Commissioner for Social Housing v Lysle
[2016] ACAT 26
•12 April 2016
ACT CIVIL & ADMINISTRATIVE TRIBUNAL
COMMISSIONER FOR SOCIAL HOUSING v LYSLE
(Residential Tenancies) [2016] ACAT 26
RT 1137/2014
Catchwords: RESIDENTIAL TENANCIES – rent arrears – conditional termination and possession order – implied tenancy
Legislation cited: Human Rights Act 2004 ss 40B and 40C
Residential Tenancies Act 1997 ss 49, sch1 cl 92
Cases cited:Commissioner for Social Housing in the ACT & Massey [2013] ACAT 41
Commissioner for Social Housing v Moffatt [2015] ACTSC 4
Commissioner for Social Housing v Pesi [2015] ACAT 58
LM v Childrens Court of the Australian Capital Territory and the Director of Public Prosecutions for the ACT [2014] ACTSC 26
Tribunal: Senior Member J Lennard
Date of Orders: 12 April 2016
Date of Reasons for Decision: 12 April 2016
AUSTRALIAN CAPITAL TERRITORY )
CIVIL & ADMINISTRATIVE TRIBUNAL ) RT 1137/2014
BETWEEN:
COMMISSIONER FOR SOCIAL HOUSING
Applicant
AND:
KATHLEEN MAREE LYSLE
Respondent
TRIBUNAL: Senior Member J Lennard
DATE: 12 April 2016
ORDER
The matter is set down for hearing before Senior Member Lennard at 10am on 20 May 2016.
The applicant is to provide to the tribunal and to the respondent on or before 27 April 2016 written submissions, which shall include:
(a)an up-to-date rent schedule;
(b)any further submissions on the human rights issues; and
(c)any further documents on which they intend to rely at the hearing.
The respondent is to provide to the tribunal and to the applicant on or before 12 May 2016, written submissions which shall include:
(a)a response to the submissions of the applicant;
(b)any further submissions on the human rights issues; and
(c)any further documents on which she intends to rely at the hearing.
………………………………..
Senior Member J Lennard
REASONS FOR DECISION
Background
The parties entered into a residential tenancy agreement in relation to premises at Macgregor, ACT on 12 November 2009.
ACAT made a conditional termination and possession order and 15 May 2012 in respect of the tenancy. That conditional termination and possession order required the tenant to pay the lessor the sum of $1522.89 for rent owed by instalments of $40 per fortnight commencing 16 May 2012; and to pay rent regularly in accordance with the tenancy agreement. The conditional termination and possession order provided at clause 2 that if the tenant fails to comply with any of the conditions for the payment of rent and arrears, the tenancy would terminate at 12 noon on the day after the tenant’s failure to comply with the condition; the lessor would be entitled to vacant possession of the premises on such termination of the tenancy and all rent payable including any rent that has accrued from the order was payable immediately. That conditional termination and possession order expired on 15 May 2013.
The rent account schedule provided by the applicant lessor shows that the tenant did make a payment of $40 towards the rent arrears and a rent payment of $196.50 on 16 May 2012. The tenant made a rent payment of $196.50 on 31 May 2012, but failed to make the required $40 payment towards rental arrears. In accordance with the terms of the conditional termination and possession order, the tenancy terminated at 12 noon on 1 June 2012 and the amount of $1286.39 was immediately payable by the tenant to the lessor.[1]
[1] Commissioner for Social Housing v Moffatt [2015] ACTSC 4
The applicant failed to take any administrative or legal action to gain possession of the premises. The tenant remained in possession of the premises, and continues in possession of the premises at the date of the hearing. The tenant continued to make payments to the lessor, albeit not in a regular amount and not at fortnightly intervals.
The evidence before the tribunal indicates that the lessor continued to deal with the respondent as if she was their tenant. The Homenet notes (an electronic file note system) provided as an attachment to the submissions of the applicant received in the tribunal on 20 April 2015 indicate that the lessor apparently failed to appreciate the effect of a conditional termination and possession order and referred to the order as a ‘legal agreement’. Those notes made from June 2012 to February 2015 refer often to rent payments and arrears payments. It appears that the lessor continued to conduct regular inspections of the premises and to calculate rebate of the market rent payable by the tenant.
