Clarke v Commissioner for Social Housing

[2016] ACAT 148

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

CLARKE v COMMISSIONER FOR SOCIAL HOUSING

(Appeal) [2016] ACAT 148

AA 49/2016 (RT 917/2014)

Catchwords:              APPEAL – residential tenancies – termination and possession – rental arrears – breach of conditional termination and possession order – exercise of discretion

Legislation cited:      Residential Tenancies Act 1997 ss 42A, 42B, 49

Cases cited:               Commissioner for Social Housing v Moffatt [2015] ACTSC 4

Fisher v Commissioner for Social Housing [2012] ACAT 32

List of

Texts/Papers cited:   Housing Assistance Public Housing Rental Assistance Program 2013

Tribunal:                   President L Crebbin
  Senior Member A Anforth

Date of Orders:  2 December 2016

Date of Reasons for Decision:         7 December 2016

AUSTRALIAN CAPITAL TERRITORY  )

CIVIL & ADMINISTRATIVE TRIBUNAL       )          AA 49/2016

BETWEEN:

TRACEY ANN CLARKE

Appellant

AND:

COMMISSIONER FOR SOCIAL HOUSING

Respondent

TRIBUNAL:   President L Crebbin

Senior Member A Anforth

DATE:2 December 2016

ORDER

The Tribunal orders that:

1.The application for appeal is upheld and the decision made by the original tribunal on 25 August 2016 set aside.

2.Pursuant to Rule 21(e) of the ACT Civil and Administrative Tribunal Procedure Rules 2009 (No 2), a conditional termination and possession order is made in the terms set out below.

CONDITIONAL TERMINATION AND POSSESSION ORDER

3.The tenant is to pay to the lessor the sum of $6,834.30 for arrears of rent, such payment to be made in instalments of a minimum of $40.00 per fortnight.

4.The tenant is to pay future rent as it becomes payable under the tenancy agreement, less any rebate granted by the Commissioner for Social Housing, the next payment of rent to be made on or before Thursday 20 December 2016 and fortnightly thereafter.

The Tribunal notes: at the date of this order the rent payable less rebate granted is $606.90 per fortnight.

5.If the tenant fails to make one of the payments required by paragraph 3:

(i)     the tenancy agreement shall terminate at 5:00 pm the following day;

(ii)     upon termination of the tenancy agreement the lessor is entitled to possession of the premises; and

(iii)    the instalments remaining under paragraph 1 are immediately due and payable.

6.If the tenant fails to make a payment of future rent as required by paragraph 4:

(i)     the tenancy agreement shall terminate at 5:00 pm the following day;

(ii)     upon termination of the tenancy agreement the lessor is entitled to possession of the premises; and

(iii)    the instalments remaining under paragraph 1 are immediately due and payable.

7.If the tenancy agreement is terminated by operation of paragraph 5 or paragraph 6 of this Order, the tenant must vacate the premises on or before the date of termination.

8.If the tenant fails to vacate the premises as required by paragraph 7 of this Order the lessor may request the Registrar of the ACT Civil and Administrative Tribunal to issue a warrant for eviction.

9.This order expires at 5:00 pm on Saturday 2 December 2017.

10.The application is listed at 2.00pm on Wednesday 7 December 2016 so that oral reasons can be given for the decision. The parties and their representatives are excused from attendance if they are not available.

……………Signed…..

President L Crebbin

REASONS FOR DECISION

1.This is an application for appeal of a decision made on 25 August 2016 to allow a warrant for eviction to issue. The appeal proceeded as a review of the decision of the original tribunal and was upheld. These are the edited extempore reasons for that decision.

2.The appellant has been a tenant of the Commissioner since 24 August 2009 under a tenancy agreement that contains the Commissioner’s standard terms including the right to a rent rebate under the Housing Assistance Public Housing Rental Assistance Program 2013.

3.The appellant fell into rent arrears in September 2010 following a retrospective recalculation of her rental rebate. She paid off these arrears. On 15 October 2012 her rental rebate was again retrospectively recalculated and arrears debited to her account. There were also other arrears at that time. In April and May 2014 the Commissioner served notices to remedy and termination, respectively, and then applied to the Tribunal for a termination of the tenancy.

