Commissioner of Housing v Key

The Supreme Court of the Australian Capital Territory was asked to review a decision of the Residential Tenancies Tribunal in relation to a dispute between the Commissioner for Housing, the appellant, and Pamela Key, the respondent. The central issue was whether a proposed increase in rental rates for a residential property was excessive and, if so, the appropriate amount of the increase. The appeal was based on alleged errors of law by the Tribunal.

The court considered several legal issues. Firstly, whether the Tribunal had correctly applied the formula in s 68(2) of the Residential Tenancies Act 1997 (ACT). The court held that the Tribunal had erred in using the formula as a moderating influence rather than merely determining which party bore the onus of proof regarding the excessiveness of the increase. Secondly, the court assessed whether the Tribunal had erred in finding that the lessor was only entitled to a rent increase contingent on improving the property. The court found no such implicit finding and concluded that the Tribunal had appropriately distinguished between renovations and routine repairs. Thirdly, the court examined if the Tribunal had improperly considered the tenant's subjective intentions regarding a previous rental increase. The court found that the Tribunal's remarks did not indicate such an error. Fourthly, the court deliberated on whether the length of the tenancy should be considered relevant. The court held that while the length of the tenancy was not a discount factor, it could be relevant in considering the advantages to a landlord of long-term tenancies.

The court further considered whether the Tribunal had denied natural justice by ordering repairs to a defective toilet without providing the appellant an opportunity to be heard on the matter. The court found that the appellant was indeed denied natural justice in this respect. Additionally, the court assessed whether the Tribunal had appropriately considered the market rental rate for comparable properties and found that the Tribunal's reasons did not adequately justify the reduction in rental rate. Finally, the court evaluated if the overall decision was unreasonable, concluding that, aside from the errors identified, the decision was not so unreasonable as to be unlawful.

The court ordered that the appeal be allowed, the orders of the Tribunal be set aside, and the matter be remitted to the Tribunal for re-hearing of the respondent's application for orders disallowing the increase in whole or in part. The court did not make any order as to costs.