On 4 December 2013 the lessor served a Notice to Remedy based on failure to pay rent. That notice to remedy specified that the tenant was in arrears to the amount of $1054.14. On 29 January 2014 the lessor served a notice to remedy based on failure to pay rent. That notice to remedy specified that the tenant was in arrears to the amount of $1653.34. On 10 February 2014 the lessor served upon the tenant a notice to vacate. The grounds for the giving of that notice where failure to remedy the arrears of rent. The notice to vacate specified that the tenant was in arrears to the amount of $1654.14.
The tenant failed to remedy the arrears of rent and on 16 December 2014 the lessor made an application pursuant to section 49 of the Residential Tenancies Act 1997 (ACT) [the RT Act] to the tribunal for termination of the tenancy and an order for the payment of rental arrears.
On 29 January 2015 the Tribunal made a termination and possession order, and adjourned the application for the payment of rental arrears. On 11 February 2014 those orders were set aside and the matters set down for a rehearing of the application on 19 February 2015.
The presently constituted tribunal first heard the matter on 19 February 2015. At that hearing the applicant claimed that the rent was in arrears in the amount of $9496.29. It was noted that the rebate of market rent had ceased, and that the tenant was seeking a review of that administrative decision. It was conceded by each party that if the Commissioner was required to backdate the rebate of rent that may have a significant effect on the amount owed by the tenant.
The matter was adjourned but interim orders were made for the payment by the tenant of weekly rent; and, for each party to make written submissions in relation to the application of the Human Rights Act 2004 (ACT) [The HR Act].
Human rights considerations and residential tenancy matters
The tribunal received written submissions on the application of the Human Rights Act from the respondent tenant on 19 March 2015 and from the applicant lessor on 22 April 2015. Each party accepts that the applicant lessor is a public authority for the purposes of the HR Act.
On 22 April 2015, the hearing was resumed and the parties made oral submissions in relation to the application of the HR Act to a hearing of a residential tenancies matter. The parties were more or less in agreement as to the approach to be taken by the tribunal in residential tenancies matters where the lessor is a public authority, and the remedy being asked for is termination of the tenancy – an eviction. I do not intend to canvas the full submissions by each party, but summarise my conclusions below.
Section 40B of the HR Act provides:
40BPublic authorities must act consistently with human rights
(1)It is unlawful for a public authority—
(a)to act in a way that is incompatible with a human right; or
(b)in making a decision, to fail to give proper consideration to a relevant human right.
(2)Subsection (1) does not apply if the act is done or decision made under a law in force in the Territory and—
(a)the law expressly requires the act to be done or decision made in a particular way and that way is inconsistent with a human right; or
(b)the law cannot be interpreted in a way that is consistent with a human right.
(3)In this section:
public authority includes an entity for whom a declaration is in force under section 40D.
Section 40C(2)(b) of the HR Act provides:
40CLegal proceedings in relation to public authority actions
(1)This section applies if a person—
(a)claims that a public authority has acted in contravention of section 40B; and
(b)alleges that the person is or would be a victim of the contravention.
(2)The person may—
(a)start a proceeding in the Supreme Court against the public authority; or
(b)rely on the person’s rights under this Act in other legal proceedings.
The phrase ‘legal proceedings’ used in section 40C(2)(b) of the HR Act includes proceedings in the ACAT under the RT Act.[2]
[2] Commissioner for Social Housing in the ACT & Massey [2013] ACAT 41 at [39]
Thus, the respondent in this matter may rely on her rights arising under the HR Act in these proceedings. Both the parties were in agreement that ACAT is limited to exercising the powers available to it pursuant to the ACAT Act and the RT Act in residential tenancies matters. I adopt the approach taken by then Member Daniel in Commissioner for Social Housing in the ACT & Massey[3] that the appropriate interpretation of the provision is that it allows rights under the HR Act to be considered, and relied upon where those rights, or a finding of unlawfulness in relation to those rights, can be incorporated into the existing legal framework of the proceedings.
[3] Ibid at [44]
In LM v Childrens Court of the Australian Capital Territory and the Director of Public Prosecutions for the ACT [2014] ACTSC 26, in determining the proper interpretation of Section 40C(2)(b) of the HR Act, the Supreme Court stated that the express power to grant a remedy (such as a stay of proceedings on the basis that the applicant’s conduct was unlawful, pursuant to the HR Act) was given only to the Supreme Court. Other court or tribunals may address breaches of the HR Act only within the context of their existing powers and processes.
