COMMISSIONER for SOCIAL HOUSING in the ACT & CHESHER and LOCKWOOD (Residential Tenancies)

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

COMMISSIONER FOR SOCIAL HOUSING IN THE ACT v CHESHER & LOCKWOOD (Residential Tenancies) [2013] ACAT 5

RT 12/895

Catchwords: RESIDENTIAL TENANCIES – application for termination and possession order and warrant for eviction – tenants unemployed and in receipt of Centrelink payments – substantial arrears – arrears payment by lump sum instalments – payment of part of arrears debt guaranteed by family member – tenants reasonably likely to pay rent and rent owed

List of legislation: Residential Tenancies Act 1997, s.49

Tribunal: Ms E. Symons, Presidential Member

Date of Orders: 18 January 2013

Date of Reasons for Decision: 25 January 2013

IN THE ACT CIVIL & )

ADMINISTRATIVE TRIBUNAL ) FILE NUMBER

RT 12/895

THE COMMISSIONER FOR SOCIAL HOUSING IN THE ACT

Applicant/Lessor

BENJAMIN LUKE CHESHER & PETA KATRINA LOCKWOOD

Respondent/Tenants

Tribunal : Ms E. Symons, Presidential Member

Date of order: 18 January 2013

CONDITIONAL TERMINATION AND POSSESSION ORDER

The tenant is to pay to the lessor the sum of $8,483.25 for arrears of rent, such payment to be made in instalments as follows:

1.1.The sum of $300.00 by 5:00 pm on Friday, 15 February 2013
1.2.The sum of $1,300.00 by 5:00 pm on Friday, 1 March 2013
1.3.The sum of $3,500.00 by 5:00 pm on Friday, 29 March 2013
1.4.The sum of $3,383.25 by 5:00 pm on Friday, 26 April 2013

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 being due on or before 25 January 2013 and fortnightly thereafter.

If the tenant fails to make one of the payments required by paragraph 1:

3.1.the tenancy agreement shall terminate at 5:00 pm the following day;
3.2.upon termination of the tenancy agreement the lessor is entitled to possession of the premises; and
3.3.the instalments remaining under paragraph 1 are immediately due and payable.

If the tenant fails to make a payment of future rent as required by paragraph 2:

4.1.the tenancy agreement shall terminate at 5:00 pm the following day;
4.2.upon termination of the tenancy agreement the lessor is entitled to possession of the premises; and
4.3.The instalments remaining under paragraph 1 are immediately due and payable.

If the tenancy agreement is terminated by operation of paragraph 3 or paragraph 4 of this Order, the tenant must vacate the premises on or before the date of termination.

If the tenant fails to vacate the premises as required by paragraph 5 of this Order and take all possessions, the lessor may request the Registrar of the ACT Civil and Administrative Tribunal to issue a warrant for eviction.
This Order expires at 5:00 pm on 17 January 2014.
Any possessions remaining in the property on date of vacation are to be dealt with under the Uncollected Goods Act 1996.

Note:

No payment method is stipulated in order.
Obligation is with the tenant to make sure each payment to the applicant is made in compliance with this order.