4.On 15 January 2015 the Tribunal made the first conditional termination and possession order (CTPO) which required the appellant to pay her rent as it fell due plus $100 per fortnight towards the arrears. The arrears were $8,827.84. The Commissioner’s rent ledger shows that the rebated rent payable at that time was $242.15 per week or $484.30 per fortnight. When the $100 per fortnight ‘catch-up’ component is added, the amount initially payable under the order was $584.30 per fortnight.

5.In April 2015 the appellant breached the CTPO by failing to make a payment on time. In accordance with the decision of the Supreme Court in Moffatt[1], the breach had the effect of automatically terminating the tenancy agreement. Payments were resumed but fell behind again in about August 2015. The appellant was employed on a casual basis at the time and her income varied. The variation made it difficult she said, to keep up payments. After a meeting with a representative of the respondent in mid August 2015, the tenant continued the payment required by the CTPO. On 24 September 2015 the Commissioner applied to the tribunal for the issue of a warrant for eviction based on the breach of the CTPO that occurred in April 2015 (the substantive application).

[1] Commissioner for Social Housing v Moffatt [2015] ACTSC 4

6.On 23 October 2015 an interim order was made decreasing the payment that the appellant was required to make towards arrears from $100 to $60. The arrears on this date were $8,098.84 and were further decreased on that day by a payment of $800. After that the appellant made payments erratically. By the end of January 2016 arrears had risen to $10,275.24 but as a result of large payments made in February 2016, reduced again. The appellant’s rent liability also changed in this period because her rebate entitlement varied.

7.The substantive application was adjourned and followed a winding procedural path which included the early re-listing of the matter in February 2016 as a result of the appellant’s erratic payments, the making of an ex parte order and the setting aside of that order.

8.By late February the appellant had set up a direct deduction from her salary which operated during February to mid May, making payments of a total of $725 per fortnight – sufficient to cover the rebated rent and the $60 that she had been ordered to pay towards arrears. The rent ledger shows that she reduced the payment slightly and from about mid-May had an automatic payment of $690 and an additional manual payment of $30 each fortnight, or a total of $720.00. The automatic payments were not calculated by reference to the amount of rent payable or to the arrears payment required. It apparently just represented a sum that the appellant was able to salary sacrifice.

9.From November 2015 the appellant’s rebated rent was $331.70 per week or $663.40 per fortnight and so the total amount to be paid taking into account the October 2015 interim order was $723.40. Her payments of $720 were slightly short of what was required.

10.The substantive application was heard by Senior Member Robinson on 23 June 2016. The appellant was represented by Ms Bartlett of Canberra Community Law and the Commissioner by Mr Safi-Westendorf. The Commissioner’s position was that the Appellant “has been making regular payments into her account which demonstrates in the Commissioner’s eyes a commitment to her tenancy.”

11.The Commissioner did not oppose the making of a second CTPO for the payment of rent as it fell due, less any rebate and a decreased sum of $40.00 towards arrears. The arrears had dropped to $7,654 by at that date.

12.The transcript of the hearing shows that there was no discussion about, or identification of, the actual amount of the rebated rent the appellant was required to pay, or of the total amount she would have to pay to fulfil her obligations under the new order. Her automatic payment of $690 was still in place. She was told that she needed to pay her rebated rent plus the additional $40 per fortnight. When the $40.00 arrears payment is added to the rebated rent, the total that had to be paid under the second CTPO was $703.40 per fortnight.

13.The appellant said that she could pay $690 per fortnight the next Monday. She appeared to believe that that amount would be sufficient. No one responded to her statement. No one corrected what was a misunderstanding of the total amount that had to be paid. While we accept that a tenant should take responsibility for knowing what rent they have to pay, it is understandable that the tenant assumed that the payment of $690 was enough in the circumstances.

