Commissioner for Social Housing in the Act and Lowe (Residential Tenancies)
[2013] ACAT 49
•25 July 2013
ACT CIVIL & ADMINISTRATIVE TRIBUNAL
COMMISSIONER FOR SOCIAL HOUSING IN THE ACT & LOWE (Residential Tenancies) [2013] ACAT 49
RT 11/506
Catchwords: RESIDENTIAL TENANCIES – rental arrears - breach of Conditional Termination and Possession Order (CTPO) as basis for termination of tenancy– whether “implied tenancy” arose after breach of CTPO – incarceration of tenant and likelihood of paying rent payment and future rent: whether tenancy could be reasonably sustained – unhousing people as a measure of last resort – warrant of eviction
List of legislation: Legislation Act 2001, s 141
Residential Tenancies Act 1997, ss 36, 42A, 42B and 49
List of cases: ACT Housing v Mildwater [2006] ACTRTT 3
Commissioner for Social Housing v Canham [2012] ACAT 41
Commissioner for Social Housing in the ACT and Radovanov
[2011] ACAT 12Fisher & Commissioner for Social Housing in the ACT
[2012] ACAT 32
Mangubat & Commissioner for Social Housing in the ACT [2013] ACAT 6
Tribunal: Ms E Symons, Presidential Member
Date of Orders: 25 July 2013
Date of Reasons for Decision: 25 July 2013
AUSTRALIAN CAPITAL TERRITORY
CIVIL & ADMINISTRATIVE TRIBUNAL
RT 11/506
BETWEEN: COMMISSIONER FOR SOCIAL HOUSING IN THE ACT
Applicant
AND:
CHRISTOPHER OWEN LOWE
Respondent
TRIBUNAL: Ms E. Symons, Presidential Member
DATE: 25 July 2013
ORDER
The Residential tenancy agreement is terminated at 5.00 pm on Thursday 8 August 2013.
The Respondent tenant must vacate the premises on or before 5.00 pm on Thursday 8 August 2013.
This order has effect as a warrant of eviction.
All officers of the Australian Federal Police are hereby authorised to take appropriate action to evict the tenant from the premises with such assistance as is necessary and reasonable, upon giving two days notice in accordance with subsection 40(1) of the Residential Tenancies Act 1997.
It is noted that pursuant to Regulation 4A(a) of the Residential Tenancies Regulation 1998, it is appropriate for a police officer to enter the premises (by force, if necessary) and physically remove a person from the premises between 8 am and 6 pm from Monday to Thursday, other than on a public holiday.
The Respondent tenant shall pay the Commissioner $428.01, being arrears of rent and rent payable to date, together with $0.71 per day, being the occupancy fee to the date of termination of the tenancy agreement.
Liberty is given to relist within 28 days of the Commissioner for Social Housing (the Applicant) obtaining possession of the premises, for hearing of any claims for compensation or occupancy fee.
………………………………..
Ms E Symons
Presidential Member
REASONS FOR DECISION
History of the proceedings
On 3 September 2007, the Respondent tenant (“the Respondent”) signed a Residential Tenancy Agreement (“the Agreement”) with the Applicant lessor (“the Commissioner”) in respect of the premises.
The Commissioner applied for a Termination and Possession Order on 11 June 2011 and for an Order for the payment of rent, inclusive of rental arrears due and owing under the Agreement. In the Statement of Particulars accompanying the Commissioner’s Application, the Commissioner stated:
·On 29/09/10, a Notice to Remedy for arrears of $309.27 was served on the Respondent;
·On 10/01/11, a Notice to Remedy for arrears of $647.77 was served on the Respondent;
·On 09/02/11, an officer of the applicant served a Notice to Vacate on the Respondent;
·On 09/02/11, the rent for the premises was in arrears to the extent of $815.47;
·On 10/06/11, the rent for the premises was in arrears to the extent of $555.77.
On 4 July 2011, and in the absence of the Respondent, the Tribunal made a Conditional Termination and Possession Order (CTPO) requiring the Respondent to pay rent arrears of $579.37 by fortnightly instalments of $30.00, the first payment of rent owed to be made on 14 July 2011, and thereafter payments each fortnight. The Order also required the Respondent to pay rent regularly in accordance with the Agreement and to pay the rent, and rent owed, by direct debit from Centrelink for so long as the Respondent is in receipt of Centrelink payments, and by manual payments thereafter.
By Application dated 17 November 2011, the Commissioner applied to restore this matter to the list and for orders that “the previous Orders of 4 July 2011 be set aside and a new Termination and Possession Order be set down for payment of rent plus an amount in repayment of arrears.” The Commissioner annexed a copy of the Rent Account which showed that the arrears of rent were then $2,517.87. The Commissioner also annexed a copy of their letter to the Respondent dated 14 November 2011 which included:
“This is a serious matter and you may wish to seek support in sustaining your tenancy from organisations like the Woden Community Services Sustaining Tenancies Program 02 62822644 (South Canberra) or Anglicare’s Sustaining Tenancies Outreach program 02 6230 1486 (Central & North Canberra).