………………………………..
Ms E. Symons
Presidential Member

Background

On 14 August 2012, the applicant lodged an application for resolution of a tenancy dispute for payment of rental arrears. On 12 November 2012, the hearing of the application was adjourned to 26 November 2012. On 26 November 2012, the matter was further adjourned to 10 December 2012 to enable the applicant to file an amended application. An amended application was lodged on 28 November 2012. In it the applicant sought orders pursuant to section 49(1) of the Residential Tenancies Act 1997 (the RT Act) for the termination of the tenancy agreement and for the payment of compensation/damages.
On 10 December 2012, the matter came before me for hearing. Ms Lockwood’s parents, Mr R. Lockwood and Ms M. Miller attended this hearing with other members of their families. Ms S. Keith, a support worker with the YWCA, had attended hearings with the respondents from and including 12 November 2012.
The Tribunal adjourned the matter part heard to 21 December 2012 to enable both respondents to attend Centrelink appointments to arrange to receive Newstart payments and to obtain and take appropriate documentation to the applicant to enable the tenants’ rental rebate application, which had been lodged on 23 August 2012, to be processed. Ms Lockwood’s parents offered to pay $100 a week during the adjournment to the applicant towards the respondents’ rental payments. Mr Chesher informed the Tribunal that he would advertise his Honda and Toyota motor vehicles for sale with the intention of using the sale proceeds to reduce the rental arrears which at that stage were $14,231.40.
On 21 December 2012, the Tribunal was informed that the rental rebate application had been processed, that the arrears were then $9,432.25 and that the applicant had received $300 being the three payments of $100 which Ms Lockwood’s parents offered to pay on 10 December 2012. The Tribunal considered submissions from the applicant and from Mr R. Lockwood in relation to how the rental arrears had arisen and to his and Ms Miller’s offer of support to their daughter, Ms Lockwood. The Tribunal also considered the oral and documentary information provided by the applicant and the respondents and made the following orders:
·Matter adjourned part heard to 18 January 2013 at 10:00 am;
·Respondents to pay $1,000 off arrears today, 21 December 2012;
·
Respondents to pay one rent payment of $126.00 per week on or before 27


December 2012 and thereafter $252.00 per fortnight; and
·
Respondents to pay one payment of $26.00 for rental arrears to the applicant


on or before 27 December 2012 and thereafter $52.00 per fortnight.
On 18 January 2013, the Tribunal made a Conditional Termination and Possession Order. The applicant requested reasons for this decision. These are the Tribunal’s reasons.
Reasons for Decision
On 18 January 2012, Ms Kazanc and Mr Butler appeared for the applicant. Ms Lockwood appeared and was accompanied by her parents Mr R. Lockwood and Ms M. Miller; Mr J. Wright and Ms S. Keith. Due to transport issues Mr Chesher was delayed in attending the Tribunal at the commencement of the hearing. The Tribunal heard submissions from all representatives. The applicant informed the Tribunal that the rental arrears were $8,483.25 and that in addition to the $1,000 paid in accordance with the previous order the applicant had received a payment of $151 on 29 December 2012 and $302 on 12 January 2012. The Tribunal is satisfied and finds that the payment of $151 was the payment for one week’s rent and the weekly payment on account of the arrears, and that the payment of $302 was the first of the fortnightly rent payments and the fortnightly arrears payments due under the previous orders.
The applicant asked the Tribunal to make a termination and possession order with this order to have effect as a warrant for eviction. Ms Lockwood opposed this order and put to the Tribunal that she and Mr Chesher had arranged for his income tax return to be prepared and lodged by a tax agent and the agent had informed them that Mr Chesher would receive $300 taxation refund. As a result of this return now being lodged she expected to receive $1,300 from Centrelink, being the refund of a Centrelink debt which she had paid. She and Mr Chesher wished to pay each of these amounts to the applicant when they received them.