In relation to residential tenancies matters where there is an application for termination and possession pursuant to section 49 of the RT Act, I consider that the appropriate approach for the ACAT to take is as follows:
(a)if a respondent raises and relies on section 40C(2)(b) of the HR Act, then the ACAT may consider whether there has been a contravention of section 40B of the HR Act;
(b)in making a decision as to whether there is a contravention of section 40B of the HR Act, ACAT must also consider whether the human right is subject to any reasonable limit, pursuant to section 28 of the HR Act; and
(c)if ACAT arrived at the conclusion that there had been a contravention of section 40B of the HR Act, that contravention must be addressed within the context of ACAT’s existing powers and processes. If ACAT were to consider any issue arising under the HR Act it would be appropriate to do so when exercising discretion whether or not to make a termination and possession order pursuant to section 49 of the RT Act.
Where a respondent raises and relies on section 40C(2)(b) of the HR Act, then the onus of proof is with that respondent. It is not for the applicant to establish on each occasion that a termination and possession order is sought to establish that they have acted in compliance with the requirements of the HR Act.
Hearing of the application for termination and possession
At a hearing conducted on 21 May 2015 the tribunal, after outlining the approach it intended to take in relation to the human rights issues, made directions in relation to further written submissions by both parties.
After two more direction hearings, submissions were received from each party, and the matter was set down for a hearing on 11 August 2015.
The issues before the tribunal are summarised as follows:
(a)What was the effect of the breach of the conditional termination and possession order made on 15 May 2012?
(b)What is the legal characterisation of the relationship between the applicant and the respondent in the period following that breach?
(c)Were the notice to remedy and notice to terminate served upon the tenant on 4 December 2013 and 29 January 2014 respectively valid within the terms of the residential tenancy agreement and the RT Act?
(d)If the above notices were not valid, is it appropriate for ACAT to exercise its power to correct defects in those notices?
(e)How should the various payments made by the respondent be characterised?
The effect of the breach of the conditional termination and possession order of 15 May 2012
That conditional termination and possession order required the tenant to pay the lessor the sum of $1522.89 for rent owed by instalments of $40 per fortnight commencing 16 May 2012; and to pay rent regularly in accordance with the tenancy agreement. The conditional termination possession order provided at clause 2 that if the tenant fail to comply with any of the conditions for the payment of rent and arrears, the tenancy would terminate at 12 noon on the day after the tenant’s failure to comply with the condition; the lessor would be entitled to vacant possession of the premises on such termination of the tenancy and all rent payable including any rent that has accrued from the order was payable immediately.
It is agreed by the parties that the tenant breached the order on 31 May 2012, by failure to make payment as required by that order.
I have previously canvassed the legal effect of a breach of a conditional termination and possession order and set out below the relevant extract from Commissioner for Social Housing v Pesi [2015] ACAT 58 at [5] and following:
Conditional termination and possession orders
5. Section 49 of the Residential Tenancies Act 1997 (ACT) [the Act] regulates the termination of the tenancy where the tenant has failed to pay rent.
6. Where a conditional termination possession order has been made by ACAT and the tenant breaches that order by either failure to pay rent or failure to pay the arrears by instalments, the effect of that breach is twofold: the tenancy terminates on the day after the breach, and any outstanding rent becomes due and payable immediately.
7. Section 42A of the Act provides that where there is a breach by the tenant of a conditional termination and possession order, the lessor may apply to the registrar for a warrant of eviction. Section 42B provides that an application under section 42A must be decided as if it were an application under section 49 for a termination and possession order.
8. In Commissioner for Social Housing v Moffatt [2015] ACTSC 4, Mossop M examined the words of the Act to determine the effect on the tenancy agreement of a breach by the tenant of a conditional termination and possession order. Mossop M stated at paragraph 43:
The starting point to interpretation of a statute should be with the words of the provision itself. The interpretation which promotes the purpose of the legislation must be preferred. Reference should be had to the broader legislative context of the Act, and, where relevant, also to extrinsic materials which provide evidence of the legislature’s intended operation or purpose.
After an examination of the provisions of the Act Mossop M concluded:
64. [T]he entirety of the RTA as I have considered it, is consistent with a conditional termination and possession order being self-executing. I have been unable to find any provision in the RTA which is inconsistent with a conditional termination and possession order being self-executing. While I do not consider that there is any ambiguity in subsection 49(4) to be resolved by reference to extrinsic material, I note that reference to the [Community Law Reform ] report confirms that such an order was intended to be self-executing.
65. It follows that I am satisfied that a conditional termination and possession order is self-executing in the sense that it terminates a residential tenancy agreement, although this does not mean that all of the rights and obligations of the parties under that agreement end at the time of termination.