If you would like help with debt counselling Care Inc Financial Counselling Service provides financial counselling at no cost to Housing ACT tenants and referrals can be arranged through your Housing Manager.
If you wish to seek legal advice then you may wish to contact organisations such as Legal Aid 62433411 or Welfare Rights and Legal Centre 62472177.
There are a number of other organisations available to help and support you and please contact your Housing Manager for additional information.”
The Respondent did not attend the hearing on 6 December 2011. In the absence of the Respondent, the Tribunal made a CTPO requiring the Respondent to pay rent arrears of $3,477.87 by fortnightly instalments of $30.00, the first payment of rent owed to be made on 22 December 2011, and thereafter payments each fortnight. The Order also required the Respondent to pay rent regularly in accordance with the Agreement and to pay the rent, and rent owed, by Centrepay/Direct Debit.
On 23 March 2012, the Commissioner again applied to have this matter restored to the list. In the Application, the Commissioner stated that Mr Lowe had attended an appointment with Housing ACT Regional Manager and Client Support Coordinator and explained that he had ceased employment. The backdating of his rental rebate and the commencement of Centrelink direct debit payments resulted in the reduction of the rental arrears to $1,054.72.
On 4 April 2012, the Respondent attended the hearing by telephone. The Tribunal, by consent, made another CTPO requiring the Respondent to pay rent arrears of $1,024.72 by fortnightly instalments of $30.00, the first payment of rent owed to be made on 17 April 2012, and thereafter payments each fortnight. The Order also required the Respondent to pay rent regularly in accordance with the Agreement and to pay the rent and rent owed, by Direct Debit Centrelink.
The Present Application
By Application dated 7 November 2012, the Commissioner applied for Resolution of Tenancy Dispute and sought termination of the Tenancy Agreement and Compensation/Damages. The Commissioner annexed a Rent Account statement which showed rental arrears of $2,212.62 and sought, inter alia, a warrant of eviction.
The Respondent attended the hearing on 21 November 2012 and the matter was adjourned to 19 December 2012 to enable him to obtain legal advice.
On 19 December 2012, Ms T. Kazanc appeared for the Commissioner, and Ms L. Bartlett, from Welfare Rights and Legal Centre, appeared for and with Mr Lowe at this hearing. Ms Bartlett made submissions about the Respondent’s personal circumstances and asked the Tribunal to exercise the discretion and to issue a further CTPO. At Ms Bartlett’s request, the Tribunal adjourned the matter to 6 February 2013 to enable the Respondent to gather evidence in support of his application that the Tribunal exercise its discretion under subsection 49(2)(b) of the Residential Tenancies Act 1997 (“the RT Act”). Ms Bartlett tendered a letter dated 18/12/2012 from Directions (Exhibit R1) stating that Mr Lowe had accessed them on 17 December 2012 for assessment and assistance with his substance use, and Directions were willing to continue to provide support for him in the future.
On 6 February 2013, Ms Kazanc appeared for the Commissioner and Ms Bartlett appeared for and with Mr Lowe, at the Tribunal hearing. Ms Bartlett made submissions about issues with the calculation of the rental rebate. The Tribunal adjourned the matter to 6 March 2013 to allow for the arrears to be re-calculated.
On 6 March 2013, Ms Bartlett raised the issue of ‘implied tenancy’ and submitted that the CTPO was breached in April 2012 but due to the actions or omissions of the Commissioner, an implied tenancy had been created in the intervening period. The Tribunal adjourned the matter to allow the parties to file further evidence on this point; directed that the parties file any witness statements or other documents on which they propose to rely, and set the matter down for hearing on 1 May 2013. On 3 April 2013, Ms Bartlett filed the Tenant’s Submissions (“the first submissions”) and a Statutory Declaration from the Respondent dated 2 April 2013. On 17 April 2013, the Commissioner filed a Witness Statement of Mr Mark Williams.
By consent, Orders were made in Chambers on 30 April 2013 vacating the hearing date of 1 May 2013 and setting the matter down for hearing on 22 May 2013. Prior to the next hearing the Respondent was sentenced to a term of imprisonment. Subsequently, on 22 May 2013 the matter was adjourned to 19 June 2013 for Directions.
On 19 June 2013, Ms H Sexton from ACT Government Solicitor appeared for the Commissioner, and Ms Bartlett appeared for the Respondent. By consent it was ordered that the matter be set down for hearing on 16 July 2013 and directions were made for the filing of submissions. The Applicant filed submissions on 21 June 2013 and the Respondent filed submissions in reply (“the second submissions”) on 5 July 2013.
The Hearing
On 16 July 2013, Ms Sexton appeared for the Commissioner and Ms Bartlett appeared for the Respondent. At the commencement of the hearing, Ms Sexton told the Tribunal that the Applicant was seeking orders from the Tribunal in accordance with the orders sought in the Application filed on 7 November 2012.
