CHU v PORT PHILLIP HOUSING ASSOCIATION LTD - [2011] FMCA 981

FEDERAL MAGISTRATES COURT OF AUSTRALIA

CHU v PORT PHILLIP HOUSING ASSOCIATION LTD

[2011] FMCA 981

COMPETITION & CONSUMER LAW – Application for urgent injunctive relief to restrain possession order in favour of respondent made by VCAT – consideration of strength of applicant’s assertion as to existence of serious issue to be tried – consideration of balance of convenience.

Competition and Consumer Act 2010, ss.231(1), 234(1)
Residential Tenancies Act 2001, s.44
Victorian Civil Administrative Tribunal Act 1998, s.123

Applicant:

JOHNNY CHANG YEE CHU

Respondent:

PORT PHILLIP HOUSING ASSOCIATION LTD

File Number:

MLG 1665 of 2011

Judgment of:

Burchardt FM

Hearing date:

23 November 2011

Date of Last Submission:

23 November 2011

Delivered at:

Melbourne

Delivered on:

23 November 2011

REPRESENTATION

The Applicant:

In person

The Respondent:

No appearance

ORDERS

The application filed 22 November 2011 be dismissed.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT MELBOURNE

MLG 1665 of 2011

JOHNNY CHANG YEE CHU

Applicant

And

PORT PHILLIP HOUSING ASSOCIATION LTD

Respondent

REASONS FOR JUDGMENT

(Revised from transcript)

The matter before the Court is an application filed yesterday. In it, the applicant, Mr Chu, seeks urgent injunctive relief. He seeks an injunction under s.231(1) and/or s.234(1) of the Consumer Law (Competition and Consumer Act 2010), which is a global phrase I use to describe schedule 2 of the relevant legislation. His substantive claim, as he confirmed before the Court, is that the respondent had engaged in unconscionable conduct in contravention of s.21 of Schedule 2 and s.23 of Schedule 2, which relate to unfair contracts.
In relation to the latter point, s.23 of Schedule 2 provides that a term of a consumer contract is void if:
a)the term is unfair; and
b)the contract is a standard form contract.
There are other matters in the sub-section. What I should say, however, is that it is not clear in this case that the contract with which I might be said to be concerned is a standard form contract.
The Court, undoubtedly, has power to grant the injunctive relief that the applicant claims, were it to be persuaded to do so. Mr Chu’s claims are articulated in his affidavit sworn and filed yesterday and also articulated in oral submissions before the Court. I turn now to deal with the facts as best I understand them, bearing in mind I have had limited time to familiarise myself with the materials.
It is clear there have been disputes between the applicant and the respondent in the past. Mr Chu told me today in Court that on 15 June 2010, the Victorian Civil and Administrative Tribunal, VCAT, made orders that he pay rent at $134 per week and arrears of $42 per week. He paid this sum, even though it is his position that it was, in fact, wrongly calculated and excessive and should have been (based upon his Newstart Allowance) around about $111.
On 14 June 2011, Mr Chu emailed the respondent attaching relevantly an income review document. That asserted his Centrelink benefits as $214.35 per week and attached a document from Centrelink that supported that proposition. I should interpolate and say I will probably erroneously refer to Newstart from time-to-time. The relevant payments seem to be from Centrelink. They may be constituted by Newstart as it is a Newstart Allowance.
On 15 June 2011, the respondent replied. It gave the applicant the benefit of certain calculations asserted by him. On the same day,

Mr Chu replied, again seeking rent on his lower income. On 17 June 2011, the respondent replied again at a calculation rent at $160 per week from 1 July. On the same day, Mr Chu sought clarification as to how that figure had been arrived at. On 22 June 2011, the respondent replied.
Newstart was said to be $232.89 per week and not Mr Chu’s figure of $214.35. I note that the email to Mr Chu on 22 June 2011 relevantly stated “is calculated at 30 per cent” and I take that to mean that 30 per cent of the Newstart Allowance applies to rent. 30 per cent of about $18, which is the difference between the parties’ calculations, is only $5.50. It is nowhere near enough to explain the jump from $134 a week rent to $160.
On 28 June 2011, Mr Chu replied disputing the calculations and on

