the hearing. The amount sought is modest. The lessor has also claimed for the costs of replacing missing hardware: this comprises $20 for a missing light globe and $20 for a missing desk divider. The latter claims have not been contested.
48.In their supplementary application the applicants claimed that they vacated the premises at the end of May 2022 because they had become uninhabitable. Standard term 86 in Schedule 1 of the RTA allows a lessor or tenant to terminate a tenancy on the grounds that the premises are not fit for habitation. If a tenant gives a notice to terminate on this basis, the tenant must allow two days’ notice and the rent abates from when the premises became uninhabitable. In their supplementary application, the applicants claimed a reduction in rent, moving costs to new premises and payment towards the increase in rent of their new premises over those they left.
49.I cannot see how a reasonably functional if imperfect back fence, a mildly leaking tap, an occasionally blocked drain, one kitchen cupboard the uses of which are limited and a non-functional oven make a house uninhabitable. The claims on this ground are denied.
Conclusion
50.The applicants have succeeded in at least some of their claims against the lessor in regard to standard term 57. No compensation is to be paid in respect of the noise from the dogs, but the tenant must be compensated for the failure to remedy the fence; the leaking tap; the kitchen cupboard door; and the oven. The rationale for compensation was explained by Presidential Member McCarthy in But v Baldwin:
Compensation is payable not because of any neglect on the lessor’s part but because the lessee continued to pay the weekly rent … but did not have the use of the property to the extent of the deficiency.[67]
[67][2016] ACAT 9 at [31]
The amounts to be paid in compensation therefore reflect the extent to which the lessor’s failures reduce the tenant’s amenity. In the present matter the loss of amenity is limited, and that limitation is compounded by the applicants’ failure to mitigate their losses.
51.The claim regarding the blocked drain is denied because the sink was cleared on each occasion by the simple application of drain cleaner. Each of the other matters is dealt with below:
(a)The fence: after a first notification in June 2021 the courtesy screen was added to the fence (the evidence does not disclose when that occurred). In December 2021 the courtesy screen had become disconnected at one end, and the lessor or his agents suggested that the applicants might reattach it, but they also issued a work order for the reattachment and to stop the fence leaning to one side, and continued to issue work orders until the end of the tenancy. Despite the orders the fence’s lean was not remedied and the courtesy screen was not reattached. The applicants say that they, and especially their small children, were prevented or discouraged from using the back garden, but the evidence suggests that the fence was of sufficient integrity to keep the neighbouring dogs out of the premises; it appears to have been the noise and vigour of the dogs that the applicants’ family found upsetting, and the absence of the requested repairs seems unlikely to have made any difference to those factors. I am not persuaded that the lessor’s failure to make changes or repairs to the fence caused any detriment or loss of amenity to the applicants, and accordingly I do not believe any compensation is warranted.
(b)The tap: the lessor’s agents took responsibility for the leaking tap and raised a work order when it was first reported, but it was not fixed until after the tenancy was terminated. The simplicity of the fix is relevant only to the extent that it suggests that the applicants had not done all they could to mitigate their losses by attempting a repair. The applicants made a claim for excess water charges, but neither the description of the extent of the leak nor the record of water consumption charges provided by the lessor[68] encourages me to regard the additional water consumption as significant. I allow $40.
(c)The oven: this was notified on 19 February 2022 but was not fixed by 17 May 2022, which was the date the applicants told the handyman Woz that any repairs could wait until they had vacated. An argument could be made that a non-functional oven was an urgent repair under standard term 59, which calls for the lessor to make such repairs “as soon as necessary”. Standard term 60 is a non-exhaustive list of examples of urgent repairs, and paragraph (j) of that term lists “a failure or breakdown of any service in the premises essential for … cooking”. No argument was made to me that this was an urgent repair; the applicants seemed inconvenienced by the absence of the oven but not to the point of agitation; and there was no evidence of anything wrong with the cooktop in the kitchen, so a good deal of cooking could have continued in a reasonably normal way. Accordingly, I regard this as a repair under standard term 57. As explored above, the lessor’s agents were slow to act, and when they did send tradesmen did not ask them to gather the essential information about the oven. The applicants’ failure to mitigate their losses is reduced in significance by the shorter period involved. The applicants notified the need for repair on 19 February and the calculation of the loss of amenity begins from 19 March, 28 days later, and runs to 16 May, giving a total of 77 days. At $50/week, the compensation is $550.
(d)The cupboard door: it is plain that the repair job done by Nick was incomplete. The applicants were unable to store anything liable to damage in the cupboard for the same period as the oven was out of service. I allow $10/week; the loss was for 11 weeks, giving a total of $110.
[68] Exhibit R2 at [53] and attachment O
52.The total compensation to be paid to the applicants is $690. Against this the lessor is entitled to unpaid rent of $848.57 less two days rent ($188.57), which comes to $660. He is also entitled to $300 compensation for cleaning and $40 for the missing hardware, coming to a total of exactly $1,000. The bond held by the ACT Office of Rental Bonds is $2,640. Accordingly I have made orders for $310 to be deducted from the bond and paid to the lessor. The remainder, namely $2,330, is to be paid to the applicants. Given that the decision apportions a share of responsibility to each side, no order for the lessor to pay the tenants’ filing fees is appropriate.
………………………………..
Senior Member M Hyman
Date(s) of hearing 4 July 2022 Applicants: In person Respondent: In person
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