Ms Bartlett told the Tribunal that, as stated in the second submissions, the Respondent agreed with the Applicant’s reasoning in their submissions as to the effect of breaching a CTPO. The Respondent was no longer pursuing dismissal of the Application pursuant to section 42B(2)(b) of the RT Act on the basis that an implied tenancy arose as a result of the conduct between the parties between 14 May 2012 and 25 July 2012. The Respondent was seeking orders from the Tribunal under section 42B(4)(b) of the RT Act that the Tribunal exercise its discretion and impose a further CTPO over the Respondent’s tenancy.
The Respondent gave evidence by telephone and was cross examined. At the conclusion of the hearing, the Tribunal reserved the decision.
The issues
The Applicant set out the issues for determination in paragraph 1 of their submissions, namely:
“(1) Does a residential tenancy agreement under the Residential Tenancies Act 1997 (RT Act) terminate automatically on breach by the tenant of his or her obligations under a conditional termination and possession order (CTPO)?
(2) If yes, is an implied tenancy created in circumstances where, after the breach, the tenant fails to vacate the premises and continues to pay rent to the lessor?”
The third issue for determination is if the answer to (1) in the previous paragraph is ‘no’, what orders should the Tribunal make pursuant to section 42B(2) of the RT Act?
Issue 1:Does a residential tenancy agreement under the Residential Tenancies Act 1997 (RT Act) terminate automatically on breach by the tenant of his or her obligations under a conditional termination and possession order (CTPO)?
The Tribunal noted, as stated in paragraph 16 above, that the parties were in agreement in regard to this issue. Given the relevance of this issue, not only in this matter but in relation to CTPOs generally, the Tribunal has set out in some detail the pertinent parts, with which the Tribunal concurs, of the Applicant’s submissions to provide clarity in relation to this issue.
The Applicant’s submissions
The Applicant submitted[1], that:
“(1) A breach by the tenant of his or her obligations under a CTPO does not of itself terminate a residential tenancy agreement for all purposes. A tenancy at law comprises rights and obligations both contractual and proprietary. Whilst the breach of a CTPO gives rise to the termination of one of these elements, final termination of the whole tenancy can only be effected by the recovery of possession to the lessor. This is triggered only by the tenant vacating the premises; whether peaceably; or forcibly by the execution of a warrant for eviction.
(2) For the reasons stated above, in circumstances where the tenant has not vacated but continues to reside in the premises, the tenancy does not come to an end. Whilst the tenant may no longer have an enforceable proprietary interest in the land, the contractual tenancy will continue until the lessor takes action to remove the tenant. The continued payment of rent by the tenant is consistent with his or her ongoing contractual obligation to pay monetary compensation, however characterised, in exchange for occupying the premises.”
[1] Applicant’s submissions, paragraph 8
The Applicant referred the Tribunal to a number of authorities as to the effect of a breach of a CTPO. In ACT Housing v Mildwater[2] (“Mildwater”) the Tribunal considered section 42 (the previous iteration of section 42A of the Act) and the proposition that a breach of a CTPO automatically terminates a tenancy. The Tribunal held:
“42. The Tribunal can find no support in ACT Housing v K.A. for the tenant’s argument that Termination and Possession Orders on Condition act as a self-executing orders (sic) in the sense that the entire relationship both proprietary and contractual between the landlord and the tenant comes to end automatically upon default by the tenant. … The scheme of the Act [where the tenant breaches the condition in the CTPO and remains in possession] prevents the lessor from retaking possession in any manner except for as provided by section 42 [now 42A] – that is by the lessor requesting that a warrant for eviction be issued, served and executed. Thus, the entire lease is not brought to an end until there is:
a) breach by the tenant of a condition to termination possession Order; and
b) action under section 42 [now 42A] by the lessor.
43. It follows that where there is a breach and the lessor takes no action the tenancy does not end, and, the rights and obligations created by the termination possession order on condition remain in force.
…
47. It is the breach by the tenant of the condition contained in the order that triggers the right of the lessor to … use the administrative processes set out in section 42 [now 42A] … This breached (sic) terminates the tenant’s proprietary right against the rest of the world, and allows the tenant to resist eviction, except where the eviction is carried out through the procedures available in the Act.”[words in square brackets inserted]
[2] [2006] ACTRTT 3, paragraphs 42-52
In response to the tenant’s suggestion in Mildwater that an implied tenancy will arise where, following breach of a CTPO, the tenant continues to reside in the premises and pay rent the Tribunal held:
“49. If the tenant’s argument was adopted, leases would ended (sic) upon the breach of every condition, whether the lessor took action or not. Suppose a tenant failed with a payment of rent as required by the termination possession order on condition; contacted the lessor and explained that they have been involved in a car accident while on the4 way to make the payment and then made the payment one day late: - on the tenant’s argument the lease would have ended for breach and the acceptance by the lessor of the (one day late) payment would give rise to a new tenancy by implication. The tenant would then evade all consequences of further breach of the condition and the lessor would be required to begin the process of termination by service of notices to remedy and vacate.
….
51. The legislature could not have intended that a tenant through the action of breaching not only the obligations under the residential tenancy agreement, but also by breaching an order made by the Tribunal, could avoid or ignore the obligations imposed by the legislation, the tenancy agreement and the order of the Tribunal in relation to an existing tenancy, without the possibility of any further sanctions for such a breach.”