18 July 2011, VCAT made an order relevantly for the applicant to vacate the property. He applied for a review and was successful. There was a stay in early August and a decision on 18 August 2011. Order 2 of the orders made by VCAT on that date ordered the applicant to lodge any claim against the landlord and that it be heard with the landlord’s application on a subsequent date. The applicant lodged such a counterclaim on 30 October 2011, which was the last day permitted under the VCAT order. Annexure 14 at page 21 of the materials annexed to Mr Chu’s affidavit constitutes the application he made to VCAT. I will read out paragraphs numbered 7 and 8. Paragraph 7 reads:
“The application is for counterclaim against PPHAs possession order application on the ground that the amount of arrears claimed by PPHA is offset in part, if not in full, by the amount of rent which PPHA has overcharged the application and by any damages payable by PPHA to the applicant for PPHAs breach of duty.”
Paragraph 8 reads:
“This is a resubmission of the application made on 15 July 2011 without prejudice to the validity of such application. Please refer to a two-page attachment to this form for details.”
I would interpolate and say that any application made on 15 July 2011 is not before me. The two-page application, which was added raises, broadly speaking, two matters. The first is a breach of s.44 of the Residential Tenancies Act 2001 Victoria and the second refers to overcharging of rent in the past, which is a matter which goes back with some considerable history.
On 16 November 2011, VCAT apparently heard the matter and made various orders. One of the orders made was an order for possession, which is what the applicant is seeking to enjoin in this proceeding. The applicant’s claim was apparently adjourned. Annexure 15 is the relevant order made on the applicant’s claim, which he described before me as a counterclaim. What VCAT ordered is set out as annexure 15 on page 24 of the applicant’s material and the order relevantly reads as follows:
“The proceeding is adjourned to a date no later than 16 February 2012 to be heard by any member of the Victorian Civil and Administrative Tribunal. The proceeding may be renewed by the landlord giving the principal registrar notice in writing but if the proceeding is not renewed on or before this date, it shall be considered withdrawn. If renewed, the hearing shall be before Member S. Liden within 3 hours to be allowed. It is noted that the respondent has today provided a response in writing to the tenant and to the landlord.”
That notation is in some respects difficult to follow because the respondent who provided the response was, of course, the landlord itself and I note that according to its terms, it was only the landlord who had apparently the capacity to renew the applicant tenant’s application. In any event, the matter was adjourned.
Mr Chu has assured me that service of his application and affidavit was effected yesterday afternoon. The respondent is not here. Mr Chu’s complaints are various, but I think they can properly be characterised as follows: First, he says it was unconscionable for the respondent to set rents as it has; in other words, ignoring the facts of his Newstart Allowance amount.
Secondly, he says it was unconscionable for the respondent to fail to exhaust other avenues of conflict resolution and, indeed, that this was not only unconscionable generally, but in breach of its own procedures which, if I understand him correctly, may have some quasi-statutory force. He finally says that it was unconscionable of the respondent to proceed in the absence of notice given pursuant to s.44 of the Residential Tenancies Act 2001 of the proposed increase in rent. I note, however, paragraph 35 of the applicant’s affidavit, which reads as follows:
“The Applicant raised the issue of the RTA Breach in the 16/11/2011 hearing. But the presiding VCAT member (“the Member”) decided that s.44(1) of the RTA did not apply to any increase in the rebated rent amount that rather only to any increase in the market rent (“the s.44(1) Decision”), notwithstanding the fact as pointed out by the Applicant that the Respondent had compiled with s.44(1) of the RTA when it sought to impose on the Applicant increase in the rebated rent on previous occasions and the Respondent’s acknowledgment that other VCAT members had decided to the contrary in terms of the applicability of s.44(1) of the RTA to any increase in the rebated rent. Since there was no increase in the market rent but only an increase in the rebated rent, the Member decided that the Respondent did not have to comply with s.44(1) of the RTA.”