9. The Act provides that the Tribunal may make a termination possession order if the tenant has failed to pay rent that has become payable under the residential tenancy agreement when the lessor has served a termination notice on the tenant on the basis of the failure to pay rent and the tenant has not vacated the premises in accordance with that notice.
10. If the Tribunal is of the opinion that the tenant has agreed to and is reasonably likely to pay the rent that has become payable, as well as pay future rent as it becomes payable, then instead of making a termination and possession order, the Tribunal may make a conditional termination and possession order. The conditions imposed under such an order are that the tenant shall pay the rent as and when it falls due, and that the tenant shall pay an identified amount of arrears by instalments, as specified in the order. Section 49(4) provides that if the tenant fails abide by that order then, the tenancy terminates at a stated hour on the day after the day when any rent becomes payable, and is not paid and the lessor becomes entitled to possession of the premises and all rent payable to the date of termination is payable immediately.
11. Thus, where the tenant breaches a conditional termination and possession order by either a failure to pay rent that has become payable (that is the arrears identified in the order) or by failing to pay rent as it becomes payable, there are two important consequences:
(a) the tenancy terminates at the time set out in the conditional termination and possession order; and
(b) all rent payable until the termination of the tenancy becomes payable immediately.
12. If the tenant does not vacate the premises then the lessor may make an application pursuant to section 42A for a warrant of eviction. The purpose of that warrant is to enable the lessor to recover vacant possession of the premises. [footnotes omitted]
The effect of the breach of the conditional termination order was to terminate the tenancy on the day after the breach, that is, on 1 June 2012. The amount of rent and arrears due on that date, that is, $1286.39 became due and payable immediately.
What is the legal characterisation of the relationship between the applicant and the respondent in the period following that breach?
I accept the proposition of the Supreme Court in Moffatt that when a residential tenancy is terminated by the breach of a conditional termination order, this does not mean that all of the rights and obligations of the parties under that agreement end at the time of termination. The tenant has a right to remain in possession of the property until the lessor obtains a warrant for eviction from ACAT; the lessor is entitled to compensation for lost rent, usually described as an occupation fee for the period between the termination of the tenancy and the delivery by the tenant of vacant possession to the lessor.
The issue now to be addressed has arisen in this, as in so many other cases, as a result of inaction by the lessor. The lessor did not take the necessary legal or administrative steps to seek a warrant for eviction, or to collect the crystallised debt. The evidence before the Tribunal (Homenet notes) indicates that the lessor did not appreciate that the tenancy had been ended as a result of the failure by the tenant to comply with the terms of the conditional order. The officers of the lessor note on 18 June 2012 that the housing manager has contacted the tenant to remind her that her rent is due this week. In several places the Homenet notes refer to the conditional termination possession order as a legal agreement.
The tenant has remained in occupation of the premises; the tenant has continued to make payments of money to the lessor; the notes and actions taken by the lessor as detailed in the evidence before the Tribunal indicate that the lessor has continued to refer to the respondent as a tenant, there has been a great deal of correspondence between the parties in relation to ‘the tenancy’; the lessor has continued to conduct ‘Client Service Visits’, or inspections as permitted by the RT Act; and calculated the rental rebate. It is noted that the lessor has taken considerable steps to support the tenant in maintaining the tenancy.
The applicant made submissions, relying on an interpretation of Moffatt that the respondent has remained in possession of the premises as a statutory tenant since 1 June 2012, that is the date the tenancy was terminated by the tenant’s failure to comply with the conditional termination and possession order.
The respondent submits that the respondent’s particular circumstances have given rise to an implied tenancy.
I have previously canvassed the legal effect of the conduct of the parties where a lessor takes no action following the breach of a conditional termination and possession order and a tenant is permitted to remain in possession of the premises and set out below the relevant extract from Commissioner for Social Housing v Pesi [2015] ACAT 58 at [14] and following:
The consequences of inaction by the lessor
14. In circumstances where the lessor fails to make an application pursuant to section 42A, and the tenant remains in possession of the premises, it may be that a new tenancy arises by implication from the conduct of the parties.
15. Section 6A of the Act defines a residential tenancy agreement as an agreement whereby a person gives to someone else (the tenant) a right to occupy premises and the premises are for the tenant to use as a home and the right is given for value. Section 6A(2) provides that the agreement may be express or implied or in writing, oral or partly in writing and partly oral.