The Applicant then referred[3] the Tribunal to Mangubat & Commissioner for Social Housing in the ACT[4] (“Mangubat”) and Fisher & Commissioner for Social Housing in the Act [5] (“Fisher”) where the Tribunal considered the current sections 42A and 42B in the RT Act and, in particular, to the Tribunal’s overview of these provisions in Mangubat[6]:
“…. Those sections provide, in summary, that where a conditional termination and possession order has been made by the Tribunal and the lessor satisfies the Registrar that the order remains in force and that the condition precedent to an application for a warrant has been satisfied (that the tenant has not complied with the terms of the order) then the application for a warrant will be set down for a hearing. Section 42B provides that such an application must be decided as if it were an application under section 49 for a termination and possession order. The Tribunal may make an order for the issue of a warrant of eviction, or dismiss the application and confirm the existing conditional termination and possession order, make a new conditional termination and possession order or set aside the existing conditional termination and possession order.
48. In determining whether or not to allow the application or dismiss it the Tribunal is, therefore, required to have regard to section 49 of the RT Act. This will necessarily include an exploration of issues relating to whether the tenant is reasonably likely to pay the rent that has become payable as well as any future rent as it becomes payable; …”
[3] Applicant’s submissions, paragraph 14
[4] [2013] ACAT 6
[5] [2012] ACAT 32
[6] at paragraphs 47 and 48
In its submissions, the Applicant then referred to sections 42A, 42B and 49 of the Act. The relevant parts of these sections are:
42AFailure to comply with conditional order
(1)A lessor may apply to the registrar for a warrant for the eviction of a person if—
(a)the ACAT has issued a conditional termination and possession order; and
(b)the order has not expired; and
(c)the lessor satisfies the registrar that the condition has been satisfied; and
(d)the person to whom the order was directed continues to live at the premises.
(2)On receiving an application for a warrant, the registrar must—
(a)list the application for hearing before the ACAT not earlier than 1 week after the day the notice under paragraph (b) is given to the person; and
(b)give notice to the person to whom the conditional termination and possession order is directed stating—
(i)that an application for a warrant for eviction has been made; and
(ii)the time when, and the place where, the application is to be heard; and
(iii)that the person should seek legal advice about the application if the person wants to continue to live at the premises.
42BHearing of application
(1) An application under section 42A must be decided as if it were an application under section 49 for a termination and possession order.
(2) After considering the application and hearing the parties who attend the hearing, the ACAT must—
(a) allow the application; or
(b) dismiss the application.
(3) If the ACAT allows the application, the ACAT must direct the registrar to issue a warrant for the eviction of the person.
(4) If the ACAT dismisses the application, the ACAT may—
(a) confirm the conditional termination and possession order; or
(b) make another conditional termination and possession order; or
(c) set aside the conditional termination and possession order.
49Failure to pay rent
(1)On application by a lessor, the ACAT may make a termination and possession order if—
(a)the tenant has failed to pay rent that has become payable under the residential tenancy agreement; and
(b)the lessor has served a termination notice on the tenant on the basis of the failure to pay rent; and
(c)the tenant has not vacated the premises in accordance with the notice.
(2)If a lessor has made an application under subsection (1), the ACAT may refuse to make a termination and possession order if—
(a)the tenant has paid any rent that has become payable and is, in the ACAT’s opinion, reasonably likely to pay future rent as it becomes payable; and
(b)the ACAT considers it just and appropriate to do so.
(3)Subsection (4) applies if—
(a)the tenant is, in the ACAT’s opinion, reasonably likely to pay the rent that has become payable as well as pay future rent as it becomes payable; and
(b)the tenant agrees to pay the rent that has become payable, and undertakes to pay future rent as it becomes payable, as required by the ACAT.
(4)Instead of making a termination and possession order under subsection (1), the ACAT may order (conditional termination and possession order) that if the tenant fails to pay the rent that has become payable, or future rent as it becomes payable, as required by the ACAT—
(a)the tenancy terminates at a stated hour on the day after the day when any rent becomes payable and is not paid; and
(b)the lessor becomes entitled to possession of the premises and all rent payable is payable immediately.
(5)If—
(a)the ACAT makes an order under subsection (1); and
(b)the ACAT is satisfied that—
(i)were the order not suspended for a specified period of no more than 3 weeks the tenant would suffer significant hardship; and
(ii)that hardship would be greater than the hardship that would be suffered by the lessor if the order were suspended for the specified period;
the ACAT may suspend the operation of the termination and possession order for a specified period of no more than 3 weeks.
The Applicant submitted that, based on these sections and the authorities referred to previously, the Tribunal still has a discretion to decline to issue a warrant in circumstances where the Tribunal is satisfied that the CTPO was breached as alleged.[7] The Applicant referred the Tribunal to section 141 of the Legislation Act 2001 and to the following statements in the Explanatory Statement[8] to the RT Act introducing sections 42A and 42B:
Clause 15 Section 42 – inserts new sections 42, 42A and 42B into the Act dealing with conditional orders. The current legislation allows a warrant of eviction to be issued by the registrar on untested assertions of the lessor about a condition precedent having been met. While the legislation attempts to avoid this result ( a tenant having received a notice from the registrar may apply to the tribunal for a stay and both parties then have an opportunity to be heard), it remains the case that the current legislation permits the tribunal to effectively delegate a core function to the registrar. Having regard to the general functions of the registrar (s. 117) and the manner in which functions are subject to direction (s.118) this delegation is undesirable. For this reason, this clause changes the procedure for eviction following a conditional order.