14.The issue was compounded because on the same day (23 June 2016), the appellant lodged a further rebate application with the Commissioner following a reduction in the number of her children residing with her. In these circumstances the appellant reasonably expected her rebated rent to fall. She asserted that the appellant’s case officer told her this would happen. The Commissioner assessed the application, but this of course could not happen straight away. Retrospective adjustments were made to the rent account on 8 August 2016 that had the effect of reducing the rebated rent payable by the appellant to $303.45 per week from 7 July 2016. The payments required to be made under the CTPO from that date on a fortnightly basis were $646.45 in total. The appellant’s payment of $690 covered the rent payable less rebate and the payment for arrears once that adjustment was made.

15.The second CTPO was issued in the template form used by the tribunal. It provided for the payment of the arrears of $7,654 by instalments of $40 with the first to be paid by 29 June 2016 and subsequent instalments paid by specified 14 day intervals thereafter. It also provided that the tenant was to pay future rent as it became payable less any rebate granted, identifying that the next payment was due on or before 29 June and was to continue fortnightly thereafter. That meant that payments had to be made on or before 29 June, 13 July, 27 July, 10 August and 24 August.

16.The payment of $690 was made as the appellant said she would on 29 June. But this was an underpayment of $13.40. The CTPO was breached. Again, in accordance with the decision of the Supreme Court in Moffatt, the tenancy agreement automatically terminated on 30 June 2016.

17.The appellant did not vacate the premises.

18.She continued to make payments by, or on, or before, the dates required by the order of 23 June. A payment was of $690 was made on what was agreed to be 13 July. A double payment of $1380 was made on 27 July, no payment was made on 10 August although none was needed on this day because the double payment had ensured that the required payment had been made before, or by, 10 August; a payment of $50 made on 20 August and a further payment of $700 on 24 August made a total of $750 paid on or before 24 August.

19.The payments meant that by 24 August arrears of rent had reduced to $7121.55, or by more than $500. The order only required that a total of $200 be paid to reduce the arrears by that date.

20.So, as at that date, the appellant had paid the rent payable less rebate, plus the required amount for arrears and an additional amount of a bit more than $300. The first payment was the only one which did not comply with the terms of the order and then only by an amount of $13.40.

21.On 15 August 2015 the Commissioner lodged an application under section 42A of the RT Act for the issue of a warrant for eviction, citing the appellant’s breach of the order by making a payment of $690 on 29 June 2016 rather than $703.40, as the reason for the application.

22.The application was listed before Senior Member Robinson on 25 August 2016. The tribunal’s task on that day was, in accordance with section 42B of the RT Act, to deal with the application as though it were an application under section 49 of the RT Act. This required the tribunal to consider exercising the discretions available under section 49 of the Act.[2]

[2] Fisher v Commisisoner for Social Housing [2012] ACAT 32

23.There was no suggestion that the appellant was able to pay the arrears in full and the discretion available under section 49(2) of the Act was therefore irrelevant. The discretion to make a further CTPO under section 49(3) was however available and required consideration by the tribunal of whether the tenant was reasonably likely to pay rent arrears and future rent payable.

24.Given the potential serious consequences for a tenant and any family living with them, it is important that facts relevant to the exercise of the discretion be carefully considered. The facts will of course include the history of payments to date but also evidence about why a breach occurred, the nature and extent of the breach, actions taken by the tenant in relation to payments since the breach, and may include evidence about the tenant’s social and economic circumstances relevant to an assessment of the likelihood of future payment.

25.The transcript shows that there was discussion about the rent, the rebate and the extent of the arrears and the payments made by the tenant after 23 June 2016. It was common ground that the appellant had defaulted in the first payment by an underpayment of $13.40. There was lengthy discussion about what was owed, when rebates had varied and what was paid, when.

26.The appellant’s representative gave evidence from the table about the appellant’s personal circumstances and changes in her circumstances since the second CTPO was made. The appellant did not give evidence herself and importantly, did not herself explain why her payments were made on inconsistent dates after 23 June or talk about what she intended for the future and how she intended to ensure that her payments were made as required.  

27.The tribunal gave oral reasons on 25 August 2016. The Senior Member said that she had explained the nature of the CTPO on 23 June 2016 and what needed to be done. The transcript for 23 June 2016 shows that there was such a discussion in general terms; there was no discussion about the actual amount of the current rent payable and the appellant’s statement that she intended to pay what was the wrong amount went unnoticed and uncorrected.