It is clear, therefore, that VCAT was not persuaded by Mr Chu’s position on that date. Mr Chu says that VCAT was wrong. The applicant says, first, that the matters he raises give rise to a serious issue to be tried and, second, that the balance of convenience favours the granting of the injunctive relief he seeks. One matter not disclosed in his affidavit is that he was, in fact, overseas from late May/early June until November in pursuit of studies for a PhD. That may well have impacted upon his capacity to respond to the march of events.
Turning to the question of whether there is a serious issue to be tried, I assume, for present purposes, that Mr Chu can properly be said to be a consumer within the meaning of the legislation and for these purposes that the respondent acted in trade or commerce in the course of providing services, once again, within the meaning of the Act.
There might be room for debate about both of those matters at trial, but I will assume in Mr Chu’s favour for these purposes. I come to look at his various arguments. The first is the argument about the way in which his rent was set. The first point I make is that I note that the figures are not readily understandable. The respondent may or may not be correct in its calculations.
Assuming that Mr Chu is correct, it is not necessarily the case that the respondent’s conduct would be unconscionable. It might be an honest mistake, although even an honest mistake might give rise to unconscionable conduct if rent was being charged improperly. I accept that the point is an arguable one, but I note that this point is covered by the applicant’s VCAT counterclaim.
The second matter raised is the failure to negotiate and the concomitant breach of the respondent’s own procedures. It is not clear to me how this would sound in damages, in any event. It is really an ancillary point to the dispute about the quantification of rent and the way in which the respondent has proceeded to seek remedies before VCAT.
Thirdly, the argument about s.44 of the Residential Tenancies Act 2001. I accept that the respondent’s conduct could amount to unconscionable conduct if it purported both to raise the rent without the appropriate notice and to seek to recover it and take other action based upon it in circumstances where it might be arguably void, however I note that the matter was raised in terms at VCAT unsuccessfully. In my view, the applicant’s case is by no means overwhelming. It is certainly not incapable of being made out, but it cannot be said to be a strong one.
I turn to the balance of convenience. I note that first, in part, the applicant is seeking to rehear the matter heard at VCAT, at least in relation to the s.44 point. That is not appropriate. The proper avenue to appeal any error made by VCAT in that regard would have been an appeal to the Supreme Court under the Victorian legislation. Secondly, VCAT appears to have taken a poor view of the applicant’s claim. As I have said, it only appears to have provided for the landlord to seek to have it re-listed.
Third, VCAT itself has the power to grant injunctions in any proceeding before it pursuant to s.123 of the Victorian Civil Administrative Tribunal Act 1998 (“the VCAT Act”). The applicant can still apply there. The correspondence sent to him shows that he is not required to vacate until Friday. Possession could not possibly occur before then. In my view, it is clear and should have always been clear that VCAT was the proper forum for such disputes between the applicant and the respondent given the apparent detailed past history there.
Finally, although it is not a matter of which I make overly much, I note that the applicant is, and very understandably so, impecunious. Any undertaking he were to proffer as to damages would be likely to be meaningless in substance. That does not, of course, for an instant preclude him from remedy, but it is not perhaps irrelevant given the likely large scope of the proceedings, albeit that the amounts of money involved would seem to be superficially small. I should qualify that again by saying that even small amounts of money are very important to people on such income as the applicant.
Finally, it is quite clear that the applicant will suffer prejudice if he were to be evicted. He loses what I would anticipate would be secure housing and might very well find it difficult to obtain other similar accommodation. It is a matter of balancing all of these factors and exercising discretion judicially. I note in particular the general uncertainty and/or weakness of the applicant’s case.
I note that the applicant, in fact, lost his s.44(1) point before VCAT which is, after all, a specialist Tribunal having jurisdiction over Residential Tenancies Act matters. I note that the applicant can, even now, seek an injunction from VCAT. In all the circumstances, it is clear I should exercise my discretion and not grant injunctive relief. Given that that is the only relief sought, I will dismiss the application.

I certify that the preceding twenty-five (25) paragraphs are a true copy of the reasons for judgment of Burchardt FM

Date: 23 November 2011