...
New section 42A – changes the procedures for dealing with a failure to comply with a conditional termination and possession order. In the new procedures the Residential Tenancies Tribunal, rather than the Registrar will consider the issue of whether the enforcement condition has been met.
New section 42B- sets out the procedure for the Residential Tenancies Tribunal hearing an application for eviction following an enforcement condition being met, the tribunal may dismiss an application or allow an application and direct the registrar to issue a warrant for eviction.
[7] Applicant’s submissions, paragraph 16
[8] Explanatory Statement for the Residential Tenancies Amendment Bill 2005
The Applicant then submitted[9] that it follows from this statement that the legislature intended the Tribunal’s role in relation to an application under section 42A would be twofold:
(i) to confirm that the condition precedent has been met, and,
(ii)if so, to consider the matter (as if it were an application under section 49) and either allow or dismiss the application for warrant.
[9] Applicant’s submissions paragraph 18
The Applicant submitted that all provisions in the RT Act dealing with termination of a tenancy including sections 42A and 42B must be read consistently with section 36 of the RT Act which sets out an exclusive list of circumstances in which a tenancy can be terminated:
36Termination
Despite anything to the contrary in any territory law, a residential tenancy agreement must not terminate or be terminated other than in the following circumstances:
(a)if a fixed term agreement ends and the tenant vacates the premises on or after the end of the agreement;
(b)if a tenant notifies the lessor in the form approved under section 133 (Approved forms—Minister) for a termination notice, and vacates the premises in accordance with the notice;
(c)if the ACAT terminates an agreement under division 4.3 or division 4.4;
(d)if the ACAT makes a termination and possession order in relation to the premises that are the subject of the agreement under division 4.4 or division 4.5;
(e)if the tenant abandons the premises that are the subject of the agreement;
(f)if a person takes action in accordance with section 64;
(g)if the tenant and lessor agree in writing to terminate the agreement and the tenant vacates the premises in accordance with the agreement to terminate;
(h)if the tenant and the lessor are the same person;
(i)if—
(i)a party to the agreement repudiates the agreement; and
(ii)the other party accepts the repudiation; and
(iii)the tenant vacates the premises;
(k)for crisis accommodation—if the lessor—
(i)gives the tenant 4 weeks notice to terminate the agreement; and
(ii)has given the tenant information about alternative accommodation; and
(iii)needs the premises to use as crisis accommodation for someone other than the tenant.
The Applicant submitted that, in considering this section, excepting special circumstances in subsections 36 (e) to (k) inclusive, which do not apply in the present matter, section 36 of the RT Act requires as a basis for termination at law either:
(i)that the tenant has vacated the premises, or
(ii)that the Tribunal has made orders terminating the tenancy.
The Applicant then posed the question “Does a CTPO satisfy section 36(d)?” and submitted[10] that a CTPO, on its face, is insufficient to satisfy section 36(d) as it does not purport to terminate the tenancy unless a condition precedent (failure to pay rent in accordance with the terms of the order/agreement) is satisfied, hence, so would lack both finality and certainty required for termination.
[10] Applicant’s submissions, paragraph 23
The Applicant further submitted that, even if the condition precedent is allegedly satisfied but the tenant does not vacate, giving rise to a right under section 42A, this sequence of events is still insufficient to satisfy section 36(d). This was based on the submissions dealt with in paragraphs 19 – 25 above and the abiding possibility that the CTPO will ultimately not operate as a final termination and possession order for one or more of the following reasons:
(i)the lessor (for any number of reasons) chooses not to exercise his right to apply to the Tribunal under section 42A;
(ii)the tenant presents evidence to satisfy the Tribunal that he or she has complied with the order, and as such the condition precedent was not in fact satisfied;
(iii)the tenant has, in the meantime, remedied the default and the Tribunal exercises discretions under sections 49(2) and 42B(2)(b); and
(iv)the tenant presents evidence to satisfy the Tribunal that he or she is likely to remedy the default and comply with the CTPO and the Tribunal exercises discretions under subsections 49(3) and (4) and/or subsections 42B(2)(b) and 42B(4).
Based on these matters, the Applicant submitted that the breach of a CTPO does not, in and of itself, terminate a tenancy.
The Respondent’s second submissions
The Respondent stated at paragraph 7 of the submissions, that “The Respondent agrees with the Applicant’s reasoning as to the effect of breaching a CTPO set out in their submissions between paragraphs 9 to 25”.
Consideration
The Tribunal noted the Respondent’s submission in the preceding paragraph and concurs with the Applicant’s submissions. The Applicant has helpfully set out sound and detailed reasoning, which the Tribunal agrees with. The Tribunal is satisfied that a breach by the tenant of his or her obligations under a CTPO does not, of itself, terminate a residential tenancy agreement for all purposes.