Ms Lockwood also submitted that Mr Chesher had tried to sell the Honda car for $5,000 and he had taken it to Summernats in the hope that someone there would buy it. She said that he had received an offer to buy the car last night and understood that Mr Chesher and the purchaser were to have further discussions that day The sale price had been dropped to $3,500. The Tribunal adjourned the proceedings to enable Mr Chesher to attend.
When the hearing resumed Mr Chesher gave evidence by way of affirmation. He confirmed the information Ms Lockwood had given to the Tribunal earlier in relation to the expected payments of $300 and $1,300. He agreed that these monies were to be paid to the applicant upon receipt. He confirmed that he was in receipt of Centrelink Newstart and his job network provider was Max Employment.
He also told the Tribunal that he had sorted out the problems with his licence and upon payment of $402 he would be able to collect his licence and return to work with his previous employer. He has the use of a work utility in this employment and had previously netted $300.00 on average a week. He is presently receiving $444 a fortnight on Newstart Allowance. Max Employment has prepared a resume for him. He has applied for employment with a cleaning company and a retail business. Max Employment notifies him by SMS of available job positions. He currently enjoys pretty good health, he wants to work and is confident that he will be able to return to the workforce as soon as he has collected his licence.
Mr Chesher confirmed what Ms Lockwood had told the Tribunal about the Honda motor vehicle. He expects to be contacted by the prospective purchaser, who is a friend of his brother, today to discuss the sale arrangements. If the sale falls over he will continue to advertise the vehicle. As he has reduced the sale price the advertisement on allClassifieds is now appearing at the top of the list. He was confident he would receive the sale proceeds of $3,500; and will be able to and agrees to pay this amount to the applicant by 29 March 2013. He said that he has had a telephone call from a person in Victoria who has expressed interest in purchasing the Toyota for $8,000. Mr Chesher needs to purchase a part at a cost of about $500 for the Toyota before he is able to conclude a sale. He will not be able to buy this part until he has employment. The applicant cross examined Mr Chesher.
Ms Lockwood also gave evidence under affirmation. She confirmed the information she previously provided to the Tribunal. She owns a Honda vehicle which has been damaged. She estimates its value at $1,000. Presently she uses this vehicle to visit her children who are living with Mr Chesher’s mother. Ms Lockwood signed an agreement with Child Protection for the children to live with Mr Chesher’s mother and father while the current matters are unresolved. She collects the children from school on some afternoons and needs a car for her transport. She is hopeful that she and Mr Chesher will be able to have their children return to live with them in the future. For this reason the continuing occupancy of their home is very important. Healthwise, Ms Lockwood described herself as “being enormously back on track”. Her job network provider is the Salvation Army and they have forwarded job applications for her to hotels, as she had previously worked for the Erindale Vikings Club Bistro. The applicant did not cross examine Ms Lockwood.
Mr Robert Lockwood gave evidence by way of affirmation and confirmed that he, Ms Lockwood’s mother, their partners and Ms Lockwood’s grandparents wanted to assist Ms Lockwood. He said that he, on their behalf and on his own behalf, would guarantee that so much of the rent debt to a maximum of $4,000 as is outstanding at the expiration of three months would be paid.
The Law
Section 49 of the Residential Tenancy Act 1997 states
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.