28.The Senior Member found that the appellant knew or should have known what her rebated rent was and hence how much was to be paid when the $40 per fortnight catch up component was added. No evidence was called from the Appellant about what she knew or believed to be the case. While as a general principle it is for the tenant to know how much rent they have to pay, in this case given what occurred at the hearing on 23 June 2016, we are satisfied that the member made a mistake in this finding. The tenant’s assumption that the amount she mentioned would satisfy the order the member was making was reasonable given that no one corrected it or warned that she needed to check what she was saying. This is a significant mistake because the consequences of it in terms of how the member subsequently exercised her discretion were serious.

29.Talking about the arrears, the member said:

...I need to be satisfied that there’s really some prospect of having payments to reduce that debt made regularly and consistently. Given the history of this matter I can’t be so satisfied.

30.This does not quite capture what is required as far as arrears are concerned by section 49(3) – which is to be satisfied that the tenant is reasonably likely to pay the arrears. The need for regular payments comes about because of the form of the CTPO orders made by the tribunal which require regular payments of instalments of arrears by specific dates.

31.In any case, save for the first payment, payments of both rent payable and arrears had been made in an amount greater than required, by each required date. In that sense they were regular and consistent, although not quite at regular intervals. The payments looked erratic because of the double payment, the small payment on a date when nothing was ‘due’ and another payment of a different amount than had been paid previously on what was a ‘due’ date. The regularity and consistency of payments would have been clearer if the appellant had just paid what was required at 14 day intervals so that the pattern of payment was clear, but that is not what is required by the Act or by the order. Payments were made on or before the required time and, save for the first payment, were of a sufficient sum to cover the total payment to be made and more. The arrears had in fact been reduced.

32.The Senior Member decided not to adjourn the matter or issue a further CTPO saying, “I’m not convinced it’s going to achieve anything in this case, other than to postpone the inevitable.”

33.The test that the Senior Member was required to apply is the evaluative judgment set out in section 49(3) which required her to form a view whether the appellant is “reasonably likely to pay the rent that has become payable as well as pay future rent as it becomes payable.” The test is one that invokes only a probabilities test, that is, ‘likely’. The test does not require the Tribunal to be certain or convinced that the appellant will so comply.

34.The evidence was that the tenant had been regular in rent and committed to the tenancy. Her default on the second CTPO was at best for two weeks and only for $13.40. Arrears had been reduced by more than $500, when only $200 was required under the order. It is not clear why logically, the member could not be satisfied that the arrears debt would be reduced when it had in fact been reduced, or that it was inevitable that the appellant would default in the future, given those facts. Acknowledging that this was a discretionary decision, the Appeal Tribunal is satisfied that it was not one which the tribunal could reasonably come to on the facts and was clearly wrong. The decision is therefore set aside. At the appeal hearing the parties agreed that if the appeal was upheld it would be appropriate for a further CTPO to be made. The arrears at the date of the hearing were $6834.30 and the appellant is required to continue to pay instalments of a minimum of $40 each fortnight to reduce the amount. In addition, she must also pay the rent payable less rebate granted. It is noted that at the date of this order that sum is $606.90. The tenant must be alert to any change to the rent payable or to her rebate and check immediately to see if she needs to adjust the amount she is paying. In the next 12 month period until 2 December 2017, while the CTPO is in place, any default on payment will mean that her tenancy will automatically terminate.

………………………………..

President L Crebbin

Delivered for and on behalf of the Tribunal

HEARING DETAILS

FILE NUMBER:	AA 49/2016
PARTIES, APPLICANT:	Tracey Ann Clarke
PARTIES, RESPONDENT:	Commissioner for Social Housing
COUNSEL APPEARING, APPLICANT	N/A
COUNSEL APPEARING, RESPONDENT	N/A
SOLICITORS FOR APPLICANT	Canberra Community Law
SOLICITORS FOR RESPONDENT	N/A
TRIBUNAL MEMBERS:	President L Crebbin, Senior Member A Anforth
DATES OF HEARING:	7 December 2016