It follows that the Tribunal is satisfied that Issue 1 must be answered in the negative.
Issue 2: If yes [to issue 1], is an implied tenancy created in circumstances where, after the breach, the tenant fails to vacate the premises and continues to pay rent to the lessor?”[words in square brackets added]
As Issue 1 has been answered in the negative it is not necessary for the Tribunal to consider Issue 2.
Issue 3: If no to issue 1, what orders should the Tribunal make pursuant to section 42B of the RT Act?
The Applicant relied upon the Respondent’s non-payment of rent for the period between 25 July 2012 and 14 November 2012 and his continuing to reside at the premises in making an application for, inter alia, a warrant of eviction pursuant to section 42A and 42B of the RT Act.
The Respondent seeks that the Tribunal exercise its discretion under subsection 42B(4)(b) and impose a further, and thus a fourth, CTPO over the Respondent’s tenancy.
It is necessary to consider the Respondent’s evidence.
The Evidence
Mr Lowe told the Tribunal that he was currently serving a sentence of six months’ imprisonment following his conviction on five criminal charges relating to drugs and possession of stolen property which occurred on 20 October 2012. He expects to be released from custody on 16 November 2013 when he will commence the periodic detention component of his sentence. He is facing another criminal charge of trafficking in drugs which allegedly occurred in December 2012; he is pleading not guilty to that charge and will be applying for bail when released from incarceration. He has arranged for his adult daughter to maintain the premises he rents from the Commissioner while he is in custody.
He said that he had been a tenant of the Commissioner for about seven years and regarded the premises as his home. If the tenancy was terminated he said he did not know what would happen to him as he has “nothing”. He also said that he did not know if he would be let out of jail if he didn’t have a place to go to.
He told the Tribunal that he had been to see Welfare Rights and Legal Centre after he appeared before the Tribunal in November 2012 and, with their assistance, he had been working with Directions for his drug dependency, by participating in counselling. He has also been receiving financial counselling. He said that prior to being sentenced to imprisonment in May 2013 he had been in receipt of Centrelink payments and paying his rent through Centrepay. Because of his drug dependency he had missed some Centrelink appointments and his Centrelink payments ceased. This was at the same time he stopped making his rent arrears payments in accordance with the most recent CTPO, and stopped paying rent in accordance with the Agreement.
He had resumed his rent and arrears payments in November 2012 and continued making these payments until he was incarcerated in May 2013.
Recently, he has been able to set up an arrangement to pay to the Commissioner $10 a week from the $35 a week he has been earning for the last six weeks’ sweeping and mopping floors at the Alexander Maconochie Centre (AMC). He agreed that these payments should commence in July 2012. He is hoping to get a better paying job in the kitchen ($50 per week) at AMC. He said he uses $15 a week for toiletries and smokes. He would pay $15 a week to the Respondent if he had to. He agreed that he had to pay rent to the Commissioner of $5 a week while incarcerated, and this amount was included in both the $10 he is currently paying, and would be included in the $15 if he had to increase his payments to that amount.
Ms Lowe said he had been trying, over the last six months, to improve everything he can as his intention is to get his life back on track for his children’s sake and to keep off the drugs. He anticipates that he will receive Centrelink payments after he is released from AMC and that his future rent and arrears could be paid from that payment.
In cross examination, Mr Lowe said it was not until he attended the Tribunal in November 2012 that he realised how serious the matter was. He had last worked as a painter three or four years ago. He had been trying to wean himself off drugs before that but had not been clean before he was incarcerated at AMC. He is clean now.
He has four children; three of whom, two sons and a daughter, reside with their mother. The younger son is 16, his daughter is almost 21 and has just completed a traffic control course and has offered to help her father with the rent arrears when she obtains employment. Prior to his incarceration, she had stayed at his premises from time to time and is currently in receipt of Centrelink payments. His older son is employed but he does not get on with his father. Mr Lowe said his son would not be willing to help him financially or with accommodation on his release from AMC. His children’s mother has re-partnered and he would not be able to stay in her home. His older daughter lives in a three bedroom house in Narrabundah and has three children including a new baby. Mr Lowe said he would not be able to stay there as there is no room.
Mr Lowe said that he did not have any other support in Canberra. He had tried, before, to discuss staying with family. In response to a question from the Tribunal, he said that he and his younger daughter, once she obtains work, possibly could get a flat but he could not arrange that from AMC.
Mr Lowe agreed that the Sustainable Tenancies Service had, at the request of his solicitor, made a one off emergency payment on 12 July 2013 in the form of a grant of $140 to the Commissioner for his rent for the period commencing from his incarceration to date.
In re-examination, Mr Lowe said that he had last rented privately 8 or 9 years ago and he has no rental history. His younger daughter had only ever lived at her mother’s home or stayed with him. She, too, has no rental history. He reiterated that he thought he would have trouble getting out of jail if he did not have accommodation; adding “I would have to find something.” He had not discussed the impact of his not having a property to reside in after he is released from jail with his criminal lawyer.