16. Where the parties are in a continuing relationship which involves exchange of documents and other correspondence, it may be possible to state that the parties are in a contractual relationship, but difficult to genuinely label any particular action as an offer or acceptance. It may be more sensible to ask whether, in the circumstances, it can be shown that each party has assented to the contract. In Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 523 the Court examined the surrounding circumstances and asked whether a reasonable bystander would conclude from the conduct of the parties – that is the doing of work and the acceptance of payment for that work – that the parties were in a contractual relationship.
17. In Brambles Holdings Ltd v Bathurst City Council [2001] NSWCA 61 the Court concluded that it was not necessary to specifically identify an offer and acceptance before a contract can be said to be formed between the parties and concluded that there was sufficient authority for a court to find that a contract may be evidenced otherwise than by offer and acceptance. In Brogden v Metropolitan Railway Co (1877) to App Cas 666 it was found that conduct of the parties could lead to the inference that a contract which had been propounded had been in fact accepted. If one party had acted so that the other was reasonably entitled to believe that there was a contract, then there would be a contract which would bind them.
18. The common law in relation to leases recognised that a residential lease could arise from the conduct of the parties, in circumstances where the requirement that the agreement be in writing had not been met. The statutory scheme provided for residential tenancies in the ACT means it is much easier to imply a residential tenancy than under the common law. The Act provides that a residential tenancy agreement may be entirely oral. Once a residential tenancy agreement has arisen by implication, its terms are the standard residential tenancy terms set out in the schedule to the Act.
19. Whether a new tenancy has arisen by implication from the conduct of the parties is a question of fact, to be determined on a case-by-case basis. In making such a determination the Tribunal would have regard to the amount of time that had passed since the tenancy terminated on the breach by the tenant and the conduct of the parties, including but not limited to:
(a)correspondence between the parties;
(b)the demanding of rent;
(c)the payment of rent;
(d)the exercise by the lessor of rights arising under a residential tenancy agreement, such as routine inspections, or market rent increases;
(e)the meeting by the lessor of obligations, such as repairs to the premises; and
(f)the calculation of a rental rebate.
20. If the Tribunal determines that a new tenancy has arisen by implication from the conduct of the parties, then if the tenant breaches the new tenancy agreement by failing to pay rent, the lessor is obliged to serve a valid notice to remedy and a valid notice to vacate upon the tenant, before making an application to ACAT for termination and possession.
21. The applicant has made representations that upon termination of the tenancy resulting from a breach of a conditional termination and possession order, the tenant remains in occupation of the premises under a statutory tenancy, subject to the terms of the terminated contractual tenancy. The statutory tenancy is seen as extending protection from eviction to the tenant by the lessor until and unless the lessor obtains a possession order from ACAT.
22. There is nothing in the Act to support the assertion that a statutory tenancy arises immediately upon termination resulting from a breach of a conditional termination and possession order. A statutory tenancy must be a tenancy that arises from the operation of the statute. Indeed, unconditional termination and possession orders made pursuant to section 49 often result in a period of time between the termination of the tenancy and the issuing of a warrant of eviction. This comparable period of time cannot be characterised as a statutory tenancy. It could be argued that the legislative scheme anticipates that, where a lessor has obtained either a conditional or unconditional termination and possession order, that lessor will within a reasonably short period of time, take the necessary steps to obtain possession of premises A lessor’s failure to avail themselves of the remedy provided for within the Act cannot give rise to a statutory tenancy, or a tenancy at will under the common law. It is again noted that the effect of the self-executing orders is that the tenancy terminates as a result of the tenant’s failure to comply with the conditional termination and possession order.
23. In Commissioner for Social Housing v Moffatt the Court stated at paragraph 46:
There can be no doubt that the RT Act creates a right, pending an order of the Tribunal, to not be evicted after a lease is terminated by a CTPO. Adopting the terminology from the lessor and tenant legislation referred to above, that right can be described as a “statutory tenancy”. However, there is also absolutely no indication that the legislature intended to pick up any of the jurisprudence on statutory tenancies, either from the United Kingdom or Australia. Therefore, caution must be exercised to ensure that any reliance upon earlier authorities is only to the extent that it is consistent with the terms of the RT Act. [emphasis added]
24. The applicant lessor made submissions based on Commissioner for Social Housing v Moffatt. In so far as there is a statutory protection afforded to the tenant against eviction by ‘self-help methods’ of the lessor, the period of time which elapses between the termination of the tenancy and the application by the lessor for a warrant of eviction may be a ‘type of statutory tenancy’. However, the effluxion of time and conduct inconsistent with an intention on the part of the lessor to make such an application for a warrant may be matters legitimately taken into account by the Tribunal in determining that, in all the circumstances, the relationship between the applicant and the respondent is now governed by a new residential tenancy agreement that has arisen by implication from the conduct of the parties.