Consideration

There was no dispute that the respondents had signed a tenancy agreement for the applicant lessor’s property at 19 Durham Place Chisholm in June 2006; that a Notice to Remedy arrears was served on 2 May 2007; that another Notice to Remedy Arrears was served on 20 April; 2012 and that on 28 May 2012 a Notice to Vacate for arrears was served. The Tribunal makes findings accordingly. There was also no dispute that the amount of rental arrears was as set out above and the Tribunal makes findings accordingly.
The Tribunal had received a Statement from Ms Lockwood dated 30 August 2012 and is satisfied that when the respondents fell into arrears in May 2007 this was around the time of the birth of their daughter on 24 April 2007 and that a verbal arrangement with the applicant was put in place and the arrears were cleared.
The Tribunal is also satisfied from this Statement and finds that the respondents had a combination of serious health issues, and relationship and family issues from October 2011 which saw their two young children residing with

Mr Chesher’s mother. The respondents were financially impacted by these issues and this is when their rental arrears, the subject of these proceedings, arose.
Neither respondent currently has employment. Both are on Centrelink Newstart Allowance and are looking for work. They are able to meet their ongoing future rent obligation from their Centrelink payments and the Tribunal is satisfied accordingly. They currently have rebated rent until February 2013. They will need to take appropriate steps to ensure their eligibility for rental rebates is assessed before the end of each rebate period.
Mr Chesher had an outstanding tax return to resolve when these proceedings commenced. The Tribunal accepted his evidence that this tax return has been completed by a tax agent and lodged with the tax office. He expects to receive a tax refund of $300.00. Because of the problems in not lodging this income tax return, Ms Lockwood had incurred a Centrelink debt of $1,300 which she had paid. As a result of Mr Chesher lodging, through the tax agent, this return she told the Tribunal that Centrelink has told her that she will be repaid the $1,300. Both respondents agreed that these payments would be paid to the applicant upon receipt.
The respondents have, currently, three cars. Mr Chesher has advertised one of the Hondas and the Toyota for sale. Ms Lockwood uses the other Honda which is damaged. She values it at around $1,000. It is her means of transport to visit her children at Mr Chesher’s mother’s home. She uses it to take and collect the children from school. While she has agreed to the children living with Mr Chesher’s mother at present, she wishes to have the children return to live with her and Mr Chesher, and she needs to maintain an ongoing relationship with them. Given that the respondents are actively taking steps to sell their remaining two cars, the Tribunal is not satisfied that Ms Lockwood should be required to sell her Honda.
The respondents have had, and continue to have, the ongoing support of Ms Lockwood’s parents and extended family in relation to the matter before the Tribunal. It is apparent to the Tribunal that they care deeply for their daughter and are very concerned for her well being. They have already provided considerable support and have offered, in the form of a guarantee, to provide a partial financial safety net up to a maximum of $4,000 at the expiration of three months for rental arrears.
The totality of the respondents’ situation is out of the ordinary. While their current income could not support them meeting both fortnightly rent of $252.00, and fortnightly rental arrears of either $326.28 (being $8,483.25 divided by 26 weeks) or $264.74 (being $8,283.25 - $1,600 [$300 + $1,300] = $6,883.24 divided by 26 fortnights), the Tribunal is satisfied from the evidence that they will be reasonably likely to pay and agree to pay the rent that has become payable by four lump sum payments, namely $300 from Mr Chesher’s tax refund by 15 February 2013, $1,300 being Ms Lockwood’s Centrelink refund by 1 March 2013; $3,500 from the sale of the Honda by 29 March 2013 and that the balance of $3,383.25 will be paid from the sale of the Toyota or in accordance with the guarantee by 26 April 2013.
If the respondents choose to continue to pay the extra $50 a fortnight which they were previously paying towards the arrears this will provide them with an opportunity to bring their rent payments into credit when the arrears have been discharged and it would provide them with some sort of buffer against unforeseen circumstances.
Subsections 49(3) and (4) of the RT Act give this Tribunal a discretion, when considering an application for a termination and possession order under section 49(1), to make a conditional termination and possession order instead. The Tribunal is satisfied that the respondents are likely to pay future rent as well as the rent that has become payable by the four lump sum payments set out above. The Tribunal notes that the respondents complied with the order on 18 December 2012 in relation to the arrears, albeit it was for only a short period.
The Tribunal is not satisfied that the legislation imposes an obligation on the Tribunal to only consider payment of rent that has become payable by regular periodic payments. The legislation provides for the Tribunal to form an opinion on the evidence before it about whether a tenant is reasonably likely to pay the rent that has become payable as well as future rent. The Tribunal had the opportunity of observing the respondents and their family members over a number of hearings and has formed the requisite opinion to meet the legislative requirements.
The Tribunal has stated above that it is of the opinion that the respondents are reasonably likely to pay future rent as it becomes due and payable. The Tribunal is satisfied from the respondents’ evidence that they each agree to pay the rent that has become payable and that they undertake to pay future rent as it becomes payable, as required by the Tribunal’s orders.

………………………………..

Ms E Symons
Presidential Member

PUBLICATION DETAILS

TO BE PUBLISHED

To be completed by Tribunal Staff

PART A FILE NO: RT 12/895

APPLICANT: COMMISSIONER FOR SOCIAL HOUSING

RESPONDENT: BENJAMIN LUKE CHESHER & PETA KATRINA LOCKWOOD

COUNSEL APPEARING: APPLICANT:

RESPONDENT:

SOLICITORS: APPLICANT:

RESPONDENT:
OTHER:APPLICANT: Commissioner for Social Housing
RESPONDENT: The Respondents

TRIBUNAL MEMBER: Ms E Symons, Presidential Member

DATE/S OF HEARING: 18 January 2013 PLACE: CANBERRA

DATE/S OF DECISION: 21 January 2013 PLACE: CANBERRA

PART B

RECOMMENDATION:

FULL REPORT ( ) CASE NOTE ( ) UNREPORTED DECISION ( )

COMMENTS:

[2013] ACAT 5

18 January 2013

Key Legal Topics

Areas of Law

Residential Tenancies

Legal Concepts

Rental Arrears

Possession Order

Conditional Termination

Income Tax Refund

Asset Sale

Return to Workforce