Consideration of the issues
When the Commissioner applied for a warrant of eviction in November 2012 the Respondent’s rental arrears were $2,212. The Rent Account (Exhibit A1) showed that the Respondent had not made any payments between 25 July 2012 and 14 November 2012 (the first period) and between 12 May 2013 and 7 July 2013 (the second period). The arrears owing as at 14 July 2013, after payment of the Sustainable Tenancies Service’s grant of $140.00, were $433.01.
In Commissioner for Social Housing in the ACT and Radovanov[11], Senior Member Anforth considered the object of housing assistance and eviction of a public housing tenant. In that decision, the Tribunal observed[12] “that maintaining the flat unoccupied for 3 months might not be the best use of the premises in the face of the waiting list for public housing.” The Tribunal referred to and included in the decision a statement made by the Commissioner to that Tribunal concerning the role that the Commissioner sees in the provision of emergency housing in the Territory. The statements[13] in the following paragraphs equally apply to the present matter before the Tribunal.
"Tenants of the Commissioner who receive housing assistance enjoy the benefits of well maintained properties with security of tenure and income based rent assessments that are not available to those in mainstream housing. In obtaining housing assistance the recipient not only enters a tenancy agreement with its attendant obligations but also enters a social contract of mutual responsibility with the community.
It is therefore very important that Housing ACT tenants understand that they have entered into responsibilities under a residential tenancy agreement and that these responsibilities are real and enforceable law, and will be given appropriate weight by the ACAT.
When support is required to sustain a tenancy, Housing ACT encourages engagement via one of the many support and advocacy services like Welfare Rights that the ACT Government funds to assist in the achievement of the social outcome of a sustainable tenancy. In addition, Housing ACT has significant internal support services, not the least of which are Housing Managers who engage extensively with tenants.
Due to the importance of housing assistance and its limited availability there is a community expectation that where someone ceases to comply with their legal responsibilities and the social contract has broken down, the ACAT will, make decisions under applicable legislation, but also give consideration to the prior actions of Housing ACT to sustain the tenancy in question.”
[11] [2011] ACAT 12
[12] at paragraph 14
[13] at paragraph 24
The Respondent’s explanation of his failure to pay rent and the arrears in accordance with his third CTPO (the first period) was that he was using drugs and not keeping his Centrelink appointments which resulted in his Centrelink payments ceasing. He did nothing during this time to address his non-compliance with the CTPO.
Doing the best it can with the evidence, the Tribunal considers that the Respondent’s explanation for his failure to pay rent at the reduced weekly amount of $5 in the second period was that he was incarcerated. In fact, the Respondent himself did not pay this rent in the end; it was paid by a grant from the Sustainable Tenancies Service.
Ms Bartlett submitted that given the smallness of the debt, the Respondent was now in the position to reduce it at a steady rate for the remaining 17 weeks of his incarceration. Ms Bartlett said that there might be further capacity for the Sustainable Tenancies Service to contribute more on the Respondent’s behalf and it is also possible that his almost 21 year old daughter will be able to contribute financially.
She further submitted that the Tribunal could now be satisfied that the Respondent has engaged with appropriate providers and been able to pay his rent, and that he will continue to be in the position to sustain his tenancy by paying between $10 and $15 a week, which would include his ongoing rent of $5 a week with the balance being applied in reduction of the arrears while he is at AMC. He proposes to apply for Centrelink on his release and he has previously been able to arrange for his rent payments and arrears payments to be paid through Centrepay.
The issue for the Tribunal, when considering the Respondent’s evidence and Ms Bartlett’s submissions, is whether the Tribunal can be satisfied that the tenancy was reasonably likely to be sustained. This would require the Tribunal to be satisfied that the Respondent is reasonably likely to pay the rent that has become payable as well as future rent and that he agrees to do so.
The Respondent told the Tribunal that he agreed to do that through a current arrangement whereby $5 a week is paid for his ongoing rent and $5 a week is to be paid towards his arrears. He seemed noticeably less enthusiastic about increasing the payments to a total of $15 per week, even though he had apparently discussed such an amount with his solicitor, telling the Tribunal that he needed $15 a week for his toiletries and smokes.
Ms Bartlett submitted that the best way for the Respondent to clear the debt was to terminate the tenancy so that he would not have an ongoing liability to pay the weekly rent of $5.
Ms Bartlett pointed out that the Respondent had only sought help from Welfare Rights and Legal Centre when he was directed to do so by the Tribunal in November 2012. In this regard, the Tribunal notes from a perusal of the file that the Commissioner had previously notified the Respondent in writing (see paragraph 4 above), when his rent had fallen into arrears, of the names and telephone numbers of organisations who could provide him with help. It appears that he, himself, did not follow up the Commissioner’s advice until he saw Welfare Rights and Legal Centre in November 2012.