25. To hold that a statutory tenancy arises immediately upon termination of the tenancy regulated by the conditional termination and possession order by the tenant’s breach of that order and that that statutory tenancy continues to regulate the relationship, is not consistent with the words or the intention of the Act. The chief difficulty is in determining the terms of such a tenancy. Either this is a tenancy subject to the Act and therefore containing the standard terms, or it is some other creature which contains only so many of those terms as suit the lessor, but allows the lessor to terminate by application to the ACAT, without the requirements of notices to remedy and vacate. There is no basis within the Act for such a statutory tenancy. The Act provides that a residential tenancy agreement must contain, and is taken to contain, terms to the effect of the standard residential tenancy terms mentioned in schedule 1. Such terms include the requirements for service of notices to remedy and to vacate. [footnotes omitted]
Applying those principles to the evidence before me, I am satisfied that a tenancy has arisen by implication. That tenancy commenced sometime after 1 June 2012 and arises from the conduct of the parties.
Has the lessor served valid notices to remedy and a valid notice to vacate upon the tenant?
The answer to the question posed above will be determined by the characterisation of the payments of money made by the tenant to the lessor from 1 June 2012 to the dates of the service of the notices to remedy.
It is a matter of agreement between the parties that at the time of the breach of the conditional termination and possession order the amount of arrears and rent was $1286.39; and that this amount became due and payable immediately.
In the period since 1 June 2012 the tenant has continued to make payments to the lessor. The Tribunal has in evidence before it a copy of the rent account schedule for the premises kept by the lessor from 2 May 2012 to February 2015. That schedule has made no allowance for the termination of the tenancy, as a result of the breach of the conditional termination and possession order. Thus this account gives a ‘running balance’. The amount owing at the time of the breach is $1286.39, the account shows the payments made by the tenant on the balance of the account of a weekly basis. An examination of the rent account schedule for the premises kept by the lessor shows that on 2 November 2013, the account was $118.96 in credit.
The Tribunal also has in evidence a document which was reached following agreement between the parties headed ‘Joint Rent Account for New Implied Tenancy’, document. This document begins with a zero balance on 1 June 2012. The joint rent account does not include the debt due and payable immediately upon the failure to comply with the conditional termination order. The document shows that the tenant made a payment of $50 on 9 June 2012 and payments ranging between $240 and $250 fortnightly from 23 June 2012 to 24 November 2012. At that time the fortnightly rebated rent was $196.50. From 18 November 2012 the fortnightly rebated rent increased to $581.20; from 8 December 2012 the tenant made five fortnightly payments of $600 each and from 16 February 2013 made payments in the in the amount of $720. This document shows that up until 15 February 2014, the tenant made intermittent payments of amounts which were in excess of the fortnightly rebated rent, including one payment of $1000 on 15 October 2013. The rent as set out in this account remained in credit until 15 February 2014. Thereafter, the tenant’s payments became infrequent and the account fell into debit and remained in debit.
On 4 December 2013 the lessor served a notice to remedy based on failure to pay rent. That notice to remedy specified that the tenant was in arrears to the amount of $1054.14. The amount of arrears specified was based on the rent schedule maintained by the lessor. The agreed joint rent account shows that the rent was in credit from 7 December to 23 December 2013.
On 29 January 2014 the lessor served a notice to remedy based on failure to pay rent. That notice to remedy specified that the tenant was in arrears to the amount of $1653.34. The amount of arrears specified was based on the rent schedule maintained by the lessor. The joint rent account shows that the rent was in arrears by $666.85 on 26 January and $966.75 on 3 February 2014.
On 10 February 2014 the lessor served upon the tenant a notice to vacate. The grounds for the giving of that notice where failure to remedy the arrears of rent. The notice to vacate specified that the tenant was in arrears to the amount of $1654.14. The amount of arrears specified was based on the rent schedule maintained by the lessor. The joint rent account shows that on 10 February 2014 the account was $66.65 in arrears.
Clause 92 of the standard residential tenancy terms provides for the termination of tenancy by the lessor on the grounds of the tenant’s failure to pay rent.
92The tribunal may order the termination of the tenancy and eviction of the tenant on the ground of nonpayment of rent in the following circumstances:
(a) rent has been unpaid for 1 week. The first day of this period concludes at midnight on the day when the unpaid rent was due;
(b) the lessor has served a notice to remedy on the tenant for the failure to pay the rent, being a notice—
(i) served not earlier than 1 week after the day when the rent was due; and
(ii) containing a statement that if the tenant pays the rent outstanding to the date of payment within 7 days of the date of service of the notice to remedy, no further action must be taken and the tenancy continues;
(c) if all rent is not paid within 1 week of the date of service of the notice to remedy—the lessor may then serve a notice to vacate on the tenant requiring the tenant to vacate the premises within 2 weeks of service of the notice to vacate;
(d) no earlier than the date when the notice to vacate is served, the lessor may apply to the tribunal for an order terminating the tenancy and evicting the tenant;
(e) the tribunal hearing of the application to terminate and evict must not be earlier than the end of the period specified in the notice to vacate;
(f) during any tenancy in which the lessor has previously issued 2 notices to remedy, the lessor may serve a notice to vacate 1 week after the day when the rent has fallen due without serving a notice to remedy.
The applicant made written submissions which conceded that if the Tribunal finds that the previous tenancy terminated and the arrears of the previous tenancy are not attached to any new implied tenancy then the notice to remedy served on 4 December 2013 will be invalid on the basis that the respondent had not fallen into arrears to an amount equalling one week’s rent in respect of the new implied tenancy.
The applicant makes further submissions in relation to the notice to remedy served on 29 January 2014. Pursuant to clause 92(a) of the standard terms, the minimum requirement for the issue of a notice to remedy is that rent is to be unpaid for one week. The applicant submits that the notice to remedy served on 29th of January 2014 meets the requirements of clause 92(a). The weekly rebated rent at the relevant time was $299.90: using the joint rent account schedule the tenant is $666.85 in arrears. It is not disputed between the parties that the notice to remedy otherwise meets the requirements of clause 92(a) and (b).
It is not contested between the parties that the tenant failed to remedy the breach by the payment of rent and arrears within seven days of the date of service of the Notice to Remedy.
I am satisfied that there is a significant difference in the amount of arrears being shown from time to time on the two rental schedules before the Tribunal. If the Tribunal adopts the view that the arrears of the previous tenancy are not attached to the new implied tenancy then, following the principles set out in Pesi, the notice to remedy will be invalid. It was noted in Pesi that the tribunal would not exercise its power to correct a defect in a notice in circumstances where the difference in quantum of arrears between the notice to remedy and the rent schedule is such that any correction of the defect in the notice would manifestly cause detriment to the tenant. It is worth repeating the approach adopted in Pesi:
[38] If the Tribunal should find that either the notice to remedy or the notice to vacate is invalid then the lessor’s application for termination cannot succeed. Where both a notice to remedy and a failure by the tenant to remedy are conditions precedent to the issuing of a notice to vacate, then the Tribunal must consider the purpose of the notice to remedy. In relation to leases generally, the common law provides that the notice should give the tenant accurate information as to the breach alleged by the lessor and what action will be necessary by the tenant to remedy the breach. The tenant should have the opportunity of determining whether or not the breach is admitted and, where the breach is capable of being remedied, the tenant should have the opportunity to remedy. If a notice to remedy, or a notice to vacate served upon the tenant contains a defect which could readily mislead the tenant about an essential element of the breach that had to be remedied, so that the decision as to what action they should take is influenced by the defective information, then taking into account the serious consequences (potential homelessness) for the tenant, the Tribunal should be extremely cautious about correcting a defect in relation to the quantum of arrears, said to be owed by the tenant. [footnotes omitted]
If, however, as a result of the peculiar circumstances in this matter, the Tribunal takes a different approach to the pattern of payment exhibited by the tenant, then the quantum of arrears are set out in the notices to remedy and notice to vacate may be correct.
The evidence before the Tribunal in relation to the pattern of payments of money by the tenant to the lessor from 1 June 2012 must be carefully examined to determine whether it was the intention of the parties that all payments should be regarded as payments of rent referenced to the new implied tenancy.
The Tribunal has examined the joint rent account for the new implied tenancy; the Homenet notes and a statement filed by the tenant on 19 May 2015.
(a)The pattern of rent payment shows that in the period of time commencing 9 June 2012 the tenant made payments in excess of the amount of the fortnightly rebated rent.