The Tribunal also noted from the Witness Statement of Mr Mark Williams, the then Manager of Operational Services for the Commissioner, dated 17 April 2013, that the Commissioner made many attempts to engage with the Respondent before the Commissioner lodged the application on 7 November 2012. The Commissioner’s file note[14] dated 24 October 2012 states that the Respondent had made no effort to make contact with Housing to discuss the various issues (that his tenancy was at risk due to ongoing non-payment of rent), despite repeated phone calls and home visits. The statement states that the Respondent made repeated promises to repay rent arrears. His failure to honour the majority of these promises demonstrated a lack of commitment to sustaining his tenancy.
[14] Annexure G - Respondent’s first submissions
The Respondent was anxious to assure the Tribunal that he had put all of this (i.e. the failure to pay both rent and rent arrears, and his criminal history) behind him. The Tribunal cannot ignore that he appeared to have relied on his solicitor to organise the Sustainable Tenancies’ grant of $140 for his rent since he has been incarcerated, notwithstanding he has had his rent reduced to $5 a week and had been receiving sufficient income over the past six weeks at AMC for him to have actually paid the $10 a week he is now offering but has not paid anything in that period.
The Tribunal could not be satisfied from the evidence that he had discussed with his criminal lawyer what impact, if any, his not having the ongoing tenancy agreement with the Commissioner would have on his applying for bail in the charge he is defending. It appeared to the Tribunal that the Respondent had not been proactive in pursuing options notwithstanding the Commissioner’s considerable efforts to engage with him up to the commencement of the current application.
A lot of the Respondent’s future plans rely on his currently unemployed daughter, who did not give evidence, being able to help him financially, and on him hoping that he has put the past behind him. So far, he has engaged in counselling and education seminars to address his drug use. While the Tribunal hopes that the Respondent’s plans may be fruitful, the Tribunal is not currently satisfied that this is sufficient to surmount his current obstacles. Given his track record, notwithstanding the payments he made between November 2012 and May 2013, the Tribunal cannot be satisfied, for the reasons set out in the preceding two paragraphs, that the Respondent was reasonably likely to sustain the tenancy.
While the Tribunal notes, as a general principle[15], that it is undesirable to unhouse people (whether single people or families) unless it is the last resort. Such ‘last resorts’ do arise. What is a last resort depends on a consideration of all the circumstances of the case, including the status of the landlord. Even in the case of social housing, where the Commissioner has social obligations, there can come a point where the balance tips in favour of eviction.
[15] Commissioner for Social Housing v Canham [2012] ACAT 41, paragraphs 67 and 69
The Tribunal is comfortably satisfied that this matter has reached that point. The Respondent’s daughter has ongoing accommodation with her mother; the Respondent has approximately 16 more weeks in custody and then he may not be released from jail as he is facing the uncertain outcome of a bail application for the pending criminal charge. The Tribunal agrees with Ms Sexton’s submission that the best way for the Respondent to clear his debt is for the tenancy to be terminated, and for the $5 a week he said he had agreed to pay for his ongoing rent while incarcerated be applied to reduce his arrears.
Conclusion
The registrar was satisfied that the Respondent had failed to make payments as had been required by the Tribunal at the time of making the CTPO (sub section 42A(1)(c) of the RT Act), and that the Commissioner’s application otherwise met the criteria of sub section 42A(1) of the RT Act. The application was listed for hearing in accordance with section 42B of the RT Act.
The Commissioner sought a termination and possession order pursuant to section 42B of the RT Act, a warrant pursuant to section 42A of the RT Act and an order pursuant to section 83(d) of the RT ACT for compensation in the amount of the daily rate from the date of termination to the date of vacation of the premises. Subsection 42B(1) of the RT Act requires the Tribunal to consider section 49 of the RT Act.
The Tribunal is satisfied that the Respondent breached Orders 1(a) (b) (c) (d) and (f) of the CTPO made on 4 April 2012 and that vacant possession of the property has not been provided to the Commissioner.
The Tribunal has considered section 49 of the RT Act, and is not satisfied, for the reasons set out above, that the Tribunal should exercise its discretion under section 49(4) and 42B(4)(b) of the RT Act, and grant the Respondent a further CTPO over his tenancy. The Tribunal is satisfied from the evidence that the orders sought by the Commissioner should be made and makes those orders accordingly.
………………………………..
Ms E Symons
Presidential Member
PUBLICATION DETAILS
TO BE PUBLISHED
To be completed by Tribunal Staff
PART A
FILE NUMBER: | RT 11/506 |
PARTIES, APPLICANT: | Commissioner for Social Housing in the ACT |
PARTIES, RESPONDENT: | Christopher Lowe |
COUNSEL APPEARING, APPLICANT | |
COUNSEL APPEARING, RESPONDENT | |
SOLICITORS FOR APPLICANT | Ms H Sexton, ACT Government Solicitor |
SOLICITORS FOR RESPONDENT | Ms L Bartlett Welfare Rights & Legal Centre |
TRIBUNAL MEMBERS: | Ms E Symons, Presidential Member |
DATES OF HEARING: | 16 July 2013 |
PLACE OF HEARING: | Canberra |
PART B
RECOMMENDATION:
FULL REPORT ( ) CASE NOTE ( ) UNREPORTED DECISION ( )
COMMENTS:
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