(b)The Homenet notes show that in the same time period, the applicant was in constant communication with the tenant with regards to the payment of rent and the payment of what is described as an arrears instalment. For example:
i. the note for 22 November 2012 states that the housing manager made contact with the tenant, in regards to rebate and not complying with the legal agreement and that the housing manager advised the tenant that she would need to pay the new rebated rent and add an extra amount as an arrears instalment in order to comply with the legal agreement;
ii. the notes are 6 February 2013 shows that the tenant attended the office of the applicant for a meeting with regard to the failure to pay rent and arrears in accordance with the legal agreement.[4] It was further noted that the tenant had said that she could pay her debt off at an extra $100 per fortnight and the housing manager accepted this repayment plan;
iii. on 26 August 2013 it was noted that the housing manager was attempting to contact the tenant to organised a fresh agreement to continue paying arrears;
iv. on 15 October 2013 it was noted that the tenant was still paying rent and arrears, but the applicant needed to be formally done; and
v. on 23 October 2013 it is noted that the tenant telephoned to advise that she could not attend a scheduled appointment but that she had made a payment of $1000 as soon as she got the letter advising she was in arrears.
(c)The payments made by the tenant were intermittent, and it is clear that she was struggling to pay rent and other debts. In her unsigned statement filed with the tribunal the tenant states with reference to the period of mid-2012, that she found it hard to budget, that she had borrowed money at high interest rates and that she had sometimes used that borrowed money to pay her rent, that she was struggling to get larger debts under control, and that she had from time to time prioritised payment of other debts over payment of rent.
(d)Despite these financial difficulties, and the somewhat erratic payment pattern, the tenant steadily reduced the debit balance shown on the rent account schedule maintained by the applicant. On 13 August 2013 the tenant made a payment of $700; on 14 September 2013 the tenant made a payment of $600; on 15 October 2013 the tenant made a payment of $1000; on 31 October 2013 the tenant made a payment of $500 and on 2 November 2013, the tenant made a payment of $500. At that time her fortnightly rebated rent was $473.30. The result of these payments was that from 2 November 2013 the rent account schedule maintained by the applicant showed an amount of $118.96 credit. The joint rent account for the new implied tenancy showed that this payment brought the account to $1167.43 in credit.
(e)The tenant rent payments became erratic soon thereafter and her account fell into arrears. Her financial difficulties were exacerbated by the cessation of the rebate on her rent.
[4] Throughout the Homenet notes the applicant’s officers referred to a LEG agreement, or legal agreement, which the Tribunal understands to be a reference to the conditional termination and possession order made on 15 May 2012
The Tribunal is satisfied that, despite having failed to comply with the conditional termination and possession order, and perhaps as a result of the ongoing support provided by officers of the applicant, the tenant made some considerable effort to reduce the amount of the debt owing to the lessor, and indeed did do so by the payment made on 2 November 2013.
I am satisfied on all the evidence before me that it was the intention of both the lessor and the tenant that the tenant should continue to pay an amount towards the arrears, and that her payments in excess of the fortnightly rent were intended by her to be repayment of the debt that had crystallised as a result of a failure to comply with the conditional termination possession order made on 15 May 2012 and payment of other arrears, that had accumulated over the time and payment of rent as and when it fell due.
It therefore follows that the notices to remedy and the notice to vacate contain correct statements as to the amount of arrears owing and are valid.
Orders
The matter is set down for hearing before Senior Member Lennard at 10am on 20 May 2016.
The applicant is to provide to the tribunal and to the respondent on or before 27 April 2016 written submissions, which shall include:
(a)an up-to-date rent schedule;
(b)any further submissions on the Human Rights issues; and
(c)any further documents on which they intend to rely at the hearing.
The respondent is to provide to the tribunal and to the applicant on or before 3 May 2016, written submissions which shall include:
(a)a response to the submissions of the applicant;
(b)any further submissions on the Human Rights issues; and
(c)any further documents on which she intends to rely at the hearing.
………………………………..
Senior Member J Lennard
HEARING DETAILS
FILE NUMBER: | RT 1137/2014 |
PARTIES, APPLICANT: | Commissioner of Social Housing |
PARTIES, RESPONDENT: | Kathleen Lysle |
COUNSEL APPEARING, APPLICANT | Ms N Tarbet |
COUNSEL APPEARING, RESPONDENT | N/A |
SOLICITORS FOR APPLICANT | ACT Government Solicitor |
SOLICITORS FOR RESPONDENT | Canberra Community Law |
TRIBUNAL MEMBERS: | Senior Member J Lennard |
DATES OF HEARING: | 11 August 2015 |
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